April 7, 2009
Ms. Sally Samuel, Esq.
Office of Insurance Products
Division of Investment Management
United States Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: Post-effective amendments to certain Form N-4 registration statements
Dear Ms. Samuel:
As you know, in February we filed post-effective amendments to certain
registration statements of Pruco Life Insurance Company, Pruco Life Insurance
Company of New Jersey, and Prudential Annuities Life Assurance Corporation
("PALAC") under Rule 485(a) to reflect, among other things, increased fees for
certain optional benefits. You provided comments to us, and in this letter, we
respond to your comments. Along with this letter, we enclose a copy of the
prospectus portion of the proposed 485(b) filing for the PALAC "Core"
prospectus, blacklined to show the changes made in response to your comments
(as well as other changes). A summary of your comments, and our proposed
responses, follows:
1. Cover page. You asked that we further describe how the registrant separate
account relates to the depositor and serves as the investment vehicle for the
variable annuity investors.
Response: with respect to the PALAC "core" prospectus, we have added an
explanatory sentence. Specifically, we have added the following sentence:
"Prudential Annuities Life Assurance Corporation Variable Account B is a
separate account of Prudential Annuities, and is the investment vehicle in
which your Purchase Payments are held." For the other prospectuses, we will add
a comparable sentence.
2. Glossary. You asked that we verify that each defined term set forth in the
Glossary is, in fact, used in the body of the prospectus. You also asked us to
add a new definition for "Book Value Fixed Allocation."
Response: Each defined term in the Glossary is, in fact, used in the body of
the prospectus. With regard to the Book Value Fixed Allocation, although we
have not made substantive changes to that option, we have decided to change the
name of the option to "DCA Fixed Rate Option." Thus, we have added the
following definition:
DCA Fixed Rate Option: An investment option that offers a fixed rate of
interest for a specified period during the accumulation period. The DCA Fixed
Rate Option is used only with our 6 or 12 Month Dollar Cost Averaging Program
("6 or 12 Month DCA Program"), under which the Purchase Payments that you have
allocated to that DCA Fixed Rate Option are
transferred to the designated Sub-accounts over a 6 month or 12 month period.
Withdrawals or transfers from the DCA Fixed Rate Option are not subject to any
Market Value Adjustment.
3. Fee Table. For the EBP death benefit, HAV death benefit, and HDV death
benefit, please set forth a maximum charge for each.
Response: Neither the "base" Annuity contract, nor the rider for each of these
death benefits, establishes a maximum charge. This reflects the fact that we
designed the benefits such that we do not reserve the right to increase the
charges under any circumstances for existing Annuities. Because we lack
authority to increase the charge for any of these death benefits under existing
Annuities, and no maximum charge was specified in our State filings, we have
not amended the fee table in that respect.
4. Expense Examples. Please verify that, although the credit is not included in
the expense example figures, the mortality and expense risk charge for the
bonus product will be reflected in the calculations. You also asked that the
loyalty credit not be included in the expense examples calculations.
Response: Although the credit is not included in the expense example figures,
the mortality & expense risk charge and administration charge for the bonus
product will be reflected in the calculations. In addition, we confirm that the
loyalty credit will not be reflected in the expense examples.
5. What Happens When My Guarantee Period Matures? You pointed to the sentence
that states that if you do not specify how the Fixed Allocation proceeds are to
be allocated upon maturity, we will transfer the Account Value to the AST Money
Market Sub-account. Similar sentences appear on subsequent pages. You asked
whether a confirmation will be sent to the Annuity Owner with respect to such a
transfer.
Response: We confirm that a Rule 10b-10 confirmation will be issued with
respect to transfers to the AST Money Market Sub-account upon the maturity of a
Fixed Allocation.
6. Under "When Do You Process And Value Transactions?" Merrill Lynch is
mentioned as being a pricing agent for Rule 22c-1 purposes. You asked whether
Merrill Lynch is still the correct name, given that it has been acquired by
Bank of America.
Response: we confirm that the Merrill Lynch name has been retained.
7. Tax Considerations, Types of Tax-Favored Plans. Please add a "plain English"
description of an inherited IRA, which appears in the following sentence
"[u]nder the Worker, Retiree and Employer Recovery Act of 2008, employer
retirement plans are required to permit non-spouse beneficiaries to roll over
funds to an inherited IRA for plan years beginning after December 31, 2009."
Response: We have added the following explanatory sentences, immediately after
the above-quoted sentence: "(Like other property, an IRA may be transferred
upon death to a survivor, by operation of a will or otherwise (i.e., an IRA may
be inherited). An inherited IRA must be directly rolled over from the employer
plan or IRA and must be titled in the name of the deceased (i.e., John Doe
deceased, for the benefit of Jane Doe)."
8. You asked that we indicate in the footnotes to the Optional Benefits section
of the fee table which optional benefits are no longer offered.
Response: We have done so.
We appreciate your attention to these filings.
Sincerely,
/s/ C. Christopher Sprague
C. Christopher Sprague
PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION
A Prudential Financial Company
One Corporate Drive, Shelton, Connecticut 06484
ADVANCED SERIES ADVISOR/SM/ PLAN III ("ASAP III")/SM/
ADVANCED SERIES APEX II/SM/ ("APEX II")/SM/
ADVANCED SERIES XTRA CREDIT/SM/ SIX ("XT6")/SM/
ADVANCED SERIES LIFEVEST II/SM/ ("ASL II")/SM/
Flexible Premium Deferred Annuities
PROSPECTUS: MAY 1, 2009
This prospectus describes four different flexible premium deferred annuities
(the "Annuities" or the "Annuity") offered by Prudential Annuities Life
Assurance Corporation ("Prudential Annuities/SM/", "we", "our", or "us"). Each
Annuity may be offered as an individual annuity contract or as an interest in
a group annuity. 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. This Prospectus describes the important features of
the Annuities and what you should consider before purchasing one of the
Annuities. The Prospectus also describes differences among the Annuities which
include differences in the fees and charges you pay and variations in some
product features such as the availability of certain bonus amounts and basic
death benefit protection. These differences among the products are discussed
more fully in the Prospectus and summarized in Appendix F entitled "Selecting
the Variable Annuity That's Right for You". There may also be differences in
the compensation paid to your Financial Professional for each Annuity.
Differences in compensation among different annuity products could influence a
Financial Professional's decision as to which annuity to recommend to you. In
addition, selling broker-dealer firms through which each Annuity is sold may
decline to make available to their customers certain of the optional features
and investment options offered generally under the Annuity. Alternatively,
such firms may restrict the optional benefits that they do make available to
their customers (e.g., by imposing a lower maximum issue age for certain
optional benefits than what is prescribed generally under the Annuity).
Selling broker-dealer firms may not offer all the Annuities described in this
prospectus and/or may impose restrictions on the availability of the Annuity
based on certain criteria. Please speak to your Financial Professional for
further details. Each Annuity or certain of its investment options and/or
features may not be available in all states. For some of the variations
specific to Annuities approved for sale by the New York State Insurance
Department, see Appendix H. Certain terms are capitalized in this Prospectus.
Those terms are either defined in the Glossary of Terms or in the context of
the particular section. Because the XT6 Annuity grants credits with respect to
your Purchase Payments, the expenses of the XT6 Annuity may be higher than
expenses for an Annuity without a credit. In addition, the amount of the
credits that you receive under the XT6 Annuity may be more than offset by the
additional fees and charges associated with the credit.
THE SUB-ACCOUNTS
Each Sub-account of Prudential Annuities Life Assurance Corporation Variable
Account B invests in an underlying mutual fund portfolio. Prudential Annuities
Life Assurance Corporation Variable Account B is a separate account of
Prudential Annuities, and is the investment vehicle in which your Purchase
Payments are held. Currently, portfolios of the following underlying mutual
funds are being offered: INVESCO AIM Advisors, Inc., Advanced Series Trust,
Evergreen Variable Annuity Trust, First Defined Portfolio Fund, LLC,
Nationwide Variable Insurance Trust, ProFunds VP, The Prudential Series Fund,
Franklin Templeton Variable Insurance Products Trust and Wells Fargo Variable
Trust. See the following page for the complete list of Sub-accounts.
PLEASE READ THIS PROSPECTUS
Please read this Prospectus and the current prospectus for the underlying
mutual funds. Keep them for future reference. If you are purchasing one of the
Annuities as a replacement for an existing variable annuity or variable life
coverage or a fixed insurance policy, you should consider any surrender or
penalty charges you may incur when replacing your existing coverage and that
this Annuity may be subject to a contingent deferred sales charge if you elect
to surrender the Annuity or take a partial withdrawal. You should consider
your need to access the Annuity's Account Value and whether the Annuity's
liquidity features will satisfy that need.
AVAILABLE INFORMATION
We have also filed a Statement of Additional Information that is available
from us, without charge, upon your request. The contents of the Statement of
Additional Information are described below - see Table of Contents. The
Statement of Additional Information is incorporated by reference into this
prospectus. This Prospectus is part of the registration statement we filed
with the SEC regarding this offering. Additional information on us and this
offering is available in the registration statement and the exhibits thereto.
You may review and obtain copies of these materials at no cost to you by
contacting us. These documents, as well as documents incorporated by
reference, may also be obtained through the SEC's Internet Website
(http://www.sec.gov) for this registration statement as well as for other
registrants that file electronically with the SEC.
These annuities are NOT deposits or obligations of, or issued, guaranteed or
endorsed by, any bank, are NOT insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board or
any other agency. An investment in an annuity involves investment risks,
including possible loss of value, even with respect to amounts allocated to
the AST Money Market Sub-account.
--------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
ADVANCED SERIES ADVISOR PLAN III/SM/, APEX II(R), XTRA CREDIT(R) AND
LIFEVEST(R)II ARE SERVICE MARKS OR REGISTERED TRADEMARKS OF THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA AND ARE USED UNDER LICENSE BY ITS AFFILIATES.
--------------------------------------------------------------------------------
FOR FURTHER INFORMATION CALL: 1-800-752-6342
Prospectus Dated: May 1, Statement of Additional
2009 Information Dated:
May 1, 2009
COREPROS ASAP3SAI, APEX2SAI,
XT6SAI, ASL2SAI
PLEASE SEE OUR PRIVACY POLICY AND OUR IRA, ROTH IRA AND FINANCIAL DISCLOSURE
STATEMENTS ATTACHED TO THE BACK COVER OF THIS PROSPECTUS.
INVESTMENT OPTIONS
(Certain investment options may not be available with your Annuity)
Advanced Series Trust
AST Academic Strategies Asset Allocation
AST Advanced Strategies
AST Aggressive Asset Allocation
AST AllianceBernstein Core Value
AST AllianceBernstein Growth & Income
AST American Century Income & Growth
AST Balanced Asset Allocation
AST Bond Portfolio 2015
AST Bond Portfolio 2016
AST Bond Portfolio 2018
AST Bond Portfolio 2019
AST Bond Portfolio 2020
AST Capital Growth Asset Allocation
AST CLS Growth Asset Allocation
AST CLS Moderate Asset Allocation
AST Cohen & Steers Realty
AST DeAM Large-Cap Value
AST Federated Aggressive Growth
AST First Trust Balanced Target
AST First Trust Capital Appreciation Target
AST Focus Four Plus
AST Global Real Estate
AST Goldman Sachs Concentrated Growth
AST Goldman Sachs Mid-Cap Growth
AST Goldman Sachs Small-Cap Value
AST High Yield
AST Horizon Growth Asset Allocation
AST Horizon Moderate Asset Allocation
AST International Growth
AST International Value
AST Investment Grade Bond
AST JPMorgan International Equity
AST Large-Cap Value
AST Lord Abbett Bond Debenture
AST Marsico Capital Growth
AST MFS Global Equity
AST MFS Growth
AST Mid-Cap Value
AST Money Market
AST Neuberger Berman Mid-Cap Growth
AST Neuberger Berman/LSV Mid-Cap Value
AST Neuberger Berman Small-Cap Growth
AST Niemann Capital Growth Asset Allocation
AST Parametric Emerging Markets Equity
AST PIMCO Limited Maturity Bond
AST PIMCO Total Return Bond
AST Preservation Asset Allocation
AST QMA US Equity Alpha
AST Schroders Multi-Asset World Strategies
AST Small-Cap Growth
AST Small-Cap Value
AST T. Rowe Price Asset Allocation
AST T. Rowe Price Global Bond
AST T. Rowe Price Large-Cap Growth
AST T. Rowe Price Natural Resources
AST UBS Dynamic Alpha Strategy
AST Western Asset Core Plus Bond
INVESCO AIM Advisors, Inc
AIM V.I. Dynamics Fund -- Series I shares
AIM V.I. Financial Services Fund -- Series I shares
AIM V.I. Global Health Care Fund -- Series I shares
AIM V.I. Technology Fund -- Series I shares
Evergreen Variable Annuity Trust
Growth
International Equity
Omega
First Defined Portfolio Fund, LLC
First Trust(R) Target Focus Four
Global Dividend Target 15
NASDAQ(R) Target 15
S&P(R) Target 24
Target Managed VIP
The Dow(R) DART 10
The Dow(R) Target Dividend
Value Line(R) Target 25
Franklin Templeton Variable Insurance Products Trust
Franklin Templeton VIP Founding Funds Allocation Fund
Nationwide Variable Insurance Trust
Gartmore NVIT Developing Markets Fund
ProFund VP
Access VP High Yield
Asia 30
Banks
Basic Materials
Bear
Biotechnology
Bull
Consumer Goods
Consumer Services
Europe 30
Financials
Health Care
Industrials
Internet
Japan
Large-Cap Growth
Large-Cap Value
Mid-Cap Growth
Mid-Cap Value
Oil & Gas
NASDAQ-100
Pharmaceuticals
Precious Metals
Real Estate
Rising Rates Opportunity
Semiconductor
Short Mid-Cap
Short NASDAQ-100
Short Small-Cap
Small-Cap Growth
Small-Cap Value
Technology
Telecommunications
U.S. Government Plus
UltraBull
UltraMid-Cap
UltraNASDAQ-100
UltraSmall-Cap
Utilities
The Prudential Series Fund
*SP International Growth
Wells Fargo Variable Trust
Wells Fargo Advantage VT Equity Income
* no longer offered.
CONTENTS
GLOSSARY OF TERMS..................................................................... 1
SUMMARY OF CONTRACT FEES AND CHARGES.................................................. 4
EXPENSE EXAMPLES...................................................................... 17
SUMMARY............................................................................... 19
INVESTMENT OPTIONS.................................................................... 24
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?................... 24
WHAT ARE THE FIXED ALLOCATIONS?...................................................... 46
FEES AND CHARGES...................................................................... 48
WHAT ARE THE CONTRACT FEES AND CHARGES?.............................................. 48
WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?......................................... 50
WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYMENT OPTION?............................ 50
EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES............................................ 50
PURCHASING YOUR ANNUITY............................................................... 51
WHAT ARE OUR REQUIREMENTS FOR PURCHASING ONE OF THE ANNUITIES?....................... 51
MANAGING YOUR ANNUITY................................................................. 53
MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?...................... 53
MAY I RETURN MY ANNUITY IF I CHANGE MY MIND?......................................... 53
MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?............................................. 54
MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?......................... 54
MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?..................... 54
MANAGING YOUR ACCOUNT VALUE........................................................... 55
HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?......................................... 55
HOW DO I RECEIVE A LOYALTY CREDIT UNDER THE ASAP III AND APEX II ANNUITIES?.......... 55
HOW ARE LOYALTY CREDITS APPLIED TO MY ACCOUNT VALUE UNDER THE ASAP III AND APEX II
ANNUITIES?......................................................................... 55
HOW DO I RECEIVE CREDITS UNDER THE XT6 ANNUITY?...................................... 56
HOW ARE CREDITS APPLIED TO ACCOUNT VALUE UNDER THE XT6 ANNUITY?...................... 56
ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?........... 57
DO YOU OFFER DOLLAR COST AVERAGING?.................................................. 59
DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?..................................... 61
ARE ANY ASSET ALLOCATION PROGRAMS AVAILABLE?......................................... 61
WHAT IS THE BALANCED INVESTMENT PROGRAM?............................................. 61
MAY I GIVE MY FINANCIAL PROFESSIONAL PERMISSION TO FORWARD TRANSACTION INSTRUCTIONS?. 62
MAY I AUTHORIZE MY THIRD PARTY INVESTMENT ADVISOR TO MANAGE MY ACCOUNT?.............. 62
HOW DO THE FIXED ALLOCATIONS WORK?................................................... 63
HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?.................................... 63
HOW DOES THE MARKET VALUE ADJUSTMENT WORK?........................................... 64
WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?....................................... 65
ACCESS TO ACCOUNT VALUE............................................................... 66
WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?..................................... 66
ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?........................................ 66
CAN I WITHDRAW A PORTION OF MY ANNUITY?.............................................. 66
HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?........................................ 67
CAN I MAKE PERIODIC WITHDRAWALS FROM MY ANNUITY DURING THE ACCUMULATION PERIOD?...... 67
DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72 (t) OF THE INTERNAL REVENUE
CODE?.............................................................................. 67
WHAT ARE REQUIRED MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?.......... 67
CAN I SURRENDER MY ANNUITY FOR ITS VALUE?............................................ 68
WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?.......................... 68
WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?......................................... 68
HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?................................. 69
HOW ARE ANNUITY PAYMENTS CALCULATED?................................................. 70
(i)
LIVING BENEFITS............................................................................. 71
DO YOU OFFER BENEFITS DESIGNED TO PROVIDE INVESTMENT PROTECTION FOR OWNERS WHILE THEY
ARE ALIVE?............................................................................... 71
GUARANTEED RETURN OPTION PLUS/SM/ (GRO PLUS/SM/)........................................... 72
GUARANTEED RETURN OPTION (GRO)(R).......................................................... 76
GUARANTEED RETURN OPTION PLUS 2008/SM/ (GRO PLUS 2008)/SM/................................. 79
HIGHEST DAILY GUARANTEED RETURN OPTION/SM/ (HD GRO)/SM/.................................... 83
GUARANTEED MINIMUM WITHDRAWAL BENEFIT (GMWB)............................................... 87
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)................................................... 90
LIFETIME FIVE/SM/ INCOME BENEFIT (LIFETIME FIVE)/SM/....................................... 94
SPOUSAL LIFETIME FIVE/SM/ INCOME BENEFIT (SPOUSAL LIFETIME FIVE)/SM/....................... 99
HIGHEST DAILY LIFETIME FIVE/SM/ INCOME BENEFIT (HIGHEST DAILY LIFETIME FIVE)/SM/........... 102
HIGHEST DAILY LIFETIME SEVEN/SM/ INCOME BENEFIT (HIGHEST DAILY LIFETIME SEVEN)/SM/......... 110
SPOUSAL HIGHEST DAILY LIFETIME SEVEN/SM/ INCOME BENEFIT (SPOUSAL HIGHEST DAILY LIFETIME
SEVEN)/SM/............................................................................... 121
HIGHEST DAILY LIFETIME 7 PLUS/SM/ INCOME BENEFIT (HIGHEST DAILY LIFETIME 7 PLUS)/SM/....... 131
SPOUSAL HIGHEST DAILY LIFETIME 7 PLUS/SM/ INCOME BENEFIT (SPOUSAL HIGHEST DAILY LIFETIME 7
PLUS)/SM/................................................................................ 144
DEATH BENEFIT............................................................................... 154
WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?.............................................. 154
BASIC DEATH BENEFIT........................................................................ 154
OPTIONAL DEATH BENEFITS.................................................................... 154
PRUDENTIAL ANNUITIES' ANNUITY REWARDS...................................................... 159
PAYMENT OF DEATH BENEFITS.................................................................. 159
VALUING YOUR INVESTMENT..................................................................... 163
HOW IS MY ACCOUNT VALUE DETERMINED?........................................................ 163
WHAT IS THE SURRENDER VALUE OF MY ANNUITY?................................................. 163
HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?................................................ 163
HOW DO YOU VALUE FIXED ALLOCATIONS?........................................................ 163
WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?................................................ 163
WHAT HAPPENS TO MY UNITS WHEN THERE IS A CHANGE IN DAILY ASSET-BASED CHARGES?.............. 165
TAX CONSIDERATIONS.......................................................................... 166
GENERAL INFORMATION......................................................................... 175
HOW WILL I RECEIVE STATEMENTS AND REPORTS?................................................. 175
WHO IS PRUDENTIAL ANNUITIES?............................................................... 175
WHAT ARE SEPARATE ACCOUNTS?................................................................ 175
WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?....................................... 177
WHO DISTRIBUTES ANNUITIES OFFERED BY PRUDENTIAL ANNUITIES?................................. 178
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................ 181
FINANCIAL STATEMENTS....................................................................... 181
HOW TO CONTACT US.......................................................................... 181
INDEMNIFICATION............................................................................ 182
LEGAL PROCEEDINGS.......................................................................... 182
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION........................................ 183
APPENDIX A - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B....................... A-1
APPENDIX B - CALCULATION OF OPTIONAL DEATH BENEFITS......................................... B-1
APPENDIX C - PLUS40/TM/ OPTIONAL LIFE INSURANCE RIDER....................................... C-1
APPENDIX D - ADDITIONAL INFORMATION ON ASSET ALLOCATION PROGRAMS............................ D-1
APPENDIX E - DESCRIPTION AND CALCULATION OF PREVIOUSLY OFFERED OPTIONAL DEATH
BENEFITS.................................................................................. E-1
APPENDIX F - SELECTING THE VARIABLE ANNUITY THAT'S RIGHT FOR YOU............................ F-1
APPENDIX G - FORMULA UNDER HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT....................... G-1
APPENDIX H - ANNUITIES APPROVED FOR SALE BY THE NEW YORK STATE INSURANCE DEPARTMENT......... H-1
(ii)
APPENDIX I - FORMULA UNDER GRO PLUS 2008 AND HIGHEST DAILY GRO...................... I-1
APPENDIX J - FORMULA UNDER HIGHEST DAILY LIFETIME SEVEN AND SPOUSAL HIGHEST DAILY
LIFETIME SEVEN.................................................................... J-1
APPENDIX K - FORMULA UNDER HIGHEST DAILY LIFETIME 7 PLUS INCOME BENEFIT AND SPOUSAL
HIGHEST DAILY LIFETIME 7 PLUS INCOME BENEFIT...................................... K-1
APPENDIX L - SPECIAL CONTRACT PROVISIONS FOR ANNUITIES ISSUED IN CERTAIN STATES..... L-1
APPENDIX M - FORMULA UNDER GRO PLUS................................................. M-1
APPENDIX N - FORMULA UNDER GRO...................................................... N-1
(iii)
GLOSSARY OF TERMS
Many terms used within this Prospectus are described within the text where
they appear. The description of those terms are not repeated in this Glossary
of Terms.
Account Value: The value of each allocation to a Sub-account (also referred to
as a "variable investment option") plus any Fixed Allocation prior to the
Annuity Date, increased by any earnings, and/or less any losses, distributions
and charges. The Account Value is calculated before we assess any applicable
Contingent Deferred Sales Charge ("CDSC" or "surrender charge") and/or, other
than on an annuity anniversary, any fee that is deducted from the Annuity
annually in arrears. The Account Value is determined separately for each
Sub-account and for each Fixed Allocation, and then totaled to determine the
Account Value for your entire Annuity. The Account Value of each MVA Fixed
Allocation on any day other than its Maturity Date may be calculated using a
market value adjustment. With respect to XT6, the Account Value includes any
Credits we applied to your purchase payments that we are entitled to take back
under certain circumstances. With respect to ASAP III and APEX II, the Account
Value includes any Loyalty Credit we apply. With respect to Annuities with a
Highest Daily Lifetime Five Income Benefit election, Account Value includes
the value of any allocation to the Benefit Fixed Rate Account.
Adjusted Purchase Payments: As used in the discussion of certain optional
benefits in this prospectus and elsewhere, Adjusted purchase payments are
purchase payments, increased by any Credits applied to your Account Value in
relation to such purchase payments, and decreased by any charges deducted from
such purchase payments.
Annuitization: The application of Account Value to one of the available
annuity options for the Owner to begin receiving periodic payments for life
(or joint lives), for a guaranteed minimum number of payments or for life with
a guaranteed minimum number of payments.
Annuity Date: The date you choose for annuity payments to commence. Unless we
agree otherwise, for Annuities issued on or after November 20, 2006, the
Annuity Date must be no later than the first day of the calendar month
coinciding with or next following the later of: (a) the oldest Owner's or
Annuitant's 95/th/ birthday, whichever occurs first, and (b) the fifth
anniversary of the Issue Date.
Annuity Year: A 12-month period commencing on the Issue Date of the Annuity
and each successive 12-month period thereafter.
Beneficiary Annuity: You may purchase an Annuity if you are a beneficiary of
an annuity that was owned by a decedent, subject to the requirements discussed
in this Prospectus. You may transfer the proceeds of the decedent's annuity
into one of the Annuities described in this prospectus and continue receiving
the distributions that are required by the tax laws. This transfer option is
only available for purchase of an IRA, Roth IRA, or a non-qualified annuity.
Benefit Fixed Rate Account: A Fixed Allocation that is used only if you have
elected the optional Highest Daily Lifetime Five Income Benefit. Amounts
allocated to the Benefit Fixed Rate Account earn a fixed rate of interest, and
are held within our general account. You may not allocate purchase payments to
the Benefit Fixed Rate Account. Rather, Account Value is transferred to and
from the Benefit Fixed Rate Account only under the asset transfer feature of
the Highest Daily Lifetime Five Income Benefit.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Combination 5% Roll-Up and HAV Death Benefit: We offer an optional Death
Benefit that, for an additional cost, provides an enhanced level of protection
for your beneficiary(ies) by providing the greater of the Highest Anniversary
Value Death Benefit and a 5% annual increase on purchase payments adjusted for
withdrawals.
Contingent Deferred Sales Charge (CDSC): This is a sales charge that may be
deducted when you make a full or partial withdrawal under your Annuity. We
refer to this as a "contingent" charge because it is imposed only if you make
a withdrawal. The charge is a percentage of each applicable Purchase Payment
that is being withdrawn. The period during which a particular percentage
applies is measured from the Issue Date of the Annuity. The amount and
duration of the CDSC varies among ASAP III, APEX II and XT6. There is no CDSC
for ASL II. See "Summary of Contract Fees and Charges" for details on the CDSC
for each Annuity.
DCA Fixed Rate Option: An investment option that offers a fixed rate of
interest for a specified period during the accumulation period. The DCA Fixed
Rate Option is used only with our 6 or 12 Month Dollar Cost Averaging Program
("6 or 12 month DCA Program"), under which the Purchase Payments that you have
allocated to that DCA Fixed Rate Option are transferred to the designated
Sub-accounts over a 6 month or 12 month period. Withdrawals or transfers from
the DCA Fixed Rate Option are not subject to any Market Value Adjustment.
1
Enhanced Beneficiary Protection Death Benefit: An Optional Death Benefit that,
for an additional cost, provides an enhanced level of protection for your
beneficiary(ies) by providing amounts in addition to the basic Death Benefit
that can be used to offset federal and state taxes payable on any taxable
gains in your Annuity at the time of your death. We no longer offer the
Enhanced Beneficiary Protection Death Benefit.
Fixed Allocation: An investment option that offers a fixed rate of interest
for a specified Guarantee Period during the accumulation period. Certain Fixed
Allocations are subject to a market value adjustment if you withdraw Account
Value prior to the Fixed Allocation's maturity (MVA Fixed Allocation). We also
offer DCA Fixed Rate Options that are used with our 6 or 12 Month Dollar Cost
Averaging Program ("6 or 12 Month DCA Program"), and are not subject to any
market value adjustment. You may participate in a dollar cost averaging
program outside of the 6 or 12 Month DCA Program, where the source of the
funds to be transferred is a Fixed Allocation.
Free Look: Under state insurance laws, you have the right, during a limited
period of time, to examine your Annuity and decide if you want to keep it or
cancel it. This right is referred to as your "free look" right. The length of
this time period depends on the law of your state, and may vary depending on
whether your purchase is a replacement or not.
Guaranteed Minimum Income Benefit (GMIB): An optional benefit that, for an
additional cost, after a seven-year waiting period, guarantees your ability to
begin receiving income from your Annuity in the form of annuity payments based
on your total purchase payments and an annual increase of 5% on such purchase
payments adjusted for withdrawals (called the "Protected Income Value"),
regardless of the impact of market performance on your Account Value. We no
longer offer GMIB.
Guaranteed Minimum Withdrawal Benefit (GMWB): An optional benefit that, for an
additional cost, guarantees your ability to withdraw amounts over time equal
to an initial principal value, regardless of the impact of market performance
on your Account Value. We no longer offer GMWB.
Guarantee Period: A period of time during the accumulation period where we
credit a fixed rate of interest on a Fixed Allocation.
Guaranteed Return Option Plus/SM/ (GRO Plus)/SM//Guaranteed Return Option Plus
2008/SM/ (GRO Plus 2008)/SM// Guaranteed Return Option (GRO)/(R)//Highest
Daily Guaranteed Return Option (Highest Daily GRO)/SM/: Each of GRO Plus, GRO
Plus 2008, GRO, and Highest Daily GRO is a separate optional benefit that, for
an additional cost, guarantees a minimum Account Value at one or more future
dates and that requires your participation in an asset transfer program.
Highest Anniversary Value Death Benefit ("HAV"): We offer an optional Death
Benefit that, for an additional cost, provides an enhanced level of protection
for your beneficiary(ies) by providing a death benefit equal to the greater of
the basic Death Benefit and the Highest Anniversary Value, less proportional
withdrawals.
Highest Daily Lifetime Five/SM/ Income Benefit: An optional benefit that, for
an additional cost, guarantees your ability to withdraw an annual amount equal
to a percentage of a guaranteed benefit base called the Total Protected
Withdrawal Value. Subject to our rules regarding the timing and amount of
withdrawals, we guarantee these withdrawal amounts, regardless of the impact
of market performance on your Account Value. We no longer offer Highest Daily
Lifetime Five.
Highest Daily Lifetime Seven/SM/ Income Benefit: An optional benefit for an
additional charge, that guarantees your ability to withdraw amounts equal to a
percentage of a guaranteed benefit base called the Protected Withdrawal Value.
Subject to our rules regarding the timing and amount of withdrawals, we
guarantee these withdrawal amounts, regardless of the impact of market
performance on your Account Value. Highest Daily Lifetime Seven is the same
class of optional benefits as our Highest Daily Lifetime Five Income Benefit,
but differs (among other things) with respect to how the Protected Withdrawal
Value is calculated and how the lifetime withdrawals are calculated. Starting
in 2009, we began offering Highest Daily Lifetime 7 Plus in lieu of Highest
Daily Lifetime Seven wherever we have received the required State and selling
firm approvals.
Highest Daily Lifetime 7 Plus/SM/ Income Benefit: An optional benefit that is
available for an additional charge. The benefit guarantees your ability to
withdraw amounts equal to a percentage of a guaranteed benefit base called the
Protected Withdrawal Value. Subject to our rules regarding the timing and
amount of withdrawals, we guarantee these withdrawal amounts, regardless of
the impact of market performance on your Account Value. Highest Daily Lifetime
7 Plus is the same class of optional benefits as our Highest Daily Lifetime
Seven Income Benefit, but differs (among other things) with respect to how the
Protected Withdrawal Value is calculated and how the lifetime withdrawals are
calculated. Starting in 2009, we began offering Highest Daily Lifetime 7 Plus
in lieu of Highest Daily Lifetime Seven wherever we have received the required
State and selling firm approvals.
Highest Daily Value Death Benefit ("HDV"): An optional Death Benefit that, for
an additional cost, provides an enhanced level of protection for your
beneficiary(ies) by providing a death benefit equal to the greater of the
basic Death Benefit and the Highest Daily Value, less proportional
withdrawals. We no longer offer HDV.
Interim Value: The value of the MVA Fixed Allocations on any date other than
the Maturity Date. The Interim Value is equal to the initial value allocated
to the MVA Fixed Allocation plus all interest credited to the MVA Fixed
Allocation as of the date
2
calculated, less any transfers or withdrawals from the MVA Fixed Allocation.
The Interim Value does not include the effect of any MVA.
Issue Date: The effective date of your Annuity.
Key Life: Under the Beneficiary Continuation Option, or the Beneficiary
Annuity, the person whose life expectancy is used to determine payments.
Lifetime Five/SM/ Income Benefit: An optional benefit that, for an additional
cost, guarantees your ability to withdraw an annual amount equal to a
percentage of an initial principal value called the Protected Withdrawal
Value. Subject to our rules regarding the timing and amount of withdrawals, we
guarantee these withdrawal amounts, regardless of the impact of market
performance on your Account Value. We no longer offer Lifetime Five.
MVA: A market value adjustment used in the determination of Account Value of a
MVA Fixed Allocation on any day more than 30 days prior to the Maturity Date
of such MVA Fixed Allocation.
Owner: With an Annuity issued as an individual annuity contract, the Owner is
either an eligible entity or person named as having ownership rights in
relation to the Annuity. With an Annuity issued as a certificate under a group
annuity contract, the "Owner" refers to the person or entity who has the
rights and benefits designated as to the "Participant" in the certificate.
Spousal Lifetime Five/SM/ Income Benefit: An optional benefit that, for an
additional cost, guarantees until the later death of two Designated Lives (as
defined in this Prospectus) the ability to withdraw an annual amount equal to
a percentage of an initial principal value called the Protected Withdrawal
Value. Subject to our rules regarding the timing and amount of withdrawals, we
guarantee these withdrawal amounts, regardless of the impact of market
performance on your Account Value. We no longer offer Spousal Lifetime Five.
Spousal Highest Daily Lifetime Seven/SM/ Income Benefit: An optional benefit
that, for an additional charge, guarantees your ability to withdraw amounts
equal to a percentage of a guaranteed benefit base called the Protected
Withdrawal Value. Subject to our rules regarding the timing and amount of
withdrawals, we guarantee these withdrawal amounts, regardless of the impact
of market performance on your Account Value. The benefit is the spousal
version of the Highest Daily Lifetime Seven Income Benefit and is the same
class of optional benefits as our Highest Daily Lifetime Five Income Benefit,
but differs (among other things) with respect to how the Protected Withdrawal
Value is calculated and to how the lifetime withdrawals are calculated.
Starting in 2009, we began offering Spousal Highest Daily Lifetime 7 Plus in
lieu of Spousal Highest Daily Lifetime Seven wherever we have received the
required State and selling firm approvals.
Spousal Highest Daily Lifetime 7 Plus/SM/ Income Benefit: An optional benefit
that, for an additional charge, guarantees your ability to withdraw amounts
equal to a percentage of a guaranteed benefit base called the Protected
Withdrawal Value. Subject to our rules regarding the timing and amount of
withdrawals, we guarantee these withdrawal amounts, regardless of the impact
of market performance on your Account Value. The benefit is the spousal
version of the Highest Daily Lifetime 7 Plus Income Benefit and is the same
class of optional benefits as our Spousal Highest Daily Lifetime Seven Income
Benefit, but differs (among other things) with respect to how the Protected
Withdrawal Value is calculated and to how the lifetime withdrawals are
calculated. Starting in 2009, we began offering Spousal Highest Daily Lifetime
7 Plus in lieu of Spousal Highest Daily Lifetime Seven wherever we have
received the required State and selling firm approvals.
Sub-Account: We issue your Annuity through our separate account. See "What is
the Separate Account?" under the General Information section. The separate
account invests in underlying mutual fund portfolios. From an accounting
perspective, we divide the separate account into a number of sections, each of
which corresponds to a particular underlying mutual fund portfolio. We refer
to each such section of our separate account as a "Sub-account".
Surrender Value: The value of your Annuity available upon surrender prior to
the Annuity Date. It equals the Account Value as of the date we price the
surrender minus any applicable CDSC, Annual Maintenance Fee, Tax Charge and
the charge for any optional benefits and any additional amounts we applied to
your purchase payments that we may be entitled to recover under certain
circumstances. The surrender value may be calculated using a MVA with respect
to amounts in any MVA Fixed Allocation. No CDSC applies to the ASL II Annuity.
Unit: A measure used to calculate your Account Value in a Sub-account during
the accumulation period.
Valuation Day: Every day the New York Stock Exchange is open for trading or
any other day the Securities and Exchange Commission requires mutual funds or
unit investment trusts to be valued.
3
SUMMARY OF CONTRACT FEES AND CHARGES
Below is a summary of the fees and charges for the Annuities. Some fees and
charges are assessed against each Annuity while others are assessed against
assets allocated to the Sub-accounts. The fees and charges that are assessed
against an Annuity include any applicable Contingent Deferred Sales Charge,
Transfer Fee, Tax Charge and Annual Maintenance Fee. The charges that are
assessed against the Sub-accounts are the Mortality and Expense Risk charge,
the charge for Administration of the Annuity, any applicable Distribution
Charge and the charge for certain optional benefits you elect. Certain
optional benefits deduct a charge from each Annuity based on a percentage of a
"protected value." Each underlying mutual fund portfolio assesses a fee for
investment management, other expenses and, with some mutual funds, a 12b-1
fee. The prospectus for each underlying mutual fund provides more detailed
information about the expenses for the underlying mutual funds.
The following tables provide a summary of the fees and charges you will pay if
you surrender your Annuity or transfer Account Value among investment options.
These fees and charges are described in more detail within this Prospectus.
-----------------------------
TRANSACTION FEES AND CHARGES
-----------------------------
-------------------------------------------------------
CONTINGENT DEFERRED SALES CHARGES FOR EACH ANNUITY/ 1/
-------------------------------------------------------
ASAP III
Yr.1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9+
-----------------------------------------------------
7.5% 7.0% 6.5% 6.0% 5.0% 4.0% 3.0% 2.0% 0.0%
-----------------------------------------------------
APEX II
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5+
------------------------------
8.5% 8.0% 7.0% 6.0% 0.0%
------------------------------
XT6
For Annuities issued prior to November 20, 2006, the following schedule
applies:
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr. 11+
--------------------------------------------------------------------
9.0% 9.0% 8.5% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 0.0%
--------------------------------------------------------------------
For Annuities issued on or after November 20, 2006 (subject to state
availability), the following schedule applies
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr. 11+
--------------------------------------------------------------------
9.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
--------------------------------------------------------------------
ASL II
There is no CDSC for this Annuity
1 The Contingent Deferred Sales Charges are assessed upon surrender or
withdrawal. The charge is a percentage of each applicable Purchase Payment
deducted upon surrender or withdrawal. The period during which a particular
percentage applies is measured from the Issue Date of the Annuity.
-----------------------------------------------------------------
OTHER TRANSACTION FEES AND CHARGES
(assessed against each Annuity)
-----------------------------------------------------------------
FEE/CHARGE ASAP III APEX II ASL II XT6
-----------------------------------------------------------------
Transfer Fee /1/
Maximum $15.00 $15.00 $15.00 $15.00
Current $10.00 $10.00 $10.00 $10.00
-----------------------------------------------------------------
Tax Charge 0% to 3.5% 0% to 3.5% 0% to 3.5% 0% to 3.5%
(current) /2/
-----------------------------------------------------------------
1 Currently, we deduct the fee after the 20/th/ transfer each Annuity Year.
We guarantee that the number of charge free transfers per Annuity Year will
never be less than 8.
2 In some states a tax is payable, either when purchase payments are
received, upon surrender or when the Account Value is applied under an
annuity option. The tax charge is assessed as a percentage of purchase
payments, Surrender Value, or Account Value, as applicable. We reserve the
right to deduct the charge either at the time the tax is imposed, upon a
full surrender of the Annuity, or upon annuitization. See the subsection
"Tax Charge" under "Fees and Charges" in this Prospectus.
4
The following table provides a summary of the periodic fees and charges you
will pay while you own your Annuity, excluding the underlying mutual fund
Portfolio annual expenses. These fees and charges are described in more detail
within this Prospectus.
------------------------------------------------------------------------------------------------------------------------
PERIODIC FEES AND CHARGES
(assessed against each Annuity)
------------------------------------------------------------------------------------------------------------------------
FEE/CHARGE ASAP III APEX II ASL II XT6
Annual Maintenance Lesser of $35 or 2% of Lesser of $35 or 2% of Lesser of $35 or 2% of Lesser of $35 or 2% of
Fee /1/ Account Value /2/ Account Value /2/ Account Value /2/ Account Value
-----------------------------------------------------------------------------------------------
Beneficiary
Continuation Lesser of $30 or 2% of Lesser of $30 or 2% of Lesser of $30 or 2% of Lesser of $30 or 2% of
Option Only Account Value Account Value Account Value Account Value
------------------------------------------------------------------------------------------------------------------------
ANNUAL FEES/CHARGES OF THE SUB-ACCOUNTS /3/
(assessed as a percentage of the daily net assets of the Sub-accounts )
------------------------------------------------------------------------------------------------------------------------
FEE/CHARGE
Mortality & Expense 0.50% 1.50% 1.50% 0.50%
Risk Charge /4/
------------------------------------------------------------------------------------------------------------------------
Administration 0.15% 0.15% 0.15% 0.15%
Charge /4/
------------------------------------------------------------------------------------------------------------------------
Distribution Charge /5/ 0.60% in Annuity N/A N/A 1.00% in Annuity
Years 1-8 Years 1-10
------------------------------------------------------------------------------------------------------------------------
Settlement Service 1.40% (qualified); 1.40% (qualified); 1.40% (qualified); 1.40% (qualified);
Charge /6/ 1.00% (non-qualified) 1.00% (non-qualified) 1.00% (non-qualified) 1.00% (non-qualified)
------------------------------------------------------------------------------------------------------------------------
Total Annual Charges 1.25% in Annuity 1.65% 1.65% 1.65% in Annuity
of the Sub-accounts Years 1-8; Years 1-10;
(excluding settlement 0.65% in Annuity 0.65% in Annuity
service charge) Years 9 and later Years 11 and later
------------------------------------------------------------------------------------------------------------------------
1 Assessed annually on the Annuity's anniversary date or upon surrender. For
beneficiaries who elect the non-qualified Beneficiary Continuation Option,
the fee is only applicable if Account Value is less than $25,000.
2 Only applicable if Account Value is less than $100,000. Fee may differ in
certain States.
3 These charges are deducted daily and apply to the Sub-accounts only.
4 The combination of the Mortality and Expense Risk Charge and Administration
Charge is referred to as the "Insurance Charge" elsewhere in this
Prospectus.
5 The Distribution Charge is 0.00% in Annuity Years 9+ for ASAP III and in
Annuity Years 11+ for XT6.
6 The Mortality & Expense Risk Charge, the Administration Charge and the
Distribution Charge (if applicable) do not apply if you are a beneficiary
under the Beneficiary Continuation Option. The Settlement Service Charge
applies only if your beneficiary elects the Beneficiary Continuation
Option. The 1.00% and 1.40% charges set forth above are annual charges that
are assessed against the Account Value in the Sub-accounts. For the
non-qualified Beneficiary Continuation Option, the fee is applicable only
if Account Value is less than $25,000 at the time the fee is assessed.
5
The following table sets forth the charge for each optional benefit under the
Annuity. These fees would be in addition to the periodic fees and transaction
fees set forth in the tables above.
---------------------------------------------------------------------------------------------------------------
YOUR OPTIONAL BENEFIT FEES AND CHARGES/ 1/
---------------------------------------------------------------------------------------------------------------
OPTIONAL BENEFIT OPTIONAL TOTAL TOTAL TOTAL TOTAL
BENEFIT FEE/ ANNUAL ANNUAL ANNUAL ANNUAL
CHARGE CHARGE/ 2/ CHARGE/ 2/ CHARGE/ 2/ CHARGE /2/
(as a percentage of for ASAP III for APEX II for ASL II for XT6
Sub-account net
assets, unless
otherwise indicated)
---------------------------------------------------------------------------------------------------------------
GUARANTEED RETURN OPTION (GRO)/GRO
PLUS
Maximum Charge /3/ 0.75% 2.00% 2.40% 2.40% 2.40%
Current Charge 0.25% 1.50% 1.90% 1.90% 1.90%
---------------------------------------------------------------------------------------------------------------
GUARANTEED RETURN PLUS OPTION 2008
(GRO Plus 2008)
Maximum Charge /3/ 0.75% 2.00% 2.40% 2.40% 2.40%
Current charge 0.60% 1.85% 2.25% 2.25% 2.25%
(if elected on or after May 1, 2009)
---------------------------------------------------------------------------------------------------------------
HIGHEST DAILY GUARANTEED RETURN
OPTION (HD GRO)
Maximum Charge /3/ 0.75% 2.00% 2.40% 2.40% 2.40%
Current charge 0.60% 1.85% 2.25% 2.25% 2.25%
(if elected on or after May 1, 2009)
---------------------------------------------------------------------------------------------------------------
GUARANTEED MINIMUM WITHDRAWAL BENEFIT
(GMWB)
Maximum Charge /3/ 1.00% 2.25% 2.65% 2.65% 2.65%
Current Charge 0.35% 1.60% 2.00% 2.00% 2.00%
---------------------------------------------------------------------------------------------------------------
GUARANTEED MINIMUM INCOME BENEFIT
(GMIB)
Maximum Charge /3/ 1.00% of PIV 1.25% + 1.65% + 1.65% + 1.65% +
1.00% of 1.00% of 1.00% of 1.00% of
PIV PIV PIV PIV
Current Charge 0.50% of PIV 1.25% + 1.65% + 1.65% + 1.65% +
0.50% of 0.50% of 0.50% of 0.50% of
PIV PIV PIV PIV
---------------------------------------------------------------------------------------------------------------
LIFETIME FIVE INCOME BENEFIT
Maximum Charge /3/ 1.50% 2.75% 3.15% 3.15% 3.15%
Current Charge 0.60% 1.85% 2.25% 2.25% 2.25%
---------------------------------------------------------------------------------------------------------------
SPOUSAL LIFETIME FIVE INCOME BENEFIT
Maximum Charge /3/ 1.50% 2.75% 3.15% 3.15% 3.15%
Current Charge 0.75% 2.00% 2.40% 2.40% 2.40%
---------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME FIVE INCOME
BENEFIT)
Maximum Charge /3/ 1.50% 2.75% 3.15% 3.15% 3.15%
Current Charge 0.60% 1.85% 2.25% 2.25% 2.25%
---------------------------------------------------------------------------------------------------------------
6
---------------------------------------------------------------------------------------------------------------
YOUR OPTIONAL BENEFIT FEES AND CHARGES/ 1/
---------------------------------------------------------------------------------------------------------------
OPTIONAL BENEFIT OPTIONAL TOTAL TOTAL TOTAL TOTAL
BENEFIT FEE/ ANNUAL ANNUAL ANNUAL ANNUAL
CHARGE CHARGE/ 2/ CHARGE/ 2/ CHARGE/ 2/ CHARGE /2/
(as a percentage of for ASAP III for APEX II for ASL II for XT6
Sub-account net
assets, unless
otherwise indicated)
---------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME SEVEN INCOME
BENEFIT
Maximum Charge /3/ 1.50% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
1.50% of 1.50% of 1.50% of 1.50% of
PWV PWV PWV PWV
Current Charge 0.60% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
0.60% of 0.60% of 0.60% of 0.60% of
PWV PWV PWV PWV
---------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME SEVEN WITH
BENEFICIARY INCOME OPTION (BIO)
Maximum Charge /3/ 2.00% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
2.00% of 2.00% of 2.00% of 2.00% of
PWV PWV PWV PWV
Current Charge 0.95% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
0.95% of 0.95% of 0.95% of 0.95% of
PWV PWV PWV PWV
---------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME SEVEN WITH
LIFETIME INCOME ACCELERATOR (LIA)
Maximum Charge /3/ 2.00% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
2.00% of 2.00% of 2.00% of 2.00% of
PWV PWV PWV PWV
Current Charge 0.95% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
0.95% of 0.95% of 0.95% of 0.95% of
PWV PWV PWV PWV
---------------------------------------------------------------------------------------------------------------
SPOUSAL HIGHEST DAILY LIFETIME SEVEN
INCOME BENEFIT
Maximum Charge /3/ 1.50% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
1.50% of 1.50% of 1.50% of 1.50% of
PWV PWV PWV PWV
Current Charge 0.75% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
0.75% of 0.75% of 0.75% of 0.75% of
PWV PWV PWV PWV
---------------------------------------------------------------------------------------------------------------
SPOUSAL HIGHEST DAILY LIFETIME SEVEN
WITH BENEFICIARY INCOME BENEFIT (BIO)
Maximum Charge /3/ 2.00% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
2.00% of 2.00% of 2.00% of 2.00% of
PWV PWV PWV PWV
Current Charge 0.95% of PWV 1.25% + 1.65% + 1.65% + 1.65% +
0.95% of 0.95% of 0.95% of 0.95% of
PWV PWV PWV PWV
---------------------------------------------------------------------------------------------------------------
7
-----------------------------------------------------------------------------------------------------------------------
YOUR OPTIONAL BENEFIT FEES AND CHARGES/ 1/
-----------------------------------------------------------------------------------------------------------------------
OPTIONAL BENEFIT OPTIONAL TOTAL TOTAL TOTAL TOTAL
BENEFIT FEE/ ANNUAL ANNUAL ANNUAL ANNUAL
CHARGE CHARGE /2/ CHARGE /2/ CHARGE /2/ CHARGE /2/
(as a percentage of for ASAP III for APEX II for ASL II for XT6
Sub-account net
assets, unless
otherwise
indicated)
-----------------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME 7 PLUS
Maximum Charge /3/ 1.50% 1.25% + 1.50% 1.65% + 1.50% 1.65% + 1.50% 1.65% + 1.50%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
Current Charge 0.75% 1.25% + 0.75% 1.65% + 0.75% 1.65% + 0.75% 1.65% + 0.75%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
-----------------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME 7 PLUS WITH
BENEFICIARY INCOME OPTION (BIO)
Maximum Charge /3/ 2.00% 1.25% + 2.00% 1.65% + 2.00% 1.65% + 2.00% 1.65% + 2.00%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
Current Charge 1.10% 1.25% + 1.10% 1.65% + 1.10% 1.65% + 1.10% 1.65% + 1.10%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
-----------------------------------------------------------------------------------------------------------------------
HIGHEST DAILY LIFETIME 7 PLUS WITH
LIFETIME INCOME ACCELERATOR (LIA)
Maximum Charge /3/ 2.00% 1.25% + 2.00% 1.65% + 2.00% 1.65% + 2.00% 1.65% + 2.00%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
Current Charge 1.10% 1.25% + 1.10% 1.65% + 1.10% 1.65% + 1.10% 1.65% + 1.10%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
-----------------------------------------------------------------------------------------------------------------------
SPOUSAL HIGHEST DAILY LIFETIME 7 PLUS
Maximum Charge /3/ 1.50% 1.25% + 1.50% 1.65% + 1.50% 1.65% + 1.50% 1.65% + 1.50%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
Current Charge 0.90% 1.25% + 0.90% 1.65% + 0.90% 1.65% + 0.90% 1.65% + 0.90%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
-----------------------------------------------------------------------------------------------------------------------
8
-----------------------------------------------------------------------------------------------------------------------
YOUR OPTIONAL BENEFIT FEES AND CHARGES/ 1/
-----------------------------------------------------------------------------------------------------------------------
OPTIONAL BENEFIT OPTIONAL TOTAL TOTAL TOTAL TOTAL
BENEFIT FEE/ ANNUAL ANNUAL ANNUAL ANNUAL
CHARGE CHARGE /2/ CHARGE /2/ CHARGE /2/ CHARGE /2/
(as a percentage of for ASAP III for APEX II for ASL II for XT6
Sub-account net
assets, unless
otherwise
indicated)
-----------------------------------------------------------------------------------------------------------------------
SPOUSAL HIGHEST DAILY LIFETIME 7 PLUS
WITH BENEFICIARY INCOME OPTION (BIO)
Maximum Charge /3/ 2.00% 1.25% + 2.00% 1.65% + 2.00% 1.65% + 2.00% 1.65% + 2.00%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
Current Charge 1.10% 1.25% + 1.10% 1.65% + 1.10% 1.65% + 1.10% 1.65% + 1.10%
greater of greater of greater of greater of greater of
Account Value Account Value Account Value Account Value Account Value
and PWV and PWV and PWV and PWV and PWV
-----------------------------------------------------------------------------------------------------------------------
ENHANCED BENEFICIARY PROTECTION DEATH 0.25% 1.50% 1.90% 1.90% 1.90%
BENEFIT
-----------------------------------------------------------------------------------------------------------------------
HIGHEST ANNIVERSARY VALUE DEATH
BENEFIT ("HAV")
Current Charge 0.40% 1.65% 2.05% 2.05% 2.05%
(if elected on or after May 1, 2009)
-----------------------------------------------------------------------------------------------------------------------
COMBINATION 5% ROLL-UP AND HAV DEATH
BENEFIT
Maximum Charge /3/ 1.00% 2.25% 2.65% 2.65% 2.65%
Current Charge 0.80% 2.05% 2.45% 2.45% 2.45%
(if elected on or after May 1, 2009)
-----------------------------------------------------------------------------------------------------------------------
HIGHEST DAILY VALUE DEATH BENEFIT
("HDV") Current Charge 0.50% 1.75% 2.15% 2.15% 2.15%
-----------------------------------------------------------------------------------------------------------------------
Please refer to the section of this Prospectus that describes each optional benefit for a complete description of the
benefit, including any restrictions or limitations that may apply.
-----------------------------------------------------------------------------------------------------------------------
How Charge is Determined
1 Guaranteed Return Option/GRO Plus: Charge for each benefit is assessed
against the average daily net assets of the Sub-accounts. For ASAP III,
1.50% total annual charge applies in Annuity years 1-8 and is 0.90%
thereafter. For APEX II and ASL II, 1.90% total annual charge applies in
all Annuity Years, and for XT6, 1.90% total annual charge applies in
Annuity Years 1-10 and is 0.90% thereafter. This benefit is no longer
available for new elections.
GRO Plus 2008: Charge for the benefit is assessed against the average daily
net assets of the Sub-accounts. If you elected the benefit prior to May 1,
2009, the fees are as follows: The charge is 0.35% of Sub-account assets.
For ASAP III, 1.60% total annual charge applies in Annuity Years 1-8 and is
1.00% thereafter. For APEX II and ASL II, 2.00% total annual charge applies
in all Annuity Years, and for XT6, 2.00% total annual charge applies in
Annuity Years 1-10 and is 1.00% thereafter. If you elect the benefit on or
after May 1, 2009, the fees are as follows: For ASAP III, 1.85% total
annual charge applies in Annuity Years 1-8 and is 1.25% thereafter. For
APEX II and ASL II, 2.25% total annual charge applies in all Annuity Years,
and for XT6, 2.25% total annual charge applies in Annuity Years 1-10 and is
1.25% thereafter.
Highest Daily GRO: Charge for this benefit is assessed against the average
daily net assets of the Sub-accounts. If you elected the benefit prior to
May 1, 2009, the fees are as follows: The current charge is .35% of
Sub-account assets. For ASAP III, 1.60% total annual charge applies in
Annuity years 1-8 and 1.00% thereafter. For APEX II and ASL II, 2.00% total
annual charge applies in all Annuity years, and for XT6, 2.00% total annual
charge applies in Annuity Years 1-10 and is 1.00% thereafter. If you
elected the benefit on or after May 1, 2009, the fees are as follows: For
ASAP III, 1.85% total annual charge applies in Annuity years 1-8 and 1.25%
thereafter. For APEX II and ASL II, 2.25% total annual charge applies in
all Annuity years, and for XT6, 2.25% total annual charge applies in
Annuity Years 1-10 and is 1.25% thereafter.
Guaranteed Minimum Withdrawal Benefit: Charge for this benefit is assessed
against the average daily net assets of the Sub-accounts. For ASAP III,
1.60% total annual charge applies in Annuity Years 1-8 and is 1.00%
thereafter. For APEX II and ASL II, 2.00% total annual charge applies in
all Annuity Years, and for XT6, 2.00% total annual charge applies in
Annuity Years 1-10 and is 1.00% thereafter. This benefit is no longer
available for new elections.
Guaranteed Minimum Income Benefit: Charge for this benefit is assessed
against the GMIB Protected Income Value ("PIV"). As discussed in the
description of the benefit, the charge is taken out of the Sub-accounts and
the Fixed Allocations. For ASAP III, 0.50% of PIV for GMIB is in addition
to 1.25% annual charge in years 1-8 and 0.65% thereafter. For APEX II and
ASL II, 0.50% of PIV for GMIB is in addition to 1.65% annual charge. For
XT6, 0.50% of PIV for GMIB is in addition to 1.65% in years 1-10 and 0.65%
thereafter. This benefit is no longer available for new elections.
9
Lifetime Five Income Benefit: Charge for this benefit is assessed against
the average daily net assets of the Sub-accounts. For ASAP III, 1.85% total
annual charge applies in Annuity years 1-8 and is 1.25% thereafter. For
APEX II and ASL II, 2.25% total annual charge applies in all Annuity years,
and for XT6, 2.25% total annual charge applies in Annuity Years 1-10 and is
1.25% thereafter. This benefit is no longer available for new elections.
Spousal Lifetime Five Income Benefit: Charge for this benefit is assessed
against the average daily net assets of the Sub-accounts. For ASAP III,
2.00% total annual charge applies in Annuity years 1-8 and is 1.40%
thereafter. For APEX II and ASL II, 2.40% total annual charge applies in
all Annuity years, and for XT6, 2.40% total annual charge applies in
Annuity Years 1-10 and is 1.40% thereafter. This benefit is no longer
available for new elections.
Highest Daily Lifetime Five Income Benefit: Charge for this benefit is
assessed against the average daily net assets of the Sub-accounts. For ASAP
III, 1.85% total annual charge applies in Annuity years 1-8 and is 1.25%
thereafter. For APEX II and ASL II, 2.25% total annual charge applies in
all Annuity years, and for XT6, 2.25% total annual charge applies in
Annuity Years 1-10 and is 1.25% thereafter. This benefit is no longer
available for new elections.
Highest Daily Lifetime Seven: Charge for this benefit is assessed against
the Protected Withdrawal Value ("PWV"). As discussed in the description of
the benefit, the charge is taken out of the Sub-accounts. For ASAP III,
0.60% for HD7 is in addition to 1.25% annual charge in years 1-8 and 0.65%
thereafter. For APEX II and ASL II, 0.60% for HD7 is in addition to 1.65%
annual charge. For XT6, 0.60% for HD7 is in addition to 1.65% in years 1-10
and 0.65% thereafter.
Highest Daily Lifetime Seven with BIO. Charge for this benefit is assessed
against the Protected Withdrawal Value ("PWV"). As discussed in the
description of the benefit, the charge is taken out of the Sub-accounts.
For ASAP III, 0.95% is in addition to 1.25% annual charge of amounts
invested in the Sub-accounts (in Annuity Years 1-8) and 0.65% annual charge
of amounts invested in the Sub-accounts in subsequent Annuity Years. For
APEX II and ASL II, 0.95% is in addition to 1.65% annual charge of amounts
invested in the Sub-accounts. For XT6, 0.95% is in addition to 1.65% annual
charge of amounts invested in the Sub-accounts in Annuity Years 1-10 and
0.65% annual charge of the amounts invested in the Sub-accounts in
subsequent Annuity Years.
Highest Daily Lifetime Seven with LIA. Charge for this benefit is assessed
against the Protected Withdrawal Value ("PWV"). As discussed in the
description of the benefit, the charge is taken out of the Sub-accounts.
For ASAP III, 0.95% is in addition to 1.25% annual charge of amounts
invested in the Sub-accounts (in Annuity Years 1-8) and 0.65% annual charge
of amounts invested in the Sub-accounts in subsequent Annuity Years. For
APEX II and ASL II, 0.95% is in addition to 1.65% annual charge of amounts
invested in the Sub-accounts. For XT6, 0.95% is in addition to 1.65% annual
charge of amounts invested in the Sub-accounts in Annuity Years 1-10 and
0.65% annual charge of the amounts invested in the Sub-accounts in
subsequent Annuity Years.
Spousal Highest Daily Lifetime Seven: Charge for this benefit is assessed
against the Protected Withdrawal Value ("PWV"). For ASAP III, 0.75% for
SHD7 is in addition to 1.25% annual charge in years 1-8 and 0.65%
thereafter. For APEX II and ASL II, 0.75% for SHD7 is in addition to 1.65%
annual charge. For XT6, 0.75% for SHD7 is in addition to 1.65% in years
1-10 and 0.65% thereafter.
Spousal Highest Daily Lifetime Seven with BIO. Charge for this benefit is
assessed against the Protected Withdrawal Value ("PWV"). As discussed in
the description of the benefit, the charge is taken out of the
Sub-accounts. For ASAP III, 0.95% is in addition to 1.25% annual charge of
amounts invested in the Sub-accounts (in Annuity Years 1-8) and 0.65%
annual charge of amounts invested in the Sub-accounts in subsequent Annuity
Years. For APEX II and ASL II, 0.95% is in addition to 1.65% annual charge
of amounts invested in the Sub-accounts. For XT6, 0.95% is in addition to
1.65% annual charge of amounts invested in the Sub-accounts in Annuity
Years 1-10 and 0.65% annual charge of the amounts invested in the
Sub-accounts in subsequent Annuity Years.
Highest Daily Lifetime 7 Plus. Charge for this benefit is assessed against
the greater of Account Value and Protected Withdrawal Value. As discussed
in the description of the benefit, the charge is taken out of the
Sub-accounts. For ASAP III, 0.75% is in addition to 1.25% annual charge of
amounts invested in the Sub-accounts (in Annuity Years 1-8) and 0.65%
annual charge of amounts invested in the Sub-accounts in subsequent Annuity
Years. For APEX II and ASL II, 0.75% is in addition to 1.65% annual charge
of amounts invested in the Sub-accounts. For XT6, 0.75% is in addition to
1.65% annual charge of amounts invested in the Sub-accounts (in Annuity
Years 1-10) and .65% annual charge of the amounts invested in the
Sub-accounts in subsequent Annuity Years.
Highest Daily Lifetime 7 Plus with BIO. Charge for this benefit is assessed
against the greater of Account Value and Protected Withdrawal Value. As
discussed in the description of the benefit, the charge is taken out of the
Sub-accounts. For ASAP III, 1.10% is in addition to 1.25% annual charge of
amounts invested in the Sub-accounts (in Annuity Years 1-8) and 0.65%
annual charge of amounts invested in the Sub-accounts in subsequent Annuity
Years. For APEX II and ASL II, 1.10% is in addition to 1.65% annual charge
of amounts invested in the Sub-accounts. For XT6, 1.10% is in addition to
1.65% annual charge of amounts invested in the Sub-accounts (in Annuity
Years 1-8) and 0.65% annual charge of amounts invested in the Sub-accounts
in subsequent Annuity Years.
Highest Daily Lifetime 7 Plus with LIA. Charge for this benefit is assessed
against the greater of Account Value and Protected Withdrawal Value. As
discussed in the description of the benefit, the charge is taken out of the
Sub-accounts. For ASAP III, 1.10% is in addition to 1.25% annual charge of
amounts invested in the Sub-accounts (in Annuity Years 1-8) and 0.65%
annual charge of amounts invested in the Sub-accounts in subsequent Annuity
Years. For APEX II and ASL II, 1.10% is in addition to 1.65% annual charge
of amounts invested in the Sub-accounts. For XT6, 1.10% is in addition to
1.65% annual charge of amounts invested in the Sub-accounts (in Annuity
Years 1-8) and 0.65% annual charge of amounts invested in the Sub-accounts
in subsequent Annuity Years.
Spousal Highest Daily Lifetime 7 Plus. Charge for this benefit is assessed
against the greater of Account Value and Protected Withdrawal Value. As
discussed in the description of the benefit, the charge is taken out of the
Sub-accounts. For ASAP III, 0.90% is in addition to 1.25% annual charge of
amounts invested in the Sub-accounts (in Annuity Years 1-8) and 0.65%
annual charge of amounts invested in the Sub-accounts in subsequent Annuity
Years. For APEX II and ASL II, 0.90% is in addition to 1.65% annual charge
of amounts invested in the Sub-accounts. For XT6, 0.90% is in addition to
1.65% annual charge of amounts invested in the Sub-accounts (in Annuity
Years 1-10) and 0.65% annual charge of amounts invested in the Sub-accounts
in subsequent Annuity Years.
Spousal Highest Daily Lifetime 7 Plus with BIO. Charge for this benefit is
assessed against the greater of Account Value and Protected Withdrawal
Value. As discussed in the description of the benefit, the charge is taken
out of the Sub-accounts. For ASAP III, 1.10% is in addition to 1.25% annual
charge of amounts invested in the Sub-accounts (in Annuity Years 1-8) and
0.65% annual charge of amounts invested in the Sub-accounts in subsequent
Annuity Years. For APEX II and ASL II, 1.10% is in addition to 1.65% annual
charge of amounts invested in the Sub-accounts. For XT6, 1.10% is in
addition to 1.65% annual charge of amounts invested in the Sub-accounts (in
Annuity Years 1-8) and 0.65% annual charge of amounts invested in the
Sub-accounts in subsequent Annuity Years.
Enhanced Beneficiary Protection Death Benefit: Charge for this benefit is
assessed against the average daily net assets of the Sub-accounts. For ASAP
III, 1.50% total annual charge applies in Annuity years 1-8 and is 0.90%
thereafter. For APEX II and ASL II, 1.90% total annual charge applies in
all Annuity years, and for XT6, 1.90% total annual charge applies in
Annuity Years 1-10 and is 0.90% thereafter. This benefit is no longer
available for new elections.
Highest Anniversary Value Death Benefit. Charge for this benefit is
assessed against the average daily net assets of the Sub-accounts. If you
elected the benefit prior to May 1, 2009, the fees are as follows: The
charge is 0.25% of Sub-account assets if you elected the benefit prior to
May 1, 2009. For ASAP III, 1.50% total annual charge applies in Annuity
Years 1-8 and is 0.90% thereafter. For APEX II and ASL II, 1.90% total
annual charge applies in all Annuity Years, and for XT6, 1.90% total annual
charge applies in Annuity Years 1-10 and is 0.90% thereafter. If you
elected the benefit on or after May 1, 2009, the fees are as follows: For
ASAP III, 1.65% total annual charge applies in Annuity Years 1-8 and is
1.05% thereafter. For APEX II and ASL II, 2.05% total annual charge applies
in all Annuity Years, and for XT6, 2.05% total annual charge applies in
Annuity Years 1-10 and is 1.05% thereafter.
Combination 5% Roll-Up and HAV Death Benefit: Charge for this benefit is
assessed against the average daily net assets of the Sub-accounts. If you
elected the benefit prior to May 1, 2009, the fees are as follows: The
charge is 0.50% of Sub-account assets if you elected the benefit prior to
May 1, 2009. For ASAP III, 1.75% total annual charge applies in Annuity
Years 1-8 and is 1.15% thereafter. For APEX II and ASL II, 2.15% total
annual charge
10
applies in all Annuity Years, and for XT6, 2.15% total annual charge
applies in Annuity Years 1-10 and is 1.15% thereafter. If you elected the
benefit on or after May 1, 2009, the fees are as follows: For ASAP III,
2.05% total annual charge applies in Annuity Years 1-8 and is 1.45%
thereafter. For APEX II and ASL II, 2.45% total annual charge applies in
all Annuity Years, and for XT6, 2.45% total annual charge applies in
Annuity Years 1-10 and is 1.45% thereafter.
Highest Daily Value Death Benefit: Charge for this benefit is assessed
against the average daily net assets of the Sub-accounts. For ASAP III,
1.75% total annual charge applies in Annuity years 1-8 and is 1.15%
thereafter. For APEX II and ASL II, 2.15% total annual charge applies in
all Annuity years, and for XT6, 2.15% total annual charge applies in
Annuity Years 1-10 and is 1.15% thereafter. This benefit is no longer
available for new elections.
2 The Total Annual Charge includes the Insurance Charge and Distribution
Charge (if applicable) assessed against the average daily net assets
allocated to the Sub-accounts. If you elect more than one optional benefit,
the Total Annual Charge would be increased to include the charge for each
optional benefit. With respect to GMIB, the 0.50% charge is assessed
against the GMIB Protected Income Value. With respect to Highest Daily
Lifetime Seven, Spousal Highest Daily Lifetime Seven, Highest Daily
Lifetime 7 Plus and Spousal Highest Daily Lifetime 7 Plus the charge is
assessed against the Protected Withdrawal Value (greater of PWV and Account
Value, for the "Plus" benefits). With respect to each of Highest Daily
Lifetime Seven, Spousal Highest Daily Lifetime Seven, Highest Daily
Lifetime 7 Plus and Spousal Highest Daily Lifetime 7 Plus one-fourth of the
annual charge is deducted at the end of each quarter, where the quarters
are part of years that have as their anniversary the date that the benefit
was elected. These optional benefits are not available under the
Beneficiary Continuation Option.
3 We reserve the right to increase the charge up to the maximum charge
indicated, upon any step-up or reset under the benefit, or new election of
the benefit.
The following table provides the range (minimum and maximum) of the total
annual expenses for the underlying mutual funds ("Portfolios") as of
December 31, 2008. Each figure is stated as a percentage of the underlying
Portfolio's average daily net assets.
----------------------------------------------------
TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES
----------------------------------------------------
MINIMUM MAXIMUM
----------------------------------------------------
Total Portfolio Operating Expense 0.62% 2.97%
----------------------------------------------------
The following are the total annual expenses for each underlying mutual fund
("Portfolio") as of December 31, 2008, except as noted. The "Total Annual
Portfolio Operating Expenses" reflect the combination of the underlying
Portfolio's investment management fee, other expenses and any 12b-1 fees. Each
figure is stated as a percentage of the underlying Portfolio's average daily
net assets. There is no guarantee that actual expenses will be the same as
those shown in the table. For certain of the underlying Portfolios, a portion
of the management fee has been waived and/or other expenses have been
partially reimbursed. The existence of any such fee waivers and/or
reimbursements have been reflected in the footnotes. The following expenses
are deducted by the underlying Portfolio before it provides Prudential
Annuities with the daily net asset value. The underlying Portfolio information
was provided by the underlying mutual funds and has not been independently
verified by us. See the prospectuses or statements of additional information
of the underlying Portfolios for further details. The current prospectus and
statement of additional information for the underlying Portfolios can be
obtained by calling 1-800-752-6342.
-----------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
(as a percentage of the average net assets of the underlying Portfolios)
-----------------------------------------------------------------------------------------------
For the year ended December 31, 2008
-------------------------------------------------
UNDERLYING PORTFOLIO Acquired Total
Portfolio Annual
Management Other Fees & Portfolio
Fee// Expenses 12b-1 Fee Expenses Expenses
-----------------------------------------------------------------------------------------------
Advanced Series Trust/1,2,3/
AST Academic Strategies Asset Allocation/4/ 0.72% 0.08% 0.00% 0.74% 1.54%
AST Advanced Strategies 0.85% 0.22% 0.00% 0.02% 1.09%
AST Aggressive Asset Allocation 0.15% 0.05% 0.00% 0.90% 1.10%
AST AllianceBernstein Core Value 0.75% 0.18% 0.00% 0.00% 0.93%
AST AllianceBernstein Growth & Income 0.75% 0.13% 0.00% 0.00% 0.88%
AST American Century Income & Growth/5/ 0.75% 0.18% 0.00% 0.00% 0.93%
AST Balanced Asset Allocation 0.15% 0.02% 0.00% 0.93% 1.10%
AST Bond Portfolio 2015/6/ 0.64% 0.26% 0.00% 0.00% 0.90%
AST Bond Portfolio 2016/6,7/ 0.65% 1.02% 0.00% 0.00% 1.67%
AST Bond Portfolio 2018/6/ 0.64% 0.35% 0.00% 0.00% 0.99%
AST Bond Portfolio 2019/6/ 0.64% 0.47% 0.00% 0.00% 1.11%
AST Bond Portfolio 2020/6,7/ 0.65% 1.02% 0.00% 0.00% 1.67%
AST Capital Growth Asset Allocation 0.15% 0.01% 0.00% 0.96% 1.12%
AST CLS Growth Asset Allocation/8/ 0.30% 0.20% 0.00% 0.95% 1.45%
AST CLS Moderate Asset Allocation/8/ 0.30% 0.16% 0.00% 0.93% 1.39%
AST Cohen & Steers Realty Portfolio/5/ 1.00% 0.17% 0.00% 0.00% 1.17%
AST DeAM Large-Cap Value 0.85% 0.15% 0.00% 0.00% 1.00%
AST Federated Aggressive Growth 0.95% 0.21% 0.00% 0.00% 1.16%
11
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UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
(as a percentage of the average net assets of the underlying Portfolios)
------------------------------------------------------------------------------------------------------
For the year ended December 31, 2008
-------------------------------------------------
UNDERLYING PORTFOLIO Acquired Total
Portfolio Annual
Management Other Fees & Portfolio
Fee// Expenses 12b-1 Fee Expenses Expenses
------------------------------------------------------------------------------------------------------
Advanced Series Trust continued
AST First Trust Balanced Target 0.85% 0.15% 0.00% 0.00% 1.00%
AST First Trust Capital Appreciation Target 0.85% 0.15% 0.00% 0.00% 1.00%
AST Focus Four Plus/9/ 0.85% 1.08% 0.00% 0.11% 2.04%
AST Global Real Estate 1.00% 0.27% 0.00% 0.00% 1.27%
AST Goldman Sachs Concentrated Growth 0.90% 0.14% 0.00% 0.00% 1.04%
AST Goldman Sachs Mid-Cap Growth 1.00% 0.18% 0.00% 0.00% 1.18%
AST Goldman Sachs Small-Cap Value 0.95% 0.22% 0.00% 0.00% 1.17%
AST High Yield/5/ 0.75% 0.18% 0.00% 0.00% 0.93%
AST Horizon Growth Asset Allocation/10/ 0.30% 0.35% 0.00% 0.93% 1.58%
AST Horizon Moderate Asset Allocation/10/ 0.30% 0.28% 0.00% 0.87% 1.45%
AST International Growth 1.00% 0.18% 0.00% 0.00% 1.18%
AST International Value 1.00% 0.18% 0.00% 0.00% 1.18%
AST Investment Grade Bond/6/ 0.64% 0.13% 0.00% 0.00% 0.77%
AST JPMorgan International Equity/5/ 0.89% 0.20% 0.00% 0.00% 1.09%
AST Large-Cap Value/5/ 0.75% 0.12% 0.00% 0.00% 0.87%
AST Lord Abbett Bond-Debenture 0.80% 0.17% 0.00% 0.00% 0.97%
AST Marsico Capital Growth 0.90% 0.13% 0.00% 0.00% 1.03%
AST MFS Global Equity 1.00% 0.32% 0.00% 0.00% 1.32%
AST MFS Growth 0.90% 0.15% 0.00% 0.00% 1.05%
AST Mid-Cap Value 0.95% 0.19% 0.00% 0.00% 1.14%
AST Money Market/5/ 0.50% 0.12% 0.00% 0.00% 0.62%
AST Neuberger Berman/LSV Mid-Cap Value 0.90% 0.15% 0.00% 0.00% 1.05%
AST Neuberger Berman Mid-Cap Growth/5/ 0.90% 0.15% 0.00% 0.00% 1.05%
AST Neuberger Berman Small-Cap Growth 0.95% 0.21% 0.00% 0.00% 1.16%
AST Niemann Capital Growth Asset Allocation/10/ 0.30% 0.29% 0.00% 0.87% 1.46%
AST Parametric Emerging Markets Equity 1.10% 0.53% 0.00% 0.00% 1.63%
AST PIMCO Limited Maturity Bond 0.65% 0.15% 0.00% 0.00% 0.80%
AST PIMCO Total Return Bond 0.65% 0.13% 0.00% 0.00% 0.78%
AST Preservation Asset Allocation 0.15% 0.02% 0.00% 0.87% 1.04%
AST QMA US Equity Portfolio/11/ 1.00% 0.57% 0.00% 0.00% 1.57%
AST Schroders Mulit-Asset World Strategies 1.10% 0.35% 0.00% 0.00% 1.45%
AST Small-Cap Growth 0.90% 0.22% 0.00% 0.00% 1.12%
AST Small-Cap Value 0.90% 0.18% 0.00% 0.00% 1.08%
AST T. Rowe Price Asset Allocation 0.85% 0.15% 0.00% 0.00% 1.00%
AST T. Rowe Price Global Bond 0.80% 0.19% 0.00% 0.00% 0.99%
AST T. Rowe Price Large-Cap Growth 0.88% 0.13% 0.00% 0.00% 1.01%
AST T. Rowe Price Natural Resources Portfolio 0.90% 0.14% 0.00% 0.00% 1.04%
AST UBS Dynamic Alpha 1.00% 0.16% 0.00% 0.00% 1.16%
AST Western Asset Core Plus Bond 0.70% 0.14% 0.00% 0.00% 0.84%
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
INVESCO AIM Varialbe Insurance Funds/12/
AIM V.I. Dynamics Fund - Series I shares 0.75% 0.47% 0.00% 0.00% 1.22%
AIM V.I. Financial Services Fund - Series I shares 0.75% 0.48% 0.00% 0.01% 1.24%
AIM V.I. Global Health Care Fund - Series I shares 0.75% 0.38% 0.00% 0.01% 1.14%
AIM V.I. Technology Fund - Series I shares 0.75% 0.41% 0.00% 0.01% 1.17%
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Evergreen Variable Annuity Trust/13/
Growth 0.70% 0.24% 0.00% 0.01% 0.95%
International Equity 0.42% 0.25% 0.00% 0.00% 0.67%
Omega 0.52% 0.20% 0.00% 0.00% 0.72%
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
12
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UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
(as a percentage of the average net assets of the underlying Portfolios)
-----------------------------------------------------------------------------------------------------------
For the year ended December 31, 2008
-------------------------------------------------
UNDERLYING PORTFOLIO Acquired Total
Portfolio Annual
Management Other Fees & Portfolio
Fee// Expenses 12b-1 Fee Expenses Expenses
-----------------------------------------------------------------------------------------------------------
First Defined Portfolio Fund, LLC
First Trust Target Focus Four 0.60% 2.12% 0.25% 0.00% 2.97%
Global Dividend Target 15 0.60% 0.68% 0.25% 0.00% 1.53%
NASDAQ(R) Target 15 0.60% 1.28% 0.25% 0.00% 2.13%
S&P(R) Target 24 0.60% 0.98% 0.25% 0.00% 1.83%
Target Managed VIP 0.60% 0.66% 0.25% 0.00% 1.51%
The Dow(R) DART 10 0.60% 0.96% 0.25% 0.00% 1.81%
The Dow(R) Target Dividend 0.60% 0.62% 0.25% 0.00% 1.47%
Value Line(R) Target 25 0.60% 0.66% 0.25% 0.00% 1.51%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Franklin Templeton Variable Insurance Products Trust/14/
Franklin Templeton VIP Founding Funds Allocation Fund 0.00% 0.13% 0.00% 0.65% 0.78%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
Nationwide Variable Insurance Trust
Gartmore NVIT Developing Markets/15/ 0.95% 0.21% 0.25% N/A 1.41%
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
ProFund VP/16/
Access VP High Yield 0.75% 0.75% 0.25% 0.00% 1.75%
Asia 30 0.75% 0.67% 0.25% 0.00% 1.67%
Banks 0.75% 0.86% 0.25% 0.00% 1.86%
Basic Materials 0.75% 0.71% 0.25% 0.00% 1.71%
Bear 0.75% 0.70% 0.25% 0.00% 1.70%
Biotechnology 0.75% 0.74% 0.25% 0.00% 1.74%
Bull 0.75% 0.71% 0.25% 0.00% 1.71%
Consumer Goods 0.75% 0.92% 0.25% 0.00% 1.92%
Consumer Services 0.75% 1.49% 0.25% 0.00% 2.49%
Europe 30 0.75% 0.68% 0.25% 0.00% 1.68%
Financials 0.75% 0.83% 0.25% 0.00% 1.83%
Health Care 0.75% 0.74% 0.25% 0.00% 1.74%
Industrials 0.75% 0.87% 0.25% 0.00% 1.87%
Internet 0.75% 0.77% 0.25% 0.00% 1.77%
Japan 0.75% 0.70% 0.25% 0.00% 1.70%
Large-Cap Growth 0.75% 0.75% 0.25% 0.00% 1.75%
Large-Cap Value 0.75% 0.80% 0.25% 0.00% 1.80%
Mid-Cap Growth 0.75% 0.77% 0.25% 0.00% 1.77%
Mid-Cap Value 0.75% 0.77% 0.25% 0.00% 1.77%
NASDAQ-100 0.75% 0.74% 0.25% 0.00% 1.74%
Oil & Gas 0.75% 0.71% 0.25% 0.00% 1.71%
Pharmaceuticals 0.75% 0.75% 0.25% 0.00% 1.75%
Precious Metals 0.75% 0.69% 0.25% 0.00% 1.69%
Real Estate 0.75% 0.77% 0.25% 0.00% 1.77%
Rising Rates Opportunity 0.75% 0.66% 0.25% 0.00% 1.66%
Semiconductor 0.75% 0.94% 0.25% 0.00% 1.94%
Short Mid-Cap 0.75% 0.71% 0.25% 0.00% 1.71%
Short NASDAQ-100 0.75% 0.74% 0.25% 0.00% 1.74%
Short Small-Cap 0.75% 0.69% 0.25% 0.00% 1.69%
Small-Cap Growth 0.75% 0.82% 0.25% 0.00% 1.82%
Small-Cap Value 0.75% 0.91% 0.25% 0.00% 1.91%
Technology 0.75% 0.73% 0.25% 0.00% 1.73%
Telecommunications 0.75% 0.77% 0.25% 0.00% 1.77%
U.S. Government Plus 0.50% 0.68% 0.25% 0.00% 1.43%
UltraBull 0.75% 0.79% 0.25% 0.00% 1.79%
13
-----------------------------------------------------------------------------------------------
UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES
(as a percentage of the average net assets of the underlying Portfolios)
-----------------------------------------------------------------------------------------------
For the year ended December 31, 2008
-------------------------------------------------
UNDERLYING PORTFOLIO Acquired Total
Portfolio Annual
Management Other Fees & Portfolio
Fee// Expenses 12b-1 Fee Expenses Expenses
-----------------------------------------------------------------------------------------------
ProFund VP continued
UltraMid-Cap 0.75% 0.75% 0.25% 0.00% 1.75%
UltraNASDAQ-100 0.75% 0.75% 0.25% 0.00% 1.75%
UltraSmall-Cap 0.75% 0.81% 0.25% 0.00% 1.81%
Utilities 0.75% 0.73% 0.25% 0.00% 1.73%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
The Prudential Series Fund
SP International Growth Portfolio 0.85% 0.29% 0.25% -- 1.39%
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
Wells Fargo Variable Trust/17/
Wells Fargo Advantage VT Equity Income Fund 0.55% 0.24% 0.25% 0.00% 1.04%
1 Advanced Series Trust: Share of the Portfolios are generally purchased
through variable insurance products. The Advanced Series Trust (the
"Trust") has entered into arrangements with the issuers of the variable
insurance products offering the Portfolios under which the Trust
compensates the issuers 0.10% for providing ongoing services to Portfolio
shareholders in lieu of the Trust providing such services directly to
shareholders. Amounts paid under these arrangements are included in "Other
Expenses." Subject to the expense limitations set forth below, for each
Portfolio of the Trust (except as noted below), Prudential Investments LLC
and AST Investment Services, Inc. have agreed to voluntarily waive a
portion of the 0.10% administrative services fee, based on the average
daily net assets of each Portfolio of the Trust, as set forth in the table
below.
Average Daily Net Assets of Portfolio Fee Rate Including Waiver
------------------------------------------------------------------------------
Up to and including $500 million 0.10% (no waiver)
------------------------------------------------------------------------------
Over $500 million up to and including $750 million 0.09%
------------------------------------------------------------------------------
Over $750 million up to and including $1 billion 0.08%
------------------------------------------------------------------------------
Over $1 billion 0.07%
------------------------------------------------------------------------------
The administrative services fee is not waived in the case of the Dynamic
Asset Allocation Portfolios and the Tactical Asset Allocation Portfolios.
The Dynamic Asset Allocation Portfolios are AST Aggressive Asset
Allocation, AST Balanced Asset Allocation, AST Capital Growth Asset
Allocation, and AST Preservation Asset Allocation. The Tactical Asset
Allocation Portfolios are AST CLS Growth Asset Allocation, AST CLS Moderate
Asset Allocation, AST Horizon Growth Asset Allocation, AST Horizon Moderate
Asset Allocation, and AST Niemann Capital Growth Asset Allocation.
The Dynamic Asset Allocation Portfolios and the Tactical Asset Allocation
Portfolios are "fund of funds" which means each of these Portfolios invests
primarily or exclusively in one or more mutual funds, referred to here as
"Underlying Portfolios". A Portfolio will not be directly subject to the
administrative services fee to the extent it invests in Underlying
Portfolios. Because the Dynamic Asset Allocation Portfolios generally
invest all of their assets in Underlying Portfolios, the Dynamic Asset
Allocation Portfolios generally will not be directly subject to the
administrative services fee. Because the Tactical Asset Allocation
Portfolios generally invest at least 90% of their assets in Underlying
Portfolios, only 10% of their assets generally will be directly subject to
the administrative services fee. Because the AST Academic Strategies Asset
Allocation Portfolio generally invests approximately 65% of its assets in
Underlying Portfolios, only 35% of its assets generally will be directly
subject to the administrative services fee. The AST Focus Four Plus
Portfolio is not directly subject to the administrative services fee to the
extent it invests in the Core Plus Bond Portfolio or any other Trust
Portfolio. The AST Academic Strategies Portfolio is not directly subject to
the administrative services fee to the extent it invests in any other Trust
Portfolio. In determining the administrative services fee, only assets of a
Tactical Asset Allocation Portfolio, the AST Academic Strategies Asset
Allocation Portfolio, and AST Focus Four Plus Portfolio that are not
invested in Underlying Portfolios will be counted as average daily net
assets of the relevant Portfolio for purposes of the above-referenced
breakpoints. This will result in a Portfolio paying higher administrative
services fees than if all of the assets of the Portfolio were counted for
purposes of computing the relevant administrative services fee breakpoints.
The Underlying Portfolios in which the Dynamic Asset Allocation Portfolios,
Tactical Asset Allocation Portfolios, and AST Academic Strategies Asset
Allocation Portfolio invest, however, will be subject to the administrative
services fee.
2 Some of the Portfolios invest in other investment companies (the "Acquired
Portfolios"). For example, each Dynamic and Tactical Asset Allocation
Portfolio invests in shares of other Portfolios of the Trust. Investors in
a Portfolio indirectly bear the fees and expenses of the Acquired
Portfolios. The expenses shown under "Acquired Portfolio Fees and Expenses"
represent a weighted average of the expense ratios of the Acquired
Portfolios in which each Portfolio invested during the year ended
December 31, 2008. The Dynamic Asset Allocation Portfolios and AST Focus
Four Plus Portfolio do not pay any transaction fees when purchasing or
redeeming shares of the Acquired Portfolios. When a Portfolio's "Acquired
Portfolio Fees and Expenses" are less that 0.01%, such expenses are
included in the column titled "Other Expenses." This may cause the Total
Annual Portfolio Operating Expenses to differ from those set forth in the
Financial Highlights tables of such Portfolios in the prospectus for the
Trust.
3 The management fee rate shown in the "management fees" column is based on
the indicated Portfolio's average daily net assets as of the fiscal year
ended December 31, 2008, except that the fee rate shown does not reflect
the impact of any contractual or voluntary management fee waivers that may
be applicable and which would result in a reduction in the fee rate paid by
the Portfolio. The management fee rate for certain Portfolios may include
"breakpoints" which are reduced fee rates that are applicable at specified
levels of Portfolio assets; the effective fee rates shown in the table
reflect and incorporate any fee "breakpoints" which may be applicable.
14
4 Academic Strategies Asset Allocation Portfolio: The only investment
management fee to be paid directly to the Investment Managers by the
Academic Strategies Asset Allocation Portfolio will be the Portfolio's
annualized contractual investment management fee of 0.72% of its average
daily net assets. Since the Academic Strategies Asset Allocation Portfolio
is expected to invest approximately 65% of its assets in portfolios of the
Trust (referred to here as "Underlying Trust Funds") under normal
circumstances, the Academic Strategies Asset Allocation Portfolio will also
indirectly pay investment management fees on its investments in the
Underlying Trust Funds. To the extent that the other Asset Allocation
Portfolios invest their assets in Underlying Trust Funds, such Asset
Allocation Portfolios will also indirectly pay investment management fees
on its investments in the Underlying Trust Funds.
The Academic Strategies Asset Allocation Portfolio will not be directly
subject to the administrative services fee to the extent it invests in
Underlying Trust Funds. The Underlying Trust Funds in which the Academic
Strategies Asset Allocation Portfolio invests, however, will be subject to
the administrative services fee.
The Academic Strategies Asset Allocation Portfolio indirectly incurs a pro
rata portion of the fees and expenses of the Acquired Portfolios in which
it invests. From January 1, 2008 to July 20, 2008, the Academic Strategies
Asset Allocation Portfolio was known as the AST Balanced Asset Allocation
Portfolio (the Balanced Portfolio). The Balanced Portfolio invested all of
its assets in Acquired Portfolios. The actual annualized "Acquired
Portfolio Fees and Expenses" for the Balanced Portfolio were 0.88% for the
period January 1, 2008 to July 20, 2008. As set forth above, under normal
conditions, the Academic Strategies Asset Allocation Portfolio invests
approximately 65% of its assets in Acquired Portfolios. The actual
annualized "Acquired Portfolio Fees and Expenses" for the Academic
Strategies Asset Allocation Portfolio were 0.735% for the period July 21,
2008 to December 31, 2008. The Investment Managers have voluntarily agreed
to reimburse expenses and/or waive fees so that the Academic Strategies
Asset Allocation Portfolio's "Acquired Portfolio Fees and Expenses" on an
annualized basis do not exceed 0.685% of the Academic Strategies Asset
Allocation Portfolio's average daily net assets based on the daily
calculation described below. This arrangement will be monitored and applied
daily based upon the Academic Strategies Asset Allocation Portfolio's then
current holdings of Acquired Portfolios and the expense ratios of the
relevant Acquired Portfolios as of their most recent fiscal year end.
Because the expense ratios of the relevant Acquired Portfolios will change
over time and may be higher than the expense ratios as of their most recent
fiscal year end, it is possible that the Academic Strategies Asset
Allocation Portfolio's actual "Acquired Portfolio Fees and Expenses" may be
higher than 0.685% of the Portfolio's average daily net assets on an
annualized basis. These arrangements relating to the Portfolio's "Acquired
Portfolio Fees and Expenses" are voluntary and are subject to termination
or modification at any time without prior notice.
The Investment Managers have contractually agreed to reimburse expenses
and/or waive fees so that the Academic Strategies Asset Allocation
Portfolio's investment management fees plus "Other Expenses" (exclusive in
all cases of taxes, interest, brokerage commissions, distribution fees,
dividend and interest expense, if any, related to short sales, and
extraordinary expenses) do not exceed 0.80% of the Portfolio's average
daily net assets during the Academic Strategies Asset Allocation
Portfolio's first year of operations (i.e., July 21, 2008 through July 20,
2009)
5 Effective as of July 1, 2008, Prudential Investments LLC and AST Investment
Services, Inc. have voluntarily agreed to waive a portion of their
management fee and/or limit expenses (expressed as a percentage of average
daily net assets) for certain Portfolios of the Trust, as set forth in the
table below. These arrangements may be discontinued or otherwise modified
at any time.
Portfolio Fee Waiver and/or Expense Limitation
---------------------------------------------------------------------------
AST Large-Cap Value 0.84%
---------------------------------------------------------------------------
AST Cohen & Steers Realty 0.97%
---------------------------------------------------------------------------
AST American Century Income & Growth 0.87%
---------------------------------------------------------------------------
AST High Yield 0.88%
---------------------------------------------------------------------------
AST Money Market 0.56%
---------------------------------------------------------------------------
AST JPMorgan International Equity 1.01%
---------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth 1.25%
---------------------------------------------------------------------------
6 With respect to each of the AST Bond Portfolio 2015, AST Bond Portfolio
2016, AST Bond Portfolio 2018, AST Bond Portfolio 2019, AST Bond Portfolio
2020, and the AST Investment Grade Bond Portfolio, Prudential Investments
LLC and AST Investment Services, Inc. have voluntarily agreed to waive a
portion of their investment management fees and/or reimburse certain
expenses for the Portfolios so that each Portfolio's investment management
fees plus other expenses (exclusive in all cases of taxes, interest,
brokerage commissions, distribution fees, dividend and interest expense, if
any, related to short sales, and extraordinary expenses) do not exceed
1.00% of each Portfolio's average daily net assets for the fiscal year
ending December 31, 2009. These arrangements are voluntary and may be
discontinued or otherwise modified by the Investment Managers at any time
without prior notice.
7 AST Bond Portfolio 2016 and AST Bond Portfolio 2020 are based on estimated
expenses for 2009 at an estimated asset level.
8 Prudential Investments LLC and AST Investment Services, Inc. have
voluntarily agreed to waive a portion of their investment management fees
and/or reimburse certain expenses for each of the AST CLS Growth Asset
Allocation Portfolio and the AST CLS Moderate Asset Allocation Portfolio so
that each Asset Allocation Portfolio's investment management fees plus
other expenses (exclusive in all cases of taxes, interest, brokerage
commissions, distribution fees, dividend and interest expense, if any,
related to short sales, extraordinary expenses, and Underlying Portfolio
fees and expenses) do not exceed 0.40% of such Asset Allocation Portfolio's
average daily net assets to $100 million; 0.35% of such Asset Allocation
Portfolio's average daily net assets from $100 million to $200 million; and
0.30% of such Asset Allocation Portfolio's average daily net assets over
$200 million.
9 The Investment Managers have contractually agreed to waive their investment
management fees on AST Focus Four Plus Portfolio assets invested in the AST
Western Asset Core Plus Bond Portfolio through May 1, 2010. Under normal
circumstances, the Portfolio invests approximately 25% of its assets in the
AST Western Asset Core Plus Bond Portfolio. Assuming a contractual fee
waiver of 0.21% (i.e., 25% of the Portfolio's contractual investment
management fee of 0.85%), the annualized operating expense ratio of the
Portfolio would be reduced from 2.04% to 1.83%.
10 The Investment Managers also have voluntarily agreed to waive a portion of
their investment management fees and/or reimburse certain expenses for each
of the AST Horizon Growth Asset Allocation Portfolio, the AST Horizon
Moderate Asset Allocation Portfolio, and the AST Niemann Capital Growth
Asset Allocation Portfolio so that each Asset Allocation Portfolio's
investment management fees plus other expenses (exclusive in all cases of
taxes, interest, brokerage commissions, distribution fees, dividend and
interest expense, if any, related to short sales, extraordinary expenses,
and Underlying Portfolio fees and expenses) do not exceed 0.40% of such
Asset Allocation Portfolio's average daily net assets to $250 million;
0.35% of such Asset Allocation Portfolio's average daily net assets from
$250 million to $750 million; and 0.30% of such Asset Allocation
Portfolio's average daily net assets over $750 million. All of these
arrangements are voluntary and may be discontinued or otherwise modified by
the Investment Managers at any time without prior notice.
11 With respect to the AST QMA US Equity Alpha Portfolio, "Other Expenses"
includes dividend expenses on short sales and interest expenses on short
sales.
15
12 Except as otherwise noted, figures shown in the table are for the year
ended December 31, 2008 and are expressed as a percentage of the Fund's
average daily net assets. There is no guarantee that actual expenses will
be the same as those shown in the table. Acquired Fund Fees and Expenses
are not fees or expenses incurred by the fund directly but are expenses of
the investment companies in which the fund invests. You incur these fees
and expenses indirectly through the valuation of the fund's investment in
those investment companies. As a result, the Net Annual Fund Operating
Expenses listed above may exceed the expense limit numbers. The impact of
the acquired fund fees and expense are included in the total returns of the
Fund. The Fund's advisor has contractually agreed, through at least April
30, 2010, to waive the advisory fee payable by the Fund in an amount equal
to 100% of the net advisory fees Invesco Aim receives from the affiliated
money market funds on investments by the Fund of uninvested cash (excluding
investments of cash collateral from securities lending) in such affiliated
money market funds. Fee Waiver reflects this agreement. The Fund's advisor
has contractually agreed, through at least April 30, 2010, to waive
advisory fees and/or reimburse expenses of Series I shares to the extent
necessary to limit Total Annual Fund Operating Expenses of Series I shares
to 1.30% of average daily net assets. The Fund's advisor has contractually
agreed, through at least April 30, 2010, to waive advisory fees and/or
reimburse expenses of Series I shares to the extent necessary to limit
Total Annual Fund Operating Expenses of Series I shares to 0.93% of average
daily net assets.
13 The Total fees in the table above include fees and expenses incurred
indirectly by the fund as a result of its investment in other investment
companies (each, an Acquired Fund). The Total ratio of expenses to net
assets excludes expense reductions. Includes voluntary fee waivers and/or
reimbursements. The Fund's investment advisor may cease these voluntary
waivers and/or reimbursements at any time.
14 The manager has agreed in advance to reduce its fee from assets invested by
the Fund in a Franklin Templeton money market fund (the Sweep Money Fund
which is the acquired fund in this case) to the extent of the Fund's fees
and expenses of the acquired fund. This reduction is required by the
Trust's board of trustees and an exemptive order by the Securities and
Exchange Commission; this arrangement will continue as long as the
exemptive order is relied upon.
15 Management fees have been restated to reflect the elimination of a
performance-based management fee and implementation of an asset-based
management fee equal to the lowest possible management fee under the
previous performance-based fee structure, as approved by the Board of
Trustees on September 18, 2008. Under no circumstances, during a six-month
transition period, as described on page 6 of Fund prospectus, will the
management fee under the new fee structure exceed what the Adviser would
have received under the old structure assuming maximum penalty for
underperformance.
16 Other Expenses and Total Annual Portfolio Operating Expenses, which are as
of December 31, 2008, have been restated to reflect subsequent changes in
the contractual amounts of fees paid for management services. ProFund
Advisors LLC has contractually agreed to waive Investment Advisory and
Management Services Fees and to reimburse other expenses to the extent
Total Annual Portfolio Operating Expenses, as a percentage of average daily
net assets, exceed 1.68% (1.38% for ProFund VP U.S. Government Plus and
1.35% for ProFund VP Money Market) through April 30, 2010. After such date,
any of the expense limitations may be terminated or revised. Amounts waived
or reimbursed in a particular fiscal year may be repaid to ProFund Advisors
LLC within three years of the waiver or reimbursement to the extent that
recoupment will not cause the Portfolio's expenses to exceed any expense
limitation in place at that time. A waiver or reimbursement lowers the
expense ratio and increases overall returns to investors. Reflects fee
waivers, reimbursement of expenses, and expense reductions, if any.
17 The breakpoint schedule for the Equity Income Fund is as follows: 0.55%
from $0 to $499 million; 0.50% for assets from $500 million to $999
million; 0.45% for assets from $1 billion to $2.99 billion; 0.425% for
assets from $3 billion to $4.99 billion; and 0.40% for assets $5 billion
and higher. Other expenses may include expenses payable to affiliates of
Wells Fargo & Company. The adviser has committed through April 30, 2009 to
waive fees and/or reimburse expenses to the extent necessary to maintain
the net operating expense ratio shown, and may include expenses of any
money market or other fund held by the fund.
16
EXPENSE EXAMPLES
These examples are intended to help you compare the cost of investing in one
Prudential Annuities Annuity with the cost of investing in other Prudential
Annuities and/or other variable annuities.
Below are examples for each Annuity showing what you would pay in expenses at
the end of the stated time periods had you invested $10,000 in the Annuity and
your investment has a 5% return each year.
The examples reflect the following fees and charges for each Annuity as
described in "Summary of Contract Fees and Charges":
. Insurance Charge
. Distribution Charge (if applicable)
. Contingent Deferred Sales Charge (when and if applicable)
. Annual Maintenance Fee
. The maximum combination of optional benefit charges
The examples also assume the following for the period shown:
. You allocate all of your Account Value to the Sub-account with the
maximum gross total annual operating expenses for 2008, and those
expenses remain the same each year*
. For each charge, we deduct the maximum charge rather than the current
charge
. You make no withdrawals of Account Value
. You make no transfers, or other transactions for which we charge a fee
. No tax charge applies
. You elect the Highest Daily Lifetime 7 Plus with Combination 5% Roll-up
and HAV Death Benefit (which are the maximum combination of optional
benefit charges)
. For the XT6 example, no Purchase Payment Credit is granted under the
Annuity.
