AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 13, 2009
REGISTRATION NO. 333-______
================================================================================
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) 802-5740
(Address and telephone number of principal executive offices)
THOMAS C. CASTANO
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:
CHRISTOPHER SPRAGUE
VICE PRESIDENT, CORPORATE COUNSEL
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
751 BROAD STREET
NEWARK, NJ 07102-2992
(973) 802-6997
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box:. [_]
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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a registration statement pursuant to General Instruction I.D.
or a post-effective amendment thereto that shall become effective upon filing
with the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [_]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. [_]
Indicate by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company.
Large accelerated filer [_] Accelerated filer [_]
Non-accelerated filer [X] Smaller reporting company [_]
Calculation of Registration fee
- -------------------------------------------------------------------------------------------
Proposed Proposed
Title of each class of Amount maximum maximum
securities to be to be offering price aggregate Amount of
registered registered* per unit* offering price registration fee**
- -------------------------------------------------------------------------------------------
Market-value adjustment
annuity contracts (or
modified guaranteed
annuity contracts) $540,000,000 $21,222
- ---------------------------------------------------------------------------------------
* Securities are not issued in predetermined units
** In this filling, Pruco Life Insurance Company of New Jersey is registering
$540,000,000 of Securities and paying a fee of $21,222 therefor.
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 may determine.
================================================================================
STRATEGIC PARTNERS/SM/ HORIZON ANNUITY
PROSPECTUS: MAY 1, 2008
----------------------------------------------
This prospectus describes a market value adjusted individual annuity contract
offered by Pruco Life Insurance Company of New Jersey (Pruco Life of New
Jersey). Pruco Life of New Jersey offers several different annuities which
your representative may be authorized to offer to you. Each annuity has
different features and benefits that may be appropriate for you based on your
financial situation, your age and how you intend to use the annuity. The
different features and benefits include variations in death benefit protection
and the ability to access your annuity's contract value and the charges that
you will be subject to if you choose to surrender the annuity. The fees and
charges under the annuity contract and compensation paid to your
representative may also be different between each annuity. If you are
purchasing the contract as a replacement for variable annuity or variable life
coverage, you should consider, among other things, any surrender or penalty
charges you may incur when replacing your existing coverage. Pruco Life of New
Jersey is an indirect wholly owned subsidiary of the Prudential Insurance
Company of America. Pruco Life of New Jersey is located at 213 Washington
Street, Newark, NJ 07102-2992, and can be contacted by calling 800-944-8786.
Pruco Life of New Jersey administers the Strategic Partners Horizon annuity
contracts (see file no. 333-100713) at the Prudential Annuity Service Center,
P.O. Box 7960, Philadelphia, PA 19176. You can contact the Prudential Annuity
Service Center by calling, toll-free, (888) PRU-2888.
PLEASE READ THIS PROSPECTUS
Please read this prospectus before purchasing a Strategic Partners Horizon
Annuity contract and keep it for future reference. The Risk Factors section
appears in Section 9 of the Summary.
- --------------------------------------------------------------------------------
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 MARKET VALUE ADJUSTED
ANNUITY CONTRACT IS SUBJECT TO RISK, INCLUDING THE POSSIBLE LOSS OF YOUR
MONEY. AN INVESTMENT IN STRATEGIC PARTNERS HORIZON ANNUITY IS NOT A BANK
DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY.
- --------------------------------------------------------------------------------
Strategic Partners/SM/ is a service mark of the Prudential Insurance Company
of America
ORDO1146NY
CONTENTS
PART I: STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS SUMMARY.............................. 3
GLOSSARY.................................................................................. 4
SUMMARY................................................................................... 6
RISK FACTORS.............................................................................. 7
PART II: STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS..................................... 8
SECTION 1: WHAT IS THE STRATEGIC PARTNERS HORIZON ANNUITY?................................ 9
SHORT TERM CANCELLATION RIGHT OR "FREE LOOK"............................................ 9
SECTION 2: WHAT GUARANTEE PERIODS CAN I CHOOSE?........................................... 9
GUARANTEE PERIODS....................................................................... 9
MARKET VALUE ADJUSTMENT................................................................. 10
SECTION 3: WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE? (ANNUITIZATION).. 11
PAYMENT PROVISIONS...................................................................... 11
OPTION 1: ANNUITY PAYMENTS FOR A FIXED PERIOD......................................... 11
OPTION 2: LIFE ANNUITY WITH 120 PAYMENTS (10 YEARS)................................... 11
OPTION 3: OTHER ANNUITY OPTIONS....................................................... 11
TAX CONSIDERATIONS.................................................................... 11
SECTION 4: WHAT IS THE DEATH BENEFIT?..................................................... 11
BENEFICIARY............................................................................. 11
CALCULATION OF THE DEATH BENEFIT........................................................ 11
JOINT OWNERSHIP RULES................................................................... 12
SECTION 5: HOW CAN I PURCHASE A STRATEGIC PARTNERS HORIZON ANNUITY CONTRACT?.............. 12
PURCHASE PAYMENT........................................................................ 12
ALLOCATION OF PURCHASE PAYMENT.......................................................... 12
SECTION 6: WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON ANNUITY
CONTRACT?............................................................................... 13
WITHDRAWAL CHARGE....................................................................... 13
TAXES ATTRIBUTABLE TO PREMIUM........................................................... 13
SECTION 7: HOW CAN I ACCESS MY MONEY?..................................................... 14
AUTOMATED WITHDRAWALS................................................................... 14
SECTION 8: WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON
ANNUITY CONTRACT?....................................................................... 14
CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX-FAVORED RETIREMENT PLANS).......
CONTRACTS HELD BY TAX-FAVORED PLANS.....................................................
SECTION 9: OTHER INFORMATION.............................................................. 21
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY.............................................. 21
SALE AND DISTRIBUTION OF THE CONTRACT................................................... 22
LITIGATION.............................................................................. 23
ASSIGNMENT.............................................................................. 23
HOUSEHOLDING............................................................................ 23
INDEMNIFICATION......................................................................... 23
MARKET-VALUE ADJUSTMENT FORMULA......................................................... 23
2
PART I SUMMARY
- --------------------------------------------------------------------------------
STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
3
PART I: STRATEGIC PARTNERS HORIZON ANNUITY 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 the key
words or terms. Other defined terms are set forth in your contract.
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 premium taxes, adjusted for any market value adjustment.
Annuitant
The person whose life determines the amount of income payments that we will
pay. If the annuitant dies before the annuity date, the co-annuitant (if any)
becomes the annuitant if the contract's requirements for changing the annuity
date are met. If, upon the death of the annuitant, there is no surviving
eligible co-annuitant, and the owner is not the annuitant, then the owner
becomes the annuitant.
Annuity Date
The date when income payments are scheduled to begin. You must have our
permission to change the annuity date. If the co-annuitant becomes the
annuitant due to the death of the annuitant, and the co-annuitant is older
than the annuitant, then the annuity date will be based on the age of the
co-annuitant, provided that the contract's requirements for changing the
annuity date are met (e.g., the co-annuitant cannot be older than a specified
age). If the co-annuitant is younger than the annuitant, then the annuity date
will remain unchanged.
Beneficiary
The person(s) or entity you have chosen to receive a death benefit.
Business Day
A day on which the New York Stock Exchange is open for business. Our business
day generally ends at 4:00 p.m. Eastern time.
Co-Annuitant
The person shown on the contract data pages who becomes the annuitant (if
eligible) upon the death of the annuitant if the requirements for changing the
annuity date are met. No co-annuitant may be designated if the owner is a
non-natural person.
Contract Date
The date we accept your initial purchase 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 Surrender Value
This is the total value of your contract adjusted by any market-value
adjustment, minus any withdrawal charge(s) and any premium taxes.
Contract Value
The total value of the amount in a contract allocated to a guarantee period as
of a particular date.
Death Benefit
If a death benefit is payable, the beneficiary you designate will receive the
contract value as the death benefit. If the contract is owned by an entity
(e.g. a corporation or trust), rather than by an individual, then we will pay
the death benefit upon the death of the annuitant. See Section 4, "What Is The
Death Benefit?"
4
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.
Guarantee Period
A period of time during which your invested purchase payment earns interest at
the declared rate. We currently make available guarantee periods equal to any
or all of the following: 1 year (currently available only as a renewal
option), 3 years, 5 years, 7 years, and 10 years. A guarantee period that does
not exceed five years will always be available as a renewal option.
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.
Invested Purchase Payment
Your purchase payment (which we define below) less any deduction we make for
any tax charge. In addition to the initial invested purchase payment, we allow
you to make additional purchase payments during the 30 days preceding the end
of a guarantee period.
Joint Owner
The person named as the joint owner, who shares ownership rights with the
owner as defined in the contract. A joint owner must be a natural person.