. For the APEX II example, no Loyalty Credit applies
. For the ASAP III example, no Loyalty Credit applies.
Amounts shown in the examples are rounded to the nearest dollar.
* Note: Not all portfolios offered as Sub-accounts may be available depending
on optional benefit selection, the applicable jurisdiction and selling firm.
THE EXAMPLES ARE ILLUSTRATIVE ONLY - THEY SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES OF THE UNDERLYING MUTUAL FUNDS OR
THEIR PORTFOLIOS - ACTUAL EXPENSES WILL BE LESS THAN THOSE SHOWN DEPENDING
UPON WHICH OPTIONAL BENEFIT YOU ELECT OTHER THAN INDICATED IN THE EXAMPLES OR
IF YOU ALLOCATE ACCOUNT VALUE TO ANY OTHER AVAILABLE SUB-ACCOUNTS.
Expense Examples are provided as follows:
If you surrender your annuity at the end of the applicable time period:/ 1/
1 yr 3 yrs 5 yrs 10 yrs
-------------------------------------
ASAP III $1,378 $2,651 $3,823 $6,318
-------------------------------------
APEX II $1,523 $2,848 $3,608 $6,791
-------------------------------------
ASL II $738 $2,159 $3,511 $6,609
-------------------------------------
XT6 /3/ $1,602 $2,927 $4,087 $6,705
-------------------------------------
If you annuitize your annuity at the end of the applicable time period: /2/
1 yr 3 yrs 5 yrs 10 yrs
-----------------------------------
ASAP III N/A $2,066 $3,373 $6,318
-----------------------------------
APEX II N/A $2,218 $3,608 $6,791
-----------------------------------
ASL II $738 $2,159 $3,511 $6,609
-----------------------------------
XT6 /3/ N/A N/A $3,511 $6,609
-----------------------------------
17
If you do not surrender your annuity:
1 yr 3 yrs 5 yrs 10 yrs
-----------------------------------
ASAP III $703 $2,066 $3,373 $6,318
-----------------------------------
APEX II $758 $2,218 $3,608 $6,791
-----------------------------------
ASL II $738 $2,159 $3,511 $6,609
-----------------------------------
XT6 /3/ $738 $2,159 $3,511 $6,609
-----------------------------------
1 There is no CDSC for ASL II. See "Summary of Contract Fees and Charges" for
the CDSC schedule for each Annuity.
2 If you own XT6, you may not annuitize in the first Three (3) Annuity Years.
If you own ASAP III or APEX II, you may not annuitize in the first Annuity
Year.
3 XT6 Annuities purchased prior to November 20, 2006 are subject to a
different CDSC schedule. Expense examples calculations for XT6 Annuities
are not adjusted to reflect the Purchase Credit. If the Purchase Credit
were reflected in the calculations, expenses would be higher.
For information relating to accumulation unit values pertaining to the
Sub-accounts, please see Appendix A - Condensed Financial Information About
Separate Account B.
18
SUMMARY
Advanced Series Advisor Plan III ("ASAP III")
Advanced Series APEX II ("APEX II")
Advanced Series XTra Credit Six ("XT6")
Advanced Series LifeVest II ("ASL II")
This Summary describes key features of the variable annuities described in
this Prospectus. It is intended to help give you an overview, and to point you
to sections of the prospectus that provide greater detail. This Summary is
intended to supplement the prospectus, so you should not rely on the Summary
alone for all the information you need to know before purchase. You should
read the entire Prospectus for a complete description of the variable
annuities. Your financial professional can also help you if you have questions.
What is a variable annuity? A variable annuity is a contract between you and
an insurance company. It is designed to help you save money for retirement,
and provide income during your retirement. With the help of your financial
professional, you choose how to invest your money within your annuity. The
value of your annuity will rise or fall depending on whether the investment
options you choose perform well or perform poorly. Investing in a variable
annuity involves risk and you can lose your money. By the same token,
investing in a variable annuity can provide you with the opportunity to grow
your money through participation in mutual fund-type investments. Your
financial professional will help you choose your investment options based on
your tolerance for risk and your needs.
Variable annuities also offer a variety of optional guarantees to receive an
income for life through withdrawal or provide minimum death benefits for your
beneficiaries, or minimum account value guarantees. These benefits provide a
degree of insurance in the event your annuity performs poorly. These optional
benefits are available for an extra cost, and are subject to limitations and
conditions more fully described later in this Prospectus. The guarantees are
based on the long-term financial strength of the insurance company.
What does it mean that my variable annuity is "tax-deferred"? Because variable
annuities are issued by an insurance company, you pay no taxes on any earnings
from your annuity until you withdraw the money. You may also transfer among
your investment options without paying a tax at the time of the transfer.
Until you withdraw the money, tax deferral allows you to keep money invested
that would otherwise go to pay taxes. When you take your money out of the
variable annuity, however, you will be taxed on the earnings at ordinary
income tax rates rather than lower capital gains rates. If you withdraw
earnings before you reach age 59 1/2, you also may be subject to a 10% federal
tax penalty.
You may also purchase one of our variable annuities as a tax-qualified
retirement investment such as an IRA, SEP-IRA, Roth IRA, 401(a) plan, or
403(b) plan. Although there is no additional tax advantage to a variable
annuity purchased through one of these plans, you may desire the variable
annuities' other features such as guaranteed lifetime income payments or death
benefits for use within these plans.
What variable annuities are offered in this Prospectus? This Prospectus
describes the variable annuities listed below. The annuities differ primarily
in the fees deducted, and whether the annuity provides credits in certain
circumstances. With the help of your financial professional, you choose the
annuity based on your time horizon, liquidity needs, and desire for credits.
The annuities described in this prospectus are:
.. Advanced Series Advisor Plan III ("ASAP III")
.. Advanced Series APEX II ("APEX II")
.. Advanced Series XTra Credit Six ("XT6")
.. Advanced Series LifeVest II ("ASL II")
See Appendix F "Selecting the Variable Annuity That's Right for You," for a
side-by-side comparison of the key features of each of these Annuities.
How do I purchase one of the variable annuities? See your financial
professional to complete an application. Your eligibility to purchase is based
on your age and the size of your investment:
Product Maximum Age for Minimum Initial
Initial Purchase Purchase Payment
-------------------------------------------
ASAP III 80 $1,000
-------------------------------------------
APEX II 85 $10,000
-------------------------------------------
XT6 75 $10,000
-------------------------------------------
ASL II 85 $15,000
-------------------------------------------
19
The "Maximum Age for Initial Purchase" applies to the oldest owner as of the
day we would issue the Annuity. If the Annuity is to be owned by an entity,
the maximum age applies to the annuitant as of the day we would issue the
Annuity. For annuities purchased as a Beneficiary Annuity, the maximum issue
age is 70 and applies to the Key Life. The availability and level of
protection of certain optional benefits may also vary based on the age of the
owner or annuitant on the issue date of the annuity, the date the benefit is
elected, or the date of the owner's death. Please see the section entitled
"Living Benefits" and "Death Benefit" for additional information on these
benefits.
We may allow you to purchase an Annuity with an amount lower than the "Minimum
Initial Purchase Payment" if you establish an electronic funds transfer that
would allow you to meet the minimum requirement within one year.
You may make additional payments of at least $100 into your Annuity at any
time, subject to maximums allowed by us and as provided by law.
After you purchase your Annuity you will have usually ten days to examine it
and cancel it if you change your mind for any reason (referred to as the "free
look period"). The period of time and the amount returned to you varies by
law, and is stated on the front cover of your contract. You must cancel your
Annuity in writing.
See "What Are the Requirements for Purchasing One of the Annuities" for more
detail.
Where should I invest my money? With the help of your financial professional,
you choose where to invest your money within the Annuity. Certain optional
benefits may limit your ability to invest in the investment options otherwise
available to you under the Annuity. You may choose from a variety of
investment options ranging from conservative to aggressive. These investment
options participate in mutual fund investments that are kept in a separate
account from our other general assets. Although you may recognize some of the
names of the money managers, these investment options are designed for
variable annuities and are not the same mutual funds available to the general
public. You can decide on a mix of investment options that suit your goals.
Or, you can choose one of our investment options that participates in several
mutual funds according to a specified goal such as balanced asset allocation,
or capital growth asset allocation. If you select certain optional benefits,
we may limit the investment options that you may elect. Each of the underlying
mutual funds is described by its own prospectus, which you should read before
investing. There is no assurance that any investment option will meet its
investment objective.
We also offer programs to help discipline your investing, such as dollar cost
averaging or automatic rebalancing.
See "Investment Options," and "Managing Your Account Value."
How can I receive income from my Annuity? You can receive income by taking
withdrawals or electing annuity payments. If you take withdrawals, you should
plan them carefully, because withdrawals may be subject to tax, and may be
subject to a contingent deferred sales charge (discussed below). See the "Tax
Considerations" section of this Prospectus. You may withdraw up to 10% of your
investment each year without being subject to a contingent deferred sales
charge.
You may elect to receive income through annuity payments over your lifetime,
also called "annuitization". This option may appeal to those who worry about
outliving their Account Value through withdrawals. If you elect to receive
annuity payments, you convert your Account Value into a stream of future
payments. This means in most cases you no longer have an Account Value and
therefore cannot make withdrawals. We offer different types of annuity options
to meet your needs, and you can choose the benefits and costs that make sense
for you. For example, some of our annuity options allow for withdrawals, and
some provide a death benefit, while others guarantee payments for life without
a death benefit or the ability to make withdrawals.
See "Access to Account Value."
Options for Guaranteed Lifetime Withdrawals. We offer several optional
benefits for an additional fee that guarantee your ability to take withdrawals
for life as a percentage of an initial guaranteed benefit base, even after
your Account Value falls to zero. These benefits may appeal to you if you wish
to maintain flexibility and control over your Account Value invested (instead
of converting it to an annuity stream) and want the assurance of predictable
income. If you withdraw more than the allowable amount during any year, your
future level of guaranteed withdrawals decreases.
As part of these benefits you are required to invest only in certain permitted
investment options. Some of the benefits utilize a predetermined mathematical
formula to help manage your guarantee through all market cycles. Please see
the applicable optional benefits section for more information.
These benefits contain detailed provisions, so please see the following
sections of the Prospectus for complete details:
.. Highest Daily Lifetime 7 Plus
.. Spousal Highest Daily Lifetime 7 Plus
20
.. Highest Daily Lifetime 7 Plus with Lifetime Income Accelerator
.. Highest Daily Lifetime 7 Plus with Beneficiary Income Option
.. Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income Option
.. Highest Daily Lifetime Seven*
.. Spousal Highest Daily Lifetime Seven*
.. Highest Daily Lifetime Seven with Lifetime Income Accelerator*
.. Highest Daily Lifetime Seven with Beneficiary Income Option*
.. Spousal Highest Daily Lifetime Seven with Beneficiary Income Option*
* No longer available for new elections in a given State once the Highest
Daily Lifetime 7 Plus version is approved.
Options for Guaranteed Accumulation. We offer several optional benefits for an
additional fee that guarantee your Account Value to a certain level after a
period of years. As part of these benefits you are required to invest only in
certain permitted investment options. Please see applicable optional benefits
sections for more information.
These benefits contain detailed provisions, so please see the following
sections of the Prospectus for complete details:
.. Guaranteed Return Option Plus 2008
.. Highest Daily Guaranteed Return Option
What happens to my annuity upon death? You may name a beneficiary to receive
the proceeds of your annuity upon your death. Your annuity must be distributed
within the time periods required by the tax laws. Each of our annuities offers
a basic death benefit. The basic death benefit provides your beneficiaries
with the greater of your purchase payments less all proportional withdrawals
or your value in the annuity at the time of death (the amount of the basic
death benefit may depend on the decedent's age).
We also offer optional death benefits for an additional charge:
.. Highest Anniversary Value Death Benefit: Offers the greater of the basic
death benefit and a highest anniversary value of the annuity.
.. Combination 5% Roll-up and Highest Anniversary Value Death Benefit: Offers
the greatest of the basic death benefit, the highest anniversary value
death benefit described above, and a value assuming 5% growth of your
investment adjusted for withdrawals.
Each death benefit has certain age restrictions. Please see the "Death
Benefit" section of the Prospectus for more information.
How do I receive credits?
With XT6, we apply a credit to your Annuity each time you make a purchase
payment during the first six (6) years. Because of the credits, the expenses
of this Annuity may be higher than other annuities that do not offer credits.
The amount of the credit depends on the year during which the purchase payment
is made:
For annuities issued on or after February 13, 2006:
ANNUITY YEAR CREDIT
--------------------
1 6.50%*
2 5.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
7+ 0.00%
--------------------
* For annuities issued before February 13, 2006, the Credit during Annuity
Year 1 is 6.00%.
Please note that during the first 10 years, the total asset-based charges on
the XT6 annuity are higher than many of our other annuities. In addition, the
Contingent Deferred Sales Charge (CDSC) on the XT6 annuity is higher and is
deducted for a longer period of time as compared to our other annuities. In
general, we may take back credits applied within 12 months of death or a
medically-related surrender. We may also take back credits if you return your
Annuity under the "free-look" provision.
For ASAP III annuities issued on or after February 13, 2006, and APEX II
annuities issued on or after June 20, 2005, we apply a "loyalty credit" at the
end of your fifth anniversary for money invested with us during the first four
years of your Annuity (less adjustments for any withdrawals). For ASAP III,
the credit is 0.50%. For APEX II, the credit is either 0%, 2.25% or 2.75%
depending on the Issue Date of your Annuity.
Please see the section entitled "Managing Your Account Value" for more
information.
21
What are the Annuity's Fees and Charges?
Contingent Deferred Sales Charge: If you withdraw all or part of your annuity
before the end of a period of years, we may deduct a contingent deferred sales
charge, or "CDSC". The CDSC is calculated as a percentage of your purchase
payment being withdrawn, and depends on how long your purchase payment has
been invested. The CDSC is different depending on which annuity you purchase:
Yr. 1 Yr. 2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7 Yr. 8 Yr. 9 Yr. 10 Yr. 11+
------------------------------------------------------------------------------
ASAP III 7.5% 7.0% 6.5% 6.0% 5.0% 4.0% 3.0% 2.0% 0.0% -- --
------------------------------------------------------------------------------
APEX II 8.5% 8.0% 7.0% 6.0% 0.0% -- -- -- -- -- --
------------------------------------------------------------------------------
XT6* 9.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
------------------------------------------------------------------------------
ASL II - There is no CDSC for this Annuity
------------------------------------------------------------------------------
* For annuities issued before November 20, 2006, the schedule is as follows:
Year 1: 9.0%; Year 2: 9.0%; Year 3: 8.5%; Year 4: 8.0%; Year 5: 7.0%; Year
6: 6.0%; Year 7: 5.0%; Year 8: 4.0%; Year 9: 3.0%; Year 10: 2.0%; Year 11+:
0.0%.
Each year you may withdraw up to 10% of your purchase payments without the
imposition of a CDSC. This free withdrawal feature does not apply when fully
surrendering your Annuity. We may also waive the CDSC under certain
circumstances, such as for medically-related circumstances or taking required
minimum distributions under a qualified contracts.
Transfer Fee: You may make 20 transfers between investment options each year
free of charge. After the 20th transfer, we will charge $10.00 for each
transfer. We do not consider transfers made as part of a Dollar Cost
Averaging, Automatic Rebalancing or asset allocation program when we count the
twenty free transfers. All transfers made on the same day will be treated as
one (1) transfer. Any transfers made as a result of the mathematical formula
used with an optional benefit will not count towards the total transfers
allowed.
Annual Maintenance Fee: Until you start annuity payments, we deduct an Annual
Maintenance Fee. The Annual Maintenance Fee is $35.00 or 2% of your Account
Value invested in the Sub-accounts, whichever is less. Except for XT6, the
Annual Maintenance Fee is only deducted if your Account Value is less than
$100,000.
Tax Charge: We may deduct a charge to reimburse us for taxes we may pay on
premiums received in certain jurisdictions. The tax charge currently ranges up
to 3 1/2% of your purchase payments and is designed to approximate the taxes
that we are required to pay.
Insurance Charge: We deduct an Insurance Charge. It is an annual charge
assessed on a daily basis. It is the combination of the Mortality & Expense
Risk Charge and the Administration Charge. The charge is assessed against the
daily assets allocated to the Sub-accounts and depends on which annuity you
purchase:
------------------------------------------------------
FEE/CHARGE ASAP III APEX II ASL II XT6
------------------------------------------------------
Mortality & Expense 0.50% 1.50% 1.50% 0.50%
Risk Charge
------------------------------------------------------
Administration 0.15% 0.15% 0.15% 0.15%
Charge
------------------------------------------------------
Total Insurance 0.65% 1.65% 1.65% 0.65%
Charge
------------------------------------------------------
Distribution Charge: For ASAP III and XT6, we deduct a Distribution Charge
daily. It is an annual charge assessed on a daily basis. The charge is
assessed for a certain number of years against the average assets allocated to
the Sub-accounts and is equal to the following:
-------------------------------------------------------------------------
FEE/CHARGE ASAP III APEX II ASL II XT6
-------------------------------------------------------------------------
Distribution Charge 0.60% in Annuity N/A N/A 1.00% in Annuity
Years 1-8 Years 1-10
-------------------------------------------------------------------------
Charges for Optional Benefits: If you elect to purchase certain optional
benefits, we will deduct an additional charge. For some optional benefits, the
charge is deducted from your Account Value allocated to the Sub-accounts. This
charge is included in the daily calculation of the Unit Price for each
Sub-account. For certain other optional benefits, such as Highest Daily
Lifetime Seven, the charge is assessed against the Protected Withdrawal Value
and taken out of the Sub-accounts periodically. Please refer to the section
entitled "Summary of Contract Fees and Charges" for the list of charges for
each optional benefit.
22
Settlement Service Charge: If your beneficiary takes the death benefit under a
Beneficiary Continuation Option, we deduct a Settlement Service Charge,
although the Insurance Charge no longer applies. The charge is assessed daily
against the average assets allocated to the Sub-accounts and is equal to an
annual charge of 1.00% for non-qualified Annuities and 1.40% for qualified
Annuities.
Fees and expenses incurred by the Portfolios: Each Portfolio incurs total
annual operating expenses comprised of an investment management fee, other
expenses and any distribution and service (12b-1) fees that may apply. More
detailed information about fees and expenses can be found in the prospectuses
for the Portfolios. Please see the "Fees and Charges" section of the
Prospectus for more information.
Costs to Sell and Administer Our Variable Annuity
Your financial professional may receive a commission for selling one of our
variable annuities to you. We may pay fees to your financial professional's
broker dealer firm to cover costs of marketing or administration. These
commissions and fees may incent your financial professional to sell our
variable annuity instead of one offered by another company. We also receive
fees from the mutual fund companies that offer the investment options for
administrative costs and marketing. These fees may influence our decision to
offer one family of funds over another. If you have any questions you may
speak with your financial professional or us. See "General Information".
Other Information
Please see the section entitled "General Information" for more information
about our annuities, including legal information about our company, separate
account, and underlying funds.
23
INVESTMENT OPTIONS
WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES OF THE PORTFOLIOS?
Each variable investment option is a Sub-account of Prudential Annuities Life
Assurance Corporation Variable Account B (see "What are Separate Accounts" for
more detailed information). Each Sub-account invests exclusively in one
Portfolio. You should carefully read the prospectus for any Portfolio in which
you are interested. The Investment Objectives/Policies chart below classifies
each of the Portfolios based on our assessment of their investment style (as
of the date of this Prospectus). The chart also provides a description of each
Portfolio's investment objective (in italics) and a short, summary description
of their key policies to assist you in determining which Portfolios may be of
interest to you. There is no guarantee that any underlying Portfolio will meet
its investment objective. Not all portfolios offered as Sub-accounts may be
available depending on optional benefit selection, the applicable jurisdiction
and selling firm. The Portfolios that you select are your choice - we do not
provide investment advice, and we do not recommend or endorse any particular
Portfolio. You bear the investment risk for amounts allocated to the
Portfolios. Please see the General Information section of this Prospectus,
under the heading concerning "service fees" for a discussion of fees that we
may receive from underlying mutual funds and/or their affiliates.
The name of the advisor/sub-advisor for each Portfolio appears next to the
description. Those Portfolios whose name includes the prefix "AST" are
Portfolios of Advanced Series Trust. The investment managers for AST are AST
Investment Services, Inc., a Prudential Financial Company, and Prudential
Investments LLC, both of which are affiliated companies of Prudential
Annuities. However, a sub-advisor, as noted below, is engaged to conduct
day-to-day management.
The Portfolios are not publicly traded mutual funds. They are only available
as investment options in variable annuity contracts and variable life
insurance policies issued by insurance companies, or in some cases, to
participants in certain qualified retirement plans. However, some of the
Portfolios available as Sub-accounts under the Annuities are managed by the
same portfolio advisor or sub-advisor as a retail mutual fund of the same or
similar name that the Portfolio may have been modeled after at its inception.
Certain retail mutual funds may also have been modeled after a Portfolio.
While the investment objective and policies of the retail mutual funds and the
Portfolios may be substantially similar, the actual investments will differ to
varying degrees. Differences in the performance of the funds can be expected,
and in some cases could be substantial. You should not compare the performance
of a publicly traded mutual fund with the performance of any similarly named
Portfolio offered as a Sub-account. Details about the investment objectives,
policies, risks, costs and management of the Portfolios are found in the
prospectuses for the underlying mutual funds. The current prospectus and
statement of additional information for the underlying Portfolios can be
obtained by calling 1-800-752-6342.
Effective May 1, 2004, the SP International Growth Portfolio (formerly the SP
William Blair International Growth Portfolio) is no longer offered as a
Sub-account under the Annuities, except as follows: if at any time prior to
May 1, 2004 you had any portion of your Account Value allocated to the SP
William Blair International Growth Sub-account, you may continue to allocate
Account Value and make transfers into and/or out of the SP William Blair
International Growth Sub-account, including any electronic funds transfer,
dollar cost averaging, asset allocation and rebalancing programs. If you never
had a portion of your Account Value allocated to the SP William Blair
International Growth Sub-account prior to May 1, 2004 or if you purchase your
Annuity on or after May 1, 2004, you cannot allocate Account Value to the SP
William Blair International Growth Sub-account.
Stipulated Investment Options if you Elect Certain Optional Benefits
As a condition to your participating in certain optional benefits, we limit
the investment options to which you may allocate your Account Value. Broadly
speaking, we offer two groups of "Permitted Sub-accounts". Under the first
group (Group I), your allowable investment options are more limited, but you
are not subject to mandatory quarterly re-balancing. Under the second group
(Group II), you may allocate your Account Value between a broader range of
investment options, but must participate in quarterly re-balancing. The set of
tables immediately below describes the first category of permitted investment
options.
While those who do not participate in any optional benefit generally may
invest in any of the investment options described in the Prospectus, only
those who participate in the optional benefits listed in Group II below may
participate in the second category (along with its attendant re-balancing
requirement). This second category is called our "Optional Allocation and
Rebalancing Program." If you participate in the Optional Allocation and
Rebalancing Program, you may not participate in an Automatic Rebalancing
Program. We may modify or terminate the Optional Allocation and Rebalancing
Program at any time. Any such modification or termination will (i) be
implemented only after we have notified you in advance, (ii) not affect the
guarantees you had accrued under the optional benefit or your ability to
continue to participate in those optional benefits, and (iii) not require you
to transfer Account Value out of any Portfolio in which you participated
immediately prior to the modification or termination.
24
Group I: Allowable Benefit Allocations
Optional Benefit Name* Allowable Benefit Allocations:
Lifetime Five Income Benefit AST Academic Strategies Asset
Spousal Lifetime Five Income Benefit Allocation Portfolio
Highest Daily Lifetime Five Income AST Capital Growth Asset Allocation
Benefit Portfolio
Highest Daily Lifetime Seven Income AST Balanced Asset Allocation
Benefit Portfolio
Spousal Highest Daily Lifetime Seven AST Preservation Asset Allocation
Income Benefit Portfolio
Highest Daily Value Death Benefit AST First Trust Balanced Target
Highest Daily Lifetime Seven with Portfolio
Beneficiary Income AST First Trust Capital Appreciation
Option Target Portfolio
Spousal Highest Daily Lifetime Seven AST Focus Four Plus Portfolio
with Beneficiary Income Option AST Advanced Strategies Portfolio
Highest Daily Lifetime Seven with AST T. Rowe Price Asset Allocation
Lifetime Income Portfolio
Accelerator AST UBS Dynamic Alpha Strategy
Portfolio
AST Niemann Capital Growth Asset
Allocation Portfolio
AST CLS Growth Asset Allocation
Portfolio
Highest Daily Lifetime 7 Plus Income AST CLS Moderate Asset Allocation
Benefit Portfolio
Highest Daily Lifetime 7 Plus with AST Horizon Growth Asset Allocation
Beneficiary Portfolio
Income Option AST Horizon Moderate Asset
Highest Daily Lifetime 7 Plus with Allocation Portfolio
Lifetime AST Schroders Multi-Asset World
Income Accelerator Strategies Asset
Spousal Highest Daily Lifetime 7 Plus Allocation Portfolio
Income Benefit Franklin Templeton VIP Founding
Spousal Highest Daily Lifetime 7 Funds Allocation Fund
Plus with Beneficiary Income Option
------------------------------------------------------------------------------
Optional Benefit Name* All investment options permitted,
EXCEPT these:
Combo 5% Rollup & HAV Death Benefit Value Line/(R)/ Target 25
Guaranteed Minimum Income Benefit AIM V.I. Technology
Guaranteed Minimum Withdrawal Benefit NASDAQ/(R)/ Target 15
GRO/GRO PLUS/GRO PLUS 2008 Evergreen VA Growth Fund
Highest Anniversary Value Death Access VP High Yield
Benefit ProFund VP UltraNASDAQ 100
Highest Daily GRO ProFund VP UltraSmall-Cap
ProFund VP Semiconductor
ProFund VP Internet
ProFund VP UltraBull
ProFund VP Technology
ProFund VP Biotechnology
ProFund VP Short Small-Cap
ProFund VP Short Mid-Cap
------------------------------------------------------------------------------
Optional Benefit Name* All investment options permitted,
EXCEPT these:
GRO PLUS 2008 ProFund VP Ultra Mid-Cap
Highest Daily GRO ProFund VP Precious Metals
ProFund VP NASDAQ-100
ProFund VP Asia 30
ProFund VP Short NASDAQ-100
Value Line/(R)/ Target 25
AIM V.I. Technology
NASDAQ/(R)/ Target 15
Evergreen VA Growth Fund
Access VP High Yield
ProFund VP UltraNASDAQ 100
ProFund VP UltraSmall-Cap
ProFund VP Semiconductor
ProFund VP Internet
ProFund VP UltraBull
ProFund VP Technology
ProFund VP Biotechnology
ProFund VP Short Small-Cap
ProFund VP Short Mid-Cap
* Detailed Information regarding these optional benefits can be found in the
"Living Benefits" and "Death Benefit" sections of this Prospectus.
25
The following set of tables describes the second category (i.e., Group II
below), under which:
(a)you must allocate at least 20% of your Account Value to certain fixed
income portfolios (currently, the AST PIMCO Total Return Bond Portfolio and
the AST Western Asset Core Plus Bond Portfolio).
(b)you may allocate up to 80% in equity and other portfolios listed in the
table below.
(c)on each benefit quarter (or the next Valuation Day, if the quarter-end is
not a Valuation Day), we will automatically re-balance your Account Value,
so that the percentages devoted to each Portfolio remain the same as those
in effect on the immediately preceding quarter-end. Note that on the first
quarter-end following your participation in the Optional Allocation and
Rebalancing Benefit, we will re-balance your Account Value so that the
percentages devoted to each Portfolio remain the same as those in effect
when you began the Optional Allocation and Rebalancing Benefit.
(d)between quarter-ends, you may re-allocate your Account Value among the
investment options permitted within this category. If you reallocate, the
next quarterly rebalancing will restore the percentages to those of your
most recent reallocation.
Group II: Optional Allocation & Rebalancing Program
Optional Benefit Name Permitted Portfolios
Highest Daily Lifetime Seven AST Academic Strategies Asset
Spousal Highest Daily Lifetime Seven Allocation
Highest Daily Lifetime Seven with AST Advanced Strategies
Beneficiary Income Option AST Aggressive Asset Allocation
Spousal Highest Daily Lifetime Seven AST AllianceBernstein Growth & Income
with Beneficiary Income Option AST Balanced Asset Allocation
Highest Daily Lifetime Seven with AST CLS Growth Asset Allocation
Lifetime Income Accelerator AST CLS Moderate Asset Allocation
Highest Daily Lifetime 7 Plus AST AllianceBernstein Core Value
Spousal Highest Daily Lifetime 7 Plus AST American Century Income & Growth
Highest Daily Lifetime 7 Plus with AST Capital Growth Asset Allocation
Beneficiary Income Option AST Cohen & Steers Realty
Spousal Highest Daily Lifetime 7 AST DeAM Large-Cap Value
Plus with Beneficiary Income Option AST Federated Aggressive Growth
Highest Daily Lifetime 7 Plus with AST First Trust Balanced Target
Lifetime Income Accelerator AST First Trust Capital Appreciation
Target
AST Focus Four Plus
AST Global Real Estate
AST Goldman Sachs Concentrated Growth
AST Goldman Sachs Mid-Cap Growth
AST Goldman Sachs Small-Cap Value
AST High Yield
AST Horizon Growth Asset Allocation
AST Horizon Moderate Asset Allocation
AST International Growth
AST International Value
AST JPMorgan International Equity
AST Large-Cap Value
AST Lord Abbett Bond-Debenture
AST Marsico Capital Growth
AST MFS Global Equity
AST MFS Growth
AST Mid-Cap Value
AST Money Market
AST Neuberger Berman Mid-Cap Growth
AST Neuberger Berman/LSV Mid-Cap
Value
AST Neuberger Berman Small-Cap Growth
AST Niemann Capital Growth Asset
Allocation
AST PIMCO Limited Maturity Bond
AST PIMCO Total Return Bond
AST Preservation Asset Allocation
AST QMA US Equity Alpha
AST Schroders Multi-Asset World
Strategies Asset Allocation
AST Small-Cap Growth
AST Small-Cap Value
26
Permitted Portfolios
AST T. Rowe Price Asset Allocation
AST T. Rowe Price Global Bond
AST T. Rowe Price Large-Cap Growth
AST T. Rowe Price Natural Resources
AST UBS Dynamic Alpha Strategy
AST Western Asset Core Plus Bond
Franklin Templeton VIP Founding
Funds Allocation Fund
The following additional Portfolios are available with ASAP III, APEX II and
ASL II only:
ProFund VP**
Consumer Goods
Consumer Services
Financials
Health Care
Industrials
Large-Cap Growth
Large-Cap Value
Mid-Cap Growth
Mid-Cap Value
Real Estate
Small-Cap Growth
Small-Cap Value
Telecommunications
Utilities
* Detailed Information regarding these optional benefits can be found in the
"Living Benefits" and "Death Benefit" sections of this Prospectus.
** For ASAP III, XT6, and ASL II Annuities issued beginning on May 26, 2008,
we limit the Owner's ability to invest in the ProFund VP Portfolios.
Specifically:
.. We will not permit those who acquire an ASAP III, XT6, or ASL II Annuity on
or after May 26, 2008 (including beneficiaries who acquire such an Annuity
under the Beneficiary Continuation Option) to invest in any ProFund VP
Portfolio; and
.. Those who acquired an ASAP III, XT6, or ASL II Annuity prior to May 26,
2008 may invest in any ProFund VP Portfolio without being subject to the
above restrictions; and
.. Those who currently hold an APEX II Annuity, or who acquire an APEX II
Annuity after May 26, 2008, may invest in any ProFund VP Portfolio (except
that beneficiaries who acquire an APEX II Annuity on or after May 26, 2008
under the Beneficiary Continuation Option may not invest in any ProFund VP
Portfolio).
Certain optional living benefits (e.g., Highest Daily Lifetime 7 Plus) employ
a pre-determined formula, under which money is transferred between your chosen
variable sub-accounts and a bond portfolio (e.g., the AST Investment Grade
Bond Portfolio). You should be aware that the operation of the formula could
impact the expenses and performance of the variable sub-accounts used with the
optional living benefits (the "Permitted Sub-accounts"). Specifically, because
transfers to and from the Permitted Sub-accounts can be frequent and the
amount transferred can vary, the Permitted Sub-accounts could experience the
following effects, among others: (a) they may be compelled to hold a larger
portion of assets in highly liquid securities than they otherwise would, which
could diminish performance if the highly liquid securities underperform other
securities (e.g., equities) that otherwise would have been held (b) they may
experience higher portfolio turnover, which generally will increase the
Permitted Sub-accounts' expenses and (c) if they are compelled by the formula
to sell securities that are thinly-traded, such sales could have a significant
impact on the price of such securities. Please consult the prospectus for the
applicable fund for complete information about these effects.
27
------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
------------------------------------------------------------------------
ADVANCED SERIES TRUST
------------------------------------------------------------------------
ASSET AST Academic Strategies Asset AlphaSimplex
ALLOCA Allocation Portfolio (formerly known Group, LLC; Credit
TION as AST Balanced Asset Allocation Suisse Securities
Portfolio): seeks long term capital (USA) LLC; First
appreciation. The Portfolio is a Quadrant L.P.;
multi- asset class fund that pursues Jennison Associates
both top-down asset allocation LLC; Mellon
strategies and bottom-up selection Capital
of securities, investment managers, Management
and mutual funds. Under normal Corporation; Pacific
circumstances, approximately 60% of Investment
the assets will be allocated to Management
traditional asset classes (including Company LLC
US and international equities and (PIMCO);
bonds) and approximately 40% of the Prudential Bache
assets will be allocated to Asset Management,
nontraditional asset classes Incorporated;
(including real estate, commodities, Quantitative
and alternative strategies). Those Management
percentages are subject to change at Associates LLC
the discretion of the advisor.
------------------------------------------------------------------------
ASSET AST Advanced Strategies Portfolio: LSV Asset
ALLOCA seeks a high level of absolute Management;
TION return. The Portfolio invests in Marsico Capital
traditional and non-traditional Management, LLC;
investment strategies and by Pacific Investment
investing in domestic and foreign Management
equity and fixed income securities, Company LLC
derivative instruments in exchange (PIMCO); T. Rowe
traded funds. The asset allocation Price Associates,
generally provides for an allotment Inc.; William Blair
of 50% of the portfolio assets to a & Company, LLC;
combination of domestic and Quantitative
international equity strategies and Management
the remainder in a combination of Associates LLC
U.S. fixed income, hedged
international bond and real return
bonds. The manager will allocate the
assets of the portfolio across
different investment categories and
subadvisors.
------------------------------------------------------------------------
ASSET AST Aggressive Asset Allocation Prudential
ALLOCA Portfolio: seeks to obtain total Investments LLC;
TION return consistent with its specified Quantitative
level of risk. The Portfolio Management
primarily invests its assets in a Associates LLC
diversified portfolio of other
mutual funds, the underlying
portfolios, of the Advanced Series
Trust and certain affiliated money
market funds. Under normal market
conditions, the Portfolio will
devote approximately 100% of its net
assets to underlying portfolios
investing primarily in equity
securities (with a range of 92.5% to
100%) and the remainder of its net
assets to underlying portfolios
investing primarily in debt
securities and money market
instruments (with a range of 0% -
7.5%). The Portfolio is not limited
to investing exclusively in shares
of the underlying portfolios and may
invest in securities and futures
contracts, swap agreements and other
financial and derivative instruments.
------------------------------------------------------------------------
LARGE AST AllianceBernstein Core Value AllianceBernstein
CAP Portfolio: seeks long-term capital L.P.
VALUE growth by investing primarily in
common stocks. The subadviser
expects that the majority of the
Portfolio's assets will be invested
in the common stocks of large
companies that appear to be
undervalued. Among other things, the
Portfolio seeks to identify
compelling buying opportunities
created when companies are
undervalued on the basis of investor
reactions to near-term problems or
circumstances even though their
long-term prospects remain sound.
The subadviser seeks to identify
individual companies with earnings
growth potential that may not be
recognized by the market at large.
------------------------------------------------------------------------
28
----------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
----------------------------------------------------------------------
LARGE AST AllianceBernstein Growth & AllianceBernstein
CAP Income Portfolio: seeks long-term L.P.
VALUE growth of capital and income while
attempting to avoid excessive
fluctuations in market value. The
Portfolio normally will invest in
common stocks (and securities
convertible into common stocks). The
subadviser will take a
value-oriented approach, in that it
will try to keep the Portfolio's
assets invested in securities that
are selling at reasonable valuations
in relation to their fundamental
business prospects.
----------------------------------------------------------------------
LARGE AST American Century Income & Growth American Century
CAP Portfolio: seeks capital growth with Investment
VALUE current income as a secondary Management, Inc.
objective. The Portfolio invests
primarily in common stocks that
offer potential for capital growth,
and may, consistent with its
investment objective, invest in
stocks that offer potential for
current income. The subadviser
utilizes a quantitative management
technique with a goal of building an
equity portfolio that provides
better returns than the S&P 500
Index without taking on significant
additional risk and while attempting
to create a dividend yield that will
be greater than the S&P 500 Index.
----------------------------------------------------------------------
ASSET AST Balanced Asset Allocation Prudential
ALLOCA Portfolio (formerly known as AST Investments LLC;
TION Conservative Asset Allocation Quantitative
Portfolio): seeks to obtain total Management
return consistent with its specified Associates LLC
level of risk. The Portfolio
primarily invests its assets in a
diversified portfolio of other
mutual funds, the underlying
portfolios, of the Advanced Series
Trust and certain affiliated money
market funds. Under normal market
conditions, the Portfolio will
devote approximately 60% of its net
assets to underlying portfolios
investing primarily in equity
securities (with a range of 52.5% to
67.5%, and 40% of its net assets to
underlying portfolios investing
primarily in debt securities and
money market instruments (with a
range of 32.5% to 47.5%). The
Portfolio is not limited to
investing exclusively in shares of
the underlying portfolios and may
invest in securities and futures
contracts, swap agreements and other
financial and derivative instruments.
----------------------------------------------------------------------
FIXED AST Bond Portfolio 2015: seeks the Prudential
INCOME highest potential total return Investment
consistent with its specified level Management, Inc.
of risk tolerance to meet the
parameters established to support
the GRO benefits and maintain
liquidity to support changes in
market conditions for a fixed
maturity of 2015. Please note that
you may not make purchase payments
to this Portfolio, and that this
Portfolio is available only with
certain living benefits.
----------------------------------------------------------------------
FIXED AST Bond Portfolio 2016: seeks the Prudential
INCOME highest potential total return Investment
consistent with its specified level Management, Inc.
of risk tolerance to meet the
parameters established to support
the GRO benefits and maintain
liquidity to support changes in
market conditions for a fixed
maturity of 2016. Please note that
you may not make purchase payments
to this Portfolio, and that this
Portfolio is available only with
certain living benefits.
----------------------------------------------------------------------
FIXED AST Bond Portfolio 2018: seeks the Prudential
INCOME highest potential total return Investment
consistent with its specified level Management, Inc.
of risk tolerance to meet the
parameters established to support
the GRO benefits and maintain
liquidity to support changes in
market conditions for a fixed
maturity of 2018. Please note that
you may not make purchase payments
to this Portfolio, and that this
Portfolio is available only with
certain living benefits.
----------------------------------------------------------------------
FIXED AST Bond Portfolio 2019: seeks the Prudential
INCOME highest potential total return Investment
consistent with its specified level Management, Inc.
of risk tolerance to meet the
parameters established to support
the GRO benefits and maintain
liquidity to support changes in
market conditions for a fixed
maturity of 2019. Please note that
you may not make purchase payments
to this Portfolio, and that this
Portfolio is available only with
certain living benefits.
----------------------------------------------------------------------
FIXED AST Bond Portfolio 2020: seeks the Prudential
INCOME highest potential total return Investment
consistent with its specified level Management, Inc.
of risk tolerance to meet the
parameters established to support
the GRO benefits and maintain
liquidity to support changes in
market conditions for a fixed
maturity of 2020. Please note that
you may not make purchase payments
to this Portfolio, and that this
Portfolio is available only with
certain living benefits.
----------------------------------------------------------------------
29
-------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
-------------------------------------------------------------------------
ASSET AST Capital Growth Asset Allocation Prudential
ALLOCA Portfolio: seeks to obtain total Investments LLC;
TION return consistent with its specified Quantitative
level of risk. The Portfolio Management
primarily invests its assets in a Associates LLC
diversified portfolio of other
mutual funds, the underlying
portfolios, of the Advanced Series
Trust and certain affiliated money
market funds. Under normal market
conditions, the Portfolio will
devote approximately 75% of its net
assets to underlying portfolios
investing primarily in equity
securities (with a range of 67.5% to
80%), and 25% of its net assets to
underlying portfolios investing
primarily in debt securities and
money market instruments (with a
range of 20.0% to 32.5%). The
Portfolio is not limited to
investing exclusively in shares of
the underlying portfolios and may
invest in securities and futures
contracts, swap agreements and other
financial and derivative instruments.
-------------------------------------------------------------------------
ASSET AST CLS Growth Asset Allocation CLS Investments
ALLOCA Portfolio: seeks the highest LLC
TION potential total return consistent
with its specified level of risk
tolerance. Under normal
circumstances, at least 90% of the
Portfolio's assets will be invested
in other portfolios of Advanced
Series Trust (the underlying
portfolios) while no more than 10%
of the Portfolio's assets may be
invested in exchange traded funds
(ETFs). Under normal market
conditions, the Portfolio will
devote from 60% to 80% of its net
assets to underlying portfolios and
ETFs investing primarily in equity
securities, and from 20% to 40% of
its net assets to underlying
portfolios and ETFs investing
primarily in debt securities and
money market instruments.
-------------------------------------------------------------------------
ASSET AST CLS Moderate Asset Allocation CLS Investments
ALLOCA Portfolio: seeks the highest LLC
TION potential total return consistent
with its specified level of risk
tolerance. Under normal
circumstances, at least 90% of the
Portfolio's assets will be invested
in other portfolios of Advanced
Series Trust (the underlying
portfolios) while no more than 10%
of the Portfolio's assets may be
invested in exchange traded funds
(ETFs). Under normal market
conditions, the Portfolio will
devote from 40% to 60% of its net
assets to underlying portfolios and
ETFs investing primarily in equity
securities, and from 40% to 60% of
its net assets to underlying
portfolios and ETFs investing
primarily in debt securities and
money market instruments.
-------------------------------------------------------------------------
SPECIALTY AST Cohen & Steers Realty Portfolio: Cohen & Steers
seeks to maximize total return Capital
through investment in real estate Management, Inc.
securities. The Portfolio pursues
its investment objective by
investing, under normal
circumstances, at least 80% of its
net assets in common stocks and
other equity securities issued by
real estate companies, such as real
estate investment trusts (REITs).
Under normal circumstances, the
Portfolio will invest substantially
all of its assets in the equity
securities of real estate companies,
i.e., a company that derives at
least 50% of its revenues from the
ownership, construction, financing,
management or sale of real estate or
that has at least 50% of its assets
in real estate. Real estate
companies may include real estate
investment trusts (REITs).
-------------------------------------------------------------------------
LARGE AST DeAM Large-Cap Value Portfolio: Deutsche
CAP seeks maximum growth of capital by Investment
VALUE investing primarily in the value Management
stocks of larger companies. The Americas, Inc.
Portfolio pursues its objective,
under normal market conditions, by
primarily investing at least 80% of
the value of its assets in the
equity securities of large-sized
companies included in the Russell
1000(R) Value Index. The subadviser
employs an investment strategy
designed to maintain a portfolio of
equity securities which approximates
the market risk of those stocks
included in the Russell 1000(R)
Value Index, but which attempts to
outperform the Russell 1000(R) Value
Index through active stock selection.
-------------------------------------------------------------------------
SMALL AST Federated Aggressive Growth Federated Equity
CAP Portfolio: seeks capital growth. The Management
GROWTH Portfolio pursues its investment Company of
objective by investing primarily in Pennsylvania/
the stocks of small companies that Federated Global
are traded on national security Investment
exchanges, NASDAQ stock exchange and Management Corp.;
the over- the-counter-market. Small Federated MDTA
companies will be defined as LLC
companies with market
capitalizations similar to companies
in the Russell 2000 Growth and S&P
600 Small Cap Index.
-------------------------------------------------------------------------
30
---------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
---------------------------------------------------------------------------
ASSET AST First Trust Balanced Target First Trust Advisors
ALLOCA Portfolio: seeks long-term capital L.P.
TION growth balanced by current income.
The Portfolio seeks to achieve its
objective by investing approximately
65% in common stocks and
approximately 35% in fixed income
securities. The Portfolio allocates
the equity portion of the portfolio
across five uniquely specialized
strategies - The Dow(R) Target
Dividend, the Value Line(R) Target
25, the Global Dividend Target 15,
the NYSE(R) International Target 25,
and the Target Small Cap. Each
strategy employs a quantitative
approach by screening common stocks
for certain attributes and/or using
a multi-factor scoring system to
select the common stocks. The fixed
income allocation is determined by
the Dow Jones Income strategy which
utilizes certain screens to select
bonds from the Dow Jones Corporate
Bond Index or like-bonds not in the
index.
---------------------------------------------------------------------------
ASSET AST First Trust Capital Appreciation First Trust Advisors
ALLOCA Target Portfolio: seeks long-term L.P.
TION capital growth. The Portfolio seeks
to achieve its objective by
investing approximately 80% in
common stocks and approximately 20%
in fixed income securities. The
portfolio allocates the equity
portion of the portfolio across five
uniquely specialized strategies -
the Value Line(R) Target 25, the
Global Dividend Target 15, the
Target Small Cap, the Nasdaq(R)
Target 15, and the NYSE(R)
International Target 25. Each
strategy employs a quantitative
approach by screening common stocks
for certain attributes and/or using
a multi-factor scoring system to
select the common stocks. The fixed
income allocation is determined by
the Dow Jones Income strategy which
utilizes certain screens to select
bonds from the Dow Jones Corporate
Bond Index or like-bonds not in the
index.
---------------------------------------------------------------------------
ASSET AST Focus Four Plus Portfolio: seeks First Trust Advisors
ALLOCA long-term capital growth. The L.P.
TION Portfolio seeks to achieve its
objective by investing approximately
75% in common stocks and
approximately 25% in fixed-income
securities. The Portfolio allocates
the equity portion of the portfolio
across four uniquely specialized
strategies - The Dow(R) Target
Dividend, the Value Line(R) Target
25, the NYSE(R) International Target
25, and the S&P Target SMid 60. Each
strategy employs a quantitative
approach by screening common stocks
for certain attributes and/or using
a multi-factor scoring system to
select the common stocks.
---------------------------------------------------------------------------
SPECIALTY AST Global Real Estate Portfolio: Prudential Real
seeks capital appreciation and Estate Investors
income. The Portfolio will normally
invest at least 80% of its liquid
assets (net assets plus any
borrowing made for investment
purposes) in equity-related
securities of real estate companies.
The Portfolio will invest in
equity-related securities of real
estate companies on a global basis
and the Portfolio may invest up to
15% of its net assets in ownership
interests in commercial real estate
through investments in private real
estate.
---------------------------------------------------------------------------
LARGE AST Goldman Sachs Concentrated Goldman Sachs
CAP Growth Portfolio: seeks long-term Asset Management,
GROWTH growth of capital. The Portfolio L.P.
will pursue its objective by
investing primarily in equity
securities of companies that the
subadviser believes have the
potential to achieve capital
appreciation over the long-term. The
Portfolio seeks to achieve its
investment objective by investing,
under normal circumstances, in
approximately 30 - 45 companies that
are considered by the subadviser to
be positioned for long-term growth.
---------------------------------------------------------------------------
MID CAP AST Goldman Sachs Mid-Cap Growth Goldman Sachs
GROWTH Portfolio: seeks long-term capital Asset Management,
growth. The Portfolio pursues its L.P.
investment objective, by investing
primarily in equity securities
selected for their growth potential,
and normally invests at least 80% of
the value of its assets in
medium-sized companies. Medium-sized
companies are those whose market
capitalizations (measured at the
time of investment) fall within the
range of companies in the Russell
Mid-cap Growth Index. The subadviser
seeks to identify individual
companies with earnings growth
potential that may not be recognized
by the market at large.
---------------------------------------------------------------------------
SMALL AST Goldman Sachs Small-Cap Value Goldman Sachs
CAP Portfolio: seeks long-term capital Asset Management,
VALUE appreciation. The Portfolio will L.P.
seek its objective through
investments primarily in equity
securities that are believed to be
undervalued in the marketplace. The
Portfolio will invest, under normal
circumstances, at least 80% of the
value of its assets plus any
borrowings for investment purposes
in small capitalization companies.
The 80% investment requirement
applies at the time the Portfolio
invests its assets. The Portfolio
generally defines small
capitalization companies as
companies with market
capitalizations that are within the
range of the Russell 2000 Value
Index at the time of purchase.
---------------------------------------------------------------------------
31
------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
------------------------------------------------------------------------
FIXED AST High Yield Portfolio: seeks Pacific Investment
INCOME maximum total return, consistent Management
with preservation of capital and Company LLC
prudent investment management. The (PIMCO)
Portfolio will invest, under normal
circumstances, at least 80% of its
net assets plus any borrowings for
investment purposes (measured at
time of purchase) in non-investment
grade high yield, fixed-income
investments which may be represented
by forwards or derivatives such as
options, futures contracts, or swap
agreements. Non-investment grade
investments are financial
instruments rated Ba or lower by a
Moody's Investors Services, Inc. or
equivalently rated by Standard
Poor's Corporation, or Fitch, or, if
unrated, determined by the
subadviser to be of comparable
quality.
------------------------------------------------------------------------
ASSET AST Horizon Growth Asset Allocation Horizon
ALLOCA Portfolio: seeks the highest Investments, LLC
TION potential total return consistent
with its specified level of risk
tolerance. Under normal
circumstances, at least 90% of the
Portfolio's assets will be invested
in other portfolios of Advanced
Series Trust (the underlying
portfolios) while no more than 10%
of the Portfolio's assets may be
invested in exchange traded funds
(ETFs). Under normal market
conditions, the Portfolio will
devote from 60% to 80% of its net
assets to underlying portfolios and
ETFs investing primarily in equity
securities, and from 20% to 40% of
its net assets to underlying
portfolios and ETFs investing
primarily in debt securities and
money market instruments.
------------------------------------------------------------------------
ASSET AST Horizon Moderate Asset Horizon
ALLOCA Allocation Portfolio: seeks the Investments, LLC
TION highest potential total return
consistent with its specified level
of risk tolerance. Under normal
circumstances, at least 90% of the
Portfolio's assets will be invested
in other portfolios of Advanced
Series Trust (the underlying
portfolios) while no more than 10%
of the Portfolio's assets may be
invested in exchange traded funds
(ETFs). Under normal market
conditions, the Portfolio will
devote from 40% to 60% of its net
assets to underlying portfolios and
ETFs investing primarily in equity
securities, and from 40% to 60% of
its net assets to underlying
portfolios and ETFs investing
primarily in debt securities and
money market instruments.
------------------------------------------------------------------------
INTER AST International Growth Portfolio: Marsico Capital
NATIONAL seeks long-term capital growth. Management, LLC;
EQUITY Under normal circumstances, the William Blair &
Portfolio invests at least 80% of Company, LLC
the value of its assets in
securities of issuers that are
economically tied to countries other
than the United States. Although the
Portfolio intends to invest at least
80% of its assets in the securities
of issuers located outside the
United States, it may at times
invest in U.S. issuers and it may
invest all of its assets in fewer
than five countries or even a single
country. The Portfolio looks
primarily for stocks of companies
whose earnings are growing at a
faster rate than other companies or
which offer attractive growth.
------------------------------------------------------------------------
INTER AST International Value Portfolio: LSV Asset
NATIONAL seeks long-term capital Management;
EQUITY appreciation. The Portfolio normally Thornburg
invests at least 80% of the Investment
Portfolio's assets in equity Management, Inc.
securities. The Portfolio will
invest at least 65% of its net
assets in the equity securities of
companies in at least three
different countries, without limit
as to the amount of assets that may
be invested in a single country.
------------------------------------------------------------------------
FIXED AST Investment Grade Bond Portfolio: Prudential
INCOME seeks the highest potential total Investment
return consistent with its specified Management, Inc.
level of risk tolerance to meet the
parameters established to support
the Highest Daily Lifetime Seven
benefits and maintain liquidity to
support changes in market conditions
for a fixed duration (weighted
average maturity) of about 6 years.
Please note that you may not make
purchase payments to this Portfolio,
and that this Portfolio is available
only with certain living benefits.
------------------------------------------------------------------------
INTER AST JPMorgan International Equity J.P. Morgan
NATIONAL Portfolio: seeks long-term capital Investment
EQUITY growth by investing in a diversified Management, Inc.
portfolio of international equity
securities. The Portfolio seeks to
meet its objective by investing,
under normal market conditions, at
least 80% of its assets in a
diversified portfolio of equity
securities of companies located or
operating in developed non-U.S.
countries and emerging markets of
the world. The equity securities
will ordinarily be traded on a
recognized foreign securities
exchange or traded in a foreign
over-the-counter market in the
country where the issuer is
principally based, but may also be
traded in other countries including
the United States.
------------------------------------------------------------------------
32
-------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
-------------------------------------------------------------------------
LARGE AST Large-Cap Value Portfolio: seeks Dreman Value
CAP current income and long-term growth Management
VALUE of income, as well as capital L.L.C.; Eaton
appreciation. The Portfolio invests, Vance
under normal circumstances, at least Management;
80% of its net assets in common Hotchkis and Wiley
stocks of large capitalization Capital
companies. Large capitalization Management LLC
companies are those companies with
market capitalizations within the
market capitalization range of the
Russell 1000 Value Index.
-------------------------------------------------------------------------
FIXED AST Lord Abbett Bond-Debenture Lord, Abbett & Co.
INCOME Portfolio: seeks high current income LLC
and the opportunity for capital
appreciation to produce a high total
return. The Portfolio invests, under
normal circumstances, at least 80%
of the value of its assets in fixed
income securities. The Portfolio
allocates its assets principally
among fixed income securities in
four market sectors: U.S. investment
grade securities, U.S. high yield
securities, foreign securities
(including emerging market
securities) and convertible
securities. Under normal
circumstances, the Portfolio invests
in each of the four sectors
described above. However, the
Portfolio may invest substantially
all of its assets in any one sector
at any time, subject to the
limitation that at least 20% of the
Portfolio's net assets must be
invested in any combination of
investment grade debt securities,
U.S. Government securities and cash
equivalents. The Portfolio may find
good value in high yield securities,
sometimes called "lower-rated bonds"
or "junk bonds," and frequently may
have more than half of its assets
invested in those securities. The
Portfolio may also make significant
investments in mortgage-backed
securities. Although the Portfolio
expects to maintain a weighted
average maturity in the range of
five to twelve years, there are no
maturity restrictions on the overall
Portfolio or on individual
securities. The Portfolio may invest
up to 20% of its net assets in
equity securities. The Portfolio may
invest up to 20% of its net assets
in foreign securities.
-------------------------------------------------------------------------
LARGE AST Marsico Capital Growth Marsico Capital
CAP Portfolio: seeks capital growth. Management, LLC
GROWTH Income realization is not an
investment objective and any income
realized on the Portfolio's
investments, therefore, will be
incidental to the Portfolio's
objective. The Portfolio will pursue
its objective by investing primarily
in common stocks of large companies
that are selected for their growth
potential. Large capitalization
companies are companies with market
capitalizations within the market
capitalization range of the Russell
1000 Growth Index. In selecting
investments for the Portfolio, the
subadviser uses an approach that
combines "top down" macroeconomic
analysis with "bottom up" stock
selection. The "top down" approach
identifies sectors, industries and
companies that may benefit from the
trends the subadviser has observed.
The subadviser then looks for
individual companies with earnings
growth potential that may not be
recognized by the market at large,
utilizing a "bottom up" stock
selection process. The Portfolio
will normally hold a core position
of between 35 and 50 common stocks.
The Portfolio may hold a limited
number of additional common stocks
at times when the Portfolio manager
is accumulating new positions,
phasing out existing or responding
to exceptional market conditions.
-------------------------------------------------------------------------
INTER AST MFS Global Equity Portfolio: Massachusetts
NATIONAL seeks capital growth. Under normal Financial Services
EQUITY circumstances the Portfolio invests Company
at least 80% of its assets in equity
securities. The Portfolio may invest
in the securities of U.S. and
foreign issuers (including issuers
in emerging market countries). While
the portfolio may invest its assets
in companies of any size, the
Portfolio generally focuses on
companies with relatively large
market capitalizations relative to
the markets in which they are traded.
-------------------------------------------------------------------------
LARGE AST MFS Growth Portfolio: seeks Massachusetts
CAP long-term capital growth and future, Financial Services
GROWTH rather than current income. Under Company
normal market conditions, the
Portfolio invests at least 80% of
its net assets in common stocks and
related securities, such as
preferred stocks, convertible
securities and depositary receipts.
The subadviser uses a "bottom up" as
opposed to a "top down" investment
style in managing the Portfolio.
-------------------------------------------------------------------------
33
--------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------------
MID CAP AST Mid-Cap Value Portfolio: seeks EARNEST Partners
VALUE to provide capital growth by LLC; WEDGE
investing primarily in Capital
mid-capitalization stocks that Management, LLP
appear to be undervalued. The
Portfolio generally invests, under
normal circumstances, at least 80%
of the value of its net assets in
mid- capitalization companies.
Mid-capitalization companies are
generally those that have market
capitalizations, at the time of
purchase, within the market
capitalization range of companies
included in the Russell Midcap Value
Index during the previous 12-months
based on month-end data.
--------------------------------------------------------------------------
FIXED AST Money Market Portfolio: seeks Prudential
INCOME high current income while Investment
maintaining high levels of Management, Inc.
liquidity. The Portfolio invests in
high-quality, short-term, U.S.
dollar denominated corporate, bank
and government obligations. The
Portfolio will invest in securities
which have effective maturities of
not more than 397 days.
--------------------------------------------------------------------------
MID CAP AST Neuberger Berman Mid-Cap Growth Neuberger Berman
GROWTH Portfolio: seeks capital growth. Management LLC
Under normal market conditions, the
Portfolio invests at least 80% of
its net assets in the common stocks
of mid-capitalization companies.
Mid-capitalization companies are
those companies whose market
capitalization is within the range
of market capitalizations of
companies in the Russell Midcap(R)
Growth Index. Using fundamental
research and quantitative analysis,
the subadviser looks for
fast-growing companies that are in
new or rapidly evolving industries.
The Portfolio may invest in foreign
securities (including emerging
markets securities).
--------------------------------------------------------------------------
MID CAP AST Neuberger Berman/LSV Mid-Cap LSV Asset
VALUE Value Portfolio (formerly known as Management;
AST Neuberger Berman Mid-Cap Value Neuberger Berman
Portfolio): seeks capital growth. Management LLC
Under normal market conditions, the
Portfolio invests at least 80% of
its net assets in the common stocks
of medium capitalization companies.
For purposes of the Portfolio,
companies with market
capitalizations that fall within the
range of the Russell Midcap(R) Index
at the time of investment are
considered medium capitalization
companies. Some of the Portfolio's
assets may be invested in the
securities of large-cap companies as
well as in small-cap companies.
Under the Portfolio's value-oriented
investment approach, the subadviser
looks for well-managed companies
whose stock prices are undervalued
and that may rise in price before
other investors realize their worth.
--------------------------------------------------------------------------
SMALL AST Neuberger Berman Small-Cap Neuberger Berman
CAP Growth Portfolio: seeks maximum Management LLC
GROWTH growth of investors' capital from a
portfolio of growth stocks of
smaller companies. The Portfolio
pursues its objective, under normal
circumstances, by primarily
investing at least 80% of its total
assets in the equity securities of
small-sized companies included in
the Russell 2000 Growth(R) Index.
--------------------------------------------------------------------------
ASSET AST Niemann Capital Growth Asset Neimann Capital
ALLOCA Allocation Portfolio: seeks the Management Inc.
TION highest potential total return
consistent with its specified level
of risk tolerance. Under normal
circumstances, at least 90% of the
Portfolio's assets will be invested
in other portfolios of Advanced
Series Trust (the underlying
portfolios) while no more than 10%
of the Portfolio's assets may be
invested in exchange traded funds
(ETFs). Under normal market
conditions, the Portfolio will
devote from 60% to 80% of its net
assets to underlying portfolios and
ETFs investing primarily in equity
securities, and from 20% to 40% of
its net assets to underlying
portfolios and ETFs investing
primarily in debt securities and
money market instruments.
--------------------------------------------------------------------------
INTER AST Parametric Emerging Markets Parametric Portfolio
NATIONAL Equity Portfolio: seeks long-term Associates LLC
EQUITY capital appreciation. The Portfolio
normally invests at least 80% of its
net assets in equity securities
traded on the equity markets of
emerging market countries, which are
those considered to be developing.
Emerging markets countries include
countries in Asia, Latin America,
the Middle East, Southern Europe,
Eastern Europe, Africa and the
region formerly comprising the
Soviet Union. A company will be
considered to be located in an
emerging market country if it is
domiciled in or derives more that
50% of its revenues or profits from
emerging market countries. The
Portfolio seeks to employ a
top-down, disciplined and structured
investment process that emphasizes
broad exposure and diversification
among emerging market countries,
economic sectors and issuers.
--------------------------------------------------------------------------
34
------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
------------------------------------------------------------------------
FIXED AST PIMCO Limited Maturity Bond Pacific Investment
INCOME Portfolio: seeks to maximize total Management
return consistent with preservation Company LLC
of capital and prudent investment (PIMCO)
management. The Portfolio will
invest, under normal circumstances,
at least 80% of the value of its net
assets in fixed- income investment
instruments of varying maturities
which may be represented by forwards
or derivatives such as options,
futures contracts, or swap
agreements.
------------------------------------------------------------------------
FIXED AST PIMCO Total Return Bond Pacific Investment
INCOME Portfolio: seeks to maximize total Management
return consistent with preservation Company LLC
of capital and prudent investment (PIMCO)
management. The Portfolio will
invest, under normal circumstances,
at least 80% of the value of its net
assets in fixed income investments,
which may be represented by forwards
or derivatives such as options,
futures contracts, or swap
agreements.
------------------------------------------------------------------------
ASSET AST Preservation Asset Allocation Prudential
ALLOCA Portfolio: seeks to obtain total Investments LLC;
TION return consistent with its specified Quantitative
level of risk. The Portfolio Management
primarily invests its assets in a Associates LLC
diversified portfolio of other
mutual funds, the underlying
portfolios, of the Advanced Series
Trust and certain affiliated money
market funds. Under normal market
conditions, the Portfolio will
devote approximately 35% of its net
assets to underlying portfolios
investing primarily in equity
securities (with a range of 27.5% to
42.5%), and 65% of its net assets to
underlying portfolios investing
primarily in debt securities and
money market instruments (with a
range of 57.5% to 72.5%. The
Portfolio is not limited to
investing exclusively in shares of
the underlying portfolios and may
invest in securities and futures
contracts, swap agreements and other
financial and derivative instruments.
------------------------------------------------------------------------
LARGE AST QMA US Equity Portfolio: seeks Quantitative
CAP long term capital appreciation. The Management
BLEND portfolio utilizes a long/short Associates LLC
investment strategy and will
normally invest at least 80% of its
net assets plus borrowings in equity
and equity related securities of US
issuers. The benchmark index is the
Russell 1000(R) which is comprised
of stocks representing more than 90%
of the market cap of the US market
and includes the largest 1000
securities in the Russell 3000(R)
index.
------------------------------------------------------------------------
ASSET AST Schroders Multi-Asset World Schroder
ALLOCA Strategies (formerly known as AST Investment
TION American Century Strategic Management North
Allocation Portfolio): seeks America Inc.
long-term capital appreciation
through a global flexible asset
allocation approach. This asset
allocation approach entails
investing in traditional asset
classes, such as equity and
fixed-income investments, and
alternative asset classes, such as
investments in real estate,
commodities, currencies, private
equity, and absolute return
strategies. The sub-advisor seeks to
emphasize the management of risk and
volatility. Exposure to different
asset classes and investment
strategies will vary over time based
upon the sub advisor's assessments
of changing market, economic,
financial and political factors and
events.
------------------------------------------------------------------------
SMALL AST Small-Cap Growth Portfolio: Eagle Asset
CAP seeks long-term capital growth. The Management, Inc.
GROWTH Portfolio pursues its objective by
investing, under normal
circumstances, at least 80% of the
value of its assets in
small-capitalization companies.
Small-capitalization companies are
those companies with a market
capitalization, at the time of
purchase, no larger than the largest
capitalized company included in the
Russell 2000(R) Index at the time of
the Portfolio's investment.
------------------------------------------------------------------------
SMALL AST Small-Cap Value Portfolio: seeks ClearBridge
CAP to provide long-term capital growth Advisors, LLC;
VALUE by investing primarily in Dreman Value
small-capitalization stocks that Management
appear to be undervalued. The L.L.C.; J.P. Morgan
Portfolio invests, under normal Investment
circumstances, at least 80% of the Management, Inc.;
value of its net assets in small Lee Munder
capitalization stocks. Small Investments, Ltd
capitalization stocks are the stocks
of companies with market
capitalization that are within the
market capitalization range of the
Russell 2000(R) Value Index.
------------------------------------------------------------------------
35
--------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------------
ASSET AST T. Rowe Price Asset Allocation T. Rowe Price
ALLOCA Portfolio: seeks a high level of Associates, Inc.
TION total return by investing primarily
in a diversified portfolio of equity
and fixed income securities. The
Portfolio normally invests
approximately 60% of its total
assets in equity securities and 40%
in fixed income securities. This mix
may vary depending on the
subadviser's outlook for the
markets. The subadviser concentrates
common stock investments in larger,
more established companies, but the
Portfolio may include small and
medium-sized companies with good
growth prospects. The fixed income
portion of the Portfolio will be
allocated among investment grade
securities, high yield or "junk"
bonds, emerging market securities,
foreign high quality debt securities
and cash reserves.
--------------------------------------------------------------------------
FIXED AST T. Rowe Price Global Bond T. Rowe Price
INCOME Portfolio: seeks to provide high International, Inc.
current income and capital growth by
investing in high-quality foreign
and U.S. dollar-denominated bonds.
The Portfolio will invest at least
80% of its total assets in fixed
income securities. The Portfolio
invests in all types of bonds,
including those issued or guaranteed
by U.S. or foreign governments or
their agencies and by foreign
authorities, provinces and
municipalities as well as investment
grade corporate bonds, mortgage and
asset-backed securities, and
high-yield bonds of U.S. and foreign
issuers. The Portfolio generally
invests in countries where the
combination of fixed-income returns
and currency exchange rates appears
attractive, or, if the currency
trend is unfavorable, where the
subadviser believes that the
currency risk can be minimized
through hedging. The Portfolio may
also invest up to 20% of its assets
in the aggregate in below
investment-grade, high-risk bonds
("junk bonds") and emerging market
bonds. In addition, the Portfolio
may invest up to 30% of its assets
in mortgage-related (including
mortgage dollar rolls and
derivatives, such as collateralized
mortgage obligations and stripped
mortgage securities) and asset-
backed securities. The Portfolio may
invest in futures, swaps and other
derivatives in keeping with its
objective.
--------------------------------------------------------------------------
LARGE AST T. Rowe Price Large-Cap Growth T. Rowe Price
CAP Portfolio: seeks long-term growth of Associates, Inc.
GROWTH capital by investing predominantly
in the equity securities of a
limited number of large, carefully
selected, high-quality U.S.
companies that are judged likely to
achieve superior earnings growth.
The Portfolio takes a growth
approach to investment selection and
normally invests at least 80% of its
net assets in the common stocks of
large companies. Large companies are
defined as those whose market cap is
larger than the median market cap of
companies in the Russell 1000 Growth
Index as of the time of purchase.
--------------------------------------------------------------------------
SPECIALTY AST T. Rowe Price Natural Resources T. Rowe Price
Portfolio: seeks long-term capital Associates, Inc.
growth primarily through invest in
the common stocks of companies that
own or develop natural resources
(such as energy products, precious
metals and forest products) and
other basic commodities. The
Portfolio invests, under normal
circumstances, at least 80% of the
value of its assets in natural
resource companies. The Portfolio
may also invest in non-resource
companies with the potential for
growth. The Portfolio looks for
companies that have the ability to
expand production, to maintain
superior exploration programs and
production facilities, and the
potential to accumulate new
resources. Although at least 50% of
Portfolio assets will be invested in
U.S. securities, up to 50% of total
assets also may be invested in
foreign securities.
--------------------------------------------------------------------------
ASSET AST UBS Dynamic Alpha Portfolio: UBS Global Asset
ALLOCA seeks to maximize total return, Management
TION consisting of capital appreciation (Americas) Inc.
and current income. The Portfolio
invests in securities and financial
instruments to gain exposure to
global equity, global fixed income
and cash equivalent markets,
including global currencies. The
Portfolio may invest in equity and
fixed income securities of issuers
located within and outside the
United States or in open-end
investment companies advised by UBS
Global Asset Management (Americas)
Inc., the Portfolio's subadviser, to
gain exposure to certain global
equity and global fixed income
markets.
--------------------------------------------------------------------------
FIXED AST Western Asset Core Plus Bond Western Asset
INCOME Portfolio: seeks to maximize total Management
return, consistent with prudent Company
investment management and liquidity
needs, by investing to obtain its
average specified duration. The
Portfolio's current target average
duration is generally 2.5 to 7
years. The Portfolio pursues this
objective by investing in all major
fixed income sectors with a bias
towards non-Treasuries.
--------------------------------------------------------------------------
36
-------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
-------------------------------------------------------------------------
INVESCO AIM VARIABLE INSURANCE FUNDS
-------------------------------------------------------------------------
MID CAP AIM Variable Insurance Funds - AIM Advisor: Invesco
GROWTH V.I. Dynamics Fund - Series I Aim Advisors, Inc.
shares: The investment objective is
long-term capital growth. The Sub-advisor:
Portfolio pursues its objective by Advisory entities
normally investing at least 65% of affiliated with
its assets in equity securities of Invesco Aim
mid-capitalization companies that Advisors, Inc.
are included in the Russell
Midcap(R) Growth Index at the time
of purchase.
-------------------------------------------------------------------------
SPECIALTY AIM Variable Insurance Funds - AIM Advisor: Invesco
V.I. Financial Services Fund - Aim Advisors, Inc.
Series I shares: The investment
objective is capital growth. The Sub-advisor:
Portfolio normally invests at least Advisory entities
80% of its assets in equity affiliated with
securities of issuers engaged Invesco Aim
primarily in financial Advisors, Inc.
services-related industries.
-------------------------------------------------------------------------
SPECIALTY AIM Variable Insurance Funds - AIM Advisor: Invesco
V.I. Global Health Care Fund - Aim Advisors, Inc.
Series I shares: The investment
objective is capital growth. The Sub-advisor:
Portfolio normally invests at least Advisory entities
80% of its net assets in securities affiliated with
of health care industry companies. Invesco Aim
Advisors, Inc.
-------------------------------------------------------------------------
SPECIALTY AIM Variable Insurance Funds - AIM Advisor: Invesco
V.I. Technology Fund - Series I Aim Advisors, Inc.
shares: The investment objective is
capital growth. The Portfolio
normally invests at least 80% of its
assets in equity securities of
issuers engaged primarily in the
technology-related industries.
-------------------------------------------------------------------------
EVERGREEN VARIABLE ANNUITY TRUST
-------------------------------------------------------------------------
SMALL Evergreen VA Growth: seeks long-term Evergreen
CAP capital growth. The Portfolio Investment
GROWTH normally invests at least 75% of its Management
assets in common stocks of small- Company, LLC
and medium-sized companies (i.e.,
companies whose market
capitalizations fall within the
market capitalization range of the
companies tracked by the Russell
2000(R) Growth Index, measured at
the time of purchase). The remaining
portion of the Portfolio's assets
may be invested in companies of any
size. The Portfolio's managers
employ a growth-style of equity
management and will generally seek
to purchase stocks of companies that
have demonstrated earnings growth
potential which they believe is not
yet reflected in the stock's market
price. The Portfolio's managers
consider potential earnings growth
above the average earnings growth of
companies included in the Russell
2000(R) Growth Index as a key factor
in selecting investments.
-------------------------------------------------------------------------
INTER Evergreen VA International Equity: Evergreen
NATIONAL seeks long-term capital growth and Investment
EQUITY secondarily, modest income. The Management
Portfolio will normally invest at Company, LLC
least 80% of its assets in equity
securities issued by in the
portfolio manager's opinion,
established and quality non-U.S.
companies located in countries with
developed markets. The Portfolio may
purchase securities across all
market capitalizations. The
Portfolio normally invests at least
65% of its assets in securities of
companies in at least three
countries (other than the U.S.). The
Portfolio may also invest in
emerging markets. The Portfolio's
managers seek both growth and value
opportunities. For growth
investments, the Portfolio's manager
seeks, among other things, good
business models, good management and
growth in cash flows. For value
investments, the Portfolio's manager
seeks, among other things, companies
that are undervalued in the
marketplace compared to their
assets. The Portfolio normally
intends to seek modest income from
dividends paid by its equity
holdings. Other than cash and cash
equivalents, the Portfolio intends
to invest substantially all of its
assets in the securities of non-U.S.
issuers.
-------------------------------------------------------------------------
37
---------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
---------------------------------------------------------------------------
SPECIALTY Evergreen VA Omega: seeks long-term Evergreen
capital growth. The Portfolio Investment
invests primarily, and under normal Management
conditions substantially all of its Company, LLC
assets, in common stocks of U.S.
companies across any market
capitalization. The Portfolio's
manager employs a growth style of
equity management that seeks to
emphasize companies with cash flow
growth, sustainable competitive
advantages, returns on invested
capital above their cost of capital
and the ability to manage for
profitable growth that can create
long-term value for shareholders.
---------------------------------------------------------------------------
FIRST DEFINED PORTFOLIO FUND, LLC
---------------------------------------------------------------------------
SPECIALTY First Trust Target Focus Four First Trust Advisors
Portfolio: seeks to provide L.P.
above-average capital appreciation.
The Portfolio seeks to achieve its
objective by investing in the common
stocks of companies which are
selected by applying four separate
uniquely specialized strategies (the
"Focus Four Strategy"). The Focus
Four Strategy adheres to a
disciplined investment process that
targets the following four
strategies: The Dow(R) Target
Dividend Strategy, Value Line(R)
Target 25 Strategy, S&P Target SMid
60 Strategy, and NYSE(R)
International Target 25 Strategy.
---------------------------------------------------------------------------
SPECIALTY Global Dividend Target 15 Portfolio: First Trust Advisors
seeks to provide above-average total L.P.
return. The Portfolio seeks to
achieve its objective by investing
in common stocks issued by companies
that are expected to provide income
and to have the potential for
capital appreciation. The Portfolio
invests primarily in the common
stocks of the companies which are
components of the Dow Jones
Industrial Average/sm/ ("DJIA/sm/"),
the Financial Times Industrial
Ordinary Share Index ("FT Index")
and the Hang Seng Index. The
Portfolio primarily consists of
common stocks of the five companies
with the lowest per share stock
prices of the ten companies in each
of the DJIA/sm/, FT Index and Hang
Seng Index, respectively, that have
the highest dividend yields in the
respective index on or about the
applicable stock selection date.
Each security is initially equally
weighted in the portfolio.
---------------------------------------------------------------------------
SPECIALTY NASDAQ(R) Target 15 Portfolio: seeks First Trust Advisors
to provide above-average total L.P.
return. Beginning with the stocks in
the NASDAQ-100 Index(R) on or about
the applicable stock selection date,
the Portfolio selects fifteen stocks
based on a multi-factor model. A
modified market capitalization
approach is used to weight each
security in the portfolio.
---------------------------------------------------------------------------
SPECIALTY S&P(R) Target 24 Portfolio: seeks to First Trust Advisors
provide above-average total return. L.P.
Beginning with the stocks in the
Standard & Poor's 500 Index ("S&P
500 Index"), on or about the
applicable stock selection date, the
Portfolio selects three stocks from
each of the eight largest economic
sectors of the S&P 500 Index. The
twenty-four stocks are selected
based on a multi-factor model and a
modified market capitalization
approach is used to weight each
security in the portfolio.
---------------------------------------------------------------------------
SPECIALTY Target Managed VIP Portfolio: seeks First Trust Advisors
to provide above-average total L.P.
return. The Portfolio seeks to
achieve its objective by investing
in common stocks of the companies
that are identified based on six
uniquely specialized strategies -
The Dow(R) DART 5, the European
Target 20, the NASDAQ(R) Target 15,
the S&P(R) Target 24, the Target
Small- Cap and the Value Line(R)
Target 25. Each strategy employs a
quantitative approach by screening
common stocks for certain attributes
and/or using a multi-factor scoring
system to select the common stocks.
---------------------------------------------------------------------------
SPECIALTY The Dow(R) Target Dividend First Trust Advisors
Portfolio: seeks to provide L.P.
above-average total return. The
Portfolio seeks to achieve its
objective by investing in common
stocks issued by companies that are
expected to provide income and to
have the potential for capital
appreciation. Beginning with the
stocks in The Dow Jones Select
Dividend Index/sm/, on or about the
applicable stock selection date, the
Portfolio selects twenty common
stocks based on a multi-factor
model. Each security is initially
equally weighted in the portfolio.
---------------------------------------------------------------------------
38
----------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
----------------------------------------------------------------------------
SPECIALTY The Dow(R) DART 10 Portfolio: seeks First Trust Advisors
to provide above-average total L.P.
return. The Portfolio seeks to
achieve its objective by investing
in common stocks issued by companies
that are expected to provide income
and to have the potential for
capital appreciation. The Portfolio
invests primarily in the common
stocks of the ten companies in the
DJIA that have the highest combined
dividend yields and buyback ratios
on or about the applicable stock
selection date. Each security is
initially equally weighted in the
portfolio.
----------------------------------------------------------------------------
SPECIALTY Value Line(R) Target 25 Portfolio: First Trust Advisors
seeks to provide above-average L.P.
capital appreciation. The Portfolio
seeks to achieve its objective by
investing in 25 of the 100 common
stocks that Value Line(R) gives a #1
ranking for Timelines/tm/ which have
recently exhibited certain positive
financial attributes. Value Line(R)
ranks approximately 1,700 stocks of
which 100 are given their #1 ranking
for Timeliness(TM) which measures
Value Line's view of their probable
price performance during the next
six to 12 months relative to the
others. Beginning with the 100
stocks that Value Line(R) ranks #1
for Timeliness(TM), on or about the
applicable stock selection date, the
Portfolio selects twenty five stocks
based on a multi-factor model. A
modified market capitalization
approach is used to weight each
security in the portfolio.
----------------------------------------------------------------------------
FRANKLIN TEMPLETON VARIABLE
INSURANCE PRODUCTS TRUST
----------------------------------------------------------------------------
MODERATE Franklin Templeton VIP Founding Franklin Templeton
ALLOCA Funds Allocation Fund: Seeks capital Services, LLC
TION appreciation, with income as a
secondary goal. The Fund normally
invests equal portions in Class 1
shares of Franklin Income Securities
Fund; Mutual Shares Securities Fund;
and Templeton Growth Securities Fund.
----------------------------------------------------------------------------
NATIONWIDE VARIABLE INSURANCE TRUST
----------------------------------------------------------------------------
INTER Gartmore NVIT Developing Markets Nationwide Fund
NATIONAL Fund: seeks long-term capital Advisors/Gartmore
EQUITY appreciation, under normal Global Partners
conditions by investing at least 80%
of the value of its net assets in
equity securities of companies of
any size based in the world's
developing market countries. The
Fund typically maintains investments
in at least six countries at all
times with no more than 35% of the
value of its net assets invested in
securities of any one country.
----------------------------------------------------------------------------
PROFUND VP
----------------------------------------------------------------------------
Each ProFund VP portfolio described below pursues an investment strategy
that seeks to provide daily investment results, before fees and expenses,
that match a widely followed index, increased by a specified factor
relative to the index, or that match the inverse of the index or the
inverse of the index multiplied by a specified factor. The investment
strategy of some of the portfolios may magnify (both positively and
negatively) the daily investment results of the applicable index. It is
recommended that only those Annuity Owners who engage a financial advisor
to allocate their account value using a strategic or tactical asset
allocation strategy invest in these portfolios. The Portfolios are
arranged based on the index on which its investment strategy is based.
----------------------------------------------------------------------------
SPECIALTY ProFund VP Bull: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the S&P 500(R)
Index.
----------------------------------------------------------------------------
SPECIALTY ProFund VP Bear: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
inverse (opposite) of the daily
performance of the S&P 500(R) Index.
If ProFund VP Bear is successful in
meeting its objective, its net asset
value should gain approximately the
same amount, on a percentage basis,
as any decrease in the S&P 500(R)
Index when the Index declines on a
given day. Conversely, its net asset
value should lose approximately the
same amount, on a percentage basis,
as any increase in the Index when
the Index rises on a given day.
----------------------------------------------------------------------------
SPECIALTY ProFund VP UltraBull: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to twice
(200%) the daily performance of the
S&P 500(R) Index. If ProFund VP
UltraBull is successful in meeting
its objective, its net asset value
should gain approximately twice as
much, on a percentage basis, as the
S&P 500(R) Index when the Index
rises on a given day. Conversely,
its net asset value should lose
approximately twice as much, on a
percentage basis, as the Index when
the Index declines on a given day.
----------------------------------------------------------------------------
39
--------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------------
The S&P 500(R) Index is a measure of large-cap U.S. stock market
performance. It is a float-adjusted market capitalization weighted
index of 500 U.S. operating companies and REITS selected by an S&P
U.S. Index Committee through a non-mechanical process that factors
criteria such as liquidity, price, market capitalization and
financial viability. Reconstitution occurs both on a quarterly and
ongoing basis.
--------------------------------------------------------------------------
SPECIALTY ProFund VP NASDAQ-100 (formerly ProFund Advisors
known as ProFund VP OTC): seeks LLC
daily investment results, before
fees and expenses, that correspond
to the daily performance of the
NASDAQ-100 Index(R).
--------------------------------------------------------------------------
SPECIALTY ProFund VP Short NASDAQ-100 ProFund Advisors
(formerly known as ProFund VP Short LLC
OTC): seeks daily investment
results, before fees and expenses,
that correspond to the inverse
(opposite) of the daily performance
of the NASDAQ-100 Index(R). If
ProFund VP Short OTC is successful
in meeting its objective, its net
asset value should gain
approximately the same amount, on a
percentage basis, as any decrease in
the NASDAQ-100 Index(R) when the
Index declines on a given day.
Conversely, its net asset value
should lose approximately the same
amount, on a percentage basis, as
any increase in the Index when the
Index rises on a given day.
--------------------------------------------------------------------------
SPECIALTY ProFund VP UltraNASDAQ-100 (formerly ProFund Advisors
known as ProFund VP UltraOTC): seeks LLC
daily investment results, before
fees and expenses, that correspond
to twice (200%) the daily
performance of the NASDAQ-100
Index(R). If ProFund VP UltraOTC is
successful in meeting its objective,
its net asset value should gain
approximately twice as much, on a
percentage basis, as the NASDAQ-100
Index(R) when the Index rises on a
given day. Conversely, its net asset
value should lose approximately
twice as much, on a percentage
basis, as the Index when the Index
declines on a given day.
--------------------------------------------------------------------------
The NASDAQ-100 Index(R) includes 100 of the largest non-financial
domestic and international issues listed on the NASDAQ Stock Market.
To be eligible for inclusion companies cannot be in bankruptcy
proceedings and must meet certain additional criteria including
minimum trading volume and "seasoning" requirements. The Index is
calculated under a modified capitalization-weighted methodology.
Reconstitution and rebalancing occurs on an annual, quarterly and
ongoing basis.
--------------------------------------------------------------------------
SPECIALTY ProFund VP UltraSmall-Cap: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to twice (200%) the daily
performance of the Russell 2000(R)
Index. If ProFund VP UltraSmall-Cap
is successful in meeting its
objective, its net asset value
should gain approximately twice as
much, on a percentage basis, as the
Russell 2000 Index(R) when the Index
rises on a given day. Conversely,
its net asset value should lose
approximately twice as much, on a
percentage basis, as the Index when
the Index declines on a given day.
--------------------------------------------------------------------------
SPECIALTY ProFund VP Short Small-Cap: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the inverse (opposite) of the
daily performance of the Russell
2000(R) Index. If ProFund VP Short
Small-Cap is successful in meeting
its objective, its net asset value
should gain approximately the same
amount, on a percentage basis, as
any decrease in the Russell 2000
Index when the Index declines on a
given day. Conversely, its net asset
value should lose approximately the
same amount, on a percentage basis,
as any increase in the Index when
the Index rises on a given day.
--------------------------------------------------------------------------
The Russell 2000 Index is a measure of small-cap U.S. stock market
performance. It is an adjusted market capitalization weighted index
containing approximately 2000 of the smallest companies in the
Russell 3000 Index or approximately 8% of the total market
capitalization of the Russell 3000 Index, which in turn represents
approximately 98% of the investable U.S. equity market. All U.S.
companies listed on the NYSE, AMEX or NASDAQ meeting an initial
minimum ($1) price are considered for inclusion. Reconstitution
occurs annually. Securities are not replaced if they leave the index,
however, new issue securities meeting other membership requirements
may be added on a quarterly basis.
--------------------------------------------------------------------------
SPECIALTY ProFund VP UltraMid-Cap: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to twice
(200%) the daily performance of the
S&P MidCap 400 Index(R). If ProFund
VP UltraMid-Cap is successful in
meeting its objective, its net asset
value should gain approximately
twice as much, on a percentage
basis, as the S&P MidCap 400 Index
when the Index rises on a given day.
Conversely, its net asset value
should lose approximately twice as
much, on a percentage basis, as the
Index when the Index declines on a
given day.
--------------------------------------------------------------------------
40
--------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------------
SPECIALTY ProFund VP Short Mid-Cap: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the inverse (opposite) of the
daily performance of the S&P MidCap
400 Index(R). If ProFund VP Short
Mid-Cap is successful in meeting its
objective, its net asset value
should gain approximately the same
amount, on a percentage basis, as
any decrease in the S&P MidCap 400
Index when the Index declines on a
given day. Conversely, its net asset
value should lose approximately the
same amount, on a percentage basis,
as any increase in the Index when
the Index rises on a given day.
--------------------------------------------------------------------------
The S&P MidCap 400 Index is a measure of mid-size company U.S. stock
market performance. It is a float-adjusted market capitalization
weighted index of 400 U.S. operating companies and REITs. Securities
are selected for inclusion in the index by the S&P U.S. Index
Committee through a non-mechanical process that factors criteria such
as liquidity, price, market capitalization and financial viability.
Reconstitution occurs both on a quarterly and ongoing basis.
--------------------------------------------------------------------------
SMALL ProFund VP Small-Cap Value: seeks ProFund Advisors
CAP daily investment results, before LLC
VALUE fees and expenses, that correspond
to the daily performance of the S&P
SmallCap 600/Citigroup Value
Index(R). The S&P SmallCap
600/Citigroup Value Index is
designed to provide a comprehensive
measure of small-cap U.S. equity
"value" performance. It is an
unmanaged float adjusted market
capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P SmallCap
600 Index that have been identified
as being on the value end of the
growth-value spectrum. (Note: The
S&P SmallCap 600 Index is a measure
of small-cap company U.S. stock
market performance. It is a float
adjusted market capitalization
weighted index of 600 U.S. operating
companies. Securities are selected
for inclusion in the index by an S&P
committee through a nonmechanical
process that factors criteria such
as liquidity, price, market
capitalization, financial viability,
and public float.)
--------------------------------------------------------------------------
SMALL ProFund VP Small-Cap Growth: seeks ProFund Advisors
CAP daily investment results, before LLC
GROWTH fees and expenses, that correspond
to the daily performance of the S&P
SmallCap 600/Citigroup Growth
Index(R). The S&P SmallCap
600/Citigroup Growth Index is
designed to provide a comprehensive
measure of small-cap U.S. equity
"growth" performance. It is an
unmanaged float adjusted market
capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P SmallCap
600 Index that have been identified
as being on the growth end of the
growth-value spectrum. (Note: The
S&P SmallCap 600 Index is a measure
of small-cap company U.S. stock
market performance. It is a float
adjusted market capitalization
weighted index of 600 U.S. operating
companies. Securities are selected
for inclusion in the index by an S&P
committee through a nonmechanical
process that factors criteria such
as liquidity, price, market
capitalization, financial viability,
and public float.)
--------------------------------------------------------------------------
The S&P SmallCap 600 Index is a measure of small-cap company U.S.
stock market performance. It is a float adjusted market
capitalization weighted index of 600 U.S. operating companies.
Securities are selected for inclusion in the index by an S&P
committee through a nonmechanical process that factors criteria such
as liquidity, price, market capitalization, financial viability, and
public float.
--------------------------------------------------------------------------
LARGE ProFund VP Large-Cap Value: seeks ProFund Advisors
CAP daily investment results, before LLC
VALUE fees and expenses, that correspond
to the daily performance of the S&P
500/Citigroup Value Index(R). The
S&P 500/Citigroup Value Index is
designed to provide a comprehensive
measure of large-cap U.S. equity
"value" performance. It is an
unmanaged float adjusted market
capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P 500 Index
that have been identified as being
on the value end of the growth value
spectrum.
--------------------------------------------------------------------------
LARGE ProFund VP Large-Cap Growth: seeks ProFund Advisors
CAP daily investment results, before LLC
GROWTH fees and expenses, that correspond
to the daily performance of the S&P
500/Citigroup Growth Index(R). The
S&P 500/Citigroup Growth Index is
designed to provide a comprehensive
measure of large-cap U.S. equity
"growth" performance. It is an
unmanaged float adjusted market
capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P 500 Index
that have been identified as being
on the growth end of the
growth-value spectrum.
--------------------------------------------------------------------------
41
--------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------------
The S&P 500/Citigroup Growth Index is designed to provide a
comprehensive measure of large-cap U.S. equity "growth"
performance. It is an unmanaged float adjusted market
capitalization weighted index comprised of stocks representing
approximately half the market capitalization of the S&P 500 Index
that have been identified as being on the growth end of the
growth-value spectrum.
--------------------------------------------------------------------------
MID CAP ProFund VP Mid-Cap Value: seeks ProFund Advisors
VALUE daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the S&P
MidCap 400/Citigroup Value Index(R).
The S&P MidCap 400/Citigroup Value
Index is designed to provide a
comprehensive measure of mid-cap
U.S. equity "value" performance. It
is an unmanaged float adjusted
market capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P MidCap 400
Index that have been identified as
being on the value end of the
growth-value spectrum.
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MID CAP ProFund VP Mid-Cap Growth: seeks ProFund Advisors
GROWTH daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the S&P
MidCap 400/Citigroup Growth
Index(R). The S&P MidCap
400/Citigroup Growth Index is
designed to provide a comprehensive
measure of mid-cap U.S. equity
"growth" performance. It is an
unmanaged float adjusted market
capitalization weighted index
comprised of stocks representing
approximately half the market
capitalization of the S&P MidCap 400
Index that have been identified as
being on the growth end of the
growth-value spectrum.
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The S&P MidCap 400/Citigroup Value Index is designed to provide a
comprehensive measure of mid-cap U.S. equity "value" performance. It
is an unmanaged float adjusted market capitalization weighted index
comprised of stocks representing approximately half the market
capitalization of the S&P MidCap 400 Index that have been identified
as being on the value end of the growth-value spectrum.
--------------------------------------------------------------------------
SPECIALTY ProFund VP Asia 30: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the ProFunds
Asia 30 Index. The ProFunds Asia 30
Index, created by ProFund Advisors,
is composed of 30 companies whose
principal offices are located in the
Asia/Pacific region, excluding
Japan, and whose securities are
traded on U.S. exchanges or on the
NASDAQ as depository receipts or
ordinary shares. The component
companies in the ProFunds Asia 30
Index are determined annually based
upon their U.S. dollar-traded
volume. Their relative weights are
determined based on the modified
market capitalization method.
--------------------------------------------------------------------------
SPECIALTY ProFund VP Europe 30: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the ProFunds
Europe 30 Index. The ProFunds Europe
30 Index, created by ProFund
Advisors, is composed of companies
whose principal offices are located
in Europe and whose securities are
traded on U.S. exchanges or on the
NASDAQ as depositary receipts or
ordinary shares. The component
companies in the ProFunds Europe 30
Index are determined annually based
upon their U.S. dollar- traded
volume. Their relative weights are
determined based on a modified
market capitalization method.
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SPECIALTY ProFund VP Japan: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Nikkei 225
Stock Average. The Fund determines
its success in meeting this
investment objective by comparing
its daily return on a given day with
the daily performance of the
dollar-denominated Nikkei 225
futures contracts traded in the
United States. The Fund seeks to
provide a return consistent with an
investment in the component equities
in the Nikkei 225 Stock Average
hedged to U.S. dollars.
--------------------------------------------------------------------------
The Nikkei 225 Stock Average ("Nikkei" ) is a modified price-weighted
index of the 225 most actively traded and liquid Japanese companies
listed in the First Section of the Tokyo Stock Exchange (TSE). The
Nikkei is calculated from the prices of the 225 TSE First Section
stocks selected to represent a broad cross-section of Japanese
industries and the overall performance of the Japanese equity market.
Nihon Keizai Shimbun, Inc. is the sponsor of the Index. Companies in
the Nikkei are reviewed annually. Emphasis is placed on maintaining
the Index's historical continuity while keeping the Index composed of
stocks with high market liquidity. The sponsor consults with various
market experts, considers company specific information and the
overall composition of the Index.
--------------------------------------------------------------------------
42
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STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
-----------------------------------------------------------------------
SPECIALTY ProFund VP Banks: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Banks Index. The Dow Jones U.S.
Banks Index measures the performance
of the banking sector of the U.S.
equity market. Component companies
include regional and major U.S.
domiciled banks engaged in a wide
range of financial services,
including retail banking, loans and
money transmissions.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Basic Materials: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Basic Materials Index.
The Dow Jones U.S. Basic Materials
Index measures the performance of
the basic materials industry of the
U.S. equity market. Component
companies are involved in the
production of aluminum, steel, non
ferrous metals, commodity chemicals,
specialty chemicals, forest
products, paper products, as well as
the mining of precious metals and
coal.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Biotechnology: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Biotechnology Index. The
Dow Jones U.S. Biotechnology Index
measures the performance of the
biotechnology subsector of the U.S.
equity market. Component companies
engage in research and development
of biological substances for drug
discovery and diagnostic
development. These companies derive
most of their revenue from the sale
of licensing of drugs and diagnostic
tools.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Consumer Goods: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Consumer Goods Index. The
Dow Jones U.S. Consumer Goods Index
measures the performance of consumer
spending in the goods industry of
the U.S. equity market. Component
companies include automobiles and
auto parts and tires, brewers and
distillers, farming and fishing,
durable and non-durable household
product manufacturers, cosmetic
companies, food and tobacco
products, clothing, accessories and
footwear.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Consumer Services: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Consumer Services Index.
The Dow Jones U.S. Consumer Services
Index measures the performance of
consumer spending in the services
industry of the U.S. equity market.
Component companies include
airlines, broadcasting and
entertainment, apparel and broadline
retailers, food and drug retailers,
media agencies, publishing,
gambling, hotels, restaurants and
bars, and travel and tourism.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Financials: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Financials Index. The Dow Jones
U.S. Financials Index measures the
performance of the financial
services industry of the U.S. equity
market. Component companies include
regional banks; major U.S. domiciled
international banks; full line,
life, and property and casualty
insurance companies; companies that
invest, directly or indirectly in
real estate; diversified financial
companies such as Fannie Mae, credit
card issuers, check cashing
companies, mortgage lenders and
investment advisers; securities
brokers and dealers, including
investment banks, merchant banks and
online brokers; and publicly traded
stock exchanges.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Health Care: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Health Care Index. The Dow
Jones U.S. Health Care Index
measures the performance of the
healthcare industry of the U.S.
equity market. Component companies
include health care providers,
biotechnology companies, medical
supplies, advanced medical devices
and pharmaceuticals.
-----------------------------------------------------------------------
43
------------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
------------------------------------------------------------------------
SPECIALTY ProFund VP Industrials: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Industrials Index. The Dow
Jones U.S. Industrials Index
measures the performance of the
industrial industry of the U.S.
equity market. Component companies
include building materials, heavy
construction, factory equipment,
heavy machinery, industrial
services, pollution control,
containers and packaging, industrial
diversified, air freight, marine
transportation, railroads, trucking,
land-transportation equipment,
shipbuilding, transportation
services, advanced industrial
equipment, electric components and
equipment, and aerospace.
------------------------------------------------------------------------
SPECIALTY ProFund VP Internet: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
Composite Internet Index. The Dow
Jones Composite Internet Index
measures the performance of stocks
in the U.S. equity markets that
generate the majority of their
revenues from the Internet. The
Index is composed of two sub-groups:
Internet Commerce - companies that
derive the majority of their
revenues from providing goods and/or
services through an open network,
such as a web site. Internet
Services - companies that derive the
majority of their revenues from
providing access to the Internet or
providing services to people using
the Internet.
------------------------------------------------------------------------
SPECIALTY ProFund VP Oil & Gas: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Oil & Gas Index. The Dow Jones
U.S. Oil & Gas Index measures the
performance of the oil and gas
industry of the U.S. equity market.
Component companies include oil
drilling equipment and services, oil
companies-major, oil
companies-secondary, pipelines,
liquid, solid or gaseous fossil fuel
producers and service companies.
------------------------------------------------------------------------
SPECIALTY ProFund VP Pharmaceuticals: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Pharmaceuticals Index.
The Dow Jones U.S. Pharmaceuticals
Index measures the performance of
the pharmaceuticals subsector of the
U.S. equity market. Component
companies include the makers of
prescription and over-the-counter
drugs such as birth control pills,
vaccines, aspirin and cold remedies.
------------------------------------------------------------------------
SPECIALTY ProFund VP Precious Metals: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones Precious Metals Index. The Dow
Jones Precious Metals Index measures
the performance of the precious
metals mining industry. Component
companies include leading miners and
producers of gold, silver and
platinum-group metals whose
securities are available to U.S.
investors during U.S. trading hours.
It is a float-adjusted
market-capitalization weighted index.
------------------------------------------------------------------------
SPECIALTY ProFund VP Real Estate: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Real Estate Index. The Dow
Jones U.S. Real Estate Index
measures the performance of the real
estate sector of the U.S. equity
market. Component companies include
those that invest directly or
indirectly through development,
management or ownership of shopping
malls, apartment buildings and
housing developments; and real
estate investment trusts ("REITs")
that invest in apartments, office
and retail properties. REITs are
passive investment vehicles that
invest primarily in income-producing
real estate or real estate related
loans or interests.
------------------------------------------------------------------------
SPECIALTY ProFund VP Semiconductor: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Semiconductosr Index. The
Dow Jones U.S. Semiconductors Index
measures the performance of the
semiconductor subsector of the U.S.
equity market. Component companies
are engaged in the production of
semiconductors and other integrated
chips, as well as other related
products such as semiconductor
capital equipment and mother-boards.
------------------------------------------------------------------------
SPECIALTY ProFund VP Technology: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Technology Index. The Dow Jones
U.S. Technology Index measures the
performance of the technology
industry of the U.S. equity market.
Component companies include those
involved in computers and office
equipment, software, communications
technology, semiconductors,
diversified technology services and
Internet services.
------------------------------------------------------------------------
44
-----------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
-----------------------------------------------------------------------
SPECIALTY ProFund VP Telecommunications: seeks ProFund Advisors
daily investment results, before LLC
fees and expenses, that correspond
to the daily performance of the Dow
Jones U.S. Telecommunications Index.
The Dow Jones U.S.
Telecommunications Index measures
the performance of the
telecommunications industry of the
U.S. equity market. Component
companies include fixed-line
communications and wireless
communications companies.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Utilities: seeks daily ProFund Advisors
investment results, before fees and LLC
expenses, that correspond to the
daily performance of the Dow Jones
U.S. Utilities Sector Index. The Dow
Jones U.S. Utilities Sector Index
measures the performance of the
utilities industry of the U.S.
equity market. Component companies
include electric utilities, gas
utilities and water utilities.