Prudential Annuity Service Center
For general correspondence: P.O. Box 7960, Philadelphia, PA, 19176. For
express overnight mail: 2101 Welsh Road, Dresher, PA 19025. The phone 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, as well as any
additional payment you make.
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 Section 8, "What Are The Tax Considerations Associated
With The Strategic Partners Horizon Annuity Contract?"
5
SUMMARY OF SECTIONS 1-9
For a more complete discussion of the following topics, see the corresponding
section in the prospectus.
SECTION 1
What Is The Strategic Partners Horizon Annuity?
This market value adjusted annuity contract, offered by Pruco Life of New
Jersey, is a contract between you, as the owner, and us. The contract is
intended for retirement savings or other long-term investment purposes and
provides a death benefit and guaranteed income options.
While your money remains in the contract for the full guarantee period, your
principal amount is guaranteed and the minimum interest amount that your money
will earn is dictated by state law. Payments allocated to the contract 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 the contract are based on the
overall financial strength of Pruco Life of New Jersey.
The contract, like all deferred annuity contracts, has two phases: the
accumulation phase and the income phase. During the accumulation phase,
earnings grow on a tax-deferred basis and are 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 of the
payments 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
selected.
We may amend the contract as permitted by law. For example, we may add new
features to the contract. Subject to applicable law, we determine whether or
not to make such contract amendments available to contracts that already have
been issued.
Free Look. If you change your mind about owning Strategic Partners Horizon
Annuity, you may cancel your contract within 10 days after receiving it (or
whatever other 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 your contract is worth as
of the day you submit your request.
We impose neither a withdrawal charge nor any market value adjustment if you
cancel your contract under this provision.
SECTION 2
What Guarantee Periods Can I Choose?
You can allocate your initial purchase payment to one of the guarantee periods
available under the contract. We have the right under the contract to offer
one or more of the following guarantee periods: 1 year (currently available
only as a renewal option), 3 years, 5 years, 7 years, or 10 years, and we may
offer other guarantee periods in the future. At any time, we may offer any or
all of these guarantee periods. You may not allocate your purchase payment to
more than one guarantee period.
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.
Once you begin receiving regular payments, you cannot change your payment plan.
SECTION 4
What Is The Death Benefit?
If the sole owner or the first of the joint owners dies, the designated
person(s) or the beneficiary will receive the contract value as the death
benefit. If the contract is owned by an entity (e.g., a corporation or trust),
rather than by an individual, then we will pay the death benefit upon the
death of the annuitant.
SECTION 5
How Can I Purchase A Strategic Partners Horizon Annuity Contract?
You can purchase this contract, under most circumstances, with a minimum
initial purchase payment of $5,000, but not greater than $5 million, absent
our prior approval. We allow you to make additional purchase payments only
during the 30 days immediately preceding the end of a guarantee period. Your
representative can help you fill out the proper forms.
SECTION 6
What Are The Expenses Associated With The Strategic Partners Horizon Annuity
Contract?
During the accumulation phase, if you withdraw money, you may have to pay a
withdrawal charge on all or part of the withdrawal. The withdrawal charge that
we impose depends on the guarantee period from which you are withdrawing your
money. The withdrawal charge ranges from 0%-7%. You also will be subject to a
market value adjustment if you make a withdrawal prior to the end of a
guarantee period.
6
SECTION 7
How Can I Access My Money?
You may withdraw money at any time during the accumulation phase. You may,
however, be subject to income tax and, if you make a withdrawal prior to age
59 1/2, an additional tax penalty as well. Each contract year after the first,
you may withdraw without charge, an amount equal to the interest you earned
during the previous contract year. Withdrawals greater than that amount will
be subject to a withdrawal charge. A market-value adjustment may also apply.
SECTION 8
What Are The Tax Considerations Associated With The Strategic Partners Horizon
Annuity Contract?
Your earnings are generally not taxed until withdrawn. If you withdraw money
during the accumulation phase, the tax laws first treat the withdrawals as a
withdrawal of earnings, which are taxed as ordinary income. If you are younger
than age 59 1/2 when you withdraw money, 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 partial return of
your original investment. Generally, all amounts withdrawn from an Individual
Retirement Annuity (IRA) (excluding Roth IRAs) contract are taxable and
subject to the 10% penalty if withdrawn prior to age 59 1/2.
SECTION 9
Other Information
This contract is issued by Pruco Life Insurance Company of New Jersey, an
indirect subsidiary of The Prudential Insurance Company of America, and sold
by registered representatives of affiliated and unaffiliated broker/dealers.
RISK FACTORS
There are various risks associated with an investment in the Strategic
Partners Horizon Annuity that we summarize below.
Issuer Risk. Your Strategic Partners Horizon Annuity is available under a
contract 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 annuity 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 Strategic Partners Horizon annuities.
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 invested
throughout the guarantee period. In addition, we cannot, of course, assure you
that the Strategic Partners Horizon Annuity will perform better than another
investment that you might have made.
Risks Related To The Withdrawal Charge. We may impose withdrawal charges that
range as high as 7%. 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.
7
PART II SECTIONS 1-9
- --------------------------------------------------------------------------------
STRATEGIC PARTNERS HORIZON ANNUITY PROSPECTUS
8
1: WHAT IS THE STRATEGIC PARTNERS HORIZON ANNUITY?
The Strategic Partners Horizon 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).
Under our contract or agreement, in exchange for your payment to us, we
promise to pay you a guaranteed income stream that can begin any time 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 purchase 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. Therefore, before
purchasing an annuity in a tax-favored plan, you should consider whether its
features and benefits beyond tax deferral meet your needs and goals. You may
also want to consider the relative features, benefits and costs of these
annuities compared with any other investment that you may use in connection
with your retirement plan or arrangement.)
Strategic Partners Horizon Annuity allows you to allocate a purchase payment
to one of several guarantee periods that we offer at the time. 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 owner is
the person upon whose death during the accumulation phase, the death benefit
generally is payable. The annuitant is the person whose life is used to
determine the amount of annuity payments and how long the payments will
continue. On and after the annuity date, the annuitant may not be changed.
The beneficiary is the person(s) or entity designated to receive any death
benefit if the owner (or first-to-die of joint owners) dies during the
accumulation phase. 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 Horizon Annuity, 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 your contract is worth as of the day
we receive your request in good order, less any applicable federal and state
income tax withholding.
We impose neither a withdrawal charge nor any market value adjustment if you
cancel your contract under this provision.
2: WHAT GUARANTEE PERIODS CAN I CHOOSE?
The contract gives you the choice of allocating your purchase payment to one
of the guarantee periods that we are offering at the time.
GUARANTEE PERIODS
Under each Strategic Partners Horizon Annuity contract, 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), 3 years, 5 years, 7
years, or 10 years in length. In the future, we may offer other guarantee
periods on substantially the same terms as described in this prospectus. We
are not obligated to offer more than one guarantee period at any time.
However, we will always make available a guarantee period not exceeding
5 years in length.
We will apply your purchase payment to the guarantee period you have chosen.
You must allocate all of your initial purchase payment to a single guarantee
period. We declare the interest rate for each available guarantee period
periodically, but we guarantee that we will declare at least a minimum
interest rate, in the amount dictated by state law. You will earn interest on
your invested purchase payment at the rate that we have declared for the
guarantee period you have chosen.
In addition to the basic interest, we also may pay additional interest with
respect to guarantee periods other than the one year and three year periods.
The amount of the additional interest varies according to the amount of your
purchase payment. Specifically, we will pay additional interest equal to 0.50%
annually for a purchase payment of $25,000 to $74,999, and 1.00% annually for
a purchase payment of $75,000 or more.
If we grant additional interest to you, you will earn that interest only
during the first year of your contract (and during the first year of the
initial renewal guarantee period, other than the one and three year periods).
We are not obligated to offer this additional interest continuously, meaning
that we reserve the right to offer additional interest only during limited
time periods of our choosing. We also reserve the right to change the amount
of the additional interest.
9
2: WHAT GUARANTEE PERIODS CAN I CHOOSE? continued
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, or (d) death of the first to die of the
owner and joint owner (or annuitant, for entity-owned contracts).
During the 30-day period immediately preceding the end of a guarantee period,
we allow you to do any of the following, without the imposition of the
withdrawal charge or market value adjustment: (a) surrender the contract, in
whole or in part, (b) allocate the contract value to another guarantee period
available at that time (provided that the new guarantee period ends prior to
the contract anniversary next following the annuitant's 90/th/ birthday (or
ten years after the contract date, if later) and that you reinvest at least
$2,000), or (c) apply the adjusted contract value 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 a guarantee period having the same
duration as the guarantee period that matured (provided that the new guarantee
period ends prior to the contract anniversary next following the annuitant's
90/th/ birthday (or ten years after the contract date, if later) and that you
reinvest at least $2,000). If any available new guarantee period would end on
or after the contract anniversary next following the annuitant's 90/th/
birthday (or ten years after the contract date, if later), or if the annuitant
is 91 years old at the end of the guarantee period, then we will make only the
one year guarantee period available as the renewal period. We will not impose
a withdrawal charge on amounts you withdraw from the one year guarantee period
described in the immediately preceding sentence, although such a withdrawal
would be subject to a market value adjustment.