-----------------------------------------------------------------------
SPECIALTY ProFund VP U.S. Government Plus: ProFund Advisors
seeks daily investment results, LLC
before fees and expenses, that
correspond to one and one-quarter
times (125%) the daily price
movement of the most recently issued
30-year U.S. Treasury bond ("Long
Bond"). In accordance with its
stated objective, the net asset
value of ProFund VP U.S. Government
Plus generally should decrease as
interest rates rise. If ProFund VP
U.S. Government Plus is successful
in meeting its objective, its net
asset value should gain
approximately one and one-quarter
times (125%) as much, on a
percentage basis, as any daily
increase in the price of the Long
Bond on a given day. Conversely, it
value should lose approximately one
and one-quarter as much, on a
percentage basis, as any daily
decrease in the price of the Long
Bond on a given day.
-----------------------------------------------------------------------
SPECIALTY ProFund VP Rising Rates Opportunity: ProFund Advisors
seeks daily investment results, LLC
before fees and expenses, that
correspond to one and one-quarter
times (125%) the inverse (opposite)
of the daily price movement of the
most recently issued 30-year U.S.
Treasury bond ("Long Bond"). In
accordance with its stated
objective, the net asset value of
ProFund VP Rising Rates Opportunity
generally should decrease as
interest rates fall. If ProFund VP
Rising Rates Opportunity is
successful in meeting its objective,
its net asset value should gain
approximately one and one-quarter
times as much, on a percentage
basis, as any daily decrease in the
Long Bond on a given day.
Conversely, its net asset value
should lose approximately one and
one-quarter times as much, on a
percentage basis, as any daily
increase in the price of the Long
Bond on a given day.
-----------------------------------------------------------------------
SPECIALTY Access VP High Yield Fund: seeks to ProFund Advisors
provide investment results that LLC
correspond generally to the total
return of the high yield market
consistent with maintaining
reasonable liquidity. The Fund will
achieve its high yield exposure
primarily through credit default
swaps (CDSs) but may invest in high
yield debt instruments ("junk
bonds"), interest rate swap
agreements and futures contracts,
and other debt and money market
instruments without limitation,
consistent with applicable
regulations. Under normal market
conditions, the Fund will invest at
least 80% of its net assets in CDSs
and other financial instruments that
in combination have economic
characteristics similar to the high
yield debt market and/or in high
yield debt securities. The Fund
seeks to maintain exposure to the
high yield bond markets regardless
of market conditions and without
taking defensive positions in cash
or other instruments in anticipation
of an adverse climate for the high
yield bond markets. ProFund Advisors
does not conduct fundamental
analysis in managing the Fund.
-----------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND
-----------------------------------------------------------------------
INTER The Prudential Series Fund - SP Prudential
NATIONAL International Growth Portfolio: Investments LLC;
EQUITY Seeks long-term capital William Blair &
appreciation. The Portfolio invests Company, LLC
primarily in stocks of large and
medium-sized companies located in
countries included in the Morgan
Stanley Capital International All
Country World Ex-U.S. Index. Under
normal market conditions, the
portfolio invests at least 80% of
its net assets in equity
securities. The Portfolio's assets
normally will be allocated among not
fewer than six different countries
and will not concentrate investments
in any particular industry. The
Portfolio seeks companies that
historically have had superior
growth, profitability and quality
relative to local markets and
relative to companies within the
same industry worldwide, and that
are expected to continue such
performance. (see information above
regarding limited availability of
this option.)
-----------------------------------------------------------------------
45
--------------------------------------------------------------------
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO
TYPE ADVISOR/
SUB-ADVISOR
--------------------------------------------------------------------
WELLS FARGO VARIABLE TRUST
--------------------------------------------------------------------
LARGE Wells Fargo Advantage VT Equity Wells Fargo Funds
CAP Income Fund: Seeks long-term capital Management, LLC,
VALUE appreciation and dividend income. adviser;
The Portfolio invests principally in Wells Capital
equity securities of large- Management
capitalization companies, which they Incorporated,
define as companies with market sub-adviser
capitalizations of $3 billion or
more.
--------------------------------------------------------------------
"Dow Jones Industrial Average/SM/", "DJIA/SM/", "Dow Industrials/SM/", "The
Dow/SM/", and "The Dow 10/SM/", are service marks of Dow Jones & Company, Inc.
("Dow Jones") and have been licensed for use for certain purposes by First
Trust Advisors L.P. ("First Trust"). The portfolios, including, and in
particular the Target Managed VIP portfolio The Dow/SM/ DART 10 portfolio, and
The Dow/SM/ Target Dividend Portfolio are not endorsed, sold or promoted by
Dow Jones, and Dow Jones makes no representation regarding the advisability of
investing in such products.
"Standard & Poor's," "S&P," "S&P 500," "Standard & Poor's 500," and "500" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use
by First Trust on behalf of the S&P Target 24 Portfolio and the Target Managed
VIP Portfolio. The Portfolios are not sponsored, endorsed, managed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the Portfolio.
"The Nasdaq 100(R)", "Nasdaq-100 Index(R)", "Nasdaq Stock Market(R)", and
"Nasdaq(R)" are trade or service marks of The Nasdaq Stock Market, Inc. (which
with its affiliates are the "Corporations") and have been licensed for use by
First Trust. The Nasdaq Target 15 Portfolio and Target Managed VIP Portfolio
have not been passed on by the Corporations as to its legality or suitability.
The Nasdaq Target 15 Portfolio and Target Managed VIP Portfolio are not
issued, endorsed, sponsored, managed, sold or promoted by the Corporations.
The Corporations make no warranties and bear no liability with respect to the
Nasdaq Target 15 Portfolio or the Target Managed VIP Portfolio.
"Value Line(R)," "The Value Line Investment Survey," and "Value Line
Timeliness/TM/ Ranking System" are registered trademarks of Value Line
Securities, Inc. or Value Line Publishing, Inc. The Target Managed VIP(R)
Portfolio and Value Line Target 25 Portfolio are not sponsored, recommended,
sold or promoted by Value Line Publishing, Inc., Value Line, Inc. or Value
Line Securities, Inc. ("Value Line"). Value Line makes no representation
regarding the advisability of investing in the Portfolio.
"Value Line Publishing, Inc.'s ("VLPI") only relationship to First Trust
Advisors L.P. or the Portfolio is VLPI's licensing to First Trust Advisors
L.P. of certain VLPI trademarks and trade names and the Value Line Timeliness
Ranking System (the "System"), which is composed by VLPI without regard to
First Trust Advisors L.P., the Portfolio or any investor. First Trust
Advisors, L.P. has sub-licensed certain VLPI trademarks and trade names to
Prudential Investments LLC. VLPI has no obligation to take the needs of First
Trust Advisors L.P., Prudential Investments LLC or any investor in the
Portfolio into consideration in composing the System. The Portfolio's results
may differ from the hypothetical or published results of the Value Line
Timeliness Ranking System. VLPI is not responsible for, and has not
participated in, the determination of the prices and composition of the
Portfolio or the timing of the issuance for sale of the Portfolio or in the
calculation of the equations by which the Portfolio is to be converted into
cash. VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM USAGE
OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND VLPI MAKES NO
WARRANTY AS TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS THAT MAY BE
ACHIEVED BY USING THE SYSTEM OR ANY INFORMATION OR MATERIALS GENERATED
THEREFROM. VLPI DOES NOT WARRANT THAT THE SYSTEM WILL MEET ANY REQUIREMENTS OR
THAT IT WILL BE ACCURATE OR ERROR-FREE. VLPI ALSO DOES NOT GUARANTEE ANY USES,
INFORMATION, DATA OR OTHER RESULTS GENERATED FROM THE SYSTEM. VLPI HAS NO
OBLIGATION OR LIABILITY (I) IN CONNECTION WITH THE ADMINISTRATION, MARKETING
OR TRADING OF THE PORTFOLIO; OR (II) FOR ANY LOSS, DAMAGE, COST OR EXPENSE
SUFFERED OR INCURRED BY ANY INVESTOR OR OTHER PERSON OR ENTITY IN CONNECTION
WITH THE PORTFOLIO, AND IN NO EVENT SHALL VLPI BE LIABLE FOR ANY LOST PROFITS
OR OTHER CONSEQUENTIAL, SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY
DAMAGES IN CONNECTION WITH THE PORTFOLIO."
Dow Jones has no relationship to the ProFunds VP, other than the licensing of
the Dow Jones sector indices and its service marks for use in connection with
the ProFunds VP. The ProFunds VP are not sponsored, endorsed, sold, or
promoted by Standard & Poor's or NASDAQ, and neither Standard & Poor's nor
NASDAQ makes any representations regarding the advisability of investing in
the ProFunds VP.
WHAT ARE THE FIXED ALLOCATIONS?
The Fixed Allocations consist of the MVA Fixed Allocations, the DCA Fixed Rate
Options used with our 6 or 12 Month Dollar Cost Averaging Program ("6 or 12
Month DCA Program"), the Fixed Allocations used with our dollar-cost averaging
program, and (with respect to Highest Daily Lifetime Five only), the Benefit
Fixed Rate Account. We describe the Benefit Fixed Rate Account in the section
of the Prospectus concerning Highest Daily Lifetime Five. We describe the
Fixed Allocations used with our dollar cost averaging program outside of the 6
or 12 month DCA Program in the section entitled "Do You Offer Dollar Cost
Averaging?"
MVA Fixed Allocations. We offer MVA Fixed Allocations of different durations
during the accumulation period. These "MVA Fixed Allocations" earn a
guaranteed fixed rate of interest for a specified period of time, called the
"Guarantee Period." In most states, we offer MVA Fixed Allocations with
Guarantee Periods from 1 to 10 years. We may also offer special purpose MVA
Fixed Allocations for use with certain optional investment programs. We
guarantee the fixed rate for the entire Guarantee Period. However, for certain
MVA Fixed Allocations, if you withdraw or transfer Account Value before the
end of the Guarantee Period, we will adjust the value of your withdrawal or
transfer based on a formula, called a "Market Value Adjustment." The Market
Value
46
Adjustment can either be positive or negative, depending on the movement of
applicable interest rates. Please refer to the section entitled "How does the
Market Value Adjustment Work?" for a description of the formula along with
examples of how it is calculated. You may allocate Account Value to more than
one MVA Fixed Allocation at a time.
MVA Fixed Allocations are not available in Washington, Nevada, North Dakota,
Maryland and Vermont. Availability of MVA Fixed Allocations is subject to
change and may differ by state and by the annuity product you purchase. Please
call Prudential Annuities at 1-800-752-6342 to determine availability of MVA
Fixed Allocations in your state and for your annuity product. You may not
allocate Account Value to MVA Fixed Allocations if you have elected the
following Optional Benefits: Lifetime Five Income Benefit, Spousal Lifetime
Five Income Benefit, Highest Daily Lifetime Five Income Benefit, Highest Daily
Lifetime Seven Income Benefit, Spousal Highest Daily Lifetime Seven Income
Benefit, Highest Daily Value Death Benefit, Highest Daily Lifetime Seven with
Beneficiary Income Option, Spousal Highest Daily Lifetime Seven with
Beneficiary Income Option, Highest Daily Lifetime Seven with Lifetime Income
Accelerator, GRO, GRO Plus, GRO Plus 2008, Highest Daily GRO, Highest Daily
Lifetime 7 Plus Income Benefit, Spousal Highest Daily Lifetime 7 Plus, Highest
Daily Lifetime 7 Plus with Beneficiary Income Option, Spousal Highest Daily
Lifetime 7 Plus with Beneficiary Income Option, and Highest Daily Lifetime 7
Plus with Lifetime Income Accelerator. The interest rate that we credit to the
MVA Fixed Allocations may be reduced by an amount that corresponds to the
asset-based charges assessed against the Sub-accounts.
No specific fees or expenses are deducted when determining the rate we credit
to an MVA Fixed Allocation. However, for some of the same reasons that we
deduct the Insurance Charge against Account Value allocated to the
Sub-accounts, we also take into consideration mortality, expense,
administration, profit and other factors in determining the interest rates we
credit to MVA Fixed Allocations. That is, the existence of those factors
results in a reduction to the interest rate that we credit under the Fixed
Allocations. Any CDSC or Tax Charge applies to amounts that are taken from the
Sub-accounts or the MVA Fixed Allocations.
DCA Fixed Rate Options. In addition to Fixed Allocations that are subject to a
Market Value Adjustment, we offer DCA Fixed Rate Options that are used with
our 6 or 12 Month Dollar Cost Averaging Program ("6 or 12 Month DCA Program"),
and are not subject to any MVA. Account Value allocated to the DCA Fixed Rate
Options earns the declared rate of interest while it is transferred over a 6
month or 12 month period into the Sub-accounts that you have designated.
Because the interest we credit is applied against a balance that declines as
transfers are made periodically to the Sub-accounts, you do not earn interest
on the full amount that you allocated initially to the DCA Fixed Rate Options.
A dollar cost averaging program does not assure a profit, or protect against a
loss.
47
FEES AND CHARGES
The charges under each Annuity are designed to cover, in the aggregate, our
direct and indirect costs of selling, administering and providing benefits
under each Annuity. They are also designed, in the aggregate, to compensate us
for the risks of loss we assume. If, as we expect, the charges that we collect
from the Annuities exceed our total costs in connection with the Annuities, we
will earn a profit. Otherwise we will incur a loss. For example, Prudential
Annuities may make a profit on the Insurance Charge if, over time, the actual
costs of providing the guaranteed insurance obligations under an Annuity are
less than the amount we deduct for the Insurance Charge. To the extent we make
a profit on the Insurance Charge, such profit may be used for any other
corporate purpose, including payment of other expenses that Prudential
Annuities incurs in promoting, distributing, issuing and administering an
Annuity and, in the case of XT6, ASAP III and APEX II to offset a portion of
the costs associated with offering any Credits which are funded through
Prudential Annuities' general account.
The rates of certain of our charges have been set with reference to estimates
of the amount of specific types of expenses or risks that we will incur. In
most cases, this prospectus identifies such expenses or risks in the name of
the charge; however, the fact that any charge bears the name of, or is
designed primarily to defray a particular expense or risk does not mean that
the amount we collect from that charge will never be more than the amount of
such expense or risk, nor does it mean that we may not also be compensated for
such expense or risk out of any other charges we are permitted to deduct by
the terms of the Annuity. A portion of the proceeds that Prudential Annuities
receives from charges that apply to the Sub-accounts may include amounts based
on market appreciation of the Sub-account values including, for ASAP III, XT6
and APEX II, appreciation on amounts that represent any Credits.
WHAT ARE THE CONTRACT FEES AND CHARGES?
Contingent Deferred Sales Charge: We do not deduct a sales charge from
purchase payments you make to your Annuity. However, we may deduct a CDSC if
you surrender your Annuity or when you make a partial withdrawal. The CDSC
reimburses us for expenses related to sales and distribution of the Annuity,
including commissions, marketing materials and other promotional expenses. The
CDSC is calculated as a percentage of your Purchase Payment being surrendered
or withdrawn during the applicable Annuity Year. For purposes of calculating
the CDSC, we consider the year following the Issue Date of your Annuity as
Year 1. The amount of the CDSC decreases over time, measured from the Issue
Date of the Annuity. The CDSC percentages for ASAP III, APEX II and XT6 are
shown under "Summary of Contract Fees and Charges". No CDSC is deducted from
ASL II Annuities. If you purchase XT6 and make a withdrawal that is subject to
a CDSC, we may use part of that CDSC to recoup our costs of providing the
Credit. However, we do not impose any CDSC on your withdrawal of a Credit
amount.
With respect to a partial withdrawal, we calculate the CDSC by assuming that
any available free withdrawal amount is taken out first (see How Much Can I
Withdraw as a Free Withdrawal?). If the free withdrawal amount is not
sufficient, we then assume that withdrawals are taken from purchase payments
that have not been previously withdrawn, on a first-in, first-out basis, and
subsequently from any other Account Value in the Annuity.
For purposes of calculating any applicable CDSC on a surrender, the purchase
payments being withdrawn may be greater than your remaining Account Value or
the amount of your withdrawal request. This is most likely to occur if you
have made prior partial withdrawals or if your Account Value has declined in
value due to negative market performance. In that scenario, we would determine
the CDSC amount as the applicable percentage of the purchase payments being
withdrawn, rather than as a percentage of the remaining Account Value or
withdrawal request. Thus, the CDSC would be greater than if it were calculated
as a percentage of remaining Account Value or withdrawal amount.
We may waive any applicable CDSC under certain circumstances including certain
medically-related circumstances or when taking a Minimum Distribution from an
Annuity purchased as a "qualified" investment. Free Withdrawals,
Medically-Related Surrenders and Minimum Distributions are each explained more
fully in the section entitled "Access to Your Account Value".
Transfer Fee: Currently, you may make twenty (20) free transfers between
investment options each Annuity Year. We currently charge $10.00 for each
transfer after the twentieth in each Annuity Year. The fee will never be more
than $15.00 for each transfer. We do not consider transfers made as part of a
Dollar Cost Averaging, Automatic Rebalancing or asset allocation program when
we count the twenty free transfers. All transfers made on the same day will be
treated as one (1) transfer. Renewals or transfers of Account Value from a
Fixed Allocation at the end of its Guarantee Period are not subject to the
Transfer Fee and are not counted toward the twenty free transfers. Similarly,
transfers made under our 6 or 12 Month Dollar Cost Averaging Program ("6 or 12
Month DCA Program") and transfers made pursuant to a formula used with an
optional benefit are not subject to the Transfer Fee and are not counted
toward the twenty free transfers. We may reduce the number of free transfers
allowable each Annuity Year (subject to a minimum of eight) without charging a
Transfer Fee unless you make use of electronic means to transmit your transfer
requests. We may eliminate the Transfer Fee for transfer requests transmitted
electronically or through other means that reduce our processing costs. If you
are enrolled in any program that does not permit transfer requests to be
transmitted electronically, the Transfer Fee will not be waived.
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Annual Maintenance Fee: During the accumulation period we deduct an Annual
Maintenance Fee. The Annual Maintenance Fee is $35.00 or 2% of your Account
Value (including any amount in Fixed Allocations), whichever is less. This fee
will be deducted annually on the anniversary of the Issue Date of your Annuity
or, if you surrender your Annuity during the Annuity Year, the fee is deducted
at the time of surrender. The fee is taken out only from the Sub-accounts.
With respect to ASAP III, APEX II and ASL II, currently, the Annual
Maintenance Fee is only deducted if your Account Value is less than $100,000
on the anniversary of the Issue Date or at the time of surrender. With respect
to XT6, we deduct the Annual Maintenance Fee regardless of Account Value. We
do not impose the Annual Maintenance Fee upon annuitization, the payment of a
Death Benefit, or a medically-related full surrender. We may increase the
Annual Maintenance Fee. However, any increase will only apply to Annuities
issued after the date of the increase. For beneficiaries that elect the
Beneficiary Continuation Option, the Annual Maintenance Fee is the lesser of
$30 or 2% of Account Value. For a non-qualified Beneficiary Continuation
Option, the fee is only applicable if the Account Value is less than $25,000
at the time the fee is assessed.
Tax Charge: Several states and some municipalities charge premium taxes or
similar taxes on annuities that we are required to pay. The amount of tax will
vary from jurisdiction to jurisdiction and is subject to change. We pay the
tax either when purchase payments are received, upon surrender or when the
Account Value is applied under an annuity option. The tax charge is designed
to approximate the taxes that we are required to pay and is assessed as a
percentage of purchase payments, surrender value, or Account Value as
applicable. The tax charge currently ranges up to 3 1/2%. We reserve the
right to deduct the charge either at the time the tax is imposed, upon a full
surrender of the Annuity, or upon annuitization. We may assess a charge
against the Sub-accounts and the Fixed Allocations equal to any taxes which
may be imposed upon the separate accounts.
We will pay company income taxes on the taxable corporate earnings created by
this separate account product. While we may consider company income taxes when
pricing our products, we do not currently include such income taxes in the tax
charges you pay under the Annuity. We will periodically review the issue of
charging for these taxes and may impose a charge in the future.
In calculating our corporate income tax liability, we derive certain corporate
income tax benefits associated with the investment of company assets,
including separate account assets, which are treated as company assets under
applicable income tax law. These benefits reduce our overall corporate income
tax liability. Under current law, such benefits may include foreign tax
credits and corporate dividends received deductions. We do not pass these tax
benefits through to holders of the separate account annuity contracts because
(i) the contract owners are not the owners of the assets generating these
benefits under applicable income tax law and (ii) we do not currently include
company income taxes in the tax charges you pay under the contract.
Insurance Charge: We deduct an Insurance Charge daily. The charge is assessed
against the daily assets allocated to the Sub-accounts and is equal to the
amount indicated under "Summary of Contract Fees and Charges". The Insurance
Charge is the combination of the Mortality & Expense Risk Charge and the
Administration Charge. The Insurance Charge is intended to compensate
Prudential Annuities for providing the insurance benefits under each Annuity,
including each Annuity's basic Death Benefit that provides guaranteed benefits
to your beneficiaries even if the market declines and the risk that persons we
guarantee annuity payments to will live longer than our assumptions. The
charge also covers administrative costs associated with providing the Annuity
benefits, including preparation of the contract and prospectus, confirmation
statements, annual account statements and annual reports, legal and accounting
fees as well as various related expenses. Finally, the charge covers the risk
that our assumptions about the mortality risks and expenses under each Annuity
are incorrect and that we have agreed not to increase these charges over time
despite our actual costs. We may increase the portion of the total Insurance
Charge that is deducted for administrative costs; however, any increase will
only apply to Annuities issued after the date of the increase.
The Insurance Charge is not deducted against assets allocated to a Fixed
Allocation. However, the amount we credit to Fixed Allocations may also
reflect similar assumptions about the insurance guarantees provided under each
Annuity and the administrative costs associated with providing the Annuity
benefits.
Distribution Charge: For ASAP III and XT6, we deduct a Distribution Charge
daily. The charge is assessed against the average assets allocated to the
Sub-accounts and is equal to the amount indicated under "Summary of Contract
Fees and Charges" on an annual basis. The Distribution Charge is intended to
compensate us for a portion of our acquisition expenses under the Annuity,
including promotion and distribution of the Annuity and, with respect to XT6,
the costs associated with offering Credits which are funded through Prudential
Annuities general account. The Distribution Charge is deducted against your
Annuity's Account Value and any increases or decreases in your Account Value
based on market fluctuations of the Sub-accounts will affect the charge.
Optional Benefits for which we assess a charge: If you elect to purchase
certain optional benefits, we will deduct an additional charge. For some
optional benefits, the charge is deducted from your Account Value allocated to
the Sub-accounts. This charge is included in the daily calculation of the Unit
Price for each Sub-account. For certain other optional benefits, such as
Highest Daily Lifetime Seven, the charge is assessed against the Protected
Withdrawal Value and taken out of the Sub-accounts periodically. Please refer
to the section entitled "Summary of Contract Fees and Charges" for the list of
charges for each optional benefit.
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Settlement Service Charge: If your beneficiary takes the death benefit under a
Beneficiary Continuation Option, we deduct a Settlement Service Charge,
although the Insurance Charge no longer applies. The charge is assessed daily
against the assets allocated to the Sub-accounts and is equal to an annual
charge of 1.00% for non-qualified Annuities and 1.40% for qualified Annuities.
Fees and expenses incurred by the Portfolios: Each Portfolio incurs total
annual operating expenses comprised of an investment management fee, other
expenses and any distribution and service (12b-1) fees that may apply. These
fees and expenses are reflected daily by each Portfolio before it provides
Prudential Annuities with the net asset value as of the close of business each
Valuation Day. More detailed information about fees and expenses can be found
in the prospectuses for the Portfolios.
WHAT CHARGES APPLY TO THE FIXED ALLOCATIONS?
No specific fees or expenses are deducted when determining the rate we credit
to a Fixed Allocation. However, for some of the same reasons that we deduct
the Insurance Charge against Account Value allocated to the Sub-accounts, we
also take into consideration mortality, expense, administration, profit and
other factors in determining the interest rates we credit to Fixed
Allocations. Any CDSC or Tax Charge applies to amounts that are taken from the
Sub-accounts or the Fixed Allocations. A Market Value Adjustment may also
apply to transfers, certain withdrawals, surrender or annuitization from an
MVA Fixed Allocation.
WHAT CHARGES APPLY IF I CHOOSE AN ANNUITY PAYMENT OPTION?
If you select a fixed payment option, the amount of each fixed payment will
depend on the Account Value of your Annuity when you elected to annuitize.
There is no specific charge deducted from these payments; however, the amount
of each annuity payment reflects assumptions about our insurance expenses. If
you select a variable payment option that we may offer, then the amount of
your benefits will reflect changes in the value of your Annuity and will be
subject to charges that apply under the variable immediate annuity option.
Also, a tax charge may apply (see "Tax Charge" above). Currently, we only
offer fixed payment options.
EXCEPTIONS/REDUCTIONS TO FEES AND CHARGES
We may reduce or eliminate certain fees and charges or alter the manner in
which the particular fee or charge is deducted. For example, we may reduce the
amount of any CDSC or the length of time it applies, reduce or eliminate the
amount of the Annual Maintenance Fee or reduce the portion of the total
Insurance Charge that is deducted as an Administration Charge. Generally,
these types of changes will be based on a reduction to our sales, maintenance
or administrative expenses due to the nature of the individual or group
purchasing the Annuity. Some of the factors we might consider in making such a
decision are: (a) the size and type of group; (b) the number of Annuities
purchased by an Owner; (c) the amount of purchase payments or likelihood of
additional purchase payments; (d) whether an annuity is reinstated pursuant to
our rules; and/or (e) other transactions where sales, maintenance or
administrative expenses are likely to be reduced. We will not discriminate
unfairly between Annuity purchasers if and when we reduce any fees and charges.
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PURCHASING YOUR ANNUITY
WHAT ARE OUR REQUIREMENTS FOR PURCHASING ONE OF THE ANNUITIES?
Initial Purchase Payment: Unless we agree otherwise and subject to our rules,
you must make a minimum initial Purchase Payment as follows: $1,000 for ASAP
III, $10,000 for XT6 and APEX II and $15,000 for ASL II. However, if you
decide to make payments under a systematic investment or an electronic funds
transfer program, we may accept a lower initial Purchase Payment provided
that, within the first Annuity Year, your subsequent purchase payments plus
your initial Purchase Payment total the minimum initial Purchase Payment
amount required for the Annuity purchased.
Where allowed by law, we must approve any initial and additional purchase
payments where the total amount of purchase payments equal $1,000,000 or more.
We may apply certain limitations and/or restrictions on an Annuity as a
condition of our acceptance, including limiting the liquidity features or the
Death Benefit protection provided under an Annuity, limiting the right to make
additional purchase payments, changing the number of transfers allowable under
an Annuity or restricting the Sub-accounts or Fixed Allocations that are
available. Other limitations and/or restrictions may apply. Applicable laws
designed to counter terrorists and prevent money laundering might, in certain
circumstances, require us to block a contract owner's ability to make certain
transactions, and thereby refuse to accept purchase payments or requests for
transfers, partial withdrawals, total withdrawals, death benefits, or income
payments until instructions are received from the appropriate regulator. We
also may be required to provide additional information about you and your
Annuity to government regulators.
Except as noted below, purchase payments must be submitted by check drawn on a
U.S. bank, in U.S. dollars, and made payable to Prudential Annuities. Purchase
payments may also be submitted via 1035 exchange or direct transfer of funds.
Under certain circumstances, purchase payments may be transmitted to
Prudential Annuities via wiring funds through your Financial Professional's
broker-dealer firm. Additional purchase payments may also be applied to your
Annuity under an electronic funds transfer arrangement where you authorize us
to deduct money directly from your bank account. We may reject any payment if
it is received in an unacceptable form. Our acceptance of a check is subject
to our ability to collect funds.
Age Restrictions: Unless we agree otherwise and subject to our rules, the
Owner (or Annuitant if entity owned) must not be older than a maximum issue
age as of the Issue Date of the Annuity as follows: age 80 for ASAP III, age
75 for XT6 and age 85 for APEX II and ASL II. If an Annuity is owned jointly,
the oldest of the Owners must not be older than the maximum issue age on the
Issue Date. You should consider your need to access your Account Value and
whether the Annuity's liquidity features will satisfy that need. If you
purchase a Beneficiary Annuity, the maximum issue age is 70 based on the Key
Life. If you take a distribution prior to age 59 1/2, you may be subject to a
10% penalty in addition to ordinary income taxes on any gain. The availability
and level of protection of certain optional benefits may vary based on the age
of the Owner on the Issue Date of the Annuity or the date of the Owner's death.
"Beneficiary" Annuity
You may purchase an Annuity if you are a beneficiary of an annuity that was
owned by a decedent, subject to the following requirements. You may transfer
the proceeds of the decedent's annuity into one of the Annuities described in
this Prospectus and continue receiving the distributions that are required by
the tax laws. This transfer option is only available for purchase of an IRA,
Roth IRA, or a non-qualified annuity, for distributions based on lives age 70
or under. This transfer option is also not available if the proceeds are being
transferred from an annuity issued by us or one of our affiliates and the
annuity offers a "Beneficiary Continuation Option".
Upon purchase, the Annuity will be issued in the name of the decedent for your
benefit. You must take required distributions at least annually, which we will
calculate based on the applicable life expectancy in the year of the
decedent's death, using Table 1 in IRS Publication 590. These distributions
are not subject to any CDSC.
For IRAs and Roth IRAs, distributions must begin by December 31 of the year
following the year of the decedent's death. If you are the surviving spouse
beneficiary, distributions may be deferred until the decedent would have
attained age 70 1/2, however if you choose to defer distributions, you are
responsible for complying with the distribution requirements under the Code,
and you must notify us when you would like distributions to begin. For
additional information regarding the tax considerations applicable to
beneficiaries of an IRA or Roth IRA, see "Required Distributions Upon Your
Death for Qualified Annuity Contracts" in the Tax Considerations section of
this Prospectus. For 2009, the required minimum distribution rules under the
Code are suspended for IRAs, Roth IRAs and qualified retirement plans.
For non-qualified Annuities, distributions must begin within one year of the
decedent's death. For additional information regarding the tax considerations
applicable to beneficiaries of a non-qualified Annuity see "Required
Distributions Upon Your Death for Nonqualified Annuity Contracts" in the Tax
Consideration section of your prospectus.
You may choose to take more than your required distribution. You may take
withdrawals in excess of your required distributions, however your withdrawal
may be subject to the Contingent Deferred Sales Charge. Any withdrawals reduce
the required distribution for the year. All applicable charges will be
assessed against your Annuity, such as the Insurance Charge and the Annual
Maintenance Fee.
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The Worker, Retiree and Employer Recovery Act of 2008 suspended required
minimum distributions for 2009. For purposes of determining whether your
withdrawal is subject to the Contingent Deferred Sales Charge, we will
continue to treat the calculated amount that would have been a required
minimum distribution if not for the suspension as the amount not subject to
Contingent Deferred Sales Charge.
The Annuity may provide a basic Death Benefit upon death, and you may name
"successors" who may either receive the Death Benefit as a lump sum or
continue receiving distributions after your death under the Beneficiary
Continuation Option.
Please note the following additional limitations for a Beneficiary Annuity:
.. No additional purchase payments are permitted. You may only make a one-time
initial Purchase Payment transferred to us directly from another annuity or
eligible account. You may not make your Purchase Payment as an indirect
rollover, or combine multiple "Transfer of Assets" or "TOA's" into a single
contract as part of this "Beneficiary" Annuity.
.. You may not elect any optional living or death benefits. Annuity Rewards is
not available.
.. You may not annuitize the Annuity; no annuity options are available.
.. You may participate only in the following programs: Auto-Rebalancing,
Dollar Cost Averaging (but not the 6 or 12 Month Dollar Cost Averaging
Program), Systematic Withdrawals, and Third Party Investment Advisor.
.. You may not assign or change ownership of the Annuity, and you may not
change or designate another life upon which distributions are based. A
"beneficiary annuity" may not be co-owned.
.. If the Annuity is funded by means of transfer from another "Beneficiary
Annuity" with another company, we require that the sending company or the
beneficial owner provide certain information in order to ensure that
applicable required distributions have been made prior to the transfer of
the contract proceeds to us. We further require appropriate information to
enable us to accurately determine future distributions from the Annuity.
Please note we are unable to accept a transfer of another "Beneficiary
Annuity" where taxes are calculated based on an exclusion amount or an
exclusion ratio of earnings to original investment. We are also unable to
accept a transfer of an annuity that has annuitized.
.. The beneficial owner of the Annuity can be an individual, grantor trust,
or, for an IRA or Roth IRA, a qualified trust. In general, a qualified
trust (1) must be valid under state law; (2) must be irrevocable or became
irrevocable by its terms upon the death of the IRA or Roth IRA owner; and
(3) the beneficiaries of the trust who are beneficiaries with respect to
the trust's interest in this Annuity must be identifiable from the trust
instrument and must be individuals. A qualified trust must provide us with
a list of all beneficiaries to the trust (including contingent and
remainder beneficiaries with a description of the conditions on their
entitlement), all of whom must be individuals, as of September 30/th/ of
the year following the year of death of the IRA or Roth IRA owner, or date
of Annuity application if later. The trustee must also provide a copy of
the trust document upon request. If the beneficial owner of the Annuity is
a grantor trust, distributions must be based on the life expectancy of the
grantor. If the beneficial owner of the Annuity is a qualified trust,
distributions must be based on the life expectancy of the oldest
beneficiary under the trust.
.. If this Beneficiary Annuity is transferred to another company as a tax-free
exchange with the intention of qualifying as a beneficiary annuity with the
receiving company, we may require certifications from the receiving company
that required distributions will be made as required by law.
.. If you are transferring proceeds as beneficiary of an annuity that is owned
by a decedent, we must receive your transfer request at least 45 days prior
to your first required distribution. If, for any reason, your transfer
request impedes our ability to complete your first distribution by the
required date, we will be unable to accept your transfer request.
Owner, Annuitant and Beneficiary Designations: We will ask you to name the
Owner(s), Annuitant and one or more Beneficiaries for your Annuity.
. Owner: The Owner(s) holds all rights under the Annuity. You may name up
to two Owners in which case all ownership rights are held jointly.
Generally, joint owners are required to act jointly; however, if each
owner provides us with an instruction that we find acceptable, we will
permit each owner to act independently on behalf of both owners. All
information and documents that we are required to send you will be sent
to the first named owner. This Annuity does not provide a right of
survivorship. Refer to the Glossary of Terms for a complete description
of the term "Owner."
. Annuitant: The Annuitant is the person upon whose life we continue to
make annuity payments. You must name an Annuitant who is a natural
person. We do not accept a designation of joint Annuitants during the
accumulation period. In limited circumstances and where allowed by law,
you may name one or more Contingent Annuitants. Generally, a Contingent
Annuitant will become the Annuitant if the Annuitant dies before the
Annuity Date. Please refer to the discussion of "Considerations for
Contingent Annuitants" in the Tax Considerations section of the
Prospectus. For Beneficiary Annuities, instead of an Annuitant there is
a "Key Life" which is used to determine the annual required
distributions.
. Beneficiary: The Beneficiary is the person(s) or entity you name to
receive the Death Benefit. Your Beneficiary Designation should be the
exact name of your beneficiary, not only a reference to the
beneficiary's relationship to you. If you use a designation of
"surviving spouse," we will pay the Death Benefit to the individual that
is your spouse at the time of your death (as defined under the federal
tax laws and regulations). If no beneficiary is named the Death Benefit
will be paid to you or your estate. For Beneficiary Annuities, instead
of a Beneficiary, the term "Successor" is used.
Your right to make certain designations may be limited if your Annuity is to
be used as an IRA, Beneficiary Annuity or other "qualified" investment that is
given beneficial tax treatment under the Code. You should seek competent tax
advice on the income, estate and gift tax implications of your designations.
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MANAGING YOUR ANNUITY
MAY I CHANGE THE OWNER, ANNUITANT AND BENEFICIARY DESIGNATIONS?
You may change the Owner, Annuitant and Beneficiary Designations by sending us
a request in writing in a form acceptable to us. However, if the Annuity is
held as a Beneficiary Annuity, the Owner may not be changed and you may not
designate another Key Life upon which distributions are based. Upon an
ownership change, any automated investment or withdrawal programs will be
canceled. The new owner must submit the applicable program enrollment if they
wish to participate in such a program. Where allowed by law, such changes will
be subject to our acceptance. Some of the changes we will not accept include,
but are not limited to:
.. a new Owner subsequent to the death of the Owner or the first of any joint
Owners to die, except where a spouse Beneficiary has become the Owner as a
result of an Owner's death;
.. a new Annuitant subsequent to the Annuity Date;
.. for "non-qualified" investments, a new Annuitant prior to the Annuity Date
if the Annuity is owned by an entity; and
.. a change in Beneficiary if the Owner had previously made the designation
irrevocable.
There are also restrictions on designation changes when you have elected
certain optional benefits. See the "Living Benefits" and "Death Benefits"
sections of this Prospectus for any such restrictions.
Spousal Designations
If an Annuity is co-owned by spouses, we will assume that the sole primary
Beneficiary is the surviving spouse that was named as the co-owner unless you
elect an alternative Beneficiary Designation. Unless you elect an alternative
Beneficiary Designation, upon the death of either spousal Owner, the surviving
spouse may elect to assume ownership of the Annuity instead of taking the
Death Benefit payment. The Death Benefit that would have been payable will be
the new Account Value of the Annuity as of the date of due proof of death and
any required proof of a spousal relationship. As of the date the assumption is
effective, the surviving spouse will have all the rights and benefits that
would be available under the Annuity to a new purchaser of the same attained
age. For purposes of determining any future Death Benefit for the beneficiary
of the surviving spouse, the new Account Value will be considered as the
initial Purchase Payment. No CDSC will apply to the new Account Value.
However, any additional purchase payments applied after the date the
assumption is effective will be subject to all provisions of the Annuity,
including the CDSC when applicable.
Spousal assumption is also permitted, subject to our rules and regulatory
approval, if the Annuity is held by a custodial account established to hold
retirement assets for the benefit of the natural person Annuitant pursuant to
the provisions of Section 408(a) of the Internal Revenue Code ("Code") (or any
successor Code section thereto) ("Custodial Account") and, on the date of the
Annuitant's death, the spouse of the Annuitant is (1) the Contingent Annuitant
under the Annuity and (2) the beneficiary of the Custodial Account. The
ability to continue the Annuity in this manner will result in the Annuity no
longer qualifying for tax deferral under the Code. However, such tax deferral
should result from the ownership of the Annuity by the Custodial Account.
Please consult your tax or legal adviser.
Spousal assumption is only permitted to spouses as defined by federal law.
Contingent Annuitant
Generally, if an Annuity is owned by an entity and the entity has named a
Contingent Annuitant, the Contingent Annuitant will become the Annuitant upon
the death of the Annuitant, and no Death Benefit is payable. Unless we agree
otherwise, the Annuity is only eligible to have a Contingent Annuitant
designation if the entity which owns the Annuity is (1) a plan described in
Internal Revenue Code Section 72(s)(5)(A)(i) (or any successor Code section
thereto); (2) an entity described in Code Section 72(u)(1) (or any successor
Code section thereto); or (3) a Custodial Account, as described in the above
section.
Where the Annuity is held by a Custodial Account, the Contingent Annuitant
will not automatically become the Annuitant upon the death of the Annuitant.
Upon the death of the Annuitant, the Custodial Account will have the choice,
subject to our rules, to either elect to receive the Death Benefit or elect to
continue the Annuity. If the Custodial Account elects to receive the Death
Benefit, the Account Value of the Annuity as of the date of due proof of death
of the Annuitant will reflect the amount that would have been payable had a
Death Benefit been paid. See the section above entitled "Spousal Designations"
for more information about how the Annuity can be continued by a Custodial
Account.
MAY I RETURN MY ANNUITY IF I CHANGE MY MIND?
If after purchasing your Annuity you change your mind and decide that you do
not want it, you may return it to us within a certain period of time known as
a right to cancel period. This is often referred to as a "free look."
Depending on the state in which you purchased your Annuity and, in some
states, if you purchased the Annuity as a replacement for a prior contract,
the right to cancel period may be ten (10) days, or longer, measured from the
time that you received your Annuity. If you return your Annuity during the
applicable period, we will refund your current Account Value plus any tax
charge deducted, less any applicable federal and state income tax withholding
and depending on your state's requirements, any applicable insurance charges
deducted. The amount
53
returned to you may be higher or lower than the Purchase Payment(s) applied
during the right to cancel period and may be subject to a market value
adjustment if it was allocated to a MVA Fixed Allocation. However, where
required by law, we will return your Purchase Payment(s) if they are greater
than your current Account Value less any federal and state income tax
withholding. With respect to XT6, if you return your Annuity, we will not
return any XTra Credits we applied your Annuity based on your purchase
payments.
MAY I MAKE ADDITIONAL PURCHASE PAYMENTS?
Unless we agree otherwise and subject to our rules, the minimum amount that we
accept as an additional Purchase Payment is $100 unless you participate in our
Systematic Investment Plan or a periodic Purchase Payment program. purchase
payments made while you participate in an asset allocation program will be
allocated in accordance with such benefit. Additional purchase payments may be
made at any time before the Annuity Date (unless the Annuity is held as a
Beneficiary Annuity), or prior to the Account Value being reduced to zero.
purchase payments are not permitted if the Annuity is held as a Beneficiary
Annuity.
MAY I MAKE SCHEDULED PAYMENTS DIRECTLY FROM MY BANK ACCOUNT?
You can make additional purchase payments to your Annuity by authorizing us to
deduct money directly from your bank account and applying it to your Annuity
(unless your Annuity is being held as a Beneficiary Annuity). We call our
electronic funds transfer program "the Systematic Investment Plan." purchase
payments made through electronic funds transfer may only be allocated to the
Sub-accounts when applied. Different allocation requirements may apply in
connection with certain optional benefits. We may allow you to invest in your
Annuity with a lower initial Purchase Payment, as long as you authorize
payments through an electronic funds transfer that will equal at least the
minimum Purchase Payment set forth above during the first 12 months of your
Annuity. We may suspend or cancel electronic funds transfer privileges if
sufficient funds are not available from the applicable financial institution
on any date that a transaction is scheduled to occur.
MAY I MAKE PURCHASE PAYMENTS THROUGH A SALARY REDUCTION PROGRAM?
These types of programs are only available with certain types of qualified
investments. If your employer sponsors such a program, we may agree to accept
periodic purchase payments through a salary reduction program as long as the
allocations are made only to Sub-accounts and the periodic purchase payments
received in the first year total at least the minimum Purchase Payment set
forth above.
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MANAGING YOUR ACCOUNT VALUE
HOW AND WHEN ARE PURCHASE PAYMENTS INVESTED?
(See "Valuing Your Investment" for a description of our procedure for pricing
initial and subsequent purchase payments.)
Initial Purchase Payment: Once we accept your application, we invest your
Purchase Payment in your Annuity according to your instructions for allocating
your Account Value. The Purchase Payment is your initial Purchase Payment
minus any tax charges that may apply. You can allocate purchase payments to
one or more available Sub-accounts or available Fixed Allocations. Investment
restrictions will apply if you elect certain optional benefits.
Subsequent Purchase Payments: Unless you participate in an asset allocation
program, or unless you have provided us with other specific allocation
instructions for one, more than one, or all subsequent purchase payments, we
will allocate any additional purchase payments you make according to your
initial Purchase Payment allocation instructions. If you so instruct us, we
will allocate subsequent purchase payments according to any new allocation
instructions. Unless you tell us otherwise, purchase payments made while you
participate in an asset allocation program will be allocated in accordance
with such program.
HOW DO I RECEIVE A LOYALTY CREDIT UNDER THE ASAP III AND APEX II ANNUITIES? We
apply a Loyalty Credit to your Annuity's Account Value at the end of your
fifth Annuity Year ("fifth Annuity Anniversary"). With respect to ASAP III,
for annuities issued on or after February 13, 2006, the Loyalty Credit is
equal to 0.50% of total purchase payments made during the first four Annuity
Years less the cumulative amount of withdrawals made (including the deduction
of any CDSC amounts) through the fifth Annuity Anniversary. With respect to
APEX II, for annuities issued between June 20, 2005 and February 12, 2006, the
Loyalty Credit is equal to 2.25% of total purchase payments made during the
first four Annuity Years less the cumulative amount of withdrawals made
(including the deduction of any CDSC amounts) through the fifth Annuity
Anniversary. For APEX II Annuities issued on or after February 13, 2006, the
Loyalty Credit is equal to 2.75% of total purchase payments made during the
first four Annuity Years less the cumulative amount of withdrawals made
(including the deduction of any CDSC amounts) through the fifth Annuity
Anniversary.
If the total purchase payments made during the first four Annuity Years is
less than the cumulative amount of withdrawals made on or before the fifth
Annuity Anniversary, no Loyalty Credit will be applied to your Annuity. Also,
no Loyalty Credit will be applied to your Annuity if your Account Value is
zero on the fifth Annuity Anniversary. This would include any situation where
the Annuity is still in force due to the fact that payments are being made
under an optional benefit such as Lifetime Five, Spousal Lifetime Five,
Highest Daily Lifetime Five, Highest Daily Lifetime Seven, Spousal Highest
Daily Lifetime Seven, Highest Daily Lifetime 7 Plus, Spousal Highest Daily
Lifetime 7 Plus or the Guaranteed Minimum Withdrawal Benefit. In addition, no
Loyalty Credit will be applied to your Annuity if before the fifth Annuity
Anniversary: (i) you have surrendered your Annuity; (ii) you have annuitized
your Annuity; (iii) your Beneficiary has elected our Beneficiary Continuation
Option; or (iv) we have received due proof of your death (and there has been
no spousal continuation election made). If your spouse continues the Annuity
under our spousal continuation option, we will apply the Loyalty Credit to
your Annuity only on the fifth Annuity Anniversary measured from the date that
we originally issued you the Annuity. Since the Loyalty Credit is applied to
the Account Value only, any guarantees that are not based on Account Value
will not reflect the Loyalty Credit. Similarly, guarantees that are made
against a loss in Account Value will not be triggered in certain very limited
circumstances where they otherwise would have been, had no Loyalty Credit been
applied to the Account Value.
HOW ARE LOYALTY CREDITS APPLIED TO MY ACCOUNT VALUE UNDER THE ASAP III AND
APEX II ANNUITIES?
Any Loyalty Credit that is allocated to your Account Value on the fifth
Annuity Anniversary will be allocated to the MVA Fixed Allocations, the
Benefit Fixed Rate Account, and the Sub-accounts in the same percentages as
purchase payments are then being allocated to your Annuity.
Example of Applying the Loyalty Credit with respect to ASAP III.
Assume you make an initial Purchase Payment of $10,000 and your Annuity is
issued on or after February 13, 2006. During Annuity Year four (i.e., prior to
the fourth Annuity Anniversary) you make an additional $10,000 Purchase
Payment. During the early part of Annuity Year five (i.e., prior to the fifth
Annuity Anniversary) you make a $10,000 Purchase Payment and later in the year
make a withdrawal of $5,000. The Loyalty Credit that we will apply to your
Annuity on the fifth Annuity Anniversary is, subject to state availability,
equal to 0.50% of $15,000 (this represents the $20,000 of purchase payments
made during the first four Annuity Years minus the $5,000 withdrawal made in
the fifth Annuity Year. The computation disregards the additional $10,000
Purchase Payment made in the fifth Annuity Year.) Therefore, the Loyalty
Credit amount would be equal to $75.00.
Example of Applying the Loyalty Credit with respect to APEX II.
Assume you make an initial Purchase Payment of $10,000 and your Annuity is
issued on or after February 13, 2006. During Annuity Year four (i.e., prior to
the fourth Annuity Anniversary) you make an additional $10,000 Purchase
Payment. During the early part of Annuity Year five (i.e., prior to the fifth
Annuity Anniversary) you make a $10,000 Purchase Payment and later in the
55
year make a withdrawal of $5,000. The Loyalty Credit that we will apply to
your Annuity on the fifth Annuity Anniversary is, subject to state
availability, equal to 2.75% of $15,000 (this represents the $20,000 of
purchase payments made during the first four
Annuity Years minus the $5,000 withdrawal made in the fifth Annuity Year. The
computation disregards the additional $10,000 Purchase Payment made in the
fifth Annuity Year.) Therefore, the Loyalty Credit amount would be equal to
$412.50.
HOW DO I RECEIVE CREDITS UNDER THE XT6 ANNUITY?
We apply a "Credit" to your Annuity's Account Value each time you make a
Purchase Payment during the first six (6) Annuity Years. The amount of the
Credit is payable from our general account. The amount of the Credit depends
on the Annuity Year in which the Purchase Payment(s) is made, according to the
table below:
For annuities issued on or after February 13, 2006 (subject to state
availability):
ANNUITY YEAR CREDIT
--------------------
1 6.50%
2 5.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
7+ 0.00%
--------------------
For annuities issued prior to February 13, 2006:
ANNUITY YEAR CREDIT
--------------------
1 6.00%
2 5.00%
3 4.00%
4 3.00%
5 2.00%
6 1.00%
7+ 0.00%
--------------------
Credits Applied to Purchase Payments for Designated Class of Annuity Owner
Prior to May 1, 2004, where allowed by state law, Annuities could be purchased
by a member of the class defined below, with a different table of Credits. The
Credit applied to all purchase payments on such Annuities is as follows based
on the Annuity Year in which the Purchase Payment was made: Year 1 -9.0%; Year
2 -9.0%; Year 3 -8.5%; Year 4 -8.0%; Year 5 -7.0%; Year 6 -6.0%; Year 7 -5.0%;
Year 8 -4.0%; Year 9 -3.0%; Year 10 -2%; Year 11+ -0.0%.
The designated class of Annuity Owners included: (a) any parent company,
affiliate or subsidiary of ours; (b) an officer, director, employee, retiree,
sales representative, or in the case of an affiliated broker-dealer,
registered representative of such company; (c) a director, officer or trustee
of any underlying mutual fund; (d) a director, officer or employee of any
investment manager, sub-advisor, transfer agent, custodian, auditing, legal or
administrative services provider that is providing investment management,
advisory, transfer agency, custodian-ship, auditing, legal and/or
administrative services to an underlying mutual fund or any affiliate of such
firm; (e) a director, officer, employee or registered representative of a
broker-dealer or insurance agency that has a then current selling agreement
with us and/or with Prudential Annuities Distributors, Inc., a Prudential
Financial Company; (f) a director, officer, employee or authorized
representative of any firm providing us or our affiliates with regular legal,
actuarial, auditing, underwriting, claims, administrative, computer support,
marketing, office or other services; (g) the then current spouse of any such
person noted in (b) through (f), above; (h) the parents of any such person
noted in (b) through (g), above; (i) the child(ren) or other legal dependent
under the age of 21 of any such person noted in (b) through (h); and (j) the
siblings of any such persons noted in (b) through (h) above.
All other terms and conditions of the Annuity apply to Owners in the
designated class.
HOW ARE CREDITS APPLIED TO ACCOUNT VALUE UNDER THE XT6 ANNUITY?
Each Credit is allocated to your Account Value at the time the Purchase
Payment is applied to your Account Value. The amount of the Credit is
allocated to the investment options in the same ratio as the applicable
Purchase Payment is applied.
Examples of Applying Credits
Initial Purchase Payment
Assume you make an initial Purchase Payment of $10,000 and your Annuity is
issued on or after February 13, 2006. We would apply a 6.5% Credit to your
Purchase Payment and allocate the amount of the Credit ($650 = $10,000 X .065)
to your Account Value in the proportion that your Purchase Payment is
allocated.
56
Additional Purchase Payment in Annuity Year 2
Assume that you make an additional Purchase Payment of $5,000. We would apply
a 5.0% Credit to your Purchase Payment and allocate the amount of the Credit
($250 = $5,000 X .05) to your Account Value.
Additional Purchase Payment in Annuity Year 6
Assume that you make an additional Purchase Payment of $15,000. We would apply
a 1.0% Credit to your Purchase Payment and allocate the amount of the Credit
($150 = $15,000 X .01) to your Account Value.
The amount of any XTra Credits applied to your XT6 Annuity Account Value can
be taken back by Prudential Annuities under certain circumstances:
.. any XTra Credits applied to your Account Value on purchase payments made
within the 12 months before the Owner's (or Annuitant's if entity owned)
date of death will be taken back;
.. the amount available under the medically-related surrender portion of the
Annuity will not include the amount of any XTra Credits payable on purchase
payments made within 12 months prior to the date of a request under the
medically-related surrender provision; and
.. if you elect to "free look" your Annuity, the amount returned to you will
not include the amount of any XTra Credits.
The Account Value may be substantially reduced if Prudential Annuities takes
back the XTra Credit amount under these circumstances. The amount we take back
will equal the XTra Credit, without adjustment up or down for investment
performance. Therefore, any gain on the XTra Credit amount will not be taken
back. But if there was a loss on the XTra Credit, the amount we take back will
still equal amount of the XTra Credit. We do not deduct a CDSC in any
situation where we take back the XTra Credit amount. During the first 10
Annuity Years, the total asset-based charges on this Annuity (including the
Insurance Charge and the Distribution Charge) are higher than many of our
other annuities, including other annuities we offer that apply credits to
purchase payments.
General Information about Credits
.. We do not consider Credits to be "investment in the contract" for income
tax purposes.
.. You may not withdraw the amount of any Credits under the Free Withdrawal
provision. The Free Withdrawal provision only applies to withdrawals of
purchase payments.
ARE THERE RESTRICTIONS OR CHARGES ON TRANSFERS BETWEEN INVESTMENT OPTIONS?
During the accumulation period you may transfer Account Value between
investment options subject to the restrictions outlined below. Transfers are
not subject to taxation on any gain. We may require a minimum of $500 in each
Sub-account you allocate Account Value to at the time of any allocation or
transfer. If you request a transfer and, as a result of the transfer, there
would be less than $500 in the Sub-account, we may transfer the remaining
Account Value in the Sub-account pro- rata to the other investment options to
which you transferred. You may not transfer Account Value to any Fixed
Allocation used with a dollar cost averaging program or any DCA Fixed Rate
Options. You may only allocate purchase payments to Fixed Allocations used
with a dollar cost averaging program or the DCA Fixed Rate Options.
Currently, any transfer involving the ProFunds VP Sub-accounts must be
received by us no later than 3:00 p.m. Eastern time (or one hour prior to any
announced closing of the applicable securities exchange) to be processed on
the current Valuation Day. The "cut-off" time for such financial transactions
involving a ProFunds VP Sub-account will be extended to 1/2 hour prior to any
announced closing (generally, 3:30 p.m. Eastern time) for transactions
submitted electronically, including through Prudential Annuities' Internet
website (www.prudentialannuities.com).
Currently, we charge $10.00 for each transfer after the twentieth
(20/th/) transfer in each Annuity Year. Transfers made as part of a Dollar
Cost Averaging (including the 6 or 12 Month Dollar Cost Averaging Program),
Automatic Rebalancing or asset allocation program do not count toward the
twenty free transfer limit. Renewals or transfers of Account Value from an MVA
Fixed Allocation at the end of its Guarantee Period are not subject to the
transfer charge. We may reduce the number of free transfers allowable each
Annuity Year (subject to a minimum of eight) without charging a Transfer Fee.
We may also increase the Transfer Fee that we charge to $15.00 for each
transfer after the number of free transfers has been used up. We may eliminate
the Transfer Fee for transfer requests transmitted electronically or through
other means that reduce our processing costs. If enrolled in any program that
does not permit transfer requests to be transmitted electronically, the
Transfer Fee will not be waived.
Once you have made 20 transfers among the Sub-accounts during an Annuity Year,
we will accept any additional transfer request during that year only if the
request is submitted to us in writing with an original signature and otherwise
is in good order. For purposes of this 20 transfer limit, we (i) do not view a
facsimile transmission as a "writing", (ii) will treat multiple transfer
requests submitted on the same Valuation Day as a single transfer, and
(iii) do not count any transfer that solely involves Sub-accounts
corresponding to any ProFund Portfolio and/or the AST Money Market Portfolio
or any transfer that involves one of our systematic programs, such as asset
allocation and automated withdrawals.
57
Frequent transfers among Sub-accounts in response to short-term fluctuations
in markets, sometimes called "market timing," can make it very difficult for a
Portfolio manager to manage a Portfolio's investments. Frequent transfers may
cause the Portfolio to
hold more cash than otherwise necessary, disrupt management strategies,
increase transaction costs, or affect performance. Each Annuity offers
Sub-accounts designed for Owners who wish to engage in frequent transfers
(i.e., one or more of the Sub-accounts corresponding to the ProFund Portfolios
and the AST Money Market Portfolio), and we encourage Owners seeking frequent
transfers to utilize those Sub-accounts.
In light of the risks posed to Owners and other investors by frequent
transfers, we reserve the right to limit the number of transfers in any
Annuity Year for all existing or new Owners and to take the other actions
discussed below. We also reserve the right to limit the number of transfers in
any Annuity Year or to refuse any transfer request for an Owner or certain
Owners if: (a) we believe that excessive transfer activity (as we define it)
or a specific transfer request or group of transfer requests may have a
detrimental effect on Unit Values or the share prices of the Portfolios; or
(b) we are informed by a Portfolio (e.g., by the Portfolio's portfolio
manager) that the purchase or redemption of shares in the Portfolio must be
restricted because the Portfolio believes the transfer activity to which such
purchase and redemption relates would have a detrimental effect on the share
prices of the affected Portfolio. Without limiting the above, the most likely
scenario where either of the above could occur would be if the aggregate
amount of a trade or trades represented a relatively large proportion of the
total assets of a particular Portfolio. In furtherance of our general
authority to restrict transfers as described above, and without limiting other
actions we may take in the future, we have adopted the following specific
restrictions:
.. With respect to each Sub-account (other than the AST Money Market
Sub-account, or a Sub-account corresponding to a ProFund Portfolio), we
track amounts exceeding a certain dollar threshold that were transferred
into the Sub-account. If you transfer such amount into a particular
Sub-account, and within 30 calendar days thereafter transfer (the "Transfer
Out") all or a portion of that amount into another Sub-account, then upon
the Transfer Out, the former Sub-account becomes restricted (the
"Restricted Sub-account"). Specifically, we will not permit subsequent
transfers into the Restricted Sub-account for 90 calendar days after the
Transfer Out if the Restricted Sub-account invests in a non-international
Portfolio, or 180 calendar days after the Transfer Out if the Restricted
Sub-account invests in an international Portfolio. For purposes of this
rule, we (i) do not count transfers made in connection with one of our
systematic programs, such as asset allocation and automated withdrawals;
(ii) do not count any transfer that solely involves Sub-accounts
corresponding to any ProFund Portfolio and/or the AST Money Market
Portfolio; and (iii) do not categorize as a transfer the first transfer
that you make after the Issue Date, if you make that transfer within 30
calendar days after the Issue Date. Even if an amount becomes restricted
under the foregoing rules, you are still free to redeem the amount from
your Annuity at any time.
.. We reserve the right to effect exchanges on a delayed basis for all
contracts. That is, we may price an exchange involving the Sub-accounts on
the Valuation Day subsequent to the Valuation Day on which the exchange
request was received. Before implementing such a practice, we would issue a
separate written notice to Owners that explains the practice in detail.
If we deny one or more transfer requests under the foregoing rules, we will
inform you or your Financial Professional promptly of the circumstances
concerning the denial.
Contract owners in New York who purchased their contracts prior to March 15,
2004 are not subject to the specific restrictions outlined in bulleted
paragraphs immediately above. In addition, there are contract owners of
different variable annuity contracts that are funded through the same Separate
Account that are not subject to the above-referenced transfer restrictions
and, therefore, might make more numerous and frequent transfers than contract
owners who are subject to such limitations. Finally, there are contract owners
of other variable annuity contracts or variable life contracts that are issued
by Prudential Annuities as well as other insurance companies that have the
same underlying mutual fund portfolios available to them. Since some contract
owners are not subject to the same transfer restrictions, unfavorable
consequences associated with such frequent trading within the underlying
mutual fund (e.g., greater portfolio turnover, higher transaction costs, or
performance or tax issues) may affect all contract owners. Similarly, while
contracts managed by a Financial Professional or third party investment
advisor are subject to the restrictions on transfers between investment
options that are discussed above, if the advisor manages a number of contracts
in the same fashion unfavorable consequences may be associated with management
activity since it may involve the movement of a substantial portion of an
underlying mutual fund's assets which may affect all contract owners invested
in the affected options. Apart from jurisdiction-specific and contract
differences in transfer restrictions, we will apply these rules uniformly
(including contracts managed by a Financial Professional or third party
investment advisor), and will not waive a transfer restriction for any
contract owner.
Although our transfer restrictions are designed to prevent excessive
transfers, they are not capable of preventing every potential occurrence of
excessive transfer activity.
The Portfolios have adopted their own policies and procedures with respect to
excessive trading of their respective shares, and we reserve the right to
enforce any such current or future policies and procedures. The prospectuses
for the Portfolios describe any such policies and procedures, which may be
more or less restrictive than the policies and procedures we have adopted.
Under SEC rules, we are required to: (1) enter into a written agreement with
each Portfolio or its principal underwriter or its transfer agent that
obligates us to provide to the Portfolio promptly upon request certain
information about the trading activity of individual contract owners
(including an Annuity Owner's TIN number), and (2) execute instructions from
the Portfolio to restrict or prohibit further
58
purchases or transfers by specific contract owners who violate the excessive
trading policies established by the Portfolio. In addition, you should be
aware that some Portfolios may receive "omnibus" purchase and redemption
orders from other insurance companies or intermediaries such as retirement
plans. The omnibus orders reflect the aggregation and netting of multiple
orders from individual owners of variable insurance contracts and/or
individual retirement plan participants. The omnibus nature of these orders
may limit the Portfolios in their ability to apply their excessive trading
policies and procedures. In addition, the other insurance companies and/or
retirement plans may have different policies and procedures or may not have
any such policies and procedures because of contractual limitations. For these
reasons, we cannot guarantee that the Portfolios (and thus contract owners)
will not be harmed by transfer activity relating to other insurance companies
and/or retirement plans that may invest in the Portfolios.
A Portfolio also may assess a short term trading fee (redemption fee) in
connection with a transfer out of the Sub-account investing in that Portfolio
that occurs within a certain number of days following the date of allocation
to the Sub-account. Each Portfolio determines the amount of the short term
trading fee and when the fee is imposed. The fee is retained by or paid to the
Portfolio and is not retained by us. The fee will be deducted from your
Account Value, to the extent allowed by law. At present, no Portfolio has
adopted a short-term trading fee.
DO YOU OFFER DOLLAR COST AVERAGING?
Yes. As discussed below, we offer Dollar Cost Averaging programs during the
accumulation period. In general, Dollar Cost Averaging allows you to
systematically transfer an amount periodically from one investment option to
one or more other investment options. You can choose to transfer earnings
only, principal plus earnings or a flat dollar amount. You may elect a Dollar
Cost Averaging program that transfers amounts monthly, quarterly,
semi-annually, or annually from Sub-accounts, or a program that transfers
amounts monthly from Fixed Allocations or DCA Fixed Rate Options. By investing
amounts on a regular basis instead of investing the total amount at one time,
Dollar Cost Averaging may decrease the effect of market fluctuation on the
investment of your Purchase Payment. This may result in a lower average cost
of units over time. However, there is no guarantee that Dollar Cost Averaging
will result in a profit or protect against a loss in a declining market. We do
not deduct a charge for participating in a Dollar Cost Averaging program.
You can Dollar Cost Average from Sub-accounts, the Fixed Allocations or the
DCA Fixed Rate Options. Dollar Cost Averaging from Fixed Allocations is
subject to a number of rules that include, but are not limited to the
following:
. You may only use Fixed Allocations with Guarantee Periods of 1, 2 or 3
years (except for the DCA Fixed Rate Options).
. You may only Dollar Cost Average earnings or principal plus earnings. If
transferring principal plus earnings, the program must be designed to
last the entire Guarantee Period for the Fixed Allocation.
. Dollar Cost Averaging transfers from Fixed Allocations are not subject
to a Market Value Adjustment.
NOTE: When a Dollar Cost Averaging program is established from a Fixed
Allocation or a DCA Fixed Rate Option, the fixed rate of interest we credit to
your Account Value is applied to a declining balance due to the transfers of
Account Value to the Sub-accounts. This will reduce the effective rate of
return on the Fixed Allocation or a DCA Fixed Rate Option over the Guarantee
Period or the duration of the program, respectively.
The Dollar Cost Averaging programs are not available if you have elected an
automatic rebalancing program or an asset allocation program. Dollar Cost
Averaging from Fixed Allocations also is not available if you elect certain
optional benefits.
Prudential Annuities originally offered specific Fixed Allocations with
Guarantee Periods of 6 months or 12 months exclusively for use with a Dollar
Cost Averaging program on the APEX II product. Those 6 month/12 month Fixed
Allocations were designed to automatically transfer Account Value in either 6
or 12 payments under a Dollar Cost Averaging program. Dollar Cost Averaging
transfers commenced on the date the Fixed Allocation was established, and then
proceeded each month following until the entire principal amount plus earnings
was transferred. Fixed Allocations could only be established with your initial
Purchase Payment or additional purchase payments. You could not transfer
existing Account Value to a Fixed Allocation. We discontinued offering these 6
and 12 month Fixed Allocations beginning on May 1, 2009.
Under our current dollar cost averaging program used with Fixed Allocations,
Account Value allocated to the Fixed Allocations will be transferred to the
Sub-accounts you choose. If you terminate the Dollar Cost Averaging program
before the entire principal amount plus earnings has been transferred to the
Sub-account(s), you must transfer all remaining Account Value to any other
investment option. Unless you provide alternate instructions at the time you
terminate the Dollar Cost Averaging program, Account Value will be transferred
to the AST Money Market Sub-account. Transfers from Fixed Allocations as part
of a Dollar Cost Averaging program are not subject to a Market Value
Adjustment. However, a Market Value Adjustment will apply if you terminate the
Dollar Cost Averaging program before the entire principal amount plus earnings
has been transferred to the Sub-account(s). Please note that under the 6 or 12
Month DCA Program (described immediately below), no Market Value Adjustment
applies.
59
6 OR 12 MONTH DOLLAR COST AVERAGING PROGRAM (THE "6 OR 12 MONTH DCA PROGRAM")
The 6 or 12 Month DCA Program is available for contracts issued on and after
May 1, 2009 (subject to applicable State approval). The program is subject to
our rules at the time of election and may not be available in conjunction with
other programs and benefits we make available. We may discontinue, modify or
amend this program from time to time. Highest Daily Lifetime 7 Plus and
Spousal Highest Daily Lifetime 7 Plus are the only optional living benefits
and the Highest Anniversary Value death benefit and the Combination 5% Roll-up
+ HAV death benefit are the only death benefits you may participate in if you
also participate in the 6 or 12 Month DCA Program, although you do not need to
select any optional benefit to participate in the program. To participate in
the 6 or 12 Month DCA Program, you must allocate at least a $2000 Purchase
Payment to our DCA Fixed Rate Options. These DCA Fixed Rate Options are
distinct from the Fixed Allocations described immediately above. Most notably,
transfers out of a DCA Fixed Rate Option are never subject to a Market Value
Adjustment. Dollar cost averaging does not assure a profit, or protect against
a loss.
The key features of this Program are as follows:
. You may only allocate purchase payments to these DCA Fixed Rate Options.
You may not transfer Account Value into this program.
. As part of your election to participate in the 6 or 12 Month DCA
Program, you specify whether the monthly transfers under the 6 or 12
Month DCA Program are to be made over a 6 month or 12 month period. We
then set the monthly transfer amount, by dividing the Purchase Payment
(including any associated credit) you have allocated to the DCA Fixed
Rate Options by the number of months. For example, if you allocated
$6000, and selected a 6 month DCA Program, we would transfer $1000 each
month. We will adjust the monthly transfer amount if, during the
transfer period, the amount allocated to the DCA Fixed Rate Options is
reduced (e.g., due to the deduction of the applicable portion of the fee
for an optional benefit, withdrawals or due to a transfer of Account
Value out of the DCA Fixed Rate Options initiated by the mathematical
formula used with Highest Daily Lifetime 7 Plus or Spousal Highest Daily
Lifetime 7 Plus). In that event, we will re-calculate the amount of each
remaining transfer by dividing the amount in the DCA Fixed Rate Option
by the number of remaining transfers. If the recalculated transfer
amount is below the minimum transfer required by the program, we will
transfer the remaining amount from the DCA Fixed Rate Option on the next
scheduled transfer and terminate the program.
. Any withdrawals, transfers, or fees deducted from the DCA Fixed Rate
Options will reduce the DCA Fixed Rate Options on a "last-in, first-out"
basis. If you have only one 6 or 12 Month DCA Program in operation,
withdrawals, transfers, or fees may be deducted from the DCA Fixed Rate
Options associated with that Program. You may, however, have more than
one 6 or 12 Month DCA Program operating at the same time (so long as any
such additional 6 or 12 Month DCA Program is of the same duration). For
example, you may have more than one 6 month DCA Program running, but may
not have a 6 month Program running simultaneously with a 12 month
Program. If you have multiple 6 or 12 Month DCA Programs running, then
the above reference to "last-in, first-out" means that amounts will be
deducted first from the DCA Fixed Rate Options associated with the 6 or
12 Month DCA Program that was established most recently.
. 6 or 12 Month DCA transfers will begin on the date the DCA Fixed Rate
Option is established and on each month following until the entire
principal amount plus earnings is transferred.
. We do not count transfers under the 6 or 12 Month DCA Program against
the number of free transfers allowed under your Annuity.
. The minimum transfer amount is $100, although we will not impose that
requirement with respect to the final amount to be transferred under the
Program.
. If you are not participating in Highest Daily Lifetime 7 Plus or Spousal
Highest Daily Lifetime 7 Plus, we will make transfers under the 6 or 12
month DCA Program to the Sub-accounts that you specified upon your
election of the Program. If you are participating in any Highest Daily
Lifetime 7 Plus benefit, we will allocate amounts transferred out of the
DCA Fixed Rate Options in the following manner: (a) if you are
participating in the Optional Allocation and Rebalancing Program, we
will allocate to the Sub-accounts in accordance with the rules of that
program (b) if you are not participating in the Optional Allocation and
Rebalancing Program, we will make transfers under the Program to the
Sub-accounts that you specified upon your election of the Program,
provided those instructions comply with the allocation requirements for
Highest Daily Lifetime 7 Plus or Spousal Highest Daily Lifetime 7 Plus
and (c) whether or not you participate in the Optional Allocation and
Rebalancing Program, no portion of our monthly transfer under the 6 or
12 Month DCA Program will be directed initially to the AST Investment
Grade Bond Sub-account (although the DCA Fixed Rate Option is treated as
a "Permitted Sub-account" for purposes of transfers to the AST
Investment Grade Bond Sub-account under the asset transfer formula under
the Highest Daily Lifetime 7 Plus benefits) (see below).
. If you are participating in Highest Daily Lifetime 7 Plus or Spousal
Highest Daily Lifetime 7 Plus and also are participating in the 6 or 12
Month DCA Program, and the formula under the benefit dictates a transfer
from the Permitted Sub-accounts to the AST Investment Grade Bond
Sub-account, then the amount to be transferred will be taken entirely
from the Sub-accounts, provided there is sufficient Account Value in
those Sub-accounts to meet the required transfer amount. Only if there
is insufficient Account Value in those Sub-accounts will an amount be
withdrawn from the DCA Fixed Rate Options associated with the 6 or 12
Month DCA Program. Amounts withdrawn from the DCA Fixed Rate Options
under the formula will be taken on a last-in, first-out basis.
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. If you are participating in one of our automated withdrawal programs
(e.g., Systematic Withdrawals), we may include within that withdrawal
program amounts held within the DCA Fixed Rate Options. If you have
elected any Highest Daily Lifetime 7 Plus benefit, any withdrawals will
be taken on a pro-rata basis from your Sub-accounts and the DCA Fixed
Rate Options.
. We impose no fee for your participation in the 6 or 12 Month DCA Program.
. You may cancel the DCA Program at any time. If you do, we will transfer
any remaining amount held within the DCA Fixed Rate Options according to
your instructions. If you do not provide any such instructions, we will
transfer any remaining amount held in the DCA Fixed Rate Options on a
pro rata basis to the Sub-accounts in which you are invested currently.
If any such Sub-account is no longer available, we may allocate the
amount that would have been applied to that Sub-account to the AST Money
Market Sub-account.
. You cannot utilize "rate lock" with the 6 or 12 Month DCA Program. The
interest rate we credit under the program will be the rate on the date
the purchase payment is allocated to the 6 or 12 Month DCA Program.
. We credit interest to amounts held within the DCA Fixed Rate Options at
the applicable declared rates. We credit such interest until the
earliest of the following (a) the date the entire amount in the DCA
Fixed Rate Option has been transferred out (b) the date the entire
amount in the DCA Fixed Rate Option is withdrawn (c) the date as of
which any death benefit payable is determined or (d) the Annuity Date.
. The interest rate earned in a DCA Fixed Rate Option will be no less than
the minimum guaranteed interest rate. We may, from time to time, declare
new interest rates for new purchase payments that are higher than the
minimum guaranteed interest rate. Please note that the interest rate
that we apply under the 6 or 12 Month DCA Program is applied to a
declining balance. Therefore, the amount of interest you receive will
decrease as amounts are systematically transferred from the DCA Fixed
Rate Option to the Sub-accounts, and the effective interest rate earned
will therefore be less than the declared interest rate.
. The 6 or 12 Month DCA Program may be referred to in your Rider and/or
the Application as the "Enhanced Dollar Cost Averaging Program."
NOTE: When a 6 or 12 Month DCA program is established from a DCA Fixed Rate
Option, the fixed rate of interest we credit to your Account Value is applied
to a declining balance due to the transfers of Account Value to the
Sub-accounts (including any transfers under an optional benefit formula). This
will reduce the effective rate of return on the DCA Fixed Rate Option.
DO YOU OFFER ANY AUTOMATIC REBALANCING PROGRAMS?
Yes. During the accumulation period, we offer Automatic Rebalancing among the
Sub-accounts you choose. You can choose to have your Account Value rebalanced
monthly, quarterly, semi-annually, or annually. On the appropriate date, the
Sub-accounts you chose are rebalanced to the allocation percentages you
requested. With Automatic Rebalancing, we transfer the appropriate amount from
the "overweighted" Sub-accounts to the "underweighted" Sub-accounts to return
your allocations to the percentages you request. For example, over time the
performance of the Sub-accounts will differ, causing your percentage
allocations to shift. We also offer the Optional Allocation and Rebalancing
Program, which is available if you elect one of the Highest Daily Lifetime
Seven (or Plus) benefits.
Any transfer to or from any Sub-account that is not part of your Automatic
Rebalancing program, will be made; however, that Sub-account will not become
part of your rebalancing program unless we receive instructions from you
indicating that you would like such option to become part of the program.
There is no minimum Account Value required to enroll in Automatic Rebalancing.
All rebalancing transfers as part of an Automatic Rebalancing program are not
included when counting the number of transfers each year toward the maximum
number of free transfers. We do not deduct a charge for participating in an
Automatic Rebalancing program. Participation in the Automatic Rebalancing
program may be restricted if you are enrolled in certain other optional
programs. Sub-accounts that are part of a Systematic Withdrawal program or
Dollar Cost Averaging program will be excluded from an Automatic Rebalancing
program.
ARE ANY ASSET ALLOCATION PROGRAMS AVAILABLE?
We currently do not offer any asset allocation programs for use with your
Annuity. Prior to December 5, 2005, we made certain asset allocation programs
available. If you enrolled in one of the asset allocation programs prior to
December 5, 2005, see the Appendix entitled, "Additional Information on the
Asset Allocation Programs" for more information on how the programs are
administered.
WHAT IS THE BALANCED INVESTMENT PROGRAM?
We offer a balanced investment program where a portion of your Account Value
is allocated to a Fixed Allocation and the remaining Account Value is
allocated to the Sub-accounts that you select. When you enroll in the Balanced
Investment Program, you choose the duration that you wish the program to last.
This determines the duration of the Guarantee Period for the Fixed Allocation.
Based on the fixed rate for the Guarantee Period chosen, we calculate the
portion of your Account Value that must be allocated to the Fixed Allocation
to grow to a specific "principal amount" (such as your initial Purchase
Payment). We determine
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the amount based on the rates then in effect for the Guarantee Period you
choose. If you continue the program until the end of the Guarantee Period and
make no withdrawals or transfers, at the end of the Guarantee Period, the
Fixed Allocation will have grown to equal the "principal amount". Withdrawals
or transfers from the Fixed Allocation before the end of the Guarantee Period
will terminate the program and may be subject to a Market Value Adjustment
(which may be positive or negative). You can transfer the Account Value that
is not allocated to the Fixed Allocation between any of the Sub-accounts
available under your Annuity. Account Value you allocate to the Sub-accounts
is subject to market fluctuations and may increase or decrease in value. We do
not deduct a charge for participating in the Balanced Investment Program. This
program is not available if your Annuity is held as a Beneficiary Annuity.
Example
Assume you invest $100,000. You choose a 10-year program and allocate a
portion of your Account Value to a Fixed Allocation with a 10-year
Guarantee Period. The rate for the 10-year Guarantee Period is 2.50%*.
Based on the fixed interest rate for the Guarantee Period chosen, the
factor is 0.781198 for determining how much of your Account Value will be
allocated to the Fixed Allocation. That means that $78,120 will be
allocated to the Fixed Allocation and the remaining Account Value
($21,880) will be allocated to the Sub-accounts. Assuming that you do not
make any withdrawals or transfers from the Fixed Allocation, it will grow
to $100,000 at the end of the Guarantee Period. Of course we cannot
predict the value of the remaining Account Value that was allocated to
the Sub-accounts.
* The rate in this example is hypothetical and may not reflect the current
rate for Guarantee Periods of this duration.
MAY I GIVE MY FINANCIAL PROFESSIONAL PERMISSION TO FORWARD TRANSACTION
INSTRUCTIONS?
Yes. Subject to our rules, your Financial Professional may forward
instructions regarding the allocation of your Account Value, and request
financial transactions involving investment options. If your Financial
Professional has this authority, we deem that all transactions that are
directed by your Financial Professional with respect to your Annuity have been
authorized by you. You must contact us immediately if and when you revoke such
authority. We will not be responsible for acting on instructions from your
Financial Professional until we receive notification of the revocation of such
person's authority. We may also suspend, cancel or limit these privileges at
any time. We will notify you if we do.
MAY I AUTHORIZE MY THIRD PARTY INVESTMENT ADVISOR TO MANAGE MY ACCOUNT?
Yes. You may engage your own investment advisor to manage your account. These
investment advisors may be firms or persons who also are appointed by us, or
whose affiliated broker-dealers are appointed by us, as authorized sellers of
the Annuities. Even if this is the case, however, please note that the
investment advisor you engage to provide advice and/or make transfers for you,
is not acting on our behalf, but rather is acting on your behalf. We do not
offer advice about how to allocate your Account Value under any circumstance.
As such, we are not responsible for any recommendations such investment
advisors make, any investment models or asset allocation programs they choose
to follow or any specific transfers they make on your behalf. Please note that
if you have engaged a third-party investment advisor to provide asset
allocation services with respect to your Annuity, we may not allow you to
elect an optional benefit that requires investment in an asset allocation
Portfolio and/or that involves mandatory Account Value transfers (e.g. Highest
Daily GRO).
You will receive confirmations of transactions that affect your Annuity.
It is your responsibility to arrange for the payment of the advisory fee
charged by your investment advisor. Similarly, it is your responsibility to
understand the advisory services provided by your investment advisor and the
advisory fees charged for the services.
We or an affiliate of ours may provide administrative support to licensed,
registered Financial Professionals or Investment advisors who you authorize to
make financial transactions on your behalf. We may require Financial
Professionals or investment advisors, who are authorized by multiple contract
owners to make financial transactions, to enter into an administrative
agreement with Prudential Annuities as a condition of our accepting
transactions on your behalf. The administrative agreement may impose
limitations on the Financial Professional's or investment advisor's ability to
request financial transactions on your behalf. These limitations are intended
to minimize the detrimental impact of a Financial Professional who is in a
position to transfer large amounts of money for multiple clients in a
particular Portfolio or type of portfolio or to comply with specific
restrictions or limitations imposed by a Portfolio(s) of Prudential Annuities.
Please Note: Annuities where your Financial Professional or investment advisor
has the authority to forward instruction on financial transactions are also
subject to the restrictions on transfers between investment options that are
discussed in the section entitled "ARE THERE RESTRICTIONS OR CHARGES ON
TRANSFERS BETWEEN INVESTMENT OPTIONS?" Since transfer activity directed by a
Financial Professional or third party investment adviser may result in
unfavorable consequences to all contract owners invested in the affected
options, we reserve the right to limit the investment options available to a
particular Owner where such authority as described above has been given to a
Financial Professional or investment advisor or impose other transfer
restrictions we deem necessary. The administrative agreement may limit the
available investment options, require advance notice of large transactions, or
impose other trading limitations on your Financial Professional. Your
Financial Professional will be
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informed of all such restrictions on an ongoing basis. We may also require
that your Financial Professional transmit all financial transactions using the
electronic trading functionality available through our Internet website
(www.prudentialannuities.com).
Limitations that we may impose on your Financial Professional or investment
advisor under the terms of the administrative agreement do not apply to
financial transactions requested by an Owner on their own behalf, except as
otherwise described in this Prospectus.
HOW DO THE FIXED ALLOCATIONS WORK?
We credit a fixed interest rate to the Fixed Allocation throughout a set
period of time called a "Guarantee Period." (Note that the discussion in this
section of Guarantee Periods is not applicable to the Benefit Fixed Rate
Account and the DCA Fixed Rate Options). Fixed Allocations currently are
offered with Guarantee Periods from 1 to 10 years. We may make Fixed
Allocations of different durations available in the future, including Fixed
Allocations offered exclusively for use with certain optional investment
programs. Fixed Allocations may not be available in all states and may not
always be available for all Guarantee Periods depending on market factors and
other considerations.
The interest rate credited to a Fixed Allocation is the rate in effect when
the Guarantee Period begins and does not change during the Guarantee Period.
The rates are an effective annual rate of interest. We determine the interest
rates for the various Guarantee Periods. At the time that we confirm your
Fixed Allocation, we will advise you of the interest rate in effect and the
date your Fixed Allocation matures. We may change the rates we credit new
Fixed Allocations at any time. Any change in interest rate does not affect
Fixed Allocations that were in effect before the date of the change. To
inquire as to the current rates for Fixed Allocations, please call
1-800-752-6342.
A Guarantee Period for a Fixed Allocation begins:
. when all or part of a net Purchase Payment is allocated to that
particular Guarantee Period;
. upon transfer of any of your Account Value to a Fixed Allocation for
that particular Guarantee Period; or
. when you "renew" a Fixed Allocation by electing a new Guarantee Period.
To the extent permitted by law, we may establish different interest rates for
Fixed Allocations offered to a class of Owners who choose to participate in
various optional investment programs we make available. This may include, but
is not limited to, Owners who elect to use Fixed Allocations under a dollar
cost averaging program (see "Do You Offer Dollar Cost Averaging?") or the
Balanced Investment Program.
Prudential Annuities may offer Fixed Allocations with Guarantee Periods of 3
months or 6 months exclusively for use as a short-term Fixed Allocation
("Short-term Fixed Allocations"). Short-term Fixed Allocations may only be
established with your initial Purchase Payment or additional purchase
payments. You may not transfer existing Account Value to a Short-term Fixed
Allocation. We reserve the right to terminate offering these special purpose
Fixed Allocations at any time.
On the Maturity Date of the Short-term Fixed Allocation, the Account Value
will be transferred to the Sub-account(s) you choose at the inception of the
program. If no instructions are provided, such Account Value will be
transferred to the AST Money Market Sub-account. Short-term Fixed Allocations
may not be renewed on the Maturity Date. If you surrender the Annuity or
transfer any Account Value from the Short-term Fixed Allocation to any other
investment option before the end of the Guarantee Period, a Market Value
Adjustment will apply.
HOW DO YOU DETERMINE RATES FOR FIXED ALLOCATIONS?
We do not have a specific formula for determining the fixed interest rates for
Fixed Allocations. Generally the interest rates we offer for Fixed Allocations
will reflect the investment returns available on the types of investments we
make to support our fixed rate guarantees. These investment types may include
cash, debt securities guaranteed by the United States government and its
agencies and instrumentalities, money market instruments, corporate debt
obligations of different durations, private placements, asset-backed
obligations and municipal bonds. In determining rates we also consider factors
such as the length of the Guarantee Period for the Fixed Allocation,
regulatory and tax requirements, liquidity of the markets for the type of
investments we make, commissions, administrative and investment expenses, our
insurance risks in relation to the Fixed Allocations, general economic trends
and competition. Some of these considerations are similar to those we consider
in determining the Insurance Charge that we deduct from Account Value
allocated to the Sub-accounts. For some of the same reasons that we deduct the
Insurance Charge against the Account Value allocated to the Sub-accounts, we
also take into consideration mortality, expense, administration, profit and
other factors in determining the interest rates we credit to Fixed
Allocations. That is, the existence of those factors results in a reduction to
the interest rate that we credit under the MVA Fixed Allocations.
We will credit interest on a new Fixed Allocation in an existing Annuity at a
rate not less than the rate we are then crediting to Fixed Allocations for the
same Guarantee Period selected by new Annuity purchasers in the same class.
The interest rate we credit for a Fixed Allocation may be subject to a
minimum. Please refer to the Statement of Additional Information. In certain
states, the interest rate may be subject to a minimum under state law or
regulation.
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HOW DOES THE MARKET VALUE ADJUSTMENT WORK?
If you transfer or withdraw Account Value from a MVA Fixed Allocation more
than 30 days before the end of its Guarantee Period, we will adjust the value
of your investment based on a formula, called a "Market Value Adjustment" or
"MVA". Under certain optional benefits (such as GRO and GRO Plus) a formula
transfers amounts between the MVA Fixed Allocations and the Permitted
Sub-accounts. The amount of any Market Value Adjustment can be either positive
or negative, depending on the movement of a combination of Strip Yields on
Strips and an Option-adjusted Spread (each as defined below) between the time
that you purchase the Fixed Allocation and the time you make a transfer or
withdrawal. The Market Value Adjustment formula compares the combination of
Strip Yields for Strips and the Option-adjusted Spreads as of the date the
Guarantee Period began with the combination of Strip Yields for Strips and the
Option-adjusted Spreads as of the date the MVA is being calculated. Any Market
Value Adjustment that applies will be subject to our rules for complying with
applicable state law.
.. "Strips" are a form of security where ownership of the interest portion of
United States Treasury securities are separated from ownership of the
underlying principal amount or corpus.
.. "Strip Yields" are the yields payable on coupon Strips of United States
Treasury securities.
.. "Option-adjusted Spread" is the difference between the yields on corporate
debt securities (adjusted to disregard options on such securities) and
government debt securities of comparable duration. We currently use the
Merrill Lynch 1 to 10 year Investment Grade Corporate Bond Index of
Option-adjusted Spreads.
MVA Formula
The MVA formula is applied separately to each MVA Fixed Allocation to
determine the Account Value of the MVA Fixed Allocation on a particular date.
The formula is as follows:
[(1+I)/(1+J+0.0010)]/N/365/
where:
I is the Strip Yield as of the start date of the Guarantee Period for
coupon Strips maturing at the end of the applicable Guarantee Period
plus the Option-adjusted Spread. If there are no Strips maturing at
that time, we will use the Strip Yield for the Strips maturing as soon
as possible after the Guarantee Period ends.
J is the Strip Yield as of the date the MVA formula is being applied
for coupon Strips maturing at the end of the applicable Guarantee
Period plus the Option-adjusted Spread. If there are no Strips maturing
at that time, we will use the Strip Yield for the Strips maturing as
soon as possible after the Guarantee Period ends.
N is the number of days remaining in the original Guarantee Period.
If you surrender your Annuity under the right to cancel provision, the MVA
formula is:
[(1 + I)/(1 + J)]/N/365/
MVA Examples
The following hypothetical examples show the effect of the MVA in determining
Account Value. Assume the following:
. You allocate $50,000 into a MVA Fixed Allocation (we refer to this as
the "Allocation Date" in these examples) with a Guarantee Period of 5
years (we refer to this as the "Maturity Date" in these examples).
. The Strip Yields for coupon Strips beginning on Allocation Date and
maturing on Maturity Date plus the Option-adjusted Spread is 5.50% (I =
5.50%).
. You make no withdrawals or transfers until you decide to withdraw the
entire MVA Fixed Allocation after exactly three (3) years, at which
point 730 days remain before the Maturity Date (N = 730).
Example of Positive MVA
Assume that at the time you request the withdrawal, the Strip Yields for
Strips maturing on the Maturity Date plus the Option-adjusted Spread is 4.00%
(J = 4.00%). Based on these assumptions, the MVA would be calculated as
follows:
MVA Factor = [(1+I)/(1+J+0.0010)]/N/365/ = [1.055/1.041]/2/ = 1.027078
Interim Value = $57,881.25
Account Value after MVA = Interim Value X MVA Factor = $59,448.56
Example of Negative MVA
Assume that at the time you request the withdrawal, the Strip Yields for
Strips maturing on the Maturity Date plus the Option-adjusted Spread is 7.00%
(J = 7.00%). Based on these assumptions, the MVA would be calculated as
follows:
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MVA Factor = [(1+I)/(1+J+0.0010)]/N/365/ = [1.055/1.071]/2/ = 0.970345
Interim Value = $57,881.25
Account Value after MVA = Interim Value X MVA Factor = $56,164.78.
WHAT HAPPENS WHEN MY GUARANTEE PERIOD MATURES?
The "Maturity Date" for a Fixed Allocation is the last day of the Guarantee
Period (note that the discussion in this section of Guarantee Periods is not
applicable to the Fixed Allocations used with a dollar cost averaging program,
the Benefit Fixed Rate Account, and the DCA Fixed Rate options). Before the
Maturity Date, you may choose to renew the Fixed Allocation for a new
Guarantee Period of the same or different length or you may transfer all or
part of that Fixed Allocation's Account Value to another Fixed Allocation or
to one or more Sub-accounts. We will not charge a MVA if you choose to renew a
Fixed Allocation on its Maturity Date or transfer the Account Value to one or
more Sub-accounts. We will notify you before the end of the Guarantee Period
about the fixed interest rates that we are currently crediting to all Fixed
Allocations that are being offered. The rates being credited to Fixed
Allocations may change before the Maturity Date.
If you do not specify how you want a Fixed Allocation to be allocated on its
Maturity Date, we will then transfer the Account Value in the Fixed Allocation
to the AST Money Market Sub-account. You can then elect to allocate the
Account Value to any of the Sub-accounts or to a new Fixed Allocation.
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ACCESS TO ACCOUNT VALUE
WHAT TYPES OF DISTRIBUTIONS ARE AVAILABLE TO ME?
During the accumulation period you can access your Account Value through
partial withdrawals, Systematic Withdrawals, and where required for tax
purposes, Required Minimum Distributions. You can also surrender your Annuity
at any time. We may deduct a portion of the Account Value being withdrawn or
surrendered as a CDSC, if applicable. If you surrender your Annuity, in
addition to any CDSC, we may deduct the Annual Maintenance Fee, any Tax Charge
that applies and the charge for any optional benefits. We may also apply a
Market Value Adjustment to MVA Fixed Allocations being withdrawn or
surrendered. Certain amounts may be available to you each Annuity Year that
are not subject to a CDSC. These are called "Free Withdrawals." Unless you
notify us differently, withdrawals are taken pro-rata based on the Account
Value in the investment options at the time we receive your withdrawal
request. Each of these types of distributions is described more fully below.
ARE THERE TAX IMPLICATIONS FOR DISTRIBUTIONS?
(For more information, see "Tax Considerations.")
During the Accumulation Period
A distribution during the accumulation period is deemed to come first from any
"gain" in your Annuity and second as a return of your "tax basis", if any.
Distributions from your Annuity are generally subject to ordinary income
taxation on the amount of any investment gain unless the distribution
qualifies as a non-taxable exchange or transfer. If you take a distribution
prior to the taxpayer's age 59 1/2, you may be subject to a 10% penalty in
addition to ordinary income taxes on any gain. You may wish to consult a
professional tax advisor for advice before requesting a distribution.
During the Annuitization Period
During the annuitization period, a portion of each annuity payment is taxed as
ordinary income at the tax rate you are subject to at the time of the payment.
The Code and regulations have "exclusionary rules" that we use to determine
what portion of each annuity payment should be treated as a return of any tax
basis you have in your Annuity. Once the tax basis in your Annuity has been
distributed, the remaining annuity payments are taxable as ordinary income.
The tax basis in your Annuity may be based on the tax-basis from a prior
contract in the case of a 1035 exchange or other qualifying transfer.
CAN I WITHDRAW A PORTION OF MY ANNUITY?
Yes, you can make a withdrawal during the accumulation period.
. To meet liquidity needs, you can withdraw a limited amount from your
Annuity during each Annuity Year without application of any CDSC. We
call this the "Free Withdrawal" amount. The Free Withdrawal amount is
not available if you choose to surrender your Annuity. Amounts withdrawn
as a Free Withdrawal do not reduce the amount of CDSC that may apply
upon a subsequent withdrawal or surrender of your Annuity. After any
partial withdrawal, your Annuity must have a Surrender Value of at least
$1,000, or we may treat the partial withdrawal request as a request to
fully surrender your Annuity. The minimum Free Withdrawal you may
request is $100.
. You can also make withdrawals in excess of the Free Withdrawal amount.
The minimum partial withdrawal you may request is $100.
To determine if a CDSC applies to partial withdrawals, we:
1. First determine what, if any, amounts qualify as a Free Withdrawal. These
amounts are not subject to the CDSC.
2. Next determine what, if any, remaining amounts are withdrawals of purchase
payments. Amounts in excess of the Free Withdrawal amount will be treated
as withdrawals of purchase payments unless all purchase payments have been
previously withdrawn. These amounts are subject to the CDSC. Purchase
payments are withdrawn on a first in, first out basis.
3. Withdraw any remaining amounts from any other Account Value. These amounts
are not subject to the CDSC.
You may request a withdrawal for an exact dollar amount after deduction of any
CDSC that applies (called a "net withdrawal") or request a gross withdrawal
from which we will deduct any CDSC that applies, resulting in less money being
payable to you than the amount you requested. If you request a net withdrawal,
the amount deducted from your Account Value to pay the CDSC may also be
subject to a CDSC.
Partial withdrawals may also be available following annuitization but only if
you choose certain annuity payment options. (Note, however, that we do not
permit commutation once annuity payments have commenced).
To request the forms necessary to make a withdrawal from your Annuity, call
1-800-752-6342 or visit our Internet Website at www.prudentialannuities.com.
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HOW MUCH CAN I WITHDRAW AS A FREE WITHDRAWAL?
The maximum Free Withdrawal amount during each Annuity Year is equal to 10% of
all purchase payments that are subject to a CDSC. Withdrawals made within an
Annuity Year reduce the Free Withdrawal amount available for the remainder of
the Annuity Year. If you do not make a withdrawal during an Annuity Year, you
are not allowed to carry over the Free Withdrawal amount to the next Annuity
Year.
CAN I MAKE PERIODIC WITHDRAWALS FROM MY ANNUITY DURING THE ACCUMULATION
PERIOD? Yes. We call these "Systematic Withdrawals." You can receive
Systematic Withdrawals of earnings only or a flat dollar amount. Systematic
Withdrawals may be subject to a CDSC. We will determine whether a CDSC applies
and the amount in the same way as we would for a partial withdrawal.
Systematic Withdrawals can be made from Account Value allocated to the
Sub-accounts or certain Fixed Allocations. Generally, Systematic Withdrawals
from Fixed Allocations are limited to earnings accrued after the program of
Systematic Withdrawals begins, or payments of fixed dollar amounts that do not
exceed such earnings. Systematic Withdrawals are available on a monthly,
quarterly, semi-annual or annual basis.
The minimum amount for each Systematic Withdrawal is $100. If any scheduled
Systematic Withdrawal is for less than $100 (which may occur under a program
that provides payment of an amount equal to the earnings in your Annuity for
the period requested), we may postpone the withdrawal and add the expected
amount to the amount that is to be withdrawn on the next scheduled Systematic
Withdrawal.
DO YOU OFFER A PROGRAM FOR WITHDRAWALS UNDER SECTION 72(t) OF THE INTERNAL
REVENUE CODE?
Yes. If your Annuity is used as a funding vehicle for certain retirement plans
that receive special tax treatment under Sections 401, 403(b), 408 or 408A of
the Code, Section 72(t) of the Code may provide an exception to the 10%
penalty tax on distributions made prior to age 59 1/2 if you elect to receive
distributions as a series of "substantially equal periodic payments".
Distributions received under these provisions in any Annuity Year that exceed
the maximum amount available as a free withdrawal will be subject to any
applicable CDSC. We may apply a Market Value Adjustment to any MVA Fixed
Allocations. To request a program that complies with Section 72(t), you must
provide us with certain required information in writing on a form acceptable
to us. We may require advance notice to allow us to calculate the amount of
72(t) withdrawals. The Surrender Value of your Annuity must be at least
$20,000 before we will allow you to begin a program for withdrawals under
Section 72(t). The minimum amount for any such withdrawal is $100 and payments
may be made monthly, quarterly, semi-annually or annually.
You may also annuitize your contract and begin receiving payments for the
remainder of your life (or life expectancy) as a means of receiving income
payments before age 59 1/2 that are not subject to the 10% penalty.
WHAT ARE REQUIRED MINIMUM DISTRIBUTIONS AND WHEN WOULD I NEED TO MAKE THEM?
(See "Tax Considerations" for a further discussion of Required Minimum
Distributions.)
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010.
Required Minimum Distributions are a type of Systematic Withdrawal we allow to
meet distribution requirements under Sections 401, 403(b) or 408 of the Code.
Required Minimum Distribution rules do not apply to Roth IRAs during the
Owner's lifetime. Under the Code, you may be required to begin receiving
periodic amounts from your Annuity. In such case, we will allow you to make
Systematic Withdrawals in amounts that satisfy the Required Minimum
Distribution rules under the Code. We do not assess a CDSC on Required Minimum
Distributions from your Annuity if you are required by law to take such
Required Minimum Distributions from your Annuity at the time it is taken.
However, a CDSC (if applicable) may be assessed on that portion of a
Systematic Withdrawal that is taken to satisfy the Required Minimum
Distribution provisions in relation to other savings or investment plans under
other qualified retirement plans not maintained with Prudential Annuities.
However, no MVA will be assessed on a withdrawal taken to meet RMD
requirements applicable to your Annuity.
The amount of the Required Minimum Distribution for your particular situation
may depend on other annuities, savings or investments. We will only calculate
the amount of your Required Minimum Distribution based on the value of your
Annuity. We require three (3) days advance written notice to calculate and
process the amount of your payments. You may elect to have Required Minimum
Distributions paid out monthly, quarterly, semi-annually or annually. The $100
minimum amount that applies to Systematic Withdrawals applies to monthly
Required Minimum Distributions but does not apply to Required Minimum
Distributions taken out on a quarterly, semi-annual or annual basis.
For purposes of determining whether your withdrawal is subject to the
Contingent Deferred Sales Charge, we will continue to treat the calculated
amount that would have been a required minimum distribution if not for the
suspension as the amount not subject to Contingent Deferred Sales Charge.
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You may also annuitize your contract and begin receiving payments for the
remainder of your life (or life expectancy) as a means of receiving income
payments and satisfying the Required Minimum Distribution provisions under the
Code. Annuitized payments are not suspended as Required Minimum Distributions
for 2009.
Please see "Highest Daily Lifetime 7 Plus" under the subsection "Required
Minimum Distributions" for further information relating to Required Minimum
Distributions if you own that benefit.
CAN I SURRENDER MY ANNUITY FOR ITS VALUE?
Yes. During the accumulation period you can surrender your Annuity at any
time. Upon surrender, you will receive the Surrender Value. Upon surrender of
your Annuity, you will no longer have any rights under the surrendered Annuity.