MARKET VALUE ADJUSTMENT
When you allocate a purchase payment 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. 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 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 could 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.
.. A negative market value adjustment could cause you to lose not only the
interest you have earned but also a portion of your principal.
.. You may withdraw (after the first contract year), without the imposition of
any market value adjustment, an amount equal to the interest earned under
your contract during the immediately preceding contract year.
.. 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, except if you annuitize or settle during the
30-day period preceding the end of a guarantee period (See Section 3 for
details).
YOU SHOULD REALIZE, HOWEVER, THAT APART FROM THE MARKET VALUE ADJUSTMENT, THE
VALUE OF THE BENEFITS 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.
10
3: WHAT KIND OF PAYMENTS WILL I RECEIVE DURING THE INCOME PHASE?
(ANNUITIZATION)
PAYMENT PROVISIONS
We can begin making annuity payments any time after the first contract
anniversary. Annuity payments must begin no later than the contract
anniversary coinciding with or next following the annuitant's 90/th/ birthday
(or ten years after the contract date, if later). If you begin annuity
payments or commence a settlement option at a time other than the 30-day
period prior to the end of a guarantee period, then we will impose a market
value adjustment.
We make the income plans described below available before the annuity date.
These plans are called annuity options. You must choose an annuity option at
least 30 days in advance of the annuity date. If you do not, we will select
Option 2 below on your behalf unless prohibited by applicable law. During the
income phase, all of the annuity options under this contract are fixed annuity
options. GENERALLY, ONCE THE ANNUITY PAYMENTS BEGIN, THE ANNUITY OPTION CANNOT
BE CHANGED AND YOU CANNOT MAKE WITHDRAWALS.
If the annuitant dies or assigns the contract, and the new annuitant is older
than the original annuitant, then the annuity date will be based on the new
annuitant's age. If the annuitant dies or assigns the contract, and the new
annuitant is younger than the original annuitant, then the annuity date will
remain unchanged. In no event, however, may an original or revised annuity
date be later than the contract anniversary next following the annuitant's
90/th/ birthday (or ten years after the contract date, if later).
Option 1
Annuity Payments For A Fixed Period: Under this option, we will make equal
payments for the period chosen, up to 25 years (but no less than 10 years).
The annuity payments may be made monthly, quarterly, semi-annually, or
annually, as you choose, for the fixed period. If the annuitant dies during
the income phase, a lump sum payment generally will be made to the
beneficiary. The amount of the lump sum payment is determined by calculating
the present value of the unpaid future payments. This is done by using the
interest rate used to compute the actual payments. The interest rate will be
at least 3% a year.
Option 2
Life Annuity With 120 Payments (10 Years): Under this option, we will make
annuity payments monthly, quarterly, semi-annually, 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 in one lump sum the present value of
the annuity payments scheduled to have been made over the remaining portion of
that 10 year period, unless we were specifically instructed that such
remaining annuity payments continue to be paid to the beneficiary. The present
value of the remaining annuity payments is calculated by using the interest
rate used to compute the amount of the original 120 payments. The interest
rate will be at least 3% a year.
Option 3
Other Annuity Options: We currently offer a variety of other annuity options
not described above. At the time annuity payments are chosen, we may make
available to you any of the fixed annuity options that are offered at your
annuity date. For example, we offer an interest payment option, under which we
credit interest on the adjusted contract value until you request payment of
all or part of the adjusted contract value. We can make interest payments on a
monthly, quarterly, semi-annual, or annual basis or allow interest to accrue
on your contract assets. Under the interest payment option, we will pay you
interest of at least 1.50% a year. This option is not available if you hold
your contract in an IRA.
Tax Considerations
If your contract is held under a tax-favored plan, you should consider the
minimum distribution requirements when selecting your annuity option.
4: WHAT IS THE DEATH BENEFIT?
BENEFICIARY
The beneficiary is the person(s) or entity you name to receive any death
benefit. The beneficiary is named at the time the contract is issued, unless
you change it at a later date. Unless an irrevocable beneficiary has been
named, you can change the beneficiary at any time before the owner or last
surviving owner dies. However, if the contract is jointly owned, the owner
must name the joint owner and the joint owner must name the owner as the
beneficiary.
CALCULATION OF THE DEATH BENEFIT
If the owner (or first-to-die of the owner and joint owner) dies during the
accumulation phase, we will, upon receiving appropriate proof of death and any
other needed documentation in good order (proof of death), pay a death benefit
to the beneficiary designated by the deceased owner or joint owner. If the
contract is owned by an entity (e.g., a corporation or trust), rather than by
an
11
4: WHAT IS THE DEATH BENEFIT? continued
individual, then we will pay the death benefit upon the death of the
annuitant. We require proof of death to be submitted promptly. The beneficiary
will receive a death benefit equal to the contract value as of the date that
proof of death is received in good order at the Prudential Annuity Service
Center.
Where a contract is structured so that it is owned by a grantor trust but the
annuitant is not the grantor, then the contract is required to terminate upon
the death of the grantor if the grantor pre-deceases the annuitant under
Section 72(s) of the Code. Under this circumstance, the Contract Surrender
Value will be paid out to the beneficiary and it is not eligible for the death
benefit provided under the contract.
Instead of asking us to pay a death benefit, the surviving spouse may opt to
continue the contract, as discussed below. Generally, we impose no withdrawal
charge or market value adjustment when we pay the death benefit.
JOINT OWNERSHIP RULES
If the contract has an owner and a joint owner and they are spouses, then upon
the first to die of the owner and joint owner, the surviving spouse has the
choice of the following:
.. The contract can continue, with the surviving spouse as the sole owner of
the contract. In this case, the contract held by the surviving spouse will
continue to be subject to the withdrawal charge and market value
adjustment; or
.. The surviving spouse can receive the death benefit and the contract will
end. If the surviving spouse wishes to receive the death benefit, he or she
must make that choice within the first 60 days following our receipt of
proof of death. Otherwise, the contract will continue with the surviving
spouse as the sole owner.
If the contract has an owner and a joint owner, and they are not spouses, the
contract will not continue. Instead, the beneficiary will receive the death
benefit.
The death benefit payout options are:
Choice 1. Lump sum.
Choice 2. Payment of the entire death benefit within 5 years of the date of
death of the first to die. Under this choice, we will impose a market value
adjustment upon any withdrawal made during the 5 year period (unless the
withdrawal is made during the 30-day period immediately preceding the end of a
guarantee period).
Choice 3. Payment under an annuity or 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 first to die.
The tax consequences to the beneficiary may vary among the three death benefit
payout options. See Section 8, "What Are The Tax Considerations Associated
With The Strategic Partners Horizon Annuity Contract?"
5: HOW CAN I PURCHASE A STRATEGIC PARTNERS HORIZON ANNUITY CONTRACT?
PURCHASE PAYMENT
A purchase payment is the amount of money you give us to purchase the
contract. The minimum initial purchase payment is $5,000, and may not exceed
$5 million absent our prior approval, unless we are prohibited under state law
from insisting on such prior approval. You can allocate subsequent purchase
payments to a guarantee period only during the 30-day period immediately
preceding the end of a guarantee period, provided that any such purchase
payment is at least $1,000.
Generally, your initial purchase payment consists of a single sum. However,
with respect to an exchange or roll-over, your purchase payment can consist of
multiple sums that you identify at the time of application. With respect to
the latter:
.. we will aggregate each sum for purposes of computing the amount of any
additional interest that we pay on each sum; and
.. each sum will earn interest only from the business day on which it is
received in good order at the Prudential Annuity Service Center until the
end of the guarantee period.
We generally will sell you a contract only if the eldest of the owner, any
joint owner, annuitant, and any co-annuitant is 85 or younger on the contract
date (age 69 or younger, for IRAs).
ALLOCATION OF PURCHASE PAYMENT
When you purchase a contract, we will allocate your invested purchase payment
to the guarantee period of your choosing, provided that we are offering that
guarantee period at the time. You must allocate all of your initial purchase
payment to a single guarantee period. Likewise, any subsequent purchase
payment you make during the 30-day period immediately preceding the end of a
guarantee period will be consolidated with your existing contract value, and
the total will be allocated to a single guarantee period of your choosing.
12
6: WHAT ARE THE EXPENSES ASSOCIATED WITH THE STRATEGIC PARTNERS HORIZON
ANNUITY CONTRACT?
THERE ARE CHARGES ASSOCIATED WITH THE CONTRACT THAT MAY REDUCE THE RETURN ON
YOUR INVESTMENT. THESE CHARGES ARE DESCRIBED BELOW.
WITHDRAWAL CHARGE
The withdrawal charge is for the payment of the expenses involved in selling
and distributing the contracts, including sales commissions, printing of
prospectuses, sales administration, preparation of sales literature and other
promotional activities.
You may surrender your contract in whole or in part while the guarantee period
remains in effect. If you do so, however, you will be subject to (a) a
possible withdrawal charge, (b) a market value adjustment (which we discussed
in Section 2 above) and (c) possible tax penalties. After the first contract
year, you may withdraw, without the imposition of any withdrawal charge or
market value adjustment, an amount equal to the interest earned under your
contract during the immediately preceding contract year. When we calculate the
withdrawal charge and market value adjustment, we first take into account any
available charge-free amount. We impose a withdrawal charge and market value
adjustment only after that amount has been exhausted. In addition, we do not
impose either a withdrawal charge or a market value adjustment on amounts you
withdraw under the contract's minimum distribution option to satisfy Internal
Revenue Service required minimum distribution rules.
If you make a full withdrawal, we will deduct the withdrawal charge from the
proceeds that we pay to you. If you make a partial withdrawal, we will deduct
the withdrawal charge from the contract value remaining in the guarantee
period. We calculate the withdrawal charge after we have given effect to any
market value adjustment.
The withdrawal charge that we impose is equal to a specified percentage of the
contract value withdrawn that is in excess of the charge-free amount described
above. With respect to the initial guarantee period, the withdrawal charge is
based on the number of contract anniversaries that have elapsed since the
contract date. Withdrawal charges also are imposed during your first, renewal
guarantee period, as discussed below. No withdrawal charges apply to any
guarantee period that you choose subsequent to your first, renewal guarantee
period. Moreover, we impose no withdrawal charge on withdrawals from any one
year guarantee period. The withdrawal charge for the initial guarantee period
is equal to the following:
Number of Contract Anniversaries Since
The Later of the Contract Date
(or Start of First Renewal Period) Withdrawal Charge
----------------------------------------------------------
0 7%
----------------------------------------------------------
1 6%
----------------------------------------------------------
2 5%
----------------------------------------------------------
3 4%
----------------------------------------------------------
4 3%
----------------------------------------------------------
5 2%
----------------------------------------------------------
6 1%
----------------------------------------------------------
7 0%
----------------------------------------------------------
The withdrawal charge during the first year of the first renewal guarantee
period is equal to the lesser of 5%, or 1% times the number of years in the
renewal guarantee period, and the charge decreases by 1% per year thereafter.
The withdrawal charge schedule for those aged 90 or older differs slightly.
Some or all of the guarantee periods that we offer at any given time will be
shorter than the time periods indicated immediately above. If a withdrawal is
effective on the day before a contract anniversary, the withdrawal charge
percentage will be that as of the next following contract anniversary.
TAXES ATTRIBUTABLE TO PREMIUM
There may be 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. It is our current
practice not to deduct a charge for state premium taxes until annuity payments
begin. New York does not currently impose a charge for premium taxes. It is
also our current practice not to deduct a charge for the federal tax
associated with 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 tax associated with 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.
13
7: HOW CAN I ACCESS MY MONEY?
You can withdraw money at any time during the accumulation phase. If you do
so, however, you may be subject to income tax and, if the withdrawal is prior
to your attaining age 59 1/2, an additional tax penalty. You will need our
consent to make a partial withdrawal if the requested withdrawal is less than
$250. During the accumulation phase, we generally have the right to terminate
your contract and pay you the contract value if the current contract value is
less than $2,000 and certain other conditions apply.
INCOME TAXES, TAX PENALTIES, WITHDRAWAL CHARGES, AND A MARKET VALUE ADJUSTMENT
MAY APPLY TO ANY WITHDRAWAL YOU MAKE. FOR A MORE COMPLETE EXPLANATION OF TAX
CONSEQUENCES, SEE SECTION 8.
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 withdrawal at the end of the business day at the
intervals you specify. We will continue at these intervals until you tell us
otherwise. We reserve the right to cease paying automated withdrawals if
paying any such withdrawal would cause the contract value to be less than
$2,000.
The minimum automated withdrawal amount you can make is $100. An assignment of
the contract terminates any automated withdrawal program that you had in
effect. Withdrawal charges, and a market value adjustment, may apply to any
automated withdrawal you make. You may not use the automated withdrawal
feature to withdraw the interest earned under your contract.
INCOME TAXES, TAX PENALTIES, WITHDRAWAL CHARGES, AND A MARKET VALUE ADJUSTMENT
MAY APPLY TO AUTOMATED WITHDRAWALS. FOR A MORE COMPLETE DISCUSSION OF TAX
CONSEQUENCES, SEE SECTION 8.
8. WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT?
The tax considerations associated with an annuity vary depending on whether
the contract is (i) owned by an individual or non-natural person, 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. The information
provided is not intended as tax advice. You should consult with a qualified
tax advisor for complete information and advice. References to purchase
payments below relate to your cost basis in your contract. Generally, your
cost basis in a contract not associated with a tax-favored retirement plan is
the amount you pay into your contract, or into annuities exchanged for your
contract, on an after-tax basis less any withdrawals of such payments. Cost
basis for a tax-favored retirement plan is provided only in limited
circumstances, such as for contributions to a Roth IRA or nondeductible IRA
contributions.
The discussion includes a description of certain spousal rights under the
contract, and our administration of such spousal rights and related tax
reporting accords with our understanding of the Defense of Marriage Act (which
defines a "marriage" as a legal union between a man and a woman and a "spouse"
as a person of the opposite sex). Depending on the state in which your annuity
is issued, we may offer certain spousal benefits to civil union couples. You
should be aware, however, that federal tax law does not recognize civil
unions. Therefore, we cannot permit a civil union partner to continue the
annuity upon the death of the first partner under the annuity's "spousal
continuance" provision. Civil union couples should consider that limitation
before selecting a spousal benefit under the annuity.
Nonqualified Annuity Contracts
In general, as used in this prospectus, a Nonqualified Annuity is owned by an
individual or non-natural person and is not associated with a tax-favored
retirement plan.
Taxes Payable by You
We believe this annuity 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. Charges for investment advisory fees that are taken
from the contract are treated as a partial withdrawal from the contract and
will be reported as such to the contract owner.
You must commence annuity payments no later than the first day of the calendar
month next following the maximum Annuity Date for your contract. Please refer
to your annuity contract for the applicable maximum Annuity Date. For some of
our contracts, you are able to choose to defer the Annuity Date beyond the
default Annuity Date described in your contract. However, the IRS may not then
consider your contract to be an annuity under the tax law.
14
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.
Once all gain has been withdrawn, payments will be treated as a nontaxable
return of purchase payments until all purchase payments have been returned.
After all purchase payments are returned, all subsequent amounts will be taxed
as ordinary income. 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 generally will be treated as a withdrawal. If you transfer
your contract for less than full consideration, such as by gift, you will also
trigger tax on any 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.
If you choose to receive payments under an interest payment option, or a
beneficiary chooses to receive a death benefit under an interest payment
option, that election will be treated, for tax purposes, as surrendering your
annuity and will immediately subject any gain in the contract to income tax.
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.
Tax Penalty for Early Withdrawal from a Nonqualified Annuity Contract
You may owe a 10% tax penalty on the taxable part of distributions received
from your Nonqualified annuity contract before you attain age 59 1/2. 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;
.. generally the amount paid or received is in the form of substantially equal
payments not less frequently than annually (please note that substantially
equal payments must continue until the later of reaching age 59 1/2 or 5
years and modification of payments during that time period will result in
retroactive application of the 10% tax penalty); or
.. the amount received is paid under an immediate annuity contract (in which
annuity payments begin within one year of purchase).
Other exceptions to this tax may apply. You should consult your tax advisor
for further details.
Special Rules in Relation to Tax-Free Exchanges Under Section 1035
Section 1035 of the Internal Revenue Code of 1986, as amended (Code), permits
certain tax-free exchanges of a life insurance, annuity or endowment contract
for an annuity. Partial surrenders may be treated in the same way as tax-free
1035 exchanges of entire contracts, therefore avoiding current taxation of any
gains in the contract as well as the 10% tax penalty on pre-age 59 1/2
withdrawals. The IRS has reserved the right to treat transactions it considers
abusive as ineligible for this favorable partial 1035 exchange treatment. We
do not know what transactions may be considered abusive. For example we do not
know how the IRS may view early withdrawals or annuitizations after a partial
exchange. In addition, it is unclear how the IRS will treat a partial exchange
from a life insurance, endowment, or annuity contract into an immediate
annuity. As of the date of this prospectus, we will accept a partial 1035
exchange from a non-qualified annuity into an immediate annuity as a
"tax-free" exchange for future tax reporting purposes, except to the extent
that we, as a reporting and withholding agent, believe that we would be
expected to deem the transaction to be abusive. However, some insurance
companies may not recognize these partial surrenders as tax-free exchanges and
may report them as taxable distributions to the extent of any gain distributed
as well as subjecting the taxable portion of the distribution to the 10% tax
penalty. We strongly urge you to discuss any transaction of this type with
your tax advisor before proceeding with the transaction.