For purposes of calculating any applicable CDSC on surrender, the purchase
payments being withdrawn may be greater than your remaining Account Value or
the amount of your withdrawal request. This is most likely to occur if you
have made prior withdrawals under the Free Withdrawal provision or if your
Account Value has declined in value due to negative market performance. In
that scenario, we would determine the CDSC amount as the applicable percentage
of the purchase payments being withdrawn, rather than as a percentage of the
remaining Account Value or withdrawal request. Thus, the CDSC would be greater
than if it were calculated as a percentage of remaining Account Value or
withdrawal amount. We may apply a Market Value Adjustment to any MVA Fixed
Allocations.
Under certain annuity payment options, you may be allowed to surrender your
Annuity for its then current value.
To request the forms necessary to surrender your Annuity, call 1-800-752-6342
or visit our Internet Website at www.prudentialannuities.com.
WHAT IS A MEDICALLY-RELATED SURRENDER AND HOW DO I QUALIFY?
Where permitted by law, you may request to surrender all or part of your
Annuity prior to the Annuity Date without application of any otherwise
applicable CDSC upon occurrence of a medically-related "Contingency Event" as
described below. We may apply a Market Value Adjustment to any MVA Fixed
Allocations. If you request a full surrender, the amount payable will be your
Account Value minus, with respect to XT6, (a) the amount of any XTra Credits
applied within 12 months prior to your request to surrender your Annuity under
this provision; and (b) the amount of any XTra Credits added in conjunction
with any purchase payments received after our receipt of your request for a
medically-related surrender (e.g. purchase payments received at such time
pursuant to a salary reduction program). With respect to partial surrenders,
we similarly reserve the right to take back XTra Credits as described above.
This waiver of any applicable CDSC is subject to our rules in place at the
time of your request, which currently include but are not limited to the
following:
. The Annuitant must have been named or any change of Annuitant must have
been accepted by us, prior to the "Contingency Event" described below in
order to qualify for a medically-related surrender;
. the Annuitant must be alive as of the date we pay the proceeds of such
surrender request;
. if the Owner is one or more natural persons, all such Owners must also
be alive at such time;
. we must receive satisfactory proof of the Annuitant's confinement in a
Medical Care Facility or Fatal Illness in writing on a form satisfactory
to us; and
. no additional purchase payments can be made to the Annuity.
A "Contingency Event" occurs if the Annuitant is:
. first confined in a "Medical Care Facility" while your Annuity is in
force and remains confined for at least 90 days in a row; or
. first diagnosed as having a "Fatal Illness" while your Annuity is in
force.
The definitions of "Medical Care Facility" and "Fatal Illness," as well as
additional terms and conditions, are provided in your Annuity. Specific
details and definitions in relation to this benefit may differ in certain
jurisdictions. This benefit is not available in Massachusetts.
WHAT TYPES OF ANNUITY OPTIONS ARE AVAILABLE?
We currently make available annuity options that provide fixed annuity
payments. Your Annuity provides certain fixed annuity payment options. We do
not guarantee to continue to make available any other option other than the
fixed annuity payment options set forth in your Annuity. Fixed options provide
the same amount with each payment. Adjustable options provide a fixed payment
that is periodically adjusted based on current interest rates. Please refer to
the "Living Benefits" section below for a description of annuity options that
are available when you elect one of the living benefits. For additional
information on annuity payment options you may request a Statement of
Additional Information.
You may choose an Annuity Date, an annuity option and the frequency of annuity
payments. You may change your choices before the Annuity Date under the terms
of your contract. A maximum Annuity Date may be required by law or under the
terms of your
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Annuity. The Annuity Date may depend on the annuity option you choose. Certain
annuity options may not be available depending on the age of the Annuitant.
See section below entitled "How and When Do I Choose the Annuity Payment
Option?"
Certain of these annuity options may be available to Beneficiaries who choose
to receive the Death Benefit proceeds as a series of payments instead of a
lump sum payment.
Please note, with respect to XT6, you may not annuitize within the first three
Annuity Years and with respect to ASAP III and APEX II, you may not annuitize
within the first Annuity Year.
For Beneficiary Annuities, no annuity payments are available and all
references to an Annuity Date are not applicable.
Option 1
Payments for Life: Under this option, income is payable periodically until the
death of the "Key Life". The "Key Life" (as used in this section) is the
person or persons upon whose life annuity payments are based. No additional
annuity payments are made after the death of the Key Life. Since no minimum
number of payments is guaranteed, this option offers the largest amount of
periodic payments of the life contingent annuity options. It is possible that
only one payment will be payable if the death of the Key Life occurs before
the date the second payment was due, and no other payments nor death benefits
would be payable. Under this option, you cannot make a partial or full
surrender of the annuity.
Option 2
Payments Based on Joint Lives: Under this option, income is payable
periodically during the joint lifetime of two key lives, and thereafter during
the remaining lifetime of the survivor, ceasing with the last payment prior to
the survivor's death. No minimum number of payments is guaranteed under this
option. It is possible that only one payment will be payable if the death of
all the Key Lives occurs before the date the second payment was due, and no
other payments or death benefits would be payable. Under this option, you
cannot make a partial or full surrender of the annuity.
Option 3
Payments for Life with a Certain Period: Under this option, income is payable
until the death of the Key Life. However, if the Key Life dies before the end
of the period selected (5, 10 or 15 years), the remaining payments are paid to
the Beneficiary until the end of such period. Under this option, you cannot
make a partial or full surrender of the annuity. If this Annuity is issued as
a Qualified Annuity contract and annuity payments begin after age 92, then
this Option will be modified to permit a period certain that will end no later
than the life expectancy of the annuitant defined under the IRS Required
Minimum Distribution tables.
Option 4
Fixed Payments for a Certain Period: Under this option, income is payable
periodically for a specified number of years. If the payee dies before the end
of the specified number of years, the remaining payments are paid to the
Beneficiary until the end of such period. Note that under this option,
payments are not based on any assumptions of life expectancy. Therefore, that
portion of the Insurance Charge assessed to cover the risk that key lives
outlive our expectations provides no benefit to an Owner selecting this
option. Under this option, you cannot make a partial or full surrender of the
annuity.
We may make different annuity payment options available in the future. We do
not guarantee to continue to make available any other option other than the
fixed annuity payment options set forth in your contract.
HOW AND WHEN DO I CHOOSE THE ANNUITY PAYMENT OPTION?
Unless prohibited by law, we require that you elect either a life annuity or
an annuity with a certain period of at least 5 years if any CDSC would apply
were you to surrender your Annuity on the Annuity Date. Certain annuity
payment options may not be available if your Annuity Date occurs during the
period that a CDSC would apply.
You have a right to choose your Annuity Date, provided it is no later than the
maximum Annuity Date that may be required by law or under the terms of your
Annuity.
For Annuities issued prior to November 20, 2006:
. if you do not provide us with your Annuity Date, a default date for the
Annuity Date will be the first day of the calendar month following the
later of the Annuitant's 85/th/ birthday or the fifth anniversary of our
receipt of your request to purchase an Annuity; and
. unless you instruct us otherwise, the annuity payments, where allowed by
law, will be calculated on a fixed basis under Option 3, Payments for
Life with 10 years certain.
If you choose to defer the Annuity Date beyond the default date, the IRS may
not consider your contract to be an annuity under the tax law. If that should
occur, all gain in your Annuity at that time will become immediately taxable
to you. Further, each subsequent year's increase in Account Value would be
taxable in that year. By choosing to continue to defer after the default date,
you will assume the risk that your Annuity will not be considered an annuity
for federal income tax purposes.
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For Annuities issued on or after November 20, 2006:
. Unless we agree otherwise, the Annuity Date you choose must be no later
than the first day of the calendar month coinciding with or next
following the later of the oldest Owner's or Annuitant's 95/th/
birthday, whichever occurs first.
. If you do not provide us with your Annuity Date, the maximum date as
described above will be the default date; and, unless you instruct us
otherwise, we will pay you the annuity payments and the annuity
payments, where allowed by law, will be calculated on a fixed basis
under Option 3, Payments for Life with 10 years certain.
Please note that annuitization essentially involves converting your Account
Value to an annuity payment stream, the length of which depends on the terms
of the applicable annuity option. Thus, once annuity payments begin, your
death benefit is determined solely under the terms of the applicable annuity
payment option, and you no longer participate in any optional living benefit
(unless you have annuitized under that benefit).
HOW ARE ANNUITY PAYMENTS CALCULATED?
Fixed Annuity Payments
If you choose to receive fixed annuity payments, you will receive equal
fixed-dollar payments throughout the period you select. The amount of the
fixed payment will vary depending on the annuity payment option and payment
frequency you select. Generally, the first annuity payment is determined by
multiplying the Account Value, minus any state premium taxes that may apply,
by the factor determined from our table of annuity rates. The table of annuity
rates differs based on the type of annuity chosen and the frequency of payment
selected. Our rates will not be less than our guaranteed minimum rates. These
guaranteed minimum rates are derived from the a2000 Individual Annuity
Mortality Table with an assumed interest rate of 3% per annum. Where required
by law or regulation, such annuity table will have rates that do not differ
according to the gender of the Key Life. Otherwise, the rates will differ
according to the gender of the Key Life.
Adjustable Annuity Payments
We may make an adjustable annuity payment option available. Adjustable annuity
payments are calculated similarly to fixed annuity payments except that on
every fifth (5/th/) anniversary of receiving annuity payments, the annuity
payment amount is adjusted upward or downward depending on the rate we are
currently crediting to annuity payments. The adjustment in the annuity payment
amount does not affect the duration of remaining annuity payments, only the
amount of each payment.
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LIVING BENEFITS
DO YOU OFFER BENEFITS DESIGNED TO PROVIDE INVESTMENT PROTECTION FOR OWNERS
WHILE THEY ARE ALIVE?
Prudential Annuities offers different optional benefits, for an additional
charge, that can provide investment protection for Owners while they are
alive. No optional benefit may be elected if your Annuity is held as a
Beneficiary Annuity. Notwithstanding the additional protection provided under
the optional Living Benefit, the additional cost has the impact of reducing
net performance of the investment options. Each optional benefit offers a
distinct type of guarantee, regardless of the performance of the Sub-accounts,
that may be appropriate for you depending on the manner in which you intend to
make use of your Annuity while you are alive. Depending on which optional
benefit you choose, you can have flexibility to invest in the Sub-accounts
while:
.. protecting a principal amount from decreases in value as of specified
future dates due to investment performance;
.. taking withdrawals with a guarantee that you will be able to withdraw not
less than a guaranteed benefit base over time;
.. guaranteeing a minimum amount of growth will be applied to your principal,
if it is to be used as the basis for certain types of lifetime income
payments or lifetime withdrawals; or
.. providing spousal continuation of certain benefits.
The "living benefits" are as follows:
Guaranteed Return Option (GRO) /1/
Guaranteed Return Option Plus (GRO Plus) /1/
Guaranteed Return Option Plus 2008 (GRO Plus 2008)
Highest Daily Guaranteed Return Option (Highest Daily GRO)
Guaranteed Minimum Withdrawal Benefit (GMWB) /1/
Guaranteed Minimum Income Benefit (GMIB) /1/
Lifetime Five Income Benefit and Spousal Lifetime Five Income Benefit /1/
Highest Daily Lifetime Five Income Benefit /1/
Highest Daily Lifetime Seven Income Benefit /2/
Spousal Highest Daily Lifetime Seven Income Benefit /2/
Highest Daily Lifetime Seven with Beneficiary Income Option Income Benefit /2/
Highest Daily Lifetime Seven with Lifetime Income Accelerator Income Benefit
/2/
Spousal Highest Daily Lifetime Seven with Beneficiary Income Option Income
Benefit /2/
Highest Daily Lifetime 7 Plus Income Benefit
Spousal Highest Daily Lifetime 7 Plus Income Benefit
Highest Daily Lifetime 7 Plus with Beneficiary Income Option Benefit
Highest Daily Lifetime 7 Plus with Lifetime Income Accelerator Benefit
Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income Option Benefit
(1)No longer available for new elections.
(2)Not available for new elections if the corresponding Highest Daily Lifetime
7 Plus version is available in your state.
Here is a general description of each kind of living benefit that exists under
this Annuity:
.. Guaranteed Minimum Accumulation Benefits. The common characteristic of
these benefits is that a specified amount of your annuity value is
guaranteed at some point in the future. For example, under our Highest
Daily GRO benefit, we make an initial guarantee that your annuity value on
the day you start the benefit will not be any less ten years later. If your
annuity value is less on that date, we use our own funds to give you the
difference. Because the guarantee inherent in the guaranteed minimum
accumulation benefit does not take effect until a specified number of years
into the future, you should elect such a benefit only if your investment
time horizon is of at least that duration.
.. Guaranteed Minimum Income Benefit or ("GMIB"). As discussed elsewhere in
this Prospectus, you have the right under your Annuity to ask us to convert
your accumulated annuity value into a series of annuity payments.
Generally, the smaller the amount of your annuity value, the smaller the
amount of your annuity payments. GMIB addresses this risk, by guaranteeing
a certain amount of appreciation in the amount used to produce annuity
payments. Thus, even if your annuity value goes down in value, GMIB
guarantees that the amount we use to determine the amount of the annuity
payments will go up in value by the prescribed amount. You should select
GMIB only if you are prepared to delay your annuity payments for the
required waiting period and if you anticipate needing annuity payments.
This benefit is no longer available for new elections.
.. Guaranteed Minimum Withdrawal Benefit or ("GMWB"). This benefit is designed
for someone who wants to access the annuity's value through withdrawals
over time, rather than by annuitizing. This benefit guarantees that a
specified amount will be available for withdrawal over time, even if the
value of the annuity itself has declined. Please note that there is a
maximum Annuity Date under your Annuity, by which date annuity payments
must commence. This benefit is no longer available for new elections.
.. Lifetime Guaranteed Minimum Withdrawal Benefits. These benefits also are
designed for someone who wants to access the annuity's value through
withdrawals over time, rather than by annuitizing. These benefits differ,
however, in that the withdrawal amounts are guaranteed for life (or until
the second to die of spouses). The way that we establish the guaranteed
amount that, in turn, determines the amount of the annual lifetime payments
varies among these benefits. Under our Highest Daily Lifetime 7 Plus
benefit, for example, the guaranteed amount generally is equal to your
highest daily Account Value,
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appreciated at seven percent annually. Please note that there is a maximum
Annuity Date under your Annuity, by which date annuity payments must
commence.
Please refer to the benefit descriptions that follow for a complete
description of the terms, conditions and limitations of each optional benefit.
Investment restrictions apply if you elect certain optional living benefits.
See the chart in the "Investment Options" section of the Prospectus for a list
of investment options available and permitted with each benefit. You should
consult with your Financial Professional to determine if any of these optional
benefits may be appropriate for you based on your financial needs. There are
many factors to consider, but we note that among them you may want to evaluate
the tax implications of these different approaches to meeting your needs, both
between these benefits and in comparison to other potential solutions to your
needs (e.g., comparing the tax implications of the withdrawal benefit and
annuity payments and comparing annuity benefits with benefits of other
products).
Termination of Existing Benefits and Election of New Benefits
If you currently own an Annuity with an optional living benefit that is
terminable, you may terminate the benefit rider and elect one of the currently
available benefits, subject to availability of the benefit at that time and
our then current rules. There is currently no waiting period to elect any
living benefit once a living benefit is terminated provided that the benefit
being elected is available for election post-issue. We reserve the right to
waive, change and/or further limit availability and election frequencies in
the future. Check with your financial professional regarding the availability
of re-electing or electing a benefit and any waiting period. The benefit you
re-elect or elect may be more expensive than the benefit you are terminating.
Note that once you terminate an existing benefit, you lose the guarantees that
you had accumulated under your existing benefit and will begin the new
guarantees under the new benefit you elect based on your Account Value as of
the date the new benefit becomes active. You should carefully consider whether
terminating your existing benefit and electing a new benefit is appropriate
for you.
GUARANTEED RETURN OPTION Plus/SM/ (GRO Plus/SM/)
GRO Plus is no longer available for election.
GRO Plus is an optional benefit that, after a seven-year period following
commencement of the benefit (we refer to the end of that period and any
applicable subsequent period as the "maturity date") and on each anniversary
of the maturity date thereafter while the benefit remains in effect,
guarantees your Account Value will not be less than your Account Value on the
effective date of your benefit (called the "Protected Principal Value"). The
benefit also offers you the opportunity to elect a second, enhanced guaranteed
amount at a later date if your Account Value has increased, while preserving
the guaranteed amount established on the effective date of your benefit. The
enhanced guaranteed amount (called the "Enhanced Protected Principal Value")
guarantees that, after a separate period following election of the enhanced
guarantee and on each anniversary thereafter while this enhanced guarantee
amount remains in effect, your Account Value will not be less than your
Account Value on the effective date of your election of the enhanced guarantee.
The benefit monitors your Account Value daily and, if necessary,
systematically transfers amounts between the Sub-accounts you choose and MVA
Fixed Allocations used to support the Protected Principal Value(s). The
benefit may be appropriate if you wish to protect a principal amount against
poor Sub-account performance as of a specific date in the future. There is an
additional charge if you elected the Guaranteed Return Option Plus benefit.
The guarantees provided by the benefit exist only on the applicable maturity
date(s) and on each anniversary of the maturity date(s) thereafter.
Key Feature - Protected Principal Value/Enhanced Protected Principal Value
The Guaranteed Return Option Plus offers a base guarantee as well as the
option of electing an enhanced guarantee at a later date.
. Base Guarantee: Under the base guarantee, Prudential Annuities
guarantees that on the maturity date and on each anniversary of the
maturity date thereafter that the benefit remains in effect, your
Account Value will be no less than the Protected Principal Value. On
the maturity date and on each anniversary after the maturity date
that the benefit remains in effect, if your Account Value is below
the Protected Principal Value, Prudential Annuities will apply
additional amounts to your Annuity from its general account to
increase your Account Value to be equal to the Protected Principal
Value. A subsequent Purchase Payment increases the amount of the
base guarantee by the amount of the Purchase Payment (plus any
Credits), and withdrawals reduce the base guarantee (as discussed
below).
. Enhanced Guarantee: On any anniversary following commencement of the
benefit, you can establish an enhanced guaranteed amount based on
your current Account Value. Under the enhanced guarantee, Prudential
Annuities guarantees that at the end of a specified period following
the election of the enhanced guarantee (also referred to as its
"maturity date"), and on each anniversary of the maturity date
thereafter that the enhanced guaranteed amount remains in effect,
your Account Value will be no less than the Enhanced Protected
Principal Value. You can elect an enhanced guarantee more than once;
however, a subsequent election supersedes the prior election of an
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enhanced guarantee. Election of an enhanced guarantee does not impact
the base guarantee. In addition, you may elect an "auto step-up"
feature that will automatically create an enhanced guarantee (or
increase your enhanced guarantee, if previously elected) on each
anniversary of the benefit (and create a new maturity period for the
new enhanced guarantee) if the Account Value as of that anniversary
exceeds the Protected Principal Value or Enhanced Protected
Principal Value by 7% or more. You may also elect to terminate an
enhanced guarantee. If you elect to terminate an enhanced guarantee,
any amounts held in the MVA Fixed Allocations for the enhanced
guarantee will be liquidated, on the Valuation Day the request is
processed, (which may result in a market value adjustment), and such
amounts will be transferred according to the rules described in
"Termination of the Benefit/ Enhanced Guarantee". Termination of an
enhanced guarantee will not result in termination of the base
guarantee. If you have elected the enhanced guarantee, on the
guarantee's maturity date and on each anniversary of the maturity
date thereafter that the enhanced guarantee amount remains in
effect, if your Account Value is below the Enhanced Protected
Principal Value, Prudential Annuities will apply additional amounts
to your Annuity from its general account to increase your Account
Value to be equal to the Enhanced Protected Principal Value. Any
amounts applied to your Account Value by Prudential Annuities on the
maturity date or any anniversary of the maturity date will first be
applied to any MVA Fixed Allocations then required to support
guarantees due on subsequent maturity dates. We will allocate the
remainder to the Sub-accounts pro-rata, based on the Account Value
in the Sub-accounts at that time.
If our assumptions are correct and the operations relating to the
administration of the benefit work properly, we do not expect that we will
need to add additional amounts to your Annuity. The Protected Principal Value
is referred to as the "Base Guarantee" and the Enhanced Protected Principal
Value is referred to as the "Step-up Guarantee" in the rider we issue for this
benefit.
Withdrawals under your Annuity
Withdrawals from your Annuity, while the benefit is in effect, will reduce the
base guarantee under the benefit as well as any enhanced guarantee. Cumulative
annual withdrawals up to 5% of the Protected Principal Value as of the
effective date of the benefit (adjusted for any subsequent purchase payments
and, with respect to XT6, any Credits applied to such purchase payments) will
reduce the applicable guaranteed amount by the actual amount of the withdrawal
(referred to as the "dollar-for-dollar limit"). If the amount withdrawn is
greater than the dollar-for-dollar limit, the portion of the withdrawal equal
to the dollar-for-dollar limit will be treated as described above, and the
portion of the withdrawal in excess of the dollar-for-dollar limit will reduce
the base guarantee and the enhanced guarantee proportionally, according to the
formula as described in the rider for this benefit (see the examples of this
calculation below). Withdrawals other than Systematic Withdrawals will be
taken pro-rata from the Sub-accounts and any Fixed Allocations. Systematic
Withdrawals will be taken pro-rata from the Sub-accounts and any MVA Fixed
Allocations up to growth attributable to the MVA Fixed Allocations and
thereafter pro-rata solely from the Sub-accounts. Withdrawals will be subject
to all other provisions of your Annuity, including any Contingent Deferred
Sales Charge and Market Value Adjustment (which may be positive or negative)
that would apply.
Charges for other optional benefits under your Annuity that are deducted as an
annual charge in arrears will not reduce the applicable guaranteed amount
under the Guaranteed Return Option Plus benefit, however, any partial
withdrawals in payment of charges for the Plus40/(TM)/ Optional Life Insurance
Rider (not currently offered for sale) and any third party investment advisory
service will be treated as withdrawals and will reduce the applicable
guaranteed amount.
The following examples of dollar-for-dollar and proportional reductions assume
that: 1.) the Issue Date and the effective date of the GRO Plus/SM/ benefit
are October 13, 2004; 2.) an initial Purchase Payment of $250,000 (includes
any Credits under XT6); 3.) a base guarantee amount of $250,000; and 4.) a
dollar-for-dollar limit of $12,500 (5% of $250,000). The values set forth here
are purely hypothetical and do not reflect the charge for GRO Plus or other
fees and charges.
Example 1. Dollar-for-dollar reduction
A $10,000 withdrawal is taken on November 29, 2004 (in the first Annuity
Year). No prior withdrawals have been taken. As the amount withdrawn is less
than the Dollar-for-dollar Limit:
.. The base guarantee amount is reduced by the amount withdrawn (i.e., by
$10,000, from $250,000 to $240,000).
.. The remaining dollar-for-dollar limit ("Remaining Limit") for the balance
of the first Annuity Year is also reduced by the amount withdrawn (from
$12,500 to $2,500).
Example 2. Dollar-for-dollar and proportional reductions
A second $10,000 withdrawal is taken on December 18, 2004 (still within the
first Annuity Year). The Account Value immediately before the withdrawal is
$180,000. As the amount withdrawn exceeds the Remaining Limit of $2,500 from
Example 1:
.. the base guarantee amount is first reduced by the Remaining Limit (from
$240,000 to $237,500);
.. The result is then further reduced by the ratio of A to B, where:
-- A is the amount withdrawn less the Remaining Limit ($10,000 - $2,500, or
$7,500).
-- B is the Account Value less the Remaining Limit ($180,000 - $2,500, or
$177,500).
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The resulting base guarantee amount is: $237,500 X (1 - $7,500 / $177,500), or
$227,464.79.
.. The Remaining Limit is set to zero (0) for the balance of the first Annuity
Year.
Example 3. Reset of the Dollar-for-dollar Limit
A $10,000 withdrawal is made on December 19, 2005 (second Annuity Year). The
Remaining Limit has been reset to the dollar-for-dollar limit of $12,500. As
the amount withdrawn is less than the dollar-for-dollar limit:
.. The base guarantee amount is reduced by the amount withdrawn (i.e., reduced
by $10,000, from $227,464.79 to $217,464.79).
.. The Remaining Limit for the balance of the second Annuity Year is also
reduced by the amount withdrawn (from $12,500 to $2,500).
Key Feature - Allocation of Account Value
GRO Plus uses a mathematical formula that we operate to help manage your
guarantees through all market cycles. Each Valuation Day, the formula
determines if any portion of your Account Value needs to be transferred into
or out of the MVA Fixed Allocations, through reference to a "reallocation
trigger". The formula does this by (a) first identifying each guarantee that
is outstanding under GRO Plus (b) then discounting the value of each such
guarantee to a present value, based on crediting rates associated with the MVA
Fixed Allocations, then (c) identifying the largest of such present values.
Then, the formula compares the largest present value to both the Account Value
and the value of assets allocated to the Sub-accounts to determine whether a
transfer into or out of the MVA Fixed Allocations is required. As detailed in
the formula, if that largest present value exceeds the Account Value less a
percentage of the Sub-account value, a transfer into the MVA Fixed Allocations
will occur. Conversely, if the largest present value is less than the Account
Value less a percentage of the Sub-account value, a transfer out of the MVA
Fixed Allocations will occur. This required formula helps us manage our
financial exposure under the benefit, by moving assets to a more stable option
(i.e., the MVA Fixed Allocations). The formula is set forth in Appendix M.
If your Account Value is greater than or equal to the reallocation trigger,
then:
.. your Account Value in the Sub-accounts will remain allocated according to
your most recent instructions; and
.. if a portion of your Account Value is allocated to an MVA Fixed Allocation
to support the applicable guaranteed amount, all or a portion of those
amounts may be transferred from the MVA Fixed Allocation and re-allocated
to the Sub-accounts according to any asset allocation programs (including
an Automatic Rebalancing program) established on your Annuity or in the
absence of such programs, pro-rata, based on the Account Values in such
Sub-accounts at that time; and
.. if all of your Account Value is allocated to an MVA Fixed Allocation, then
all or a portion of that amount may be transferred from the MVA Fixed
Allocation and re-allocated to the Sub-accounts, according to the following
hierarchy: (i) first according to any asset allocation program that you may
have in effect (ii) if no such program is in effect, then in accordance
with any automatic rebalancing program that you may have in effect and
(iii) if neither such program is in effect, then to the AST Money Market
Sub-account; and
.. a Market Value Adjustment will apply when we reallocate Account Value from
an MVA Fixed Allocation to the Sub-accounts, which may result in a decrease
or increase in your Account Value.
At any given time, some, none, or all of your Account Value may be allocated
to the MVA Fixed Allocations. With respect to any amounts held within the MVA
Fixed Allocations, we can give no assurance how long the amounts will reside
there or if such amounts will transfer out of the MVA Fixed Allocations. If
you make additional purchase payments to your Annuity, they will be allocated
to the Sub-accounts according to your allocation instructions. Such additional
purchase payments may or may not cause the formula to transfer money in or out
of the MVA Fixed Allocations. Once the purchase payments are allocated to your
Annuity, they will also be subject to the formula, which may result in
immediate transfers to or from the MVA Fixed Allocations, if dictated by the
formula. The amount of such transfers will vary, as dictated by the formula,
and will depend on the factors listed below.
The amount that is transferred to and from the MVA Fixed Allocations pursuant
to the formula depends upon a number of factors unique to your Annuity (and is
not necessarily directly correlated with the securities markets, bond markets,
or interest rates, in general) including:
.. The difference between your Account Value (including any Market Value
Adjustment) and your Protected Principal Value(s);
.. The amount of time until the maturity of your guarantee(s);
.. The amount invested in, and the performance of, the Sub-accounts;
.. The amount invested in, and interest earned within, the MVA Fixed
Allocations;
.. The current crediting rates associated with MVA Fixed Allocations;
.. Additional purchase payments, if any, that you make to the Annuity; and
.. Withdrawals, if any, taken from the Annuity.
Any amounts invested in the MVA Fixed Allocations will affect your ability to
participate in a subsequent recovery within the Sub-accounts. Conversely, the
Account Value may be higher at the beginning of the recovery, e.g. more of the
Account Value may have been protected from decline and volatility than it
otherwise would have been had the benefit not been elected.
While you are not notified when your Account Value reaches a reallocation
trigger, you will receive a confirmation statement indicating the transfer of
a portion of your Account Value either to or from the MVA Fixed Allocations.
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You may not allocate purchase payments to or transfer Account Value to or from
the MVA Fixed Allocations.
Separate Fixed Allocations may be established in support of the Protected
Principal Value and the Enhanced Protected Principal Value (if elected). There
may also be circumstances when an MVA Fixed Allocation will be established
only in support of the Protected Principal Value or the Enhanced Protected
Principal Value. If you elect an enhanced guarantee, it is more likely that a
portion of your Account Value may be allocated to MVA Fixed Allocations and
will remain allocated for a longer period of time to support the Enhanced
Protected Principal Value, even during a period of positive Sub-account
performance and/or under circumstances where MVA Fixed Allocations would not
be necessary to support the Protected Principal Value. Further, there may be
circumstances where MVA Fixed Allocations in support of the Protected
Principal Value or Enhanced Protected Principal Value are transferred to the
Sub-accounts under the formula differently than each other because of the
different guarantees they support.
You should be aware of the following potential ramifications of the formula:
.. Transfers of your Account Value can be frequent, and under some scenarios
may occur on a daily basis. As indicated, each such transfer may be subject
to a Market Value Adjustment, which can be positive or negative. Thus, a
Market Value Adjustment will directly increase or reduce your Account Value.
.. As indicated, some or even all, of your Account Value may be maintained in
the MVA Fixed Allocations. The greater the Account Value held in MVA Fixed
Allocations, the larger (in dollar terms) the Market Value Adjustment upon
any transfer of such Account Value to the Sub-accounts.
.. If your Account Value is less than the reallocation trigger, a portion of
your Account Value in the Sub-accounts will be transferred from the
Sub-accounts pro-rata according to your allocations to a new MVA Fixed
Allocation(s) to support the applicable guaranteed amount. The new MVA
Fixed Allocation(s) will have a Guarantee Period equal to the time
remaining until the applicable maturity date(s). The Account Value
allocated to the new MVA Fixed Allocation(s) will be credited with the
fixed interest rate(s) then being credited to a new MVA Fixed Allocation(s)
maturing on the applicable maturity date(s) (rounded to the next highest
yearly duration). The Account Value will remain invested in each applicable
MVA Fixed Allocation until the applicable maturity date unless, at an
earlier date, your Account Value is greater than or equal to the
reallocation trigger and, therefore, amounts can be transferred to the
Sub-accounts while maintaining the guaranteed protection under the program
(as described above).
Transfers under the formula do not impact your guarantees under GRO Plus that
have already been locked-in.
Election of the Benefit
We no longer permit new elections of GRO Plus. If you currently participate in
GRO Plus, your existing guarantees are unaffected by the fact that we no
longer offer GRO Plus.
Termination of the Benefit/Enhanced Guarantee
You can elect to terminate the enhanced guarantee but maintain the protection
provided by the base guarantee. You also can terminate the Guaranteed Return
Option Plus benefit entirely, in which case you will lose any existing
guarantees.
Upon termination of the benefit or of the enhanced guarantee, any amounts held
in the MVA Fixed Allocations related to the guarantee(s) being terminated will
be transferred as follows: (a) if only a portion of your Account Value is in
the MVA Fixed Allocations, we will transfer such Account Value (i) to the
Sub-accounts pro-rata, based on your Account Value in such Sub-accounts on the
day of the transfer, unless we receive other prior instructions from you or
(ii) if you are then participating in an asset allocation program for which we
are providing administrative support, we allocate the transferred amount in
accordance with the then current percentages for that asset allocation program
(b) if your entire Account Value is in the MVA Fixed Allocations, we will
transfer your Account Value to the Sub-account corresponding to the AST Money
Market Portfolio, unless we receive prior instructions from you. A Market
Value Adjustment will apply.
In general, you may cancel GRO Plus and then elect another living benefit that
is available post issue, effective on any Valuation Day after your
cancellation of GRO Plus. If you terminate GRO Plus, you will lose all
guarantees under that benefit. Your election of another living benefit is
subject to State and firm availability and our eligibility rules.
The benefit will terminate automatically upon: (a) the death of the Owner or
the Annuitant (in an entity owned contract); (b) as of the date Account Value
is applied to begin annuity payments; or (c) upon full surrender of the
Annuity. If you elect to terminate the benefit, the Guaranteed Return Option
Plus will no longer provide any guarantees. The surviving spouse may elect the
benefit at any time, subject to the limitations described above, after the
death of the Annuity Owner. The surviving spouse's election will be effective
on the Valuation Day that we receive the required documentation in good order
at our home office, and the Account Value on that Valuation Day will be the
Protected Principal Value.
Special Considerations under the Guaranteed Return Option Plus
This benefit is subject to certain rules and restrictions, including, but not
limited to the following:
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Sub-accounts. No MVA Fixed Allocations may be in effect as of the
date that you elect to participate in the benefit. However, the formula may
transfer Account Value to MVA Fixed Allocations as of the effective date of
the benefit under some circumstances.
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.. You cannot allocate any portion of purchase payments (including any Credits
applied to such purchase payments under XT6) or transfer Account Value to
or from a MVA Fixed Allocation while participating in the benefit; however,
all or a portion of any purchase payments (including any Credits applied to
such purchase payments under XT6) may be allocated by us to an MVA Fixed
Allocations to support the amount guaranteed. You cannot participate in any
dollar cost averaging benefit that transfers Account Value from a MVA Fixed
Allocation to a Sub-account.
.. Transfers from MVA Fixed Allocations made as a result of the formula under
the benefit will be subject to the Market Value Adjustment formula under an
Annuity; however, the 0.10% liquidity factor in the formula will not apply.
A Market Value Adjustment may be either positive or negative. Transfer
amounts will be taken from the most recently established MVA Fixed
Allocation.
.. Transfers from the Sub-accounts to MVA Fixed Allocations or from MVA Fixed
Allocations to the Sub-accounts under the benefit will not count toward the
maximum number of free transfers allowable under an Annuity.
.. Any amounts applied to your Account Value by Prudential Annuities on the
maturity date or any anniversary of the maturity date will not be treated
as "investment in the contract" for income tax purposes.
.. Low interest rates may require allocation to MVA Fixed Allocations even
when the current Account Value exceeds the guarantee.
.. As the time remaining until the applicable maturity date gradually
decreases the benefit will become increasingly sensitive to moves to MVA
Fixed Allocations.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Should we prohibit access to any
investment option, any transfers required to move Account Value to eligible
investment options will not be counted in determining the number of free
transfers during an Annuity Year.
Charges under the Benefit
We currently deduct a charge equal to 0.25% of the average daily net assets of
the Sub-accounts for participation in the Guaranteed Return Option Plus
benefit. The annual charge is deducted daily. The charge is deducted to
compensate Prudential Annuities for: (a) the risk that your Account Value on
the maturity date is less than the amount guaranteed; and (b) administration
of the benefit.
If you elect the Enhanced Guarantee under the benefit, and on the date you
elect to step-up, the charges under the benefit have changed for new
purchases, your benefit may be subject to the new charge level. These charges
will not exceed the maximum charges shown in the section of this prospectus
entitled "Your Optional Benefit Fees and Charges"
GUARANTEED RETURN OPTION (GRO)(R)
GRO is no longer available for election.
GRO is an optional benefit that, after a seven-year period following
commencement of the benefit (we refer to the end of that period as the
"maturity date") guarantees your Account Value will not be less than your
Account Value on the effective date of your benefit (called the "Protected
Principal Value").
The benefit monitors your Account Value daily and, if necessary,
systematically transfers amounts pursuant to a mathematical formula between
the Sub-accounts you choose and the MVA Fixed Allocation used to support the
Protected Principal Value. There is an additional charge if you elect the
Guaranteed Return Option benefit.
The guarantee provided by the benefit exists only on the applicable maturity
date. However, due to the ongoing monitoring of your Account Value and the
transfer of Account Value between the Sub-accounts and the MVA Fixed
Allocation to support our future guarantee, the benefit may provide some
protection from significant Sub-account losses if you choose to surrender your
Annuity or begin receiving annuity payments prior to a maturity date.
Key Feature - Protected Principal Value
Under the GRO benefit, Prudential Annuities guarantees that on the maturity
date, your Account Value will be no less than the Protected Principal Value.
On the maturity date if your Account Value is below the Protected Principal
Value, Prudential Annuities will apply additional amounts to your Annuity from
its general account to increase your Account Value to be equal to the
Protected Principal Value. A subsequent Purchase Payment increases the amount
of the Protected Principal Value by the amount of the Purchase Payment (plus
any Credits), and withdrawals reduce the Protected Principal Value (as
discussed below).
We will notify you of any amounts added to your Annuity under the benefit. If
our assumptions are correct and the operations relating to the administration
of the benefit work properly, we do not expect that we will need to add
additional amounts to an Annuity. The Protected Principal Value is generally
referred to as the "Guaranteed Amount" in the rider we issue for this benefit.
Key Feature - Allocation of Account Value
GRO uses a mathematical formula that we operate to help manage your guarantees
through all market cycles. The formula weighs a number of factors, including
the current Account Value, the value in the Sub-accounts, the value in the MVA
Fixed Allocations, the Protected Principal Value, the expected value of the
MVA Fixed Allocations used to support the guarantee, the time remaining
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until maturity, and the current crediting rates associated with the MVA Fixed
Allocations. In essence, and as detailed in the formula, the formula will
transfer Account Value into the MVA Fixed Allocations if needed to support an
anticipated guarantee. The formula is set forth in Appendix N. This required
formula thus helps us manage our financial exposure under the benefit, by
moving assets to a more stable option (i.e., the MVA Fixed Allocations).
Each Valuation Day, the formula determines if any portion of your Account
Value needs to be transferred into or out of the MVA Fixed Allocations,
through reference to a "reallocation trigger". At any given time, some, none,
or all of your Account Value may be allocated to the MVA Fixed Allocations. If
your entire Account Value is transferred to the MVA Fixed Allocations, the
formula will not transfer amounts out of the MVA Fixed Allocations to the
Sub-accounts and the entire Account Value would remain in the MVA Fixed
Allocations. If you make additional purchase payments to your Annuity, they
will be allocated to the Sub-accounts according to your allocation
instructions. Such additional purchase payments may or may not cause the
formula to transfer money in or out of the MVA Fixed Allocations. Once the
purchase payments are allocated to your Annuity, they will also be subject to
the formula, which may result in immediate transfers to or from the MVA Fixed
Allocations, if dictated by the formula. The amount of any such transfers will
vary, as dictated by the formula, and will depend on the factors listed below.
The amount that is transferred to and from the MVA Fixed Allocations pursuant
to the formula depends upon a number of factors unique to your Annuity (and is
not necessarily directly correlated with the securities markets, bond markets,
or interest rates, in general) including:
.. The difference between your Account Value (including any Market Value
Adjustment) and your Protected Principal Value(s);
.. The amount of time until the maturity of your guarantee(s);
.. The amount invested in, and the performance of, the Sub-accounts;
.. The amount invested in, and interest earned within, the MVA Fixed
Allocations;
.. The current crediting rates associated with MVA Fixed Allocations;
.. Additional purchase payments, if any, that you make to the Annuity; and
.. Withdrawals, if any, taken from the Annuity.
Any amounts invested in the MVA Fixed Allocations will affect your ability to
participate in a subsequent recovery within the Sub-accounts. Conversely, the
Account Value may be higher at the beginning of the recovery, e.g. more of the
Account Value may have been protected from decline and volatility than it
otherwise would have been had the benefit not been elected.
While you are not notified when your Account Value reaches a reallocation
trigger, you will receive a confirmation statement indicating the transfer of
a portion of your Account Value either to or from the MVA Fixed Allocation.
You may not allocate purchase payments to or transfer Account Value to or from
the MVA Fixed Allocations.
You should be aware of the following potential ramifications of the formula:
.. A Market Value Adjustment will apply when we reallocate Account Value from
the MVA Fixed Allocation to the Sub-accounts. Transfers of your Account
Value can be frequent, and under some scenarios may occur on a daily basis.
As indicated, each such transfer may be subject to a Market Value
Adjustment, which can be positive or negative. Thus, a Market Value
Adjustment will directly increase or reduce your Account Value.
.. As indicated, some or even all, of your Account Value may be maintained in
the MVA Fixed Allocations. The greater the Account Value held in MVA Fixed
Allocations, the larger (in dollar terms) the Market Value Adjustment upon
any transfer of such Account Value to the Sub-accounts.
.. If your Account Value is less than the reallocation trigger, a portion of
your Account Value in the Sub-accounts will be transferred from the
Sub-accounts pro-rata according to your allocations to a new MVA Fixed
Allocation(s) to support the applicable guaranteed amount. The new MVA
Fixed Allocation(s) will have a Guarantee Period equal to the time
remaining until the applicable maturity date(s). The Account Value
allocated to the new MVA Fixed Allocation(s) will be credited with the
fixed interest rate(s) then being credited to a new MVA Fixed Allocation(s)
maturing on the applicable maturity date(s) (rounded to the next highest
yearly duration). The Account Value will remain invested in each applicable
MVA Fixed Allocation until the applicable maturity date unless, at an
earlier date, your Account Value is greater than or equal to the
reallocation trigger and, therefore, amounts can be transferred to the
Sub-accounts while maintaining the guaranteed protection under the program
(as described above).
Transfers under the formula do not impact your guarantees under GRO that have
already been locked-in.
Withdrawals from your Annuity, while the benefit is in effect, will reduce the
Protected Principal Value proportionally. The proportion will be equal to the
proportionate reduction in the Account Value due to the withdrawal as of that
date. Withdrawals will be taken pro rata from the Sub-accounts and any MVA
Fixed Allocations. Systematic withdrawals will be taken pro rata from the
Sub-accounts and any MVA Fixed Allocations up to growth attributable to the
MVA Fixed Allocations and thereafter pro rata solely from the Sub-accounts.
Withdrawals will be subject to all other provisions of your Annuity, including
any Contingent Deferred Sales Charge and Market Value Adjustment that would
apply.
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Election of the Benefit
We no longer permit new elections of GRO. If you currently participate in GRO,
your existing guarantees are unaffected by the fact that we no longer offer
GRO.
Restart of the Benefit
Once each Annuity Year you may request to restart the Benefit. Such a request
is an election by you to terminate the existing Benefit (and all guarantees
under the benefit) and start a new one. Restarts only take effect on
anniversaries of the Issue Date. To make such a request for a restart, you
must notify us in advance in accordance with our administrative requirements.
If we accept your request, we then terminate the existing Benefit as of that
valuation period, if it is an anniversary of the Issue Date, or, if not, as of
the next following anniversary of the Issue Date. The new Benefit starts at
that time. The initial Protected Principal Value for the new Benefit is the
Account Value as of the effective date of the new Benefit. Unless you tell us
otherwise, the duration of the new Benefit will be the same as that for the
existing Benefit. However, if we do not then make that duration available, you
must elect from those we make available at that time. For those who elect to
re-start the benefit, the charge will be assessed daily as a percentage of the
average daily net assets of the Sub-accounts - see "Charges under the Benefit"
below.
As part of terminating the existing Benefit, we transfer any amounts in MVA
Fixed Allocations, subject to a Market Value Adjustment, to the Sub-accounts
on a pro-rata basis. If your entire Account Value was then in MVA Fixed
Allocations, you must first provide us instructions as to how to allocate the
transferred Account Value among the Sub-accounts.
Termination of the Benefit
The Annuity Owner also can terminate the Guaranteed Return Option benefit.
Upon termination, any amounts held in the MVA Fixed Allocations will be
transferred as follows: (a) if only a portion of your Account Value is in the
MVA Fixed Allocations, we will transfer such Account Value (i) to the
Sub-accounts pro-rata based on the Account Values in such Sub-accounts on the
day of the transfer, unless we receive at our office other prior instructions
from you or (ii) if you are then participating in an asset allocation program
for which we are providing administrative support, we allocate the transferred
amount in accordance with the then current percentages for that asset
allocation program (b) if your entire Account Value is in MVA Fixed
Allocations, we will transfer your Account Value to the Sub-account
corresponding to the AST Money Market Portfolio, unless we receive at our
Office prior instructions from you. A Market Value Adjustment will apply.
In general, you may cancel GRO and then elect another living benefit available
post issue, effective on any Valuation Day after your cancellation of GRO. If
you terminate GRO, you will lose all guarantees under that benefit. Your
election of another living benefit is subject to State and firm availability
and our eligibility rules.
The benefit will terminate automatically upon: (a) the death of the Owner or
the Annuitant (in an entity owned contract); (b) as of the date Account Value
is applied to begin annuity payments; or (c) upon full surrender of your
Annuity. If you elect to terminate the benefit, the Guaranteed Return Option
will no longer provide any guarantees. If the surviving spouse assumes your
Annuity, he/she may re-elect the benefit on any anniversary of the Issue Date
of the Annuity or, if the deceased Owner had not previously elected the
benefit, may elect the benefit at any time. The surviving spouse's election
will be effective on the Valuation Day that we receive the required
documentation in good order at our home office, and the Account Value on that
Valuation Day will be the Protected Principal Value.
The charge for the Guaranteed Return Option benefit will no longer be deducted
from your Account Value after the benefit has been terminated, although for
those Annuities for which the GRO charge is deducted annually rather than
daily (see Charges Under the Benefit below), we will deduct the final annual
charge upon termination of the benefit.
Special Considerations under the Guaranteed Return Option. This benefit is
subject to certain rules and restrictions, including, but not limited to the
following:
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Sub-accounts. The MVA Fixed Allocation may not be in effect as of
the date that you elect to participate in the benefit. However, the formula
may transfer Account Value to the MVA Fixed Allocation as of the effective
date of the benefit under some circumstances.
.. Annuity Owners cannot allocate any portion of purchase payments (including
any Credits applied to such purchase payments under XT6) or transfer
Account Value to or from the MVA Fixed Allocation while participating in
the benefit; however, all or a portion of any purchase payments (including
any Credits applied to such purchase payments under XT6) may be allocated
by us to the MVA Fixed Allocation to support the amount guaranteed. You
cannot participate in any dollar cost averaging benefit that transfers
Account Value from a MVA Fixed Allocation to a Sub-account.
.. Transfers from the MVA Fixed Allocation made as a result of the formula
under the benefit will be subject to the Market Value Adjustment formula
under an Annuity; however, the 0.10% liquidity factor in the formula will
not apply. A Market Value Adjustment may be either positive or negative.
Transfer amounts will be taken from the most recently established MVA Fixed
Allocation.
.. Transfers from the Sub-accounts to the MVA Fixed Allocation or from the MVA
Fixed Allocation to the Sub-accounts under the benefit will not count
toward the maximum number of free transfers allowable under an Annuity.
.. Any amounts applied to your Account Value by Prudential Annuities on the
maturity date will not be treated as "investment in the contract" for
income tax purposes.
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.. Any amounts that we add to your Annuity to support our guarantee under the
benefit will be applied to the Sub-accounts pro rata, after first
transferring any amounts held in the MVA Fixed Allocations as follows:
(a) if only a portion of your Account Value is in the MVA Fixed
Allocations, we will transfer such Account Value (i) to the Sub-accounts
pro-rata based on the Account Values in such Sub-accounts on the day of the
transfer, unless we receive at our office other prior instructions from you
or (ii) if you are then participating in an asset allocation program for
which we are providing administrative support, we allocate the transferred
amount in accordance with the then current percentages for that asset
allocation program and (b) if your entire Account Value is in the MVA Fixed
Allocations, we will transfer your Account Value to the Sub-account
corresponding to the AST Money Market Portfolio, unless we receive at our
Office prior instructions from you.
.. Low interest rates may require allocation to the MVA Fixed Allocation even
when the current Account Value exceeds the guarantee.
.. As the time remaining until the applicable maturity date gradually
decreases the benefit will become increasingly sensitive to moves to the
MVA Fixed Allocation.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Should we prohibit access to any
investment option, any transfers required to move Account Value to eligible
investment options will not be counted in determining the number of free
transfers during an Annuity Year.
Charges under the Benefit
We deduct a charge equal to 0.25% of the average daily net assets of the
Sub-accounts for participation in the Guaranteed Return Option benefit. The
annual charge is deducted daily. The charge is deducted to compensate
Prudential Annuities for: (a) the risk that your Account Value on the maturity
date is less than the amount guaranteed; and (b) administration of the benefit.
With respect to XT6 and APEX II, effective November 18, 2002, Prudential
Annuities changed the manner in which the annual charge for the Guaranteed
Return Option is deducted to the method described above. The annual charge for
the Guaranteed Return Option for Owners who elected the benefit between
February 4, 2002 and November 15, 2002 for XT6 and APEX II and subsequent to
November 15, 2002 in those states where the daily deduction of the charge has
not been approved, is deducted annually, in arrears, according to the
prospectus in effect as of the date the benefit was elected.
Owners who purchased an ASAP III Annuity between April 1, 2003 and
September 30, 2003 or an ASL II Annuity between February 4, 2002 and
November 15, 2002 (the "Promotional Period") will not be charged the 0.25%
annual fee for the Guaranteed Return Option benefit (or GRO Plus if we are no
longer offering GRO) if elected at any time while their Annuity is in effect.
.. Prudential Annuities will not charge the 0.25% annual fee for the entire
period that the benefit remains in effect, including any extension of the
benefit's maturity date resulting from the Owner's election to restart the
7-year benefit duration, regardless of when the Owner elects to participate
in the Guaranteed Return Option benefit (or GRO Plus if we are no longer
offering GRO).
.. Owners who complete the initial 7-year benefit duration OR terminate the
benefit before the benefit's maturity date, will not be charged the 0.25%
annual fee for participating in the benefit if they re-elect the Guaranteed
Return Option benefit (or GRO Plus if we are no longer offering GRO) at a
later date.
.. All other terms and conditions of your Annuity and the Guaranteed Return
Option benefit (or GRO Plus if we are no longer offering GRO) apply to
Owners who qualify for the waiver of the 0.25% annual fee.
.. Owners who purchase an Annuity after the completion of the Promotional
Period do not qualify for the 0.25% annual fee waiver.
GUARANTEED RETURN OPTION PLUS 2008/SM/ (GRO Plus 2008)/SM/
You can elect this benefit on the Issue Date of your Annuity, or at any time
thereafter (unless you previously participated in either this benefit or
Highest Daily GRO, in which case your election must be on an Annuity
Anniversary). GRO Plus 2008 is not available if you participate in any other
optional living benefit. However, GRO Plus 2008 may be elected together with
any optional death benefit, other than the Highest Daily Value Death Benefit
and the Plus40 Optional Life Insurance Rider.
Under GRO Plus 2008, we guarantee that the Account Value on the date that the
benefit is added to your Annuity (adjusted for subsequent purchase payments
and withdrawals as detailed below) will not be any less than that original
value on the seventh anniversary of benefit election and each anniversary
thereafter. We refer to this initial guarantee as the "base guarantee." In
addition to the base guarantee, GRO Plus 2008 offers the possibility of an
enhanced guarantee. You may lock in an enhanced guarantee once per "benefit
year" (i.e., a year beginning on the date you acquired the benefit and each
anniversary thereafter) if your Account Value on the Valuation Day exceeds the
amount of any outstanding base guarantee or enhanced guarantee. We guarantee
that the Account Value locked-in by that enhanced guarantee will not be any
less seven years later, and each anniversary of that date thereafter. In
addition, you may elect an automatic enhanced guarantee feature under which,
if Account Value on a benefit anniversary exceeds the highest existing
guarantee by 7% or more, we guarantee that such Account Value will not be any
less seven benefit anniversaries later and each benefit anniversary
thereafter. You may maintain only one enhanced guarantee in addition to your
base guarantee. Thus, when a new enhanced guarantee is created, it cancels any
existing enhanced guarantee. However, the fact that an enhanced guarantee was
effected automatically on a benefit anniversary does not prevent you from
"manually" locking-in an enhanced guarantee during the ensuing benefit year.
You may elect to terminate an enhanced guarantee without also terminating the
base guarantee. If you do, any amounts held in the AST bond portfolio
Sub-account with respect to that enhanced guarantee will be transferred to
your other Sub-accounts in accordance with your current allocation
instructions.
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Amounts held in an AST bond portfolio Sub-account with respect to the base
guarantee will not be transferred as a result of the termination of an
enhanced guarantee. Please note that whenever an enhanced guarantee is
created, we reserve the right to increase your charge for GRO Plus 2008 if we
have increased the charge for new elections of the benefit generally. You may
not lock in an enhanced guarantee, either manually or through our optional
automatic program, within seven years of the date by which annuity payments
must commence under the terms of your Annuity (please see "How and When Do I
Choose The Annuity Payment Option?" for further information on your maximum
Annuity Date). The inability to lock in an enhanced guarantee referenced in
the immediately preceding sentence also applies to a new Owner who has
acquired the Annuity from the original Owner.
In general, we refer to a date on which the Account Value is guaranteed to be
present as the "maturity date". If the Account Value on the maturity date is
less than the guaranteed amount, we will contribute funds from our general
account to bring your Account Value up to the guaranteed amount. If the
maturity date is not a Valuation Day, then we would contribute such an amount
on the next Valuation Day. We will allocate any such amount to each
Sub-account (other than the "Current AST bond portfolio Sub-account" described
below) in accordance with your current allocations instructions. Regardless of
whether we need to contribute funds at the end of a guarantee period, we will
at that time transfer all amounts held within the Current AST bond portfolio
Sub-account associated with the maturing guarantee to your other Sub-accounts,
on a pro rata basis. If the entire Account Value is invested in an AST bond
portfolio Sub-account, we will allocate according to your current allocation
instructions.
We increase both the base guarantee and any enhanced guarantee by the amount
of each Purchase Payment (and associated Credits) made subsequent to the date
that the guarantee was established. For example, if the effective date of the
benefit was January 1, 2009 and the Account Value was $100,000 on that date,
then a $30,000 Purchase Payment made on March 30, 2010 would increase the base
guarantee amount to $130,000. As illustrated in the examples below, additional
purchase payments also increase an amount we refer to as the
"dollar-for-dollar corridor."
The dollar-for-dollar corridor is equal to 5% of the base guarantee amount
(i.e., 5% of the Account Value at benefit election). Thereafter, the
dollar-for-dollar corridor is adjusted only for subsequent purchase payments
(i.e., 5% of the Purchase Payment is added to the corridor amount) and "excess
withdrawals" (as described below). Thus, the creation of any enhanced
guarantee has no impact on the dollar-for-dollar corridor. Each "benefit
year", withdrawals that you make that are equal to or less than the
dollar-for-dollar corridor reduce both the amount of the dollar-for-dollar
corridor for that benefit year plus the base guarantee amount and the amount
of any enhanced guarantee by the exact amount of the withdrawal. However, if
you withdraw more than the dollar-for-dollar corridor in a given benefit year,
we use the portion of the withdrawal that exceeded the dollar-for-dollar
corridor to effect a proportional reduction to both the dollar-for-dollar
corridor itself and each guarantee amount. We calculate a proportional
reduction by (i) identifying the amount of the withdrawal that exceeded the
dollar-for-dollar corridor (the "excess withdrawal") (ii) subtracting the
dollar-for-dollar amount from the Account Value prior to the withdrawal (iii)
dividing the excess withdrawal by the amount in (ii), and (iv) reducing each
guarantee amount, and the dollar-for-dollar corridor itself, by the percentage
derived in (iii). See examples of this calculation below.
Any partial withdrawals in payment of any third party investment advisory
service will be treated as withdrawals, and will reduce each guarantee amount
and the dollar-for-dollar corridor in the manner indicated above.
EXAMPLES
The following examples of dollar-for-dollar and proportional reductions assume
that: 1.) the Issue Date and the effective date of the GRO Plus/SM/ 2008
benefit are October 13, 2008; 2.) an initial Purchase Payment of $250,000
(includes any Credits); 3.) a base guarantee amount of $250,000; and 4.) a
dollar-for-dollar limit of $12,500 (5% of $250,000). The values set forth here
are purely hypothetical and do not reflect the charge for GRO Plus 2008 or
other fees and charges.
Example 1. Dollar-for-dollar reduction
A $10,000 withdrawal is taken on November 29, 2008 (in the first Annuity
Year). No prior withdrawals have been taken. As the amount withdrawn is less
than the Dollar-for-dollar Limit:
.. The base guarantee amount is reduced by the amount withdrawn (i.e., by
$10,000, from $250,000 to $240,000).
.. The remaining dollar-for-dollar limit ("Remaining Limit") for the balance
of the first Annuity Year is also reduced by the amount withdrawn (from
$12,500 to $2,500).
Example 2. Dollar-for-dollar and proportional reductions
A second $10,000 withdrawal is taken on December 18, 2008 (still within the
first Annuity Year). The Account Value immediately before the withdrawal is
$180,000. As the amount withdrawn exceeds the Remaining Limit of $2,500 from
Example 1:
.. the base guarantee amount is first reduced by the Remaining Limit (from
$240,000 to $237,500);
.. The result is then further reduced by the ratio of A to B, where:
-- A is the amount withdrawn less the Remaining Limit ($10,000 - $2,500, or
$7,500).
-- B is the Account Value less the Remaining Limit ($180,000 - $2,500, or
$177,500).
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The resulting base guarantee amount is: $237,500 X (1 - $7,500 / $177,500), or
$227,464.79.
.. The Remaining Limit is set to zero (0) for the balance of the first Annuity
Year. The resulting dollar-for-dollar corridor for the next Annuity Year is
calculated by multiplying the prior dollar-for-dollar corridor by the same
ratio by which we reduce the Guarantee Amount above: $12,500 X (1 - $7,500
/ $177,500), or $11,971.83.
Key Feature - Allocation of Account Value
GRO Plus 2008 uses a mathematical formula to help manage your guarantees
through all market cycles. Because the formula is made part of your schedule
supplement, the formula applicable to you may not be altered once you elect
the benefit. However, subject to regulatory approval, we do reserve the right
to amend the formula for newly-issued Annuities that elect GRO Plus 2008 and
for existing Annuities that elect the benefit in the future. This required
formula helps us manage our financial exposure under GRO Plus 2008, by moving
assets out of certain Sub-accounts if dictated by the formula (see below). In
essence, we seek to preserve the value of these assets, by transferring them
to a more stable option (i.e., one or more specified bond portfolios of
Advanced Series Trust). We refer to these bond portfolios collectively as the
"AST bond portfolios." The formula also contemplates the transfer of assets
from an AST bond portfolio to the other Sub-accounts in certain other
scenarios. The formula itself is the same as that used for our Highest Daily
GRO benefit, and is set forth in Appendix I to this Prospectus. A summary
description of each AST Bond Portfolio appears within the Prospectus section
entitled "What Are The Investment Objectives and Policies Of The Portfolios?
Upon the initial transfer of your Account Value into an AST Bond Portfolio, we
will send a prospectus for that Portfolio to you along with your confirmation.
In addition, you can find a copy of the AST Bond Portfolio prospectus by going
to www.prudentialannuities.com.
Each AST bond portfolio is unique, in that its underlying investments
generally mature at different times. For example, there would be an AST bond
portfolio whose underlying investments generally mature in 2015, an AST bond
portfolio whose underlying investments generally mature in 2016, and so forth.
We will introduce new AST bond portfolios in subsequent years, to correspond
generally to the length of new guarantee periods that are created under this
benefit (and the Highest Daily GRO benefit). If you have elected GRO Plus
2008, you may invest in an AST bond Portfolio only by operation of the
formula, and thus you may not allocate purchase payments to such a Portfolio.
Please see this Prospectus and the prospectus for the Advanced Series Trust
for more information about each AST bond portfolio used with this benefit.
Although we employ several AST bond portfolios for purposes of the benefit,
the formula described in the next paragraph operates so that your Account
Value may be allocated to only one AST bond portfolio Sub-account at one time.
In the description of the formula in the next paragraph, we refer to the AST
bond portfolio Sub-account in which you are invested immediately prior to any
potential asset transfer as the "Current AST bond portfolio Sub-account." The
formula may dictate that a transfer out of the Current AST Bond Portfolio
Sub-account be made, or alternatively may mandate a transfer into another AST
bond portfolio Sub-account. Any transfer into an AST bond portfolio
Sub-account will be directed to the AST bond portfolio Sub-account associated
with the "current liability" (we refer to that Sub-account as the "Transfer
AST bond portfolio Sub-account"). Note that if the Current AST bond portfolio
Sub-account is associated with the current liability, then that Sub-account
would be the Transfer AST bond portfolio Sub-account, and we would simply
transfer additional assets into the Sub-account if such a transfer is dictated
by the formula. As indicated, the AST bond portfolios are employed with this
benefit to help us mitigate the financial risks under our guarantee. Thus, in
accordance with the formula, applicable to you under the benefit, we determine
which AST bond portfolio your Account Value is transferred to, and under what
circumstances a transfer is made.
In general, the formula works as follows (please see Appendix I). On each
Valuation Day, the formula automatically performs an analysis with respect to
each guarantee amount that is outstanding. For each outstanding guarantee, the
formula begins by determining the present value on that Valuation Day that, if
appreciated at the applicable "discount rate", would equal the applicable
guarantee amount on the maturity date. As detailed in the formula, the
discount rate is an interest rate determined by taking a benchmark index used
within the financial services industry and then reducing the rate determined
by that index by a prescribed adjustment. Once selected, we do not change the
applicable benchmark index (although we do reserve the right to use a new
benchmark index if the original benchmark is discontinued). The greatest of
each such present value is referred to as the "current liability" in the
formula. The formula compares the current liability to the amount of your
Account Value held within the Current AST bond portfolio Sub-account and to
your Account Value held within the other Sub-accounts. If the current
liability, reduced by the amount held within the Current AST bond portfolio
Sub-account, and divided by the amount held within your other Sub-accounts,
exceeds an upper target value (currently, 0.85), then the formula will make a
transfer into the Transfer AST bond portfolio Sub-account, in the amount
dictated by the formula. If the current liability, reduced by the amount held
within the Current AST bond portfolio Sub-account, and divided by the amount
within your other Sub-accounts, is less than a lower target value (currently,
0.79), then the formula will transfer Account Value within the Current AST
bond portfolio Sub-account into the other Sub-accounts (other than the
Transfer AST bond portfolio Sub-account), in the amount dictated by the
formula.
As discussed above, each Valuation Day, the formula analyzes the difference
between your Account Value and your guarantees, as well as how long you have
owned the benefit, and determines if any portion of your Account Value needs
to be transferred into or out of the AST bond portfolio Sub-accounts (the
"Bond Portfolios"). Therefore, at any given time, some, none, or all of your
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Account Value may be allocated to the Bond Portfolios. If your entire Account
Value is transferred to the Bond Portfolios, then based on the way the formula
operates, the formula will not transfer amounts out of the Bond Portfolios to
the Sub-accounts and the entire Account Value would remain in the Bond
Portfolios. If you make additional purchase payments to your Annuity, they
will be allocated to the Sub-accounts according to your allocation
instructions. Such additional purchase payments may or may not cause the
formula to transfer money in or out of the Bond Portfolios. Once the purchase
payments are allocated to your Annuity, they will also be subject to the
formula, which may result in immediate transfers to or from the Bond
Portfolios, if dictated by the formula. The amounts of any such transfers will
vary, as dictated by the formula, and will depend on the factors listed below.
The amount that is transferred to and from the Bond Portfolios pursuant to the
formula depends upon a number of factors unique to your Annuity (and is not
necessarily directly correlated with the securities markets, bond markets, or
interest rates, in general) including:
.. The difference between your Account Value and your Guarantee Amount(s);
.. The amount of time until the maturity of your Guarantee(s);
.. The amount invested in, and the performance of, the Permitted Sub-accounts;
.. The amount invested in, and the performance of, the Bond Portfolios;
.. The discount rate used to determine the present value of your Guarantee(s);
.. Additional purchase payments, if any, that you make to the Annuity; and
.. Withdrawals, if any, taken from the Annuity.
Any amounts invested in the Bond Portfolios will affect your ability to
participate in a subsequent recovery within the Permitted Sub-accounts.
Conversely, the Account Value may be higher at the beginning of the recovery,
e.g. more of the Account Value may have been protected from decline and
volatility than it otherwise would have been had the benefit not been elected.
The Bond Portfolios are available only with these benefits, and you may not
allocate purchase payments and transfer Account Value to or from the Bond
Portfolios.
Transfers under the formula do not impact any guarantees under the benefit
that have already been locked-in.
Election/Cancellation of the Benefit
GRO Plus 2008 can be elected on the Issue Date of your Annuity, or at any time
thereafter. You may elect GRO Plus 2008 only if the oldest of the Owner and
Annuitant is 84 or younger on the date of election (80 or younger, in New
York). If you currently participate in one of the original versions of GRO,
you may terminate that benefit at any time and elect GRO Plus 2008.
You may cancel the GRO Plus 2008 benefit at any time. You also can cancel an
enhanced guarantee, but leave the base guarantee intact. Upon cancellation of
GRO Plus 2008, we will transfer any Account Value that is held in an AST bond
portfolio Sub-account to the other Sub-accounts, according to your current
allocation instructions. GRO Plus 2008 will terminate automatically upon:
(a) the death of the Owner or the Annuitant (in an entity owned contract),
unless the Annuity is continued by the surviving spouse; (b) as of the date
Account Value is applied to begin annuity payments; (c) as of the anniversary
of benefit election that immediately precedes the contractually-mandated
latest annuity date, or (d) upon full surrender of the Annuity. If you elect
to terminate the benefit, GRO Plus 2008 will no longer provide any guarantees.
The charge for the GRO Plus 2008 benefit will no longer be deducted from your
Account Value upon termination of the benefit.
If you wish, you may cancel the GRO Plus 2008 benefit. You may then elect
either GRO Plus 2008 or Highest Daily GRO (or any other currently available
living benefit) on any Valuation Day after you have cancelled the GRO Plus
2008 benefit, provided the request is received in good order (subject to state
availability and in accordance with any applicable age requirements). Upon
cancellation of the GRO Plus 2008 benefit, any Account Value allocated to the
AST Bond Portfolio Sub-accounts used with the formula will be reallocated to
the Permitted Sub-Accounts according to your most recent allocation
instructions or, in absence of such instructions, pro rata. Upon your
re-election of GRO Plus 2008 or election of Highest Daily GRO, Account Value
may be transferred between the AST Bond Portfolio Sub-accounts and the
Permitted Sub-accounts according to the formula (see "Key Feature - Allocation
of Account Value" section for more details). It is possible that over time the
formula could transfer some, all, or none of the Account Value to the AST Bond
Portfolio Sub-accounts under the newly-elected benefit. You also should be
aware that upon cancellation of the GRO Plus 2008 benefit, you will lose all
guarantees that you had accumulated under the benefit. Thus, the guarantees
under any newly-elected benefit will be based on your current Account Value.
The benefit you elect or re-elect may be more expensive than the benefit you
cancel. Once the GRO Plus 2008 benefit is canceled you are not required to
re-elect another optional living benefit and any subsequent benefit election
may be made on or after the first Valuation Day following the cancellation of
the GRO Plus 2008 benefit provided that the benefit you are looking to elect
is available on a post-issue basis.
Special Considerations under GRO Plus 2008
This benefit is subject to certain rules and restrictions, including, but not
limited to the following:
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the permitted Sub-accounts. The permitted Sub-accounts are those
described in the Investment Option section of the prospectus. No fixed
interest rate allocations may be in effect as of the date that you elect to
participate in the benefit.
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.. You cannot participate in any dollar cost averaging benefit that transfers
Account Value from a fixed interest rate option to a Sub-account.
.. Transfers between an AST bond portfolio Sub-account and your other
Sub-accounts under the benefit will not count toward the maximum number of
free transfers allowable under the Annuity.
.. Any amounts applied to your Account Value by us on a maturity date will not
be treated as "investment in the contract" for income tax purposes.
.. As the time remaining until the applicable maturity date gradually
decreases, the benefit may become increasingly sensitive to moves to an AST
bond portfolio Sub-account.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Moreover, if you are invested in
prohibited investment options and seek to acquire the benefit, we will ask
you to reallocate to permitted investment options as a prerequisite to
acquiring the benefit. Should we prohibit access to any investment option,
any transfers required to move Account Value to eligible investment options
will not be counted in determining the number of free transfers during an
Annuity Year.
.. If you elect this benefit, and in connection with that election you are
required to reallocate to different investment options permitted under this
benefit, then on the Valuation Day on which we receive your request in Good
Order, we will (i) sell units of the non-permitted investment options and
(ii) invest the proceeds of those sales in the permitted investment options
that you have designated. During this reallocation process, your Account
Value allocated to the Sub-accounts will remain exposed to investment risk,
as is the case generally. The newly-elected benefit will commence at the
close of business on the following Valuation Day. Thus, the protection
afforded by the newly-elected benefit will not arise until the close of
business on the following Valuation Day.
Charges under the Benefit
We deduct a charge equal to 0.60% (0.35%, for elections prior to May 1, 2009)
of the average daily net assets of the Sub-accounts for participation in the
GRO Plus 2008 benefit. The annual charge is deducted daily. The charge is
deducted to compensate us for: (a) the risk that your Account Value on a
maturity date is less than the amount guaranteed and (b) administration of the
benefit. We reserve the right to increase this fee for newly-issued contracts
or new elections of the benefit. The charges will not exceed the maximum
charges shown in the section of the prospectus entitled "Summary of Contract
Fees and Charges."
HIGHEST DAILY GUARANTEED RETURN OPTION/SM/ (HD GRO)/SM/
You can elect this benefit on the Issue Date of your Annuity, or at any time
thereafter (unless you previously participated in this benefit, in which case
your election must be on an Annuity Anniversary). Highest Daily GRO is not
available if you participate in any other living benefit. However, Highest
Daily GRO may be elected together with any optional death benefit, other than
the Highest Daily Value Death Benefit or the Plus40 Life Insurance Rider.
Highest Daily GRO creates a series of separate guarantees, each of which is
based on the highest Account Value attained on a day during the applicable
time period. As each year of your participation in the benefit passes, we
create a new guarantee. Each guarantee then remains in existence until the
date on which it matures (unless the benefit terminates sooner). We refer to
each date on which the specified Account Value is guaranteed as the "maturity
date" for that guarantee. Highest Daily GRO will not create a guarantee if the
maturity date of that guarantee would extend beyond the date by which annuity
payments must commence under the terms of your Annuity. This is true even with
respect to a new Owner who has acquired the Annuity from the original Owner.
The guarantees provided by the benefit exist only on the applicable maturity
date(s). However, due to the ongoing monitoring of your Account Value, and the
transfer of Account Value to support our future guarantees, the benefit may
provide some protection from significant Sub-account losses if you choose to
surrender your Annuity or begin receiving annuity payments prior to a maturity
date. For this same reason, the benefit may limit your ability to benefit from
Sub-account increases while it is in effect.
The initial guarantee is created on the day that the Highest Daily GRO benefit
is added to your Annuity. We guarantee that your Account Value on the tenth
anniversary of that day (we refer to each such anniversary as a "benefit
anniversary") will not be less than your Account Value on the day that the
Highest Daily GRO benefit was added to your Annuity. Each benefit anniversary
thereafter, we create a new guarantee. With respect to each such subsequent
guarantee, we identify the highest Account Value that occurred between the
date of that benefit anniversary and the date on which Highest Daily GRO was
added to your Annuity. We guarantee that your Account Value ten years after
that benefit anniversary will be no less than the highest daily Account Value
that occurred during that time period. The following example illustrates the
time period over which we identify the highest daily Account Value for
purposes of each subsequent guarantee under the benefit. If the date of
benefit election were January 1, 2009, we would create a guarantee on
January 1, 2012 based on the highest Account Value achieved between January 1,
2009 and January 1, 2012, and that guarantee would mature on January 1, 2022.
As described below, we adjust each of the guarantee amounts for purchase
payments and withdrawals.
In general, we refer to a date on which the Account Value is guaranteed to be
present as the "maturity date". If the Account Value on the maturity date is
less than the guaranteed amount, we will contribute funds from our general
account to bring your Account Value up to the guaranteed amount. If the
maturity date is not a Valuation Day, then we would contribute such an amount
on the
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next Valuation Day. We will allocate any such amount to each Sub-account
(other than the "Current AST bond portfolio Sub-account" described below) in
accordance with your current allocations instructions. Regardless of whether
we need to contribute funds at the end of a guarantee period, we will at that
time transfer all amounts held within the AST bond portfolio Sub-account
associated with the maturing guarantee to your other Sub-accounts, on a pro
rata basis. If the entire account value is invested in the AST bond portfolio
Sub-account, we will allocate according to your current allocation
instructions.
We increase the amount of each guarantee that has not yet reached its maturity
date, as well as the highest daily Account Value that we calculate to
establish a guarantee, by the amount of each Purchase Payment (and associated
Credits) made prior to the applicable maturity date. For example, if the
effective date of the benefit was January 1, 2009, and there was an initial
guaranteed amount that was set at $100,000 maturing January 1, 2019, and a
second guaranteed amount that was set at $120,000 maturing January 1, 2020,
then a $30,000 Purchase Payment made on March 30, 2010 would increase the
guaranteed amounts to $130,000 and $150,000, respectively. As illustrated in
the examples below, additional purchase payments also increase an amount we
refer to as the "dollar-for-dollar corridor."
We reflect the effect of withdrawals by reference to an amount called the
"dollar-for-dollar corridor." The dollar-for-dollar corridor is set initially
to equal 5% of the initial guaranteed amount (i.e., 5% of the Account Value at
benefit election). Each "benefit year" (i.e., a year that begins on the date
of election of Highest Daily GRO and each anniversary thereafter), withdrawals
that you make that are equal to or less than the dollar-for-dollar corridor
reduce (i) the amount of the dollar-for-dollar corridor for that benefit year
(ii) the amount of each outstanding guarantee amount, and (iii) the highest
daily Account Value that we calculate to establish a guarantee, by the exact
amount of the withdrawal. However, if you withdraw more than the
dollar-for-dollar corridor in a given benefit year, we use the portion of the
withdrawal that exceeded the dollar-for-dollar corridor to effect a
proportional reduction to both the dollar-for-dollar corridor itself and each
outstanding guaranteed amount, as well as the highest daily Account Value that
we calculate to establish a guarantee. We calculate a proportional reduction
by (i) identifying the amount of the withdrawal that exceeded the
dollar-for-dollar corridor (the "excess withdrawal") (ii) subtracting the
dollar-for-dollar amount from the Account Value prior to the withdrawal
(iii) dividing the excess withdrawal by the amount in (ii), and (iv) reducing
each guaranteed amount, as well as the highest daily Account Value that we
calculate to establish a guarantee and the dollar for dollar corridor itself,
by the percentage derived in (iii). See examples of this calculation below.
Any partial withdrawals in payment of any third party investment advisory
service will be treated as withdrawals, and will reduce each applicable
guaranteed amount and the dollar-for-dollar corridor in the manner indicated
above.
EXAMPLES
The following examples of dollar-for-dollar and proportional reductions assume
that: 1.) the Issue Date and the effective date of the Highest Daily GRO
benefit are October 13, 2008; 2.) an initial Purchase Payment of $250,000
(includes any Credits); 3.) an initial guarantee amount of $250,000; and 4.) a
dollar-for-dollar limit of $12,500 (5% of $250,000). The values set forth here
are purely hypothetical and do not reflect the charge for Highest Daily GRO or
other fees and charges.
Example 1. Dollar-for-dollar reduction
A $10,000 withdrawal is taken on November 29, 2008 (in the first Annuity
Year). No prior withdrawals have been taken. As the amount withdrawn is less
than the Dollar-for-dollar Limit:
.. The initial guarantee amount is reduced by the amount withdrawn (i.e., by
$10,000, from $250,000 to $240,000).
.. The remaining dollar-for-dollar limit ("Remaining Limit") for the balance
of the first Annuity Year is also reduced by the amount withdrawn (from
$12,500 to $2,500).
Example 2. Dollar-for-dollar and proportional reductions
A second $10,000 withdrawal is taken on December 18, 2008 (still within the
first Annuity Year). The Account Value immediately before the withdrawal is
$180,000. As the amount withdrawn exceeds the Remaining Limit of $2,500 from
Example 1:
.. the initial guarantee amount is first reduced by the Remaining Limit (from
$240,000 to $237,500);
.. The result is then further reduced by the ratio of A to B, where:
-- A is the amount withdrawn less the Remaining Limit ($10,000 - $2,500, or
$7,500).
-- B is the Account Value less the Remaining Limit ($180,000 - $2,500, or
$177,500).
The resulting initial guarantee amount is: $237,500 X (1 - $7,500 / $177,500),
or $227,464.79.
.. The Remaining Limit is set to zero (0) for the balance of the first Annuity
Year.
The resulting dollar-for-dollar corridor for the next Annuity Year is
calculated by multiplying the prior dollar-for-dollar corridor by the same
ratio by which we reduce the Guarantee Amount above: $12,500 X (1 - $7,500 /
$177,500), or $11,971.83.
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Key Feature - Allocation of Account Value
Highest Daily GRO uses a mathematical formula to help manage your guarantees
through all market cycles. Because the formula is made part of your schedule
supplement, the formula may not be altered. However, subject to any regulatory
approval, we do reserve the right to amend the formula for newly-issued
annuity contracts that elect Highest Daily GRO and for existing contracts that
elect the benefit post-issue. This required formula helps us manage our
financial exposure under Highest Daily GRO, by moving assets out of certain
Sub-accounts in certain scenarios if dictated by the formula (see below). In
essence, we seek to preserve the value of these assets, by transferring them
to a more stable option (i.e., one of a specified group of bond portfolios
within Advanced Series Trust) (collectively, the "AST Bond Portfolios"). The
formula also contemplates the transfer of assets from the AST Bond Portfolios
to the Permitted Sub-accounts in other scenarios.
For purposes of operating the Highest Daily GRO formula, we have included as
investment options within this Annuity several AST bond portfolios. Each AST
bond portfolio is unique, in that its underlying investments generally mature
at the same time as each outstanding maturity date that exists under the
benefit. For example, there would be an AST bond portfolio whose underlying
investments generally mature in 2018 (corresponding to all guarantees that
mature in 2018), an AST Bond Portfolio whose underlying investments generally
mature in 2019 (corresponding to all guarantees that mature in 2019), and so
forth. We will introduce new AST bond portfolios in subsequent years, to
correspond generally to the length of new guarantee periods that are created
under this benefit. If you have elected Highest Daily GRO, you may invest in
an AST bond portfolio only by operation of the formula, and thus you may not
allocate purchase payments to, or transfer Account Value to or from, such a
Portfolio. Please see this Prospectus and the prospectus for the Advanced
Series Trust for more information about each AST bond portfolio used with this
benefit. A summary description of each AST Bond Portfolio appears within the
Prospectus section entitled "What Are The Investment Objectives and Policies
Of The Portfolios?" Upon the initial transfer of your Account Value into an
AST Bond Portfolio, we will send a prospectus for that Portfolio to you along
with your confirmation. In addition, you can find a copy of the AST Bond
Portfolio prospectus by going to www.prudentialannuities.com
Although we employ several AST bond portfolios for purposes of the benefit,
the formula described in the next paragraph operates so that your Account
Value may be allocated to only one AST bond portfolio Sub-account at one time.
In the description of the formula in the next paragraph, we refer to the AST
bond portfolio Sub-account in which you are invested immediately prior to any
potential asset transfer as the "Current AST bond portfolio Sub-account." The
formula may dictate that a transfer out of the Current AST bond portfolio
Sub-account be made, or alternatively may mandate a transfer into an AST bond
portfolio Sub-account. Any transfer into an AST bond portfolio Sub-account
will be directed to the AST bond portfolio Sub-account associated with the
"current liability" (we refer to that Sub-account as the "Transfer AST bond
portfolio Sub-account"). Note that if the Current AST bond portfolio
Sub-account is associated with the current liability, then that Sub-account
would be the Transfer AST bond portfolio Sub-account, and we would simply
transfer additional assets into the Sub-account if dictated by the formula.
In general, the formula works as follows. On each Valuation Day, the formula
automatically performs an analysis with respect to each guarantee that is
outstanding. For each outstanding guarantee, the formula begins by determining
the present value on that Valuation Day that, if appreciated at the applicable
"discount rate", would equal the applicable guarantee amount on the maturity
date. As detailed in the formula, the discount rate is an interest rate
determined by taking a benchmark index used within the financial services
industry and then reducing that interest rate by a prescribed adjustment. Once
selected, we do not change the applicable benchmark index (although we do
reserve the right to use a new benchmark index if the original benchmark is
discontinued). The greatest of each such present value is referred to as the
"current liability" in the formula. The formula compares the current liability
to the amount of your Account Value held within the Current AST bond portfolio
Sub-account and to your Account Value held within the other Sub-accounts. If
the current liability, reduced by the amount held within the Current AST bond
portfolio Sub-account, and divided by the amount held within your other
Sub-accounts, exceeds an upper target value (currently, 0.85), then the
formula will make a transfer into the Transfer AST bond portfolio Sub-account,
in the amount dictated by the formula. If the current liability, reduced by
the amount held within the Current AST bond portfolio Sub-account, and divided
by the amount within your other Sub-accounts, is less than a lower target
value (currently, 0.79), then the formula will transfer Account Value within
the Current AST bond portfolio Sub-account into the other Sub-accounts (other
than the Transfer AST bond portfolio Sub-account), in the amount dictated by
the formula.
As discussed above, each Valuation Day, the formula analyzes the difference
between your Account Value and your guarantees, as well as how long you have
owned the benefit, and determines if any portion of your Account Value needs
to be transferred into or out of the AST bond portfolios. Therefore, at any
given time, some, none, or all of your Account Value may be allocated to the
AST bond portfolios. If your entire Account Value is transferred to the AST
bond portfolios, then based on the way the formula operates, the formula will
not transfer amounts out of the AST bond portfolios to the Sub-accounts and
the entire Account Value would remain in the AST bond portfolios. If you make
additional purchase payments to your Annuity, they will be allocated to the
Sub-accounts according to your allocation instructions. Such additional
purchase payments may or may not cause the formula to transfer money in or out
of the AST bond portfolios. Once the purchase payments are allocated to your
Annuity, they will also be subject to the formula, which may result in
immediate transfers to or from the AST bond portfolios, if dictated by the
formula.
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The amount that is transferred to and from the AST bond portfolios pursuant to
the formula depends upon a number of factors unique to your Annuity (and is
not necessarily directly correlated with the securities markets, bond markets,
or interest rates, in general) including:
.. The difference between your Account Value and your Guarantee Amount(s);
.. The amount of time until the maturity of your Guarantee(s);
.. The amount invested in, and the performance of, the Permitted Sub-accounts;
.. The amount invested in, and the performance of, the AST bond portfolios;
.. The discount rate used to determine the present value of your Guarantee(s);
.. Additional purchase payments, if any, that you make to the Annuity; and
.. Withdrawals, if any, taken from the Annuity.
Any amounts invested in the AST bond portfolios will affect your ability to
participate in a subsequent recovery within the Permitted Sub-accounts.
Conversely, the Account Value may be higher at the beginning of the recovery,
e.g. more of the Account Value may have been protected from decline and
volatility than it otherwise would have been had the benefit not been elected.
The AST bond portfolios are available only with these benefits, and you may
not allocate purchase payments and transfer Account Value to or from the AST
bond portfolios.
Transfers do not impact any guarantees that have already been locked-in.
Election/Cancellation of the Benefit
Highest Daily GRO can be elected on the Issue Date of your Annuity, or at any
time thereafter. You may elect Highest Daily GRO only if the oldest of the
Owner and Annuitant is 84 or younger on the date of election (80 or younger,
in New York). If you currently participate in one of the original versions of
GRO, you may terminate that benefit at any time and elect Highest Daily GRO.
If you wish, you may cancel the Highest Daily GRO benefit. You may then elect
either GRO Plus 2008 or Highest Daily GRO (or any other currently available
living benefit, which is available to be added post issue) on any Valuation
Day after you have cancelled the Highest Daily GRO benefit, provided the
request is received in good order (subject to state availability and in
accordance with any applicable age requirements). Upon cancellation of the
Highest Daily GRO benefit, any Account Value allocated to the AST Bond
Portfolio Sub-accounts used with the formula will be reallocated to the
Permitted Sub-Accounts according to your most recent allocation instructions
or, in absence of such instructions, pro-rata. Upon your re-election of GRO
Plus 2008 or Highest Daily GRO, Account Value may be transferred between the
AST Bond Portfolio Sub-accounts and the other Sub-accounts according to the
formula (see "Key Feature - Allocation of Account Value" section for more
details). It is possible that over time the formula could transfer some, all,
or none of the Account Value to the AST Bond Portfolio Sub-accounts under the
newly-elected benefit. You also should be aware that upon cancellation of the
Highest Daily GRO benefit, you will lose all guarantees that you had
accumulated under the benefit. Thus, the guarantees under your newly-elected
benefit will be based on your current Account Value. The benefit you elect or
re-elect may be more expensive than the benefit you cancel. Once the Highest
Daily GRO benefit is canceled you are not required to re-elect another
optional living benefit and any subsequent benefit election may be made on or
after the first Valuation Day following the cancellation of the Highest Daily
GRO benefit provided that the benefit you are looking to elect is available on
a post-issue basis.
Highest Daily GRO will terminate automatically upon: (a) the death of the
Owner or the Annuitant (in an entity owned contract), unless the Annuity is
continued by the surviving spouse; (b) as of the date Account Value is applied
to begin annuity payments; (c) as of the anniversary of benefit election that
immediately precedes the contractually-mandated latest annuity date, or
(d) upon full surrender of the Annuity. If you elect to terminate the benefit,
Highest Daily GRO will no longer provide any guarantees. The charge for the
Highest Daily GRO benefit will no longer be deducted from your Account Value
upon termination of the benefit.
Special Considerations under Highest Daily GRO
This benefit is subject to certain rules and restrictions, including, but not
limited to the following:
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Permitted Sub-accounts. The Permitted Sub-accounts are those
described in the Investment Option section of this prospectus. No fixed
interest rate allocations may be in effect as of the date that you elect to
participate in the benefit.
.. You cannot participate in any dollar cost averaging benefit that transfers
Account Value from a fixed interest rate option to a Sub-account.
.. Transfers from the other Sub-accounts to an AST bond portfolio Sub-account
or from an AST bond portfolio Sub-account to the other Sub-accounts under
the benefit will not count toward the maximum number of free transfers
allowable under the Annuity.
.. Any amounts applied to your Account Value by us on a maturity date will not
be treated as "investment in the contract" for income tax purposes.
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.. As the time remaining until the applicable maturity date gradually
decreases, the benefit may become increasingly sensitive to moves to an AST
bond portfolio Sub-account.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Moreover, if you are invested in
prohibited investment options and seek to acquire the benefit, we will ask
you to reallocate to permitted investment options as a prerequisite to
acquiring the benefit. Should we prohibit access to any investment option,
any transfers required to move Account Value to eligible investment options
will not be counted in determining the number of free transfers during an
Annuity Year.
.. If you elect this benefit, and in connection with that election you are
required to reallocate to different investment options permitted under this
benefit, then on the Valuation Day on which we receive your request in Good
Order, we will (i) sell units of the non-permitted investment options and
(ii) invest the proceeds of those sales in the permitted investment options
that you have designated. During this reallocation process, your Account
Value allocated to the Sub-accounts will remain exposed to investment risk,
as is the case generally. The newly-elected benefit will commence at the
close of business on the following Valuation Day. Thus, the protection
afforded by the newly-elected benefit will not arise until the close of
business on the following Valuation Day.
Charges under the Benefit
We deduct an annual charge equal to 0. 60% (0.35%, for elections prior to
May 1, 2009) of the average daily net assets of the Sub-accounts (including
each AST bond portfolio Sub-account) for participation in the Highest Daily
GRO benefit. The charge is deducted daily. The charge is deducted to
compensate us for: (a) the risk that your Account Value on the maturity date
is less than the amount guaranteed and (b) administration of the benefit. We
reserve the right to increase this fee for newly-issued contracts or new
elections of the benefit. The charges will not exceed the maximum charges
shown in the section of this prospectus entitled "Summary of Contract Fees and
Charges."
GUARANTEED MINIMUM WITHDRAWAL BENEFIT (GMWB)
The Guaranteed Minimum Withdrawal Benefit is no longer available for new
elections.
The Guaranteed Minimum Withdrawal Benefit guarantees your ability to withdraw
amounts equal to an initial principal value (called the "Protected Value"),
regardless of the impact of Sub-account performance on your Account Value,
subject to our benefit rules regarding the timing and amount of withdrawals.
The benefit may be appropriate if you intend to make periodic withdrawals from
your Annuity and wish to ensure that Sub-account performance will not affect
your ability to protect your principal. You are not required to make
withdrawals as part of the benefit - the guarantee is not lost if you withdraw
less than the maximum allowable amount of principal each year under the rules
of the benefit. There is an additional charge if you elected the GMWB benefit;
however, the charge may be waived under certain circumstances described below.
Key Feature - Protected Value
The Protected Value is the total amount that we guarantee will be available to
you through withdrawals from your Annuity and/or benefit payments, regardless
of the impact of Sub-account performance on your Account Value. The Protected
Value is reduced with each withdrawal you make until the Protected Value is
reduced to zero. When the Protected Value is reduced to zero due to your
withdrawals, the GMWB benefit terminates. Additionally, the Protected Value is
used to determine the maximum annual amount that you can withdraw from your
Annuity, called the Protected Annual Withdrawal Amount, without triggering an
adjustment in the Protected Value on a proportional basis. The Protected Value
is referred to as the "Benefit Base" in the rider we issue for this benefit.
The Protected Value is determined as of the date you make your first
withdrawal under your Annuity following your election of the GMWB benefit. The
initial Protected Value is equal to the greater of (A) the Account Value on
the date you elect the GMWB benefit, plus any additional purchase payments
(plus any Credits applied to such purchase payments under XT6) before the date
of your first withdrawal; or (B) the Account Value as of the date of the first
withdrawal from your Annuity. The Protected Value may be enhanced by increases
in your Account Value due to market performance during the period between your
election of the GMWB benefit and the date of your first withdrawal.
.. If you elect the GMWB benefit at the time you purchase your Annuity, the
Account Value will be your initial Purchase Payment (plus any Credits
applied to such purchase payments under XT6).
.. If we offer the GMWB benefit to existing Annuity Owners, the Account Value
on the anniversary of the Issue Date of your Annuity following your
election of the GMWB benefit will be used to determine the initial
Protected Value.
.. If you make additional purchase payments after your first withdrawal, the
Protected Value will be increased by the amount of the additional Purchase
Payment (plus any Credits applied to such purchase payments under XT6).
You may elect to step-up your Protected Value if, due to positive market
performance, your Account Value is greater than the Protected Value. You are
eligible to step-up the Protected Value on or after the 5/th/ Annuity
anniversary following the first withdrawal under the GMWB benefit. The
Protected Value can be stepped up again on or after the 5/th/ Annuity
anniversary following the preceding step-up. If you elect to step-up the
Protected Value, you must do so during the 30-day period prior to your
eligibility date. If you elect to step-up the Protected Value under the
benefit, and on the date you elect to step-up, the charges under the GMWB
benefit have changed for new purchasers, your benefit may be subject to the
new charge going forward.
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Upon election of the step-up, we reset the Protected Value to be equal to the
then current Account Value. For example, assume your initial Protected Value
was $100,000 and you have made cumulative withdrawals of $40,000, reducing the
Protected Value to $60,000. On the date you are eligible to step-up the
Protected Value, your Account Value is equal to $75,000. You could elect to
step-up the Protected Value to $75,000 on the date you are eligible. Upon
election of the step-up, we also reset the Protected Annual Withdrawal Amount
(discussed immediately below) to be equal to the greater of (A) the Protected
Annual Withdrawal Amount immediately prior to the reset; and (B) 7% of the
Protected Value immediately after the reset.
Key Feature - Protected Annual Withdrawal Amount.
The initial Protected Annual Withdrawal Amount is equal to 7% of the Protected
Value. Under the GMWB benefit, if your cumulative withdrawals each Annuity
Year are less than or equal to the Protected Annual Withdrawal Amount, your
Protected Value will be reduced on a "dollar-for-dollar" basis (the Protected
Value is reduced by the actual amount of the withdrawal, including any CDSC or
MVA that may apply). Cumulative withdrawals in any Annuity Year that exceed
the Protected Annual Withdrawal Amount trigger a proportional adjustment to
both the Protected Value and the Protected Annual Withdrawal Amount, as
described in the rider for this benefit (see the examples of this calculation
below). The Protected Annual Withdrawal Amount is referred to as the "Maximum
Annual Benefit" in the rider we issue for this benefit.
The GMWB benefit does not affect your ability to make withdrawals under your
Annuity or limit your ability to request withdrawals that exceed the Protected
Annual Withdrawal Amount. You are not required to withdraw all or any portion
of the Protected Annual Withdrawal Amount each Annuity Year.
.. If, cumulatively, you withdraw an amount less than the Protected Annual
Withdrawal Amount in any Annuity Year, you cannot carry-over the unused
portion of the Protected Annual Withdrawal Amount to subsequent Annuity
Years. However, because the Protected Value is only reduced by the actual
amount of withdrawals you make under these circumstances, any unused
Protected Annual Withdrawal Amount may extend the period of time until the
remaining Protected Value is reduced to zero.
.. Additional purchase payments will increase the Protected Annual Withdrawal
Amount by 7% of the applicable Purchase Payment (and any Credits we apply
to such purchase payments under XT6).
.. If the Protected Annual Withdrawal Amount after an adjustment exceeds the
Protected Value, the Protected Annual Withdrawal Amount will be set equal
to the Protected Value.
The following examples of dollar-for dollar and proportional reductions and
the reset of the Maximum Annual Benefit assume that: 1.) the Issue Date and
the effective date of the GMWB benefit are October 13, 2005; 2.) an initial
Purchase Payment of $250,000 (includes any Credits in the case of XT6); 3.) a
Protected Value of $250,000; and 4.) a Protected Annual Withdrawal Amount of
$17,500 (7% of $250,000). The values set forth here are purely hypothetical
and do not reflect the charge for GMWB or any other fees and charges.
Example 1. Dollar-for-dollar reduction
A $10,000 withdrawal is taken on November 13, 2005 (in the first Annuity
Year). No prior withdrawals have been taken. As the amount withdrawn is less
than the Protected Annual Withdrawal Amount:
.. The Protected Value is reduced by the amount withdrawn (i.e., by $10,000,
from $250,000 to $240,000).
.. The remaining Protected Annual Withdrawal Amount for the balance of the
first Annuity Year is also reduced by the amount withdrawn (from $17,500 to
$7,500).
Example 2. Dollar-for-dollar and proportional reductions
A second $10,000 withdrawal is taken on December 13, 2005 (still within the
first Annuity Year). The Account Value immediately before the withdrawal is
$220,000. As the amount withdrawn exceeds the remaining Protected Annual
Withdrawal Amount of $7,500 from Example 1:
.. the Protected Value is first reduced by the remaining Protected Annual
Withdrawal Amount (from $240,000 to $232,500);
.. The result is then further reduced by the ratio of A to B, where:
-- A is the amount withdrawn less the remaining Protected Annual Withdrawal
Amount ($10,000 - $7,500, or $2,500).
-- B is the Account Value less the remaining Protected Annual Withdrawal
Amount ($220,000 - $7,500, or $212,500).
The resulting Protected Value is: $232,500 X (1 - $2,500 / $212,500), or
$229,764.71.
.. the Protected Annual Withdrawal Amount is also reduced by the ratio of A to
B: The resulting Protected Annual Withdrawal Amount is: $17,500 X (1 -
$2,500 / $212,500), or $17,294.12.
-- The remaining Protected Annual Withdrawal Amount is set to zero (0) for
the balance of the first Annuity Year.
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Example 3. Reset of the Maximum Annual Benefit
A $10,000 withdrawal is made on October 13, 2006 (second Annuity Year). The
remaining Protected Annual Withdrawal Amount has been reset to the Protected
Annual Withdrawal Amount of $17,294.12 from Example 2. As the amount withdrawn
is less than the remaining Protected Annual Withdrawal Amount:
.. the Protected Value is reduced by the amount withdrawn (i.e., reduced by
$10,000, from $229,764.71 to $219,764.71).
.. the remaining Protected Annual Withdrawal Amount for the balance of the
second Annuity Year is also reduced by the amount withdrawn (from
$17,294.12 to $7,294.12).
BENEFITS UNDER GMWB
.. In addition to any withdrawals you make under the GMWB benefit, Sub-account
performance may reduce your Account Value. If your Account Value is equal
to zero, and you have not received all of your Protected Value in the form
of withdrawals from your Annuity, we will continue to make payments equal
to the remaining Protected Value in the form of fixed, periodic payments
until the remainder of the Protected Value is paid, at which time the rider
terminates. The fixed, periodic payments will each be equal to the
Protected Annual Withdrawal Amount, except for the last payment which may
be equal to the remaining Protected Value. We will determine the duration
for which periodic payments will continue by dividing the Protected Value
by the Protected Annual Withdrawal Amount. You will not have the right to
make additional purchase payments or receive the remaining Protected Value
in a lump sum. You can elect the frequency of payments, subject to our
rules then in effect.
.. If the death benefit under your Annuity becomes payable before you have
received all of your Protected Value in the form of withdrawals from your
Annuity, your Beneficiary has the option to elect to receive the remaining
Protected Value as an alternate death benefit payout in lieu of the amount
payable under any other death benefit provided under your Annuity. The
remaining Protected Value will be payable in the form of fixed, periodic
payments. Your beneficiary can elect the frequency of payments, subject to
our rules then in effect. We will determine the duration for which periodic
payments will continue by dividing the Protected Value by the Protected
Annual Withdrawal Amount. The Protected Value is not equal to the Account
Value for purposes of the Annuity's other death benefit options. The GMWB
benefit does not increase or decrease the amount otherwise payable under
the Annuity's other death benefit options. Generally, the GMWB benefit
would be of value to your Beneficiary only when the Protected Value at
death exceeds any other amount available as a death benefit.
.. If you elect to begin receiving annuity payments before you have received
all of your Protected Value in the form of withdrawals from your Annuity,
an additional annuity payment option will be available that makes fixed
annuity payments for a certain period, determined by dividing the Protected
Value by the Protected Annual Withdrawal Amount. If you elect to receive
annuity payments calculated in this manner, the assumed interest rate used
to calculate such payments will be 0%, which is less than the assumed
interest rate on other annuity payment options we offer. This 0% assumed
interest rate results in lower annuity payments than what would have been
paid if the assumed interest rate was higher than 0%. You can also elect to
terminate the GMWB benefit and begin receiving annuity payments based on
your then current Account Value (not the remaining Protected Value) under
any of the available annuity payment options.
Other Important Considerations
.. Withdrawals under the GMWB benefit are subject to all of the terms and
conditions of your Annuity, including any CDSC and MVA that may apply.
.. Withdrawals made while the GMWB benefit is in effect will be treated, for
tax purposes, in the same way as any other withdrawals under your Annuity.
.. The GMWB benefit does not directly affect your Annuity's Account Value or
Surrender Value, but any withdrawal will decrease the Account Value by the
amount of the withdrawal. If you surrender your Annuity, you will receive
the current Surrender Value, not the Protected Value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the GMWB benefit. The GMWB benefit
provides a guarantee that if your Account Value declines due to market
performance, you will be able to receive your Protected Value in the form
of periodic benefit payments.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Should we prohibit access to any
investment option, any transfers required to move Account Value to eligible
investment options will not be counted in determining the number of free
transfers during an Annuity Year.
Election of the Benefit
The GMWB benefit is no longer available.
We reserve the right to restrict the maximum amount of Protected Value that
may be covered under the GMWB benefit under this Annuity or any other
annuities that you own that are issued by Prudential Annuities or its
affiliated companies.
Termination of the Benefit
The benefit terminates automatically when your Protected Value reaches zero
based on your withdrawals. You may terminate the benefit at any time by
notifying us. If you terminate the benefit, any guarantee provided by the
benefit will terminate as of the date
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the termination is effective. The benefit terminates upon your surrender of
your Annuity, upon due proof of death (unless your surviving spouse elects to
continue your Annuity and the GMWB benefit or your Beneficiary elects to
receive the amounts payable under the GMWB benefit in lieu of the death
benefit) or upon your election to begin receiving annuity payments.
The charge for the GMWB benefit will no longer be deducted from your Account
Value upon termination of the benefit.