If an annuity is purchased through a tax-free exchange of a life insurance,
annuity or endowment contract that was purchased prior to August 14, 1982,
then any purchase payments made to the original contract prior to August 14,
1982 will be treated as made to the new contract prior to that date.
Generally, such pre-August 14, 1982 withdrawals are treated as a recovery of
your investment in the contract first until purchase payments made before
August 14, 1982 are withdrawn. Moreover, any income allocable to purchase
payments made before August 14, 1982, is not subject to the 10% tax penalty.
Taxes Payable by Beneficiaries
The Death Benefit options are subject to income tax to the extent the
distribution exceeds the cost basis in the contract. The value of the Death
Benefit, as determined under federal law, is also included in the owner's
estate. Generally, the same tax rules described above would also apply to
amounts received by your beneficiary. Choosing any option other than a lump
sum Death
15
8: WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT? continued
Benefit may defer taxes. Certain minimum distribution requirements apply upon
your death, as discussed further below in the Annuity Qualification section.
Tax consequences to the beneficiary vary depending upon the Death Benefit
payment option selected. Generally, for payment of the Death Benefit
.. As a lump sum payment: the beneficiary is taxed on gain in the contract.
.. Within 5 years of death of owner: the beneficiary is taxed as amounts are
withdrawn (in this case gain is treated as being distributed first).
.. Under an annuity or annuity settlement option with distribution beginning
within one year of the date of death of the owner: the beneficiary is taxed
on each payment (part will be treated as gain and part as return of
purchase payments).
CONSIDERATIONS FOR CONTINGENT ANNUITANTS: We may allow the naming of a
contingent annuitant when a Nonqualified annuity contract is held by a pension
plan or a tax favored retirement plan. In such a situation, the annuity may no
longer qualify for tax deferral where the annuity contract continues after the
death of the Annuitant. In some of our contracts we allow for the naming of a
co-annuitant, which also is used to mean the successor annuitant (and not
another life used for measuring the duration of an annuity payment option).
Like in the case of a contingent annuitant, the annuity may no longer qualify
for tax deferral where the contract continues after the death of the Annuitant.
Reporting and Withholding on Distributions
Taxable amounts distributed from an annuity 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 three (3) exemptions unless
you designate a different withholding status. If no U.S. taxpayer
identification number is provided, we will automatically withhold using single
with zero exemptions as the default. 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
discussion below regarding withholding rules for a Qualified annuity.
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.
Entity Owners
Where a contract is held by a non-natural person (e.g. a corporation), other
than as an agent or nominee for a natural person (or in other limited
circumstances), the contract will not be taxed as an annuity and increases in
the value of the contract over its cost basis will be subject to tax annually.
Where a contract is issued to a trust, and such trust is characterized as a
grantor trust under the Internal Revenue Code, such contract shall not be
considered to be held by a non-natural person and will generally be subject to
the tax reporting and withholding requirements for a Nonqualified annuity.
Annuity Qualification
REQUIRED DISTRIBUTIONS UPON YOUR DEATH FOR NONQUALIFIED ANNUITY CONTRACTS.
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 the date of death, or as periodic
payments over a period not extending beyond the life or life expectancy of
such designated beneficiary (provided such payments begin within one year of
your death). 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 a periodic payment option based on life expectancy or a period
exceeding five years. Additionally, if the annuity 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. For Nonqualified annuity contracts
owned by a non-natural person, the required distribution rules apply upon the
death of the annuitant. This means that for a contract held by a non-natural
person (such as a trust) for which there is named a co-annuitant, then such
required distributions will be triggered by the death of the first
co-annuitants to die.
16
CHANGES IN YOUR ANNUITY. We reserve the right to make any changes we deem
necessary to assure that your annuity 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.
Qualified Annuity Contracts
In general, as used in this prospectus, a Qualified annuity is an annuity
contract with applicable endorsements for a tax-favored plan or a Nonqualified
annuity contract held by a tax-favored retirement plan.
The following is a general discussion of the tax considerations for Qualified
annuity contracts. This annuity may or may not be available for all types of
the tax-favored retirement plans discussed below. This discussion assumes that
you have satisfied the eligibility requirements for any tax-favored retirement
plan. Please consult your Financial Professional prior to purchase to confirm
if this contract is available for a particular type of tax-favored retirement
plan or whether we will accept the type of contribution you intend for this
contract.
A Qualified annuity may typically be purchased for use in connection with:
.. Individual retirement accounts and annuities (IRAs) which are subject to
Sections 408(a) and 408(b) of the Code;
.. Roth IRAs under Section 408A of the Code;
.. A corporate Pension or Profit-sharing plan (subject to 401(a) of the Code);
.. H.R. 10 plans (also known as Keogh Plans, subject to 401(a) of the Code);
.. Tax Sheltered Annuities (subject to 403(b) of the Code, also known as Tax
Deferred Annuities or TDAs);
.. Section 457 plans (subject to 457 of the Code).
A Nonqualified annuity may also be purchased by a 401(a) trust or custodial
IRA or Roth IRA account, which can hold other permissible assets. The terms
and administration of the trust or custodial account in accordance with the
laws and regulations for 401(a) plans, IRAs or Roth IRAs, as applicable, are
the responsibility of the applicable trustee or custodian.
You should be aware that tax favored plans such as IRAs generally provide
income tax deferral regardless of 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 benefits (such as income tax
deferral and income tax free transfers).
Types of Tax-Favored Plans
IRAs. If you buy an annuity for use as an IRA, we will provide you a copy of
the prospectus and contract. The "IRA Disclosure Statement" and "Roth IRA
Disclosure Statement" which accompany the prospectus contain 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 annuity by notifying us in
writing, and we will refund all of the purchase payments under the annuity
(or, if provided by applicable state law, the amount credited under the
annuity, if greater), less any applicable federal and state income tax
withholding.
CONTRIBUTIONS LIMITS/ROLLOVERS. Subject to the minimum purchase payment
requirements of an annuity, you may purchase an annuity for an IRA in
connection with a "rollover" of amounts from a qualified retirement plan, as a
transfer from another IRA, by making a single contribution consisting of your
IRA contributions and catch-up contributions, if applicable, attributable to
the prior year and the current year during the period from January 1 to
April 15, or as a current year contribution. In 2008 the contribution limit is
$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, allowing these individuals an additional $1,000 contribution each
year. The catch-up amount is not indexed for inflation.
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 meets the requirements
for distribution. Once you buy an annuity, you can make regular IRA
contributions under the annuity (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. In some circumstances, non-spouse
beneficiaries may directly roll over to an IRA amounts due from qualified
plans, 403(b) plans, and governmental 457(b) plans.
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;
17
8: WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT? continued
.. You cannot sell, assign or pledge the contract;
.. The annual contribution 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 required minimum distributions must begin cannot be later
than April 1st of the calendar year after the calendar year you turn age
70 1/2; and
.. Death and annuity payments must meet "required minimum distribution" rules
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 regarding a Nonqualified annuity. In addition to this
normal tax liability, you may also be liable for the following, depending on
your actions:
.. A 10% early withdrawal penalty described below;
.. Liability for "prohibited transactions" if you, for example, borrow against
the value of an IRA; or
.. Failure to take a required minimum distribution, also described below.
SEPS. SEPs are a variation on a standard IRA, and contracts issued to a SEP
must satisfy the same general requirements described under IRAs (above). There
are, however, some differences:
.. If you participate in a SEP, you generally do not include in income any
employer contributions made to the SEP on your behalf up to the lesser of
(a) $46,000 in 2008 ($45,000 in 2007) or (b) 25% of your taxable
compensation paid by the contributing employer (not including the
employer's SEP contribution as compensation for these purposes). However,
for these purposes, compensation in excess of certain limits established by
the IRS will not be considered. In 2008, this limit is $230,000 ($225,000
for 2007);
.. SEPs must satisfy certain participation and nondiscrimination requirements
not generally applicable to IRAs; and
.. SEPs that contain a salary reduction or "SARSEP" provision prior to 1997
may permit salary deferrals up to $15,500 in 2008 with the employer making
these contributions to the SEP. However, no new "salary reduction" or
"SARSEPs" can be established after 1996. Individuals participating in a
SARSEP who are age 50 or above by the end of the year will be permitted to
contribute an additional $5,000 in 2008. These amounts are indexed for
inflation. These annuities are not available for SARSEPs. You will also be
provided the same information, and have the same "free look" period, as you
would have if you purchased the contract for a standard IRA.
ROTH IRAS. The "Roth IRA Disclosure Statement" contains information about
eligibility, contribution limits, tax particulars and other Roth IRA
information. 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" 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 earnings will be taxed generally in the same
manner as distributions from a traditional IRA.
.. If eligible (including meeting income limitations and earnings
requirements), 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.
Subject to the minimum purchase payment requirements of an annuity, if you
meet certain income limitations you may purchase an annuity for a Roth IRA in
connection with a "rollover" of amounts of another traditional IRA, conduit
IRA, SEP, SIMPLE-IRA or Roth IRA by making a single contribution consisting of
your Roth IRA contributions and catch-up contributions, if applicable,
attributable to the prior year and the current year during the period from
January 1 to April 15 of the current year, or with a current contribution. The
Code permits persons who meet certain income limitations (generally, adjusted
gross income under $100,000) who are not married filing a separate return 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. Beginning
January 2008, an individual receiving an eligible rollover distribution from
an employer sponsored retirement plan under sections 401(a) or 403(b) of the
Code can directly roll over contributions to a Roth IRA, subject to the same
income limits. This conversion triggers current taxation (but is not subject
to a 10% early distribution penalty). Once an annuity has been purchased,
regular Roth IRA contributions will be accepted to the extent permitted by
law. In addition, an individual receiving an eligible rollover distribution
from a designated Roth account under an employer plan may roll over the
distribution to a Roth IRA even if the individual is not eligible to make
regular contributions to a Roth IRA. Until 2010, participants with an adjusted
gross income greater than $100,000 are not permitted to roll over funds from
an employer plan , including a Roth 401(k) distribution, to a Roth IRA.
18
TDAS. You may own a Tax Deferred Annuity (also known as a TDA, Tax Sheltered
Annuity (TSA), 403(b) plan or 403(b) annuity) generally if you are either an
employer or employee of a tax-exempt organization (as defined under Code
Section 501(c)(3)) or a public educational organization, and you may make
contributions to a TDA so long as your rights (or your employee's rights) to
the annuity are nonforfeitable. Contributions to a TDA, and any earnings, are
not taxable until distribution. You may also make contributions to a TDA under
a salary reduction agreement, generally up to a maximum of $15,500 in 2008.
Individuals participating in a TDA who are age 50 or above by the end of the
year will be permitted to contribute an additional $5,000 in 2008. This amount
is indexed for inflation. Further, you may roll over TDA amounts to another
TDA or an IRA. You may also roll over TDA amounts to a qualified retirement
plan, a SEP and a 457 government plan. A contract may generally only qualify
as a TDA if distributions of salary deferrals (other than "grandfathered"
amounts held as of December 31, 1988) may be made only on account of:
.. Your attainment of age 59 1/2;
.. Your severance of employment;
.. Your death;
.. Your total and permanent disability; or
.. Hardship (under limited circumstances, and only related to salary
deferrals, not including earnings attributable to these amounts).
In any event, you must begin receiving distributions from your TDA by
April 1st of the calendar year after the calendar year you turn age 70 1/2 or
retire, whichever is later. These distribution limits do not apply either to
transfers or exchanges of investments under the contract, or to any "direct
transfer" of your interest in the contract to another TDA or to a mutual fund
"custodial account" described under Code Section 403(b)(7). Employer
contributions to TDAs are subject to the same general contribution,
nondiscrimination, and minimum participation rules applicable to "qualified"
retirement plans.
Final regulations related to 403(b) contracts were issued in 2007. Under these
final regulations certain contract exchanges may be accepted only if the
employer and the issuer have entered into the required information sharing
agreements. Such agreements must be in place by January 1, 2009. We believe
that these regulations would permit current exchanges to take place as long as
such agreements are implemented by that required due date.
Required Minimum Distributions and Payment Options
If you hold the contract under an IRA (or other tax-favored plan), required
minimum distribution rules must be satisfied. This means that generally
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. For a TDA or a 401(a) plan for
which the participant is not a greater than 5% owner of the employer, this
required beginning date can generally be deferred to retirement, if later.
Roth IRAs are not subject to these rules during the Owner's lifetime. The
amount of the payment must at least equal the minimum required under the IRS
rules. Several choices are available for calculating the minimum amount. More
information on the mechanics of this calculation is available on request.
Please contact us at a reasonable time before the IRS deadline so that a
timely distribution is made. Please note that there is a 50% tax penalty on
the amount of any required minimum distribution not made in a timely manner.
Required minimum distributions are calculated based on the sum of the account
value and the actuarial value of any additional death benefits and benefits
from optional riders that you have purchased under the contract. As a result,
the required minimum distributions may be larger than if the calculation were
based on the account value only, which may in turn result in an earlier (but
not before the required beginning date) distribution of amounts under the
annuity and an increased amount of taxable income distributed to the annuity
owner, and a reduction of death benefits and the benefits of any optional
riders.
You can use the Minimum Distribution option to satisfy the required minimum
distribution rules for an annuity without either beginning annuity payments or
surrendering the annuity. We will distribute to you the required minimum
distribution amount, less any other partial withdrawals that you made during
the year. Such amount will be based on the value of the contract as of
December 31 of the prior year, but is determined without regard to other
contracts you may own.
Although the IRS rules determine the required amount to be distributed from
your IRA each year, certain payment alternatives are still available to you.
If you own more than one IRA, you can choose to satisfy your minimum
distribution requirement for each of your IRAs by withdrawing that amount from
any of your IRAs. If you inherit more than one Roth IRA from the same owner,
similar rules apply.
Required Distributions Upon Your Death for Qualified Annuity Contracts
Upon your death under an IRA, Roth IRA, 403(b) or other employer sponsored
plan, the designated beneficiary may generally elect to continue the contract
and receive required minimum distributions under the contract instead of
receiving the death benefit in a single payment. The available payment options
will depend on whether you die before the date required minimum distributions
under the Code were to begin, whether you have named a designated beneficiary
and whether that beneficiary is your surviving spouse.
.. If you die after a designated beneficiary has been named, the death benefit
must be distributed by December 31st of the year including the five year
anniversary of the date of death, or as periodic payments not extending
beyond the life or life expectancy of the designated beneficiary (as long
as payments begin by December 31st of the year following the year of
death). However, if
19
8: WHAT ARE THE TAX CONSIDERATIONS ASSOCIATED WITH THE STRATEGIC PARTNERS
HORIZON ANNUITY CONTRACT? continued
your surviving spouse is the beneficiary, the death benefit can be paid out
over the life or life expectancy of your spouse with such payments
beginning no later than December 31st of the year following the year of
death or December 31st of the year in which you would have reached age
70 1/2, which ever is later. Additionally, if 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.
.. If you die before a designated beneficiary is named and before the date
required minimum distributions must begin under the Code, the death benefit
must be paid out by December 31st of the year including the five year
anniversary of the date of death. For contracts where multiple
beneficiaries have been named and at least one of the beneficiaries does
not qualify as a designated beneficiary and the account has not been
divided into separate accounts by December 31st of the year following the
year of death, such contract is deemed to have no designated beneficiary.
.. If you die before a designated beneficiary is named and after the date
required minimum distributions must begin under the Code, the death benefit
must be paid out at least as rapidly as under the method then in effect.
For contracts where multiple beneficiaries have been named and at least one
of the beneficiaries does not qualify as a designated beneficiary and the
account has not been divided into separate accounts by December 31st of the
year following the year of death, such contract is deemed to have no
designated beneficiary.
A beneficiary has the flexibility to take out more each year than mandated
under the required minimum distribution rules.
Until withdrawn, amounts in a Qualified annuity contract continue to be tax
deferred. Amounts withdrawn each year, including amounts that are required to
be withdrawn under the required minimum distribution rules, are subject to
tax. You may wish to consult a professional tax advisor for tax advice as to
your particular situation.
For a Roth IRA, if death occurs before the entire interest is distributed, the
death benefit must be distributed under the same rules applied to IRAs where
death occurs before the date required minimum distributions must begin under
the Code.
Tax Penalty for Early Withdrawals from Qualified Annuity Contracts
You may owe a 10% tax penalty on the taxable part of distributions received
from an IRA, SEP, Roth IRA, TDA or qualified retirement plan before you attain
age 59 1/2. 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; or
.. generally the amount paid or received is in the form of substantially equal
payments not less frequently than annually. (Please note that substantially
equal payments must continue until the later of reaching age 59 1/2 or 5
years. Modification of payments during that time period will result in
retroactive application of the 10% tax penalty.)
Other exceptions to this tax may apply. You should consult your tax advisor
for further details.