Charges under the Benefit
.. Currently, we deduct a charge equal to 0.35% of the average daily net
assets of the Sub-accounts per year for the GMWB benefit. The annual charge
is deducted daily.
.. If, during the seven years following the effective date of the benefit, you
do not make any withdrawals, and do not make any additional purchase
payments after a five-year period following the effective date of the
benefit, the benefit will remain in effect; however, we will waive the
annual charge going forward. If you make an additional Purchase Payment
following the waiver of the annual charge, we will begin charging for the
benefit. After year seven (7) following the effective date of the benefit,
withdrawals will not cause a charge to be re-imposed.
.. If you elect to step-up the Protected Value under the benefit, and on the
date you elect to step-up, the charges under the benefit have changed for
new purchasers, your benefit may be subject to the new charge level for the
benefit.
Additional Tax Considerations for Qualified Contracts/Arrangements
If you purchase an Annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the required minimum distribution
rules under the Code provide that you begin receiving periodic amounts from
your Annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than 5 percent 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 required under the Code may exceed the Protected
Annual Withdrawal Amount, which will cause us to recalculate the Protected
Value and the Protected Annual Withdrawal Amount, resulting in a lower amount
payable in future Annuity Years. In addition, the amount and duration of
payments under the annuity payment and death benefit provisions may be
adjusted so that the payments do not trigger any penalty or excise taxes due
to tax considerations such as required minimum distribution provisions under
the tax law.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)
The Guaranteed Minimum Income Benefit is no longer available for new elections.
The Guaranteed Minimum Income Benefit is an optional benefit that, after a
seven-year waiting period, guarantees your ability to begin receiving income
from your Annuity in the form of annuity payments based on a guaranteed
minimum value (called the "Protected Income Value") that increases after the
waiting period begins, regardless of the impact of Sub-account performance on
your Account Value. The benefit may be appropriate for you if you anticipate
using your Annuity as a future source of periodic fixed income payments for
the remainder of your life and wish to ensure that the basis upon which your
income payments will be calculated will achieve at least a minimum amount
despite fluctuations in market performance. There is an additional charge if
you elected the GMIB benefit.
Key Feature - Protected Income Value
The Protected Income Value is the minimum amount that we guarantee will be
available (net of any applicable tax charge), after a waiting period of at
least seven years, as a basis to begin receiving fixed annuity payments. The
Protected Income Value is initially established on the effective date of the
GMIB benefit and is equal to your Account Value on such date. Currently, since
the GMIB benefit may only be elected at issue, the effective date is the Issue
Date of your Annuity. The Protected Income Value is increased daily based on
an annual growth rate of 5%, subject to the limitations described below. The
Protected Income Value is referred to as the "Protected Value" in the rider we
issue for this benefit. The 5% annual growth rate is referred to as the
"Roll-Up Percentage" in the rider we issue for this benefit.
The Protected Income Value is subject to a limit of 200% (2X) of the sum of
the Protected Income Value established on the effective date of the GMIB
benefit, or the effective date of any step-up value, plus any additional
purchase payments (and any Credit that is applied to such purchase payments in
the case of XT6) made after the waiting period begins ("Maximum Protected
Income Value"), minus the sum of any reductions in the Protected Income Value
due to withdrawals you make from your Annuity after the waiting period begins.
.. Subject to the maximum age/durational limits described immediately below,
we will no longer increase the Protected Income Value by the 5% annual
growth rate once you reach the Maximum Protected Income Value. However, we
will increase the Protected Income Value by the amount of any additional
purchase payments after you reach the Maximum Protected Income Value.
Further, if you make withdrawals after you reach the Maximum Protected
Income Value, we will reduce the Protected Income Value and the Maximum
Protected Income Value by the proportional impact of the withdrawal on your
Account Value.
.. Subject to the Maximum Protected Income Value, we will no longer increase
the Protected Income Value by the 5% annual growth rate after the later of
the anniversary date on or immediately following the Annuitant's 80/th/
birthday or the 7/th/ anniversary of the later of the effective date of the
GMIB benefit or the effective date of the most recent step-up. However, we
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will increase the Protected Income Value by the amount of any additional
purchase payments (and any Credit that is applied to such purchase payments
in the case of XT6). Further, if you make withdrawals after the Annuitant
reaches the maximum age/duration limits, we will reduce the Protected
Income Value and the Maximum Protected Income Value by the proportional
impact of the withdrawal on your Account Value.
.. Subject to the Maximum Protected Income Value, if you make an additional
Purchase Payment, we will increase the Protected Income Value by the amount
of the Purchase Payment (and any Credit that is applied to such Purchase
Payment in the case of XT6) and will apply the 5% annual growth rate on the
new amount from the date the Purchase Payment is applied.
.. As described below, after the waiting period begins, cumulative withdrawals
each Annuity Year that are up to 5% of the Protected Income Value on the
prior anniversary of your Annuity will reduce the Protected Income Value by
the amount of the withdrawal. Cumulative withdrawals each Annuity Year in
excess of 5% of the Protected Income Value on the prior anniversary of your
Annuity will reduce the Protected Income Value proportionately. All
withdrawals after the Maximum Protected Income Value is reached will reduce
the Protected Income Value proportionately. The 5% annual growth rate will
be applied to the reduced Protected Income Value from the date of the
withdrawal.
Stepping-Up the Protected Income Value - You may elect to "step-up" or "reset"
your Protected Income Value if your Account Value is greater than the current
Protected Income Value. Upon exercise of the step-up provision, your initial
Protected Income Value will be reset equal to your current Account Value. From
the date that you elect to step-up the Protected Income Value, we will apply
the 5% annual growth rate to the stepped-up Protected Income Value, as
described above. You can exercise the step-up provision twice while the GMIB
benefit is in effect, and only while the Annuitant is less than age 76.
.. A new seven-year waiting period will be established upon the effective date
of your election to step-up the Protected Income Value. You cannot exercise
your right to begin receiving annuity payments under the GMIB benefit until
the end of the new waiting period. In light of this waiting period upon
resets, it is not recommended that you reset your GMIB if the required
beginning date under IRS minimum distribution requirements would commence
during the 7 year waiting period. See "Tax Considerations" section in this
prospectus for additional information on IRS requirements.
.. The Maximum Protected Income Value will be reset as of the effective date
of any step-up. The new Maximum Protected Income Value will be equal to
200% of the sum of the Protected Income Value as of the effective date of
the step-up plus any subsequent purchase payments (and any Credit that is
applied to such purchase payments in the case of XT6), minus the impact of
any withdrawals after the date of the step-up.
.. When determining the guaranteed annuity purchase rates for annuity payments
under the GMIB benefit, we will apply such rates based on the number of
years since the most recent step-up.
.. If you elect to step-up the Protected Income Value under the benefit, and
on the date you elect to step-up, the charges under the GMIB benefit have
changed for new purchasers, your benefit may be subject to the new charge
going forward.
.. A step-up will increase the dollar for dollar limit on the anniversary of
the Issue Date of the Annuity following such step-up.
Impact of Withdrawals on the Protected Income Value - Cumulative withdrawals
each Annuity Year up to 5% of the Protected Income Value will reduce the
Protected Income Value on a "dollar-for-dollar" basis (the Protected Income
Value is reduced by the actual amount of the withdrawal). Cumulative
withdrawals in any Annuity Year in excess of 5% of the Protected Income Value
will reduce the Protected Income Value proportionately (see the examples of
this calculation below). The 5% annual withdrawal amount is determined on each
anniversary of the Issue Date (or on the Issue Date for the first Annuity
Year) and applies to any withdrawals during the Annuity Year. This means that
the amount available for withdrawals each Annuity Year on a
"dollar-for-dollar" basis is adjusted on each Annuity anniversary to reflect
changes in the Protected Income Value during the prior Annuity Year.
The following examples of dollar-for-dollar and proportional reductions assume
that: 1.) the Issue Date and the effective date of the GMIB benefit are
October 13, 2005; 2.) an initial Purchase Payment of $250,000 (includes any
Credits in the case of XT6); 3.) an initial Protected Income Value of
$250,000; and 4.) a dollar-for-dollar limit of $12,500 (5% of $250,000). The
values set forth here are purely hypothetical and do not reflect the charge
for GMIB or any other fees and charges.
Example 1. Dollar-for-dollar reduction
A $10,000 withdrawal is taken on November 13, 2005 (in the first Annuity
Year). No prior withdrawals have been taken. Immediately prior to the
withdrawal, the Protected Income Value is $251,038.10 (the initial value
accumulated for 31 days at an annual effective rate of 5%). As the amount
withdrawn is less than the dollar-for-dollar limit:
.. The Protected Income Value is reduced by the amount withdrawn (i.e., by
$10,000, from $251,038.10 to $241,038.10).
.. The remaining dollar-for-dollar limit ("Remaining Limit") for the balance
of the first Annuity Year is also reduced by the amount withdrawn (from
$12,500 to $2,500).
Example 2. Dollar-for-dollar and proportional reductions
A second $10,000 withdrawal is taken on December 13, 2005 (still within the
first Annuity Year). Immediately before the withdrawal, the Account Value is
$220,000 and the Protected Income Value is $242,006.64. As the amount
withdrawn exceeds the Remaining Limit of $2,500 from Example 1:
.. the Protected Income Value is first reduced by the Remaining Limit (from
$242,006.64 to $239,506.64);
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.. The result is then further reduced by the ratio of A to B, where:
-- A is the amount withdrawn less the Remaining Limit ($10,000 - $2,500, or
$7,500).
-- B is the Account Value less the Remaining Limit ($220,000 - $2,500, or
$217,500).
The resulting Protected Income Value is: $239,506.64 X (1 - $7,500 /
$217,500), or $231,247.79.
.. The Remaining Limit is set to zero (0) for the balance of the first Annuity
Year.
Example 3. Reset of the Dollar-for-dollar Limit
A $10,000 withdrawal is made on the first anniversary of the Issue Date,
October 13, 2006 (second Annuity Year). Prior to the withdrawal, the Protected
Income Value is $240,838.37. The Remaining Limit is reset to 5% of this
amount, or $12,041.92. As the amount withdrawn is less than the
dollar-for-dollar limit:
.. the Protected Income Value is reduced by the amount withdrawn (i.e.,
reduced by $10,000, from $240,838.37 to $230,838.37).
.. the Remaining Limit for the balance of the second Annuity Year is also
reduced by the amount withdrawn (from $12,041.92 to $2,041.92).
Key Feature - GMIB Annuity Payments
You can elect to apply the Protected Income Value to one of the available GMIB
Annuity Payment Options on any anniversary date following the initial waiting
period, or any subsequent waiting period established upon your election to
step-up the Protected Income Value. Once you have completed the waiting
period, you will have a 30-day period each year, after the Annuity
anniversary, during which you may elect to begin receiving annuity payments
under one of the available GMIB Annuity Payment Options. You must elect one of
the GMIB Annuity Payment Options by the anniversary of the Annuity's Issue
Date on or immediately following the Annuitant's or your 95/th/ birthday
(whichever is sooner), except for Annuities used as a funding vehicle for an
IRA, SEP IRA or 403(b), in which case you must elect one of the GMIB Annuity
Payment Options by the anniversary of the Annuity's Issue Date on or
immediately following the Annuitant's 92/nd/ birthday.
Your Annuity or state law may require you to begin receiving annuity payments
at an earlier date.
The amount of each GMIB Annuity Payment will be determined based on the age
and, where permitted by law, sex of the Annuitant by applying the Protected
Income Value (net of any applicable tax charge that may be due) to the GMIB
Annuity Payment Option you choose. We use special annuity purchase rates to
calculate the amount of each payment due under the GMIB Annuity Payment
Options. These special rates for the GMIB Annuity Payment Options are
calculated using an assumed interest rate factor that provides for lower
growth in the value applied to produce annuity payments than if you elected an
annuity payment option that is not part of the GMIB benefit. These special
rates also are calculated using other factors such as "age setbacks" (use of
an age lower than the Annuitant's actual age) that result in lower payments
than would result if you elected an annuity payment option that is not part of
the GMIB benefit. Use of an age setback entails a longer assumed life for the
Annuitant which in turn results in lower annuity payments.
On the date that you elect to begin receiving GMIB Annuity Payments, we
guarantee that your payments will be calculated based on your Account Value
and our then current annuity purchase rates if the payment amount calculated
on this basis would be higher than it would be based on the Protected Income
Value and the special GMIB annuity purchase rates.
GMIB Annuity Payment Option 1 - Payments for Life with a Certain Period
Under this option, monthly annuity payments will be made until the death of
the Annuitant. If the Annuitant dies before having received 120 monthly
annuity payments, the remainder of the 120 monthly annuity payments will be
made to the Beneficiary.
GMIB Annuity Payment Option 2 - Payments for Joint Lives with a Certain Period
Under this option, monthly annuity payments will be made until the death of
both the Annuitant and the Joint Annuitant. If the Annuitant and the Joint
Annuitant die before having received 120 monthly annuity payments, the
remainder of the 120 monthly annuity payments will be made to the Beneficiary.
.. If the Annuitant dies first, we will continue to make payments until the
later of the death of the Joint Annuitant and the end of the period
certain. However, if the Joint Annuitant is still receiving annuity
payments following the end of the certain period, we will reduce the amount
of each subsequent payment to 50% of the original payment amount.
.. If the Joint Annuitant dies first, we will continue to make payments until
the later of the death of the Annuitant and the end of the period certain.
You cannot withdraw your Account Value or the Protected Income Value under
either GMIB Annuity Payment Option once annuity payments have begun. We may
make other payout frequencies available, such as quarterly, semi-annually or
annually.
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Other Important Considerations
You should note that GMIB is designed to provide a type of insurance that
serves as a safety net only in the event your Account Value declines
significantly due to negative investment performance. If your Account Value is
not significantly affected by negative investment performance, it is unlikely
that the purchase of the GMIB will result in your receiving larger annuity
payments than if you had not purchased GMIB. This is because the assumptions
that we use in computing the GMIB, such as the annuity purchase rates, (which
include assumptions as to age-setbacks and assumed interest rates), are more
conservative than the assumptions that we use in computing annuity payout
options outside of GMIB. Therefore, you may generate higher income payments if
you were to annuitize a lower Account Value at the current annuity purchase
rates, than if you were to annuitize under the GMIB with a higher Protected
Value than your Account Value but, at the annuity purchase rates guaranteed
under the GMIB. The GMIB benefit does not directly affect an Annuity's Account
Value, Surrender Value or the amount payable under either the basic Death
Benefit provision of the Annuity or any optional Death Benefit provision. If
you surrender your Annuity, you will receive the current Surrender Value, not
the Protected Income Value. The Protected Income Value is only applicable if
you elect to begin receiving annuity payments under one of the GMIB annuity
options after the waiting period.
.. Each Annuity offers other annuity payment options that you can elect which
do not impose an additional charge, but which do not offer to guarantee a
minimum value on which to make annuity payments.
.. Where allowed by law, we reserve the right to limit subsequent purchase
payments if we determine, at our sole discretion, that based on the timing
of your purchase payments and withdrawals, your Protected Income Value is
increasing in ways we did not intend. In determining whether to limit
purchase payments, we will look at purchase payments which are
disproportionately larger than your initial Purchase Payment and other
actions that may artificially increase the Protected Income Value.
.. We currently limit the Sub-accounts in which you may allocate Account Value
if you participate in this benefit. Should we prohibit access to any
investment option, any transfers required to move Account Value to eligible
investment options will not be counted in determining the number of free
transfers during an Annuity Year.
.. If you change the Annuitant after the effective date of the GMIB benefit,
the period of time during which we will apply the 5% annual growth rate may
be changed based on the age of the new Annuitant. If the new Annuitant
would not be eligible to elect the GMIB benefit based on his or her age at
the time of the change, then the GMIB benefit will terminate.
.. Annuity payments made under the GMIB benefit are subject to the same tax
treatment as any other annuity payment.
.. At the time you elect to begin receiving annuity payments under the GMIB
benefit or under any other annuity payment option we make available, the
protection provided by an Annuity's basic Death Benefit or any optional
Death Benefit provision you elected will no longer apply.
Election of the Benefit
The GMIB benefit is no longer available. The Annuitant must have been age 75
or less as of the effective date of the GMIB benefit.
Termination of the Benefit
The GMIB benefit cannot be terminated by the Owner once elected. The GMIB
benefit automatically terminates as of the date your Annuity is fully
surrendered, on the date the Death Benefit is payable to your Beneficiary
(unless your surviving spouse elects to continue your Annuity), or on the date
that your Account Value is transferred to begin making annuity payments. The
GMIB benefit may also be terminated if you designate a new Annuitant who would
not be eligible to elect the GMIB benefit based on his or her age at the time
of the change.
Upon termination of the GMIB benefit we will deduct the charge from your
Account Value for the portion of the Annuity Year since the prior anniversary
of the Annuity's Issue Date (or the Issue Date if in the first Annuity Year).
Charges under the Benefit
Currently, we deduct a charge equal to 0.50% per year of the average Protected
Income Value for the period the charge applies. Because the charge is
calculated based on the average Protected Income Value, it does not increase
or decrease based on changes to the Annuity's Account Value due to market
performance. The dollar amount you pay each year will increase in any year the
Protected Income Value increases, and it will decrease in any year the
Protected Income Value decreases due to withdrawal, irrespective of whether
your Account Value increases or decreases.
The charge is deducted annually in arrears each Annuity Year on the
anniversary of the Issue Date of an Annuity. We deduct the amount of the
charge pro-rata from the Account Value allocated to the Sub-accounts and the
Fixed Allocations. No MVA will apply to Account Value deducted from a Fixed
Allocation. If you surrender your Annuity, begin receiving annuity payments
under the GMIB benefit or any other annuity payment option we make available
during an Annuity Year, or the GMIB benefit terminates, we will deduct the
charge for the portion of the Annuity Year since the prior anniversary of the
Annuity's Issue Date (or the Issue Date if in the first Annuity Year).
No charge applies after the Annuity Date.
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LIFETIME FIVE/SM/ INCOME BENEFIT (LIFETIME FIVE)/SM/
The Lifetime Five Income Benefit is no longer being offered. Lifetime Five
could be elected only where the Annuitant and the Owner were the same person
or, if the Annuity Owner is an entity, where there was only one Annuitant. The
Annuitant must be at least 45 years old when the benefit is elected. The
Lifetime Five Income Benefit was not available if you elected any other
optional living benefit. As long as your Lifetime Five Income Benefit is in
effect, you must allocate your Account Value in accordance with the then
permitted and available option(s) with this benefit.
The benefit guarantees your ability to withdraw amounts equal to a percentage
of an initial principal value (called the "Protected Withdrawal Value"),
regardless of the impact of market performance on your Account Value, subject
to our benefit rules regarding the timing and amount of withdrawals. There are
two options - one is designed to provide an annual withdrawal amount for life
(the "Life Income Benefit") and the other is designed to provide a greater
annual withdrawal amount as long as there is Protected Withdrawal Value
(adjusted as described below) (the "Withdrawal Benefit"). If there is no
Protected Withdrawal Value, the withdrawal benefit will be zero. You do not
choose between these two options; each option will continue to be available as
long as your Annuity has an Account Value and the Lifetime Five is in effect.
Certain benefits under Lifetime Five may remain in effect even if the Account
Value of your Annuity is zero. The benefit may be appropriate if you intend to
make periodic withdrawals from your Annuity and wish to ensure that market
performance will not affect your ability to receive annual payments. You are
not required to make withdrawals as part of the benefit - the guarantees are
not lost if you withdraw less than the maximum allowable amount each year
under the rules of the benefit.
Key Feature - Protected Withdrawal Value
The Protected Withdrawal Value is used to determine the amount of each annual
payment under the Life Income Benefit and the Withdrawal Benefit. The initial
Protected Withdrawal Value is determined as of the date you make your first
withdrawal under your Annuity following your election of Lifetime Five. The
initial Protected Withdrawal Value is equal to the greater of (A) the Account
Value on the date you elect Lifetime Five, plus any additional purchase
payments, as applicable, each growing at 5% per year from the date of your
election of the benefit, or application of the Purchase Payment to your
Annuity until the date of your first withdrawal or the 10/th/ anniversary of
the benefit effective date, if earlier (B) the Account Value on the date of
the first withdrawal from your Annuity, prior to the withdrawal, and (C) the
highest Account Value on each Annuity anniversary, plus subsequent purchase
payments prior to the first withdrawal or the 10/th/ anniversary of the
benefit effective date, if earlier. With respect to (A) and (C) above, after
the 10/th/ anniversary of the benefit effective date, each value is increased
by the amount of any subsequent purchase payments. With respect to XT6,
Credits are added to purchase payments for purposes of calculating the
Protected Withdrawal Value, the Annual Income Amount and the Annual Withdrawal
Amount (see below for a description of Annual Income Amount and Annual
Withdrawal Amount).
.. If you elect the Lifetime Five benefit at the time you purchase your
Annuity, the Account Value will be your initial Purchase Payment.
.. For existing Owners who are electing the Lifetime Five benefit, the Account
Value on the date of your election of the Lifetime Five benefit will be
used to determine the initial Protected Withdrawal Value.
.. If you make additional purchase payments after your first withdrawal, the
Protected Withdrawal Value will be increased by the amount of each
additional Purchase Payment.
The Protected Withdrawal Value is reduced each time a withdrawal is made on a
dollar-for-dollar basis up to 7% per Annuity Year of the Protected Withdrawal
Value and on the greater of a dollar-for-dollar basis or a pro rata basis for
withdrawals in an Annuity Year in excess of that amount until the Protected
Withdrawal Value is reduced to zero. At that point the Annual Withdrawal
Amount will be zero until such time (if any) as the Annuity reflects a
Protected Withdrawal Value (for example, due to a step-up or additional
purchase payments being made into the Annuity).
Step-Up of the Protected Withdrawal Value
You may elect to step-up your Protected Withdrawal Value if, due to positive
market performance, your Account Value is greater than the Protected
Withdrawal Value.
If you elected the Lifetime Five benefit on or after March 20, 2006:
.. you are eligible to step-up the Protected Withdrawal Value on or after the
1/st/ anniversary of the first withdrawal under the Lifetime Five benefit
.. the Protected Withdrawal Value can be stepped up again on or after the
1/st/ anniversary of the preceding step-up
If you elected the Lifetime Five benefit prior to March 20, 2006 and that
original election remains in effect:
.. you are eligible to step-up the Protected Withdrawal Value on or after the
5/th/ anniversary of the first withdrawal under the Lifetime Five benefit
.. the Protected Withdrawal Value can be stepped up again on or after the
5/th/ anniversary of the preceding step-up
In either scenario (i.e., elections before or after March 20, 2006) if you
elect to step-up the Protected Withdrawal Value under the benefit, and on the
date you elect to step-up, the charges under the Lifetime Five benefit have
changed for new purchasers, your
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benefit may be subject to the new charge at the time of step-up. Upon election
of the step-up, we increase the Protected Withdrawal Value to be equal to the
then current Account Value. For example, assume your initial Protected
Withdrawal Value was $100,000 and you have made cumulative withdrawals of
$40,000, reducing the Protected Withdrawal Value to $60,000. On the date you
are eligible to step-up the Protected Withdrawal Value, your Account Value is
equal to $75,000. You could elect to step-up the Protected Withdrawal Value to
$75,000 on the date you are eligible. If your current Annual Income Amount and
Annual Withdrawal Amount are less than they would be if we did not reflect the
step-up in Protected Withdrawal Value, then we will increase these amounts to
reflect the step-up as described below.
An optional automatic step-up ("Auto Step-Up") feature is available for this
benefit. This feature may be elected at the time the benefit is elected or at
any time while the benefit is in force.
If you elected the Lifetime Five benefit on or after March 20, 2006 and have
also elected the Auto Step-Up feature:
.. the first Auto Step-Up opportunity will occur on the 1/st/ Annuity
Anniversary that is at least one year after the later of (1) the date of
the first withdrawal under the Lifetime Five benefit or (2) the most recent
step-up
.. your Protected Withdrawal Value will only be stepped-up if 5% of the
Account Value is greater than the Annual Income Amount by any amount
.. if at the time of the first Auto Step-Up opportunity, 5% of the Account
Value is not greater than the Annual Income Amount, an Auto Step-Up
opportunity will occur on each successive Annuity Anniversary until a
step-up occurs
.. once a step-up occurs, the next Auto Step-Up opportunity will occur on the
1/st/ Annuity Anniversary that is at least one year after the most recent
step-up
If you elected the Lifetime Five benefit prior to March 20, 2006 and have also
elected the Auto Step-Up feature:
.. the first Auto Step-Up opportunity will occur on the Annuity Anniversary
that is at least 5 years after the later of (1) the date of the first
withdrawal under the Lifetime Five Benefit or (2) the most recent step-up
.. your Protected Withdrawal Value will only be stepped-up if 5% of the
Account Value is greater than the Annual Income Amount by 5% or more
.. if at the time of the first Auto Step-Up opportunity, 5% of the Account
Value does not exceed the Annual Income Amount by 5% or more, an Auto
Step-Up opportunity will occur on each successive Annuity Anniversary until
a step-up occurs
.. once a step-up occurs, the next Auto Step-Up opportunity will occur on the
Annuity Anniversary that is at least 5 years after the most recent step-up
In either scenario (i.e., elections before or after March 20, 2006), if on the
date that we implement an Auto Step-Up to your Protected Withdrawal Value, the
charge for Lifetime Five has changed for new purchasers, you may be subject to
the new charge at the time of such step-up. Subject to our rules and
restrictions, you will still be permitted to manually step-up the Protected
Withdrawal Value even if you elect the Auto Step-Up feature.
Key Feature - Annual Income Amount under the Life Income Benefit
The initial Annual Income Amount is equal to 5% of the initial Protected
Withdrawal Value. Under the Lifetime Five benefit, if your cumulative
withdrawals in an Annuity Year are less than or equal to the Annual Income
Amount, they will not reduce your Annual Income Amount in subsequent Annuity
Years, but any such withdrawals will reduce the Annual Income Amount on a
dollar-for-dollar basis in that Annuity Year. If your cumulative withdrawals
are in excess of the Annual Income Amount ("Excess Income"), your Annual
Income Amount in subsequent years will be reduced (except with regard to
required minimum distributions) by the result of the ratio of the Excess
Income to the Account Value immediately prior to such withdrawal (see examples
of this calculation below). Reductions include the actual amount of the
withdrawal, including any CDSC that may apply. A withdrawal can be considered
Excess Income under the Life Income Benefit even though it does not exceed the
Annual Withdrawal Amount under the Withdrawal Benefit. When you elect a
step-up (or an auto step-up is effected), your Annual Income Amount increases
to equal 5% of your Account Value after the step-up if such amount is greater
than your Annual Income Amount. Your Annual Income Amount also increases if
you make additional purchase payments. The amount of the increase is equal to
5% of any additional purchase payments (and any associated Credit with respect
to XT6). Any increase will be added to your Annual Income Amount beginning on
the day that the step-up is effective or the Purchase Payment is made. A
determination of whether you have exceeded your Annual Income Amount is made
at the time of each withdrawal; therefore a subsequent increase in the Annual
Income Amount will not offset the effect of a withdrawal that exceeded the
Annual Income Amount at the time the withdrawal was made.
Key Feature - Annual Withdrawal Amount under the Withdrawal Benefit
The initial Annual Withdrawal Amount is equal to 7% of the initial Protected
Withdrawal Value. Under the Lifetime Five benefit, if your cumulative
withdrawals each Annuity Year are less than or equal to the Annual Withdrawal
Amount, your Protected Withdrawal Value will be reduced on a dollar-for-dollar
basis. If your cumulative withdrawals are in excess of the Annual Withdrawal
Amount ("Excess Withdrawal"), your Annual Withdrawal Amount will be reduced
(except with regard to required minimum distributions) by the result of the
ratio of the Excess Withdrawal to the Account Value immediately prior to such
withdrawal (see the examples of this calculation below). Reductions include
the actual amount of the withdrawal, including any
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CDSC that may apply. When you elect a step-up (or an auto step-up is
effected), your Annual Withdrawal Amount increases to equal 7% of your Account
Value after the step-up if such amount is greater than your Annual Withdrawal
Amount. Your Annual Withdrawal Amount also increases if you make additional
purchase payments. The amount of the increase is equal to 7% of any additional
purchase payments (and any associated Credit with respect to XT6). A
determination of whether you have exceeded your Annual Withdrawal Amount is
made at the time of each withdrawal; therefore, a subsequent increase in the
Annual Withdrawal Amount will not offset the effect of a withdrawal that
exceeded the Annual Withdrawal Amount at the time the withdrawal was made.
The Lifetime Five benefit does not affect your ability to make withdrawals
under your Annuity or limit your ability to request withdrawals that exceed
the Annual Income Amount and the Annual Withdrawal Amount. You are not
required to withdraw all or any portion of the Annual Withdrawal Amount or
Annual Income Amount in each Annuity Year.
.. If, cumulatively, you withdraw an amount less than the Annual Withdrawal
Amount under the Withdrawal Benefit in any Annuity Year, you cannot
carry-over the unused portion of the Annual Withdrawal Amount to subsequent
Annuity Years. However, because the Protected Withdrawal Value is only
reduced by the actual amount of withdrawals you make under these
circumstances, any unused Annual Withdrawal Amount may extend the period of
time until the remaining Protected Withdrawal Value is reduced to zero.
.. If, cumulatively, you withdraw an amount less than the Annual Income Amount
under the Life Income Benefit in any Annuity Year, you cannot carry-over
the unused portion of the Annual Income Amount to subsequent Annuity Years.
However, because the Protected Withdrawal Value is only reduced by the
actual amount of withdrawals you make under these circumstances, any unused
Annual Income Amount may extend the period of time until the remaining
Protected Withdrawal Value is reduced to zero.
Examples of Withdrawals
The following examples of dollar-for-dollar and proportional reductions of the
Protected Withdrawal Value, Annual Withdrawal Amount and Annual Income Amount
assume: 1.) the Issue Date and the Effective Date of the Lifetime Five benefit
are February 1, 2005; 2.) an initial Purchase Payment of $250,000; 3.) the
Account Value on February 1, 2006 is equal to $265,000; and 4.) the first
withdrawal occurs on March 1, 2006 when the Account Value is equal to
$263,000. The values set forth here are purely hypothetical, and do not
reflect the charge for Lifetime Five or any other fees and charges.
The initial Protected Withdrawal Value is calculated as the greatest of (a),
(b) and (c):
(a)Purchase payment accumulated at 5% per year from February 1, 2005 until
March 1, 2006 (393 days) = $250,000 X 1.05/(393/365)/ = $263,484.33
(b)Account Value on March 1, 2006 (the date of the first withdrawal) = $263,000
(c)Account Value on February 1, 2006 (the first Annuity Anniversary) = $265,000
Therefore, the initial Protected Withdrawal Value is equal to $265,000. The
Annual Withdrawal Amount is equal to $18,550 under the Withdrawal Benefit (7%
of $265,000). The Annual Income Amount is equal to $13,250 under the Life
Income Benefit (5% of $265,000).
Example 1. Dollar-for-dollar reduction
If $10,000 was withdrawn (less than both the Annual Income Amount and the
Annual Withdrawal Amount) on March 1, 2006, then the following values would
result:
.. Remaining Annual Withdrawal Amount for current Annuity Year = $18,550 -
$10,000 = $8,550.
Annual Withdrawal Amount for future Annuity Years remains at $18,550.
.. Remaining Annual Income Amount for current Annuity Year = $13,250 - $10,000
= $3,250.
Annual Income Amount for future Annuity Years remains at $13,250.
.. Protected Withdrawal Value is reduced by $10,000 from $265,000 to $255,000
Example 2. Dollar-for-dollar and proportional reductions
(a)If $15,000 was withdrawn (more than the Annual Income Amount but less than
the Annual Withdrawal Amount) on March 1, 2006, then the following values
would result:
.. Remaining Annual Withdrawal Amount for current Annuity Year = $18,550 -
$15,000 = $3,550. Annual Withdrawal Amount for future Annuity Years remains
at $18,550
.. Remaining Annual Income Amount for current Annuity Year = $0
Excess of withdrawal over the Annual Income Amount ($15,000 - $13,250 =
$1,750) reduces Annual Income Amount for future Annuity Years.
.. Reduction to Annual Income Amount = Excess Income/Account Value before
Excess Income X Annual Income Amount = $1,750/($263,000 - $13,250) X
$13,250 = $93
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Annual Income Amount for future Annuity Years = $13,250 - $93 = $13,157
.. Protected Withdrawal Value is reduced by $15,000 from $265,000 to $250,000
(b)If $25,000 was withdrawn (more than both the Annual Income Amount and the
Annual Withdrawal Amount) on March 1, 2006, then the following values would
result:
.. Remaining Annual Withdrawal Amount for current Annuity Year = $0
Excess of withdrawal over the Annual Withdrawal Amount ($25,000 - $18,550 =
$6,450) reduces Annual Withdrawal Amount for future Annuity Years.
.. Reduction to Annual Withdrawal Amount = Excess Withdrawal/Account Value
before Excess Withdrawal X Annual Withdrawal Amount = $6,450/($263,000 -
$18,550) X $18,550 = $489
Annual Withdrawal Amount for future Annuity Years = $18,550 - $489 = $18,061
.. Remaining Annual Income Amount for current Annuity Year = $0
Excess of withdrawal over the Annual Income Amount ($25,000 - $13,250 =
$11,750) reduces Annual Income Amount for future Annuity Years.
.. Reduction to Annual Income Amount = Excess Income/Account Value before
Excess Income X Annual Income Amount = $11,750/($263,000 - $13,250) X
$13,250 = $623.
Annual Income Amount for future Annuity Years = $13,250 - $623 = $12,627
.. Protected Withdrawal Value is first reduced by the Annual Withdrawal Amount
($18,550) from $265,000 to $246,450. It is further reduced by the greater
of a dollar-for-dollar reduction or a proportional reduction.
Dollar-for-dollar reduction = $25,000 - $18,550 = $6,450
.. Proportional reduction = Excess Withdrawal/Account Value before Excess
Withdrawal X Protected Withdrawal Value = $6,450/($263,000 - $18,550) X
$246,450 = $6,503 Protected Withdrawal Value = $246,450 - max {$6,450,
$6,503} = $239,947
Benefits Under the Lifetime Five Benefit
.. If your Account Value is equal to zero, and the cumulative withdrawals in
the current Annuity Year are greater than the Annual Withdrawal Amount, the
Lifetime Five benefit will terminate. To the extent that your Account Value
was reduced to zero as a result of cumulative withdrawals that are equal to
or less than the Annual Income Amount and amounts are still payable under
both the Life Income Benefit and the Withdrawal Benefit, you will be given
the choice of receiving the payments under the Life Income Benefit or under
the Withdrawal Benefit. Thus, in that scenario, the remaining amounts under
the Life Income Benefit and the Withdrawal Benefit would be payable even
though your Account Value was reduced to zero. Once you make this election
we will make an additional payment for that Annuity Year equal to either
the remaining Annual Income Amount or Annual Withdrawal Amount for the
Annuity Year, if any, depending on the option you choose. In subsequent
Annuity Years we make payments that equal either the Annual Income Amount
or the Annual Withdrawal Amount as described in this Prospectus. You will
not be able to change the option after your election and no further
purchase payments will be accepted under your Annuity. If you do not make
an election, we will pay you annually under the Life Income Benefit. To the
extent that cumulative withdrawals in the current Annuity Year that reduced
your Account Value to zero are more than the Annual Income Amount but less
than or equal to the Annual Withdrawal Amount and amounts are still payable
under the Withdrawal Benefit, you will receive the payments under the
Withdrawal Benefit. In the year of a withdrawal that reduced your Account
Value to zero, we will make an additional payment to equal any remaining
Annual Withdrawal Amount and make payments equal to the Annual Withdrawal
Amount in each subsequent year (until the Protected Withdrawal Value is
depleted). Once your Account Value equals zero no further purchase payments
will be accepted under your Annuity.
.. If annuity payments are to begin under the terms of your Annuity or if you
decide to begin receiving annuity payments and there is any Annual Income
Amount due in subsequent Annuity Years or any remaining Protected
Withdrawal Value, you can elect one of the following three options:
(1)apply your Account Value to any annuity option available; or
(2)request that, as of the date annuity payments are to begin, we make
annuity payments each year equal to the Annual Income Amount. We make
such annuity payments until the Annuitant's death; or
(3)request that, as of the date annuity payments are to begin, we pay
out any remaining Protected Withdrawal Value as annuity payments.
Each year such annuity payments will equal the Annual Withdrawal
Amount or the remaining Protected Withdrawal Value if less. We make
such annuity payments until the earlier of the Annuitant's death or
the date the Protected Withdrawal Value is depleted.
We must receive your request in a form acceptable to us at our office.
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.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments as a single life fixed annuity with
five payments certain using the greater of the annuity rates then currently
available or the annuity rates guaranteed in your Annuity. The amount that
will be applied to provide such annuity payments will be the greater of:
(1)the present value of future Annual Income Amount payments. Such
present value will be calculated using the greater of the single life
fixed annuity rates then currently available or the single life fixed
annuity rates guaranteed in your Annuity; and
(2)the Account Value.
.. If no withdrawal was ever taken, we will determine a Protected Withdrawal
Value and calculate an Annual Income Amount and an Annual Withdrawal Amount
as if you made your first withdrawal on the date the annuity payments are
to begin.
Other Important Considerations
.. Withdrawals under the Lifetime Five benefit are subject to all of the terms
and conditions of your Annuity, including any applicable CDSC.
.. Withdrawals made while the Lifetime Five benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under
your Annuity. The Lifetime Five benefit does not directly affect your
Annuity's Account Value or Surrender Value, but any withdrawal will
decrease the Account Value by the amount of the withdrawal (plus any
applicable CDSC). If you surrender your Annuity, you will receive the
current Surrender Value, not the Protected Withdrawal Value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Lifetime Five benefit. The
Lifetime Five benefit provides a guarantee that if your Account Value
declines due to market performance, you will be able to receive your
Protected Withdrawal Value or Annual Income Amount in the form of periodic
benefit payments.
.. In general, you must allocate your Account Value in accordance with the
then available investment option(s) that we may prescribe in order to elect
and maintain the benefit. If, subsequent to your election of the benefit,
we change our requirements for how Account Value must be allocated under
the benefit, the new requirement will apply only to new elections of the
benefit, and we will not compel you to re-allocate your Account Value in
accordance with our newly-adopted requirements. Subsequent to any change in
requirements, transfers of Account Value and allocation of additional
purchase payments may be subject to the new investment limitations.
Election of the Benefit
We no longer permit elections of Lifetime Five. If you wish, you may cancel
the Lifetime Five benefit. You may then elect Highest Daily Lifetime 7 Plus,
Highest Daily Lifetime 7 Plus with Beneficiary Income Option, Highest Daily
Lifetime 7 Plus with Lifetime Income Accelerator, Spousal Highest Daily
Lifetime 7 Plus, or Spousal Highest Daily Lifetime 7 Plus with Beneficiary
Income Option (or any other currently available living benefit) on the
Valuation Day after you have cancelled the Lifetime Five benefit provided, the
request is received in good order (subject to state availability and in
accordance with any applicable age requirements). Once the Lifetime Five
benefit is canceled you are not required to re-elect another optional living
benefit and any subsequent benefit election may be made on or after the first
Valuation Day following the cancellation of the Lifetime Five benefit provided
that the benefit you are looking to elect is available on a post- issue basis.
If you cancel Lifetime Five, you lose all guarantees under the benefit and
will base any guarantees under the new benefit based on your Account Value.
Any such new benefit may be more expensive.
Termination of the Benefit
The benefit terminates automatically when your Protected Withdrawal Value and
Annual Income Amount equal zero. You may terminate the benefit at any time by
notifying us. If you terminate the benefit, any guarantee provided by the
benefit will terminate as of the date the termination is effective. The
benefit terminates upon your surrender of your Annuity, upon the death of the
Annuitant, upon a change in ownership of your Annuity that changes the tax
identification number of the Owner, upon change in the Annuitant or upon your
election to begin receiving annuity payments. While you may terminate your
benefit at any time, we may not terminate the benefit other than in the
circumstances listed above.
The charge for the Lifetime Five benefit will no longer be deducted from your
Account Value upon termination of the benefit.
Additional Tax Considerations
If you purchase an Annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the Required Minimum Distribution
rules under the Code provide that you begin receiving periodic amounts from
your Annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than five (5) percent
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 required under the Code may exceed the Annual
Withdrawal Amount and the Annual Income Amount, which will cause us to
increase the Annual Income Amount and the Annual Withdrawal Amount in any
Annuity Year that Required Minimum Distributions due from your Annuity are
greater than such amounts. Any such payments will reduce your Protected
Withdrawal
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Value. In addition, the amount and duration of payments under the annuity
payment and Death Benefit provisions may be adjusted so that the payments do
not trigger any penalty or excise taxes due to tax considerations such as
Required Minimum Distribution provisions under the tax law.
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this Benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of this prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this Benefit here.
SPOUSAL LIFETIME FIVE/SM/ INCOME BENEFIT (SPOUSAL LIFETIME FIVE)/SM/
The Spousal Lifetime Five benefit is no longer being offered. Spousal Lifetime
Five must have been elected based on two Designated Lives, as described below.
Each Designated Life must have been at least 55 years old when the benefit was
elected. The Spousal Lifetime Five benefit was not available if you elected
any other optional living benefit or optional death benefit. As long as your
Spousal Lifetime Five Income Benefit is in effect, you must allocate your
Account Value in accordance with the then permitted and available option(s)
with this benefit.
The benefit guarantees until the later death of two natural persons that are
each other's spouses at the time of election of Spousal Lifetime Five and at
the first death of one of them (the "Designated Lives", each a "Designated
Life") the ability to withdraw an annual amount ("Spousal Life Income
Benefit") equal to a percentage of an initial principal value (the "Protected
Withdrawal Value") regardless of the impact of market performance on the
Account Value, subject to our benefit rules regarding the timing and amount of
withdrawals. The Spousal Life Income Benefit may remain in effect even if the
Account Value of the Annuity is zero. The benefit may be appropriate if you
intend to make periodic withdrawals from your Annuity, wish to ensure that
market performance will not affect your ability to receive annual payments,
and wish either spouse to be able to continue the Spousal Life Income Benefit
after the death of the first. You are not required to make withdrawals as part
of the benefit - the guarantees are not lost if you withdraw less than the
maximum allowable amount each year under the rules of the benefit.
Key Feature - Initial Protected Withdrawal Value
The Protected Withdrawal Value is used to determine the amount of each annual
payment under the Spousal Life Income Benefit. The initial Protected
Withdrawal Value is determined as of the date you make your first withdrawal
under the Annuity following your election of Spousal Lifetime Five. The
initial Protected Withdrawal Value is equal to the greater of (A) the Account
Value on the date you elect Spousal Lifetime Five, plus any additional
purchase payments as applicable, each growing at 5% per year from the date of
your election of the benefit, or application of the Purchase Payment to your
Annuity, until the date of your first withdrawal or the 10/th/ anniversary of
the benefit effective date, if earlier (B) the Account Value on the date of
the first withdrawal from your Annuity, prior to the withdrawal, and (C) the
highest Account Value on each Annuity anniversary, plus subsequent purchase
payments prior to the first withdrawal or the 10/th/ anniversary of the
benefit effective date, if earlier. With respect to (A) and (C) above, after
the 10/th/ anniversary of the benefit effective date, each value is increased
by the amount of any subsequent purchase payments. With respect to XT6,
Credits are added to purchase payments for purposes of calculating the
Protected Withdrawal Value and the Annual Income Amount (see below for a
description of Annual Income Amount).
.. If you elect the Spousal Lifetime Five benefit at the time you purchase
your Annuity, the Account Value will be your initial Purchase Payment.
Key Feature - Annual Income Amount under the Spousal Lifetime Five Income
Benefit
The initial Annual Income Amount is equal to 5% of the initial Protected
Withdrawal Value. Under the Spousal Lifetime Five benefit, if your cumulative
withdrawals in an Annuity Year are less than or equal to the Annual Income
Amount, they will not reduce your Annual Income Amount in subsequent Annuity
Years, but any such withdrawals will reduce the Annual Income Amount on a
dollar-for-dollar basis in that Annuity Year. If, cumulatively, you withdraw
an amount less than the Annual Income Amount under the Spousal Life Income
Benefit in any Annuity Year, you cannot carry-over the unused portion of the
Annual Income Amount to subsequent Annuity Years. If your cumulative
withdrawals are in excess of the Annual Income Amount ("Excess Income"), your
Annual Income Amount in subsequent years will be reduced (except with regard
to required minimum distributions) by the result of the ratio of the Excess
Income to the Account Value immediately prior to such withdrawal (see examples
of this calculation below). Reductions include the actual amount of the
withdrawal, including any CDSC that may apply. The Spousal Lifetime Five
benefit does not affect your ability to make withdrawals under your Annuity or
limit your ability to request withdrawals that exceed the Annual Income Amount.
Step-Up of Annual Income Amount
You may elect to step-up your Annual Income Amount if, due to positive market
performance, 5% of your Account Value is greater than the Annual Income
Amount. You are eligible to step-up the Annual Income Amount on or after the
1/st/ anniversary of the first withdrawal under the Spousal Lifetime Five
benefit. The Annual Income Amount can be stepped up again on or after the
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1/st/ anniversary of the preceding step-up. If you elect to step-up the Annual
Income Amount under the benefit, and on the date you elect to step-up, the
charges under the Spousal Lifetime Five benefit have changed for new
purchasers, your benefit may be subject to the new charge at the time of such
step-up. When you elect a step-up, your Annual Income Amount increases to
equal 5% of your Account Value after the step-up. Your Annual Income Amount
also increases if you make additional purchase payments. The amount of the
increase is equal to 5% of any additional purchase payments (plus any Credit
with respect to XT6). Any increase will be added to your Annual Income Amount
beginning on the day that the step-up is effective or the Purchase Payment is
made. A determination of whether you have exceeded your Annual Income Amount
is made at the time of each withdrawal; therefore a subsequent increase in the
Annual Income Amount will not offset the effect of a withdrawal that exceeded
the Annual Income Amount at the time the withdrawal was made.
An optional automatic step-up ("Auto Step-Up") feature is available for this
benefit. This feature may be elected at the time the benefit is elected or at
any time while the benefit is in force. If you elect this feature, the first
Auto Step-Up opportunity will occur on the 1/st/ Annuity Anniversary that is
at least one year after the later of (1) the date of the first withdrawal
under the Spousal Lifetime Five benefit or (2) the most recent step-up. At
this time, your Annual Income Amount will be stepped-up if 5% of your Account
Value is greater than the Annual Income Amount by any amount. If 5% of the
Account Value does not exceed the Annual Income Amount, then an Auto Step-Up
opportunity will occur on each successive Annuity Anniversary until a step-up
occurs. Once a step-up occurs, the next Auto Step-Up opportunity will occur on
the 1/st/ Annuity Anniversary that is at least 1 year after the most recent
step-up. If, on the date that we implement an Auto Step-Up to your Annual
Income Amount, the charge for Spousal Lifetime Five has changed for new
purchasers, you may be subject to the new charge at the time of such step-up.
Subject to our rules and restrictions, you will still be permitted to manually
step-up the Annual Income Amount even if you elect the Auto Step-Up feature.
Examples of withdrawals and step-up
The following examples of dollar-for-dollar and proportional reductions and
the step-up of the Annual Income Amount assume: 1.) the Issue Date and the
Effective Date of the Spousal Lifetime Five benefit are February 1, 2005; 2.)
an initial Purchase Payment of $250,000; 3.) the Account Value on February 1,
2006 is equal to $265,000; 4.) the first withdrawal occurs on March 1, 2006
when the Account Value is equal to $263,000; and 5.) the Account Value on
February 1, 2010 is equal to $280,000. The values set forth here are purely
hypothetical, and do not reflect the charge for the Spousal Lifetime Five or
any other fees and charges.
The initial Protected Withdrawal Value is calculated as the greatest of (a),
(b) and (c):
(a)Purchase payment accumulated at 5% per year from February 1, 2005 until
March 1, 2006 (393 days) = $250,000 X 1.05/(393/365)/ = $263,484.33
(b)Account Value on March 1, 2006 (the date of the first withdrawal) = $263,000
(c)Account Value on February 1, 2006 (the first Annuity Anniversary) = $265,000
Therefore, the initial Protected Withdrawal Value is equal to $265,000. The
Annual Income Amount is equal to $13,250 under the Spousal Life Income Benefit
(5% of $265,000).
Example 1. Dollar-for-dollar reduction
If $10,000 was withdrawn (less than the Annual Income Amount) on March 1,
2006, then the following values would result:
.. Remaining Annual Income Amount for current Annuity Year = $13,250 - $10,000
= $3,250.
.. Annual Income Amount for future Annuity Years remains at $13,250
Example 2. Dollar-for-dollar and proportional reductions
If $15,000 was withdrawn (more than the Annual Income Amount) on March 1,
2006, then the following values would result:
.. Remaining Annual Income Amount for current Annuity Year = $0
.. Excess of withdrawal over the Annual Income Amount ($15,000 - $13,250
$1,750) reduces
.. Annual Income Amount for future Annuity Years.
.. Reduction to Annual Income Amount = Excess Income/Account Value before
Excess Income X Annual Income Amount = $1,750/($263,000 - $13,250) X
$13,250 = $93. Annual Income Amount for future Annuity Years = $13,250 -
$93 = $13,157
Example 3. Step-up of the Annual Income Amount
If a step-up of the Annual Income Amount is requested on February 1, 2010 or
the Auto Step-Up feature was elected, the step-up would occur because 5% of
the Account Value, which is $14,000 (5% of $280,000), is greater than the
Annual Income Amount of $13,250. The new Annual Income Amount will be equal to
$14,000.
BENEFITS UNDER THE SPOUSAL LIFETIME FIVE BENEFIT
To the extent that your Account Value was reduced to zero as a result of
cumulative withdrawals that are equal to or less than the Annual Income Amount
and amounts are still payable under the Spousal Life Income Benefit, we will
make an additional payment for that Annuity Year equal to the remaining Annual
Income Amount for the Annuity Year, if any. Thus, in that scenario, the
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remaining Annual Income Amount would be payable even though your Account Value
was reduced to zero. In subsequent Annuity Years we make payments that equal
the Annual Income Amount as described in this Prospectus. No further purchase
payments will be accepted under your Annuity. We will make payments until the
first of the Designated Lives to die, and will continue to make payments until
the death of the second Designated Life as long as the Designated Lives were
spouses at the time of the first death. To the extent that cumulative
withdrawals in the current Annuity Year that reduced your Account Value to
zero are more than the Annual Income Amount, the Spousal Life Income Benefit
terminates and no additional payments will be made.
.. If annuity payments are to begin under the terms of your Annuity or if you
decide to begin receiving annuity payments and there is any Annual Income
Amount due in subsequent Annuity Years, you can elect one of the following
two options:
(1)apply your Account Value to any annuity option available; or
(2)request that, as of the date annuity payments are to begin, we make
annuity payments each year equal to the Annual Income Amount. We will
make payments until the first of the Designated Lives to die, and
will continue to make payments until the death of the second
Designated Life as long as the Designated Lives were spouses at the
time of the first death.
We must receive your request in a form acceptable to us at our office.
.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments as a joint and survivor or single (as
applicable) life fixed annuity with five payments certain using the same
basis that is used to calculate the greater of the annuity rates then
currently available or the annuity rates guaranteed in your Annuity. The
amount that will be applied to provide such annuity payments will be the
greater of:
(1)the present value of future Annual Income Amount payments. Such
present value will be calculated using the same basis that is used to
calculate the single life fixed annuity rates then currently
available or the single life fixed annuity rates guaranteed in your
Annuity; and
(2)the Account Value.
.. If no withdrawal was ever taken, we will determine an initial Protected
Withdrawal Value and calculate an Annual Income Amount as if you made your
first withdrawal on the date the annuity payments are to begin.
Other Important Considerations
.. Withdrawals under the Spousal Lifetime Five benefit are subject to all of
the terms and conditions of the Annuity, including any CDSC.
.. Withdrawals made while the Spousal Lifetime Five benefit is in effect will
be treated, for tax purposes, in the same way as any other withdrawals
under the Annuity. The Spousal Lifetime Five benefit does not directly
affect the Annuity's Account Value or Surrender Value, but any withdrawal
will decrease the Account Value by the amount of the withdrawal (plus any
applicable CDSC). If you surrender your Annuity, you will receive the
current Surrender Value, not the Protected Withdrawal Value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Spousal Lifetime Five benefit. The
Spousal Lifetime Five benefit provides a guarantee that if your Account
Value declines due to market performance, you will be able to receive your
Annual Income Amount in the form of periodic benefit payments.
.. In general, you must allocate your Account Value in accordance with the
then available investment option(s) that we may prescribe in order to elect
and maintain the benefit. If, subsequent to your election of the benefit,
we change our requirements for how Account Value must be allocated under
the benefit, the new requirement will apply only to new elections of the
benefit, and we will not compel you to re-allocate your Account Value in
accordance with our newly-adopted requirements. Subsequent to any change in
requirements, transfers of Account Value and allocation of additional
purchase payments may be subject to the new investment limitations.
.. There may be circumstances where you will continue to be charged the full
amount for the Spousal Lifetime Five benefit even when the benefit is only
providing a guarantee of income based on one life with no survivorship.
.. In order for the Surviving Designated Life to continue the Spousal Lifetime
Five benefit upon the death of an owner, the Designated Life must elect to
assume ownership of the Annuity under the spousal continuation option. When
the Annuity is owned by a Custodial Account, in order for Spousal Lifetime
Five to be continued after the death of the first Designated Life (the
Annuitant), the Custodial Account must elect to continue the Annuity and
the second Designated Life (the Contingent Annuitant) will be named as the
new Annuitant. See "Spousal Designations", and "Spousal Assumption of
Annuity" in this Prospectus.
Election of and Designations under the Benefit
We no longer permit elections of Spousal Lifetime Five - whether for those who
currently participate in Spousal Lifetime Five or for those who are buying an
Annuity for the first time. If you wish, you may cancel the Spousal Lifetime
Five benefit. You may then elect Highest Daily Lifetime 7 Plus, Highest Daily
Lifetime 7 Plus with Beneficiary Income Option, Highest Daily Lifetime 7 Plus
with Lifetime Income Accelerator, Spousal Highest Daily Lifetime 7 Plus, or
Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income Option (or any
other currently available living benefit) on the Valuation Day after have you
cancelled the
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Spousal Lifetime Five benefit, provided the request is received in good order
(subject to state availability and any applicable age requirements). Once the
Spousal Lifetime Five benefit is canceled you are not required to re-elect
another optional living benefit and any subsequent benefit election may be
made on or after the first Valuation Day following the cancellation of the
Spousal Lifetime Five benefit provided that the benefit you are looking to
elect is available on a post-issue basis. If you cancel the benefit, you lose
all guarantees under the benefit, and your guarantee under any new benefit you
elect will be based on your Account Value at that time.
Spousal Lifetime Five could only be elected based on two Designated Lives.
Designated Lives must be natural persons who are each other's spouses at the
time of election of the benefit and at the death of the first of the
Designated Lives to die. Spousal Lifetime Five only could be elected where the
Owner, Annuitant, and Beneficiary designations are as follows:
.. One Annuity Owner, where the Annuitant and the Owner are the same person
and the beneficiary is the Owner's spouse. The Owner/Annuitant and the
beneficiary each must be at least 59 1/2 years old at the time of election;
or
.. Co-Annuity Owners, where the Owners are each other's spouses. The
beneficiary designation must be the surviving spouse, or the spouses named
equally. One of the owners must be the Annuitant. Each Owner must each be
at least 59 1/2 years old at the time of election; or
.. One Annuity Owner, where the Owner is a custodial account established to
hold retirement assets for the benefit of the Annuitant pursuant to the
provisions of Section 408(a) of the Internal Revenue Code (or any successor
Code section thereto) ("Custodial Account"), the beneficiary is the
Custodial Account, and the spouse of the Annuitant is the Contingent
Annuitant. Both the Annuitant and the Contingent Annuitant each must be at
least 59 1/2 years old at the time of election.
We do not permit a change of Owner under this benefit, except as follows:
(a)if one Owner dies and the surviving spousal Owner assumes the Annuity or
(b)if the Annuity initially is co-owned, but thereafter the Owner who is not
the Annuitant is removed as Owner. We permit changes of beneficiary under
this benefit. If the Designated Lives divorce, the Spousal Lifetime Five
benefit may not be divided as part of the divorce settlement or judgment.
Nor may the divorcing spouse who retains ownership of the Annuity appoint a
new Designated Life upon re-marriage.
Termination of the Benefit
The benefit terminates automatically when your Annual Income Amount equals
zero. You may terminate the benefit at any time by notifying us. If you
terminate the benefit, any guarantee provided by the benefit will terminate as
of the date the termination is effective. The benefit terminates upon your
surrender of the Annuity, upon the first Designated Life to die if the Annuity
is not continued, upon the second Designated Life to die or upon your election
to begin receiving annuity payments.
The charge for the Spousal Lifetime Five benefit will no longer be deducted
from your Account Value upon termination of the benefit.
Additional Tax Considerations
If you purchase an Annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
an employer plan under Code Section 401(a), the Required Minimum Distribution
rules under the Code provide that you begin receiving periodic amounts from
your Annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than 5 percent 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 required under the Code may exceed the Annual
Income Amount, which will cause us to increase the Annual Income Amount in any
Annuity Year that Required Minimum Distributions due from your Annuity are
greater than such amounts. Any such payments will reduce your Protected
Withdrawal Value. In addition, the amount and duration of payments under the
annuity payment and Death Benefit provisions may be adjusted so that the
payments do not trigger any penalty or excise taxes due to tax considerations
such as Required Minimum Distribution provisions under the tax law.
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this Benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this Benefit here.
HIGHEST DAILY LIFETIME FIVE/SM/ INCOME BENEFIT (HD5)/SM/
The Highest Daily Lifetime Five benefit is no longer offered for new
elections. The income benefit under Highest Daily Lifetime Five currently is
based on a single "designated life" who is at least 55 years old on the date
that the benefit is acquired. The Highest Daily Lifetime Five Benefit was not
available if you elected any other optional living benefit, although you may
elect any optional death benefit (other than the Highest Daily Value Death
Benefit). Any DCA program that transfers Account Value from a Fixed Allocation
is also not available as Fixed Allocations are not permitted with the benefit.
As long as your Highest Daily Lifetime Five Benefit is in effect, you must
allocate your Account Value in accordance with the then-permitted and
available investment option(s) with this benefit.
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The benefit that guarantees until the death of the single designated life the
ability to withdraw an annual amount (the "Total Annual Income Amount") equal
to a percentage of an initial principal value (the "Total Protected Withdrawal
Value") regardless of the impact of Sub-account performance on the Account
Value, subject to our benefit rules regarding the timing and amount of
withdrawals. The benefit may be appropriate if you intend to make periodic
withdrawals from your Annuity, and wish to ensure that Sub-account performance
will not affect your ability to receive annual payments. You are not required
to make withdrawals as part of the benefit - the guarantees are not lost if
you withdraw less than the maximum allowable amount each year under the rules
of the benefit. As discussed below, we require that you participate in our
asset transfer program in order to participate in Highest Daily Lifetime Five,
and in Appendix G to this Prospectus, we set forth the formula under which we
make those asset transfers.
As discussed below, a key component of Highest Daily Lifetime Five is the
Total Protected Withdrawal Value, which is an amount that is distinct from
Account Value. Because each of the Total Protected Withdrawal Value and Total
Annual Income Amount is determined in a way that is not solely related to
Account Value, it is possible for Account Value to fall to zero, even though
the Total Annual Income Amount remains. You are guaranteed to be able to
withdraw the Total Annual Income Amount for the rest of your life, provided
that you have not made "excess withdrawals." Excess withdrawals, as discussed
below, will reduce your Total Annual Income Amount. Thus, you could experience
a scenario in which your Account Value was zero, and, due to your excess
withdrawals, your Total Annual Income Amount also was reduced to zero. In that
scenario, no further amount would be payable under Highest Daily Lifetime Five.
Key Feature - Total Protected Withdrawal Value
The Total Protected Withdrawal Value is used to determine the amount of the
annual payments under Highest Daily Lifetime Five. The Total Protected
Withdrawal Value is equal to the greater of the Protected Withdrawal Value and
any Enhanced Protected Withdrawal Value that may exist. We describe how we
determine Enhanced Protected Withdrawal Value, and when we begin to calculate
it, below. If you do not meet the conditions described below for obtaining
Enhanced Protected Withdrawal Value then Total Protected Withdrawal Value is
simply equal to Protected Withdrawal Value.
The Protected Withdrawal Value initially is equal to the Account Value on the
date that you elect Highest Daily Lifetime Five. On each Valuation Day
thereafter, until the earlier of the first withdrawal or ten years after the
date of your election of the benefit, we recalculate the Protected Withdrawal
Value. Specifically, on each such Valuation Day (the "Current Valuation Day"),
the Protected Withdrawal Value is equal to the greater of:
.. the Protected Withdrawal Value for the immediately preceding Valuation Day
(the "Prior Valuation Day"), appreciated at the daily equivalent of 5%
annually during the calendar day(s) between the Prior Valuation Day and the
Current Valuation Day (i.e., one day for successive Valuation Days, but
more than one calendar day for Valuation Days that are separated by
weekends and/or holidays), plus the amount of any Purchase Payment
(including any associated credit) made on the Current Valuation Day; and
.. the Account Value.
If you have not made a withdrawal prior to the tenth anniversary of the date
you elected Highest Daily Lifetime Five (which we refer to as the "Tenth
Anniversary"), we will continue to calculate a Protected Withdrawal Value. On
or after the Tenth Anniversary and up until the date of the first withdrawal,
your Protected Withdrawal Value is equal to the greater of the Protected
Withdrawal Value on the Tenth Anniversary or your Account Value.
The Enhanced Protected Withdrawal Value is only calculated if you do not take
a withdrawal prior to the Tenth Anniversary. Thus, if you do take a withdrawal
prior to the Tenth Anniversary, you are not eligible to receive Enhanced
Protected Withdrawal Value. If so, then on or after the Tenth Anniversary up
until the date of the first withdrawal, the Enhanced Protected Withdrawal
Value is equal to the sum of:
(a)200% of the Account Value on the date you elected Highest Daily Lifetime
Five;
(b)200% of all purchase payments (and any associated Credits) made during the
one-year period after the date you elected Highest Daily Lifetime Five; and
(c)100% of all purchase payments (and any associated Credits) made more than
one year after the date you elected Highest Daily Lifetime Five, but prior
to the date of your first withdrawal.
We cease these daily calculations of the Protected Withdrawal Value and
Enhanced Protected Withdrawal Value (and therefore, the Total Protected
Withdrawal Value) when you make your first withdrawal. However, as discussed
below, subsequent purchase payments (and any associated Credits) will increase
the Total Annual Income Amount, while "excess" withdrawals (as described
below) may decrease the Total Annual Income Amount.
Key Feature - Total Annual Income Amount under the Highest Daily Lifetime Five
Benefit
The initial Total Annual Income Amount is equal to 5% of the Total Protected
Withdrawal Value. For purposes of the mathematical formula described below, we
also calculate a Highest Daily Annual Income Amount, which is initially equal
to 5% of the Protected Withdrawal Value. Under the Highest Daily Lifetime Five
benefit, if your cumulative withdrawals in an Annuity Year are less than or
equal to the Total Annual Income Amount, they will not reduce your Total
Annual Income Amount in subsequent Annuity Years, but any such withdrawals
will reduce the Total Annual Income Amount on a dollar-for-dollar basis in
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that Annuity Year. If your cumulative withdrawals are in excess of the Total
Annual Income Amount ("Excess Income"), your Total Annual Income Amount in
subsequent years will be reduced (except with regard to required minimum
distributions) by the result of the ratio of the Excess Income to the Account
Value immediately prior to such withdrawal (see examples of this calculation
below). Reductions include the actual amount of the withdrawal, including any
CDSC that may apply. A Purchase Payment that you make will increase the
then-existing Total Annual Income Amount and Highest Daily Annual Income
Amount by an amount equal to 5% of the Purchase Payment (including the amount
of any associated Credits).
An automatic step-up feature ("Highest Quarterly Auto Step-Up") is included as
part of this benefit. As detailed in this paragraph, the Highest Quarterly
Auto Step-Up feature can result in a larger Total Annual Income Amount if your
Account Value increases subsequent to your first withdrawal. We begin
examining the Account Value for purposes of this feature starting with the
anniversary of the Issue Date of the Annuity (the "Annuity Anniversary")
immediately after your first withdrawal under the benefit. Specifically, upon
the first such Annuity Anniversary, we identify the Account Value on the
Valuation Days corresponding to the end of each quarter that (i) is based on
your Annuity Year, rather than a calendar year; (ii) is subsequent to the
first withdrawal; and (iii) falls within the immediately preceding Annuity
Year. If the end of any such quarter falls on a holiday or a weekend, we use
the next Valuation Day. We multiply each of those quarterly Account Values by
5%, adjust each such quarterly value for subsequent withdrawals and purchase
payments, and then select the highest of those values. If the highest of those
values exceeds the existing Total Annual Income Amount, we replace the
existing amount with the new, higher amount. Otherwise, we leave the existing
Total Annual Income Amount intact. In later years, (i.e., after the first
Annuity Anniversary after the first withdrawal) we determine whether an
automatic step-up should occur on each Annuity Anniversary, by performing a
similar examination of the Account Values on the end of the four immediately
preceding quarters. If, on the date that we implement a Highest Quarterly Auto
Step-Up to your Total Annual Income Amount, the charge for Highest Daily
Lifetime Five has changed for new purchasers, you may be subject to the new
charge at the time of such step-up. Prior to increasing your charge for
Highest Daily Lifetime Five upon a step-up, we would notify you, and give you
the opportunity to cancel the automatic step-up feature. If you receive notice
of a proposed step-up and accompanying fee increase, you should carefully
evaluate whether the amount of the step-up justifies the increased fee to
which you will be subject.
The Highest Daily Lifetime Five benefit does not affect your ability to make
withdrawals under your annuity, or limit your ability to request withdrawals
that exceed the Total Annual Income Amount. Under Highest Daily Lifetime Five,
if your cumulative withdrawals in an Annuity Year are less than or equal to
the Total Annual Income Amount, they will not reduce your Total Annual Income
Amount in subsequent Annuity Years, but any such withdrawals will reduce the
Total Annual Income Amount on a dollar-for-dollar basis in that Annuity Year.
If, cumulatively, you withdraw an amount less than the Total Annual Income
Amount in any Annuity Year, you cannot carry-over the unused portion of the
Total Annual Income Amount to subsequent Annuity Years.
Examples of dollar-for-dollar and proportional reductions, and the Highest
Quarterly Auto Step-Up are set forth below. The values depicted here are
purely hypothetical, and do not reflect the charges for the Highest Daily
Lifetime Five benefit or any other fees and charges. Assume the following for
all three examples:
. The Issue Date is December 1, 2006.
. The Highest Daily Lifetime Five benefit is elected on March 5, 2007.
Dollar-for-dollar reductions
On May 2, 2007, the Total Protected Withdrawal Value is $120,000, resulting in
a Total Annual Income Amount of $6,000 (5% of $120,000). Assuming $2,500 is
withdrawn from the Annuity on this date, the remaining Total Annual Income
Amount for that Annuity Year (up to and including December 1, 2007) is $3,500.
This is the result of a dollar-for-dollar reduction of the Total Annual Income
Amount - $6,000 less $2,500 = $3,500.
Proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000
occurs on August 6, 2007 and the Account Value at the time of this withdrawal
is $110,000. The first $3,500 of this withdrawal reduces the Total Annual
Income Amount for that Annuity Year to $0. The remaining withdrawal amount -
$1,500 - reduces the Total Annual Income Amount in future Annuity Years on a
proportional basis based on the ratio of the excess withdrawal to the Account
Value immediately prior to the excess withdrawal. (Note that if there were
other withdrawals in that Annuity Year, each would result in another
proportional reduction to the Total Annual Income Amount).
Here is the calculation:
Account Value before withdrawal $110,000.00
Less amount of "non" excess withdrawal $ 3,500.00
Account Value immediately before excess withdrawal of $1,500 $106,500.00
Excess withdrawal amount $ 1,500.00
Divided by Account Value immediately before excess withdrawal $106,500.00
Ratio 1.41%
Total Annual Income Amount $ 6,000.00
Less ratio of 1.41% $ 84.51
Total Annual Income Amount for future Annuity Years $ 5,915.49
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Highest Quarterly Auto Step-Up
On each Annuity Anniversary date, the Total Annual Income Amount is stepped-up
if 5% of the highest quarterly value since your first withdrawal (or last
Annuity Anniversary in subsequent years), adjusted for withdrawals and
additional purchase payments, is higher than the Total Annual Income Amount,
adjusted for excess withdrawals and additional purchase payments (plus any
Credit with respect to XT6).
Continuing the same example as above, the Total Annual Income Amount for this
Annuity Year is $6,000. However, the excess withdrawal on August 6 reduces
this amount to $5,915.49 for future years (see above). For the next Annuity
Year, the Total Annual Income Amount will be stepped-up if 5% of the highest
quarterly Account Value, adjusted for withdrawals, is higher than $5,915.49.
Here are the calculations for determining the quarterly values. Only the
June 1 value is being adjusted for excess withdrawals as the September 1 and
December 1 Valuation Days occur after the excess withdrawal on August 6.
Highest Quarterly Value
(adjusted with Adjusted Total Annual
withdrawal and purchase Income Amount (5% of the
Date* Account value payments)** Highest Quarterly Value)
----- ------------- ----------------------- ------------------------
June 1, 2007 $118,000.00 $118,000.00 $5,900.00
August 6, 2007 $110,000.00 $112,885.55 $5,644.28
September 1, 2007 $112,000.00 $112,885.55 $5,644.28
December 1, 2007 $119,000.00 $119,000.00 $5,950.00
* In this example, the Annuity Anniversary date is December 1. The quarterly
valuation dates are every three months thereafter -
March 1, June 1, September 1, and December 1. In this example, we do not
use the March 1 date as the first withdrawal took place after March 1. The
Annuity Anniversary Date of December 1 is considered the fourth and final
quarterly valuation date for the year.
** In this example, the first quarterly value after the first withdrawal is
$118,000 on June 1, yielding an adjusted Total Annual Income Amount of
$5,900.00. This amount is adjusted on August 6 to reflect the $5,000
withdrawal. The calculations for the adjustments are:
. The Account Value of $118,000 on June 1 is first reduced
dollar-for-dollar by $3,500 ($3,500 is the remaining Total Annual Income
Amount for the Annuity Year), resulting in an adjusted Account Value of
$114,500 before the excess withdrawal.
. This amount ($114,500) is further reduced by 1.41% (this is the ratio in
the above example which is the excess withdrawal divided by the Account
Value immediately preceding the excess withdrawal) resulting in a
Highest Quarterly Value of $112,885.55.
The adjusted Total Annual Income Amount is carried forward to the next
quarterly anniversary date of September 1. At this time, we compare this
amount to 5% of the Account Value on September 1. Since the June 1 adjusted
Total Annual Income Amount of $5,644.28 is higher than $5,600.00 (5% of
$112,000), we continue to carry $5,644.28 forward to the next and final
quarterly anniversary date of December 1. The Account Value on December 1 is
$119,000 and 5% of this amount is $5,950. Since this is higher than $5,644.28,
the adjusted Total Annual Income Amount is reset to $5,950.00.
In this example, 5% of the December 1 value yields the highest amount of $
5,950.00. Since this amount is higher than the current year's Total Annual
Income Amount of $5,915.49 adjusted for excess withdrawals, the Total Annual
Income Amount for the next Annuity Year, starting on December 2, 2007 and
continuing through December 1, 2008, will be stepped-up to $5,950.00.
Benefits Under the Highest Daily Lifetime Five Benefit
.. To the extent that your Account Value was reduced to zero as a result of
cumulative withdrawals that are equal to or less than the Total Annual
Income Amount and amounts are still payable under Highest Daily Lifetime
Five, we will make an additional payment, if any, for that Annuity Year
equal to the remaining Total Annual Income Amount for the Annuity Year.
Thus, in that scenario, the remaining Total Annual Income Amount would be
payable even though your Account Value was reduced to zero. In subsequent
Annuity Years we make payments that equal the Total Annual Income Amount as
described in this section. We will make payments until the death of the
single designated life. To the extent that cumulative withdrawals in the
current Annuity Year that reduced your Account Value to zero are more than
the Total Annual Income Amount, the Highest Daily Lifetime Five benefit
terminates, and no additional payments will be made.
.. If Annuity payments are to begin under the terms of your Annuity, or if you
decide to begin receiving Annuity payments and there is a Total Annual
Income Amount due in subsequent Annuity Years, you can elect one of the
following two options:
(1)apply your Account Value to any Annuity option available; or
(2)request that, as of the date Annuity payments are to begin, we make
Annuity payments each year equal to the Total Annual Income Amount.
We will make payments until the death of the single designated life.
We must receive your request in a form acceptable to us at our office.
.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments in the form of a single life fixed
annuity with ten payments certain, by applying the greater of the annuity
rates then currently available or the annuity rates guaranteed in your
Annuity. The amount that will be applied to provide such Annuity payments
will be the greater of:
(1)the present value of the future Total Annual Income Amount payments.
Such present value will be calculated using the greater of the single
life fixed annuity rates then currently available or the single life
fixed annuity rates guaranteed in your Annuity; and
(2)the Account Value.
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.. If no withdrawal was ever taken, we will calculate the Total Annual Income
Amount as if you made your first withdrawal on the date the annuity
payments are to begin.
.. Please note that if your Annuity has a maximum Annuity Date requirement,
payments that we make under this benefit as of that date will be treated as
annuity payments.
Other Important Considerations
.. Withdrawals under the Highest Daily Lifetime Five benefit are subject to
all of the terms and conditions of the Annuity, including any CDSC.
.. Withdrawals made while the Highest Daily Lifetime Five Benefit is in effect
will be treated, for tax purposes, in the same way as any other withdrawals
under the Annuity. The Highest Daily Lifetime Five Benefit does not
directly affect the Account Value or surrender value, but any withdrawal
will decrease the Account Value by the amount of the withdrawal (plus any
applicable CDSC). If you surrender your Annuity you will receive the
current surrender value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Highest Daily Lifetime Five
benefit. The Highest Daily Lifetime Five benefit provides a guarantee that
if your Account Value declines due to market performance, you will be able
to receive your Total Annual Income Amount in the form of periodic benefit
payments.
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Permitted Sub-accounts. However, the mathematical formula component
of the benefit as described below may transfer Account Value to the Benefit
Fixed Rate Account as of the effective date of the benefit in some
circumstances.
.. You cannot allocate purchase payments or transfer Account Value to or from
a Fixed Allocation if you elect this benefit.
.. Transfers to and from the Sub-accounts and the Benefit Fixed Rate Account
triggered by the formula component of the benefit will not count toward the
maximum number of free transfers allowable under an Annuity.
.. In general, you must allocate your Account Value in accordance with the
then available investment option(s) that we may prescribe in order to elect
and maintain the Highest Daily Lifetime Five benefit. If, subsequent to
your election of the benefit, we change our requirements for how Account
Value must be allocated under the benefit, the new requirement will apply
only to new elections of the benefit, and we will not compel you to
re-allocate your Account Value in accordance with our newly-adopted
requirements. Subsequent to any change in requirements, transfers of
Account Value and allocation of additional purchase payments may be subject
to the new investment limitations.
.. The charge for Highest Daily Lifetime Five is 0.60% annually, assessed
against the average daily net assets of the Sub-accounts and as a reduction
to the interest rate credited under the Benefit Fixed Rate Account. This
charge is in addition to any other fees under the annuity.
Election of and Designations under the Benefit
For Highest Daily Lifetime Five, there must be either a single Owner who is
the same as the Annuitant, or if the Annuity is entity-owned, there must be a
single natural person Annuitant. In either case, the Annuitant must be at
least 55 years old.
Any change of the Annuitant under the Annuity will result in cancellation of
Highest Daily Lifetime Five. Similarly, any change of Owner will result in
cancellation of Highest Daily Lifetime Five, except if (a) the new Owner has
the same taxpayer identification number as the previous owner (b) both the new
Owner and previous Owner are entities or (c) the previous Owner is a natural
person and the new Owner is an entity.
We no longer permit elections of Highest Daily Lifetime Five. If you wish, you
may cancel the Highest Daily Lifetime Five benefit. You may then elect Highest
Daily Lifetime 7 Plus, Highest Daily Lifetime 7 Plus with Beneficiary Income
Option, Highest Daily Lifetime 7 Plus with Lifetime Income Accelerator,
Spousal Highest Daily Lifetime 7 Plus, or Spousal Highest Daily Lifetime 7
Plus with Beneficiary Income Option (or any other currently available living
benefit) on the Valuation Day after you have cancelled the Highest Daily
Lifetime Five benefit, provided the request is received in good order (subject
to state availability and any applicable age requirements). Upon cancellation
of the Highest Daily Lifetime Five benefit, any Account Value allocated to the
Benefit Fixed Rate Account used with the formula will be reallocated to the
Permitted Sub-Accounts according to your most recent allocation instructions
or, in absence of such instructions, pro-rata. Once the Highest Daily Lifetime
Five benefit is canceled you are not required to re-elect another optional
living benefit and any subsequent benefit election may be made on or after the
first Valuation Day following the cancellation of the Highest Daily Lifetime
Five benefit provided that the benefit you are looking to elect is available
on a post-issue basis. If you cancel the benefit, you lose all guarantees
under the benefit, and your guarantee under any new benefit you elect will be
based on your Account Value at that time. Any such new benefit may be more
expensive.
Termination of the Benefit
You may terminate the benefit at any time by notifying us. If you terminate
the benefit, any guarantee provided by the benefit will terminate as of the
date the termination is effective, and certain restrictions on re-election
will apply as described above. The benefit terminates: (i) upon your
termination of the benefit (ii) upon your surrender of the Annuity (iii) upon
your election to begin receiving annuity payments (iv) upon the death of the
Annuitant (v) if both the Account Value and Total Annual Income Amount equal
zero or (vi) if you fail to meet our requirements for issuing the benefit. If
you terminate the benefit, you will lose the Protected Withdrawal Value,
Annual Income Amount, as well as any Enhanced Protected Withdrawal Value and
Return of Principal Guarantees.
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Upon termination of Highest Daily Lifetime Five, we cease deducting the charge
for the benefit. With regard to your investment allocations, upon termination
we will: (i) leave intact amounts that are held in the variable investment
options, and (ii) transfer all amounts held in the Benefit Fixed Rate Account
(as defined below) to your variable investment options, based on your existing
allocation instructions or (in the absence of such existing instructions) pro
rata (i.e. in the same proportion as the current balances in your variable
investment options). Upon termination, we may limit or prohibit investment in
the Fixed Allocations.
Return of Principal Guarantee
If you have not made a withdrawal before the Tenth Anniversary, we will
increase your Account Value on that Tenth Anniversary (or the next Valuation
Day, if that anniversary is not a Valuation Day), if the requirements set
forth in this paragraph are met. On the Tenth Anniversary, we add:
(a)your Account Value on the day that you elected Highest Daily Lifetime Five;
and
(b)the sum of each Purchase Payment you made (including any Credits with
respect to XT6) during the one-year period after you elected the benefit.
If the sum of (a) and (b) is greater than your Account Value on the Tenth
Anniversary, we increase your Account Value to equal the sum of (a) and (b),
by contributing funds from our general account. If the sum of (a) and (b) is
less than or equal to your Account Value on the Tenth Anniversary, we make no
such adjustment. The amount that we add to your Account Value under this
provision will be allocated to each of our variable investment options and the
Benefit Fixed Rate Account (described below), in the same proportion that each
such investment option bears to your total Account Value, immediately prior to
the application of the amount. Any such amount will not be considered a
Purchase Payment when calculating your Total Protected Withdrawal Value, your
death benefit, or the amount of any other or optional benefit that you may
have selected, and therefore will have no direct impact on any such values at
the time we add this amount. This potential addition to Account Value is
available only if you have elected Highest Daily Lifetime Five and if you meet
the conditions set forth in this paragraph. Thus, if you take a withdrawal
prior to the Tenth Anniversary, you are not eligible to receive the Return of
Principal Guarantee.
Mathematical Formula Component of Highest Daily Lifetime Five
As indicated above, we limit the sub-accounts to which you may allocate
Account Value if you elect Highest Daily Lifetime Five. For purposes of this
benefit, we refer to those permitted sub-accounts as the "Permitted
Sub-accounts". As a requirement of participating in Highest Daily Lifetime
Five, we require that you participate in our mathematical formula under which
we may transfer Account Value between the Permitted Sub-accounts and a fixed
interest rate account that is part of our general account (the "Benefit Fixed
Rate Account"). This required formula helps us manage our financial exposure
under the benefit, by moving assets to a more stable option (i.e., the Benefit
Fixed Rate Account). We determine whether to make a transfer, and the amount
of any transfer, under a non-discretionary formula, discussed below. The
Benefit Fixed Rate Account is available only with this benefit, and thus you
may not allocate purchase payments to or transfer Account Value to or from the
Benefit Fixed Rate Account. The interest rate that we pay with respect to the
Benefit Fixed Rate Account is reduced by an amount that corresponds generally
to the charge that we assess against your variable Sub-accounts for Highest
Daily Lifetime Five. The Benefit Fixed Rate Account is not subject to the
Investment Company Act of 1940 or the Securities Act of 1933.
Under the formula component of Highest Daily Lifetime Five, we monitor your
Account Value daily and, if necessary, systematically transfer amounts between
the Permitted Sub-accounts you have chosen and the Benefit Fixed Rate Account.
Any transfer would be made in accordance with the formula, which is set forth
in the schedule supplement to the endorsement for this benefit (and also
appears in the Appendices to this prospectus). Speaking generally, the
formula, which we apply each Valuation Day, operates as follows. The formula
starts by identifying your Protected Withdrawal Value for that day and then
multiplies that figure by 5%, to produce a projected (i.e., hypothetical)
Highest Daily Annual Income Amount. Then, using our actuarial tables, we
produce an estimate of the total amount we would target in our allocation
model, based on the projected Highest Daily Annual Income Amount each year for
the rest of your life. In the formula, we refer to that value as the "Target
Value" or "L". If you have already made a withdrawal, your projected Annual
Income Amount (and thus your Target Value) would take into account any
automatic step-up that was scheduled to occur according to the step-up formula
described above. Next, the formula subtracts from the Target Value the amount
held within the Benefit Fixed Rate Account on that day, and divides that
difference by the amount held within the Permitted Sub-accounts. That ratio,
which essentially isolates the amount of your Target Value that is not offset
by amounts held within the Benefit Fixed Rate Account, is called the "Target
Ratio" or "r". If the Target Ratio exceeds a certain percentage (currently
83%) it means essentially that too much Target Value is not offset by assets
within the Benefit Fixed Rate Account, and therefore we will transfer an
amount from your Permitted Sub-accounts to the Benefit Fixed Rate Account.
Conversely, if the Target Ratio falls below a certain percentage (currently
77%), then a transfer from the Benefit Fixed Rate Account to the Permitted
Sub-accounts would occur. Note that the formula is calculated with reference
to the Highest Daily Annual Income Amount, rather than with reference to the
Annual Income Amount. If you elect the new mathematical formula, see the
discussion below regarding the 90% cap.
As you can glean from the formula, poor investment performance of your Account
Value may result in a transfer of a portion of your variable Account Value to
the Benefit Fixed Rate Account, because such poor investment performance will
tend to increase the Target Ratio. Moreover, "flat" investment returns of your
Account Value over a period of time also could result in the transfer of your
Account Value to the Benefit Fixed Rate Account. Because the amount allocated
to the Benefit Fixed Rate Account and the amount allocated to
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the Permitted Sub-accounts each is a variable in the formula, the investment
performance of each affects whether a transfer occurs for your Annuity. In
deciding how much to transfer, we use another formula, which essentially seeks
to re-balance amounts held in the Permitted Sub-accounts and the Benefit Fixed
Rate Account so that the Target Ratio meets a target, which currently is equal
to 80%. Once you elect Highest Daily Lifetime Five, the ratios we use will be
fixed. For newly issued annuities that elect Highest Daily Lifetime Five and
existing annuities that elect Highest Daily Lifetime Five, however, we reserve
the right to change the ratios.
While you are not notified when the formula dictates a transfer, you will
receive a confirmation statement indicating the transfer of a portion of your
Account Value either to or from the Benefit Fixed Rate Account. The formula is
designed primarily to mitigate the financial risks that we incur in providing
the guarantee under Highest Daily Lifetime Five.
Depending on the results of the formula calculation, we may, on any day:
.. Not make any transfer between the Permitted Sub-accounts and the Benefit
Fixed Rate Account; or
.. If a portion of your Account Value was previously allocated to the Benefit
Fixed Rate Account, transfer all or a portion of those amounts to the
Permitted Sub-accounts, based on your existing allocation instructions or
(in the absence of such existing instructions) pro rata (i.e., in the same
proportion as the current balances in your variable investment options).
Amounts taken out of the Benefit Fixed Rate Account will be withdrawn for
this purpose on a last-in, first-out basis (an amount renewed into a new
guarantee period under the Benefit Fixed Rate Account will be deemed a new
investment for purposes of this last-in, first-out rule); or
.. Transfer all or a portion of your Account Value in the Permitted
Sub-accounts pro-rata to the Benefit Fixed Rate Account. The interest that
you earn on such transferred amount will be equal to the annual rate that
we have set for that day, and we will credit the daily equivalent of that
annual interest until the earlier of one year from the date of the transfer
or the date that such amount in the Benefit Fixed Rate Account is
transferred back to the Permitted Sub-accounts.
Therefore, at any given time, some, none, or all of your Account Value may be
allocated to the Benefit Fixed Rate Account. If your entire Account Value is
transferred to the Benefit Fixed Rate Account, then based on the way the
formula operates, the formula will not transfer amounts out of the Benefit
Fixed Rate Account to the Permitted Sub-accounts and the entire Account Value
would remain in the Benefit Rate Fixed Account. If you make additional
purchase payments to your Annuity, they will be allocated to the Sub-accounts
according to your allocation instructions. Such additional purchase payments
may or may not cause the formula to transfer money in or out of the Benefit
Fixed Rate Account. Once the purchase payments are allocated to your Annuity,
they will also be subject to the formula, which may result in immediate
transfers to or from the Benefit Fixed Rate Account, if dictated by the
formula. The amounts of any such transfer will vary, as dictated by the
formula, and will depend on the factors listed below.
The amount that is transferred to and from the Benefit Fixed Rate Account
pursuant to the formula depends upon a number of factors unique to your
Annuity (and is not necessarily directly correlated with the securities
markets, bond markets, or interest rates, in general) including:
.. How long you have owned Highest Daily Lifetime Five;
.. The performance of the Permitted Sub-accounts you have chosen;
.. The performance of the Benefit Fixed Rate Account (i.e., the amount of
interest credited to the Benefit Fixed Rate Account);
.. The amount allocated to each of the Permitted Sub-accounts you have chosen;
.. The amount allocated to the Benefit Fixed Rate Account;
.. Additional purchase payments, if any, you make to your Annuity;
.. Withdrawals, if any, you take from your Annuity (withdrawals are taken pro
rata from your Account Value).
Any Account Value in the Benefit Fixed Rate Account will not be available to
participate in the investment experience of the Permitted Sub-accounts if
there is a recovery until it is moved out of the Benefit Fixed Rate Account.
The more of your Account Value allocated to the Benefit Fixed Rate Account
under the formula, the greater the impact of the performance of the Benefit
Fixed Rate Account (i.e., the amount of interest credited to the Benefit Fixed
Rate Account) in determining whether (and how much) of your Account Value is
transferred back to the Permitted Sub-accounts. Further, it is possible under
the formula, that if a significant portion your Account Value is allocated to
the Benefit Fixed Rate Account and that Account has good performance but the
performance of your Permitted Sub-accounts is negative, that the formula might
transfer your Account Value to the Permitted Sub-accounts. Thus, the converse
is true too (the more you have allocated to the Permitted Sub-accounts, the
greater the impact of the performance of those Sub-accounts will have on any
transfer to the Benefit Fixed Rate Account).
Additional Tax Considerations
If you purchase an annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the Required Minimum Distribution
rules under the Code provide that you begin receiving periodic amounts from
your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than 5 percent 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 required under the Code may exceed the Total
Annual Income Amount, which will cause us to increase the Total Annual Income
Amount in any Annuity Year that Required Minimum Distributions due from your
Annuity that are greater than such amounts. In
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addition, the amount and duration of payments under the annuity payment and
death benefit provisions may be adjusted so that the payments do not trigger
any penalty or excise taxes due to tax considerations such as Required Minimum
Distribution provisions under the tax law. Please note, however, that any
withdrawal you take prior to the Tenth Anniversary, even if withdrawn to
satisfy required minimum distribution rules, will cause you to lose the
ability to receive Enhanced Protected Withdrawal Value and an amount under the
Return of Principal Guarantee.
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this Benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this Benefit
here. However, we do note that if you participate in Highest Daily Lifetime
Five through a non-qualified annuity, and your annuity has received Enhanced
Protected Withdrawal Value and/or an additional amount under the Return of
Principal Guarantee, as with all withdrawals, once all purchase payments are
returned under the Annuity, all subsequent withdrawal amounts will be taxed as
ordinary income.
Optional 90% Cap Rule Feature for the Formula Under Highest Daily Lifetime
Five.
If you currently participate in the Highest Daily Lifetime Five Income
Benefit, you can elect this feature which utilizes a new mathematical formula.
The new formula is described below and will (if you elect it) replace the
"Transfer Calculation" portion of the mathematical formula currently used in
connection with your benefit on a prospective basis. There is no cost to
adding this feature to your Annuity. This election may only be made once and
may not be revoked once elected. This feature is available subject to state
approval. The new formula is found in Appendix G (page G-2).
Under the new formula, the formula will not execute a transfer to the Benefit
Fixed Rate Account that results in more than 90% of your Account Value being
allocated to the Benefit Fixed Rate Account ("90% cap" or "90% cap rule").
Thus, on any Valuation Day, if the formula would require a transfer into the
Benefit Fixed Rate Account that would result in more than 90% of the Account
Value being allocated to the Benefit Fixed Rate Account, only the amount that
results in exactly 90% of the Account Value being allocated to the Benefit
Fixed Rate Account will be transferred. Additionally, future transfers into
the Benefit Fixed Rate Account will not be made (regardless of the performance
of the Benefit Fixed Rate Account and the Permitted Sub-accounts) at least
until there is first a transfer out of the Benefit Fixed Rate Account. Once
this transfer occurs out of the Benefit Fixed Rate Account, future amounts may
be transferred to or from the Benefit Fixed Rate Account if dictated by the
formula (subject to the 90% cap). At no time will the formula make a transfer
to the Benefit Fixed Rate Account that results in greater than 90% of your
Account Value being allocated to the Benefit Fixed Rate Account. However, it
is possible that, due to the investment performance of your allocations in the
Benefit Fixed Rate Account and your allocations in the Permitted Sub-accounts
you have selected, your Account Value could be more than 90% invested in the
Benefit Fixed Rate Account.
If you make additional purchase payments to your Annuity while the 90% cap is
in effect, the formula will not transfer any of such additional purchase
payments to the Benefit Fixed Rate Account at least until there is first a
transfer out of the Benefit Fixed Rate Account, regardless of how much of your
Account Value is in the Permitted Sub-accounts. This means that there could be
scenarios under which, because of the additional purchase payments you make,
less than 90% of your entire Account Value is allocated to the Benefit Fixed
Rate Account, and the formula will still not transfer any of your Account
Value to the Benefit Fixed Rate Account (at least until there is first a
transfer out of the Benefit Fixed Rate Account). For example:
.. March 19, 2009 - a transfer is made to the Benefit Fixed Rate Account that
results in the 90% cap being met and now $90,000 is allocated to the
Benefit Fixed Rate Account and $10,000 is allocated to the Permitted
Sub-accounts.
.. March 20, 2009 - you make an additional purchase payment of $10,000. No
transfers have been made from the Benefit Fixed Rate Account to the
Permitted Sub-accounts since the cap went into effect on March 19, 2009.
.. As of March 20, 2009 (and at least until first a transfer is made out of
the Benefit Fixed Rate Account under the formula) - the $10,000 payment is
allocated to the Permitted Sub-accounts and now you have 82% in the Benefit
Fixed Rate Account and 18% in the Permitted Sub-accounts (such that $20,000
is allocated to the Permitted Sub-accounts and $90,000 is allocated to the
Benefit Fixed Rate Account).
.. Once there is a transfer out of the Benefit Fixed Rate Account (of any
amount), the formula will operate as described above, meaning that the
formula could transfer amounts to or from the Benefit Fixed Rate Account if
dictated by the formula (subject to the 90% cap).
Under the operation of the formula, the 90% cap may come into existence and
may be removed multiple times while you participate in the benefit. We will
continue to monitor your Account Value daily and, if dictated by the formula,
systematically transfer amounts between the Permitted Sub-accounts you have
chosen and the Benefit Fixed Rate Account as dictated by the formula. Once you
elect this feature, the new transfer formula described above and set forth in
Appendix G will be the formula for your Annuity.
In the event that more than ninety percent (90%) of your Account Value is
allocated to the Benefit Fixed Rate Account and you have elected this feature,
up to ten percent (10%) of your Account Value currently allocated to the
Benefit Fixed Rate Account will
109
be transferred to your Permitted Sub-accounts, such that after the transfer,
90% of your Account Value on the date of the transfer is in the Benefit Fixed
Rate Account. The transfer to the Permitted Sub-accounts will be based on your
existing allocation instructions or (in the absence of such existing
instructions) pro rata (i.e., in the same proportion as the current balances
in your variable investment options). Amounts taken out of the Benefit Fixed
Rate Account will be withdrawn for this purpose on a last-in, first-out basis
(an amount renewed into a new guarantee period under the Benefit Fixed Rate
Account will be deemed a new investment for purposes of this last-in,
first-out rule). It is possible that additional transfers might occur after
this initial transfer if dictated by the formula. The amounts of such
additional transfer(s) will vary.
Once the 90% cap rule is met, future transfers into the Benefit Fixed Rate
Account will not be made (regardless of the performance of the Benefit Fixed
Rate Account and the Permitted Sub-accounts) at least until there is a first
transfer out of the Benefit Fixed Rate Account. Once this transfer occurs out
of the Benefit Fixed Rate Account, future amounts may be transferred to or
from the Benefit Fixed Rate Account if dictated by the formula.
Important Considerations When Electing the New Formula:
.. At any given time, some, most or none of your Account Value may be
allocated to the Benefit Fixed Rate Account.
.. Please be aware that because of the way the new 90% cap formula operates,
it is possible that more than or less than 90% of your Account Value may be
allocated to the Benefit Fixed Rate Account.
.. Because the charge for Highest Daily Lifetime Five is assessed against the
average daily net assets of the Sub-accounts, that charge will be assessed
against all assets transferred into the Permitted Sub-accounts.
.. If this feature is elected, any Account Value transferred to the Permitted
Sub-accounts is subject to the investment performance of those
Sub-accounts. Your Account Value can go up or down depending of the
performance of the Permitted Sub-accounts you select.
HIGHEST DAILY LIFETIME SEVEN/SM/ INCOME BENEFIT (HD 7)/SM/
The income benefit under Highest Daily Lifetime Seven currently is based on a
single "designated life" who is at least 55 years old on the date that the
benefit is acquired. The Highest Daily Lifetime Seven Benefit is not available
if you elect any other optional living benefit, although you may elect any
optional death benefit other than the Highest Daily Value death benefit or the
Plus40 Life Insurance Rider. As long as your Highest Daily Lifetime Seven
Benefit is in effect, you must allocate your Account Value in accordance with
the then permitted and available investment option(s) with this benefit. For a
more detailed description of the permitted investment options, see the
Investment options section of this prospectus. Highest Daily Lifetime Seven is
only available in those states that have not yet approved Highest Daily
Lifetime 7 Plus.
We offer a benefit that guarantees until the death of the single designated
life the ability to withdraw an annual amount (the "Annual Income Amount")
equal to a percentage of an initial principal value (the "Protected Withdrawal
Value") regardless of the impact of market performance on the Account Value,
subject to our benefit rules regarding the timing and amount of withdrawals.
The benefit may be appropriate if you intend to make periodic withdrawals from
your Annuity, and wish to ensure that market performance will not affect your
ability to receive annual payments. You are not required to make withdrawals
as part of the benefit - the guarantees are not lost if you withdraw less than
the maximum allowable amount each year under the rules of the benefit. As
discussed below, we require that you participate in our asset transfer benefit
in order to participate in Highest Daily Lifetime Seven, and in Appendix J to
this prospectus, we set forth the formula under which we make those asset
transfers.
As discussed below, a key component of Highest Daily Lifetime Seven is the
Protected Withdrawal Value. Because each of the Protected Withdrawal Value and
Annual Income Amount is determined in a way that is not solely related to
Account Value, it is possible for the Account Value to fall to zero, even
though the Annual Income Amount remains. You are guaranteed to be able to
withdraw the Annual Income Amount for the rest of your life, provided that you
have not made "excess withdrawals." Excess withdrawals, as discussed below,
will reduce your Annual Income Amount. Thus, you could experience a scenario
in which your Account Value was zero, and, due to your excess withdrawals,
your Annual Income Amount also was reduced to zero. In that scenario, no
further amount would be payable under Highest Daily Lifetime Seven.
Key Feature - Protected Withdrawal Value
The Protected Withdrawal Value is used to calculate the initial Annual Income
Amount. On the effective date of the benefit, the Protected Withdrawal Value
is equal to your Account Value. On each Valuation Day thereafter, until the
earlier of the tenth anniversary of benefit election (the "Tenth Anniversary
Date") or the date of the first withdrawal, the Protected Withdrawal Value is
equal to the "Periodic Value" described in the next paragraph.
The "Periodic Value" initially is equal to the Account Value on the effective
date of the benefit. On each Valuation Day thereafter, until the earlier of
the first withdrawal or the Tenth Anniversary Date, we recalculate the
Periodic Value. We stop determining the Periodic Value upon the earlier of
your first withdrawal after the effective date of the benefit or the Tenth
Anniversary Date. On each Valuation Day (the "Current Valuation Day"), the
Periodic Value is equal to the greater of:
(1)the Periodic Value for the immediately preceding business day (the "Prior
Valuation Day") appreciated at the daily equivalent of 7% annually during
the calendar day(s) between the Prior Valuation Day and the Current
Valuation Day (i.e., one day for successive Valuation Days, but more than
one calendar day for Valuation Days that are separated by weekends and/or
holidays), plus the amount of any adjusted Purchase Payment made on the
Current Valuation Day; and
(2)the Account Value.
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If you make a withdrawal prior to the Tenth Anniversary Date, the Protected
Withdrawal Value on the date of the withdrawal is equal to the greatest of:
(a)the Account Value; or
(b)the Periodic Value on the date of the withdrawal.
If you have not made a withdrawal on or before the Tenth Anniversary Date,
your Protected Withdrawal Value subsequent to the Tenth Anniversary Date is
equal to the greatest of:
(1)the Account Value; or
(2)the Periodic Value on the Tenth Anniversary Date, increased for subsequent
adjusted purchase payments; or
(3)the sum of:
(a)200% of the Account Value on the effective date of the benefit;
(b)200% of all adjusted purchase payments made within one year after the
effective date of the benefit; and
(c)all adjusted purchase payments made after one year following the
effective date of the benefit up to the date of the first withdrawal.
On and after the date of your first withdrawal, your Protected Withdrawal
Value is increased by the amount of any subsequent purchase payments, is
reduced by withdrawals, including your first withdrawal (as described below),
and is increased if you qualify for a step-up (as described below).
Irrespective of these calculations, your Protected Withdrawal Value will
always be at least equal to your Account Value.
Key Feature - Annual Income Amount under the Highest Daily Lifetime Seven
Benefit
The Annual Income Amount is equal to a specified percentage of the Protected
Withdrawal Value. The percentage depends on the age of the Annuitant on the
date of the first withdrawal after election of the benefit. The percentages
are: 5% for ages 74 and younger, 6% for ages 75-79, 7% for ages 80-84, and 8%
for ages 85 and older. Under the Highest Daily Lifetime Seven benefit, if your
cumulative withdrawals in an Annuity Year are less than or equal to the Annual
Income Amount, they will not reduce your Annual Income Amount in subsequent
Annuity Years, but any such withdrawals will reduce the Annual Income Amount
on a dollar-for-dollar basis in that Annuity Year. If your cumulative
withdrawals are in excess of the Annual Income Amount ("Excess Income"), your
Annual Income Amount in subsequent years will be reduced (except with regard
to required minimum distributions) by the result of the ratio of the Excess
Income to the Account Value immediately prior to such withdrawal (see examples
of this calculation below). Withdrawals of any amount up to and including the
Annual Income Amount will reduce the Protected Withdrawal Value by the amount
of the withdrawal. Withdrawals of Excess Income will reduce the Protected
Withdrawal Value by the same ratio as the reduction to the Annual Income
Amount.
A Purchase Payment that you make will (i) increase the then-existing Annual
Income Amount by an amount equal to a percentage of the Purchase Payment
(including the amount of any associated Credits) based on the age of the
Annuitant at the time of the first withdrawal (the percentages are: 5% for
ages 74 and younger, 6% for ages 75-79, 7% for ages 80-84, and 8% for ages 85
and older) and (ii) increase the Protected Withdrawal Value by the amount of
the Purchase Payment (including the amount of any associated Credits).
An automatic step-up feature ("Highest Quarterly Auto Step-Up") is included as
part of this benefit. As detailed in this paragraph, the Highest Quarterly
Auto Step-Up feature can result in a larger Annual Income Amount if your
Account Value increases subsequent to your first withdrawal. We begin
examining the Account Value for purposes of the Highest Quarterly Step-Up
starting with the anniversary of the Issue Date of the Annuity (the "Annuity
Anniversary") immediately after your first withdrawal under the benefit.
Specifically, upon the first such Annuity Anniversary, we identify the Account
Value on the Valuation Days corresponding to the end of each quarter that
(i) is based on your Annuity Year, rather than a calendar year; (ii) is
subsequent to the first withdrawal; and (iii) falls within the immediately
preceding Annuity Year. If the end of any such quarter falls on a holiday or a
weekend, we use the next Valuation Day. Having identified each of those
quarter-end Account Values, we then multiply each such value by a percentage
that varies based on the age of the Annuitant on the Annuity Anniversary as of
which the step-up would occur. The percentages are 5% for ages 74 and younger,
6% for ages 75-79, 7% for ages 80-84, and 8% for ages 85 and older. Thus, we
multiply each quarterly value by the applicable percentage, adjust each such
quarterly value for subsequent withdrawals and purchase payments, and then
select the highest of those values. If the highest of those values exceeds the
existing Annual Income Amount, we replace the existing amount with the new,
higher amount. Otherwise, we leave the existing Annual Income Amount intact.
In later years, (i.e., after the first Annuity Anniversary after the first
withdrawal) we determine whether an automatic step-up should occur on each
Annuity Anniversary, by performing a similar examination of the Account Values
on the end of the four immediately preceding quarters. At the time that we
increase your Annual Income Amount, we also increase your Protected Withdrawal
Value to equal the highest quarterly value upon which your step-up was based.
If, on the date that we implement a Highest Quarterly Auto Step-Up to your
Annual Income Amount, the charge for Highest Daily Lifetime Seven has changed
for new purchasers, you may be subject to the new charge at the time of such
step-up. Prior to increasing your charge for Highest Daily Lifetime Seven upon
a step-up, we would notify you, and give you the opportunity to cancel the
automatic step-up
111
feature. If you receive notice of a proposed step-up and accompanying fee
increase, you should carefully evaluate whether the amount of the step-up
justifies the increased fee to which you will be subject.
The Highest Daily Lifetime Seven benefit does not affect your ability to make
withdrawals under your Annuity, or limit your ability to request withdrawals
that exceed the Annual Income Amount. Under Highest Daily Lifetime Seven, if
your cumulative withdrawals in an Annuity Year are less than or equal to the
Annual Income Amount, they will not reduce your Annual Income Amount in
subsequent Annuity Years, but any such withdrawals will reduce the Annual
Income Amount on a dollar-for-dollar basis in that Annuity Year.
If, cumulatively, you withdraw an amount less than the Annual Income Amount in
any Annuity Year, you cannot carry-over the unused portion of the Annual
Income Amount to subsequent Annuity Years.
Examples of dollar-for-dollar and proportional reductions, and the Highest
Quarterly Auto Step-Up are set forth below. The values depicted here are
purely hypothetical, and do not reflect the charges for the Highest Daily
Lifetime Seven benefit or any other fees and charges. Assume the following for
all three examples:
.. The Issue Date is December 1, 2007
.. The Highest Daily Lifetime Seven benefit is elected on March 5, 2008
.. The Annuitant was 70 years old when he/she elected the Highest Daily
Lifetime Seven benefit.
Dollar-for-dollar reductions
On May 2, 2008, the Protected Withdrawal Value is $120,000, resulting in an
Annual Income Amount of $6,000 (since the Annuitant is younger than 75 at the
time of the 1/st/ withdrawal, the Annual Income Amount is 5% of the Protected
Withdrawal Value, in this case 5% of $120,000). Assuming $2,500 is withdrawn
from the Annuity on this date, the remaining Annual Income Amount for that
Annuity Year (up to and including December 1, 2008) is $3,500. This is the
result of a dollar-for-dollar reduction of the Annual Income Amount-$6,000
less $2,500 = $3,500.
Proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000
occurs on August 6, 2008 and the Account Value at the time of this withdrawal
is $110,000. The first $3,500 of this withdrawal reduces the Annual Income
Amount for that Annuity Year to $0. The remaining withdrawal amount - $1,500 -
reduces the Annual Income Amount in future Annuity Years on a proportional
basis based on the ratio of the excess withdrawal to the Account Value
immediately prior to the excess withdrawal. (Note that if there were other
withdrawals in that Annuity Year, each would result in another proportional
reduction to the Annual Income Amount).
Here is the calculation:
Account Value before withdrawal $110,000.00
Less amount of "non" excess withdrawal $ 3,500.00
Account Value immediately before excess withdrawal of $1,500 $106,500.00
Excess withdrawal amount $ 1,500.00
Divided by Account Value immediately before excess withdrawal $106,500.00
Ratio 1.41%
Annual Income Amount $ 6,000.00
Less ratio of 1.41% $ 84.51
Annual Income Amount for future Annuity Years $ 5,915.49
Highest Quarterly Auto Step-Up
On each Annuity Anniversary date, the Annual Income Amount is stepped-up if
the appropriate percentage (based on the Annuitant's age on the Annuity
Anniversary) of the highest quarterly value since your first withdrawal (or
last Annuity Anniversary in subsequent years), adjusted for withdrawals and
additional purchase payments, is higher than the Annual Income Amount,
adjusted for excess withdrawals and additional purchase payments (plus any
Credits).
Continuing the same example as above, the Annual Income Amount for this
Annuity Year is $6,000. However, the excess withdrawal on August 6 reduces
this amount to $5,915.49 for future years (see above). For the next Annuity
Year, the Annual Income Amount will be stepped-up if 5% (since the youngest
Designated Life is younger than 75 on the date of the potential step-up) of
the highest quarterly Account Value adjusted for withdrawals, is higher than
$5,915.49. Here are the calculations for determining the quarterly values.
Only the June 1 value is being adjusted for excess withdrawals as the
September 1 and December 1 Valuation Days occur after the excess withdrawal on
August 6.
112
Highest Quarterly Value
(adjusted with Adjusted Annual Income
withdrawal and purchase Amount (5% of the
Date* Account value payments)** Highest Quarterly Value)
----- ------------- ----------------------- ------------------------
June 1, 2008 $118,000.00 $118,000.00 $5,900.00
August 6, 2008 $110,000.00 $112,885.55 $5,644.28
September 1, 2008 $112,000.00 $112,885.55 $5,644.28
December 1, 2008 $119,000.00 $119,000.00 $5,950.00
* In this example, the Annuity Anniversary date is December 1. The quarterly
valuation dates are every three months thereafter -
March 1, June 1, September 1, and December 1. In this example, we do not
use the March 1 date as the first withdrawal took place after March 1. The
Annuity Anniversary Date of December 1 is considered the fourth and final
quarterly valuation date for the year.
** In this example, the first quarterly value after the first withdrawal is
$118,000 on June 1, yielding an adjusted Annual Income Amount of $5,900.00.
This amount is adjusted on August 6 to reflect the $5,000 withdrawal. The
calculations for the adjustments are:
. The Account Value of $118,000 on June 1 is first reduced
dollar-for-dollar by $3,500 ($3,500 is the remaining Annual Income
Amount for the Annuity Year), resulting in an adjusted Account Value of
$114,500 before the excess withdrawal.
. This amount ($114,500) is further reduced by 1.41% (this is the ratio in
the above example which is the excess withdrawal divided by the Account
Value immediately preceding the excess withdrawal) resulting in a
Highest Quarterly Value of $112,885.55.
. The adjusted Annual Income Amount is carried forward to the next
quarterly anniversary date of September 1. At this time, we compare this
amount to 5% of the Account Value on September 1. Since the June 1
adjusted Annual Income Amount of $5,644.28 is higher than $5,600.00 (5%
of $112,000), we continue to carry $5,644.28 forward to the next and
final quarterly anniversary date of December 1. The Account Value on
December 1 is $119,000 and 5% of this amount is $5,950. Since this is
higher than $5,644.28, the adjusted Annual Income Amount is reset to
$5,950.00.
In this example, 5% of the December 1 value yields the highest amount of
$5,950.00. Since this amount is higher than the current year's Annual Income
Amount of $5,915.49 adjusted for excess withdrawals, the Annual Income Amount
for the next Annuity Year, starting on December 2, 2008 and continuing through
December 1, 2009, will be stepped-up to $5,950.00.
Benefits Under the Highest Daily Lifetime Seven Benefit
.. To the extent that your Account Value was reduced to zero as a result of
cumulative withdrawals that are equal to or less than the Annual Income
Amount or as a result of the fee that we assess for Highest Daily Lifetime
Seven, and amounts are still payable under Highest Daily Lifetime Seven, we
will make an additional payment, if any, for that Annuity Year equal to the
remaining Annual Income Amount for the Annuity Year. Thus, in that
scenario, the remaining Annual Income Amount would be payable even though
your Account Value was reduced to zero. In subsequent Annuity Years we make
payments that equal the Annual Income Amount as described in this section.
We will make payments until the death of the single designated life. To the
extent that cumulative withdrawals in the current Annuity Year that reduced
your Account Value to zero are more than the Annual Income Amount, the
Highest Daily Lifetime Seven benefit terminates, and no additional payments
are made. However, if a withdrawal in the latter scenario was taken to meet
required minimum distribution requirements under the Annuity, then the
benefit will not terminate, and we will continue to pay the Annual Income
Amount in the form of a fixed annuity.
.. If Annuity payments are to begin under the terms of your Annuity, or if you
decide to begin receiving Annuity payments and there is a Annual Income
Amount due in subsequent Annuity Years, you can elect one of the following
two options:
(1)apply your Account Value to any Annuity option available; or
(2)request that, as of the date Annuity payments are to begin, we make
Annuity payments each year equal to the Annual Income Amount. We will
make payments until the death of the single designated life.
We must receive your request in a form acceptable to us at our office.
.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments in the form of a single life fixed
annuity with ten payments certain, by applying the greater of the annuity
rates then currently available or the annuity rates guaranteed in your
Annuity. The amount that will be applied to provide such Annuity payments
will be the greater of:
(1)the present value of the future Annual Income Amount payments. Such
present value will be calculated using the greater of the single life
fixed annuity rates then currently available or the single life fixed
annuity rates guaranteed in your Annuity; and
(2)the Account Value.
.. If no withdrawal was ever taken, we will calculate the Annual Income Amount
as if you made your first withdrawal on the date the annuity payments are
to begin.
.. Please note that payments that we make under this benefit after the Annuity
Anniversary coinciding with or next following the annuitant's 95/th/
birthday will be treated as annuity payments.
113
Other Important Considerations
.. Withdrawals under the Highest Daily Lifetime Seven benefit are subject to
all of the terms and conditions of the Annuity, including any CDSC that may
apply. Note that if your withdrawal of the Annual Income Amount in a given
Annuity Year exceeds the applicable free withdrawal amount under the
Annuity (but is not considered Excess Income), we will not impose any CDSC
on the amount of that withdrawal. However, we may impose a CDSC on the
portion of a withdrawal that is deemed Excess Income.
.. Withdrawals made while the Highest Daily Lifetime Seven Benefit is in
effect will be treated, for tax purposes, in the same way as any other
withdrawals under the Annuity. The Highest Daily Lifetime Seven Benefit
does not directly affect the Account Value or surrender value, but any
withdrawal will decrease the Account Value by the amount of the withdrawal
(plus any applicable CDSC). If you surrender your Annuity you will receive
the current surrender value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Highest Daily Lifetime Seven
benefit. The Highest Daily Lifetime Seven benefit provides a guarantee that
if your Account Value declines due to market performance, you will be able
to receive your Annual Income Amount in the form of periodic benefit
payments.
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the permitted Sub-accounts.
.. You cannot allocate purchase payments or transfer Account Value to or from
the AST Investment Grade Bond Portfolio Sub-account (see description below)
if you elect this benefit. A summary description of the AST Investment
Grade Bond Portfolio appears within the Prospectus section entitled "What
Are The Investment Objectives and Policies of The Portfolios?". Upon the
initial transfer of your Account Value into the AST Investment Grade Bond
Portfolio, we will send a prospectus for that Portfolio to you, along with
your confirmation. In addition, you can find a copy of the AST Investment
Grade Bond Portfolio prospectus by going to www.prudentialannuities.com.
.. Transfers to and from the elected Sub-accounts and an AST Investment Grade
Bond Portfolio Sub-account triggered by the mathematical formula component
of the benefit will not count toward the maximum number of free transfers
allowable under an Annuity.
.. You must allocate your Account Value in accordance with the then available
investment option(s) that we may prescribe in order to elect and maintain
the Highest Daily Lifetime Seven benefit. If, subsequent to your election
of the benefit, we change our requirements for how Account Value must be
allocated under the benefit, the new requirement will apply only to new
elections of the benefit, and we will not compel you to re-allocate your
Account Value in accordance with our newly adopted requirements. Subject to
any change in requirements, transfer of Account Value and allocation of
additional purchase payments may be subject to new investment limitations.
.. If you elect this benefit, and in connection with that election you are
required to reallocate to different investment options permitted under this
benefit, then on the Valuation Day on which we receive your request in Good
Order, we will (i) sell units of the non-permitted investment options and
(ii) invest the proceeds of those sales in permitted investment options
that you have designated. During this reallocation process, your Account
Value allocated to the Sub-accounts will remain exposed to investment risk,
as is the case generally. The newly-elected benefit will commence at the
close of business on the following Valuation Day. Thus, the protection
afforded by the newly-elected benefit will not arise until the close of
business on the following Valuation Day.
.. The fee for Highest Daily Lifetime Seven is 0.60% annually of the Protected
Withdrawal Value. We deduct this fee at the end of each quarter, where each
such quarter is part of a year that begins on the effective date of the
benefit or an anniversary thereafter. Thus, on each such quarter-end (or
the next Valuation Day, if the quarter-end is not a Valuation Day), we
deduct 0.15% of the Protected Withdrawal Value at the end of the quarter.
We deduct the fee pro rata from each of your Sub-accounts including the AST
Investment Grade Bond Portfolio Sub-account. Since this fee is based on the
Protected Withdrawal Value the fee for Highest Daily Lifetime Seven may be
greater than it would have been, had it been based on the Account Value
alone. If the fee to be deducted exceeds the current Account Value, we will
reduce the Account Value to zero, and continue the benefit as described
above.
Election of and Designations under the Benefit
For Highest Daily Lifetime Seven, there must be either a single Owner who is
the same as the Annuitant, or if the Annuity is entity owned, there must be a
single natural person Annuitant. In either case, the Annuitant must be at
least 55 years old.
Any change of the Annuitant under the Annuity will result in cancellation of
Highest Daily Lifetime Seven. Similarly, any change of Owner will result in
cancellation of Highest Daily Lifetime Seven, except if (a) the new Owner has
the same taxpayer identification number as the previous owner (b) ownership is
transferred from a custodian to the Annuitant, or vice versa or (c) ownership
is transferred from one entity to another entity.
If you wish, you may cancel any Highest Daily Lifetime Seven benefit. You may
then elect Highest Daily Lifetime 7 Plus, Highest Daily Lifetime 7 Plus with
Beneficiary Income Option, Highest Daily Lifetime 7 Plus with Lifetime Income
Accelerator, Spousal Highest Daily Lifetime 7 Plus, or Spousal Highest Daily
Lifetime 7 Plus with Beneficiary Income Option (or any other currently
available living benefit) on the Valuation Day after you have cancelled the
Highest Daily Lifetime Seven benefit, provided the request is received in good
order (subject to state availability and any applicable age requirements).
Upon cancellation of any Highest Daily Lifetime Seven benefit, any Account
Value allocated to the AST Investment Grade Bond Portfolio Sub-account used
with the formula will be reallocated to the Permitted Sub-Accounts according
to your most recent allocation instructions or, in absence of such
instructions, pro rata. You should be aware that upon termination of Highest
Daily Lifetime Seven, you will lose the Protected Withdrawal Value (including
the Tenth Anniversary Date Guarantee), Annual Income Amount, and the Return of
Principal Guarantee
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that you had accumulated under the benefit. Thus, the initial guarantees under
any newly-elected benefit will be based on your current Account Value at the
time you elect a new benefit. Once the Highest Daily Lifetime Seven benefit is
canceled you are not required to re-elect another optional living benefit and
any subsequent benefit election may be made on or after the first Valuation
Day following the cancellation of the Highest Daily Lifetime Seven benefit
provided that the benefit you are looking to elect is available on a
post-issue basis. If you cancel the benefit, you lose all guarantees under the
benefit, and your guarantee under any new benefit you elect will be based on
your Account Value at that time. Any such new benefit may be more expensive.
Return of Principal Guarantee
If you have not made a withdrawal before the Tenth Anniversary, we will
increase your Account Value on that Tenth Anniversary (or the next Valuation
Day, if that anniversary is not a Valuation Day), if the requirements set
forth in this paragraph are met. On the Tenth Anniversary, we add:
a) your Account Value on the day that you elected Highest Daily Lifetime
Seven; and
b) the sum of each Purchase Payment you made (including any Credits) during
the one-year period after you elected the benefit.
If the sum of (a) and (b) is greater than your Account Value on the Tenth
Anniversary, we increase your Account Value to equal the sum of (a) and (b),
by contributing funds from our general account. If the sum of (a) and (b) is
less than or equal to your Account Value on the Tenth Anniversary, we make no
such adjustment. The amount that we add to your Account Value under this
provision will be allocated to each of your variable investment options
(including the bond Sub-account used with this benefit), in the same
proportion that each such Sub-account bears to your total Account Value,
immediately before the application of the amount. Any such amount will not be
considered a Purchase Payment when calculating your Protected Withdrawal
Value, your death benefit, or the amount of any optional benefit that you may
have selected, and therefore will have no direct impact on any such values at
the time we add this amount. This potential addition to Account Value is
available only if you have elected Highest Daily Lifetime Seven and if you
meet the conditions set forth in this paragraph. Thus, if you take a
withdrawal prior to the Tenth Anniversary, you are not eligible to receive the
Return of Principal Guarantee.
Termination of the Benefit
You may terminate the benefit at any time by notifying us. If you terminate
the benefit, any guarantee provided by the benefit will terminate as of the
date the termination is effective, and certain restrictions on re-election
will apply as described above. The benefit terminates: (i) upon your
termination of the benefit (ii) upon your surrender of the Annuity (iii) upon
your election to begin receiving annuity payments (although if you have
elected to the Annual Income Amount in the form of Annuity payments, we will
continue to pay the Annual Income Amount) (iv) upon the death of the Annuitant
(v) if both the Account Value and Annual Income Amount equal zero or (vi) if
you cease to meet our requirements for issuing the benefit (see Elections and
Designations under the Benefit).
Upon termination of Highest Daily Lifetime Seven other than upon the death of
the Annuitant, we impose any accrued fee for the benefit (i.e., the fee for
the pro-rated portion of the year since the fee was last assessed), and
thereafter we cease deducting the charge for the benefit. With regard to your
investment allocations, upon termination we will: (i) leave intact amounts
that are held in the variable investment options, and (ii) transfer all
amounts held in the AST Investment Grade Bond Portfolio Sub-account to your
variable investment options, based on your existing allocation instructions or
(in the absence of such existing instructions) pro rata (i.e. in the same
proportion as the current balances in your variable investment options).
Mathematical Formula Component of Highest Daily Lifetime Seven
As indicated above, we limit the Sub-accounts to which you may allocate
Account Value if you elect Highest Daily Lifetime Seven. For purposes of the
benefit, we refer to those permitted Sub-accounts as the "Permitted
Sub-accounts". As a requirement of participating in Highest Daily Lifetime
Seven, we require that you participate in our mathematical formula, under
which we may transfer Account Value between the Permitted Sub-accounts and a
specified bond fund within the Advanced Series Trust (the "AST Investment
Grade Bond Sub-account"). We determine whether to make a transfer, and the
amount of any transfer, under a non-discretionary formula, discussed below.
The AST Investment Grade Bond Sub-account is available only with this benefit,
and thus you may not allocate purchase payments to the AST Investment Grade
Bond Sub-account. Under the formula component of Highest Daily Lifetime Seven,
we monitor your Account Value daily and, if dictated by the formula,
systematically transfer amounts between the Permitted Sub-accounts you have
chosen and the AST Investment Grade Bond Sub-account. Any transfer would be
made in accordance with a formula, which is set forth in Appendix J to this
prospectus.
Speaking generally, the formula, which we apply each Valuation Day, operates
as follows. The formula starts by identifying an income basis for that day and
then multiplies that figure by 5%, to produce a projected (i.e., hypothetical)
income amount. Note that we use 5% in the formula, irrespective of the
Annuitant's attained age. Then we produce an estimate of the total amount we
would target in our allocation model, based on the projected income amount and
factors set forth in the formula. In the formula, we refer to that value as
the "Target Value" or "L". If you have already made a withdrawal, your
projected income amount (and thus your Target Value) would take into account
any automatic step-up, any subsequent purchase payments, and any excess
withdrawals. Next, the formula subtracts from the Target Value the amount held
within the AST Investment Grade Bond Sub-account on that day, and divides that
difference by the amount held within the Permitted Sub-accounts. That ratio,
which essentially isolates the amount of your Target Value that is not offset
by amounts held within the AST Investment Grade Bond Sub-account, is called
the "Target Ratio" or "r". If the Target Ratio exceeds a certain percentage
(currently 83%), it means essentially that too much Target Value is not offset
by assets within the AST Investment Grade Bond Sub-account, and therefore
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we will transfer an amount from your Permitted Sub-accounts to the AST
Investment Grade Bond Sub-account. Conversely, if the Target Ratio falls below
a certain percentage (currently 77%), then a transfer from the AST Investment
Grade Bond Sub-account to the Permitted Sub-accounts would occur.
If you elect the new formula (90% Cap Rule), see discussion below.
As you can glean from the formula, poor investment performance of your Account
Value may result in a transfer of a portion of your variable Account Value to
the AST Investment Grade Bond Sub-account because such poor investment
performance will tend to increase the Target Ratio. Moreover, "flat"
investment returns of your Account Value over a period of time also could
result in the transfer of your Account Value from the Permitted Sub-accounts
to the AST Investment Grade Bond Sub-account. Because the amount allocated to
the AST Investment Grade Bond Sub-account and the amount allocated to the
Permitted Sub-accounts each is a variable in the formula, the investment
performance of each affects whether a transfer occurs for your Annuity. In
deciding how much to transfer, we use another formula, which essentially seeks
to re-balance amounts held in the Permitted Sub-accounts and the AST
Investment Grade Bond Sub-account so that the Target Ratio meets a target,
which currently is equal to 80%. Once you elect Highest Daily Lifetime Seven,
the ratios we use will be fixed. For newly-issued Annuities that elect Highest
Daily Lifetime Seven and existing Annuities that elect Highest Daily Lifetime
Seven, however, we reserve the right, subject to any required regulatory
approval, to change the ratios.
While you are not notified when your Annuity reaches a reallocation trigger,
you will receive a confirmation statement indicating the transfer of a portion
of your Account Value either to or from the AST Investment Grade Bond
Sub-account. The formula by which the reallocation triggers operate is
designed primarily to mitigate the financial risks that we incur in providing
the guarantee under Highest Daily Lifetime Seven.
Depending on the results of the calculation relative to the reallocation
triggers, we may, on any day:
. Not make any transfer between the Permitted Sub-accounts and the AST
Investment Grade Bond Sub-account; or
. If a portion of your Account Value was previously allocated to the AST
Investment Grade Bond Sub-account, transfer all or a portion of those
amounts to the Permitted Sub-accounts, based on your existing allocation
instructions or (in the absence of such existing instructions) pro rata
(i.e., in the same proportion as the current balances in your variable
investment options); or
. Transfer all or a portion of your Account Value in the Permitted
Sub-accounts pro rata to the AST Investment Grade Bond Sub-account.
Therefore, at any given time, some, none, or all of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account. If your entire Account
Value is transferred to the AST Investment Grade Bond Sub-account, then based
on the way the formula operates, the formula will not transfer amounts out of
the AST Investment Grade Bond Sub-account to the Permitted Sub-accounts and
the entire Account Value would remain in the AST Investment Grade Bond
Sub-account. If you make additional purchase payments to your Annuity, they
will be allocated to the Sub-accounts according to your allocation
instructions. Such additional purchase payments may or may not cause the
formula to transfer money in or out of the AST Investment Grade Bond
Sub-account. Once the purchase payments are allocated to your Annuity, they
will also be subject to the formula, which may result in immediate transfers
to or from the AST Investment Grade Bond Sub-accounts, if dictated by the
formula. The amounts of any such transfers will vary (and in some instances,
could be large), as dictated by the formula, and will depend on the factors
listed below.
The amount that is transferred to and from the AST Investment Grade Bond
Sub-account pursuant to the formula depends upon a number of factors unique to
your Annuity (and is not necessarily directly correlated with the securities
markets, bond markets, or interest rates, in general) including:
. How long you have owned Highest Daily Lifetime Seven;
. The performance of the Permitted Sub-accounts you have chosen;
. The performance of the AST Investment Grade Bond Sub-account;
. The amount allocated to each of the Permitted Sub-accounts you have
chosen;
. The amount allocated to the AST Investment Grade Bond Sub-account;
. Additional purchase payments, if any, you make to your Annuity;
. Withdrawals, if any, you take from your Annuity (withdrawals are taken
pro rata from your Account Value).
Any Account Value in the AST Investment Grade Bond Sub-account will not be
available to participate in the investment experience of the Permitted
Sub-accounts if there is a recovery until it is moved out of the AST
Investment Grade Bond Sub-account.
The more of your Account Value allocated to the AST Investment Grade Bond
Sub-account under the formula, the greater the impact of the performance of
that Sub-account in determining whether (and how much) of your Account Value
is transferred back to the Permitted Sub-accounts. Further, it is possible
under the formula, that if a significant portion your Account Value is
allocated to the AST Investment Grade Bond Sub-account and that Sub-account
has good performance but the performance of your Permitted Sub-accounts is
negative, that the formula might transfer your Account Value to the Permitted
Sub-accounts. Thus, the converse is true too (the more you have allocated to
the Permitted Sub-accounts, the greater the impact of the performance of those
Sub-accounts will have on any transfer to the AST Investment Grade Bond
Sub-account).
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Additional Tax Considerations
If you purchase an annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the Required Minimum Distribution
rules under the Code provide that you begin receiving periodic amounts from
your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than five (5) percent
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 required under the Code may exceed the Annual
Income Amount, which will cause us to increase the Annual Income Amount in any
Annuity Year that Required Minimum Distributions due from your Annuity are
greater than such amounts. In addition, the amount and duration of payments
under the annuity payment and death benefit provisions may be adjusted so that
the payments do not trigger any penalty or excise taxes due to tax
considerations such as Required Minimum Distribution provisions under the tax
law. Please note, however, that any withdrawal you take prior to the Tenth
Anniversary, even if withdrawn to satisfy required minimum distribution rules,
will cause you to lose the ability to receive the Return of Principal
Guarantee and the guaranteed amount described above under "Key Feature -
Protected Withdrawal Value".
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this Benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this Benefit
here. However, we do note that if you participate in Highest Daily Lifetime
Seven through a non-qualified annuity, as with all withdrawals, once all
purchase payments are returned under the Annuity, all subsequent withdrawal
amounts will be taxed as ordinary income.
HD Lifetime Seven/SM/ with Beneficiary Income Option
There is an optional death benefit feature under this benefit, the amount of
which is linked to your Annual Income Amount. We refer to this optional death
benefit as the Beneficiary Income Option or ("BIO"). You may choose Highest
Daily Lifetime Seven without also selecting the Beneficiary Income Option
death benefit. You must elect the Beneficiary Income Option death benefit at
the time you elect Highest Daily Lifetime Seven. Highest Daily Lifetime Seven
with Beneficiary Income Option is only available in states that have not yet
approved Highest Daily Lifetime 7 Plus with Beneficiary Income Option. If you
terminate your Highest Daily Lifetime Seven benefit to elect the Highest Daily
Lifetime Seven with Beneficiary Income Option benefit, you will lose the
guarantees that you had accumulated under your Highest Daily Lifetime Seven
benefit and will begin new guarantees under the Highest Daily Lifetime Seven
with BIO benefit based on the Account Value as of the date the new benefit
becomes active. This benefit may be elected, provided that all owners and
beneficiaries are natural persons or an agent acting for a natural person.
If you elect this death benefit, you may not elect any other optional benefit.
You may elect the Beneficiary Income Option death benefit so long as the
Annuitant is no older than age 75 at the time of election. For purposes of
this optional death benefit, we calculate the Annual Income Amount and
Protected Withdrawal Value in the same manner that we do under Highest Daily
Lifetime Seven itself . Because the fee for this benefit is based on the
Protected Withdrawal Value, the fee for Highest Daily Lifetime Seven with the
Beneficiary Income Option may be greater than it would have been based on the
Account Value alone.
Upon a death that triggers payment of a death benefit under the Annuity, we
identify the following amounts: (a) the amount of the basic death benefit
under the Annuity (b) the Protected Withdrawal Value and (c) the Annual Income
Amount. If there were no withdrawals prior to the date of death, then we
calculate the Protected Withdrawal Value for purposes of this death benefit as
of the date of death, and we calculate the Annual Income Amount as if there
were a withdrawal on the date of death. If there were withdrawals prior to the
date of death, then we set the Protected Withdrawal Value and Annual Income
Amount for purposes of this death benefit as of the date that we receive due
proof of death.
If there is one beneficiary, he/she must choose to receive either the basic
death benefit (in a lump sum or other permitted form of distribution) or the
Beneficiary Income Option death benefit (in the form of periodic payments of
the Annual Income Amount - such payments may be annual or at other intervals
that we permit). If there are multiple beneficiaries, each beneficiary is
presented with the same choice. Thus, each beneficiary can choose to take
his/her portion of either (a) the basic death benefit or (b) the Beneficiary
Income Option death benefit. In order to receive the Beneficiary Income Option
death benefit, each beneficiary's share of the death benefit proceeds must be
allocated as a percentage of the total death benefit to be paid. We allow a
beneficiary who has opted to receive the Annual Income Amount to designate
another beneficiary, who would receive any remaining payments upon the former
beneficiary's death. Note also that the final payment, exhausting the
Protected Withdrawal Value, may be less than the Annual Income Amount.
Here is an example to illustrate how the death benefit may be paid:
.. Assume that (i) the basic death benefit is $50,000, the Protected
Withdrawal Value is $100,000, and the Annual Income Amount is $5,000;
(ii) there are two beneficiaries (the first designated to receive 75% of
the death benefit and the second designated to receive 25% of the death
benefit); (iii) the first beneficiary chooses to receive his/her portion of
the death benefit in the form of the Annual Income Amount, and the second
beneficiary chooses to receive his/her portion of the death benefit with
reference to the basic death benefit.
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.. Under those assumptions, the first beneficiary will be paid a pro-rated
portion of the Annual Income Amount for 20 years (the 20 year pay out
period is derived from the $5,000 Annual Income Amount, paid each year
until it exhausts the entire $100,000 Protected Withdrawal Value).
The pro-rated portion of the Annual Income Amount, equal to $3,750 annually
(i.e., the first beneficiary's 75% share multiplied by $5000), is then paid
each year for the 20 year period. Payment of $3,750 for 20 years results in
total payments of $75,000 (i.e., the first beneficiary's 75% share of the
$100,000 Protected Withdrawal Value).
The second beneficiary would receive 25% of the basic death benefit amount (or
$12,500).
If you elect to terminate Highest Daily Lifetime Seven with Beneficiary Income
Option, both Highest Daily Lifetime Seven and that death benefit option will
be terminated. You may not terminate the death benefit option without
terminating the entire benefit. If you terminate Highest Daily Lifetime Seven
with Beneficiary Income Option, your ability to elect other optional living
benefits will be affected as indicated in the "Election and Designations under
the Benefit" section, above.
HD Lifetime Seven/SM/ with Lifetime Income Accelerator
There is another version of Highest Daily Lifetime Seven that we call Highest
Daily Lifetime Seven with Lifetime Income Accelerator ("Highest Daily Lifetime
Seven with LIA"). Highest Daily Lifetime Seven with Lifetime Income
Accelerator is only available in states where Highest Daily Lifetime 7 Plus
with Lifetime Income Accelerator is not yet approved. Highest Daily Lifetime
Seven with LIA is offered as an alternative to other lifetime withdrawal
options. If you elect this benefit, you may not elect any other optional
benefit. The income benefit under Highest Daily Lifetime Seven with LIA
currently is based on a single "designated life" who is between the ages of 55
and 75 on the date that the benefit is elected. If you terminate your Highest
Daily Lifetime Seven Benefit to elect the Highest Daily Lifetime Seven with
LIA benefit, you will lose the guarantees that you had accumulated under your
Highest Daily Lifetime Seven benefit and will begin the new guarantees under
the Highest Daily Lifetime Seven benefit with LIA based on the account value
as of the date the new benefit becomes active.
Highest Daily Lifetime Seven with LIA is not long-term care insurance and
should not be purchased as a substitute for long-term care insurance. The
income you receive through the Lifetime Income Accelerator may be used for any
purpose, and it may or may not be sufficient to address expenses you may incur
for long-term care. You should seek professional advice to determine your
financial needs for long-term care.
Highest Daily Lifetime Seven with LIA guarantees, until the death of the
single designated life, the ability to withdraw an amount equal to double the
Annual Income Amount (which we refer to as the "LIA Amount") if you meet the
conditions set forth below. If you choose the Highest Daily Lifetime Seven
with LIA, the maximum charge is 2.00% of Protected Withdrawal Value ("PWV")
annually. We deduct the current charge (0.95% of PWV) at the end of each
quarter, where each such quarter is part of a year that begins on the
effective date of the benefit or an anniversary thereafter. Thus, on each such
quarter-end (or the next Valuation Day, if the quarter-end is not a Valuation
Day), we deduct 0.2375% of the Protected Withdrawal Value at the end of the
quarter. We deduct the fee pro rata from each of your Sub-accounts including
the AST Investment Grade Bond Portfolio Sub-account. Since this fee is based
on the protected withdrawal value, the fee for Highest Daily Lifetime Seven
with LIA may be greater than it would have been, had it been based on the
Account Value alone. If the fee to be deducted exceeds the current Account
Value, we will reduce the Account Value to zero, and continue the benefit as
described below.
If this benefit is being elected on an Annuity held as a 403 (b) plan, then in
addition to meeting the eligibility requirements listed below for the LIA
Amount you must separately qualify for distributions from the 403 (b) plan
itself.
You may choose Highest Daily Lifetime Seven without also electing LIA, however
you may not elect LIA without Highest Daily Lifetime Seven. All terms and
conditions of Highest Daily Lifetime Seven apply to this version of the
benefit, except as described herein. Currently, if you elect Highest Daily
Lifetime Seven with LIA and subsequently terminate the benefit, you will be
able to re-elect Highest Daily Lifetime Seven with LIA but all conditions of
the benefit described below must be met, and you may be subject to a waiting
period until you can elect this or another lifetime withdrawal benefit.
Eligibility Requirements for LIA Amount. Both a waiting period of 36 months,
from the benefit effective date, and an elimination period of 120 days, from
the date of notification that one or both of the requirements described
immediately below have been met, apply before you can become eligible for the
LIA Amount. Assuming the 36 month waiting period has been met and we have
received the notification referenced in the immediately preceding sentence,
the LIA amount would be available for withdrawal on the Valuation Day
immediately after the 120/th/ day. The waiting period and the elimination
period may run concurrently. In addition to satisfying the waiting and
elimination period, either or both of the following requirements ("LIA
conditions") must be met. It is not necessary to meet both conditions:
(1)The designated life is confined to a qualified nursing facility. A
qualified nursing facility is a facility operated pursuant to law or any
state licensed facility providing medically necessary in-patient care which
is prescribed by a licensed physician in writing and based on physical
limitations which prohibit daily living in a non-institutional setting.
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(2)The designated life is unable to perform two or more basic abilities of
caring for oneself or "activities of daily living." We define these basic
abilities as:
i. Eating: Feeding oneself by getting food into the body from a receptacle
(such as a plate, cup or table) or by a feeding tube or intravenously.
ii.Dressing: Putting on and taking off all items of clothing and any
necessary braces, fasteners or artificial limbs.
iii.Bathing: Washing oneself by sponge bath; or in either a tub or shower,
including the task of getting into or out of the tub or shower.
iv.Toileting: Getting to and from the toilet, getting on and off the
toilet, and performing associated personal hygiene.
v. Transferring: Moving into or out of a bed, chair or wheelchair.
vi.Continence: Maintaining control of bowel or bladder function; or when
unable to maintain control of bowel or bladder function, the ability to
perform personal hygiene (including caring for catheter or colostomy
bag).
You must notify us when the LIA conditions have been met. If, when we receive
such notification, there are more than 120 days remaining until the end of the
waiting period described above, you will not be eligible for the LIA Amount.
If there are 120 days or less remaining until the end of the waiting period
when we receive notification that the LIA conditions are met, we will
determine eligibility for the LIA Amount through our then current
administrative process, which may include, but is not limited to,
documentation verifying the LIA conditions and/or an assessment by a third
party of our choice. Such assessment may be in person and we will assume any
costs associated with the aforementioned assessment. Once eligibility is
determined, the LIA Amount is equal to double the Annual Income Amount as
described in this prospectus under the Highest Daily Lifetime Seven Benefit.
Additionally, we will reassess your eligibility on an annual basis although
your LIA benefit for the year that immediately precedes our reassessment will
not be affected if it is determined that you are no longer eligible. Your
first reassessment may occur in the same year as your initial assessment. If
we determine you are no longer eligible to receive the LIA Amount, upon the
next Annuity Anniversary the Annual Income Amount would replace the LIA
Amount. There is no limit on the number of times you can become eligible for
the LIA Amount, however, each time would require the completion of the 120-day
elimination period, notification that the designated life meets the LIA
conditions, and determination, through our then current administrative
process, that you are eligible for the LIA Amount, each as described above.
You should also keep in mind that, at the time you are experiencing the LIA
conditions that would qualify you for the LIA Amount, you may also be
experiencing other disabilities that could impede your ability to conduct your
affairs. You may wish to consult with a legal advisor to determine whether you
should authorize a fiduciary who could notify us if you meet the LIA
conditions and apply for the benefit.
You should also keep in mind that, at the time you are experiencing the LIA
conditions that would qualify you for the LIA Amount, you may also be
experiencing other disabilities that could impede your ability to conduct your
affairs. You may wish to consult with a legal advisor to determine whether you
should authorize a fiduciary who could notify us if you meet the LIA
conditions and apply for the benefit.
LIA amount at the first Withdrawal. If your first withdrawal subsequent to
election of Highest Daily Lifetime Seven with LIA occurs while you are
eligible for the LIA Amount, the available LIA Amount is equal to double the
Annual Income Amount.
LIA amount after the First Withdrawal. If you become eligible for the LIA
Amount after you have taken your first withdrawal, the available LIA amount
for the current and subsequent Annuity Years is equal to double the then
current Annual Income Amount, however the available LIA amount in the current
Annuity Year is reduced by any withdrawals that have been taken in the current
Annuity Year. Cumulative withdrawals in an Annuity Year which are less than or
equal to the LIA Amount (when eligible for the LIA amount) will not reduce
your LIA Amount in subsequent Annuity Years, but any such withdrawals will
reduce the LIA Amount on a dollar-for-dollar basis in that Annuity Year.
Withdrawals In Excess of the LIA amount. If your cumulative withdrawals in an
Annuity Year are in excess of the LIA Amount when you are eligible ("Excess
Withdrawal"), your LIA Amount in subsequent years will be reduced (except with
regard to required minimum distributions) by the result of the ratio of the
excess portion of the withdrawal to the Account Value immediately prior to the
Excess Withdrawal. Reductions include the actual amount of the withdrawal,
including any CDSC that may apply. Withdrawals of any amount up to and
including the LIA Amount will reduce the Protected Withdrawal Value by the
amount of the withdrawal. Excess Withdrawals will reduce the Protected
Withdrawal Value by the same ratio as the reduction to the LIA Amount. Any
withdrawals that are less than or equal to the LIA amount (when eligible) but
in excess of the free withdrawal amount available under this Annuity will not
incur a CDSC.
Withdrawals are not required. However, subsequent to the first withdrawal, the
LIA Amount is not increased in subsequent Annuity Years if you decide not to
take a withdrawal in an Annuity Year or take withdrawals in an Annuity Year
that in total are less than the LIA Amount.
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Purchase Payments. If you are eligible for the LIA Amount as described under
"Eligibility Requirements for LIA Amount" and you make an additional Purchase
Payment, we will increase your LIA Amount by double the amount we add to your
Annual Income Amount.
Step Ups. If your Annual Income Amount is stepped up, your LIA Amount will be
stepped up to equal double the stepped up Annual Income Amount.
Guarantee Payments. If your Account Value is reduced to zero as a result of
cumulative withdrawals that are equal to or less than the LIA Amount, or as a
result of the fee that we assess for Highest Daily Lifetime Seven with LIA,
and there is still a LIA Amount available, we will make an additional payment
for that Annuity Year equal to the remaining LIA Amount. Thus, in that
scenario, the remaining LIA Amount would be payable even though your Account
Value was reduced to zero. In subsequent Annuity Years we make payments that
equal the LIA Amount as described in this section. We will make payments until
the death of the single designated life. Should the designated life no longer
qualify for the LIA amount (as described under "Eligibility Requirements for
LIA Amount" above), the Annual Income Amount would continue to be available.
Subsequent eligibility for the LIA Amount would require the completion of the
120 day elimination period as well as meeting the LIA conditions listed above
under "Eligibility Requirements for LIA Amount". To the extent that cumulative
withdrawals in the current Annuity Year that reduce your Account Value to zero
are more than the LIA Amount (except in the case of required minimum
distributions), Highest Daily Lifetime Seven with LIA terminates, and no
additional payments are made.
Annuity Options. In addition to the Highest Daily Lifetime Seven Annuity
Options described above, after the 10/th/ benefit anniversary you may also
request that we make annuity payments each year equal to the Annual Income
Amount. In any year that you are eligible for the LIA Amount, we make annuity
payments equal to the LIA Amount. If you would receive a greater payment by
applying your Account Value to receive payments for life under your Annuity,
we will pay the greater amount. Prior to the 10/th/ benefit anniversary this
option is not available.
We will continue to make payments until the death of the Designated Life. If
this option is elected, the Annual Income Amount and LIA Amount will not
increase after annuity payments have begun.
If you elect Highest Daily Lifetime Seven with LIA, and never meet the
eligibility requirements you will not receive any additional payments based on
the LIA Amount.
Optional 90% Cap Rule Feature for Formula for Highest Daily Lifetime Seven
If you currently own an Annuity and have elected the Highest Daily Lifetime
Seven Income Benefit (including Highest Daily Lifetime Seven with Beneficiary
Income Option and Highest Daily Lifetime Seven with Lifetime Income
Accelerator) or Spousal Highest Daily Lifetime Seven Income Benefit (including
Spousal Highest Daily Lifetime Seven with Beneficiary Income Option), you can
elect this feature (subject to state approval) which utilizes a new
mathematical formula. The new formula is described below and will replace the
"Transfer Calculation" portion of the mathematical formula currently used in
connection with your benefit on a prospective basis. This election may only be
made once and may not be revoked once elected. The new mathematical formula is
added to Appendix J.
Under the new formula, the formula will not execute a transfer to the AST
Investment Grade Bond Sub-account that results in more than 90% of your
Account Value being allocated to the AST Investment Grade Bond Sub-account
("90% cap" or "90% Cap Rule"). Thus, on any Valuation Day, if the formula
would require a transfer to the AST Investment Grade Bond Sub-account that
would result in more than 90% of the Account Value being allocated to the AST
Investment Grade Bond Sub-account, only the amount that results in exactly 90%
of the Account Value being allocated to the AST Investment Grade Bond
Sub-account will be transferred. Additionally, future transfers into the AST
Investment Grade Bond Sub-account will not be made (regardless of the
performance of the AST Investment Grade Bond Sub-account and the Permitted
Sub-accounts) at least until there is first a transfer out of the AST
Investment Grade Bond Sub-account. Once this transfer occurs out of the AST
Investment Grade Bond Sub-account, future amounts may be transferred to or
from the AST Investment Grade Bond Sub-account if dictated by the formula
(subject to the 90% cap). At no time will the formula make a transfer to the
AST Investment Grade Bond Sub-account that results in greater than 90% of your
Account Value being allocated to the AST Investment Grade Bond Sub-account.
However, it is possible that, due to the investment performance of your
allocations in the AST Investment Grade Bond Sub-account and your allocations
in the Permitted Sub-accounts you have selected, your Account Value could be
more than 90% invested in the AST Investment Grade Bond Sub-account.
If you make additional purchase payments to your Annuity while the 90% cap is
in effect, the formula will not transfer any of such additional purchase
payments to the AST Investment Grade Bond Sub-account at least until there is
first a transfer out of the AST Investment Grade Bond Sub-account, regardless
of how much of your Account Value is in the Permitted Sub-accounts. This means
that there could be scenarios under which, because of the additional purchase
payments you make, less than 90% of your entire Account Value is allocated to
the AST Investment Grade Bond Sub-account, and the formula will still not
transfer any of your Account Value to the AST Investment Grade Bond
Sub-account (at least until there is first a transfer out of the AST
Investment Grade Bond Sub-account). For example,
.. March 19, 2009 - a transfer is made that results in the 90% cap being met
and now $90,000 is allocated to the AST Investment Grade Bond Sub-account
and $10,000 is allocated to the Permitted Sub-accounts.
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.. March 20, 2009 - you make an additional purchase payment of $10,000. No
transfers have been made from the AST Investment Grade Bond Sub-account to
the Permitted Sub-accounts since the cap went into effect on March 19, 2009.
.. As of March 20, 2009 (and at least until first a transfer is made out of
the AST Investment Grade Bond Sub-account under the formula) - the $10,000
payment is allocated to the Permitted Sub-accounts and now you have 82% in
the AST Investment Grade Bond Sub-account and 18% in the Permitted
Sub-accounts (such that $20,000 is allocated to the Permitted Sub-accounts
and $90,000 is allocated to the AST Investment Grade Bond Sub-account).
.. Once there is a transfer out of the AST Investment Grade Bond Sub-account
(of any amount), the formula will operate as described above, meaning that
the formula could transfer amounts to or from the AST Investment Grade Bond
Sub-account if dictated by the formula (subject to the 90% cap).
Under the operation of the formula, the 90% cap may come into existence and
may be removed multiple times while you participate in the benefit. We will
continue to monitor your Account Value daily and, if dictated by the formula,
systematically transfer amounts between the Permitted Sub-accounts you have
chosen and the AST Investment Grade Bond Sub-account as dictated by the
formula. Once you elect this feature, the new transfer formula described above
and set forth in Appendix J will be the formula for your Annuity.
In the event that more than ninety percent (90%) of your Account Value is
allocated to the AST Investment Grade Bond Sub-account and you have elected
this feature, up to ten percent (10%) of your Account Value currently
allocated to the AST Investment Grade Bond Sub-account will be transferred to
your Permitted Sub-accounts, such that after the transfer, 90% of your Account
Value on the date of the transfer is in the AST Investment Grade Bond
Sub-account. The transfer to the Permitted Sub-accounts will be based on your
existing allocation instructions or (in the absence of such existing
instructions) pro rata (i.e., in the same proportion as the current balances
in your variable investment options). It is possible that additional transfers
might occur after this initial transfer if dictated by the formula. The
amounts of such additional transfer(s) will vary. If on the date this feature
is elected 100% of your Account Value is allocated to the AST Investment Grade
Bond Sub-account, a transfer of an amount equal to 10% of your Account Value
will be made to your Permitted Sub-accounts. It is possible that an additional
transfer to the permitted Sub-accounts could occur following the Valuation
Day, and in some instances (based on the formula) this additional transfer
could be large.
Once the 90% cap rule is met, future transfers into the AST Investment Grade
Bond Sub-account will not be made (regardless of the performance of the AST
Investment Grade Bond Sub-account and the Permitted Sub-accounts) at least
until there is first a transfer out of the AST Investment Grade Bond
Sub-account. Once this transfer occurs out of the AST Investment Grade Bond
Sub-account, future amounts may be transferred to or from the AST Investment
Grade Bond Sub-account if dictated by the formula (subject to the 90% cap).
Important Consideration When Electing the New Formula:
.. At any given time, some, most or none of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account.
.. Please be aware that because of the way the 90% cap formula operates, it is
possible that more than or less than 90% of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account.
.. If this feature is elected, any Account Value transferred to the Permitted
Sub-accounts is subject to the investment performance of those
Sub-accounts. Your Account Value can go up or down depending of the
performance of the Permitted Sub-accounts you select.
SPOUSAL HIGHEST DAILY LIFETIME SEVEN/SM/ INCOME BENEFIT (SHD7)/SM/
Spousal Highest Daily Lifetime Seven is the spousal version of Highest Daily
Lifetime Seven. Spousal Highest Daily Lifetime Seven is only available in
those states that have not yet approved Spousal Highest Daily Lifetime 7 Plus.
Spousal Highest Daily Lifetime Seven must be elected based on two Designated
Lives, as described below. Each Designated Life must be at least 59 1/2 years
old when the benefit is elected. Spousal Highest Daily Lifetime Seven is not
available if you elect any other optional living benefit or optional death
benefit. As long as your Spousal Highest Daily Lifetime Seven Benefit is in
effect, you must allocate your Account Value in accordance with the then
permitted and available investment option(s) with this benefit. For a more
detailed description of permitted investment options, see the Investment
options section of this prospectus.
The benefit that guarantees until the later death of two natural persons who
are each other's spouses at the time of election of the benefit and at the
first death of one of them (the "Designated Lives", and each, a "Designated
Life") the ability to withdraw an annual amount (the "Annual Income Amount")
equal to a percentage of an initial principal value (the "Protected Withdrawal
Value") regardless of the impact of Sub-account performance on the Account
Value, subject to our benefit rules regarding the timing and amount of
withdrawals. The benefit may be appropriate if you intend to make periodic
withdrawals from your Annuity, wish to ensure that Sub-account performance
will not affect your ability to receive annual payments, and wish either
spouse to be able to continue the Spousal Highest Daily Lifetime Seven benefit
after the death of the first spouse. You are not required to make withdrawals
as part of the benefit - the guarantees are not lost if you withdraw less than
the maximum allowable amount each year under the rules of the benefit. As
discussed below, we require that you participate in our asset transfer benefit
in order to participate in Spousal Highest Daily Lifetime Seven, and in
Appendix J to this prospectus, we set forth the formula under which we make
those asset transfers.
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As discussed below, a key component of Spousal Highest Daily Lifetime Seven is
the Protected Withdrawal Value. Because each of the Protected Withdrawal Value
and Annual Income Amount is determined in a way that is not solely related to
Account Value, it is possible for the Account Value to fall to zero, even
though the Annual Income Amount remains. You are guaranteed to be able to
withdraw the Annual Income Amount until the death of the second Designated
Life, provided that there have not been "excess withdrawals." Excess
withdrawals, as discussed below, will reduce your Annual Income Amount. Thus,
you could experience a scenario in which your Account Value was zero, and, due
to your excess withdrawals, your Annual Income Amount also was reduced to
zero. In that scenario, no further amount would be payable under Spousal
Highest Daily Lifetime Seven.
Key Feature - Protected Withdrawal Value
The Protected Withdrawal Value is used to calculate the initial Annual Income
Amount. On the effective date of the benefit, the Protected Withdrawal Value
is equal to your Account Value. On each Valuation Day thereafter, until the
earlier of the tenth anniversary of benefit election (the "Tenth Anniversary
Date") or the date of the first withdrawal, the Protected Withdrawal Value is
equal to the "Periodic Value" described in the next paragraph.
The "Periodic Value" initially is equal to the Account Value on the effective
date of the benefit. On each Valuation Day thereafter, until the earlier of
the first withdrawal or the Tenth Anniversary Date, we recalculate the
Periodic Value. We stop determining the Periodic Value upon the earlier of
your first withdrawal after the effective date of the benefit or the Tenth
Anniversary Date. On each Valuation Day (the "Current Valuation Day"), the
Periodic Value is equal to the greater of:
(1)the Periodic Value for the immediately preceding business day (the "Prior
Valuation Day") appreciated at the daily equivalent of 7% annually during
the calendar day(s) between the Prior Valuation Day and the Current
Valuation Day (i.e., one day for successive Valuation Days, but more than
one calendar day for Valuation Days that are separated by weekends and/or
holidays), plus the amount of any adjusted Purchase Payment made on the
Current Valuation Day; and
(2)the Account Value.
If you make a withdrawal prior to the Tenth Anniversary Date, the Protected
Withdrawal Value on the date of the withdrawal is equal to the greatest of:
(1)the Account Value; or
(2)the Periodic Value on the date of the withdrawal.
If you have not made a withdrawal on or before the Tenth Anniversary Date,
your Protected Withdrawal Value subsequent to the Tenth Anniversary Date is
equal to the greatest of:
(1)the Account Value; or
(2)the Periodic Value on the Tenth Anniversary Date, increased for subsequent
adjusted purchase payments; or
(3)the sum of:
(a)200% of the Account Value on the effective date of the benefit;
(b)200% of all adjusted purchase payments made within one year after the
effective date of the benefit; and
(c)all adjusted purchase payments made after one year following the
effective date of the benefit up to the date of the first withdrawal.
On and after the date of your first withdrawal, your Protected Withdrawal
Value is increased by the amount of any subsequent purchase payments, is
reduced by withdrawals, including your first withdrawal (as described below),
and is increased if you qualify for a step-up (as described below).
Irrespective of these calculations, your Protected Withdrawal Value will
always be at least equal to your Account Value.
Key Feature - Annual Income Amount under the Spousal Highest Daily Lifetime
Seven Benefit
The Annual Income Amount is equal to a specified percentage of the Protected
Withdrawal Value. The percentage depends on the age of the youngest Designated
Life on the date of the first withdrawal after election of the benefit. The
percentages are: 5% for ages 79 and younger, 6% for ages 80 to 84, 7% for ages
85 to 89, and 8% for ages 90 and older. We use the age of the youngest
Designated Life even if that Designated Life is no longer a participant under
the Annuity due to death or divorce. Under the Spousal Highest Daily Lifetime
Seven benefit, if your cumulative withdrawals in an Annuity Year are less than
or equal to the Annual Income Amount, they will not reduce your Annual Income
Amount in subsequent Annuity Years, but any such withdrawals will reduce the
Annual Income Amount on a dollar-for-dollar basis in that Annuity Year. If
your cumulative withdrawals are in excess of the Annual Income Amount ("Excess
Income"), your Annual Income Amount in subsequent years will be reduced
(except with regard to required minimum distributions) by the result of the
ratio of the Excess Income to the Account Value immediately prior to such
withdrawal (see examples of this calculation below). Withdrawals of any amount
up to and including the Annual Income Amount will reduce the Protected
Withdrawal Value by the amount of the withdrawal. Withdrawals of Excess Income
will reduce the Protected Withdrawal Value by the same ratio as the reduction
to the Annual
122
Income Amount. A Purchase Payment that you make will (i) increase the
then-existing Annual Income Amount by an amount equal to a percentage of the
Purchase Payment (including the amount of any associated Credits) based on the
age of the Annuitant at the time of the first withdrawal (the percentages are:
5% for ages 79 and younger, 6% for ages 80-84, 7% for ages 85-89, and 8% for
ages 90 and older) and (ii) increase the Protected Withdrawal Value by the
amount of the Purchase Payment (including the amount of any associated
Credits).
An automatic step-up feature ("Highest Quarterly Auto Step-Up") is included as
part of this benefit. As detailed in this paragraph, the Highest Quarterly
Auto Step-Up feature can result in a larger Annual Income Amount if your
Account Value increases subsequent to your first withdrawal. We begin
examining the Account Value for purposes of the Highest Quarterly Step-Up
starting with the anniversary of the Issue Date of the Annuity (the "Annuity
Anniversary") immediately after your first withdrawal under the benefit.
Specifically, upon the first such Annuity Anniversary, we identify the Account
Value on the Valuation Days corresponding to the end of each quarter that
(i) is based on your Annuity Year, rather than a calendar year; (ii) is
subsequent to the first withdrawal; and (iii) falls within the immediately
preceding Annuity Year. If the end of any such quarter falls on a holiday or a
weekend, we use the next Valuation Day. Having identified each of those
quarter-end Account Values, we then multiply each such value by a percentage
that varies based on the age of the youngest Designated Life on the Annuity
Anniversary as of which the step-up would occur. The percentages are 5% for
ages 79 and younger, 6% for ages 80-84, 7% for ages 85-89, and 8% for ages 90
and older. Thus, we multiply each quarterly value by the applicable
percentage, adjust each such quarterly value for subsequent withdrawals and
purchase payments, and then select the highest of those values. If the highest
of those values exceeds the existing Annual Income Amount, we replace the
existing amount with the new, higher amount. Otherwise, we leave the existing
Annual Income Amount intact. In later years, (i.e., after the first Annuity
Anniversary after the first withdrawal) we determine whether an automatic
step-up should occur on each Annuity Anniversary, by performing a similar
examination of the Account Values on the end of the four immediately preceding
quarters. At the time that we increase your Annual Income Amount, we also
increase your Protected Withdrawal Value to equal the highest quarterly value
upon which your step-up was based. If, on the date that we implement a Highest
Quarterly Auto Step-Up to your Annual Income Amount, the charge for Spousal
Highest Daily Lifetime Seven has changed for new purchasers, you may be
subject to the new charge at the time of such step-up. Prior to increasing
your charge for Spousal Highest Daily Lifetime Seven upon a step-up, we would
notify you, and give you the opportunity to cancel the automatic step-up
feature. If you receive notice of a proposed step-up and accompanying fee
increase, you should carefully evaluate whether the amount of the step-up
justifies the increased fee to which you will be subject.
The Spousal Highest Daily Lifetime Seven benefit does not affect your ability
to make withdrawals under your annuity, or limit your ability to request
withdrawals that exceed the Annual Income Amount. Under Spousal Highest Daily
Lifetime Seven, if your cumulative withdrawals in an Annuity Year are less
than or equal to the Annual Income Amount, they will not reduce your Annual
Income Amount in subsequent Annuity Years, but any such withdrawals will
reduce the Annual Income Amount on a dollar-for-dollar basis in that Annuity
Year.
If, cumulatively, you withdraw an amount less than the Annual Income Amount in
any Annuity Year, you cannot carry-over the unused portion of the Annual
Income Amount to subsequent Annuity Years.
Examples of dollar-for-dollar and proportional reductions, and the Highest
Quarterly Auto Step-Up are set forth below. The values depicted here are
purely hypothetical, and do not reflect the charges for the Spousal Highest
Daily Lifetime Seven benefit or any other fees and charges. Assume the
following for all three examples:
.. The Issue Date is December 1, 2007
.. The Spousal Highest Daily Lifetime Seven benefit is elected on March 5,
2008.
.. The youngest Designated Life was 70 years old when he/she elected the
Spousal Highest Daily Lifetime Seven benefit.
Dollar-for-dollar reductions
On May 2, 2008, the Protected Withdrawal Value is $120,000, resulting in an
Annual Income Amount of $6,000 (since the youngest Designated Life is younger
than 80 at the time of the 1/st/ withdrawal, the Annual Income Amount is 5% of
the Protected Withdrawal Value, in this case 5% of $120,000). Assuming $2,500
is withdrawn from the Annuity on this date, the remaining Annual Income Amount
for that Annuity Year (up to and including December 1, 2008) is $3,500. This
is the result of a dollar-for-dollar reduction of the Annual Income Amount -
$6,000 less $2,500 = $3,500.
Proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000
occurs on August 6, 2008 and the Account Value at the time of this withdrawal
is $110,000. The first $3,500 of this withdrawal reduces the Annual Income
Amount for that Annuity Year to $0. The remaining withdrawal amount - $1,500 -
reduces the Annual Income Amount in future Annuity Years on a proportional
basis based on the ratio of the excess withdrawal to the Account Value
immediately prior to the excess withdrawal. (Note that if there were other
withdrawals in that Annuity Year, each would result in another proportional
reduction to the Annual Income Amount).
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Here is the calculation:
Account Value before withdrawal $110,000.00
Less amount of "non" excess withdrawal $ 3,500.00
Account Value immediately before excess withdrawal of $1,500 $106,500.00
Excess withdrawal amount $ 1,500.00
Divided by Account Value immediately before excess withdrawal $106,500.00
Ratio 1.41%
Annual Income Amount $ 6,000.00
Less ratio of 1.41% $ 84.51
Annual Income Amount for future Annuity Years $ 5,915.49
Highest Quarterly Auto Step-Up
On each Annuity Anniversary date, the Annual Income Amount is stepped-up if
the appropriate percentage (based on the youngest Designated Life's age on the
Annuity Anniversary) of the highest quarterly value since your first
withdrawal (or last Annuity Anniversary in subsequent years), adjusted for
withdrawals and additional purchase payments, is higher than the Annual Income
Amount, adjusted for excess withdrawals and additional purchase payments (plus
any Credits).
Continuing the same example as above, the Annual Income Amount for this
Annuity Year is $6,000. However, the excess withdrawal on August 6 reduces
this amount to $5,915.49 for future years (see above). For the next Annuity
Year, the Annual Income Amount will be stepped-up if 5% (since the youngest
Designated Life is younger than 80 on the date of the potential step-up) of
the highest quarterly Account Value adjusted for withdrawals, is higher than
$5,915.49. Here are the calculations for determining the quarterly values.
Only the June 1 value is being adjusted for excess withdrawals as the
September 1 and December 1 Valuation Days occur after the excess withdrawal on
August 6.
Highest Quarterly Value
(adjusted with Adjusted Annual
withdrawal and purchase Income Amount (5% of the
Date* Account value payments)** Highest Quarterly Value)
----- ------------- ----------------------- ------------------------
June 1, 2008 $118,000.00 $118,000.00 $5,900.00
August 6, 2008 $110,000.00 $112,885.55 $5,644.28
September 1, 2008 $112,000.00 $112,885.55 $5,644.28
December 1, 2008 $119,000.00 $119,000.00 $5,950.00
* In this example, the Annuity Anniversary date is December 1. The quarterly
valuation dates are every three months thereafter -
March 1, June 1, September 1, and December 1. In this example, we do not
use the March 1 date as the first withdrawal took place after March 1. The
Annuity Anniversary Date of December 1 is considered the fourth and final
quarterly valuation date for the year.
** In this example, the first quarterly value after the first withdrawal is
$118,000 on June 1, yielding an adjusted Annual Income Amount of $5,900.00.
This amount is adjusted on August 6 to reflect the $5,000 withdrawal. The
calculations for the adjustments are:
. The Account Value of $118,000 on June 1 is first reduced
dollar-for-dollar by $3,500 ($3,500 is the remaining Total Annual Income
Amount for the Annuity Year), resulting in an adjusted Account Value of
$114,500 before the excess withdrawal.
. This amount ($114,500) is further reduced by 1.41% (this is the ratio in
the above example which is the excess withdrawal divided by the Account
Value immediately preceding the excess withdrawal) resulting in a
Highest Quarterly Value of $112,885.55.
The adjusted Annual Income Amount is carried forward to the next quarterly
anniversary date of September 1. At this time, we compare this amount to 5% of
the Account Value on September 1. Since the June 1 adjusted Annual Income
Amount of $5,644.28 is higher than $5,600.00 (5% of $112,000), we continue to
carry $5,644.28 forward to the next and final quarterly anniversary date of
December 1. The Account Value on December 1 is $119,000 and 5% of this amount
is $5,950. Since this is higher than $5,644.28, the adjusted Annual Income
Amount is reset to $5,950.00.
In this example, 5% of the December 1 value yields the highest amount of
$5,950.00. Since this amount is higher than the current year's Annual Income
Amount of $5,915.49 adjusted for excess withdrawals, the Annual Income Amount
for the next Annuity Year, starting on December 2, 2008 and continuing through
December 1, 2009, will be stepped-up to $5,950.00.
Benefits Under the Spousal Highest Daily Lifetime Seven Benefit
.. To the extent that your Account Value was reduced to zero as a result of
cumulative withdrawals that are equal to or less than the Annual Income
Amount or as a result of the fee that we assess for Spousal Highest Daily
Lifetime Seven, and amounts are still payable under Spousal Highest Daily
Lifetime Seven, we will make an additional payment, if any, for that
Annuity Year equal to the remaining Annual Income Amount for the Annuity
Year. Thus, in that scenario, the remaining Annual Income Amount would be
payable even though your Account Value was reduced to zero. In subsequent
Annuity Years we make payments that equal the Annual Income Amount as
described in this section. We will make payments until the death of the
first of the Designated Lives to die, and will continue to make payments
until the death of the second Designated Life as long as the Designated
Lives were spouses at the time of the first death. To the extent that
cumulative withdrawals in the current Annuity
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Year that reduced your Account Value to zero are more than the Annual Income
Amount, the Spousal Highest Daily Lifetime Seven benefit terminates, and no
additional payments will be made. However, if a withdrawal in the latter
scenario was taken to meet required minimum distribution requirements under
the Annuity, then the benefit will not terminate, and we will continue to
pay the Annual Income Amount in the form of a fixed annuity.
.. If Annuity payments are to begin under the terms of your Annuity, or if you
decide to begin receiving Annuity payments and there is a Annual Income
Amount due in subsequent Annuity Years, you can elect one of the following
two options:
(1)apply your Account Value to any Annuity option available; or
(2)request that, as of the date Annuity payments are to begin, we make
Annuity payments each year equal to the Annual Income Amount. We will
make payments until the first of the Designated Lives to die, and
will continue to make payments until the death of the second
Designated Life as long as the Designated Lives were spouses at the
time of the first death. If, due to death of a Designated Life or
divorce prior to annuitization, only a single Designated Life
remains, then Annuity payments will be made as a life annuity for the
lifetime of the Designated Life.
We must receive your request in a form acceptable to us at our office.
In the absence of an election when mandatory annuity payments are to begin, we
will make annual annuity payments as a joint and survivor or single (as
applicable) life fixed annuity with ten payments certain, by applying the
greater of the annuity rates then currently available or the annuity rates
guaranteed in your Annuity. The amount that will be applied to provide such
Annuity payments will be the greater of:
(1)the present value of the future Annual Income Amount payments. Such
present value will be calculated using the greater of the joint and
survivor or single (as applicable) life fixed annuity rates then
currently available or the joint and survivor or single (as
applicable) life fixed annuity rates guaranteed in your Annuity; and
(2)the Account Value.
.. If no withdrawal was ever taken, we will calculate the Annual Income Amount
as if you made your first withdrawal on the date the annuity payments are
to begin.
.. Please note that payments that we make under this benefit after the Annuity
Anniversary coinciding with or next following the older of the owner or
Annuitant's 95/th/ birthday, will be treated as annuity payments.
Other Important Considerations
.. Withdrawals under the Spousal Highest Daily Lifetime Seven benefit are
subject to all of the terms and conditions of the Annuity, including any
CDSC that may apply. Note that if your withdrawal of the Annual Income
Amount in a given Annuity Year exceeds the applicable free withdrawal
amount under the Annuity (but is not considered Excess Income), we will not
impose any CDSC on the amount of that withdrawal. However, we may impose a
CDSC on the portion of a withdrawal that is deemed Excess Income.
.. Withdrawals made while the Spousal Highest Daily Lifetime Seven Benefit is
in effect will be treated, for tax purposes, in the same way as any other
withdrawals under the Annuity. The Spousal Highest Daily Lifetime Seven
Benefit does not directly affect the Account Value or surrender value, but
any withdrawal will decrease the Account Value by the amount of the
withdrawal (plus any applicable CDSC). If you surrender your Annuity you
will receive the current surrender value.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Spousal Highest Daily Lifetime
Seven benefit. The Spousal Highest Daily Lifetime Seven benefit provides a
guarantee that if your Account Value declines due to Sub-account
performance, you will be able to receive your Annual Income Amount in the
form of periodic benefit payments.
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the permitted Sub-accounts.
.. You cannot allocate purchase payments or transfer Account Value to or from
the AST Investment Grade Bond Portfolio Sub-account (as described below) if
you elect this benefit. A summary description of the AST Investment Grade
Bond Portfolio appears within the prospectus section entitled "What Are The
Investment Objectives and Policies of The Portfolios?". Upon the initial
transfer of your Account Value into the AST Investment Grade Bond
Portfolio, we will send a prospectus for that Portfolio to you, along with
your confirmation. In addition, you can find a copy of the AST Investment
Grade Bond Portfolio prospectus by going to www.prudentialannuities.com.
.. You can make withdrawals from your Annuity without purchasing the Spousal
Highest Daily Lifetime Seven benefit. The Spousal Highest Daily Lifetime
Seven benefit provides a guarantee that if your Account Value declines due
to market performance, you will be able to receive your Annual Income
Amount in the form of periodic benefit payments.
.. Transfers to and from the elected Sub-accounts and the AST Investment Grade
Bond Portfolio Sub-account triggered by the mathematical formula component
of the benefit will not count toward the maximum number of free transfers
allowable under an Annuity.
.. You must allocate your Account Value in accordance with the then available
investment option(s) that we may prescribe in order to elect and maintain
the Spousal Highest Daily Lifetime Seven benefit. If, subsequent to your
election of the benefit, we change our requirements for how Account Value
must be allocated under the benefit, the new requirement will apply only to
new elections of the benefit, and we will not compel you to re-allocate
your Account Value in accordance with our newly adopted requirements.
Subject to any change in requirements, transfers of Account Value and
allocation of Additional purchase payments may be subject to new investment
limitations.
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.. If you elect this benefit, and in connection with that election you are
required to reallocate to different investment options permitted under this
benefit, then on the Valuation Day on which we receive your request in Good
Order, we will (i) sell units of the non-permitted investment options and
(ii) invest the proceeds of those sales in permitted investment options
that you have designated. During this reallocation process, your Account
Value allocated to the Sub-accounts will remain exposed to investment risk,
as is the case generally. The newly-elected benefit will commence at the
close of business on the following Valuation Day. Thus, the protection
afforded by the newly-elected benefit will not arise until the close of
business on the following Valuation Day.
.. The fee for Spousal Highest Daily Lifetime Seven is 0.75% annually of the
Protected Withdrawal Value. We deduct this fee at the end of each quarter,
where each such quarter is part of a year that begins on the effective date
of the benefit or an anniversary thereafter. Thus, on each such quarter-end
(or the next Valuation Day, if the quarter-end is not a Valuation Day), we
deduct 0.1875% of the Protected Withdrawal Value at the end of the quarter.
We deduct the fee pro rata from each of your Sub-accounts including the AST
Investment Grade Bond Sub-account. Since this fee is based on the Protected
Withdrawal Value, the fee for Spousal Highest Daily Lifetime Seven may be
greater than it would have been, had it been based on the Account Value
alone. If the fee to be deducted exceeds the current Account Value, we will
reduce the Account Value to zero, and continue the benefit as described
above.
Election of and Designations under the Benefit.
Spousal Highest Daily Lifetime Seven can only be elected based on two
Designated Lives. Designated Lives must be natural persons who are each
other's spouses at the time of election of the benefit and at the death of the
first of the Designated Lives to die. Currently, Spousal Highest Daily
Lifetime Seven only may be elected where the Owner, Annuitant, and Beneficiary
designations are as follows:
.. One Annuity Owner, where the Annuitant and the Owner are the same person
and the beneficiary is the Owner's spouse. The Owner/Annuitant and the
beneficiary each must be at least 59 1/2 years old at the time of election;
or
.. Co-Annuity Owners, where the Owners are each other's spouses. The
beneficiary designation must be the surviving spouse, or the spouses named
equally. One of the owners must be the Annuitant. Each Owner must each be
at least 59 1/2 years old at the time of election; or
.. One Annuity Owner, where the Owner is a custodial account established to
hold retirement assets for the benefit of the Annuitant pursuant to the
provisions of Section 408(a) of the Internal Revenue Code (or any successor
Code section thereto) ("Custodial Account"), the beneficiary is the
Custodial Account, and the spouse of the Annuitant is the Contingent
Annuitant. Both the Annuitant and the Contingent Annuitant each must be at
least 59 1/2 years old at the time of election.
We do not permit a change of Owner under this benefit, except as follows:
(a)if one Owner dies and the surviving spousal Owner assumes the Annuity or
(b)if the Annuity initially is co-owned, but thereafter the Owner who is not
the Annuitant is removed as Owner. We permit changes of beneficiary under
this benefit. If the Designated Lives divorce, the Spousal Highest Daily
Lifetime Seven benefit may not be divided as part of the divorce settlement
or judgment. Nor may the divorcing spouse who retains ownership of the
Annuity appoint a new Designated Life upon re-marriage.
If you wish, you may cancel any Spousal Highest Daily Lifetime Seven benefit.
You may then elect Spousal Highest Daily Lifetime 7 Plus, Spousal Highest
Daily Lifetime 7 Plus with Beneficiary Income Option, Highest Daily Lifetime 7
Plus, Highest Daily Lifetime 7 Plus with Beneficiary Income Option, or Highest
Daily Lifetime 7 Plus with Lifetime Income Accelerator (or any other currently
available living benefit) on any Valuation Day after you have cancelled the
Spousal Highest Daily Lifetime Seven benefit, provided the request is received
in good order (subject to state availability and any applicable age
requirements). Upon cancellation of any Spousal Highest Daily Lifetime Seven
benefit, any Account Value allocated to the AST Investment Grade Bond
Portfolio Sub-account used with the formula will be reallocated to the
Permitted Sub-Accounts according to your most recent allocation instruction or
in absence of such instruction, pro-rata. You should be aware that upon
termination of Spousal Highest Daily Lifetime Seven, you will lose the
Protected Withdrawal Value (including the Tenth Anniversary Date Guarantee),
Annual Income Amount, and the Return of Principal Guarantee that you had
accumulated under the benefit. Thus, the initial guarantees under any
newly-elected benefit will be based on your current Account Value. Once the
Spousal Highest Daily Lifetime Seven benefit is cancelled you are not required
to re-elect another optional living benefit and any subsequent benefit
election may be made on or after the first Valuation Day following the
cancellation of the Spousal Highest Daily Lifetime Seven benefit provided that
the benefit you are looking to elect is available on a post-issue basis. Any
such new benefit may be more expensive.
Return of Principal Guarantee
If you have not made a withdrawal before the Tenth Anniversary, we will
increase your Account Value on that Tenth Anniversary (or the next Valuation
Day, if that anniversary is not a Valuation Day), if the requirements set
forth in this paragraph are met. On the Tenth Anniversary, we add:
a) your Account Value on the day that you elected Spousal Highest Daily
Lifetime Seven; and
b) the sum of each Purchase Payment you made (including any Credits) during
the one-year period after you elected the benefit.
If the sum of (a) and (b) is greater than your Account Value on the Tenth
Anniversary, we increase your Account Value to equal the sum of (a) and (b),
by contributing funds from our general account. If the sum of (a) and (b) is
less than or equal to your Account Value on the Tenth Anniversary, we make no
such adjustment. The amount that we add to your Account Value under this
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provision will be allocated to each of your variable investment options
(including the a bond Sub-account used with this benefit), in the same
proportion that each such Sub-account bears to your total Account Value,
immediately before the application of the amount. Any such amount will not be
considered a Purchase Payment when calculating your Protected Withdrawal
Value, your death benefit, or the amount of any optional benefit that you may
have selected, and therefore will have no direct impact on any such values at
the time we add this amount. This potential addition to Account Value is
available only if you have elected Spousal Highest Daily Lifetime Seven and if
you meet the conditions set forth in this paragraph. Thus, if you take a
withdrawal prior to the Tenth Anniversary, you are not eligible to receive the
Return of Principal Guarantee.
Termination of the Benefit
You may terminate the benefit at any time by notifying us. If you terminate
the benefit, any guarantee provided by the benefit will terminate as of the
date the termination is effective, and certain restrictions on re-election
will apply as described above. The benefit terminates: (i) if upon the death
of the first Designated Life, the surviving Designated Life opts to take the
death benefit under the Annuity (thus, the benefit does not terminate solely
because of the death of the first Designated Life) (ii) upon the death of the
second Designated Life, (iii) upon your termination of the benefit (although
if you have elected to take annuity payments in the form of the Annual Income
Amount, we will continue to pay the Annual Income Amount) (iv) upon your
surrender of the Annuity (v) upon your election to begin receiving annuity
payments (vi) if both the Account Value and Annual Income Amount equal zero or
(vii) if you cease to meet our requirements for issuing the benefit (see
Election of and Designations under the Benefit).
Upon termination of Spousal Highest Daily Lifetime Seven other than upon death
of a Designated Life, we impose any accrued fee for the benefit (i.e., the fee
for the pro-rated portion of the year since the fee was last assessed), and
thereafter we cease deducting the charge for the benefit. With regard to your
investment allocations, upon termination we will: (i) leave intact amounts
that are held in the variable investment options, and (ii) transfer all
amounts held in the AST Investment Grade Bond Portfolio Sub-account (as
defined below) to your variable investment options, based on your existing
allocation instructions or (in the absence of such existing instructions) pro
rata (i.e. in the same proportion as the current balances in your variable
investment options).
Mathematical Formula Component of Spousal Highest Daily Lifetime Seven
As indicated above, we limit the Sub-accounts to which you may allocate
Account Value if you elect Spousal Highest Daily Lifetime Seven. For purposes
of the benefit, we refer to those permitted Sub-accounts as the "Permitted
Sub-accounts". As a requirement of participating in Spousal Highest Daily
Lifetime Seven, we require that you participate in our specialized formula,
under which we may transfer Account Value between the Permitted Sub-accounts
and a specified bond fund within the Advanced Series Trust (the "AST
Investment Grade Bond Sub-account"). We determine whether to make a transfer,
and the amount of any transfer, under a non-discretionary formula, discussed
below. The AST Investment Grade Bond Sub-account is available only with this
benefit, and thus you may not allocate purchase payments to the AST Investment
Grade Bond Sub-account. Under the formula component of Spousal Highest Daily
Lifetime Seven, we monitor your Account Value daily and, if dictated by the
formula, systematically transfer amounts between the Permitted Sub-accounts
you have chosen and the AST Investment Grade Bond Sub-account. Any transfer
would be made in accordance with a formula, which is set forth in the
Appendices to this prospectus.
Speaking generally, the formula, which we apply each Valuation Day, operates
as follows. The formula starts by identifying an income basis for that day and
then multiplies that figure by 5%, to produce a projected (i.e., hypothetical)
income amount. Note that we use 5% in the formula, irrespective of the
Annuitant's attained age. Then we produce an estimate of the total amount we
would target in our allocation model, based on the projected income amount and
factors set forth in the formula. In the formula, we refer to that value as
the "Target Value" or "L". If you have already made a withdrawal, your
projected income amount (and thus your Target Value) would take into account
any automatic step-up, any subsequent purchase payments, and any excess
withdrawals. Next, the formula subtracts from the Target Value the amount held
within the AST Investment Grade Bond Sub-account on that day, and divides that
difference by the amount held within the Permitted Sub-accounts. That ratio,
which essentially isolates the amount of your Target Value that is not offset
by amounts held within the AST Investment Grade Bond Sub-account, is called
the "Target Ratio" or "r". If the Target Ratio exceeds a certain percentage
(currently 83%), it means essentially that too much Target Value is not offset
by assets within the AST Investment Grade Bond Sub-account, and therefore we
will transfer an amount from your Permitted Sub-accounts to the AST Investment
Grade Bond Sub-account. Conversely, if the Target Ratio falls below a certain
percentage (currently 77%), then a transfer from the AST Investment Grade Bond
Sub-account to the Permitted Sub-accounts would occur. If you elect the new
formula (90% Cap Rule), see the discussion below.
As you can glean from the formula, poor investment performance of your Account
Value may result in a transfer of a portion of your variable Account Value to
the AST Investment Grade Bond Sub-account because such poor investment
performance will tend to increase the Target Ratio. Moreover, "flat"
investment returns of your Account Value over a period of time also could
result in the transfer of your Account Value from the Permitted Sub-accounts
to the AST Investment Grade Bond Sub-account. Because the amount allocated to
the AST Investment Grade Bond Sub-account and the amount allocated to the
Permitted Sub-accounts each is a variable in the formula, the investment
performance of each affects whether a transfer occurs for your Annuity. In
deciding how much to transfer, we use another formula, which essentially seeks
to re-balance amounts held in the Permitted Sub-accounts and the AST
Investment Grade Bond Sub-account so that the Target Ratio meets a target,
which currently is equal to 80%. Once you elect Spousal Highest Daily Lifetime
Seven, the ratios we use will be fixed. For newly-issued Annuities that elect
Spousal Highest Daily Lifetime Seven and existing Annuities that elect Spousal
Highest Daily Lifetime Seven, however, we reserve the right, subject to
regulatory approval, to change the ratios.
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While you are not notified when your Annuity reaches a reallocation trigger,
you will receive a confirmation statement indicating the transfer of a portion
of your Account Value either to or from the AST Investment Grade Bond
Sub-account. The formula by which the reallocation trigger operates is
designed primarily to mitigate the financial risks that we incur in providing
the guarantee under Spousal Highest Daily Lifetime Seven.
Depending on the results of the calculation relative to the reallocation
triggers, we may, on any day:
. Not make any transfer between the Permitted Sub-accounts and the AST
Investment Grade Bond Sub-account; or
. If a portion of your Account Value was previously allocated to the AST
Investment Grade Bond Sub-account, transfer all or a portion of those
amounts to the Permitted Sub-accounts, based on your existing allocation
instructions or (in the absence of such existing instructions) pro rata
(i.e., in the same proportion as the current balances in your variable
investment options); or
. Transfer all or a portion of your Account Value in the Permitted
Sub-accounts pro-rata to the AST Investment Grade Bond Sub-account.
Therefore, at any given time, some, none, or all of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account. If your entire Account
Value is transferred to the AST Investment Grade Bond Sub-account, then based
on the way the formula operates, the formula will not transfer amounts out of
the AST Investment Grade Bond Sub-account to the Permitted Sub-accounts and
the entire Account Value would remain in the AST Investment Grade Bond
Sub-account. If you make additional purchase payments to your Annuity, they
will be allocated to the Sub-accounts according to your allocation
instructions. Such additional purchase payments may or may not cause the
formula to transfer money in or out of the AST Investment Grade Bond
Sub-account. Once the purchase payments are allocated to your Annuity, they
will also be subject to the formula, which may result in immediate transfers
to or from the AST Investment Grade Bond Sub-accounts, if dictated by the
formula. The amount of any such transfers will vary (and in some instances
could be large) as dictated by the formula, and will depend on the factors
listed below.
The amount that is transferred to and from the AST Investment Grade Bond
Sub-account pursuant to the formula depends upon a number of factors unique to
your Annuity (and is not necessarily directly correlated with the securities
markets, bond markets, or interest rates, in general) including:
. How long you have owned Spousal Highest Daily Lifetime Seven;
. The performance of the Permitted Sub-accounts you have chosen;
. The performance of the AST Investment Grade Bond Sub-account;
. The amount you have allocated to each of the Permitted Sub-accounts you
have chosen;
. The amount you have allocated to the AST Investment Grade Bond
Sub-account;
. Additional purchase payments, if any, you make to your Annuity;
. Withdrawals, if any, you take from your Annuity (withdrawals are taken
pro rata from your Account Value).
Any Account Value in the AST Investment Grade Bond Sub-account will not be
available to participate in the investment experience of the Permitted
Sub-accounts if there is a recovery until it is moved out of the AST
Investment Grade Bond Sub-account.
The more of your Account Value allocated to the AST Investment Grade Bond
Sub-account under the formula, the greater the impact of the performance of
that Sub-account in determining whether (and how much) of your Account Value
is transferred back to the Permitted Sub-accounts. Further, it is possible
under the formula, that if a significant portion your Account Value is
allocated to the AST Investment Grade Bond Sub-account and that Sub-account
has good performance but the performance of your Permitted Sub-accounts is
negative, that the formula might transfer your Account Value to the Permitted
Sub-accounts. Thus, the converse is true too (the more you have allocated to
the Permitted Sub-accounts, the greater the impact of the performance of those
Sub-accounts will have on any transfer to the AST Investment Grade Bond
Sub-account).
Additional Tax Considerations
If you purchase an annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the Required Minimum Distribution
rules under the Code provide that you begin receiving periodic amounts from
your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than five (5) percent
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 required under the Code may exceed the Annual
Income Amount, which will cause us to increase the Annual Income Amount in any
Annuity Year that Required Minimum Distributions due from your Annuity are
greater than such amounts. In addition, the amount and duration of payments
under the annuity payment and death benefit provisions may be adjusted so that
the payments do not trigger any penalty or excise taxes due to tax
considerations such as Required Minimum Distribution provisions under the tax
law. Please note, however, that any withdrawal you take prior to the Tenth
Anniversary, even if withdrawn to satisfy required minimum distribution rules,
will cause you to lose the ability to receive the Return of Principal
Guarantee and the guaranteed amount described above under "Key Feature -
Protected Withdrawal Value".
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Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this benefit
here. However, we do note that if you participate in Spousal Highest Daily
Lifetime Seven through a non-qualified annuity, as with all withdrawals, once
all purchase payments are returned under the Annuity, all subsequent
withdrawal amounts will be taxed as ordinary income.
Spousal Highest Daily Lifetime Seven/SM/ with Beneficiary Income Option
There is an optional death benefit feature under this benefit, the amount of
which is linked to your Annual Income Amount. You may choose Spousal Highest
Daily Lifetime Seven without also selecting the Beneficiary Income Option
death benefit ("BIO"). If you elect Spousal Highest Daily Lifetime Seven
without the Beneficiary Income Option and would like to add this feature
later, you must terminate the Spousal Highest Daily Lifetime Seven benefit and
elect the Spousal Highest Daily Lifetime Seven with Beneficiary Income Option.
Spousal Highest Daily Lifetime Seven with Beneficiary Income Option is only
available in those states where Spousal Highest Daily Lifetime 7 Plus with
Beneficiary Income Option is not yet approved. If you terminate your Spousal
Highest Daily Lifetime Seven benefit to elect the Spousal Highest Daily
Lifetime Seven with Beneficiary Income Option benefit, you will lose all
guarantees under the Spousal Highest Daily Lifetime Seven benefit, and will
begin new guarantees under the Spousal Highest Daily Lifetime Seven with BIO
based on the Account Value as of the date the new benefit becomes active.
If you elect the Beneficiary Income Option death benefit, you may not elect
any other optional benefit. You may elect the Beneficiary Income Option death
benefit so long as each Designated Life is no older than age 75 at the time of
election. This death benefit is not transferable in the event of a divorce,
nor may the benefit be split in accordance with any divorce proceedings or
similar instrument of separation. Since this fee is based on the Protected
Withdrawal Value, the fee for Spousal Highest Daily Lifetime Seven with BIO
may be greater than it would have been, had it been based on the Account Value
alone.
For purposes of the Beneficiary Income Option death benefit, we calculate the
Annual Income Amount and Protected Withdrawal Value in the same manner that we
do under Spousal Highest Daily Lifetime Seven itself. Upon the first death of
a Designated Life, no amount is payable under the Beneficiary Income Option
death benefit. Upon the second death of a Designated Life, we identify the
following amounts: (a) the amount of the base death benefit under the Annuity
(b) the Protected Withdrawal Value and (c) the Annual Income Amount. If there
were no withdrawals prior to the date of death, then we calculate the
Protected Withdrawal Value for purposes of this death benefit as of the date
of death, and we calculate the Annual Income Amount as if there were a
withdrawal on the date of death. If there were withdrawals prior to the date
of death, then we set the Protected Withdrawal Value and Annual Income Amount
for purposes of this death benefit as of the date that we receive due proof of
death.
If there is one beneficiary, he/she must choose to receive either the base
death benefit (in a lump sum or other permitted form of distribution) or the
Beneficiary Income Option death benefit (in the form of annual payment of the
Annual Income Amount - such payments may be annual or at other intervals that
we permit). If there are multiple beneficiaries, each beneficiary is presented
with the same choice. Thus, each beneficiary can choose to take his/her
portion of either (a) the basic death benefit or (b) the Beneficiary Income
Option death benefit. In order to receive the Beneficiary Income Option death
benefit, each beneficiary's share of the death benefit proceeds must be
allocated as a percentage of the total death benefit to be paid. We allow a
beneficiary who has opted to receive the Annual Income Amount to designate
another beneficiary, who would receive any remaining payments upon the former
beneficiary's death. Note also that the final payment, exhausting the
Protected Withdrawal Value, may be less than the Annual Income Amount.
Here is an example to illustrate how the death benefit may be paid:
.. Assume that (i) the basic death benefit is $50,000, the Protected
Withdrawal Value is $100,000, and the Annual Income Amount is $5,000;
(ii) there are two beneficiaries (the first designated to receive 75% of
the death benefit and the second designated to receive 25% of the death
benefit); (iii) the first beneficiary chooses to receive his/her portion of
the death benefit in the form of the Annual Income Amount, and the second
beneficiary chooses to receive his/her portion of the death benefit with
reference to the basic death benefit.
.. Under those assumptions, the first beneficiary will be paid a pro-rated
portion of the Annual Income Amount for 20 years (the 20 year pay out
period is derived from the $5,000 Annual Income Amount, paid each year
until it exhausts the entire $100,000 Protected Withdrawal Value).
The pro-rated portion of the Annual Income Amount equal to $3,750 (i.e., the
first beneficiary's 75% share multiplied by $5,000) is then paid each year for
the 20 year period. Payment of $3,750 for 20 years results in total payments
of $75,000 (i.e., the first beneficiary's 75% share of the $100,000 Protected
Withdrawal Value).
The second beneficiary would receive 25% of the basic death benefit amount (or
$12,500).
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If you elect to terminate Spousal Highest Daily Lifetime Seven with
Beneficiary Income Option, both Spousal Highest Daily Lifetime Seven and that
death benefit option will be terminated. You may not terminate the death
benefit option without terminating the entire benefit. If you terminate
Spousal Highest Daily Lifetime Seven with Beneficiary Income Option, your
ability to elect other optional living benefits will be affected as indicated
in the "Election of and Designations under the Benefit" section, above.
Optional 90% Cap Rule Feature for Spousal Highest Daily Lifetime Seven
If you currently own an Annuity and have elected Spousal Highest Daily
Lifetime Seven Income Benefit (including Spousal Highest Daily Lifetime Seven
with Beneficiary Income Option), you can elect this feature which utilizes a
new mathematical formula. The new formula is described below and will replace
the "Transfer Calculation" portion of the formula currently used in connection
with your benefit on a prospective basis. This election may only be made once
and may not be revoked once elected. The new formula appears in Appendix J of
this prospectus.
Under the new formula, the formula will not execute a transfer to the AST
Investment Grade Bond Sub-account that results in more than 90% of your
Account Value being allocated to the AST Investment Grade Bond Sub-account
("90% cap" or "90% Cap Rule"). Thus, on any Valuation Day, if the formula
would require a transfer to the AST Investment Grade Bond Sub-account that
would result in more than 90% of the Account Value being allocated to the AST
Investment Grade Bond Sub-account, only the amount that results in exactly 90%
of the Account Value being allocated to the AST Investment Grade Bond
Sub-account will be transferred. Additionally, future transfers into the AST
Investment Grade Bond Sub-account will not be made (regardless of the
performance of the AST Investment Grade Bond Sub-account and the Permitted
Sub-accounts) at least until there is first a transfer out of the AST
Investment Grade Bond Sub-account. Once this transfer occurs out of the AST
Investment Grade Bond Sub-account, future amounts may be transferred to or
from the AST Investment Grade Bond Sub-account if dictated by the formula
(subject to the 90% cap). At no time will the formula make a transfer to the
AST Investment Grade Bond Sub-account that results in greater than 90% of your
Account Value being allocated to the AST Investment Grade Bond Sub-account.
However, it is possible that, due to the investment performance of your
allocations in the AST Investment Grade Bond Sub-account and your allocations
in the Permitted Sub-accounts you have selected, your Account Value could be
more than 90% invested in the AST Investment Grade Bond Sub-account.
If you make additional purchase payments to your Annuity while the 90% cap is
in effect, the formula will not transfer any of such additional purchase
payments to the AST Investment Grade Bond Sub-account at least until there is
first a transfer out of the AST Investment Grade Bond Sub-account, regardless
of how much of your Account Value is in the Permitted Sub-accounts. This means
that there could be scenarios under which, because of the additional purchase
payments you make, less than 90% of your entire Account Value is allocated to
the AST Investment Grade Bond Sub-account, and the formula will still not
transfer any of your Account Value to the AST Investment Grade Bond
Sub-account (at least until there is first a transfer out of the AST
Investment Grade Bond Sub-account). For example,
.. March 19, 2009 - a transfer is made that results in the 90% cap being met
and now $90,000 is allocated to the AST Investment Grade Bond Sub-account
and $10,000 is allocated to the Permitted Sub-accounts.
.. March 20, 2009 - you make an additional purchase payment of $10,000. No
transfers have been made from the AST Investment Grade Bond Sub-account to
the Permitted Sub-accounts since the cap went into effect on March 19, 2009.
.. As of March 20, 2009 (and at least until first a transfer is made out of
the AST Investment Grade Bond Sub-account under the formula) - the $10,000
payment is allocated to the Permitted Sub-accounts and now you have 82% in
the AST Investment Grade Bond Sub-account and 18% in the Permitted
Sub-accounts (such that $20,000 is allocated to the Permitted Sub-accounts
and $90,000 is allocated to the AST Investment Grade Bond Sub-account).
.. Once there is a transfer out of the AST Investment Grade Bond Sub-account
(of any amount), the formula will operate as described above, meaning that
the formula could transfer amounts to or from the AST Investment Grade Bond
Sub-account if dictated by the formula (subject to the 90% cap).
Under the operation of the formula, the 90% cap may come into existence and
may be removed multiple times while you participate in the benefit. We will
continue to monitor your Account Value daily and, if dictated by the formula,
systematically transfer amounts between the Permitted Sub-accounts you have
chosen and the AST Investment Grade Bond Sub-account as dictated by the
formula. Once you elect this feature, the new transfer formula described above
and set forth in appendix J will be the formula for your Annuity.
In the event that more than ninety percent (90%) of your Account Value is
allocated to the AST Investment Grade Bond Sub-account and you have elected
this feature, up to ten percent (10%) of your Account Value currently
allocated to the AST Investment Grade Bond Sub-account will be transferred to
your Permitted Sub-accounts, such that after the transfer, 90% of your Account
Value on the date of the transfer is in the AST Investment Grade Bond
Sub-account. The transfer to the Permitted Sub-accounts will be based on your
existing allocation instructions or (in the absence of such existing
instructions) pro rata (i.e., in the same proportion as the current balances
in your variable investment options). It is possible that additional transfers
might occur after this initial transfer if dictated by the formula. The
amounts of such additional transfer(s) will vary. If on the date this feature
is elected 100% of your Account Value is allocated to the AST Investment Grade
Bond Sub-account, a transfer of an amount equal to
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10% of your Account Value will be made to your Permitted Sub-accounts. It is
possible that an additional transfer to the permitted Sub-accounts could occur
following the Valuation Day, and in some instances (based on the formula) this
additional transfer could be large.
Once the 90% cap rule is met, future transfers into the AST Investment Grade
Bond Sub-account will not be made (regardless of the performance of the AST
Investment Grade Bond Sub-account and the Permitted Sub-accounts) at least
until there is first a transfer out of the AST Investment Grade Bond
Sub-account. Once this transfer occurs out of the AST Investment Grade Bond
Sub-account, future amounts may be transferred to or from the AST Investment
Grade Bond Sub-account if dictated by the formula (subject to the 90% cap).
Important Consideration When Electing The New Formula:
.. At any given time, some, most or none of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account.
.. Please be aware that because of the way the 90% cap formula operates, it is
possible that more than or less than 90% of your Account Value may be
allocated to the AST Investment Grade Bond Sub-account.
.. If this feature is elected, any Account Value transferred to the Permitted
Sub-accounts is subject to the investment performance of those
Sub-accounts. Your Account Value can go up or down depending of the
performance of the Permitted Sub-accounts you select.
HIGHEST DAILY LIFETIME 7 PLUS/SM/ INCOME BENEFIT (HD 7 Plus)/SM/
Highest Daily Lifetime 7 Plus is offered as a replacement to Highest Daily
Lifetime Seven in those jurisdictions where we have received regulatory
approval. Currently, if you elect Highest Daily Lifetime 7 Plus and
subsequently terminate the benefit, you may elect another lifetime withdrawal
benefit, subject to our current rules. See "Election of and Designations under
the Benefit" and "Termination of Existing Benefits and Election of New
Benefits" below for details. Please note that if you terminate Highest Daily
Lifetime 7 Plus and elect another lifetime benefit, you lose the guarantees
that you had accumulated under your existing benefit and will begin the new
guarantees under the new benefit you elect based on your Account Value as of
the date the new benefit becomes active. The income benefit under Highest
Daily Lifetime 7 Plus currently is based on a single "designated life" who is
at least 45 years old on the date that the benefit is acquired. The Highest
Daily Lifetime 7 Plus Benefit is not available if you elect any other optional
living benefit, although you may elect any optional death benefit other than
the Plus 40 life insurance rider and Highest Daily Value death benefit. As
long as your Highest Daily Lifetime 7 Plus Benefit is in effect, you must
allocate your Account Value in accordance with the then permitted and
available investment option(s) with this benefit. For a more detailed
description of the permitted investment options, see the "Investment Options"
section in this prospectus.
We offer a benefit that guarantees until the death of the single designated
life (the Annuitant) the ability to withdraw an annual amount (the "Annual
Income Amount") equal to a percentage of an initial principal value (the
"Protected Withdrawal Value") regardless of the impact of Sub-account
performance on the Account Value, subject to our rules regarding the timing
and amount of withdrawals. You are guaranteed to be able to withdraw the
Annual Income Amount for the rest of your life ("Lifetime Withdrawals"),
provided that you have not made "excess withdrawals" that have resulted in
your Account Value being reduced to zero. We also permit you to make a
one-time Non-Lifetime Withdrawal from your Annuity prior to taking Lifetime
Withdrawals under the benefit. Highest Daily Lifetime 7 Plus may be
appropriate if you intend to make periodic withdrawals from your Annuity, and
wish to ensure that Sub-account performance will not affect your ability to
receive annual payments. You are not required to make withdrawals as part of
the benefit - the guarantees are not lost if you withdraw less than the
maximum allowable amount each year under the rules of the benefit. As
discussed below, we require that you participate in our asset transfer program
in order to participate in Highest Daily Lifetime 7 Plus.
Although you are guaranteed the ability to withdraw your Annual Income Amount
for life even if your Account Value falls to zero, if you take an excess
withdrawal that brings your Account Value to zero, it is possible that your
Annual Income Amount could also fall to zero. In that scenario, no further
amount would be payable under the Highest Daily Lifetime 7 Plus benefit.