Withholding
We will withhold federal income tax at the rate of 20% for any eligible
rollover distribution paid by us to or for a plan participant, unless such
distribution is "directly" rolled over into another qualified plan, IRA
(including the IRA variations described above), SEP, 457 government plan or
TDA. An eligible rollover distribution is defined under the tax law as a
distribution from an employer plan under 401(a), a TDA or a 457 governmental
plan, excluding any distribution that is part of a series of substantially
equal payments (at least annually) made over the life expectancy of the
employee or the joint life expectancies of the employee and his designated
beneficiary, any distribution made for a specified period of 10 years or more,
any distribution that is a required minimum distribution and any hardship
distribution. Regulations also specify certain other items which are not
considered eligible rollover distributions. 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. If no U.S. taxpayer identification number is provided, we will
automatically withhold using single with zero exemptions as the default; 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. There may be additional state income tax
withholding requirements.
20
ERISA Requirements
ERISA (the "Employee Retirement Income Security Act of 1974") and the Code
prevent 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 in the applicable sections of
this Prospectus. Information about sales representatives and commissions may
be found in the sections of this Prospectus addressing distribution of the
annuities.
Other relevant information required by the exemptions is contained in the
contract and accompanying documentation.
Please consult with your tax advisor if you have any questions about ERISA and
these disclosure requirements.
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 AND MONEY PURCHASE PENSION PLANS. 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 AND ERISA 403(B)
ANNUITIES). 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 usually 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
IRAs and Roth IRAs, see the IRA Disclosure Statement or Roth IRA Disclosure
Statement, as applicable.
Generation-Skipping Transfers
If you transfer your contract to a person two or more generations younger than
you (such as a grandchild or grandniece) or to a person that is more than
37 1/2 years younger than you, there may be generation-skipping transfer tax
consequences.
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 on September 17, 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 October 13, 1875. Prudential is an
indirect wholly-owned subsidiary
21
9: OTHER INFORMATION continued
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, 2007, 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 contract owners, 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. The SEC
file number for Pruco Life of New Jersey is 33-18053. 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 100 F Street, N.E., Fifth Street, Washington, D.C.
20549-0102. You can obtain information on the operation of the Public
Reference Room by calling (202) 551-8090. 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.
SALE AND DISTRIBUTION OF THE CONTRACT
Prudential Annuities Distributors, Inc. (PAD), a wholly-owned subsidiary of
Prudential Financial, Inc., is the distributor and principal underwriter of
the securities offered through this prospectus. PAD acts as the distributor of
a number of annuity contracts and life insurance products we offer.
PAD's principal business address is 100 Mulberry Street, Newark, New Jersey
07102-4077. PAD is registered as a broker/dealer under the Securities Exchange
Act of 1934 (Exchange Act) and is a member of the Financial Industry
Regulatory Authority (FINRA).
The contract is offered on a continuous basis. PAD enters into distribution
agreements with broker/dealers who are registered under the Exchange Act and
with entities that may offer the contract but are exempt from registration
(firms). Applications for the contract are solicited by registered
representatives of those firms. Such representatives will also be our
appointed insurance agents under state insurance law. In addition, PAD may
offer the contract directly to potential purchasers.
Commissions are paid to firms on sales of the contract according to one or
more schedules. The individual representative will receive a portion of the
compensation, depending on the practice of his or her firm. Commissions are
generally based on a percentage of purchase payments made, up to a maximum of
5%. Alternative compensation schedules are available that provide a lower
initial commission plus ongoing annual compensation based on all or a portion
of contract value. We may also provide compensation to the distributing firm
for providing ongoing service to you in relation to the contract. Commissions
and other compensation paid in relation to the contract do not result in any
additional charge to you or to the separate account.
In addition, in an effort to promote the sale of our products (which may
include the placement of Pruco Life of New Jersey and/or the contract on a
preferred or recommended company or product list and/or access to the firm's
registered representatives), we or PAD may enter into compensation
arrangements with certain broker/dealer firms with respect to certain or all
registered representatives of such firms under which such firms may receive
separate compensation or reimbursement for, among other things, training of
sales personnel and/or marketing and/or administrative services and/or other
services they provide to us or our affiliates. These services may include, but
are not limited to: educating customers of the firm on the contract's
features; conducting due diligence and analysis; providing office access,
operations and systems support; holding seminars intended to educate
registered representatives and make them more knowledgeable about the
contract; providing a dedicated marketing coordinator; providing priority
sales desk support; and providing expedited marketing compliance approval to
PAD. A list of firms that PAD paid pursuant to such arrangements is available
upon request.
To the extent permitted by FINRA rules and other applicable laws and
regulations, PAD may pay or allow other promotional incentives or payments in
the form of cash or non-cash compensation. These arrangements may not be
offered to all firms and the terms of such arrangements may differ between
firms.
You should note that firms and individual registered representatives and
branch managers within some firms participating in one of these compensation
arrangements might receive greater compensation for selling the contract than
for selling a different contract that is not eligible for these compensation
arrangements. While compensation is generally taken into account as an expense
in considering the charges applicable to a contract product, any such
compensation will be paid by us or PAD and will not result in
22
any additional charge to you. Your registered representative can provide you
with more information about the compensation arrangements that apply upon the
sale of the contract.
LITIGATION
Pruco Life of New Jersey is subject to legal and regulatory actions in the
ordinary course of its businesses. Pending legal and regulatory actions
include proceedings specific to Pruco Life of New Jersey and proceedings
generally applicable to business practices in the industries in which Pruco
Life of New Jersey operates. Pruco Life of New Jersey is subject to class
action lawsuits and individual lawsuits involving a variety of issues,
including sales practices, underwriting practices, claims payment and
procedures, additional premium charges for premiums paid on a periodic basis,
denial or delay of benefits, return of premiums or excessive premium charges
and breaching fiduciary duties to customers. In its annuity operations, Pruco
Life of New Jersey is subject to litigation involving class action lawsuits
and other litigation alleging, among other things, that Pruco Life of New
Jersey made improper or inadequate disclosures in connection with the sale of
annuity products or charged excessive or impermissible fees on these products,
recommended unsuitable products to customers, mishandled customer accounts or
breached fiduciary duties to customers. Pruco Life of New Jersey is also
subject to litigation arising out of its general business activities, such as
its investments and third-party contracts. Regulatory authorities from time to
time make inquiries and conduct investigations and examinations relating
particularly to Pruco Life of New Jersey and its businesses and products. In
addition, Pruco Life of New Jersey, along with other participants in the
businesses in which Pruco Life of New Jersey engage, may be subject from time
to time to investigations, examinations and inquiries, in some cases
industry-wide, concerning issues or matters upon which such regulators have
determined to focus. In some of its pending legal and regulatory actions,
parties are seeking large and/or indeterminate amounts, including punitive or
exemplary damages. The outcome of a litigation or regulatory matter, and the
amount or range of potential loss at any particular time, is often inherently
uncertain.
Pruco Life of New Jersey's litigation and regulatory matters are subject to
many uncertainties, and given their complexity and scope, the outcome cannot
be predicted. It is possible that the results of operations or cash flow in a
particular quarterly or annual period could be materially affected by an
ultimate unfavorable resolution of pending litigation and regulatory matters
depending, in part, upon the results of operations or cash flow for such
period. In light of the unpredictability of Pruco Life of New Jersey's
litigation and regulatory matters, it is also possible that in certain cases
an ultimate unfavorable resolution of one or more pending litigation or
regulatory matters could have a material adverse effect on Pruco Life of New
Jersey's financial position. Management believes, however, that based on
information currently known to it, the ultimate outcome of all pending
litigation and regulatory matters, after consideration of applicable reserves
and rights to indemnification, is not likely to have a material adverse effect
on Pruco Life of New Jersey's financial position.
ASSIGNMENT
In general, you can assign the contract at any time during your lifetime. 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 you assign the contract, that assignment will result in the termination of
any automated withdrawal program that had been in effect. If the new owner
wants to re-institute an automated withdrawal program, then he/she needs to
submit the forms that we require, in good order.
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.
HOUSEHOLDING
To reduce costs, we now send only a single copy of prospectuses to each
consenting household, in lieu of sending a copy to each contract owner 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, by calling (877) 778-5008.
INDEMNIFICATION
Pruco Life of New Jersey, in conjunction with certain affiliates, maintains
insurance on behalf of any person who is or was a trustee, director, officer,
employee, or agent of Pruco Life of New Jersey, or who is or was serving at
the request of Pruco Life of New Jersey as a trustee, director, officer,
employee or agent of such other affiliated trust or corporation, against any
liability asserted against and incurred by him or her arising out of his or
her position with such trust or corporation.
New Jersey, being the state of organization of Pruco Life of New Jersey,
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 et. seq. of the New
Jersey Statutes Annotated. The text of Pruco Life of New Jersey's By-law,
Article V, which relates to indemnification of officers and directors, is
incorporated by reference to Exhibit 1.A.(6)(c) to Form S-6, Registration
No. 333-85117, filed August 13, 1999 on behalf of Pruco Life of New Jersey
Variable Appreciable Account.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of Pruco
Life of New Jersey pursuant to the foregoing provisions or otherwise, Pruco
Life of New Jersey has
23
9: OTHER INFORMATION continued
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 Pruco Life of New Jersey
of expenses incurred or paid by a director, officer or controlling person of
Pruco Life of New Jersey 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, Pruco Life of New Jersey
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.