Key Feature - Protected Withdrawal Value
The Protected Withdrawal Value is used to calculate the initial Annual Income
Amount. The Protected Withdrawal Value is separate from your Account Value and
not available as cash or a lump sum. On the effective date of the benefit, the
Protected Withdrawal Value is equal to your Account Value. On each Valuation
Day thereafter until the date of your first Lifetime Withdrawal (excluding any
Non-Lifetime Withdrawal discussed below), the Protected Withdrawal Value is
equal to the "Periodic Value" described in the next paragraphs.
The "Periodic Value" initially is equal to the Account Value on the effective
date of the benefit. On each Valuation Day thereafter until the first Lifetime
Withdrawal, we recalculate the Periodic Value. We stop determining the
Periodic Value upon your first Lifetime Withdrawal after the effective date of
the benefit. On each Valuation Day (the "Current Valuation Day"), the Periodic
Value is equal to the greater of:
(1)the Periodic Value for the immediately preceding business day (the "Prior
Valuation Day") appreciated at the daily equivalent of 7% annually during
the calendar day(s) between the Prior Valuation Day and the Current
Valuation Day (i.e., one day for
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successive Valuation Days, but more than one calendar day for Valuation
Days that are separated by weekends and/or holidays), plus the amount of
any adjusted Purchase Payment made on the Current Valuation Day (the
Periodic Value is proportionally reduced for any Non-Lifetime Withdrawal);
and
(2)the Account Value.
If you have not made a Lifetime Withdrawal on or before the 10/th/, 20/th/, or
25/th/ Anniversary of the effective date of the benefit, your Periodic Value
on the 10/th/, 20/th/, or 25/th/ Anniversary of the benefit effective date is
equal to the greater of:
(1)the Periodic Value described above or,
(2)the sum of (a), (b) and (c) below (proportionally reduced for any
Non-Lifetime Withdrawals):
(a)200% (on the 10/th/ anniversary), 400% (on the 20/th/ anniversary) or
600% (on the 25/th/ anniversary) of the Account Value on the effective
date of the benefit;
(b)200% (on the 10/th/ anniversary), 400% (on the 20/th/ anniversary) or
600% (on the 25/th/ anniversary) of all adjusted purchase payments made
within one year following the effective date of the benefit; and
(c)all adjusted purchase payments made after one year following the
effective date of the benefit.
If you elect Highest Daily Lifetime 7 Plus with Beneficiary Income Option
("BIO") (see below), we will stop determining the Periodic Value (as described
above) on the earlier of your first Lifetime Withdrawal after the effective
date of the benefit or the Tenth Anniversary of the effective date of the
benefit ("Tenth Anniversary"). This means that under the Highest Daily
Lifetime 7 Plus with BIO benefit you will not be eligible for the guaranteed
minimum Periodic Values described above on the 20/th/ and 25/th/ Anniversary
of the Benefit Effective Date.
On and after the date of your first Lifetime Withdrawal, your Protected
Withdrawal Value is increased by the amount of any subsequent purchase
payments, is reduced by withdrawals, including your first Lifetime Withdrawal
(as described below), and may be increased if you qualify for a step-up (as
described below).
Return of Principal Guarantee
If you have not made a Lifetime Withdrawal before the Tenth Anniversary, we
will increase your Account Value on that Tenth Anniversary (or the next
Valuation Day, if that anniversary is not a Valuation Day), if the
requirements set forth in this paragraph are met. On the Tenth Anniversary, we
add:
a) your Account Value on the day that you elected Highest Daily Lifetime 7
Plus proportionally reduced for any Non-Lifetime Withdrawal; and
b) the sum of each Purchase Payment proportionally reduced for any subsequent
Non-Lifetime Withdrawal (including the amount of any associated Credits)
you made during the one-year period after you elected the benefit.
If the sum of (a) and (b) is greater than your Account Value on the Tenth
Anniversary, we increase your Account Value to equal the sum of (a) and (b),
by contributing funds from our general account. If the sum of (a) and (b) is
less than or equal to your Account Value on the Tenth Anniversary, we make no
such adjustment. The amount that we add to your Account Value under this
provision will be allocated to each of your variable investment options
(including the AST Investment Grade Bond Sub-account), in the same proportion
that each such Sub-account bears to your total Account Value, immediately
before the application of the amount. Any such amount will not be considered a
Purchase Payment when calculating your Protected Withdrawal Value, your death
benefit, or the amount of any optional benefit that you may have selected, and
therefore will have no direct impact on any such values at the time we add
this amount. Because the amount is added to Account Value, it will also be
subject to each charge under your Annuity based on Account Value. This
potential addition to Account Value is available only if you have elected
Highest Daily Lifetime 7 Plus and if you meet the conditions set forth in this
paragraph. Thus, if you take a withdrawal (other than a Non-Lifetime
Withdrawal) prior to the Tenth Anniversary, you are not eligible to receive
the Return of Principal Guarantee. The Return of Principal Guarantee is
referred to as the Guaranteed Minimum Account Value Credit in the benefit
rider.
Key Feature - Annual Income Amount under the Highest Daily Lifetime 7 Plus
Benefit
The Annual Income Amount is equal to a specified percentage of the Protected
Withdrawal Value. The percentage initially depends on the age of the Annuitant
on the date of the first Lifetime Withdrawal after election of the benefit.
The percentages are: 4% for ages 45 - less than 59 1/2, 5% for ages 59 1/2 -
74, 6% for ages 75-79, 7% for ages 80-84, and 8% for ages 85 and older. Under
the Highest Daily Lifetime 7 Plus benefit, if your cumulative Lifetime
Withdrawals in an Annuity Year are less than or equal to the Annual Income
Amount, they will not reduce your Annual Income Amount in subsequent Annuity
Years, but any such withdrawals will reduce the Annual Income Amount on a
dollar-for-dollar basis in that Annuity Year. If your cumulative Lifetime
Withdrawals in an Annuity Year are in excess of the Annual Income Amount
("Excess Income"), your Annual Income Amount in subsequent years will be
reduced (except with regard to required minimum distributions for this Annuity
that comply with our rules) by the result of the ratio of the Excess Income to
the Account Value immediately prior to such withdrawal (see examples of this
calculation below). Reductions are based on the actual amount of the
withdrawal, including any CDSC that may apply. Lifetime Withdrawals of any
amount up to and including the Annual Income Amount will reduce the Protected
Withdrawal Value by the amount of the withdrawal. Withdrawals of Excess Income
will reduce the Protected Withdrawal Value by the same ratio as the reduction
to the Annual Income Amount.
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Note that if your withdrawal of the Annual Income Amount in a given Annuity
Year exceeds the applicable free withdrawal amount under the Annuity (but is
not considered Excess Income), we will not impose any CDSC on the amount of
that withdrawal.
You may use the Systematic Withdrawal program to make withdrawals of the
Annual Income Amount. Any systematic withdrawal will be deemed a Lifetime
Withdrawal under this benefit.
Any Purchase Payment that you make subsequent to the election of Highest Daily
Lifetime 7 Plus will (i) increase the then-existing Annual Income Amount by an
amount equal to a percentage of the Purchase Payment (including the amount of
any associated Credits) based on the age of the Annuitant at the time of the
first Lifetime Withdrawal (the percentages are: 4% for ages 45 - less than
59 1/2, 5% for ages 59 1/2 - 74, 6% for ages 75-79, 7% for ages 80-84, and 8%
for ages 85 and older) and (ii) increase the Protected Withdrawal Value by the
amount of the Purchase Payment (including the amount of any associated
Credits).
Highest Daily Auto Step-Up
An automatic step-up feature ("Highest Daily Auto Step-Up") is part of Highest
Daily Lifetime 7 Plus. As detailed in this paragraph, the Highest Daily Auto
Step-Up feature can result in a larger Annual Income Amount subsequent to your
first Lifetime Withdrawal. The Highest Daily Auto Step-Up starts with the
anniversary of the Issue Date of the Annuity (the "Annuity Anniversary")
immediately after your first Lifetime Withdrawal under the benefit.
Specifically, upon the first such Annuity Anniversary, we identify the Account
Value on each Valuation Day within the immediately preceding Annuity Year
after your first Lifetime Withdrawal. Having identified the highest daily
value (after all daily values have been adjusted for subsequent purchase
payments and withdrawals), we then multiply that value by a percentage that
varies based on the age of the Annuitant on the Annuity Anniversary as of
which the step-up would occur. The percentages are: 4% for ages 45 - less than
59 1/2, 5% for ages 59 1/2-74, 6% for ages 75-79, 7% for ages 80-84, and 8%
for ages 85 and older. If that value exceeds the existing Annual Income
Amount, we replace the existing amount with the new, higher amount. Otherwise,
we leave the existing Annual Income Amount intact. The Account Value on the
Annuity Anniversary is considered the last daily step-up value of the Annuity
Year. All daily valuations and annual step-ups will only occur on a Valuation
Day. In later years (i.e., after the first Annuity Anniversary after the first
Lifetime Withdrawal), we determine whether an automatic step-up should occur
on each Annuity Anniversary, by performing a similar examination of the
Account Values that occurred on Valuation Days during the year. At the time
that we increase your Annual Income Amount, we also increase your Protected
Withdrawal Value to equal the highest daily value upon which your step-up was
based only if that results in an increase to the Protected Withdrawal Value.
Your Protected Withdrawal Value will never be decreased as a result of an
income step-up. If, on the date that we implement a Highest Daily Auto Step-Up
to your Annual Income Amount, the charge for Highest Daily Lifetime 7 Plus has
changed for new purchasers, you may be subject to the new charge at the time
of such step-up. Prior to increasing your charge for Highest Daily Lifetime 7
Plus upon a step-up, we would notify you, and give you the opportunity to
cancel the automatic step-up feature. If you receive notice of a proposed
step-up and accompanying fee increase, you should carefully evaluate whether
the amount of the step-up justifies the increased fee to which you will be
subject.
If you establish a Systematic Withdrawal program, we will not automatically
increase the withdrawal amount when there is an increase to the Annual Income
Amount.
The Highest Daily Lifetime 7 Plus benefit does not affect your ability to make
withdrawals under your Annuity, or limit your ability to request withdrawals
that exceed the Annual Income Amount. Under Highest Daily Lifetime 7 Plus, if
your cumulative Lifetime Withdrawals in an Annuity Year are less than or equal
to the Annual Income Amount, they will not reduce your Annual Income Amount in
subsequent Annuity Years, but any such withdrawals will reduce the Annual
Income Amount on a dollar-for-dollar basis in that Annuity Year.
If, cumulatively, you withdraw an amount less than the Annual Income Amount in
any Annuity Year, you cannot carry over the unused portion of the Annual
Income Amount to subsequent Annuity Years.
Because each of the Protected Withdrawal Value and Annual Income Amount is
determined in a way that is not solely related to Account Value, it is
possible for the Account Value to fall to zero, even though the Annual Income
Amount remains.
Examples of dollar-for-dollar and proportional reductions, and the Highest
Daily Auto Step-Up are set forth below. The values shown here are purely
hypothetical, and do not reflect the charges for the Highest Daily Lifetime 7
Plus benefit or any other fees and charges. Assume the following for all three
examples:
.. The Issue Date is December 1, 2008
.. The Highest Daily Lifetime 7 Plus benefit is elected on March 5, 2009
.. The Annuitant was 70 years old when he/she elected the Highest Daily
Lifetime 7 Plus benefit.
Example of dollar-for-dollar reductions
On November 24, 2009, the Protected Withdrawal Value is $120,000, resulting in
an Annual Income Amount of $6,000 (since the Annuitant is between the ages of
59 1/2 and 74 at the time of the first Lifetime Withdrawal, the Annual Income
Amount is 5% of the
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Protected Withdrawal Value, in this case 5% of $120,000). Assuming $2,500 is
withdrawn from the Annuity on this date, the remaining Annual Income Amount
for that Annuity Year (up to and including December 1, 2009) is $3,500. This
is the result of a dollar-for-dollar reduction of the Annual Income Amount
($6,000 less $2,500 = $3,500).
Example of proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000
occurs on November 27, 2009 and the Account Value at the time and immediately
prior to this withdrawal is $118,000. The first $3,500 of this withdrawal
reduces the Annual Income Amount for that Annuity Year to $0. The remaining
withdrawal amount of $1,500 - reduces the Annual Income Amount in future
Annuity Years on a proportional basis based on the ratio of the excess
withdrawal to the Account Value immediately prior to the excess withdrawal.
(Note that if there are other future withdrawals in that Annuity Year, each
would result in another proportional reduction to the Annual Income Amount).
Here is the calculation:
Account Value before Lifetime Withdrawal $118,000.00
Less amount of "non" excess withdrawal $ 3,500.00
Account Value immediately before excess withdrawal of $1,500 $114,500.00
Excess withdrawal amount $ 1,500.00
Divided by Account Value immediately before excess withdrawal $114,500.00
Ratio 1.31%
Annual Income Amount $ 6,000.00
Less ratio of 1.31% $ 78.60
Annual Income Amount for future Annuity Years $ 5,921.40
Example of highest daily auto step-up
On each Annuity Anniversary date, the Annual Income Amount is stepped-up if
the appropriate percentage (based on the Annuitant's age on the Annuity
Anniversary) of the highest daily value since your first Lifetime Withdrawal
(or last Annuity Anniversary in subsequent years), adjusted for withdrawals
and additional purchase payments, is higher than the Annual Income Amount,
adjusted for excess withdrawals and additional purchase payments (including
the amount of any associated Credits).
Continuing the same example as above, the Annual Income Amount for this
Annuity Year is $6,000. However, the excess withdrawal on November 27 reduces
the amount to $5,921.40 for future years (see above). For the next Annuity
Year, the Annual Income Amount will be stepped up if 5% (since the designated
life is between 59 1/2 and 74 on the date of the potential step-up) of the
highest daily Account Value adjusted for withdrawals and purchase payments
(including the amount of any associated Credits), is higher than $5,921.40.
Here are the calculations for determining the daily values. Only the
November 25 value is being adjusted for excess withdrawals as the November 30
and December 1 Valuation Days occur after the excess withdrawal on November 27.
Highest Daily Value
(adjusted with Adjusted Annual
withdrawal and purchase Income Amount (5% of the
Date* Account value payments)** Highest Daily Value)
----- ------------- ----------------------- ------------------------
November 25, 2009 $119,000.00 $ 119,000.00 $5,950.00
November 26, 2009 Thanksgiving Day
November 27, 2009 $113,000.00 $ 113,986.95 $5,699.35
November 30, 2009 $113,000.00 $ 113,986.95 $5,699.35
December 01, 2009 $119,000.00 $ 119,000.00 $5,950.00
* In this example, the Annuity Anniversary date is December 1. The Valuation
Dates are every day following the first Lifetime Withdrawal. In subsequent
Annuity Years Valuation Dates will be every day following the Annuity
Anniversary. The Annuity Anniversary Date of December 1 is considered the
final Valuation Date for the Annuity Year.
** In this example, the first daily value after the first Lifetime Withdrawal
is $119,000 on November 25, resulting in an adjusted Annual Income Amount
of $5,950.00. This amount is adjusted on November 27 to reflect the $5,000
withdrawal. The calculations for the adjustments are:
. The Account Value of $119,000 on November 25 is first reduced
dollar-for-dollar by $3,500 ($3,500 is the remaining Annual Income
Amount for the Annuity Year), resulting in an adjusted Account Value of
$115,500 before the excess withdrawal.
. This amount ($115,500) is further reduced by 1.31% (this is the ratio in
the above example which is the excess withdrawal divided by the Account
Value immediately preceding the excess withdrawal) resulting in a
Highest Daily Value of $113,986.95.
. The adjusted Annual Income Amount is carried forward to the next
Valuation Date of November 30. At this time, we compare this amount to
5% of the Account Value on November 30. Since the November 27 adjusted
Annual Income Amount of $5,699.35 is higher than $5,650.00 (5% of
$113,000), we continue to carry $5,699.35 forward to the next and final
Valuation Date of December 1. The Account Value on December 1 is
$119,000 and 5% of this amount is $5,950. Since this is higher than
$5,699.35, the adjusted Annual Income Amount is reset to $5,950.00.
In this example, 5% of the December 1 value results in the highest amount of
$5,950.00. Since this amount is higher than the current year's Annual Income
Amount of $5,921.40 adjusted for excess withdrawals, the Annual Income Amount
for the next Annuity Year, starting on December 2, 2009 and continuing through
December 1, 2010, will be stepped-up to $5,950.00.
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Non-Lifetime Withdrawal Feature
You may take a one-time non-lifetime withdrawal ("Non-Lifetime Withdrawal")
under Highest Daily Lifetime 7 Plus. It is an optional feature of the benefit
that you can only elect at the time of your first withdrawal. The amount of
the Non-Lifetime Withdrawal cannot be more than the amount that would cause
the Annuity to be taken below the minimum Surrender Value after a withdrawal
for your Annuity. This Non-Lifetime Withdrawal will not establish your initial
Annual Income Amount and the Periodic Value described above will continue to
be calculated. However, the total amount of the withdrawal will proportionally
reduce all guarantees associated with the Highest Daily Lifetime 7 Plus
benefit. You must tell us if your withdrawal is intended to be the
Non-Lifetime Withdrawal and not the first Lifetime Withdrawal under the
Highest Daily Lifetime 7 Plus benefit. If you don't elect the Non-Lifetime
Withdrawal, the first withdrawal you make will be the first Lifetime
Withdrawal that establishes your Protected Withdrawal Value and Annual Income
Amount. Once you elect to take the Non-Lifetime Withdrawal or Lifetime
Withdrawals, no additional Non-Lifetime Withdrawals may be taken.
The Non-Lifetime Withdrawal will proportionally reduce the Protected
Withdrawal Value, the Return of Principal guarantee, and the Periodic Value
guarantees on the tenth, twentieth and twenty-fifth anniversaries of the
benefit effective date, described above, by the percentage the total
withdrawal amount (including any applicable CDSC) represents of the then
current Account Value immediately prior to the withdrawal.
If you are participating in a Systematic Withdrawal program, the first
withdrawal under the program cannot be classified as the Non-Lifetime
Withdrawal. The first partial withdrawal in payment of any third party
investment advisory service from your Annuity also cannot be classified as the
Non-Lifetime Withdrawal.
Example - Non-Lifetime Withdrawal (proportional reduction)
This example is purely hypothetical and does not reflect the charges for the
benefit or any other fees and charges. It is intended to illustrate the
proportional reduction of the Non-Lifetime Withdrawal under this benefit.
Assume the following:
.. The Issue Date is December 1, 2008
.. The Highest Daily Lifetime 7 Plus benefit is elected on March 5, 2009
.. The Account Value at benefit election was $105,000
.. The Annuitant was 70 years old when he/she elected the Highest Daily
Lifetime 7 Plus benefit.
.. No previous withdrawals have been taken under the Highest Daily Lifetime 7
Plus benefit.
On May 2, 2009, the Protected Withdrawal Value is $125,000, the 10/th/ benefit
year minimum Periodic Value guarantee is $210,000, the 10/th/ benefit year
Return of Principal guarantee is $105,000, the 20/th/ benefit year minimum
Periodic Value guarantee is $420,000, the 25/th/ benefit year minimum Periodic
Value guarantee is $630,000 and the Account Value is $120,000. Assuming
$15,000 is withdrawn from the Annuity on May 2, 2009 and is designated as a
Non-Lifetime Withdrawal, all guarantees associated with the Highest Daily
Lifetime 7 Plus benefit will be reduced by the ratio the total withdrawal
amount represents of the Account Value just prior to the withdrawal being
taken.
Here is the calculation:
Withdrawal Amount divided by $ 15,000
Account Value before withdrawal $120,000
Equals ratio 12.5%
All guarantees will be reduced by the above ratio (12.5%)
Protected Withdrawal Value $109,375
10/th/ benefit year Return of Principal $ 91,875
10/th/ benefit year Minimum Periodic Value $183,750
20/th/ benefit year Minimum Periodic Value $367,500
25/th/ benefit year Minimum Periodic Value $551,250
Required Minimum Distributions
Withdrawals that exceed the Annual Income Amount, but which you are required
to take as a required minimum distribution for this Annuity, will not reduce
the Annual Income Amount for future years. No additional Annual Income Amounts
will be available in an Annuity Year due to required minimum distributions
unless the required minimum distribution amount is greater than the Annual
Income Amount. Any withdrawal you take that exceeds the Annual Income Amount
in Annuity Years that your required minimum distribution amount is not greater
than the Annual Income Amount will be treated as an Excess Withdrawal under
the benefit. If the required minimum distribution (as calculated by us for
your Annuity and not previously withdrawn in the current calendar year) is
greater than the Annual Income Amount, an amount equal to the remaining Annual
Income Amount plus the difference between the required minimum distribution
amount not previously withdrawn in the current calendar year and the Annual
Income Amount will be available in the current Annuity Year without it being
considered an excess withdrawal. In the
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event that a required minimum distribution is calculated in a calendar year
that crosses more than one Annuity Year and you choose to satisfy the entire
required minimum distribution for that calendar year in the next Annuity Year,
the distribution taken in the next Annuity Year will reduce your Annual Income
Amount in that Annuity Year on a dollar by dollar basis. If the required
minimum distribution not taken in the prior Annuity Year is greater than the
Annual Income Amount as guaranteed by the benefit in the current Annuity Year,
the total required minimum distribution amount may be taken without being
treated as an excess withdrawal.
Example - required minimum distributions
The following example is purely hypothetical and is intended to illustrate a
scenario in which the required minimum distribution amount in a given Annuity
Year is greater than the Annual Income Amount.
Annual Income Amount = $5,000
Remaining Annual Income Amount = $3,000
Required Minimum Distribution = $6,000
The amount you may withdraw in the current Annuity Year without it being
treated as an Excess Withdrawal is $4,000. ($3,000 + ($6,000 - $5,000) =
$4,000).
If the $4,000 withdrawal is taken, the remaining Annual Income Amount will be
zero and the remaining required minimum distribution amount of $2,000 may be
taken in the subsequent Annuity Year (when your Annual Income Amount is reset
to $5,000) without proportionally reducing all of the guarantees associated
with the Highest Daily Lifetime 7 Plus benefit as described above. The amount
you may withdraw in the subsequent Annuity Year if you choose not to satisfy
the required minimum distribution in the current Annuity Year (assuming the
Annual Income Amount in the subsequent Annuity Year is $5,000), without being
treated as an Excess Withdrawal is $6,000. This withdrawal must comply with
all IRS guidelines in order to satisfy the required minimum distribution for
the current calendar year.
Benefits Under Highest Daily Lifetime 7 Plus
.. To the extent that your Account Value was reduced to zero as a result of
cumulative Lifetime Withdrawals in an Annuity Year that are less than or
equal to the Annual Income Amount or as a result of the fee that we assess
for Highest Daily Lifetime 7 Plus, and amounts are still payable under
Highest Daily Lifetime 7 Plus, we will make an additional payment, if any,
for that Annuity Year equal to the remaining Annual Income Amount for the
Annuity Year. If you have not begun taking Lifetime Withdrawals and your
Account Value is reduced to zero as a result of the fee we assess for
Highest Daily Lifetime 7 Plus, we will calculate the Annual Income Amount
as if you made your first Lifetime Withdrawal on the date the Account Value
was reduced to zero and Lifetime Withdrawals will begin on the next Annuity
anniversary. If this were to occur, you are not permitted to make
additional purchase payments to your Annuity. Thus, in these scenarios, the
remaining Annual Income Amount would be payable even though your Account
Value was reduced to zero. In subsequent Annuity Years we make payments
that equal the Annual Income Amount as described in this section. We will
make payments until the death of the single designated life. To the extent
that cumulative withdrawals in the Annuity Year that reduced your Account
Value to zero are more than the Annual Income Amount, the Highest Daily
Lifetime 7 Plus benefit terminates, and no additional payments are made.
However, if a withdrawal in the latter scenario was taken to satisfy a
required minimum distribution under the Annuity, then the benefit will not
terminate, and we will continue to pay the Annual Income Amount in
subsequent Annuity Years until the death of the Designated Life.
.. If Annuity payments are to begin under the terms of your Annuity, or if you
decide to begin receiving Annuity payments and there is an Annual Income
Amount due in subsequent Annuity Years, you can elect one of the following
two options:
(1)apply your Account Value to any Annuity option available; or
(2)request that, as of the date Annuity payments are to begin, we make
Annuity payments each year equal to the Annual Income Amount. If this
option is elected, the Annual Income Amount will not increase after
annuity payments have begun. We will make payments until the death of
the single Designated Life. We must receive your request in a form
acceptable to us at our office.
.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments in the form of a single life fixed
annuity with ten payments certain, by applying the greater of the annuity
rates then currently available or the annuity rates guaranteed in your
Annuity. The amount that will be applied to provide such Annuity payments
will be the greater of:
(1)the present value of the future Annual Income Amount payments. Such
present value will be calculated using the greater of the single life
fixed annuity rates then currently available or the single life fixed
annuity rates guaranteed in your Annuity; and
(2)the Account Value.
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.. If no Lifetime Withdrawal was ever taken, we will calculate the Annual
Income Amount as if you made your first Lifetime Withdrawal on the date the
annuity payments are to begin.
.. Please note that payments that we make under this benefit after the Annuity
Anniversary coinciding with or next following the annuitant's 95/th/
birthday will be treated as annuity payments.
Other Important Considerations
.. Withdrawals under the Highest Daily Lifetime 7 Plus benefit are subject to
all of the terms and conditions of the Annuity, including any applicable
CDSC for the Non-Lifetime Withdrawal as well as withdrawals that exceed the
Annual Income Amount.
.. Withdrawals made while the Highest Daily Lifetime 7 Plus Benefit is in
effect will be treated, for tax purposes, in the same way as any other
withdrawals under the Annuity. Any withdrawals made under the benefit will
be taken pro-rata from the Sub-accounts (including the AST Investment Grade
Bond Sub-account) and the DCA Fixed Rate Options (if you are participating
in the 6 or 12 Month DCA Program). Withdrawals from the DCA Fixed Rate
Options will be taken on a last-in, first-out basis.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Highest Daily Lifetime 7 Plus
benefit. The Highest Daily Lifetime 7 Plus benefit provides a guarantee
that if your Account Value is reduced to zero (subject to our rules
regarding time and amount of withdrawals), you will be able to receive your
Annual Income Amount in the form of periodic benefit payments.
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Permitted Sub-accounts.
.. You cannot allocate purchase payments or transfer Account Value to or from
the AST Investment Grade Bond Portfolio Sub-account (see description below)
if you elect this benefit. A summary description of the AST Investment
Grade Bond Portfolio appears within the prospectus section entitled "What
Are The Investment Objectives and Policies of The Portfolios?". Upon the
initial transfer of your Account Value into the AST Investment Grade Bond
Portfolio, we will send a prospectus for that Portfolio to you, along with
your confirmation statement. In addition, you can find a copy of the AST
Investment Grade Bond Portfolio prospectus by going to
www.prudentialannuities.com.
.. Transfers to and from the elected Sub-accounts and the AST Investment Grade
Bond Portfolio Sub-account triggered by the Highest Daily Lifetime 7 Plus
asset transfer program will not count toward the maximum number of free
transfers allowable under an Annuity.
.. You must allocate your Account Value in accordance with the then available
investment option(s) that we may prescribe in order to elect and maintain
the Highest Daily Lifetime 7 Plus benefit. If, subsequent to your election
of the benefit, we change our requirements for how Account Value must be
allocated under the benefit, the new requirement will apply only to new
elections of the benefit, and we will not compel you to re-allocate your
Account Value in accordance with our newly adopted requirements. Subject to
any change in requirements, transfer of Account Value and allocation of
additional purchase payments may be subject to new investment limitations.
.. If you elect this benefit and in connection with that election, you are
required to reallocate to permitted investment options, then on the
Valuation Day we receive your request in Good Order, we will (i) sell units
of the non-permitted investment options and (ii) invest the proceeds of
those sales in the permitted investment options that you have designated.
During this reallocation process, your Account Value allocated to the
Sub-accounts will remain exposed to investment risk, as is the case
generally. The newly-elected benefit will commence at the close of business
on the following Valuation Day. Thus, the protection afforded by the
newly-elected benefit will not arise until the close of business on the
following Valuation Day.
.. The maximum charge for Highest Daily Lifetime 7 Plus is 1.50% annually of
the greater of Account Value and the Protected Withdrawal Value (PWV). The
current charge is 0.75% annually of the greater of Account Value and the
Protected Withdrawal Value. We deduct this fee at the end of each benefit
quarter, where each such quarter is part of a year that begins on the
effective date of the benefit or an anniversary thereafter. Thus, on each
such quarter-end (or the next Valuation Day, if the quarter-end is not a
Valuation Day), we deduct 0.1875% of the greater of the prior day's Account
Value or the prior day's Protected Withdrawal Value at the end of the
quarter. We deduct the fee pro rata from each of your Sub-accounts
including the AST Investment Grade Bond Portfolio Sub-account and the DCA
Fixed Rate Option (if applicable). Since this fee is based on the greater
of the Account Value or the Protected Withdrawal Value, the fee for Highest
Daily Lifetime 7 Plus may be greater than it would have been, had it been
based on the Account Value alone. If the fee to be deducted exceeds the
Account Value at the benefit quarter, we will charge the remainder of the
Account Value for the benefit and continue the benefit as described above.
Election of and Designations under the Benefit
For Highest Daily Lifetime 7 Plus, there must be either a single Owner who is
the same as the Annuitant, or if the Annuity is entity owned, there must be a
single natural person Annuitant. In either case, the Annuitant must be at
least 45 years old.
Any change of the Annuitant under the Annuity will result in cancellation of
Highest Daily Lifetime 7 Plus. Similarly, any change of Owner will result in
cancellation of Highest Daily Lifetime 7 Plus, except if (a) the new Owner has
the same taxpayer identification number as the previous owner, (b) ownership
is transferred from a custodian to the Annuitant, or vice versa or
(c) ownership is transferred from one entity to another entity that is
satisfactory to us.
Highest Daily Lifetime 7 Plus can be elected at the time that you purchase
your Annuity or after the Issue Date, subject to our eligibility rules and
restrictions. If you elect Highest Daily Lifetime 7 Plus and terminate it, you
can re-elect it, subject to our current rules. Additionally, if you currently
own an Annuity with a living benefit, you may terminate your existing benefit
rider and
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elect any available benefits subject to our current rules. Please note that if
you terminate a living benefit and elect a new living benefit, you lose the
guarantees that you had accumulated under your existing benefit and will begin
the new guarantees under the new benefit you elect based on your Account Value
as of the date the new benefit becomes active. We reserve the right to waive,
change and/or further limit the election frequency in the future.
Termination of the Benefit
You may terminate Highest Daily Lifetime 7 Plus at any time by notifying us.
If you terminate the benefit, any guarantee provided by the benefit will
terminate as of the date the termination is effective, and certain
restrictions on re-election may apply. The benefit automatically terminates:
(i) upon your termination of the benefit, (ii) upon your surrender of the
Annuity, (iii) upon your election to begin receiving annuity payments
(although if you have elected to receive the Annual Income Amount in the form
of Annuity payments, we will continue to pay the Annual Income Amount),
(iv) upon our receipt of due proof of the death of the Annuitant, (v) if both
the Account Value and Annual Income Amount equal zero, or (vi) if you cease to
meet our requirements as described in Elections of and Designations under the
Benefit".
Upon termination of Highest Daily Lifetime 7 Plus other than upon the death of
the Annuitant, we impose any accrued fee for the benefit (i.e., the fee for
the pro-rated portion of the year since the fee was last assessed), and
thereafter we cease deducting the charge for the benefit. With regard to your
investment allocations, upon termination we will: (i) leave intact amounts
that are held in the variable investment options, and (ii) transfer all
amounts held in the AST Investment Grade Bond Portfolio Sub-account to your
variable investment options, based on your existing allocation instructions or
(in the absence of such existing instructions) pro rata (i.e. in the same
proportion as the current balances in your variable investment options).
If a surviving spouse elects to continue the Annuity, the Highest Daily
Lifetime 7 Plus benefit terminates. The spouse may elect the benefit subject
to the restrictions discussed above.
How Highest Daily Lifetime 7 Plus Transfers Account Value Between Your
Permitted Sub-accounts and the AST Investment Grade Bond Sub-Account
As indicated above, we limit the Sub-accounts to which you may allocate
Account Value if you elect Highest Daily Lifetime 7 Plus. For purposes of this
benefit, we refer to those permitted investment options as the "Permitted
Sub-accounts". If your annuity was issued on or after May 1, 2009 (subject to
regulatory approval), you may also choose to allocate purchase payments while
this program is in effect to DCA Fixed Rate Options utilized with our 6 or 12
Month Dollar Cost Averaging Program ("6 or 12 Month DCA Program"). If you are
participating in Highest Daily Lifetime 7 Plus and also are participating in
the 6 or 12 Month DCA Program, and the formula under the benefit dictates a
transfer from the Permitted Sub-accounts to the AST Investment Grade Bond
Sub-account, then the amount to be transferred will be taken entirely from the
Sub-accounts, provided there is sufficient Account Value in those Sub-accounts
to meet the required transfer amount. Only if there is insufficient Account
Value in those Sub-accounts will an amount be withdrawn from the DCA Fixed
Rate Options. Amounts withdrawn from the DCA Fixed Rate Options under the
formula will be taken on a last-in, first-out basis. For purposes of the
discussion below concerning transfers from the Permitted Sub-accounts to the
AST Investment Grade Bond Sub-account, amounts held within the DCA Fixed Rate
Options are included within the term "Permitted Sub-Accounts". Thus, amounts
may be transferred from the DCA Fixed Rate Options in the circumstances
described above and in the section of this prospectus entitled 6 or 12 Month
Dollar Cost Averaging Program. Any transfer dictated by the formula out of the
AST Investment Grade Bond Sub-account will be transferred to the Permitted
Sub-accounts, not including the DCA Fixed Rate Options.
An integral part of Highest Daily Lifetime 7 Plus is the pre-determined
mathematical formula used to transfer Account Value between the Permitted
Sub-Accounts and a specified bond fund within the Advanced Series Trust (the
"AST Investment Grade Bond Sub-Account"). The AST Investment Grade Bond
Sub-account is available only with this benefit, and thus you may not allocate
purchase payments to or make transfers to or from the AST Investment Grade
Bond Sub-account. The formula monitors your Account Value daily and, if
dictated by the formula, systematically transfers amounts between the
Permitted Sub-accounts you have chosen and the AST Investment Grade Bond
Sub-account. The formula is set forth in Appendix K.
Speaking generally, the formula, which is applied each Valuation Day, operates
as follows. The formula starts by identifying an income basis for that day and
then multiplies that figure by 5%, to produce a projected (i.e., hypothetical)
income amount. Note that 5% is used in the formula, irrespective of the
Annuitant's attained age. Then it produces an estimate of the total amount
targeted in our allocation model, based on the projected income amount and
factors set forth in the formula. In the formula, we refer to that value as
the "Target Value" or "L". If you have already made a withdrawal, your
projected income amount (and thus your Target Value) would take into account
any automatic step-up, any subsequent purchase payments, and any excess
withdrawals. Next, the formula subtracts from the Target Value the amount held
within the AST Investment Grade Bond Sub-account on that day, and divides that
difference by the amount held within the Permitted Sub-accounts including any
amounts allocated to DCA Fixed Rate Options. That ratio, which essentially
isolates the amount of your Target Value that is not offset by amounts held
within the AST Investment Grade Bond Sub-account, is called the "Target Ratio"
or "r". If, on each of three consecutive Valuation Days, the Target Ratio is
greater than 83% but less than or equal to 84.5%, the formula will, on such
third Valuation Day, make a transfer from the Permitted Sub-accounts in which
you are invested (subject to the 90% cap discussed
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below) to the AST Investment Grade Bond Sub-account. As discussed above, if
all or a portion of your Account Value is allocated to one or more DCA Fixed
Rate Options at the time a transfer to the AST Investment Grade Bond
Sub-account is required under the formula, we will first look to process the
transfer from the Permitted Sub-accounts, other than the DCA Fixed Rate
Options. If the amount allocated to the Permitted Sub-accounts is insufficient
to satisfy the transfer, then any remaining amounts will be transferred from
the DCA Fixed Rate Options on a "last-in, first-out" basis. Once a transfer is
made, the three consecutive Valuation Days begin again. If, however, on any
Valuation Day, the Target Ratio is above 84.5%, it will make a transfer from
the Permitted Sub-accounts (subject to the 90% cap) to the AST Investment
Grade Bond Sub-account (as described above). If the Target Ratio falls below
78% on any Valuation Day, then a transfer from the AST Investment Grade Bond
Sub-account to the Permitted Sub-accounts will occur.
The formula will not execute a transfer to the AST Investment Grade Bond
Sub-account that results in more than 90% of your Account Value being
allocated to the AST Investment Grade Bond Sub-account ("90% cap"). Thus, on
any Valuation Day, if the formula would require a transfer to the AST
Investment Grade Bond Sub-account that would result in more than 90% of the
Account Value being allocated to the AST Investment Grade Bond Sub-account,
only the amount that results in exactly 90% of the Account Value being
allocated to the AST Investment Grade Bond Sub-account will be transferred.
Additionally, future transfers into the AST Investment Grade Bond Sub-account
will not be made (regardless of the performance of the AST Investment Grade
Bond Sub-account and the Permitted Sub-accounts) at least until there is first
a transfer out of the AST Investment Grade Bond Sub-account. Once this
transfer occurs out of the AST Investment Grade Bond Sub-account, future
amounts may be transferred to or from the AST Investment Grade Bond
Sub-account if dictated by the formula (subject to the 90% cap). At no time
will the formula make a transfer to the AST Investment Grade Bond Sub-account
that results in greater than 90% of your Account Value being allocated to the
AST Investment Grade Bond Sub-account. However, it is possible that, due to
the investment performance of your allocations in the AST Investment Grade
Bond Sub-account and your allocations in the Permitted Sub-accounts you have
selected, your Account Value could be more than 90% invested in the AST
Investment Grade Bond Sub-account.
If you make additional purchase payments to your Annuity while the 90% cap is
in effect, the formula will not transfer any of such additional purchase
payments to the AST Investment Grade Bond Sub-account at least until there is
first a transfer out of the AST Investment Grade Bond Sub-account, regardless
of how much of your Account Value is in the Permitted Sub-accounts. This means
that there could be scenarios under which, because of the additional purchase
payments you make, less than 90% of your entire Account Value is allocated to
the AST Investment Grade Bond Sub-account, and the formula will still not
transfer any of your Account Value to the AST Investment Grade Bond
Sub-account (at least until there is first a transfer out of the AST
Investment Grade Bond Sub-account). For example,
.. March 19, 2009 - a transfer is made to the AST Investment Grade Bond
Sub-account that results in the 90% cap being met and now $90,000 is
allocated to the AST Investment Grade Bond Sub-account and $10,000 is
allocated to the Permitted Sub-accounts.
.. March 20, 2009 - you make an additional purchase payment of $10,000. No
transfers have been made from the AST Investment Grade Bond Sub-account to
the Permitted Sub-accounts since the cap went into effect on March 19, 2009.
.. On March 20, 2009 (and at least until first a transfer is made out of the
AST Investment Grade Bond Sub-account under the formula) - the $10,000
payment is allocated to the Permitted Sub-accounts and on this date you
have 82% in the AST Investment Grade Bond Sub-account and 18% in the
Permitted Sub-accounts (such that $20,000 is allocated to the Permitted
Sub-accounts and $90,000 to the AST Investment Grade Bond Sub-account).
.. Once there is a transfer out of the AST Investment Grade Bond Sub-account
(of any amount), the formula will operate as described above, meaning that
the formula could transfer amounts to or from the AST Investment Grade Bond
Sub-account if dictated by the formula (subject to the 90% cap).
Under the operation of the formula, the 90% cap may come into existence and be
removed multiple times while you participate in the benefit. We will continue
to monitor your Account Value daily and, if dictated by the formula,
systematically transfer amounts between the Permitted Sub-accounts you have
chosen and the AST Investment Grade Bond Sub-account as dictated by the
formula.
As you can glean from the formula, poor or flat investment performance of your
Account Value may result in a transfer of a portion of your Account Value in
the Permitted Sub-accounts to the AST Investment Grade Bond Sub-account
because such poor investment performance will tend to increase the Target
Ratio. Because the amount allocated to the AST Investment Grade Bond
Sub-account and the amount allocated to the Permitted Sub-accounts each is a
variable in the formula, the investment performance of each affects whether a
transfer occurs for your Annuity. In deciding how much to transfer, we use
another formula, which essentially seeks to re-balance amounts held in the
Permitted Sub-accounts and the AST Investment Grade Bond Sub-account so that
the Target Ratio meets a target, which currently is equal to 80%. Once you
elect Highest Daily Lifetime 7 Plus, the values we use to compare to the
Target Ratio will be fixed. For newly-issued Annuities that elect Highest
Daily Lifetime 7 Plus and existing Annuities that elect Highest Daily Lifetime
7 Plus in the future, however, we reserve the right to change such values.
Additionally, on each monthly Annuity Anniversary (if the monthly Annuity
Anniversary does not fall on a Valuation Day, the next Valuation Day will be
used), following all of the above described daily calculations, a transfer may
be made from the AST Investment Grade Bond Sub-account to the Permitted
Sub-accounts. Any such transfer will be based on your existing allocation
instructions or (in the absence of such existing instructions) pro rata (i.e.
in the same proportion as the current balances in your
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variable investment options). This transfer will automatically occur provided
that the Target Ratio, as described above, would be less than 83% after the
transfer. The formula will not execute a transfer if the Target Ratio after
this transfer would occur would be greater than or equal to 83%.
The amount of the transfer will be equal to the lesser of:
a) The total value of all your Account Value in the AST Investment Grade Bond
Sub-account, or
b) An amount equal to 5% of your total Account Value.
While you are not notified when your Annuity reaches a transfer trigger under
the formula, you will receive a confirmation statement indicating the transfer
of a portion of your Account Value either to or from the AST Investment Grade
Bond Sub-account. The formula by which the transfer operates is designed
primarily to mitigate some of the financial risks that we incur in providing
the guarantee under Highest Daily Lifetime 7 Plus. Depending on the results of
the calculations of the formula, we may, on any Valuation Day:
.. Not make any transfer between the Permitted Sub-accounts and the AST
Investment Grade Bond Sub-account; or
.. If a portion of your Account Value was previously allocated to the AST
Investment Grade Bond Sub-account, transfer all or a portion of those
amounts to the Permitted Sub-accounts, based on your existing allocation
instructions or (in the absence of such existing instructions) pro rata
(i.e., in the same proportion as the current balances in your variable
investment options). ; or
.. Transfer a portion of your Account Value in the Permitted Sub-accounts pro
rata to the AST Investment Grade Bond Sub-account.
The amount and timing of transfers to and from the AST Investment Grade Bond
Sub-account pursuant to the formula depends upon a number of factors unique to
your Annuity (and is not necessarily directly correlated with the securities
markets, bond markets, or interest rates, in general) including:
.. The difference between your Account Value and your Protected Withdrawal
Value;
.. How long you have owned Highest Daily Lifetime 7 Plus or Spousal Highest
Daily Lifetime 7 Plus;
.. The performance of the Permitted Sub-accounts you have chosen;
.. The performance of the AST Investment Grade Bond Sub-account;
.. The amount allocated to each of the Permitted Sub-accounts you have chosen;
.. The amount allocated to the AST Investment Grade Bond Sub-account;
.. Additional purchase payments, if any, you make to your Annuity; and
.. Withdrawals, if any, you take from your Annuity (withdrawals are taken pro
rata from your Account Value).
At any given time, some, most or none of your Account Value will be allocated
to the AST Investment Grade Bond Sub-account, as dictated by the formula.
The more of your Account Value allocated to the AST Investment Grade Bond
Sub-account under the formula, the greater the impact of the performance of
that Sub-account in determining whether (and how much) your Account Value is
transferred back to the Permitted Sub-accounts. Further, it is possible under
the formula that, if a significant portion of your Account Value is allocated
to the AST Investment Grade Bond Sub-account and that Sub-account has good
performance but the performance of your Permitted Sub-accounts is negative,
that the formula might transfer your Account Value to the Permitted
Sub-accounts. Similarly, the more you have allocated to the Permitted
Sub-accounts, the greater the impact of the performance of those Permitted
Sub-accounts will have on any transfer to the AST Investment Grade Bond
Sub-account.
If you make additional purchase payments to your Annuity, they will be
allocated according to your allocation instructions. Once they are allocated
to your Annuity, they will also be subject to the formula described above and
therefore may be transferred to the AST Investment Grade Bond Portfolio, if
dictated by the formula.
Any Account Value in the AST Investment Grade Bond Sub-account will not be
available to participate in the investment experience of the Permitted
Sub-accounts regardless of whether there is a subsequent Sub-account decline
or recovery until it is transferred out of the AST Investment Grade Bond
Sub-account.
Additional Tax Considerations
If you purchase an annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the required minimum distribution
rules under the Code provide that you begin receiving periodic amounts from
your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than five (5) percent
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 required under the Code may exceed the Annual
Income Amount, which will cause us to increase the Annual Income Amount in any
Annuity Year that required minimum distributions due from your Annuity are
greater than such amounts. In addition, the amount and duration of payments
under the annuity payment and death benefit provisions may be adjusted so that
the payments do
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not trigger any penalty or excise taxes due to tax considerations such as
required minimum distribution provisions under the tax law. Please note,
however, that any withdrawal (except the Non-Lifetime Withdrawal) you take
prior to the Tenth Anniversary, even if withdrawn to satisfy required minimum
distribution rules, will cause you to lose the ability to receive the Return
of Principal Guarantee and the guaranteed amount described above under "Key
Feature - Protected Withdrawal Value".
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this benefit
here. However, we do note that if you participate in Highest Daily Lifetime 7
Plus through a non-qualified annuity, as with all withdrawals, once all
purchase payments are returned under the Annuity, all subsequent withdrawal
amounts will be taxed as ordinary income.
Highest Daily Lifetime 7 Plus/SM/ with Beneficiary Income Option
We offer an optional death benefit feature under Highest Daily Lifetime 7
Plus, the amount of which is linked to your Annual Income Amount. We refer to
this optional death benefit as the Beneficiary Income Option or BIO. This
version is only being made available in those jurisdictions where we have
received regulatory approval and will be offered subsequently in other
jurisdictions when we receive regulatory approval in those jurisdictions. You
may choose Highest Daily Lifetime 7 Plus with or without also selecting the
Beneficiary Income Option death benefit. However, you may not elect the
Beneficiary Income Option without Highest Daily Lifetime 7 Plus and you must
elect the Beneficiary Income Option death benefit at the time you elect
Highest Daily Lifetime 7 Plus. If you elect Highest Daily Lifetime 7 Plus
without the Beneficiary Income Option and would like to add the feature later,
you must terminate the Highest Daily Lifetime 7 Plus benefit and elect the
Highest Daily Lifetime 7 Plus with Beneficiary Income Option (subject to
availability and benefit re-election provisions). Please note that if you
terminate Highest Daily Lifetime 7 Plus and elect the Highest Daily Lifetime 7
Plus with BIO you lose the guarantees that you had accumulated under your
existing benefit and will begin the new guarantees under the new benefit you
elect based on your Account Value as of the date the new benefit becomes
active. As long as your Highest Daily Lifetime 7 Plus with Beneficiary Income
Option is in effect, you must allocate your Account Value in accordance with
the then permitted and available investment option(s) with this benefit. This
benefit may be elected, provided that all owners and beneficiaries are natural
persons or an agent acting for a natural person.
If you elect this death benefit, you may not elect any other optional benefit.
You may elect the Beneficiary Income Option death benefit so long as the
Annuitant is no older than age 75 at the time of election and meet the Highest
Daily Lifetime 7 Plus age requirements. For purposes of this optional death
benefit, we calculate the Annual Income Amount and Protected Withdrawal Value
in the same manner that we do under Highest Daily Lifetime 7 Plus itself.
However, we will stop determining the Periodic Value (as described above) on
the earlier of your first Lifetime Withdrawal after the effective date of the
benefit or the Tenth Anniversary Date. This means that under the Highest Daily
Lifetime 7 Plus with BIO benefit you will not be eligible for the guaranteed
minimum Periodic Values described above on the 20/th/ and 25/th/ Anniversary
of the Benefit Effective Date. If you choose the Highest Daily Lifetime 7 Plus
with BIO, the maximum charge is 2.00% of the greater of Account Value and the
Protected Withdrawal Value ("PWV") annually. The current charge is 1.10%
annually of the greater of the Account Value and the PWV. We deduct this
charge at the end of each benefit quarter, where each such quarter is part of
a year that begins on the effective date of the benefit or an anniversary
thereafter. Thus, on each such quarter-end (or the next Valuation Day, if the
quarter-end is not a Valuation Day), we deduct 0.275% of the greater of the
prior day's Account Value or the prior day's Protected Withdrawal Value at the
end of the quarter. We deduct the fee pro rata from each of your Sub-accounts
including the AST Investment Grade Bond Sub-account. Because the fee for this
benefit is based on the greater of the Account Value or the Protected
Withdrawal Value, the fee for Highest Daily Lifetime 7 Plus with the
Beneficiary Income Option may be greater than it would have been based on the
Account Value alone. If the fee to be deducted exceeds the current Account
Value, we will reduce the Account Value to zero and, continue the benefit as
described below.
Upon a death that triggers payment of a death benefit under the Annuity, we
identify the following amounts: (a) the amount of the basic death benefit
under the Annuity, (b) the Protected Withdrawal Value, and (c) the Annual
Income Amount. If there were no Lifetime Withdrawals prior to the date of
death, then we calculate the Protected Withdrawal Value for purposes of this
death benefit as of the date of death, and we calculate the Annual Income
Amount as if there were a withdrawal on the date of death. If there were
Lifetime Withdrawals prior to the date of death, then we set the Protected
Withdrawal Value and Annual Income Amount for purposes of this death benefit
as of the date that we receive due proof of death.
If there is one beneficiary, he/she must choose to receive either the basic
death benefit (in a lump sum or other permitted form of distribution) or the
Beneficiary Income Option death benefit (in the form of periodic payments of
the Annual Income Amount - such payments may be annual or at other intervals
that we permit). If there are multiple beneficiaries, each beneficiary is
presented with the same choice. Each beneficiary can choose to take his/her
portion of either (a) the basic death benefit, or (b) the Beneficiary Income
Option death benefit. In order to receive the Beneficiary Income Option death
benefit, each beneficiary's share of the death
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benefit proceeds must be allocated as a percentage of the total death benefit
to be paid. We allow a beneficiary who has opted to receive the Annual Income
Amount to designate another beneficiary, who would receive any remaining
payments upon the former beneficiary's death. Note also that the final
payment, exhausting the Protected Withdrawal Value, may be less than the
Annual Income Amount.
Here is an example to illustrate how the death benefit may be paid:
.. Assume that (i) the basic death benefit is $50,000, the Protected
Withdrawal Value is $100,000, and the Annual Income Amount is $5,000; (ii)
there are two beneficiaries (the first designated to receive 75% of the
death benefit and the second designated to receive 25% of the death
benefit); (iii) the first beneficiary chooses to receive his/her portion of
the death benefit in the form of the Annual Income Amount, and the second
beneficiary chooses to receive his/her portion of the death benefit with
reference to the basic death benefit.
.. Under those assumptions, the first beneficiary will be paid a pro-rated
portion of the Annual Income Amount for 20 years (the 20 year pay out
period is derived from the $5,000 Annual Income Amount, paid each year
until it exhausts the entire $100,000 Protected Withdrawal Value). The
pro-rated portion of the Annual Income Amount, equal to $3,750 annually
(i.e., the first beneficiary's 75% share multiplied by $5,000), is then
paid each year for the 20 year period. Payment of $3,750 for 20 years
results in total payments of $75,000 (i.e., the first beneficiary's 75%
share of the $100,000 Protected Withdrawal Value). The second beneficiary
would receive 25% of the basic death benefit amount (or $12,500).
If you elect to terminate Highest Daily Lifetime 7 Plus with Beneficiary
Income Option, both Highest Daily Lifetime 7 Plus and that death benefit
option will be terminated. You may not terminate the death benefit option
without terminating the entire benefit. If you terminate Highest Daily
Lifetime 7 Plus with Beneficiary Income Option, your ability to elect other
optional living benefits will be affected as indicated in the "Election of and
Designations under the Benefit" section above.
Highest Daily Lifetime 7 Plus/SM/ with Lifetime Income Accelerator
We offer another version of Highest Daily Lifetime 7 Plus that we call Highest
Daily Lifetime 7 Plus with Lifetime Income Accelerator ("Highest Daily
Lifetime 7 Plus with LIA"). This version is only being offered in those
jurisdictions where we have received regulatory approval and will be offered
subsequently in other jurisdictions when we receive regulatory approval in
those jurisdictions. You may choose Highest Daily Lifetime 7 Plus with or
without also electing LIA, however you may not elect LIA without Highest Daily
Lifetime 7 Plus and you must elect the LIA benefit at the time you elect
Highest Daily Lifetime 7 Plus. If you elect Highest Daily Lifetime 7 Plus
without LIA and would like to add the feature later, you must terminate the
Highest Daily Lifetime 7 Plus benefit and elect the Highest Daily Lifetime 7
Plus with LIA (subject to availability and benefit re-election provisions).
Please note that if you terminate Highest Daily Lifetime 7 Plus and elect the
Highest Daily Lifetime 7 Plus with LIA you lose the guarantees that you had
accumulated under your existing benefit and will begin the new guarantees
under the new benefit you elect based on your Account Value as of the date the
new benefit becomes active. Highest Daily Lifetime 7 Plus with LIA is offered
as an alternative to other lifetime withdrawal options. If you elect this
benefit, you may not elect any other optional benefit. As long as your Highest
Daily Lifetime 7 Plus with LIA benefit is in effect, you must allocate your
Account Value in accordance with the then permitted and available investment
option(s) with this benefit. The income benefit under Highest Daily Lifetime 7
Plus with LIA currently is based on a single "designated life" who is between
the ages of 45 and 75 on the date that the benefit is elected. All terms and
conditions of Highest Daily Lifetime 7 Plus apply to this version of the
benefit, except as described herein.
Highest Daily Lifetime 7 Plus with LIA is not long-term care insurance and
should not be purchased as a substitute for long-term care insurance. The
income you receive through the Lifetime Income Accelerator may be used for any
purpose, and it may or may not be sufficient to address expenses you may incur
for long-term care. You should seek professional advice to determine your
financial needs for long-term care.
Highest Daily Lifetime 7 Plus with LIA guarantees, until the death of the
single designated life, the ability to withdraw an amount equal to double the
Annual Income Amount (which we refer to as the "LIA Amount") if you meet the
conditions set forth below. If you choose the Highest Daily Lifetime 7 Plus
with LIA, the maximum charge is 2.00% of the greater of Account Value and the
Protected Withdrawal Value ("PWV") annually. The current charge is 1.10%
annually of the greater of Account Value and the PWV. We deduct this charge at
the end of each benefit quarter, where each such quarter is part of a year
that begins on the effective date of the benefit or an anniversary thereafter.
Thus, on each such quarter-end (or the next Valuation Day, if the quarter-end
is not a Valuation Day), we deduct 0.275% of the greater of the prior day's
Account Value, or the prior day's Protected Withdrawal Value at the end of the
quarter. We deduct the fee pro rata from each of your Sub-accounts including
the AST Investment Grade Bond Sub-account. Since this fee is based on the
greater of Account Value or the Protected Withdrawal Value, the fee for
Highest Daily Lifetime 7 Plus with LIA may be greater than it would have been,
had it been based on the Account Value alone. If the fee to be deducted
exceeds the current Account Value, we will reduce the Account Value to zero,
and continue the benefit as described below.
If this benefit is being elected on an Annuity held as a 403(b) plan, then in
addition to meeting the eligibility requirements listed below for the LIA
Amount you must separately qualify for distributions from the 403(b) plan
itself.
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Eligibility Requirements for LIA Amount. Both a waiting period of 36 months
from the benefit effective date, and an elimination period of 120 days from
the date of notification that one or both of the requirements described
immediately below have been met, apply before you can become eligible for the
LIA Amount. Assuming the 36 month waiting period has been met and we have
received the notification referenced in the immediately preceding sentence,
the LIA amount would be available for withdrawal on the Valuation Day
immediately after the 120/th/ day. The waiting period and the elimination
period may run concurrently. In addition to satisfying the waiting and
elimination period, at least one of the following requirements ("LIA
conditions") must be met.
(1)The designated life is confined to a qualified nursing facility. A
qualified nursing facility is a facility operated pursuant to law or any
state licensed facility providing medically necessary in-patient care which
is prescribed by a licensed physician in writing and based on physical
limitations which prohibit daily living in a non-institutional setting.
(2)The designated life is unable to perform two or more basic abilities of
caring for oneself or "activities of daily living." We define these basic
abilities as:
i. Eating: Feeding oneself by getting food into the body from a receptacle
(such as a plate, cup or table) or by a feeding tube or intravenously.
ii.Dressing: Putting on and taking off all items of clothing and any
necessary braces, fasteners or artificial limbs.
iii.Bathing: Washing oneself by sponge bath; or in either a tub or shower,
including the task of getting into or out of the tub or shower.
iv.Toileting: Getting to and from the toilet, getting on and off the
toilet, and performing associated personal hygiene.
v. Transferring: Moving into or out of a bed, chair or wheelchair.
vi.Continence: Maintaining control of bowel or bladder function; or when
unable to maintain control of bowel or bladder function, the ability to
perform personal hygiene (including caring for catheter or colostomy
bag).
You must notify us when the LIA conditions have been met. If, when we receive
such notification, there are more than 120 days remaining until the end of the
waiting period described above, you will not be eligible for the LIA Amount.
If there are 120 days or less remaining until the end of the waiting period
when we receive notification that the LIA conditions are met, we will
determine eligibility for the LIA Amount through our then current
administrative process, which may include, but is not limited to,
documentation verifying the LIA conditions and/or an assessment by a third
party of our choice. Such assessment may be in person and we will assume any
costs associated with the aforementioned assessment. Once eligibility is
determined, the LIA Amount is equal to double the Annual Income Amount as
described above under the Highest Daily Lifetime 7 Plus benefit.
Additionally, once eligibility is determined, we will reassess your
eligibility on an annual basis although your LIA benefit for the year that
immediately precedes our reassessment will not be affected if it is determined
that you are no longer eligible. Your first reassessment may occur in the same
year as your initial assessment. If we determine that you are no longer
eligible to receive the LIA Amount, upon the next Annuity Anniversary the
Annual Income Amount would replace the LIA Amount. There is no limit on the
number of times you can become eligible for the LIA Amount, however, each time
would require the completion of the 120-day elimination period, notification
that the designated life meets the LIA conditions, and determination, through
our then current administrative process, that you are eligible for the LIA
Amount, each as described above.
LIA amount at the first Lifetime Withdrawal. If your first Lifetime Withdrawal
subsequent to election of Highest Daily Lifetime 7 Plus with LIA occurs while
you are eligible for the LIA Amount, the available LIA Amount is equal to
double the Annual Income Amount.
LIA amount after the first Lifetime Withdrawal. If you become eligible for the
LIA Amount after you have taken your first Lifetime Withdrawal, the available
LIA amount for the current and subsequent Annuity Years is equal to double the
then current Annual Income Amount, however the available LIA amount in the
current Annuity Year is reduced by any Lifetime Withdrawals that have been
taken in the current Annuity Year. Cumulative Lifetime Withdrawals in an
Annuity Year which are less than or equal to the LIA Amount (when eligible for
the LIA amount) will not reduce your LIA Amount in subsequent Annuity Years,
but any such withdrawals will reduce the LIA Amount on a dollar-for-dollar
basis in that Annuity Year.
Withdrawals In Excess of the LIA amount. If your cumulative Lifetime
Withdrawals in an Annuity Year are in excess of the LIA Amount when you are
eligible ("Excess Withdrawal"), your LIA Amount in subsequent years will be
reduced (except with regard to required minimum distributions) by the result
of the ratio of the excess portion of the withdrawal to the Account Value
immediately prior to the Excess Withdrawal. Reductions include the actual
amount of the withdrawal, including any CDSC that may apply. Withdrawals of
any amount (excluding the Non-Lifetime Withdrawal) up to and including the LIA
Amount will reduce the Protected Withdrawal Value by the amount of the
withdrawal. Excess Withdrawals will reduce the Protected Withdrawal Value by
the same ratio as the reduction to the LIA Amount. Any withdrawals that are
less than or equal to the LIA amount (when eligible) but in excess of the free
withdrawal amount available under this Annuity will not incur a CDSC.
Withdrawals are not required. However, subsequent to the first Lifetime
Withdrawal, the LIA Amount is not increased in subsequent Annuity Years if you
decide not to take a withdrawal in an Annuity Year or take withdrawals in an
Annuity Year that in total are less than the LIA Amount.
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Purchase Payments. If you are eligible for the LIA Amount as described under
"Eligibility Requirements for LIA Amount" and you make an additional Purchase
Payment, we will increase your LIA Amount by double the amount we add to your
Annual Income Amount.
Step Ups. If your Annual Income Amount is stepped up, your LIA Amount will be
stepped up to equal double the stepped up Annual Income Amount.
Guarantee Payments. If your Account Value is reduced to zero as a result of
cumulative withdrawals that are equal to or less than the LIA Amount when you
are eligible, or as a result of the fee that we assess for Highest Daily
Lifetime 7 Plus with LIA, and there is still a LIA Amount available, we will
make an additional payment for that Annuity Year equal to the remaining LIA
Amount. If you have not begun taking Lifetime Withdrawals and your Account
Value is reduced to zero as a result of the fee we assess for Highest Daily
Lifetime 7 Plus with LIA, we will calculate the Annual Income Amount and any
LIA amount if you are eligible, as if you made your first Lifetime Withdrawal
on the date the Account Value was reduced to zero and Lifetime Withdrawals
will begin on the next Annuity Anniversary. If this were to occur, you are not
permitted to make additional purchase payments to your Annuity. Thus, in these
scenarios, the remaining LIA Amount would be payable even though your Account
Value was reduced to zero. In subsequent Annuity Years we make payments that
equal the LIA Amount as described in this section. We will make payments until
the death of the single designated life. Should the designated life no longer
qualify for the LIA amount (as described under "Eligibility Requirements for
LIA Amount" above), the Annual Income Amount would continue to be available.
Subsequent eligibility for the LIA Amount would require the completion of the
120 day elimination period as well as meeting the LIA conditions listed above
under "Eligibility Requirements for LIA Amount". To the extent that cumulative
withdrawals in the current Annuity Year that reduce your Account Value to zero
are more than the LIA Amount (except in the case of required minimum
distributions), Highest Daily Lifetime 7 Plus with LIA terminates, and no
additional payments are made.
Annuity Options. In addition to the Highest Daily Lifetime 7 Plus Annuity
Options described above, after the Tenth Anniversary you may also request that
we make annuity payments each year equal to the Annual Income Amount. In any
year that you are eligible for the LIA Amount, we make annuity payments equal
to the LIA Amount. If you would receive a greater payment by applying your
Account Value to receive payments for life under your Annuity, we will pay the
greater amount. Annuitization prior to the Tenth Anniversary will forfeit any
present or future LIA amounts. We will continue to make payments until the
death of the Designated Life. If this option is elected, the Annual Income
Amount and LIA Amount will not increase after annuity payments have begun.
If you elect Highest Daily Lifetime 7 Plus with LIA, and never meet the
eligibility requirements you will not receive any additional payments based on
the LIA Amount.
SPOUSAL HIGHEST DAILY LIFETIME 7 PLUS/SM/ INCOME BENEFIT (SHD7 Plus)/SM/
Spousal Highest Daily Lifetime 7 Plus is the spousal version of Highest Daily
Lifetime 7 Plus. This version is only being offered in those jurisdictions
where we have received regulatory approval and will be offered subsequently in
other jurisdictions when we receive regulatory approval in those
jurisdictions. Currently, if you elect Spousal Highest Daily Lifetime 7 Plus
and subsequently terminate the benefit, you may elect another lifetime
withdrawal benefit, subject to our current rules. See "Termination of Existing
Benefits and Election New Benefits". Please note that if you terminate Spousal
Highest Daily Lifetime 7 Plus and elect another benefit, you lose the
guarantees that you had accumulated under your existing benefit and will begin
the new guarantees under the new benefit you elect based on your Account Value
as of the date the new benefit becomes active. Spousal Highest Daily Lifetime
7 Plus must be elected based on two Designated Lives, as described below. The
youngest Designated Life must be at least 50 years old and the oldest
Designated Life must be at least 55 years old when the benefit is elected.
Spousal Highest Daily Lifetime 7 Plus is not available if you elect any other
optional benefit. As long as your Spousal Highest Daily Lifetime 7 Plus
Benefit is in effect, you must allocate your Account Value in accordance with
the then permitted and available investment option(s) with this benefit. For a
more detailed description of permitted investment options, see the "Investment
Options" section in this prospectus.
We offer a benefit that guarantees until the later death of two natural
persons who are each other's spouses at the time of election of the benefit
and at the first death of one of them (the "Designated Lives", and each, a
"Designated Life") the ability to withdraw an annual amount (the "Annual
Income Amount") equal to a percentage of an initial principal value (the
"Protected Withdrawal Value") regardless of the impact of Sub-account
performance on the Account Value, subject to our rules regarding the timing
and amount of withdrawals. You are guaranteed to be able to withdraw the
Annual Income Amount for the lives of the Designated Lives ("Lifetime
Withdrawals") provided you have not made "excess withdrawals" that have
resulted in your Account Value being reduced to zero. We also permit a
one-time Non-Lifetime Withdrawal from your Annuity prior to taking Lifetime
Withdrawals under the benefit. The benefit may be appropriate if you intend to
make periodic withdrawals from your Annuity, wish to ensure that Sub-account
performance will not affect your ability to receive annual payments, and wish
either spouse to be able to continue the Spousal Highest Daily Lifetime 7 Plus
benefit after the death of the first spouse. You are not required to make
withdrawals as part of the benefit - the guarantees are not lost if you
withdraw less than the maximum allowable amount each year under the rules of
the benefit. As discussed below, we require that you participate in our asset
transfer program in order to participate in Spousal Highest Daily Lifetime 7
Plus.
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Although you are guaranteed the ability to withdraw your Annual Income Amount
for life even if your Account Value falls to zero, if you take an excess
withdrawal that brings your Account Value to zero, it is possible that your
Annual Income Amount could also fall to zero. In that scenario, no further
amount would be payable under Spousal Highest Daily Lifetime 7 Plus.
Key Feature - Protected Withdrawal Value
The Protected Withdrawal Value is used to calculate the initial Annual Income
Amount. The Protected Withdrawal Value is separate from your Account Value and
not available as cash or a lump sum. On the effective date of the benefit, the
Protected Withdrawal Value is equal to your Account Value. On each Valuation
Day thereafter until the date of your first Lifetime Withdrawal (excluding any
Non-Lifetime Withdrawal discussed below), the Protected Withdrawal Value is
equal to the "Periodic Value" described in the next paragraph.
The "Periodic Value" initially is equal to the Account Value on the effective
date of the benefit. On each Valuation Day thereafter until the first Lifetime
Withdrawal, we recalculate the Periodic Value. We stop determining the
Periodic Value upon your first Lifetime Withdrawal after the effective date of
the benefit. On each Valuation Day (the "Current Valuation Day"), the Periodic
Value is equal to the greater of:
(1)the Periodic Value for the immediately preceding business day (the "Prior
Valuation Day") appreciated at the daily equivalent of 7% annually during
the calendar day(s) between the Prior Valuation Day and the Current
Valuation Day (i.e., one day for successive Valuation Days, but more than
one calendar day for Valuation Days that are separated by weekends and/or
holidays), plus the amount of any adjusted Purchase Payment made on the
Current Valuation Day (the Periodic Value is proportionally reduced for any
Non-Lifetime Withdrawal); and
(2)the Account Value.
If you have not made a Lifetime Withdrawal on or before the 10/th/, 20/th/, or
25/th/ Anniversary of the effective date of the benefit, your Periodic Value
on the 10/th/, 20/th/, or 25/th/ Anniversary of the benefit effective date is
equal to the greater of:
(1)the Periodic Value described above or,
(2)the sum of (a), (b) and (c) (proportionally reduced for any Non-Lifetime
Withdrawal):
(a)200% (on the 10/th/ anniversary), 400% (on the 20/th/ anniversary) or
600% (on the 25/th/ anniversary) of the Account Value on the effective
date of the benefit;
(b)200% (on the 10/th/ anniversary), 400% (on the 20/th/ anniversary) or
600% (on the 25/th/ anniversary) of all adjusted purchase payments made
within one year following the effective date of the benefit; and
(c)All adjusted purchase payments made after one year following the
effective date of the benefit.
If you elect Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income
Option ("BIO") (see below), we will stop determining the Periodic Value (as
described above) on the earlier of your first Lifetime Withdrawal after the
effective date of the benefit or the Tenth Anniversary of the effective date
of the benefit ("Tenth Anniversary"). This means that under the Spousal
Highest Daily Lifetime 7 Plus with BIO benefit you will not be eligible for
the guaranteed minimum Periodic Values described above on the 20/th/ and
25/th/ Anniversary of the Benefit Effective Date.
On and after the date of your first Lifetime Withdrawal, your Protected
Withdrawal Value is increased by the amount of any subsequent purchase
payments, is reduced by withdrawals, including your first Lifetime Withdrawal
(as described below), and may be increased if you qualify for a step-up (as
described below).
Return of Principal Guarantee
If you have not made a Lifetime Withdrawal before the Tenth Anniversary, we
will increase your Account Value on that Tenth Anniversary (or the next
Valuation Day, if that anniversary is not a Valuation Day), if the
requirements set forth in this paragraph are met. On the Tenth Anniversary, we
add:
a) your Account Value on the day that you elected Spousal Highest Daily
Lifetime 7 Plus proportionally reduced for any Non-Lifetime Withdrawal; and
b) the sum of each Purchase Payment proportionally reduced for any subsequent
Non-Lifetime Withdrawal (including the amount of any associated Credits)
you made during the one-year period after you elected the benefit.
If the sum of (a) and (b) is greater than your Account Value on the Tenth
Anniversary, we increase your Account Value to equal the sum of (a) and (b),
by contributing funds from our general account. If the sum of (a) and (b) is
less than or equal to your Account Value on the Tenth Anniversary, we make no
such adjustment. The amount that we add to your Account Value under this
provision will be allocated to each of your variable investment options
(including the AST Investment Grade Bond Sub-account used with this benefit),
in the same proportion that each such Sub-account bears to your total Account
Value, immediately before the application of the amount. Any such amount will
not be considered a Purchase Payment when calculating your Protected
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Withdrawal Value, your death benefit, or the amount of any optional benefit
that you may have selected, and therefore will have no direct impact on any
such values at the time we add this amount. Because the amount is added to
your Account Value, it will also be subject to each charge under your Annuity
based on Account Value. This potential addition to Account Value is available
only if you have elected Spousal Highest Daily Lifetime 7 Plus and if you meet
the conditions set forth in this paragraph. Thus, if you take a withdrawal,
including a required minimum distribution, (other than a Non-Lifetime
Withdrawal) prior to the Tenth Anniversary, you are not eligible to receive
the Return of Principal Guarantee. The Return of Principal Guarantee is
referred to as the Guaranteed Minimum Account Value Credit in the benefit
rider.
Key Feature - Annual Income Amount under the Spousal Highest Daily Lifetime 7
Plus Benefit
The Annual Income Amount is equal to a specified percentage of the Protected
Withdrawal Value. The percentage initially depends on the age of the youngest
Designated Life on the date of the first Lifetime Withdrawal after election of
the benefit. The percentages are: 4% for ages 50 - less than 59 1/2, 5% for
ages 59 1/2 - 79, 6% for ages 80 to 84, 7% for ages 85 to 89, and 8% for ages
90 and older. We use the age of the youngest Designated Life even if that
Designated Life is no longer a participant under the Annuity due to death or
divorce. Under the Spousal Highest Daily Lifetime 7 Plus benefit, if your
cumulative Lifetime Withdrawals in an Annuity Year are less than or equal to
the Annual Income Amount, they will not reduce your Annual Income Amount in
subsequent Annuity Years, but any such withdrawals will reduce the Annual
Income Amount on a dollar-for-dollar basis in that Annuity Year. If your
cumulative Lifetime Withdrawals in an Annuity Year are in excess of the Annual
Income Amount for any Annuity Year ("Excess Income"), your Annual Income
Amount in subsequent years will be reduced (except with regard to required
minimum distributions for this Annuity that comply with our rules) by the
result of the ratio of the Excess Income to the Account Value immediately
prior to such withdrawal (see examples of this calculation below). Reductions
are based on the actual amount of the withdrawal, including any CDSC that may
apply. Lifetime Withdrawals of any amount up to and including the Annual
Income Amount will reduce the Protected Withdrawal Value by the amount of the
withdrawal. Withdrawals of Excess Income will reduce the Protected Withdrawal
Value by the same ratio as the reduction to the Annual Income Amount.
Note that if your withdrawal of the Annual Income Amount in a given Annuity
Year exceeds the applicable free withdrawal amount under the Annuity (but is
not considered Excess Income), we will not impose any CDSC on the amount of
that withdrawal.
You may use the Systematic Withdrawal program to make withdrawals of the
Annual Income Amount. Any systematic withdrawal will be deemed a Lifetime
Withdrawal under this benefit.
Any Purchase Payment that you make subsequent to the election of Spousal
Highest Daily Lifetime 7 Plus will (i) increase the then-existing Annual
Income Amount by an amount equal to a percentage of the Purchase Payment
(including the amount of any associated Credit) based on the age of the
younger Annuitant at the time of the first Lifetime Withdrawal (the
percentages are: 4% for ages 50 - less than 59 1/2, 5% for ages 59 1/2 - 79,
6% for ages 80-84, 7% for ages 85-89, and 8% for ages 90 and older), and
(ii) increase the Protected Withdrawal Value by the amount of the Purchase
Payment (including the amount of any associated Credit).
Highest Daily Auto Step-Up
An automatic step-up feature ("Highest Daily Auto Step-Up") is part of this
benefit. As detailed in this paragraph, the Highest Daily Auto Step-Up feature
can result in a larger Annual Income Amount subsequent to your first Lifetime
Withdrawal. The Highest Daily Step-Up starts with the anniversary of the Issue
Date of the Annuity (the "Annuity Anniversary") immediately after your first
Lifetime Withdrawal under the benefit. Specifically, upon the first such
Annuity Anniversary, we identify the Account Value on each Valuation Day
within the immediately preceding Annuity Year after your first Lifetime
Withdrawal. Having identified the highest daily value (after all daily values
have been adjusted for subsequent purchase payments and withdrawals), we then
multiply that value by a percentage that varies based on the age of the
youngest Designated Life on the Annuity Anniversary as of which the step-up
would occur. The percentages are 4% for ages 50 - less than 59 1/2, 5% for
ages 59 1/2 - 79, 6% for ages 80-84, 7% for ages 85-89, and 8% for ages 90 and
older. If that value exceeds the existing Annual Income Amount, we replace the
existing amount with the new, higher amount. Otherwise, we leave the existing
Annual Income Amount intact. The Account Value on the Annuity Anniversary is
considered the last daily step-up value of the Annuity Year. In later years
(i.e., after the first Annuity Anniversary after the first Lifetime
Withdrawal), we determine whether an automatic step-up should occur on each
Annuity Anniversary by performing a similar examination of the Account Values
that occurred on Valuation Days during the year. At the time that we increase
your Annual Income Amount, we also increase your Protected Withdrawal Value to
equal the highest daily value upon which your step-up was based only if that
results in an increase to the Protected Withdrawal Value. Your Protected
Withdrawal Value will never be decreased as a result of an income step-up. If,
on the date that we implement a Highest Daily Auto Step-Up to your Annual
Income Amount, the charge for Spousal Highest Daily Lifetime 7 Plus has
changed for new purchasers, you may be subject to the new charge at the time
of such step-up. Prior to increasing your charge for Spousal Highest Daily
Lifetime 7 Plus upon a step-up, we would notify you, and give you the
opportunity to cancel the automatic step-up feature. If you receive notice of
a proposed step-up and accompanying fee increase, you should carefully
evaluate whether the amount of the step-up justifies the increased fee to
which you will be subject.
If you establish a Systematic Withdrawal program, we will not automatically
increase the withdrawal amount when there is an increase to the Annual Income
Amount.
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The Spousal Highest Daily Lifetime 7 Plus benefit does not affect your ability
to make withdrawals under your Annuity, or limit your ability to request
withdrawals that exceed the Annual Income Amount. Under Spousal Highest Daily
Lifetime 7 Plus, if your cumulative Lifetime Withdrawals in an Annuity Year
are less than or equal to the Annual Income Amount, they will not reduce your
Annual Income Amount in subsequent Annuity Years, but any such withdrawals
will reduce the Annual Income Amount on a dollar-for-dollar basis in that
Annuity Year.
If, cumulatively, you withdraw an amount less than the Annual Income Amount in
any Annuity Year, you cannot carry-over the unused portion of the Annual
Income Amount to subsequent Annuity Years.
Because each of the Protected Withdrawal Value and Annual Income Amount is
determined in a way that is not solely related to Account Value, it is
possible for the Account Value to fall to zero, even though the Annual Income
Amount remains.
Examples of dollar-for-dollar and proportional reductions, and the Highest
Daily Auto Step-Up are set forth below. The values shown here are purely
hypothetical, and do not reflect the charges for the Spousal Highest Daily
Lifetime 7 Plus benefit or any other fees and charges. Assume the following
for all three examples:
.. The Issue Date is December 1, 2008
.. The Spousal Highest Daily Lifetime 7 Plus benefit is elected on March 5,
2009
.. The younger Designated Life was 70 years old when he/she elected the
Spousal Highest Daily Lifetime 7 Plus benefit.
Example of dollar-for-dollar reductions
On November 24, 2009, the Protected Withdrawal Value is $120,000, resulting in
an Annual Income Amount of $6,000 (since the youngest designated life is
between the ages of 59 1/2 and 79 at the time of the first Lifetime
Withdrawal, the Annual Income Amount is 5% of the Protected Withdrawal Value,
in this case 5% of $120,000). Assuming $2,500 is withdrawn from the Annuity on
this date, the remaining Annual Income Amount for that Annuity Year (up to and
including December 1, 2009) is $3,500. This is the result of a
dollar-for-dollar reduction of the Annual Income Amount ($6,000 less $2,500 =
$3,500).
Example of proportional reductions
Continuing the previous example, assume an additional withdrawal of $5,000
occurs on November 27, 2009 and the Account Value at the time and immediately
prior to this withdrawal is $118,000. The first $3,500 of this withdrawal
reduces the Annual Income Amount for that Annuity Year to $0. The remaining
withdrawal amount of $1,500 - reduces the Annual Income Amount in future
Annuity Years on a proportional basis based on the ratio of the excess
withdrawal to the Account Value immediately prior to the excess withdrawal.
(Note that if there were other withdrawals in that Annuity Year, each would
result in another proportional reduction to the Annual Income Amount).
Here is the calculation:
Account Value before Lifetime Withdrawal $118,000.00
Less amount of "non" excess withdrawal $ 3,500.00
Account Value immediately before excess withdrawal of $1,500 $114,500.00
Excess withdrawal amount $ 1,500.00
Divided by Account Value immediately before excess withdrawal $114,500.00
Ratio 1.31%
Annual Income Amount $ 6,000.00
Less ratio of 1.31% $ 78.60
Annual Income Amount for future Annuity Years $ 5,921.40
Example of highest daily auto step-up
On each Annuity Anniversary date, the Annual Income Amount is stepped-up if
the appropriate percentage (based on the youngest Designated Life's age on the
Annuity Anniversary) of the highest daily value since your first Lifetime
Withdrawal (or last Annuity Anniversary in subsequent years), adjusted for
withdrawals and additional purchase payments, is higher than the Annual Income
Amount, adjusted for excess withdrawals and additional purchase payments
(including the amount of any associated Credits).
Continuing the same example as above, the Annual Income Amount for this
Annuity Year is $6,000. However, the excess withdrawal on November 27 reduces
the amount to $5,921.40 for future years (see above). For the next Annuity
Year, the Annual Income Amount will be stepped up if 5% (since the youngest
Designated Life is between 59 1/2 and 79 on the date of the potential step-up)
of the highest daily Account Value adjusted for withdrawals and purchase
payments (including credits), is higher than $5921.40. Here are the
calculations for determining the daily values. Only the November 25 value is
being adjusted for excess withdrawals as the November 30 and December 1
Valuation Days occur after the excess withdrawal on November 27.
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Highest Daily Value
(adjusted with Adjusted Annual Income
withdrawal and purchase Amount (5% of the
Date* Account value payments)** Highest Daily Value)
----- ------------- ----------------------- ----------------------
November 25, 2009 $119,000.00 $ 119,000.00 $5,950.00
November 26, 2009 Thanksgiving Day
November 27, 2009 $113,000.00 $ 113,986.95 $5,699.35
November 30, 2009 $113,000.00 $ 113,986.95 $5,699.35
December 01, 2009 $119,000.00 $ 119,000.00 $5,950.00
* In this example, the Annuity Anniversary date is December 1. The Valuation
Dates are every day following the first Lifetime Withdrawal. In subsequent
Annuity Years Valuation Dates will be every day following the Annuity
Anniversary. The Annuity Anniversary Date of December 1 is considered the
final Valuation Date for the Annuity Year.
** In this example, the first daily value after the first Lifetime Withdrawal
is $119,000 on November 25, resulting in an adjusted Annual Income Amount
of $5,950.00. This amount is adjusted on November 27 to reflect the $5,000
withdrawal. The calculations for the adjustments are:
. The Account Value of $119,000 on November 25 is first reduced
dollar-for-dollar by $3,500 ($3,500 is the remaining Annual Income
Amount for the Annuity Year), resulting in an adjusted Account Value of
$115,500 before the excess withdrawal.
. This amount ($115,500) is further reduced by 1.31% (this is the ratio in
the above example which is the excess withdrawal divided by the Account
Value immediately preceding the excess withdrawal) resulting in a
Highest Daily Value of $113,986.95.
. The adjusted Annual Income Amount is carried forward to the next
Valuation Date of November 30. At this time, we compare this amount to
5% of the Account Value on November 30. Since the November 27 adjusted
Annual Income Amount of $5,699.35 is higher than $5,650.00 (5% of
$113,000), we continue to carry $5,699.35 forward to the next and final
Valuation Date of December 1. The Account Value on December 1 is
$119,000 and 5% of this amount is $5,950. Since this is higher than
$5,699.35, the adjusted Annual Income Amount is reset to $5,950.00.
In this example, 5% of the December 1 value results in the highest amount of
$5,950.00. Since this amount is higher than the current year's Annual Income
Amount of $5,921.40 adjusted for excess withdrawals, the Annual Income Amount
for the next Annuity Year, starting on December 2, 2009 and continuing through
December 1, 2010, will be stepped-up to $5,950.00.
Non-Lifetime Withdrawal Feature
You may take a one-time non-lifetime withdrawal ("Non-Lifetime Withdrawal")
under Spousal Highest Daily Lifetime 7 Plus. It is an optional feature of the
benefit that you can only elect at the time of your first withdrawal. The
amount of the Non-Lifetime Withdrawal cannot be more than the amount that
would cause the Annuity to be taken below the minimum Surrender Value after a
withdrawal for your Annuity. This Non-Lifetime Withdrawal will not establish
our initial Annual Income Amount and the Periodic Value above will continue to
be calculated. However, the total amount of the withdrawal will proportionally
reduce all guarantees associated with the Spousal Highest Daily Lifetime 7
Plus benefit. You must tell us if your withdrawal is intended to be the
Non-Lifetime Withdrawal and not the first Lifetime Withdrawal under the
Spousal Highest Daily Lifetime 7 Plus benefit. If you don't elect the
Non-Lifetime Withdrawal, the first withdrawal you make will be the first
Lifetime Withdrawal that establishes your Protected Withdrawal Value and
Annual Income Amount. Once you elect the Non-Lifetime Withdrawal or Lifetime
Withdrawals, no additional Non-Lifetime withdrawals may be taken.
The Non-Lifetime Withdrawal will proportionally reduce the Protected
Withdrawal Value, the Return of Principal guarantee and the Periodic Value
guarantees on the tenth, twentieth and twenty-fifth anniversaries of the
benefit effective date, described above, by the percentage the total
withdrawal amount (including any applicable CDSC) represents of the then
current Account Value immediately prior to the time of the withdrawal.
If you are participating in a Systematic Withdrawal program, the first
withdrawal under the program cannot be classified as the Non-Lifetime
Withdrawal. The first partial withdrawal in payment of any third party
investment advisory service from your Annuity also cannot be classified as the
Non-Lifetime Withdrawal.
Example - Non-Lifetime Withdrawal (proportional reduction)
This example is purely hypothetical and does not reflect the charges for the
benefit or any other fees and charges. It is intended to illustrate the
proportional reduction of the Non-Lifetime Withdrawal under this benefit.
Assume the following:
.. The Issue Date is December 1, 2008
.. The Spousal Highest Daily Lifetime 7 Plus benefit is elected on March 5,
2009
.. The Account Value at benefit election was $105,000
.. The younger Designated Life was 70 years old when he/she elected the
Spousal Highest Daily Lifetime 7 Plus benefit.
.. No previous withdrawals have been taken under the Spousal Highest Daily
Lifetime 7 Plus benefit.
On May 2, 2009, the Protected Withdrawal Value is $125,000, the 10/th/ benefit
year minimum Periodic Value guarantee is $210,000, the 10/th/ benefit year
Return of Principal guarantee is $105,000, the 20/th/ benefit year minimum
Periodic Value guarantee is $420,000, the 25/th/ benefit year minimum Periodic
Value guarantee is $630,000 and the Account Value is $120,000. Assuming
$15,000 is withdrawn from the Annuity on May 2, 2009 and is designated as a
Non-Lifetime Withdrawal, all guarantees associated with the Spousal Highest
Daily Lifetime 7 Plus benefit will be reduced by the ratio the total
withdrawal amount represents of the Account Value just prior to the withdrawal
being taken.
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Here is the calculation:
Withdrawal Amount divided by $ 15,000
Account Value before withdrawal $120,000
Equals ratio 12.5%
All guarantees will be reduced by the above ratio (12.5%)
Protected Withdrawal Value $109,375
10/th/ benefit year Return of Principal $ 91,875
10/th/ benefit year Minimum Periodic Value $183,750
20/th/ benefit year Minimum Periodic Value $367,500
25/th/ benefit year Minimum Periodic Value $551,250
Required Minimum Distributions
Withdrawals that exceed the Annual Income Amount, but which you are required
to take as a required minimum distribution for this Annuity, will not reduce
the Annual Income Amount for future years. No additional Annual Income Amounts
will be available in an Annuity Year due to required minimum distributions
unless the required minimum distribution amount is greater than the Annual
Income Amount. Any withdrawal you take that exceeds the Annual Income Amount
in Annuity Years that your required minimum distribution amount is not greater
than the Annual Income Amount will be treated as an Excess Withdrawal under
the benefit. If the required minimum distribution (as calculated by us for
your Annuity and not previously withdrawn in the current calendar year) is
greater than the Annual Income Amount, an amount equal to the remaining Annual
Income Amount plus the difference between the required minimum distribution
amount not previously withdrawn in the current calendar year and the Annual
Income Amount will be available in the current Annuity Year without it being
considered an excess withdrawal. In the event that a required minimum
distribution is calculated in a calendar year that crosses more than one
Annuity Year and you choose to satisfy the entire required minimum
distribution for that calendar year in the next Annuity Year, the distribution
taken in the next Annuity Year will reduce your Annual Income Amount in that
Annuity Year on a dollar for dollar basis. If the required minimum
distribution not taken in the prior Annuity Year is greater than the Annual
Income Amount as guaranteed by the benefit in the current Annuity Year, the
total required minimum distribution amount may be taken without being treated
as an excess withdrawal.
Example - required minimum distributions
The following example is purely hypothetical and is intended to illustrate a
scenario in which the required minimum distribution amount in a given Annuity
Year is greater than the Annual Income Amount.
Annual Income Amount = $5,000
Remaining Annual Income Amount = $3,000
Required Minimum Distribution = $6,000
The amount you may withdraw in the current Annuity Year without it being
treated as an Excess Withdrawal is $4,000. ($3,000 + ($6,000 - $5,000) =
$4,000).
If the $4,000 withdrawal is taken, the remaining Annual Income Amount will be
zero and the remaining required minimum distribution amount of $2,000 may be
taken in the subsequent Annuity Year (when your Annual Income Amount is reset
to $5,000) without proportionally reducing all guarantees associated with the
Spousal Highest Daily Lifetime 7 Plus benefit as described above. The amount
you may withdraw in the subsequent Annuity Year if you choose not to satisfy
the required minimum distribution in the current Annuity Year (assuming the
Annual Income Amount in the subsequent Annuity Year is $5,000) without being
treated as an Excess Withdrawal is $6,000. This withdrawal must comply with
all IRS guidelines in order to satisfy the required minimum distribution for
the current calendar year.
Benefits Under Spousal Highest Daily Lifetime 7 Plus
.. To the extent that your Account Value was reduced to zero as a result of
cumulative Lifetime Withdrawals in an Annuity Year that are equal to or
less than the Annual Income Amount or as a result of the fee that we assess
for Spousal Highest Daily Lifetime 7 Plus, and amounts are still payable
under Spousal Highest Daily Lifetime 7 Plus, we will make an additional
payment, if any, for that Annuity Year equal to the remaining Annual Income
Amount for the Annuity Year. If you have not begun taking Lifetime
Withdrawals and your Account Value is reduced to zero as a result of the
fee we assess for Spousal Highest Daily Lifetime 7 Plus, we will calculate
the Annual Income Amount as if you made your first Lifetime Withdrawal on
the date the Account Value was reduced to zero and Lifetime Withdrawals
will begin on the next Annuity Anniversary. If this were to occur, you are
not permitted to make additional purchase payments to your Annuity. Thus,
in these scenarios, the remaining Annual Income Amount would be payable
even though your Account Value was reduced to zero. In subsequent
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Annuity Years we make payments that equal the Annual Income Amount as
described in this section. We will make payments until the death of the
first of the Designated Lives to die, and will continue to make payments
until the death of the second Designated Life as long as the Designated
Lives were spouses at the time of the first death. To the extent that
cumulative withdrawals in the Annuity Year that reduced your Account Value
to zero are more than the Annual Income Amount, the Spousal Highest Daily
Lifetime 7 Plus benefit terminates, and no additional payments will be
made. However, if a withdrawal in the latter scenario was taken to satisfy
a required minimum distribution under the Annuity the benefit will not
terminate, and we will continue to pay the Annual Income Amount in
subsequent Annuity Years until the death of the second Designated Life
provided the Designated lives were spouses at the death of the first
Designated Life.
.. If Annuity payments are to begin under the terms of your Annuity, or if you
decide to begin receiving Annuity payments and there is an Annual Income
Amount due in subsequent Annuity Years, you can elect one of the following
two options:
(1)apply your Account Value to any Annuity option available; or
(2)request that, as of the date Annuity payments are to begin, we make
Annuity payments each year equal to the Annual Income Amount. We will
make payments until the first of the Designated Lives to die, and
will continue to make payments until the death of the second
Designated Life as long as the Designated Lives were spouses at the
time of the first death. If, due to death of a Designated Life or
divorce prior to annuitization, only a single Designated Life
remains, then Annuity payments will be made as a life annuity for the
lifetime of the Designated Life. We must receive your request in a
form acceptable to us at our office.
.. In the absence of an election when mandatory annuity payments are to begin,
we will make annual annuity payments as a joint and survivor or single (as
applicable) life fixed annuity with ten payments certain, by applying the
greater of the annuity rates then currently available or the annuity rates
guaranteed in your Annuity. The amount that will be applied to provide such
Annuity payments will be the greater of:
(1)the present value of the future Annual Income Amount payments. Such
present value will be calculated using the greater of the joint and
survivor or single (as applicable) life fixed annuity rates then
currently available or the joint and survivor or single (as
applicable) life fixed annuity rates guaranteed in your Annuity; and
(2)the Account Value.
.. If no Lifetime Withdrawal was ever taken, we will calculate the Annual
Income Amount as if you made your first Lifetime Withdrawal on the date the
annuity payments are to begin.
.. Please note that payments that we make under this benefit after the Annuity
Anniversary coinciding with or next following the older of the owner or
Annuitant's 95/th/ birthday will be treated as annuity payments.
Other Important Considerations
.. Withdrawals under the Spousal Highest Daily Lifetime 7 Plus benefit are
subject to all of the terms and conditions of the Annuity, including any
applicable CDSC for the Non-Lifetime Withdrawal as well as withdrawals that
exceed the Annual Income Amount.
.. Withdrawals made while the Spousal Highest Daily Lifetime 7 Plus benefit is
in effect will be treated, for tax purposes, in the same way as any other
withdrawals under the Annuity. Any withdrawals made under the benefit will
be taken pro-rata from the Sub-accounts (including the AST Investment Grade
Bond Sub-account) and the DCA Fixed Rate Options (if you are participating
in the 6 or 12 Month DCA Program). Withdrawals from the DCA Fixed Rate
Options will be taken on a last-in, first-out basis.
.. You can make withdrawals from your Annuity while your Account Value is
greater than zero without purchasing the Spousal Highest Daily Lifetime 7
Plus benefit. The Spousal Highest Daily Lifetime 7 Plus benefit provides a
guarantee that if your Account Value is reduced to zero (subject to program
rules regarding the timing and amount of withdrawals), you will be able to
receive your Annual Income Amount in the form of periodic benefit payments.
.. Upon inception of the benefit, 100% of your Account Value must be allocated
to the Permitted Sub-accounts.
.. You cannot allocate purchase payments or transfer Account Value to or from
the AST Investment Grade Bond Portfolio Sub-account (as described below) if
you elect this benefit. A summary description of the AST Investment Grade
Bond Portfolio appears in the prospectus section entitled "What Are The
Investment Objectives and Policies of The Portfolios?". Upon the initial
transfer of your Account Value into the AST Investment Grade Bond
Portfolio, we will send a prospectus for that Portfolio to you, along with
your confirmation statement. In addition, you can find a copy of the AST
Investment Grade Bond Portfolio prospectus by going to
www.prudentialannuities.com.
.. You can make withdrawals from your Annuity without purchasing the Spousal
Highest Daily Lifetime 7 Plus benefit. The Spousal Highest Daily Lifetime 7
Plus benefit provides a guarantee that if your Account Value declines due
to Sub-account performance, you will be able to receive your Annual Income
Amount in the form of periodic benefit payments.
.. Transfers to and from the elected Sub-accounts and the AST Investment Grade
Bond Portfolio Sub-account triggered by the Spousal Highest Daily Lifetime
7 Plus asset transfer program will not count toward the maximum number of
free transfers allowable under an Annuity.
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.. You must allocate your Account Value in accordance with the then available
investment option(s) that we may prescribe in order to elect and maintain
the Spousal Highest Daily Lifetime 7 Plus benefit. If, subsequent to your
election of the benefit, we change our requirements for how Account Value
must be allocated under the benefit, the new requirement will apply only to
new elections of the benefit, and we will not compel you to re-allocate
your Account Value in accordance with our newly adopted requirements.
Subject to any change in requirements, transfers of Account Value and
allocation of Additional purchase payments may be subject to new investment
limitations.
.. If you elect this benefit and in connection with that election, you are
required to reallocate to permitted investment options, then on the
Valuation Day we receive your request in Good Order, we will (i) sell units
of the non-permitted investment options and (ii) invest the proceeds of
those sales in the permitted investment options that you have designated.
During this reallocation process, your Account Value allocated to the
Sub-accounts will remain exposed to investment risk, as is the case
generally. The newly-elected benefit will commence at the close of business
on the following Valuation Day. Thus, the protection afforded by the
newly-elected benefit will not arise until the close of business on the
following Valuation Day.
.. The maximum fee for Spousal Highest Daily Lifetime 7 Plus is 1.50% annually
of the greater of Account Value and the Protected Withdrawal Value. The
current fee for Spousal Highest Daily Lifetime 7 Plus is 0.90% annually of
the greater of Account Value and the Protected Withdrawal Value. We deduct
this fee at the end of each benefit quarter, where each such quarter is
part of a year that begins on the effective date of the benefit or an
anniversary thereafter. Thus, on each such quarter-end (or the next
Valuation Day, if the quarter-end is not a Valuation Day), we deduct 0.225%
of the greater of the prior day's Account Value, or the prior day's
Protected Withdrawal Value at the end of the quarter. We deduct the fee pro
rata from each of your Sub-accounts including the AST Investment Grade Bond
Sub-account. Since this fee is based on the greater of the Account Value
and the Protected Withdrawal Value, the fee for Spousal Highest Daily
Lifetime 7 Plus may be greater than it would have been, had it been based
on the Account Value alone. If the fee to be deducted exceeds the Account
Value, we will reduce the Account Value to zero, and continue the benefit
as described above.
Election of and Designations under the Benefit
Spousal Highest Daily Lifetime 7 Plus can only be elected based on two
Designated Lives. Designated Lives must be natural persons who are each
other's spouses at the time of election of the benefit and at the death of the
first of the Designated Lives to die. Currently, Spousal Highest Daily
Lifetime 7 Plus only may be elected where the Owner, Annuitant, and
Beneficiary designations are as follows:
.. One Annuity Owner, where the Annuitant and the Owner are the same person
and the beneficiary is the Owner's spouse. The youngest Owner/Annuitant and
the beneficiary must be at least 50 years old and the oldest must be at
least 55 years old at the time of election; or
.. Co-Annuity Owners, where the Owners are each other's spouses. The
beneficiary designation must be the surviving spouse, or the spouses named
equally. One of the owners must be the Annuitant. The youngest Owner must
be at least 50 years old and the oldest owner must be at least 55 years old
at the time of election; or
.. One Annuity Owner, where the Owner is a custodial account established to
hold retirement assets for the benefit of the Annuitant pursuant to the
provisions of Section 408(a) of the Internal Revenue Code (or any successor
Code section thereto) ("Custodial Account"), the beneficiary is the
Custodial Account, and the spouse of the Annuitant is the Contingent
Annuitant. The youngest of the Annuitant and the Contingent Annuitant must
be at least 50 years old and the oldest must be at least 55 years old at
the time of election.
We do not permit a change of Owner under this benefit, except as follows: (a)
if one Owner dies and the surviving spousal Owner assumes the Annuity, or (b)
if the Annuity initially is co-owned, but thereafter the Owner who is not the
Annuitant is removed as Owner. We permit changes of beneficiary under this
benefit. If the Designated Lives divorce, the Spousal Highest Daily Lifetime 7
Plus benefit may not be divided as part of the divorce settlement or judgment.
Nor may the divorcing spouse who retains ownership of the Annuity appoint a
new Designated Life upon re-marriage.
Spousal Highest Daily Lifetime 7 Plus can be elected at the time that you
purchase your Annuity or after the Issue Date, subject to our eligibility
rules and restrictions. See "Termination of Existing Benefits and Election of
New Benefits" below for information pertaining to elections, termination and
re-election of benefits. Please note that if you terminate a living benefit
and elect a new living benefit, you lose the guarantees that you had
accumulated under your existing benefit and will begin the new guarantees
under the new benefit you elected based on your Account Value as of the date
the new benefit becomes active. We reserve the right to waive, change and/or
further limit the election frequency in the future.
Termination of the Benefit
You may terminate the benefit at any time by notifying us. If you terminate
the benefit, any guarantee provided by the benefit will terminate as of the
date the termination is effective, and certain restrictions on re-election may
apply. The benefit automatically terminates: (i) if upon the death of the
first Designated Life, the surviving Designated Life opts to take the death
benefit under the Annuity (thus, the benefit does not terminate solely because
of the death of the first Designated Life), (ii) upon the death of the second
Designated Life, (iii) upon your termination of the benefit, (iv) upon your
surrender of the Annuity, (v) upon your election to begin receiving annuity
payments (although if you have elected to take annuity payments in the form of
the Annual Income Amount, we will continue to pay the Annual Income Amount),
(vi) if both the Account Value and Annual Income Amount equal zero, or
(vii) if you cease to meet our requirements as described in "Election of and
Designations under the Benefit".