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 Horizon 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:
MVA = [ ( 1 + I )/N/12/ ] -1
---------
1 + J + .0025
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 or
annuitization or settlement for a
guarantee period of equal length to
the number of whole years remaining
in the Contract's current guarantee
period plus one year.
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.
The MVA 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 additional days remaining in
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 these hypothetical examples.
Positive market value adjustment
.. Suppose a contract owner made an invested purchase payment of $10,000 on
July 1, 2005 and received a guaranteed interest rate of 6% for 5 years. A
request to surrender the contract is made on May 1, 2007. At the time, the
Contract Value has accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
.. On May 1, 2007 the interest rate declared by Pruco Life of New Jersey 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) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
24
3) Determine the Market Value Adjustment factor.
N = 38
I = 6% (0.06)
J = [(61/365) X 0.05] + [((365 - 61)/365) X 0.04] = 0.0417
The MVA factor calculation would be: [(1.06)/(1.0417 + .0025)](38/12) - 1 =
0.04871
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X 0.04871 = $512.78
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 + $ 512.78 = $11,039.89
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$11,039.89 + $600.00 = $11,639.89
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, 2005 and received a guaranteed interest rate of 6% for 5 years. A
request to surrender the contract is made on May 1, 2007. At the time, the
Contract Value has accumulated to $11,127.11. The number of whole years
remaining in the guarantee period is 3.
.. On May 1, 2007 the interest rate declared by Pruco Life of New Jersey 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) Calculate the Charge Free Amount. The Charge Free Amount is the interest
credited in the contract in the previous contract year. This amount is
$600.00. It is not subject to a Market Value Adjustment.
2) Subtract the Charge Free Amount from the Contract Value. The result is the
amount subject to a Market Value Adjustment (MVA).
$11,127.11 - $600.00 = $10,527.11
3) Determine the Market Value Adjustment Factor.
N = 38
I = 6% (0.06)
J = [(61/365)X 0.08] + [((365 - 61)/365) X 0.07] = 0.0717
The MVA Factor calculation would be: [(1.06)/(1.0717 + .0025)](38/12) - 1 =
-0.04126
4) Multiply the amount subject to a Market Value Adjustment by the factor
calculated in Step 3.
$10,527.11 X -0.04126 = - $434.35
5) Add together the Market Value Adjustment and the amount subject to the MVA.
$10,527.11 - $434.35 = $10,092.76
6) Add back the Charge Free Amount to get the total Contract Surrender Value.
$10,092.76 + $600.00 = $10,692.76
25
----------------
[LOGO] Prudential PRSRT STD
The Prudential Insurance Company of America U.S. POSTAGE
751 Broad Street PAID
Newark, NJ 07102-3777 LANCASTER, PA
PERMIT NO. 1793
----------------
ORD01146NY
PRUCO LIFE INSURANCE COMPANY
OF NEW JERSEY
Supplement, dated February 11, 2009
To
Prospectus, dated May 1, 2001
This supplement should be read and retained with your current prospectus. If you
would like another copy of that prospectus, please call us at 800-752-6342.
Pruco Life Insurance Company of New Jersey ("PLNJ") incorporates by reference
into the prospectus its latest annual report on Form 10-K filed pursuant to
Section 13(a) or Section 15(d) of the Exchange Act since the end of the fiscal
year covered by its latest annual report. In addition, all documents
subsequently filed by PLNJ pursuant to Sections 13(a), 13 (c), 14 or 15(d) of
the Exchange Act also are incorporated into the prospectus by reference. PLNJ
will provide to each person, including any beneficial owner, to whom a
prospectus is delivered, a copy of any or all of the information that has been
incorporated by reference into the prospectus but not delivered with the
prospectus. Such information will be provided upon written or oral request at no
cost to the requester by writing to Prudential Annuities Life Assurance
Corporation, One Corporate Drive, Shelton, CT 06484 or by calling 800-752-6342.
PLNJ files periodic reports as required under the Securities Exchange Act of
1934. The public may read and copy any materials that PLNJ files with the SEC at
the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 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 (see
http://www.sec.gov). Our internet address is http://www.prudentialannuities.com.
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Registration Fees
In this registration statement, Pruco Life Insurance Company of New Jersey is
registering $540,000,000 of securities and paying a filing fee of $21,222
therefor.
Federal Taxes
Pruco Life Insurance Company of New Jersey estimated the federal tax effect
associated with the deferred acquisition costs attributable to receipt of $1
million of purchase payments over a two year period to be approximately $74,000.
State Taxes
Pruco Life Insurance Company of New Jersey estimated that approximately $-0- in
premium taxes would be owed upon receipt of purchase payments under the
contracts.
Printing Costs
Pruco Life Insurance Company of New Jersey States that the cost of printing
will be reflected in the printing of the annually updated prospectuses.
Legal Costs
This registration statement was prepared by Prudential attorneys whose time is
allocated to Pruco Life Insurance Company of New Jersey.
Accounting Costs
PricewaterhouseCoopers LLP, the independent registered public accounting firm
that audits Pruco Life Insurance Company of New Jersey's financial statements,
will charge $2500.00 in connection with the filing of this registration
statement with the Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant, in conjunction with certain of its affiliates, maintains
insurance on behalf of any person who is or was a trustee, director, officer,
employee, or agent of the Registrant, or who is or was serving at the request
of the Registrant as a trustee, director, officer, employee or agent of such
other affiliated trust or corporation, against any liability asserted against
and incurred by him or her arising out of his or her position with such trust
or corporation.
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 1A(6)(c) to Form S-6 filed August 13,
1999 on behalf of the Pruco Life of New Jersey Variable Appreciable Account.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities 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 Securities 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 Securities Act and will be governed by the final adjudication
of such issue.
ITEM 16. EXHIBITS
(a) Exhibits
(1) Form of Distribution Agreement between Prudential Annuities Distributors
Inc., ("PAD") (Principal Underwriter) and Pruco Life Insurance Company of
New Jersey (Depositor). (Note 4)
(4) Form of Contract (Note 2)
(4) (a) Form of Application [ORD 99720] (Note 2)
(4) (b) Form of Application [ORD 99720 New York Third Party] (Note 2)
(5) Opinion of Counsel as to legality of the securities being registered. (Note
1)
(23)Consent of PricewaterhouseCoopers LLP, Independent accountants (Note 1)
(24)(a) Powers of Attorney: James J. Avery, Jr., Helen M. Galt, Bernard J.
Jacob, Tucker I. Marr, Scott D. Kaplan, Scott G. Sleyster (Note 3)
(b)Power of Attorney: Stephen Pelletier (Note 1)
- --------
(Note 1) Filed herewith.
(Note 2) Incorporated by reference to Post-Effective Amendment No. 4 to Form
S-3 to this Registration Statement, filed April 6, 2006, on behalf of
Pruco Life Insurance Company of New Jersey.
(Note 3) Incorporated by reference to Post-Effective Amendment No. 10 to Form
N-4, Registration No. 333-131035, filed April 15, 2008 on behalf of
Pruco Life Insurance Company of New Jersey.
(Note 4) Incorporated by reference to Post-Effective Amendment No. 9 to Form
N-4, Registration No. 333-131035, filed December 18, 2007 on behalf of
Pruco Life Insurance Company of New Jersey.
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; and
(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.
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 12th day of February 2009.
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY (Registrant)
Attest: /s/ Thomas C. Castano /s/ Scott D. Kaplan
------------------------------------ -----------------------------------
Thomas C. Castano Scott D. Kaplan
Chief Legal Officer and Secretary President and Chief Executive
Officer
Signature and Title
*
- --------------------------
JAMES J. AVERY JR.
VICE CHAIRMAN AND DIRECTOR Date: February 12, 2009
* **By: /s/ Thomas C. Castano
- ------------------------------------ -----------------------------------
SCOTT D. KAPLAN THOMAS C. CASTANO
DIRECTOR VICE PRESIDENT AND CORPORATE
COUNSEL
*
- --------------------------
TUCKER I. MARR
CHIEF ACCOUNTING OFFICER
*
- --------------------------
BERNARD J. JACOB
DIRECTOR
*
- --------------------------
SCOTT G. SLEYSTER
DIRECTOR
*
- --------------------------
HELEN M. GALT
DIRECTOR
*
- --------------------------
STEPHEN PELLETIER
DIRECTOR
EXHIBIT INDEX
Exhibit No.
- -----------
5 Opinion of Counsel
23 Written Consent of PricewaterhouseCoopers LLP, Independent
Registered Public Accounting Firm
24 Power of attorney for Director, Stephen Pelletier.