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Upon termination of Spousal Highest Daily Lifetime 7 Plus other than upon
death of a Designated Life, we impose any accrued fee for the benefit (i.e.,
the fee for the pro-rated portion of the year since the fee was last
assessed), and thereafter we cease deducting the charge for the benefit. With
regard to your investment allocations, upon termination we will: (i) leave
intact amounts that are held in the variable investment options, and
(ii) transfer all amounts held in the AST Investment Grade Bond Portfolio
Sub-account (as defined below) to your variable investment options based on
your existing allocation instructions or (in the absence of such instruction)
pro rata (i.e. in the same proportion as the current balances in your variable
investment options).
How Spousal Highest Daily Lifetime 7 Plus Transfers Account Value between Your
Permitted Sub-accounts and the AST Investment Grade Bond Sub-account
See "How Highest Daily Lifetime 7 Plus Transfers Account Value Between Your
Permitted Sub-accounts and the AST Investment Grade Bond Sub-account" in this
Prospectus for information regarding this component of the benefit.
Additional Tax Considerations
If you purchase an annuity as an investment vehicle for "qualified"
investments, including an IRA, SEP-IRA, Tax Sheltered Annuity (or 403(b)) or
employer plan under Code Section 401(a), the required minimum distribution
rules under the Code provide that you begin receiving periodic amounts from
your annuity beginning after age 70 1/2. For a Tax Sheltered Annuity or a
401(a) plan for which the participant is not a greater than five (5) percent
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 required under the Code may exceed the Annual
Income Amount, which will cause us to increase the Annual Income Amount in any
Annuity Year that required minimum distributions due from your Annuity are
greater than such amounts. In addition, the amount and duration of payments
under the annuity payment and death benefit provisions may be adjusted so that
the payments do not trigger any penalty or excise taxes due to tax
considerations such as required minimum distribution provisions under the tax
law. Please note, however, that any withdrawal (except the Non-Lifetime
Withdrawal) you take prior to the Tenth Anniversary, even if withdrawn to
satisfy required minimum distribution rules, will cause you to lose the
ability to receive the Return of Principal Guarantee and the guaranteed amount
described above under "Key Feature - Protected Withdrawal Value".
Note that under the Worker, Retiree and Employer Recovery Act of 2008,
Required Minimum Distributions are suspended for 2009 and are scheduled to
resume in 2010. We will continue to treat the calculated amount that would
have been a required minimum distribution if not for the suspension as the
amount available for withdrawal if you so choose.
As indicated, withdrawals made while this benefit is in effect will be
treated, for tax purposes, in the same way as any other withdrawals under the
Annuity. Please see the Tax Considerations section of the prospectus for a
detailed discussion of the tax treatment of withdrawals. We do not address
each potential tax scenario that could arise with respect to this benefit
here. However, we do note that if you participate in Spousal Highest Daily
Lifetime 7 Plus through a non-qualified annuity, as with all withdrawals, once
all purchase payments are returned under the Annuity, all subsequent
withdrawal amounts will be taxed as ordinary income.
Spousal Highest Daily Lifetime 7 Plus/SM/ with Beneficiary Income Option
We offer an optional death benefit feature under Spousal Highest Daily
Lifetime 7 Plus, the amount of which is linked to your Annual Income Amount .
We refer to this optional death benefit as the Beneficiary Income Option or
BIO. This version is only being made available in those jurisdictions where we
have received regulatory approval and will be offered subsequently in other
jurisdictions when we receive regulatory approval in those jurisdictions. You
may choose Spousal Highest Daily Lifetime 7 Plus with or without also
selecting the Beneficiary Income Option death benefit. However, you may not
elect the Beneficiary Income Option without Spousal Highest Daily Lifetime 7
Plus and you must elect the Beneficiary Income Option death benefit at the
time you elect Spousal Highest Daily Lifetime 7 Plus. If you elect Spousal
Highest Daily Lifetime 7 Plus without the Beneficiary Income Option and would
like to add the feature later, you must terminate the Spousal Highest Daily
Lifetime 7 Plus benefit and elect the Spousal Highest Daily Lifetime 7 Plus
with Beneficiary Income Option (subject to availability and benefit
re-election provisions). Please note that if you terminate Spousal Highest
Daily Lifetime 7 Plus and elect the Spousal Highest Daily Lifetime 7 Plus with
BIO you lose the guarantees that you had accumulated under your existing
benefit and will begin the new guarantees under the new benefit you elect
based on your Account Value as of the date the new benefit becomes active. As
long as your Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income
Option is in effect, you must allocate your Account Value in accordance with
the then permitted and available investment option(s) with this benefit.
If you elect the Beneficiary Income Option death benefit, you may not elect
any other optional benefit. You may elect the Beneficiary Income Option death
benefit so long as each Designated Life is no older than age 75 at the time of
election and the Spousal Highest Daily Lifetime 7 Plus age requirements are
met. This death benefit is not transferable in the event of a divorce, nor may
the benefit be split in accordance with any divorce proceedings or similar
instrument of separation. If you choose the Spousal Highest Daily Lifetime 7
Plus with BIO, the maximum charge is 2.00% of the greater of Account Value and
the Protected Withdrawal Value ("PWV") annually. The current charge is 1.10%
annually of the greater of Account Value and the PWV. We deduct this charge at
the end of each benefit quarter, where each such quarter is part of a year
that begins on the effective date of the benefit or an anniversary thereafter.
Thus, on each such quarter-end (or the next Valuation Day, if the quarter-end
is not a
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Valuation Day), we deduct 0.275% of the greater of the prior day's Account
Value or the prior day's Protected Withdrawal Value at the end of the quarter.
We deduct the fee pro rata from each of your Sub-accounts, including the AST
Investment Grade Bond Sub-account. Because the fee for this benefit is based
on the greater of the Account Value or the Protected Withdrawal Value, the fee
for Spousal Highest Daily Lifetime 7 Plus with the Beneficiary Income Option
may be greater than it would have been based on the Account Value alone. If
the fee to be deducted exceeds the current Account Value, we will reduce the
Account Value to zero, and continue the benefit as described below.
For purposes of this optional death benefit, we calculate the Annual Income
Amount and Protected Withdrawal Value in the same manner that we do under
Spousal Highest Daily Lifetime 7 Plus itself. However, we will stop
determining the Periodic Value (as described above) on the earlier of your
first Lifetime Withdrawal after the effective date of the benefit or the Tenth
Anniversary Date. This means that under the Spousal Highest Daily Lifetime 7
Plus with BIO benefit you will not be eligible for the guaranteed minimum
Periodic Values described above on the 20/th/ and 25/th/ Anniversary of the
Benefit Effective Date. Upon the first death of a Designated Life, no amount
is payable under the Beneficiary Income Option death benefit. Upon the second
death of a Designated Life, we identify the following amounts: (a) the amount
of the basic death benefit under the Annuity, (b) the Protected Withdrawal
Value (less any credits associated with purchase payments applied within 12
months prior to the date of death), and (c) the Annual Income Amount. If there
were no Lifetime Withdrawals prior to the date of death of the second
Designated Life, then we calculate the Protected Withdrawal Value for purposes
of this death benefit as of the date of death of the second Designated Life,
and we calculate the Annual Income Amount as if there were a Lifetime
Withdrawal on the date of death of the second Designated Life. If there were
Lifetime Withdrawals prior to the date of death of the second Designated Life,
then we set the Protected Withdrawal Value and Annual Income Amount for
purposes of this death benefit as of the date that we receive due proof of
death.
If there is one beneficiary, he/she must choose to receive either the basic
death benefit (in a lump sum or other permitted form of distribution) or the
Beneficiary Income Option death benefit (in the form of annual payments of the
Annual Income Amount - such payments may be annual or at other intervals that
we permit). If there are multiple beneficiaries, each beneficiary is presented
with the same choice. Thus, each beneficiary can choose to take his/her
portion of either (a) the basic Death Benefit, or (b) the Beneficiary Income
Option death benefit. In order to receive the Beneficiary Income Option Death
Benefit, each beneficiary's share of the death benefit proceeds must be
allocated as a percentage of the total death benefit to be paid. We allow a
beneficiary who has opted to receive the Annual Income Amount to designate
another beneficiary, who would receive any remaining payments upon the former
beneficiary's death. Note also that the final payment, exhausting the
Protected Withdrawal Value, may be less than the Annual Income Amount.
Here is an example to illustrate how the death benefit may be paid:
.. Assume that (i) the basic death benefit is $50,000, the Protected
Withdrawal Value is $100,000, and the Annual Income Amount is $5,000;
(ii) there are two beneficiaries (the first designated to receive 75% of
the death benefit and the second designated to receive 25% of the death
benefit); (iii) the first beneficiary chooses to receive his/her portion of
the death benefit in the form of the Annual Income Amount, and the second
beneficiary chooses to receive his/her portion of the death benefit with
reference to the basic death benefit.
.. Under those assumptions, the first beneficiary will be paid a pro-rated
portion of the Annual Income Amount for 20 years (the 20 year pay out
period is derived from the $5,000 Annual Income Amount, paid each year
until it exhausts the entire $100,000 Protected Withdrawal Value). The
pro-rated portion of the Annual Income Amount equal to $3,750 (i.e., the
first beneficiary's 75% share multiplied by $5,000) is then paid each year
for the 20 year period. Payment of $3,750 for 20 years results in total
payments of $75,000 (i.e., the first beneficiary's 75% share of the
$100,000 Protected Withdrawal Value). The second beneficiary would receive
25% of the basic death benefit amount (or $12,500).
If you elect to terminate Spousal Highest Daily Lifetime 7 Plus with
Beneficiary Income Option, both Spousal Highest Daily Lifetime 7 Plus and that
death benefit option will be terminated. You may not terminate the death
benefit option without terminating the entire benefit. If you terminate
Spousal Highest Daily Lifetime 7 Plus with Beneficiary Income Option, your
ability to elect other optional living benefits will be affected as indicated
in the "Election of and Designations under the Benefit" section.
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DEATH BENEFIT
WHAT TRIGGERS THE PAYMENT OF A DEATH BENEFIT?
Each Annuity provides a Death Benefit during its accumulation period. If an
Annuity is owned by one or more natural persons, the Death Benefit is payable
upon the first death of an Owner. If an Annuity is owned by an entity, the
Death Benefit is payable upon the Annuitant's death, if there is no Contingent
Annuitant. Please note that if your Annuity is held as a Beneficiary Annuity
and owned by one of the permissible entities, no death benefit will be payable
since the Annuity will continue distributing the required distributions over
the life expectancy of the Key Life until either the Account Value is depleted
or the Annuity is fully surrendered. Generally, if a Contingent Annuitant was
designated before the Annuitant's death and the Annuitant dies, then the
Contingent Annuitant becomes the Annuitant and a Death Benefit will not be
paid at that time. The person upon whose death the Death Benefit is paid is
referred to below as the "decedent."
BASIC DEATH BENEFIT
Each Annuity provides a basic Death Benefit at no additional charge. The
Insurance Charge we deduct daily from your Account Value allocated to the
Sub-accounts is used, in part, to pay us for the risk we assume in providing
the basic Death Benefit guarantee under an Annuity. Each Annuity also offers
two different optional Death Benefits that can be purchased for an additional
charge. The additional charge is deducted to compensate Prudential Annuities
for providing increased insurance protection under the optional Death
Benefits. Notwithstanding the additional protection provided under the
optional Death Benefits, the additional cost has the impact of reducing the
net performance of the investment options. In addition, with respect to XT6,
under certain circumstances, your Death Benefit may be reduced by the amount
of any Credits we applied to your purchase payments. (See "How are Credits
Applied to My Account Value".)
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 Annuities 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.
For ASAP III, APEX II and XT6 Annuities, the existing basic Death Benefit (for
all decedent ages) is the greater of:
.. The sum of all purchase payments (not including any Credits) less the sum
of all proportional withdrawals.
.. The sum of your Account Value in the Sub-accounts and your Interim Value in
the MVA Fixed Allocations (less the amount of any Credits applied within
12-months prior to the date of death, with respect to XT6).
For ASL II Annuities issued before July 21, 2008, where death occurs before
the decedent's age 85, the basic Death Benefit is the greater of:
.. The sum of all purchase payments less the sum of all proportional
withdrawals.
.. The sum of your Account Value in the Sub-accounts and your Interim Value in
the MVA Fixed Allocations.
For ASL II Annuities issued before July 21, 2008 where death occurs after the
decedent's age 85, the Death Benefit is (a) your Account Value (for Annuities
other than those issued in New York) or (b) your Account Value in the
Sub-accounts plus your Interim Value in the MVA Fixed Allocations (for
Annuities issued in New York only).
For ASL II Annuities issued on or after July 21, 2008 the basic Death Benefit
is the greater of:
.. The sum of all purchase payments less the sum of all proportional
withdrawals.
.. The sum of your Account Value in the Sub-accounts and your Interim Value in
the MVA Fixed Allocations.
"Proportional withdrawals" are determined by calculating the percentage of
your Account Value that each prior withdrawal represented when withdrawn. For
example, a withdrawal of 50% of Account Value would be considered as a 50%
reduction in purchase payments for purposes of calculating the basic Death
Benefit.
OPTIONAL DEATH BENEFITS
Two optional Death Benefits are offered for purchase with your Annuity to
provide an enhanced level of protection for your beneficiaries. No optional
Death Benefit is available if your Annuity is held as a Beneficiary Annuity.
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Currently, these benefits are only offered in those jurisdictions where we
have received regulatory approval and must be elected at the time that you
purchase your Annuity. We may, at a later date, allow existing Annuity Owners
to purchase an optional Death Benefit subject to our rules and any changes or
restrictions in the benefits. The "Combination 5% Roll-up and Highest
Anniversary Value" Death Benefit may only be elected individually, and cannot
be elected in combination with any other optional Death Benefit. If you elect
Spousal Lifetime Five, Spousal Highest Daily Lifetime Seven, Spousal Highest
Daily Lifetime 7 Plus, or the BIO feature of the Highest Daily Lifetime Seven
or the Highest Daily Lifetime 7 Plus suite of benefits, you are not permitted
to elect an optional Death Benefit. With respect to XT6, under certain
circumstances, each Optional Death Benefit that you elect may be reduced by
the amount of Credits applied to your purchase payments.
Investment Restrictions may apply if you elect certain optional death
benefits. See the chart in the "Investment Options" section of the Prospectus
for a list of investment options available and permitted with each benefit.
Enhanced Beneficiary Protection Optional Death Benefit
The Enhanced Beneficiary Protection Optional Death Benefit is no longer
available for new elections. It provides additional amounts to your
Beneficiary that may be used to offset federal and state taxes payable on any
taxable gains in your Annuity at the time of your death. Whether this benefit
is appropriate for you may depend on your particular circumstances, including
other financial resources that may be available to your Beneficiary to pay
taxes on your Annuity should you die during the accumulation period. No
benefit is payable if death occurs on or after the Annuity Date.
The Enhanced Beneficiary Protection Optional Death Benefit provided a benefit
payable in addition to the basic Death Benefit and certain other optional
death benefits you may elect in conjunction with this benefit. If the Annuity
has one Owner, the Owner had to be age 75 or less at the time the benefit was
purchased. If an Annuity has joint Owners, the oldest Owner had to be age 75
or less. If an Annuity is owned by an entity, the Annuitant had to be age 75
or less.
Calculation of Enhanced Beneficiary Protection Optional Death Benefit
If you purchased the Enhanced Beneficiary Protection Optional Death Benefit,
the Death Benefit is calculated as follows:
1. the basic Death Benefit described above;
PLUS
2. 40% of your "Growth" under an Annuity, as defined below.
"Growth" means the sum of your Account Value in the Sub-accounts and your
Interim Value in the MVA Fixed Allocations, minus the total of all purchase
payments (less the amount of any Credits applied within 12-months prior to the
date of death, with respect to XT6) reduced by the sum of all proportional
withdrawals.
"Proportional withdrawals" are determined by calculating the percentage of
your Account Value that each prior withdrawal represented when withdrawn. For
example, a withdrawal of 50% of Account Value would be considered as a 50%
reduction in purchase payments.
The Enhanced Beneficiary Protection Optional Death Benefit is subject to a
maximum of 100% of all purchase payments applied to an Annuity at least 12
months prior to the death of the decedent that triggers the payment of the
Death Benefit.
The Enhanced Beneficiary Protection Optional Death Benefit was offered in
those jurisdictions where we received regulatory approval. Certain terms and
conditions may differ between jurisdictions. With respect to XT6, APEX II and
ASL II, please see Appendix E for a description of the Enhanced Beneficiary
Protection Optional Death Benefit offered before November 18, 2002 in those
jurisdictions where we received regulatory approval. Please refer to the
section entitled "Tax Considerations" for a discussion of special tax
considerations for purchasers of this benefit. The Enhanced Beneficiary
Protection Death Benefit was not available if you elected the "Combination 5%
Roll-up and Highest Anniversary Value" Death Benefit, the Spousal Lifetime
Five Income Benefit Spousal Highest Daily Lifetime Seven or Highest Daily
Lifetime Seven with BIO.
See Appendix B for examples of how the Enhanced Beneficiary Protection
Optional Death Benefit is calculated.
Highest Anniversary Value Death Benefit ("HAV")
If an Annuity has one Owner, the Owner must be age 79 or less at the time the
Highest Anniversary Value Optional Death Benefit is purchased. If an Annuity
has joint Owners, the oldest Owner must be age 79 or less. If an Annuity is
owned by an entity, the Annuitant must be age 79 or less.
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Certain of the Portfolios offered as Sub-accounts under the Annuity are not
available if you elect the Highest Anniversary Value Death Benefit. In
addition, we reserve the right to require you to use certain asset allocation
model(s) if you elect this death benefit.
Calculation of Highest Anniversary Value Death Benefit
The HAV Death Benefit depends on whether death occurs before or after the
Death Benefit Target Date.
If the Owner dies before the Death Benefit Target Date, the Death
Benefit equals the greater of:
1. the basic Death Benefit described above; and
2. the Highest Anniversary Value as of the Owner's date of death.
If the Owner dies on or after the Death Benefit Target Date, the Death
Benefit equals the greater of:
1. the basic Death Benefit described above; and
2. the Highest Anniversary Value on the Death Benefit Target Date plus
the sum of all purchase payments (including any Credits applied to
such purchase payments more than twelve (12) months prior to date of
death in the case of XT6) less the sum of all proportional
withdrawals since the Death Benefit Target Date.
The amount determined by this calculation is increased by any purchase
payments received after the Owner's date of death and decreased by any
proportional withdrawals since such date.
The Highest Anniversary Value Death Benefit described above is currently
being offered in those jurisdictions where we have received regulatory
approval. The Highest Anniversary Value Death Benefit is not available
if you have elected the "Combination 5% Roll-up and Highest Anniversary
Value" or the "Highest Daily Value" Death Benefit. It is also not
available with Spousal Lifetime Five or Spousal Highest Daily Lifetime
Seven. With respect to XT6, APEX II and ASL II, please see Appendix E
for a description of the Guaranteed Minimum Death Benefit offered before
November 18, 2002 in those jurisdictions where we received regulatory
approval.
Please refer to the definition of Death Benefit Target Date below. This death
benefit may not be an appropriate feature where the Owner's age is near the
age specified in the Death Benefit Target Date. This is because the benefit
may not have the same potential for growth as it otherwise would, since there
will be fewer contract anniversaries before the death benefit target date is
reached. The death benefit target date under this death benefit is earlier
than the death benefit target date under the Combination 5% Roll-up and
Highest Anniversary Value Death Benefit for Owners who are age 76 or older
when an Annuity is issued, which may result in a lower value on the death
benefit, since there will be fewer contract anniversaries before the death
benefit target date is reached.
See Appendix B for examples of how the Highest Anniversary Value Death Benefit
is calculated.
Combination 5% Roll-up and Highest Anniversary Value Death Benefit
If an Annuity has one Owner, the Owner must be age 79 or less at the time the
Combination 5% Roll-up and HAV Optional Death Benefit is purchased. If an
Annuity has joint Owners, the oldest Owner must be age 79 or less. If the
Annuity is owned by an entity, the Annuitant must be age 79 or less.
Certain of the Portfolios offered as Sub-accounts under an Annuity are not
available if you elect the Combination 5% Roll-up and HAV Death Benefit. If
you elect this benefit, you must allocate your Account Value in accordance
with the then permitted and available option(s). In addition, we reserve the
right to require you to use certain asset allocation model(s) if you elect
this Death Benefit.
Calculation of the Combination 5% Roll-up and Highest Anniversary Value Death
Benefit
The Combination 5% Roll-up and HAV Death Benefit equals the greatest of:
1. the basic Death Benefit described above; and
2. the Highest Anniversary Value Death Benefit described above; and
3. 5% Roll-up described below.
The calculation of the 5% Roll-up depends on whether death occurs before
or after the Death Benefit Target Date.
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If the Owner dies before the Death Benefit Target Date the 5% Roll up is
equal to:
. all purchase payments (including any Credits applied to such
purchase payments more than twelve (12) months prior to date of
death in the case of XT6) increasing at an annual effective interest
rate of 5% starting on the date that each Purchase Payment is made
and ending on the Owner's date of death;
MINUS
. the sum of all withdrawals, dollar for dollar up to 5% of the Death
Benefit's value as of the prior contract anniversary (or Issue Date
if the withdrawal is in the first contract year). Any withdrawals in
excess of the 5% dollar for dollar limit are proportional.
If the Owner dies on or after the Death Benefit Target Date the 5%
Roll-up is equal to:
. the 5% Roll-up value as of the Death Benefit Target Date increased
by total purchase payments (including any Credits applied to such
purchase payments more than twelve (12) months prior to date of
death in the case of XT6) made after the Death Benefit Target Date;
MINUS
. the sum of all withdrawals which reduce the 5% Roll-up
proportionally.
In the case of XT6, as indicated, the amounts calculated in Items 1, 2 and 3
above (before, on or after the Death Benefit Target Date) may be reduced by
any Credits under certain circumstances. Please refer to the definitions of
Death Benefit Target Date below. This Death Benefit may not be an appropriate
feature where the Owner's age is near the age specified
in the Death Benefit Target Date. This is because the benefit may not have the
same potential for growth as it otherwise would, since there will be fewer
Annuity anniversaries before the Death Benefit Target Date is reached.
The "Combination 5% Roll-up and Highest Anniversary Value" Death Benefit
described above is currently being offered in those jurisdictions where we
have received regulatory approval. The "Combination 5% Roll-up and Highest
Anniversary Value" Death Benefit is not available if you elect any other
optional Death Benefit or elect Spousal Lifetime Five, Spousal Highest Daily
Lifetime Seven or the BIO feature of the Highest Daily Lifetime Seven or the
Highest Daily Lifetime 7 Plus suite of benefits. In the case of XT6, APEX II
and ASL II, please see Appendix E for a description of the Guaranteed Minimum
Death Benefit offered before November 18, 2002 in those jurisdictions where we
received regulatory approval.
See Appendix B for examples of how the "Combination 5% Roll-up and Highest
Anniversary Value" Death Benefit is calculated.
Key Terms Used with the Highest Anniversary Value Death Benefit and the
Combination 5% Roll-up and Highest Anniversary Value Death Benefit:
. The Death Benefit Target Date for the Highest Anniversary Value Death
Benefit is the contract anniversary on or after the 80th birthday of the
current Owner, the oldest of either joint Owner or the Annuitant, if
entity owned.
. The Death Benefit Target Date for the Combination 5% Roll-up and HAV
Death Benefit is the later of the contract anniversary on or after the
80th birthday of the current Owner, the oldest of either joint Owner or
the Annuitant, if entity owned, or five years after the Issue Date of an
Annuity.
. The Highest Anniversary Value equals the highest of all previous
"Anniversary Values" less proportional withdrawals since such
anniversary and plus any purchase payments (including any Credits
applied to such purchase payments more than twelve (12) months prior to
the date of death in the case of XT6) since such anniversary.
. The Anniversary Value is the Account Value in the Sub-accounts plus the
Interim Value in any MVA Fixed Allocations as of each anniversary of the
Issue Date of an Annuity. The Anniversary Value on the Issue Date is
equal to your Purchase Payment. (including any Credits applied to such
purchase payments more than twelve (12) months prior to the date of
death in the case of XT6)
. Proportional Withdrawals are determined by calculating the percentage of
your Account Value that each prior withdrawal represented when
withdrawn. Proportional withdrawals result in a reduction to the Highest
Anniversary Value or 5% Roll-up value by reducing such value in the same
proportion as the Account Value was reduced by the withdrawal as of the
date the withdrawal occurred. For example, if your Highest Anniversary
Value or 5% Roll-up value is $125,000 and you subsequently withdraw
$10,000 at a time when your Account Value is equal to $100,000 (a 10%
reduction), when calculating the optional Death Benefit we will reduce
your Highest Anniversary Value ($ 125,000) by 10% or $12,500.
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Highest Daily Value Death Benefit ("HDV")
The Highest Daily Value Death Benefit is no longer available for new
elections. If an Annuity has one Owner, the Owner must have been age 79 or
less at the time the Highest Daily Value Death Benefit was elected. If an
Annuity has joint Owners, the older Owner must have been age 79 or less. If
there are joint Owners, death of the Owner refers to the first to die of the
joint Owners. If an Annuity is owned by an entity, the Annuitant must have
been age 79 or less at the time of election and death of the Owner refers to
the death of the Annuitant.
If you elected this benefit, you must have allocated your Account Value in
accordance with the then permitted and available option(s) with this benefit.
The HDV Death Benefit depends on whether death occurs before or after
the Death Benefit Target Date (see the definitions below).
If the Owner dies before the Death Benefit Target Date, the Death
Benefit equals the greater of:
1. the basic Death Benefit described above (including any Credits
applied to such purchase payments more than twelve (12) months prior
to the date of death in the case of XT6); and
2. the HDV as of the Owner's date of death.
If the Owner dies on or after the Death Benefit Target Date, the Death
Benefit equals the greater of:
1. the basic Death Benefit described above; and
2. the HDV on the Death Benefit Target Date plus the sum of all purchase
payments (including any Credits applied to such purchase payments
more than twelve (12) months prior to the date of death in the case
of XT6) less the sum of all proportional withdrawals since the Death
Benefit Target Date.
The amount determined by this calculation is increased by any purchase
payments received after the Owner's date of death and decreased by any
proportional withdrawals since such date.
The Highest Daily Value Death Benefit described above was offered in
those jurisdictions where we received regulatory approval. The Highest
Daily Value Death Benefit was not available if you elected the
Guaranteed Return Option, Guaranteed Return Option Plus, Guaranteed
Return Option Plus 2008, Highest Daily GRO, Spousal Lifetime Five,
Highest Daily Lifetime Five, Highest Daily Lifetime Seven, Spousal
Highest Daily Lifetime Seven, the Highest Daily Lifetime 7 Plus
benefits, the "Combination 5% Roll-up and Highest Anniversary Value"
Death Benefit, or the Highest Anniversary Value Death Benefit.
Key Terms Used with the Highest Daily Value Death Benefit:
. The Death Benefit Target Date for the Highest Daily Value Death Benefit
is the later of an Annuity anniversary on or after the 80th birthday of
the current Owner, or the older of either the joint Owner or the
Annuitant, if entity owned, or five years after the Issue Date of an
Annuity. .
. The Highest Daily Value equals the highest of all previous "Daily
Values" less proportional withdrawals since such date and plus any
purchase payments (plus associated Credits in the case of XT6) since
such date. .
. The Daily Value is the Account Value as of the end of each Valuation
Day. The Daily Value on the Issue Date is equal to your Purchase Payment
(plus associated Credits applied more than twelve (12) months prior to
the date of death in the case of XT6). .
. Proportional Withdrawals are determined by calculating the percentage of
your Account Value that each prior withdrawal represented when
withdrawn. Proportional withdrawals result in a reduction to the Highest
Daily Value by reducing such value in the same proportion as the Account
Value was reduced by the withdrawal as of the date the withdrawal
occurred. For example, if your Highest Daily Value is $125,000 and you
subsequently withdraw $10,000 at a time when your Account Value is equal
to $100,000 (a 10% reduction), when calculating the optional Death
Benefit we will reduce your Highest Daily Value ($125,000) by 10% or
$12,500.
Please see Appendix B to this prospectus for a hypothetical example of how the
HDV Death Benefit is calculated.
Annuities with Joint Owners
For Annuities with Joint Owners, the Death Benefits are calculated as shown
above except that the age of the oldest of the joint Owners is used to
determine the Death Benefit Target Date. NOTE: If you and your spouse own your
Annuity jointly, we will pay the Death Benefit to the Beneficiary. If the sole
primary Beneficiary is the surviving spouse, then the surviving spouse can
elect to assume ownership of your Annuity and continue the Annuity instead of
receiving the Death Benefit (unless the Annuity is held as a Beneficiary
Annuity).
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Annuities Owned by Entities
For Annuities owned by an entity, the Death Benefits are calculated as shown
above except that the age of the Annuitant is used to determine the Death
Benefit Target Date. Payment of the Death Benefit is based on the death of the
Annuitant (or Contingent Annuitant, if applicable).
Can I terminate the optional Death Benefits? Do the optional Death Benefits
terminate under other circumstances?
You can terminate the Enhanced Beneficiary Protection Death Benefit and the
Highest Anniversary Value Death Benefit at any time. The "Combination 5%
Roll-up and HAV Death Benefit" and the HDV Death Benefit may not be terminated
once elected. The optional Death Benefits will terminate automatically on the
Annuity Date. We may also terminate any optional Death Benefit if necessary to
comply with our interpretation of the Code and applicable regulations. For
jointly owned Annuities, the optional death benefits are payable upon the
first death of either Owner and therefore terminate and do not continue if a
surviving spouse continues the Annuity. Where an Annuity is structured so that
it is owned by a grantor trust but the annuitant is not the grantor, then the
Annuity 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 Account Value will be paid out to the beneficiary and it is
not eligible for the death benefit provided under the Annuity.
What are the charges for the optional Death Benefits?
For elections of the Highest Anniversary Value Death Benefit and the
Combination 5% Roll-Up and HAV Death Benefit made on or after May 1, 2009, we
impose a charge equal to 0.40% and 0.80%, respectively, per year of the
average daily net assets of the Sub-accounts. For elections of the Highest
Anniversary Value Death Benefit and the Combination 5% Roll-Up and HAV Death
Benefit that were made prior to May 1, 2009, we impose a charge equal to 0.25%
and 0.50%, respectively, per year of the average daily net assets of the
Sub-accounts. We deduct a charge equal to 0.25% per year of the average daily
net assets of the Sub-accounts for each of the Enhanced Beneficiary Protection
Death Benefit and 0.50% per year of the average daily net assets of the
Sub-accounts for the HDV Death Benefit. We deduct the charge for each of these
benefits to compensate Prudential Annuities for providing increased insurance
protection under the optional Death Benefits. The additional annual charge is
deducted daily against your Account Value allocated to the Sub-accounts.
Please refer to the section entitled "Tax Considerations" for additional
considerations in relation to the optional Death Benefit.
PRUDENTIAL ANNUITIES' ANNUITY REWARDS
What is the Annuity Rewards Benefit in ASAP III, APEX II and XT6?
The Annuity Rewards Benefit offers Owners the ability to capture any market
gains since the Issue Date of their Annuity as an enhancement to their current
Death Benefit so their beneficiaries will not receive less than an Annuity's
value as of the effective date of the benefit. Under the Annuity Rewards
Benefit, Prudential Annuities guarantees that the Death Benefit will not be
less than:
. your Account Value in the Sub-accounts plus the Interim Value in any
MVA Fixed Allocations as of the effective date of the benefit
. MINUS any proportional withdrawals following the effective date of
the benefit
. PLUS any additional purchase payments applied to your Annuity
following the effective date of the benefit.
The Annuity Rewards Death Benefit enhancement does not affect the calculation
of the basic Death Benefit or any Optional Death Benefits available under an
Annuity. If the Death Benefit amount payable under your Annuity's basic Death
Benefit or any Optional Death Benefits you purchase is greater than the
enhanced Death Benefit under the Annuity Rewards Benefit on the date the Death
Benefit is calculated, your beneficiary will receive the higher amount.
Annuity Rewards is not available under ASL II or if your Annuity is held as a
Beneficiary Annuity.
Who is eligible for the Annuity Rewards benefit?
Owners can elect the Annuity Rewards Death Benefit enhancement when the
original CDSC period is over. However, the Account Value on the date that the
Annuity Rewards benefit is effective, must be greater than the amount that
would be payable to the Beneficiary under the Death Benefit (including any
amounts payable under any Optional Death Benefit then in effect). The
effective date must occur before annuity payments begin. There can only be one
effective date for the Annuity Rewards Death Benefit enhancement. There is no
additional charge for electing the Annuity Rewards Death Benefit enhancement.
PAYMENT OF DEATH BENEFITS
Alternative Death Benefit Payment Options - Annuities owned by Individuals
(not associated with Tax-Favored Plans)
Except in the case of a spousal assumption as described below, upon your
death, certain distributions must be made under the Annuity. The required
distributions depend on whether you die before you start taking annuity
payments under the Annuity or after you start taking annuity payments under
the Annuity.
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If you die on or after the Annuity Date, the remaining portion of the interest
in the Annuity must be distributed at least as rapidly as under the method of
distribution being used as of the date of death.
In the event of your death before the Annuity Date, the Death Benefit must be
distributed:
. within five (5) years of the date of death; or
. as a series of payments not extending beyond the life expectancy of the
beneficiary or over the life of the beneficiary. Payments under this
option must begin within one year of the date of death.
Unless you have made an election prior to Death Benefit proceeds becoming due,
a Beneficiary can elect to receive the Death Benefit proceeds under the
Beneficiary Continuation Option as described below in the section entitled
"Beneficiary Continuation Option," as a series of required distributions.
If the Annuity is held as a Beneficiary Annuity, the payment of the Death
Benefit must be distributed:
. as a lump sum payment; or
. Unless you have made an election prior to Death Benefit proceeds
becoming due, a beneficiary can elect to receive the Death Benefit
proceeds under the Beneficiary Continuation Option as described below in
the section entitled "Beneficiary Continuation Option," as a series of
required distributions.
Upon our receipt of proof of death, we will send to the beneficiary materials
that list these payment options.
Alternative Death Benefit Payment Options - Annuities Held by Tax-Favored Plans
The Code provides for alternative death benefit payment options when an
Annuity is used as an IRA, 403(b) or other "qualified investment" that
requires minimum distributions. Upon your death under an IRA, 403(b) or other
"qualified investment", the designated Beneficiary may generally elect to
continue the Annuity and receive Required Minimum Distributions under the
Annuity 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 the Beneficiary is your surviving
spouse.
. If you die after a designated beneficiary has been named, the death
benefit must be distributed by December 31/st/ of the year including the
five year anniversary of the date of death, or as periodic payments not
extending beyond the life expectancy of the designated beneficiary
(provided such payments begin by December 31/st/ of the year following
the year of death). However, if your surviving spouse is the
beneficiary, the death benefit can be paid out over the life expectancy
of your spouse with such payments beginning no later than
December 31/st/ of the year following the year of death or
December 31/st/ 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 Annuity may
be continued with your spouse as the owner. Note that the Worker,
Retiree and Employer Recovery Act of 2008 suspended Required Minimum
Distributions for 2009. This means that if your beneficiary receives
payment as periodic payments, no payment is required in 2009. If your
beneficiary elects to receive full distribution by December 31/st/ of
the year including the five year anniversary of the date of death, 2009
shall not be included in the five year requirement period. This
effectively extends this period to December 31/st/ of the year including
the six year anniversary date of death.
. 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 31/st/ 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 31/st/ of the year following
the year of death, such contract is deemed to have no designated
beneficiary. For this distribution requirement also, 2009 shall not be
included in the five year requirement period.
. 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 31/st/ 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 an IRA, 403(b) or other "qualified investment"
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.
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The tax consequences to the beneficiary may vary among the different death
benefit payment options. See the Tax Considerations section of this
prospectus, and consult your tax advisor.
Beneficiary Continuation Option
Instead of receiving the death benefit in a single payment, or under an
Annuity Option, a beneficiary may take the death benefit under an alternative
death benefit payment option, as provided by the Code and described above
under the sections entitled "Payment of Death Benefits" and "Alternative Death
Benefit Payment Options - Annuities Held by Tax-Favored Plans." This
"Beneficiary Continuation Option" is described below and is available for both
qualified Annuities (i.e. annuities sold to an IRA, Roth IRA, SEP IRA, or
403(b)), Beneficiary Annuities and non-qualified Annuities.
Under the Beneficiary Continuation Option:
.. The beneficiary must apply at least $15,000 to the Beneficiary Continuation
Option.
.. The Owner's Annuity will be continued in the Owner's name, for the benefit
of the beneficiary.
.. Beginning on the date we receive an election by the beneficiary to take the
death benefit in a form other than a lump sum, the beneficiary will incur a
Settlement Service Charge which is an annual charge assessed on a daily
basis against the average assets allocated to the Sub-accounts. For
non-qualified Annuities the charge is 1.00% per year, and for qualified
Annuities the charge is 1.40% per year.
.. Beginning on the date we receive an election by the beneficiary to take the
death benefit in a form other than a lump sum, the beneficiary will incur
an annual maintenance fee equal to the lesser of $35 or 2% of Account
Value. For non-qualified annuities, the fee will only apply if the Account
Value is less than $25,000 at the time the fee is assessed. The fee will
not apply if it is assessed 30 days prior to a surrender request.
.. The initial Account Value will be equal to any death benefit (including any
optional death benefit) that would have been payable to the beneficiary if
the beneficiary had taken a lump sum distribution.
.. The available Sub-accounts will be among those available to the Owner at
the time of death, however certain Sub-Accounts may not be available.
.. The beneficiary may request transfers among Sub-accounts, subject to the
same limitations and restrictions that applied to the Owner. Transfers in
excess of 20 per year will incur a $10 transfer fee.
.. No Fixed Allocations or fixed interest rate options will be offered for the
non-qualified Beneficiary Continuation Options. However, for qualified
Annuities, the Fixed Allocations will be those offered at the time the
Beneficiary Continuation Option is elected.
.. No additional purchase payments can be applied to the Annuity.
.. The basic death benefit and any optional benefits elected by the Owner will
no longer apply to the beneficiary.
.. The beneficiary can request a withdrawal of all or a portion of the Account
Value at any time, unless the Beneficiary Continuation Option was the
payout predetermined by the Owner and the Owner restricted the
beneficiary's withdrawal rights.
.. Withdrawals are not subject to CDSC.
.. Upon the death of the beneficiary, any remaining Account Value will be paid
in a lump sum to the person(s) named by the beneficiary (successor), unless
the successor chooses to continue receiving payments.
Currently only Investment Options corresponding to Portfolios of the Advanced
Series Trust and the ProFund VP are available under the Beneficiary
Continuation Option.
In addition to the materials referenced above, the Beneficiary will be
provided with a prospectus and a settlement agreement describing the
Beneficiary Continuation Option. We may pay compensation to the broker-dealer
of record on the Annuity based on amounts held in the Beneficiary Continuation
Option. Please contact us for additional information on the availability,
restrictions and limitations that will apply to a beneficiary under the
Beneficiary Continuation Option.
Spousal Assumption of Annuity
You may name your spouse as your beneficiary. If you and your spouse own your
Annuity jointly, we assume that the sole primary beneficiary will be the
surviving spouse unless you elect an alternative Beneficiary Designation.
Unless you elect an alternative Beneficiary Designation or the Annuity is held
as a Beneficiary Annuity, (if available under your Annuity) the spouse
beneficiary may elect to assume ownership of the Annuity instead of taking the
Death Benefit payment. Any Death Benefit (including any optional Death
Benefits) that would have been payable to the Beneficiary will become the new
Account Value as of the date we receive due proof of death and any required
proof of a spousal relationship. As of the date the assumption is effective,
the surviving spouse will have all the rights and benefits that would be
available under the Annuity to a new purchaser of the same attained age. For
purposes of determining any future Death Benefit for the surviving spouse, the
new Account Value will be considered as the initial Purchase Payment. No CDSC
will apply to the new Account Value. However, any additional purchase payments
applied after the date the assumption is effective will be subject to all
provisions of the Annuity, including any CDSC that may apply to the additional
purchase payments.
See the section entitled "Managing Your Annuity" - "Spousal Designations" and
"Contingent Annuitant" for a discussion of the treatment of a spousal
Contingent Annuitant in the case of the death of the Annuitant in an Annuity
owned by a Custodial Account.
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Are there any exceptions to these rules for paying the Death Benefit?
Yes, there are exceptions that apply no matter how your Death Benefit is
calculated. There are exceptions to the Death Benefit if the decedent was not
the Owner or Annuitant as of the Issue Date (or within 60 days thereafter) and
did not become the Owner or Annuitant due to the prior Owner's or Annuitant's
death. Any Death Benefit (including any optional Death Benefit) that applies
will be suspended for a two-year period from the date he or she first became
Owner or Annuitant. After the two-year suspension period is completed, the
Death Benefit is the same as if this person had been an Owner or Annuitant on
the Issue Date.
When do you determine the Death Benefit?
We determine the amount of the Death Benefit as of the date we receive "due
proof of death" (and in certain limited circumstances as of the date of
death), any instructions we require to determine the method of payment and any
other written representations we require to determine the proper payment of
the Death Benefit. "Due proof of death" may include a certified copy of a
death certificate, a certified copy of a decree of a court of competent
jurisdiction as to the finding of death or other satisfactory proof of death.
Upon our receipt of "due proof of death" we automatically transfer the Death
Benefit to the AST Money Market Sub-account until we further determine the
universe of eligible Beneficiaries. Once the universe of eligible
Beneficiaries has been determined each eligible Beneficiary may allocate his
or her eligible share of the Death Benefit to an eligible annuity payment
option.
Each Beneficiary must make an election as to the method they wish to receive
their portion of the Death Benefit. Absent an election of a Death Benefit
payment method, no Death Benefit can be paid to the Beneficiary. We may
require written acknowledgment of all named Beneficiaries before we can pay
the Death Benefit. During the period from the date of death until we receive
all required paper work, the amount of the Death Benefit may be subject to
market fluctuations.
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VALUING YOUR INVESTMENT
HOW IS MY ACCOUNT VALUE DETERMINED?
During the accumulation period, your Annuity has an Account Value. The Account
Value is determined separately for each Sub-account allocation and for each
Fixed Allocation. The Account Value is the sum of the values of each
Sub-account allocation and the value of each Fixed Allocation. For Annuities
with a Highest Daily Lifetime Five election, Account Value also includes the
value of any allocation to the Benefit Fixed Rate Account. See the "Living
Benefits - Highest Daily Lifetime Five" section of the Prospectus for a
description of the Benefit Fixed Rate Account. The Account Value does not
reflect any CDSC that may apply to a withdrawal or surrender. With respect to
ASAP III and APEX II, the Account Value includes any Loyalty Credit we apply.
With respect to XT6, the Account Value includes any Credits we applied to your
purchase payments which we are entitled to take back under certain
circumstances. When determining the Account Value on a day more than 30 days
prior to a MVA Fixed Allocation's Maturity Date, the Account Value may include
any Market Value Adjustment that would apply to a MVA Fixed Allocation (if
withdrawn or transferred) on that day.
WHAT IS THE SURRENDER VALUE OF MY ANNUITY?
The Surrender Value of your Annuity is the value available to you on any day
during the accumulation period. The Surrender Value is defined under "Glossary
of Terms" above.
HOW AND WHEN DO YOU VALUE THE SUB-ACCOUNTS?
When you allocate Account Value to a Sub-account, you are purchasing units of
the Sub-account. Each Sub-account invests exclusively in shares of an
underlying Portfolio. The value of the Units fluctuates with the market
fluctuations of the Portfolios. The value of the Units also reflects the daily
accrual for the Insurance Charge, the Distribution Charge (if applicable), and
if you elected one or more optional benefits whose annual charge is deducted
daily, the additional charge made for such benefits. There may be several
different Unit Prices for each Sub-account to reflect the Insurance Charge,
any Distribution Charge and the charges for any optional benefits. The Unit
Price for the Units you purchase will be based on the total charges for the
benefits that apply to your Annuity. See the section entitled "What Happens to
My Units When There is a Change in Daily Asset-Based Charges?" for a detailed
discussion of how Units are purchased and redeemed to reflect changes in the
daily charges that apply to your Annuity.
Each Valuation Day, we determine the price for a Unit of each Sub-account,
called the "Unit Price." The Unit Price is used for determining the value of
transactions involving Units of the Sub-accounts. We determine the number of
Units involved in any transaction by dividing the dollar value of the
transaction by the Unit Price of the Sub-account as of the Valuation Day.
Example
Assume you allocate $5,000 to a Sub-account. On the Valuation Day you make the
allocation, the Unit Price is $14.83. Your $5,000 buys 337.154 Units of the
Sub-account. Assume that later, you wish to transfer $3,000 of your Account
Value out of that Sub-account and into another Sub-account. On the Valuation
Day you request the transfer, the Unit Price of the original Sub-account has
increased to $16.79 and the Unit Price of the new Sub-account is $17.83. To
transfer $3,000, we sell 178.677 Units at the current Unit Price, leaving you
158.477 Units. We then buy $3,000 of Units of the new Sub-account at the Unit
Price of $17.83. You would then have 168.255 Units of the new Sub-account.
HOW DO YOU VALUE FIXED ALLOCATIONS?
During the Guarantee Period, we use the concept of an Interim Value for the
MVA Fixed Allocations. The Interim Value can be calculated on any day and is
equal to the initial value allocated to an MVA Fixed Allocation plus all
interest credited to an MVA Fixed Allocation as of the date calculated. The
Interim Value does not include the impact of any Market Value Adjustment. If
you made any transfers or withdrawals from an MVA Fixed Allocation, the
Interim Value will reflect the withdrawal of those amounts and any interest
credited to those amounts before they were withdrawn. To determine the Account
Value of an MVA Fixed Allocation on any day more than 30 days prior to its
Maturity Date, we multiply the Account Value of the MVA Fixed Allocation times
the Market Value Adjustment factor. In addition to MVA Fixed Allocations that
are subject to a Market Value Adjustment, we offer DCA Fixed Rate Options that
are used with our 6 or 12 Month Dollar Cost Averaging Program and are not
subject to any MVA. Account Value allocated to the DCA Fixed Rate Options
earns the declared rate of interest while it is transferred over a 6 month or
12 month period into the Sub-accounts that you have designated.
WHEN DO YOU PROCESS AND VALUE TRANSACTIONS?
Prudential Annuities is generally open to process financial transactions on
those days that the New York Stock Exchange (NYSE) is open for trading. There
may be circumstances where the NYSE does not open on a regularly scheduled
date or time or closes at an earlier time than scheduled (normally 4:00 p.m.
EST). Generally, financial transactions requested before the close of the NYSE
which meet our requirements will be processed according to the value next
determined following the close of business. Financial transactions requested
on a non-Valuation Day or after the close of the NYSE will be processed based
on the value next computed on the next Valuation Day. There may be
circumstances when the opening or closing time of the NYSE is different than
other major stock exchanges, such as NASDAQ or the American Stock Exchange.
Under such circumstances, the closing time of the NYSE will be used when
valuing and processing transactions.
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There may be circumstances where the NYSE is open, however, due to inclement
weather, natural disaster or other circumstances beyond our control, our
offices may be closed or our business processing capabilities may be
restricted. Under those circumstances, your Account Value may fluctuate based
on changes in the Unit Values, but you may not be able to transfer Account
Value, or make a purchase or redemption request.
We have arrangements with certain selling firms, under which receipt by the
firm in good order prior to our cut-off time on a given Valuation Day is
treated as receipt by us on that Valuation Day for pricing purposes.
Currently, we have such an arrangement with Citigroup Global Markets Inc.
("CGM"). In addition, we currently have an arrangement with Merrill Lynch,
Pierce, Fenner & Smith, Inc. ("Merrill Lynch") under which transfer orders
between Sub-accounts that are received in good order by Merrill Lynch prior to
the NYSE close on a given Valuation Day will be priced by us as of that
Valuation Day. The arrangements with CGM and Merrill Lynch may be terminated
in certain circumstances.
The NYSE is closed on the following nationally recognized holidays: New Year's
Day, Martin Luther King, Jr. Day, President's Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, and Christmas. On those dates, we
will not process any financial transactions involving purchase or redemption
orders.
Prudential Annuities will also not process financial transactions involving
purchase or redemption orders or transfers on any day that:
.. trading on the NYSE is restricted;
.. an emergency, as determined by the SEC, exists making redemption or
valuation of securities held in the separate account impractical; or
.. the SEC, by order, permits the suspension or postponement for the
protection of security holders.
Initial Purchase Payments: We are required to allocate your initial Purchase
Payment to the Sub-accounts within two (2) Valuation Days after we receive all
of our requirements at our office to issue an Annuity. If we do not have all
the required information to allow us to issue your Annuity, we may retain the
Purchase Payment while we try to reach you or your representative to obtain
all of our requirements. If we are unable to obtain all of our required
information within five (5) Valuation Days, we are required to return the
Purchase Payment to you at that time, unless you specifically consent to our
retaining the Purchase Payment while we gather the required information. Once
we obtain the required information, we will invest the Purchase Payment (and
any associated Credits with respect to XT6) and issue an Annuity within two
(2) Valuation Days. With respect to both your initial Purchase Payment and any
subsequent Purchase Payment that is pending investment in our separate
account, we may hold the amount temporarily in our general account and may
earn interest on such amount. You will not be credited with interest during
that period.
Additional Purchase Payments: We will apply any additional purchase payments
(and any associated Credit with respect to XT6) on the Valuation Day that we
receive the Purchase Payment at our office with satisfactory allocation
instructions.
Scheduled Transactions: Scheduled transactions include transfers made in
connection with dollar cost averaging, the asset allocation program,
auto-rebalancing, systematic withdrawals, systematic investments, required
minimum distributions, substantially equal periodic payments under
Section 72(t) of the Code, or annuity payments. Scheduled transactions are
processed and valued as of the date they are scheduled, unless the scheduled
day is not a Valuation Day. In that case, the transaction will be processed
and valued on the next Valuation Day, unless (with respect to required minimum
distributions, substantially equal periodic payments under Section 72(t) of
the Code, systematic withdrawals and annuity payments only), the next
Valuation Day falls in the subsequent calendar year, in which case the
transaction will be processed and valued on the prior Valuation Day.
Unscheduled Transactions: "Unscheduled" transactions include any other
non-scheduled transfers and requests for Partial Withdrawals or Free
Withdrawals or Surrenders. Unscheduled transactions are processed and valued
as of the Valuation Day we receive the request at our Office and have all of
the required information.
Medically-related Surrenders & Death Benefits: Medically-related surrender
requests and Death Benefit claims require our review and evaluation before
processing. We price such transactions as of the date we receive at our Office
all supporting documentation we require for such transactions and that are
satisfactory to us.
We are generally required by law to pay any surrender request or death benefit
claims from the Separate Account within 7 days of our receipt of your request
in good order.
Transactions in ProFunds VP Sub-accounts: Generally, purchase or redemption
orders or transfer requests must be received by us by no later than the close
of the NYSE to be processed on the current Valuation Day. However, any
transfer request involving the ProFunds VP Sub-accounts must be received by us
no later than one hour prior to any announced closing of the applicable
securities exchange (generally, 3:00 p.m. Eastern time) to be processed on the
current Valuation Day. The "cut-off" time for such financial transactions
involving a ProFunds VP Sub-account will be extended to 1/2 hour prior to any
announced closing (generally,
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3:30 p.m. Eastern time) for transactions submitted electronically through
Prudential Annuities' Internet website (www. prudentialannuities.com). You
cannot request a transaction involving the transfer of units in one of the
ProFunds VP Sub-accounts between the applicable "cut-off" time and 4:00 p.m.
Transactions received after 4:00 p.m. will be treated as received by us on the
next Valuation Day.
WHAT HAPPENS TO MY UNITS WHEN THERE IS A CHANGE IN DAILY ASSET-BASED CHARGES?
Distribution Charge Applicable to ASAP III and XT6: At the end of the Period
during which the Distribution Charge applies, your Annuity will become subject
to a different daily asset-based charge. We will process a transaction where
your Account Value allocated to the Sub-accounts will be used to purchase new
Units of the Sub-accounts that reflect the Insurance Charge (and the charge
for any optional benefits you have elected) but not the Distribution Charge.
The number of Units attributed to your Annuity will be decreased and the Unit
Price of each unit of the Sub-accounts in which you invested will be
increased. The adjustment in the number of Units and Unit Price will not
affect your Account Value. Beginning on that date, your Account Value will be
determined based on the change in the value of Units that reflect the
Insurance Charge and any other optional benefits that you have elected.
Termination of Optional Benefits: Except for the Guaranteed Minimum Income
Benefit, the "Combination 5% Roll-up and Highest Anniversary Value Death
Benefit" and the Highest Daily Value Death Benefit, which generally cannot be
terminated by the owner once elected, if any optional benefit terminates, we
will no longer deduct the charge we apply to purchase the optional benefit.
Certain optional benefits may be added after you have purchased your Annuity.
On the date a charge no longer applies or a charge for an optional benefit
begins to be deducted, your Annuity will become subject to a different daily
asset-based charge. This change may result in the number of Units attributed
to your Annuity and the value of those Units being different than it was
before the change; however, the adjustment in the number of Units and Unit
Price will not affect your Account Value (although the change in charges that
are deducted will affect your Account Value).
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TAX CONSIDERATIONS
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 or same-sex marriages. You should be aware, however, that federal tax
law does not recognize civil unions or same-sex marriages. Therefore, we
cannot permit a civil union partner or same-sex spouse to continue the annuity
upon the death of the first partner under the annuity's "spousal continuance"
provision. Civil union couples and same-sex marriage spouses should consider
that limitation before selecting a spousal benefit under the annuity.
The discussion below generally assumes that the Annuity Contract is issued to
the Contract Owner. For Annuity Contracts issued under the Beneficiary
Continuation Option or as a Beneficiary Annuity, refer to the Taxes Payable by
Beneficiaries for Nonqualified Annuity Contracts and Required Distributions
Upon Your Death for Qualified Annuity Contracts in this Tax Considerations
section.
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 the 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.
It is possible that the Internal Revenue Service (IRS) would assert that some
or all of the charges for the optional benefits under the contract should be
treated for federal income tax purposes as a partial withdrawal from the
contract. If this were the case, the charge for this benefit could be deemed a
withdrawal and treated as taxable to the extent there are earnings in the
contract. Additionally, for owners under age 59 1/2, the taxable income
attributable to the charge for the benefit could be subject to a tax penalty.
If the IRS determines that the charges for one or more benefits under the
contract are taxable withdrawals, then the sole or surviving owner will be
provided with a notice from us describing available alternatives regarding
these benefits.
You must commence annuity payments no later than the first day of the calendar
month next following the maximum Annuity date for your Contract. 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.
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. Withdrawals under any of the optional
living benefits or as a systematic payment are taxed under these rules. 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
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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.
Please refer to your Annuity Contract for the maximum Annuity Date.
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, including tax-free exchanges of annuity death benefits for a
Beneficiary 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. In Revenue Procedure 2008-24, the IRS has indicated
that where there is a surrender or distribution from either the initial
annuity contract or receiving annuity contract within 12 months of the date on
which the partial exchange was completed, the transfer will retroactively be
treated as a taxable distribution from the initial annuity contract and a
contribution to the receiving annuity contract. Tax free exchange treatment
will be retained if the subsequent surrender or distribution would be eligible
for an exception to the 10% federal income tax penalty, other than the
exceptions for substantially equal periodic payments or distributions under an
immediate annuity. 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 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.
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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.
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 value will be
paid out to the beneficiary and it is not eligible for the death benefit
provided under the contract.
Annuity Qualification
Diversification And Investor Control. In order to qualify for the tax rules
applicable to annuity contracts described above, the assets underlying the
Sub-accounts of an Annuity must be diversified, according to certain rules
under the Internal Revenue Code. Each portfolio is required to diversify its
investments each quarter so that no more than 55% of the value of its assets
is represented by any one investment, no more than 70% is represented by any
two investments, no more than 80% is represented by any three investments, and
no more than 90% is represented by any four investments. Generally, securities
of a single issuer are treated as one investment and obligations of each U.S.
Government agency and instrumentality (such as the Government National
Mortgage Association) are treated as issued by separate issuers. In addition,
any security issued, guaranteed or insured (to the extent so guaranteed or
insured) by the United States or an instrumentality of the U.S. will be
treated as a security issued by the U.S. Government or its instrumentality,
where applicable. We believe the portfolios underlying the variable investment
options of the Annuity meet these diversification requirements.
An additional requirement for qualification for the tax treatment described
above is that we, and not you as the contract owner, must have sufficient
control over the underlying assets to be treated as the owner of the
underlying assets for tax purposes. While we also believe these investor
control rules will be met, the Treasury Department may promulgate guidelines
under which a variable annuity will not be treated as an annuity for tax
purposes if persons with ownership rights have excessive control over the
investments underlying such variable annuity. It is unclear whether such
guidelines, if in fact promulgated, would have retroactive effect. It is also
unclear what effect, if any, such guidelines might have on transfers between
the investment options offered pursuant to this Prospectus. We reserve the
right to take any action, including modifications to your Annuity or the
investment options, required to comply with such guidelines if promulgated.
Any such changes will apply uniformly to affected owners and will be made with
such notice to affected owners as is feasible under the circumstances.
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
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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.
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), including inherited
IRAs (which we refer to as a Beneficiary IRA), which are subject to
Sections 408(a) and 408(b) of the Code;
.. Roth IRAs, including inherited Roth IRAs (which we refer to as a
Beneficiary Roth IRA) 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, or a Section 457 plan, which can hold other
permissible assets. The terms and administration of the trust or custodial
account or plan in accordance with the laws and regulations for 401(a) plans,
IRAs or Roth IRAs, or a Section 457 plan, 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 2009 the contribution limit is
$5,000. The contribution amount is 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.
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The rollover rules applicable to non-spouse beneficiaries under the Code are
more restrictive than the rollover rules applicable to owner/participants and
spouse beneficiaries. Generally, non-spouse beneficiaries may roll over
distributions from tax favored retirement plans only as a direct rollover, and
if permitted by the plan. Under the Worker, Retiree and Employer Recovery Act
of 2008, employer retirement plans are required to permit non-spouse
beneficiaries to roll over funds to an inherited IRA for plan years beginning
after December 31, 2009. An inherited IRA must be directly rolled over from
the employer plan or IRA, and must be titled in the name of the deceased
(i.e., John Doe deceased for the benefit of Jane Doe). No additional
contributions can be made to a Beneficiary IRA.
Required Provisions. Contracts that are IRAs (or endorsements that are part of
the contract) must contain certain provisions:
.. You, as owner of the contract, must be the "annuitant" under the contract
(except in certain cases involving the division of property under a decree
of divorce);
.. Your rights as owner are non-forfeitable;
.. You cannot sell, assign or pledge the contract;
.. 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) $49,000 in 2009 ($46,000 in 2008) 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 2009, this limit is $245,000 ($230,000
for 2008);
.. 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 $16,500 in 2009 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 $5,500 in 2009. 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
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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 , other than a Roth 401(k)
or Roth 403(b) distribution, to a Roth IRA.
Non-spouse beneficiaries receiving a distribution from an employer sponsored
retirement plan under sections 401(a) or 403(b) of the Code can also directly
roll over contributions to a Roth IRA, subject to the same income limits.
However, it is our understanding of the Code that non-spouse beneficiaries
cannot "rollover" benefits from a traditional IRA to a Roth IRA.
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 an 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 employer maintains such a plan and your 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 $16,500 in 2009. Individuals
participating in a TDA who are age 50 or above by the end of the year will be
permitted to contribute an additional $5,500 in 2009. 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 employer's TDA plan or
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.
Caution: Under recent IRS regulations we can accept contributions, transfers
and rollovers only if we have entered into an information-sharing agreement,
or its functional equivalent, with the applicable employer or its agent. In
addition, in order to comply with the regulations, we will only process
certain transactions (e.g, transfers, withdrawals, hardship distributions and,
if applicable, loans) with employer approval. This means that if you request
one of these transactions we will not consider your request to be in good
order, and will not therefore process the transaction, until we receive the
employer's approval in written or electronic form.
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. Note that under the Worker,
Retiree and Employer Recovery Act of 2008, Required Minimum Distributions are
suspended for 2009 and are scheduled to resume in 2010.
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
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December 31 of the prior year, but is determined without regard to other
contracts you may own. If you have previously elected the Minimum Distribution
Option to satisfy your required minimum distributions, we will continue to
make such distributions to you in 2009 based on this methodology, unless you
tell us not to make a 2009 distribution.
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 IRA or 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 31/st/ 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 31/st/ of the year following the year of
death). However, if 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 31/st/ of the year
following the year of death or December 31/st/ 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.
Note that the Worker, Retiree and Employer Recovery Act of 2008 suspended
Required Minimum Distributions for 2009. This means that if your
beneficiary receives payment as periodic payments, no payment is required
in 2009. If your beneficiary elects to receive full distribution by
December 31 of the year including the five year anniversary of the date of
death, 2009 shall not be included in the five year requirement period. This
effectively extends this period to December 31/st/ of the six year
anniversary of the date of death.
.. 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 31/st/ 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 31/st/ of the year following the
year of death, such contract is deemed to have no designated beneficiary. A
designated beneficiary may elect to apply the rules for no designated
beneficiary if those would provide a smaller payment requirement. For this
distribution requirement also, 2009 shall not be included in the five year
requirement period.
.. 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 designated beneficiary may elect to apply the
rules for no designated beneficiary if those would provide a smaller
payment requirement. For this distribution requirement also, 2009 shall not
be included in the five year requirement period.
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.
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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.
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.
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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.
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GENERAL INFORMATION
HOW WILL I RECEIVE STATEMENTS AND REPORTS?
We send any statements and reports required by applicable law or regulation to
you at your last known address of record. You should therefore give us prompt
notice of any address change. We reserve the right, to the extent permitted by
law and subject to your prior consent, to provide any prospectus, prospectus
supplements, confirmations, statements and reports required by applicable law
or regulation to you through our Internet Website at
www.prudentialannuities.com or any other electronic means, including diskettes
or CD ROMs. We send a confirmation statement to you each time a transaction is
made affecting Account Value, such as making additional purchase payments,
transfers, exchanges or withdrawals. We may also send quarterly statements
detailing the activity affecting your Annuity during the calendar quarter. We
may confirm regularly scheduled transactions, including, but not limited to,
the Annual Maintenance Fee, Systematic Withdrawals (including 72(t) payments
and required minimum distributions), electronic funds transfer, Dollar Cost
Averaging, and static rebalancing, in quarterly statements instead of
confirming them immediately. You should review the information in these
statements carefully. You may request additional reports. We reserve the right
to charge up to $50 for each such additional report. We also send an annual
report and a semi-annual report containing applicable financial statements for
the Portfolios to Owners or, with your prior consent, make such documents
available electronically through our Internet Website or other electronic
means.
WHO IS PRUDENTIAL ANNUITIES?
Prudential Annuities Life Assurance Corporation, a Prudential Financial
Company, ("Prudential Annuities") is a stock life insurance company
incorporated under the laws of Connecticut on July 26, 1988 and is domiciled
in Connecticut with licenses in all 50 states, the District of Columbia and
Puerto Rico. Prudential Annuities is a wholly-owned subsidiary of Prudential
Annuities, Inc., whose ultimate parent is Prudential Financial, Inc.
Prudential Annuities markets through and in conjunction with registered
broker-dealers.
Prudential Annuities offers a wide array of annuities, including (1) deferred
variable annuities that are registered with the SEC, including fixed interest
rate annuities that are offered as a companion to certain of our variable
annuities and are registered because of their market value adjustment feature
and (2) fixed annuities that are not registered with the SEC. In addition,
Prudential Annuities has in force a relatively small block of variable life
insurance policies and immediate variable annuities, but it no longer actively
sells such policies.
No company other than Prudential Annuities has any legal responsibility to pay
amounts that it owes under its annuity and variable life insurance contracts.
However, Prudential Financial exercises significant influence over the
operations and capital structure of Prudential Annuities.
Prudential Annuities conducts the bulk of its operations through staff
employed by it or by affiliated companies within the Prudential Financial
family. Certain discrete functions have been delegated to non-affiliates that
could be deemed "service providers" under the Investment Company Act of 1940.
The entities engaged by Prudential Annuities may change over time. As of
December 31, 2008, non-affiliated entities that could be deemed service
providers to Prudential Annuities and/or another insurer within the Prudential
Annuities business unit consisted of the following: Alliance-One Services Inc.
(administration of variable life policies) located at 55 Hartland Street East
Hartford CT 06108, Ascensus (qualified plan administrator) located at 200
Dryden Road, Dresher, PA 19025, Blue Frog Solutions, Inc. (order entry systems
provider) located at 555 SW 12/th/ Ave, Suite 202 Pompano Beach, FL 33069,
Broadridge Investor Communication Solutions, Inc. (proxy tabulation services),
51 Mercedes Way, Edgewood, NY 11717, EBIX Inc. (order-entry system) located at
5 Concourse Parkway Suite 3200 Atlanta, GA 30328, Diversified Information
Technologies Inc. (records management) located at 123 Wyoming Ave Scranton, PA
18503, Fosdick Fulfillment Corp. (fulfillment of prospectuses and marketing
materials) located at 26 Barnes Industrial Park Road North Wallingford, CT
06492, Insurance Technologies (annuity illustrations) located at 38120 Amrhein
Ave., Livonia, MI 48150, Lason Systems Inc. (contract printing and mailing)
located at 1305 Stephenson Highway Troy, MI 48083, Morningstar Associates LLC
(asset allocation recommendations) located at 225 West Wacker Drive Chicago,
IL 60606, Pershing LLC (order-entry systems provider) located at One Pershing
Plaza Jersey City, NJ 07399, Personix (printing and fulfillment of
confirmations and client statements) located at 13100 North Promenade
Boulevard Stafford, TX 77477, RR Donnelley Receivables Inc. (printing annual
reports and prospectuses) located at 111 South Wacker Drive Chicago, IL
60606-4301, Stanton Group (qualified plan administrator) located at Two Pine
Tree Drive Suite 400 Arden Hills, MN 55112 Attention: Alerus Retirement
Solutions, State Street (accumulation unit value calculations) located at
State Street Financial Center One Lincoln Street Boston, Massachusetts 02111,
The Harty Press, Inc. (printing and fulfillment of marketing materials)
located at 25 James Street New Haven, CT 06513, VG Reed & Sons Inc. (printing
and fulfillment of annual reports) located at 1002 South 12/th/ Street
Louisville, KY 40210, William B. Meyer (printing and fulfillment of
prospectuses and marketing materials) located at 255 Long Beach Boulevard
Stratford, CT 06615.
WHAT ARE SEPARATE ACCOUNTS?
The separate accounts are where Prudential Annuities sets aside and invests
the assets of some of our annuities. These separate accounts were established
under the laws of the State of Connecticut. The assets of each separate
account are held in the name of
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Prudential Annuities, and legally belong to us. These assets are kept separate
from all our other assets, and may not be charged with liabilities arising out
of any other business we may conduct. Thus, income, gains and losses from
assets allocated to a separate account are credited to or charged against each
such separate account, without regard to other income, gains, or losses of
Prudential Annuities or of any other of our separate accounts. More detailed
information about Prudential Annuities, including its audited consolidated
financial statements, is provided in the Statement of Additional Information.
Separate Account B
During the accumulation period, the assets supporting obligations based on
allocations to the Sub-accounts are held in Sub-accounts of Prudential
Annuities Life Assurance Corporation Variable Account B, also referred to as
"Separate Account B".
Separate Account B was established by us pursuant to Connecticut law on
November 25, 1987. Separate Account B also holds assets of other annuities
issued by us with values and benefits that vary according to the investment
performance of Separate Account B.
Separate Account B consists of multiple Sub-accounts. Each Sub-account invests
only in a single mutual fund or mutual fund portfolio. The name of each
Sub-account generally corresponds to the name of the underlying Portfolio.
Each Sub-account in Separate Account B may have several different Unit Prices
to reflect the Insurance Charge, Distribution Charge (when applicable) and the
charges for any optional benefits that are offered under the Annuities issued
by us through Separate Account B. Separate Account B is registered with the
SEC under the Investment Company Act of 1940 ("Investment Company Act") as a
unit investment trust, which is a type of investment company. The SEC does not
supervise investment policies, management or practices of Separate Account B.
We may offer new Sub-accounts, eliminate Sub-accounts, or combine Sub-accounts
at our sole discretion. We may also close Sub-accounts to additional purchase
payments on existing Annuities or close Sub-accounts for Annuities purchased
on or after specified dates. We will first notify you and receive any
necessary SEC and/or state approval before making such a change. If an
underlying mutual fund is liquidated, we will ask you to reallocate any amount
in the liquidated fund. If you do not reallocate these amounts, we will
reallocate such amounts only in accordance with SEC pronouncements and only
after obtaining an order from the SEC, if required. If we make a fund
substitution or change, we may change the Annuity contract to reflect the
substitution or change. We do not control the underlying mutual funds, so we
cannot guarantee that any of those funds will always be available.
If you are enrolled in a Dollar Cost Averaging, Asset Rebalancing, or
comparable programs while an underlying fund merger, substitution or
liquidation takes place, unless otherwise noted in any communication from us,
your Account Value invested in such underlying fund will be transferred
automatically to the designated surviving fund in the case of mergers, the
replacement fund in the case of substitutions, and an available Money Market
Fund in the case of fund liquidations. Your enrollment instructions will be
automatically updated to reflect the surviving fund, the replacement fund or a
Money Market Fund for any continued and future investments.
Values and benefits based on allocations to the Sub-accounts will vary with
the investment performance of the underlying mutual funds or fund portfolios,
as applicable. We do not guarantee the investment results of any Sub-account.
Your Account Value allocated to the Sub-accounts may increase or decrease. You
bear the entire investment risk. There is no assurance that the Account Value
of your Annuity will equal or be greater than the total of the purchase
payments you make to us.
Separate Account D
During the accumulation period, assets supporting our obligations based on
Fixed Allocations are held in Prudential Annuities Life Assurance Corporation
Separate Account D, also referred to as "Separate Account D". Such obligations
are based on the fixed interest rates we credit to Fixed Allocations and the
terms of the Annuities. These obligations do not depend on the investment
performance of the assets in Separate Account D. Separate Account D was
established by us pursuant to Connecticut law.
There are no units in Separate Account D. The Fixed Allocations are guaranteed
by our general account. An Annuity Owner who allocates a portion of their
Account Value to Separate Account D does not participate in the investment
gain or loss on assets maintained in Separate Account D. Such gain or loss
accrues solely to us. We retain the risk that the value of the assets in
Separate Account D may drop below the reserves and other liabilities we must
maintain. Should the value of the assets in Separate Account D drop below the
reserve and other liabilities we must maintain in relation to the annuities
supported by such assets, we will transfer assets from our general account to
Separate Account D to make up the difference. We have the right to transfer to
our general account any assets of Separate Account D in excess of such
reserves and other liabilities. We maintain assets in Separate Account D
supporting a number of annuities we offer.
We may employ investment managers to manage the assets maintained in Separate
Account D. Each manager we employ is responsible for investment management of
a different portion of Separate Account D. From time to time additional
investment managers may be employed or investment managers may cease being
employed. We are under no obligation to employ or continue to employ any
investment manager(s) and have sole discretion over the investment managers we
retain.
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We are not obligated to invest according to specific guidelines or strategies
except as may be required by Connecticut and other state insurance laws.
WHAT IS THE LEGAL STRUCTURE OF THE UNDERLYING FUNDS?
Each underlying mutual fund is registered as an open-end management investment
company under the Investment Company Act. Shares of the underlying mutual fund
portfolios are sold to separate accounts of life insurance companies offering
variable annuity and variable life insurance products. The shares may also be
sold directly to qualified pension and retirement plans.
Voting Rights
We are the legal owner of the shares of the underlying mutual funds in which
the Sub-accounts invest. However, under SEC rules, you have voting rights in
relation to Account Value maintained in the Sub-accounts. If an underlying
mutual fund portfolio requests a vote of shareholders, we will vote our shares
based on instructions received from Owners with Account Value allocated to
that Sub-account. Owners have the right to vote an amount equal to the number
of shares attributable to their contracts. If we do not receive voting
instructions in relation to certain shares, we will vote those shares in the
same manner and proportion as the shares for which we have received
instructions. This voting procedure is sometimes referred to as "mirror
voting" because, as indicated in the immediately preceding sentence, we mirror
the votes that are actually cast, rather than decide on our own how to vote.
In addition, because all the shares of a given mutual fund held within our
separate account are legally owned by us, we intend to vote all of such shares
when that underlying fund seeks a vote of its shareholders. As such, all such
shares will be counted towards whether there is a quorum at the underlying
fund's shareholder meeting and towards the ultimate outcome of the vote. Thus,
under "mirror voting," it is possible that the votes of a small percentage of
contractholders who actually vote will determine the ultimate outcome. We will
furnish those Owners who have Account Value allocated to a Sub-account whose
underlying mutual fund portfolio has requested a "proxy" vote with proxy
materials and the necessary forms to provide us with their voting
instructions. Generally, you will be asked to provide instructions for us to
vote on matters such as changes in a fundamental investment strategy, adoption
of a new investment advisory agreement, or matters relating to the structure
of the underlying mutual fund that require a vote of shareholders.
Advanced Series Trust (the "Trust") has obtained an exemption from the
Securities and Exchange Commission that permits its co-investment advisers,
AST Investment Services, Inc. and Prudential Investments LLC, subject to
approval by the Board of Trustees of the Trust, to change sub-advisors for a
Portfolio and to enter into new sub-advisory agreements, without obtaining
shareholder approval of the changes. This exemption (which is similar to
exemptions granted to other investment companies that are organized in a
similar manner as the Trust) is intended to facilitate the efficient
supervision and management of the sub-advisors by AST Investment Services,
Inc., Prudential Investments LLC and the Trustees. The Trust is required,
under the terms of the exemption, to provide certain information to
shareholders following these types of changes. We may add new Sub-accounts
that invest in a series of underlying funds other than the Trust. Such series
of funds may have a similar order from the SEC. You also should review the
prospectuses for the other underlying funds in which various Sub-accounts
invest as to whether they have obtained similar orders from the SEC.
Material Conflicts
It is possible that differences may occur between companies that offer shares
of an underlying mutual fund portfolio to their respective separate accounts
issuing variable annuities and/or variable life insurance products.
Differences may also occur surrounding the offering of an underlying mutual
fund portfolio to variable life insurance policies and variable annuity
contracts that we offer. Under certain circumstances, these differences could
be considered "material conflicts," in which case we would take necessary
action to protect persons with voting rights under our variable annuity
contracts and variable life insurance policies against persons with voting
rights under other insurance companies' variable insurance products. If a
"material conflict" were to arise between owners of variable annuity contracts
and variable life insurance policies issued by us we would take necessary
action to treat such persons equitably in resolving the conflict. "Material
conflicts" could arise due to differences in voting instructions between
owners of variable life insurance and variable annuity contracts of the same
or different companies. We monitor any potential conflicts that may exist.
Service Fees Payable to Prudential Annuities
Prudential Annuities or our affiliates have entered into agreements with the
investment adviser or distributor of the underlying Portfolios. Under the
terms of these agreements, Prudential Annuities, or our affiliates may provide
administrative and support services to the Portfolios for which it receives a
fee of up to 0.75% (currently) of the average assets allocated to the
Portfolios under each Annuity from the investment adviser, distributor and/or
the fund. These agreements may be different for each underlying mutual fund
whose portfolios are offered as Sub-accounts.
Prudential Annuities and/or our affiliates receive substantial and varying
administrative service payments, Rule 12b-1 fees, and "revenue sharing"
payments from certain underlying Portfolios or related parties. Rule 12b-1
fees compensate our affiliated principal underwriter for distribution,
marketing, and/or servicing functions. Administrative services payments
compensate us for providing administrative services with respect to Annuity
Owners invested indirectly in the Portfolio, which include duties such as
recordkeeping, shareholder services, and the mailing of periodic reports. We
receive administrative services fees with respect to
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both affiliated underlying Portfolios and unaffiliated underlying Portfolios.
The administrative services fees we receive from affiliates originate from the
assets of the affiliated Portfolio itself and/or the assets of the Portfolio's
investment adviser. In recognition of the administrative services provided by
the relevant affiliated insurance companies, the investment advisers to
certain affiliated Portfolios also make "revenue sharing" payments to such
affiliated insurance companies. In any case, the existence of these fees tends
to increase the overall cost of investing in the Portfolio. In addition,
because these fees are paid to us, allocations you make to these affiliated
underlying Portfolios benefit us financially. In addition to the payments that
we receive from underlying funds and/or their affiliates, those same funds
and/or their affiliates may make payments to us and/or other insurers within
the Prudential Financial group related to the offering of investment options
within variable annuities or life insurance offered by different Prudential
business units.
We collect these payments and fees under agreements between us and a
Portfolio's principal underwriter, transfer agent, investment adviser and/or
other entities related to the Portfolio.
The 12b-1 fees and administrative services fees that we receive may vary among
the different fund complexes that are part of our investment platform. Thus,
the fees we collect may be greater or smaller, based on the Portfolios that
you select. In addition, we may consider these payments and fees, among a
number of factors, when deciding to add or keep a Portfolio on the "menu" of
Portfolios that we offer through the Annuity.
Please see the table entitled "Underlying Mutual Fund Portfolio Annual
Expenses" for a listing of the Portfolios that pay a 12b-1 fee. With respect
to administrative services fees, the maximum fee that we receive is equal to
0.75% of the average assets allocated to the Portfolio(s) under the Annuity.
We expect to make a profit on these fees.
In addition, an investment adviser, sub-adviser or distributor of the
underlying Portfolios may also compensate us by providing reimbursement,
defraying the costs of, or paying directly for, among other things, marketing
and/or administrative services and/or other services they provide in
connection with the Annuity. These services may include, but are not limited
to: sponsoring or co-sponsoring various promotional, educational or marketing
meetings and seminars attended by distributors, wholesalers, and/or broker
dealer firms' registered representatives, and creating marketing material
discussing the contract, available options, and underlying Portfolios. The
amounts paid depend on the nature of the meetings, the number of meetings
attended by the adviser, sub-adviser, or distributor, the number of
participants and attendees at the meetings, the costs expected to be incurred,
and the level of the adviser's, sub-adviser's or distributor's participation.
These payments or reimbursements may not be offered by all advisers,
sub-advisers, or distributor and the amounts of such payments may vary between
and among each adviser, sub-adviser and distributor depending on their
respective participation.
During 2008, with regard to amounts that were paid under the kinds of
arrangements described immediately above, the amounts ranged from
approximately $750 to approximately $1,138,481. These amounts may have been
paid to one or more Prudential-affiliated insurers issuing individual variable
annuities.
WHO DISTRIBUTES ANNUITIES OFFERED BY PRUDENTIAL ANNUITIES?
Prudential Annuities Distributors, Inc. (PAD), a wholly-owned subsidiary of
Prudential Annuities, Inc., is the distributor and principal underwriter of
the Annuities offered through this prospectus. PAD acts as the distributor of
a number of annuity and life insurance products. PAD's principal business
address is One Corporate Drive, Shelton, Connecticut 06484. 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).
Each Annuity 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 Annuities but are exempt from registration
("firms"). Applications for each Annuity 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 Annuities directly to potential purchasers.
Prudential Annuities sells its annuity products through multiple distribution
channels, including (1) independent broker-dealer firms and financial
planners; (2) broker-dealers that are members of the New York Stock Exchange,
including "wirehouse" and regional broker-dealer firms; and (3) broker-dealers
affiliated with banks or that specialize in marketing to customers of banks.
Although we are active in each of those distribution channels, the majority of
our sales have come from the independent broker-dealer firms and financial
planners. On June 1, 2006, The Prudential Insurance Company of America, an
affiliate of Prudential Annuities, acquired the variable annuity business of
The Allstate Corporation ("Allstate"), which included exclusive access to the
Allstate affiliated broker-dealer until May 31, 2009. We began selling
variable annuities through the Allstate affiliated broker-dealer registered
representatives in the third quarter of 2006.
Commissions are paid to firms on sales of the Annuities according to one or
more schedules. The registered 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
7.0% for ASAP III, 6.0% for XT6, 5.5% for APEX II and 2.0% for ASL II.
Alternative compensation schedules are available that provide a lower initial
commission plus ongoing annual compensation based on all or a portion of the
Account Value. We may also provide compensation to the distributing firm for
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providing ongoing service to you in relation to your Annuity. Commissions and
other compensation paid in relation to your Annuity 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 Prudential Annuities and/or the Annuities 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. These services may include, but are not limited to:
educating customers of the firm on the Annuity's features; conducting due
diligence and analysis, providing office access, operations and systems
support; holding seminars intended to educate the firm's registered
representatives and make them more knowledgeable about the Annuities;
providing a dedicated marketing coordinator; providing priority sales desk
support; and providing expedited marketing compliance approval. 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. In addition, we or
our affiliates may provide such compensation, payments and/or incentives to
firms arising out of the marketing, sale and/or servicing of variable
annuities or life insurance offered by different Prudential business units.
A list of the firms to whom Prudential Annuities pays an amount under these
arrangements is provided below. 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 Annuities than for selling a different annuity that is not
eligible for these compensation arrangements. While compensation is generally
taken into account as an expense in considering the charges applicable to an
annuity product, any such compensation will be paid by us or PAD and will not
result in any additional charge to you. Overall compensation paid to the
distributing firm does not exceed, based on actuarial assumptions, 8.5% of the
total purchase payments made. Your registered representative can provide you
with more information about the compensation arrangements that apply upon the
sale of the Annuity. Further information about the firms that are part of
these compensation arrangements appears in the Statement of Additional
Information, which is available without charge upon request.
We or PAD also may compensate third-party vendors, for services that such
vendors render to broker-dealer firms. To the extent permitted by the FINRA
rules and other applicable laws and regulations, PAD may pay or allow other
promotional incentives or payments in the forms 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.
The list below identifies three general types of payments that PAD pays which
are broadly defined as follows:
. Percentage Payments based upon "Assets under Management" or "AUM": This
type of payment is a percentage payment that is based upon assets,
subject to certain criteria, in certain Prudential Annuities products.
. Percentage Payments based upon sales: This type of payment is a
percentage payment that is based upon the total amount of money received
as purchase payments under Prudential Annuities annuity products sold
through the firm.
. Fixed Payments: These types of payments are made directly to or in
sponsorship of the firm (or its affiliated broker-dealers). Examples of
arrangements under which such payments may be made currently include,
but are not limited to: sponsorships, conferences (national, regional
and top producer), speaker fees, promotional items and reimbursements to
firms for marketing activities or services paid by the firms and/or
their registered representatives. The amount of these payments varies
widely because some payments may encompass only a single event, such as
a conference, and others have a much broader scope. In addition, we may
make payments periodically during the relationship for systems,
operational and other support.
The list below includes the names of the firms (or their affiliated
broker/dealers) that we are aware (as of December 31, 2008) received payment
with respect to annuity business during 2008 (or as to which a payment amount
was accrued during 2008). The firms listed below include those receiving
payments in connection with marketing of products issued by Prudential
Annuities Life Assurance Corporation. Your registered representative can
provide you with more information about the compensation arrangements that
apply upon the sale of the contract. During 2008, the least amount paid, and
greatest amount paid, were $3,106 and $7,256,316 respectively.
Name of Firm:
1717 Capital Management Co. American Financial Associates BancorpSouth Investment Services, Inc.
1st Global Capital Corp. American General Securities BCG Securities, Inc.
A. G. Edwards & Sons, Inc. American Independent Securities Beneficial Investment Services Inc
Advantage Capital Group, LLC Berthel Fisher & Company
Advisory Group Equity Services Agency American Portfolios Financial Services BFT Financial Group, LLC
AIG Retirement Advisors Ameriprise Advisor Services, Inc. Brecek & Young Advisors, Inc.
AIG Financial Advisors, Inc. Ameritas Investment Corp. Broker Dealer Financial Services
Allegheny Investments Ltd. Associated Securities Corp. BrokersXpress LLC
Allmax Financial Solutions, LLC AXA Advisors, LLC Brookstone Securities, Inc.
Allstate Financial Services, LLC Bancnorth Investment Group, Inc. Cadaret, Grant & Co., Inc.
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Calton & Associates, Inc. ING Financial Partners, Inc. ProEquities, Inc.
Cambridge Investment Research Institutional Securities Corp. Professional Asset Management
Cambridge Legacy Securities, LLC Intercarolina Financial Services QA3 Financial Corp.
Cantella & Co., Inc. InterSecurities, Inc. Questar Capital Corporation
Capital Analysts Intervest International Equities Corp. R. Seelaus & Company Inc
Capital Financial Services, Inc. Invest Financial Corporation Raymond James & Associates, Inc.
Capital Investment Group, Inc. Investacorp Raymond James Financial Services
Capital One Investments, LLC Investment Centers of America RBC Dain Rauscher, Inc.
Centaurus Financial, Inc. Investment Professionals Regency Securities, Inc.
CFD Investments, Inc. Investors Capital Corporation Resource Horizons Group
Citigroup Global Markets, Inc. J.J.B. Hilliard Lyons, Inc. Robert W. Baird & Co., Inc.
City Securities Corp. J.P. Turner & Company, LLC Royal Alliance Associates, Inc.
Commonwealth Financial Network J.W. Cole Financial, Inc. Sage Rutty & Co., Inc.
Community Bankers Securities Janney Montgomery Scott, LLC. Sammons Securities Co., LLC
Comprehensive Asset Management KCD Financial, Inc. Scottsdale Capital Advisors
Crown Capital Securities, LP Key Investment Services LLC Securian Financial Services, Inc.
CUE KMS Financial Services, Inc. Securities America, Inc.
CUNA Brokerage Services, Inc. LaSalle St. Securities, LLC Securities Service Network, Inc.
CUSO Financial Services, LP Legend Equities Corporation Sigma Financial Corporation
Dalton Strategic Inv. Svcs. Inc Legg Mason Wood Walker, Inc. Signator Investors, Inc.
David A. Noyes & Company Lincoln Financial Advisors SII Investments, Inc.
Eagle One Investments, LLC Lincoln Financial Securities SMH Capital, Inc.
EDI Financial Corporation Source Capital Group, Inc.
Ensemble Financial Services Inc Lincoln Investment Planning Southwest Securities, Inc.
ePLANNING Securities, Inc. Lombard Securities, Inc. Stifel Nicolaus & Co., Inc.
Equity Services, Inc. LPL Financial Corporation Summit Brokerage Services, Inc.
Essex National Securities, Inc. M Holdings Securities, Inc Summit Equities, Inc.
Ferris Baker Watts, Inc. McClurg Capital Corporation Sunset Financial Services, Inc.
FFP Securities, Inc. McGinn, Smith & Co., INC. Synergy Investment Group, LLC
Financial Network Investment Corp. Medallion Investment Services TFS Securities, Inc.
Financial Planning Consultants Merrill Lynch The Investment Center, Inc.
Financial West Group Metropolitan Life Insurance Co. The Leaders Group, Inc.
Fintegra, LLC Michigan Securities, Inc. Tower Square Securities, Inc.
First Allied Securities, Inc. MML Investors Services, Inc. Traderight Securities
First Brokerage America, LLC Money Concepts Capital Corp. Transamerica Financial Advisors
First Montauk Securities Corp. Moors & Cabot, Inc. Triad Advisors, Inc.
First Wall Street Corp. Morgan Keegan & Company Trinity Wealth Securities, LLC
First Western Advisors Morgan Stanley & Co Incorporated Trustmont Financial Group, Inc.
Fortune Financial Services, Inc. Multi-Financial Securities Corp. UBS Financial Services, Inc.
Founders Financial Securities LLC Mutual Service Corporation United Planners Financial Services of
FSC Securities Corp. National Financial LLD America
FSICGarden State Securities, Inc. National Planning Corporation USA Financial Securities Corp.
Gary Goldberg & Co., Inc. National Retirement Partners UVEST Financial Services Group, Inc.
Geneos Wealth Management, Inc. National Securities Corp. Vanderbilt Securities
Genworth Financial Securities Corp. Next Financial Group, Inc. Wachovia Securities Financial
Girard Securities, Inc. NFP Securities, Inc. Network, LLC
Great American Advisors, Inc. North Ridge Securities Corp. Wachovia Securities, Inc. (PCG)/PSI
GunnAllen Financial, Inc. NYLIFE Securities, Inc. Wachovia Securities,LLC(BA)
GWN Securities, Inc. OneAmerica Securities, Inc. Wall Street Financial Group
H. Beck, Inc. Oppenheimer & Co., Inc. (Fahnestock) Walnut Street Securities, Inc.
H.D. Vest Investment Pacific West Securities, Inc. Waterford Investor Services, Inc.
Hantz Financial Services, Inc. Packerland Brokerage Services, Inc. Waterstone Financial Group, Inc.
Harbour Investments, Inc. Park Avenue Securities, LLC Wayne Hummer Investments LLC
HBW Securities LLC Penn Plaza Brokerage, Ltd. Webster Investment Services, Inc.
Hornor, Townsend & Kent, Inc. Penrod & Company Wells Fargo Investments, LLC
Howe Barnes Hoefer & Arnett Inc PNC Investments, LLC Wescom Financial Services LLC
IFMG Securities, Inc. Presidential Brokerage, Inc. Woodbury Financial Services, Inc.
IMS Securities Prime Capital Services, Inc. World Equity Group, Inc.
Independent Financial Grp, LLC PrimeVest Financial Services, Inc. World Group Securities, Inc.
Infinex Investments, Inc. Princor Financial Services Corp. WRP Investments, Inc.
- -
180
On July 1, 2003, Prudential Financial combined its retail securities brokerage
and clearing operations with those of Wachovia Corporation ("Wachovia") and
formed Wachovia Securities Financial Holdings, LLC ("Wachovia Securities"), a
joint venture headquartered in Richmond, Virginia. Wachovia is the majority
owner and Prudential Financial, indirectly through subsidiaries, is a minority
owner of Wachovia Securities. Prudential Financial has announced its intention
to divest its interest in Wachovia Securities.
Wachovia and Wachovia Securities are key distribution partners for certain
products of Prudential Financial affiliates, including mutual funds and
individual annuities that are distributed through their financial advisors,
bank channel and independent channel. In addition, Prudential Financial is a
service provider to the managed account platform and certain wrap-fee benefits
offered by Wachovia Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Prudential Annuities Life Assurance Corporation 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 us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
also are incorporated into the prospectus by reference. We 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. We file
periodic reports as required under the Securities Exchange Act of 1934. The
public may read and copy any materials that we file 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.
FINANCIAL STATEMENTS
The financial statements of the Separate Account and Prudential Annuities Life
Assurance Corporation are included in the Statement of Additional Information.
HOW TO CONTACT US
You can contact us by:
.. calling our Customer Service Team at 1-888-PRU-2888 during our normal
business hours, Monday through Friday, or our telephone automated response
system at 1-800-766-4530.
.. writing to us via regular mail at Prudential Annuities, P.O. Box 7960,
Philadelphia, PA 19176 OR for express mail Prudential Annuities, 2101 Welsh
Road, Dresher, PA 19025. NOTE: Failure to send mail to the proper address
may result in a delay in our receiving and processing your request.
.. accessing information about your Annuity through our Internet Website at
www.prudentialannuities.com.
You can obtain account information by calling our automated response system
and at www.prudentialannuities.com, our Internet Website. Our Customer Service
representatives are also available during business hours to provide you with
information about your account. You can request certain transactions through
our telephone voice response system, our Internet Website or through a
customer service representative. You can provide authorization for a third
party, including your attorney-in-fact acting pursuant to a power of attorney
or your Financial Professional, to access your account information and perform
certain transactions on your account. You will need to complete a form
provided by us which identifies those transactions that you wish to authorize
via telephonic and electronic means and whether you wish to authorize a third
party to perform any such transactions. Please note that unless you tell us
otherwise, we deem that all transactions that are directed by your Financial
Professional with respect to your Annuity have been authorized by you. We
require that you or your representative provide proper identification before
performing transactions over the telephone or through our Internet Website.
This may include a Personal Identification Number (PIN) that will be provided
to you upon issue of your Annuity or you may establish or change your PIN by
calling our automated response system and at www.prudentialannuities.com, our
Internet Website. Any third party that you authorize to perform financial
transactions on your account will be assigned a PIN for your account.
Transactions requested via telephone are recorded. To the extent permitted by
law, we will not be responsible for any claims, loss, liability or expense in
connection with a transaction requested by telephone or other electronic means
if we acted on such transaction instructions after following reasonable
procedures to identify those persons authorized to perform transactions on
your Annuity using verification methods which may include a request for your
Social Security number, PIN or other form of electronic identification. We may
be liable for losses due to unauthorized or fraudulent instructions if we did
not follow such procedures.
Prudential Annuities does not guarantee access to telephonic, facsimile,
Internet or any other electronic information or that we will be able to accept
transaction instructions via such means at all times. Regular and/or express
mail will be the only means by which we will accept transaction instructions
when telephonic, facsimile, Internet or any other electronic means are
unavailable or
181
delayed. Prudential Annuities reserves the right to limit, restrict or
terminate telephonic, facsimile, Internet or any other electronic transaction
privileges at any time.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the
registrant has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable.
LEGAL PROCEEDINGS
We are subject to legal and regulatory actions in the ordinary course of our
businesses, including class action lawsuits. Our pending legal and regulatory
actions include proceedings specific to us and proceedings generally
applicable to business practices in the industry in which we operate. We are
subject to class action lawsuits and other litigation alleging, among other
things, that we 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. We are also subject to
litigation arising out of our general business activities, such as our
investments and contracts, and could be exposed to claims or litigation
concerning certain business or process patents. Regulatory authorities from
time to time make inquiries and conduct investigations and examinations
relating particularly to us and our products. In addition, we, along with
other participants in the business in which we 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 our 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 inherently
uncertain. The following is a summary of certain pending proceedings.
We have substantially completed a remediation program to correct errors in the
administration of approximately 11,000 annuity contracts issued by us. The
owners of these contracts did not receive notification that the contracts were
approaching or past their designated annuitization date or default
annuitization date (both dates referred to as the "contractual annuity date")
and the contracts were not annuitized at their contractual annuity dates. Some
of these contracts also were affected by data integrity errors resulting in
incorrect contractual annuity dates. The lack of notice and the data integrity
errors, as reflected on the annuities administrative system, all occurred
before the acquisition of Prudential Annuities by Prudential Financial, Inc.
(the "Acquisition"). The remediation and administrative costs of the
remediation program are subject to the indemnification provisions of the
agreement (the "Acquisition Agreement") pursuant to which Prudential
Financial, Inc. acquired Prudential Annuities from Skandia Insurance Company
Ltd. (publ) ("Skandia").
Commencing in 2003, we received formal requests for information from the SEC
and the New York Attorney General ("NYAG") relating to market timing in
variable annuities by us and certain affiliated companies. In connection with
these investigations, with the approval of Skandia an offer was made by us to
the authorities investigating our companies, the SEC and NYAG, to settle these
matters by paying restitution and a civil penalty of $95 million in the
aggregate. While not assured, we believe these discussions are likely to lead
to settlements with these authorities by us or our affiliates. Any regulatory
settlement involving us and certain affiliates would be subject to the
indemnification provisions of the Acquisition Agreement pursuant to which
Prudential Financial purchased Prudential Annuities and certain affiliates in
May 2003 from Skandia. If achieved, settlement of the matters relating to us
and certain affiliates also could involve continuing monitoring, changes to
and/or supervision of business practices, findings that may adversely affect
existing or cause additional litigation, adverse publicity and other adverse
impacts to our businesses.
During the third quarter of 2004, we identified a system-generated calculation
error in our annuity contract administration system that existed prior to the
Acquisition. This error related to the calculation of amounts due to customers
for certain transactions subject to a market value adjustment upon the
surrender or transfer of monies out of their annuity contract's fixed
allocation options. The error resulted in an underpayment to policyholders, as
well as additional anticipated costs to us associated with remediation,
breakage and other costs. Our consultants have developed the systems
functionality to compute remediation amounts and are in the process of running
the computations on affected contracts. We contacted state insurance
regulators and commenced Phase I of our outreach to customers on November 12,
2007. Phase II commenced June 6, 2008. Phase III commenced December 5, 2008. A
final phase is expected to rollout in April of 2009. We have advised Skandia
that a portion of the remediation and related administrative costs are subject
to the indemnification provisions of the Acquisition Agreement.
From January 2006 to February 2008, thirty-one complaints were filed in 17th
Judicial Circuit Court, Broward County, Florida alleging misrepresentations in
the sale of annuities against us and in certain of the cases the two brokers
who sold the annuities. The complaints allege that the brokers represented
that any losses in the annuities would be insured or paid by a state guaranty
fund and purport to state claims of breach of fiduciary duty, negligence,
fraud, fraudulent inducement, negligent misrepresentation and seek damages in
unspecified amounts but in excess of $15,000 per case. Thirty of the
thirty-one lawsuits settled in December 2008. Skandia has indemnified us for
the thirty settled matters, but has reserved the right to seek reimbursement
of a portion of the total indemnified settlement amount pursuant to the
provisions of the Acquisition Agreement.
182
Our litigation and regulatory matters are subject to many uncertainties, and
given its complexity and scope, their outcome cannot be predicted. It is
possible that results of operations or cash flow of Prudential Annuities 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 our 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 our 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 our financial position.
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The following are the contents of the Statement of Additional Information:
General Information about Prudential Annuities
Prudential Annuities Life Assurance Corporation
Prudential Annuities Life Assurance Corporation Variable Account B
Prudential Annuities Life Assurance Corporation Separate Account D
Principal Underwriter/Distributor - Prudential Annuities Distributors, Inc.
How the Unit Price is Determined
Additional Information on Fixed Allocations
How We Calculate the Market Value Adjustment
General Information
Voting Rights
Modification
Deferral of Transactions
Misstatement of Age or Sex
Ending the Offer
Annuitization
Experts
Legal Experts
Financial Statements
183
APPENDIX A - CONDENSED FINANCIAL INFORMATION ABOUT SEPARATE ACCOUNT B
Separate Account B consists of multiple Sub-accounts that are available as
investment options for the Prudential Annuities Annuities. Each Sub-account
invests only in a single mutual fund or mutual fund portfolio. All or some of
these Sub-accounts are available as investment options for other variable
annuities we offer pursuant to different prospectuses.
Unit Prices And Numbers Of Units. The following tables show for each Annuity:
(a) the historical Unit Price, corresponding to the Annuity features bearing
the highest and lowest combinations of asset-based charges*, as of the dates
shown, for Units in each of the Sub-accounts of Separate Account B that are
being offered pursuant to this Prospectus**; and (b) the number of Units
outstanding for each such Sub-account as of the dates shown. The period for
each year begins on January 1 and ends on December 31. Since November 18,
2002, we have been determining, on a daily basis, multiple Unit Prices for
each Sub-account of Separate Account B. We compute multiple Unit Prices
because several of our variable annuities invest in the same Sub-accounts, and
these annuities deduct varying charges that correspond to each combination of
the applicable Insurance Charge, Distribution Charge (when applicable) and the
charges for each optional benefit. Where an asset-based charge corresponding
to a particular Sub-account within a new annuity product is identical to that
in the same Sub-account within an existing annuity, the Unit Price for the new
annuity will be identical to that of the existing annuity. In such cases, we
will for reference purposes depict, in the condensed financial information for
the new annuity, Unit Prices of the existing annuity. To the extent a
Sub-account commenced operations during a particular calendar year, the Unit
Price as of the end of the period reflects only the partial year results from
the commencement of operations until December 31/st/ of the applicable year.
When a Unit Price was first calculated for a particular Sub-account, we set
the price of that Unit at $10.00 per Unit. Thereafter, Unit Prices vary based
on market performance. Unit Prices and Units are provided for Sub-accounts
that commenced operations prior to January 1, 2009.
* Note: While a unit price is reflected for the maximum combination of asset
based charges for each Sub-account, not all Sub-accounts are available if
you elect certain optional benefits.
** The remaining unit values appear in the Statement of Additional
Information, which you may obtain free of charge by sending in the request
form at the end of the Prospectus or contacting us at 1-800-752-6342.
ASAP III
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With No Optional Benefits (1.25%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
01/01/2000 to 12/31/2000 -- $8.99 33,897
01/01/2001 to 12/31/2001 $8.99 $6.86 136,976
01/01/2002 to 12/31/2002 $6.86 $5.53 153,652
01/01/2003 to 12/31/2003 $5.53 $7.13 362,254
01/01/2004 to 12/31/2004 $7.13 $8.24 553,542
01/01/2005 to 12/31/2005 $8.24 $9.04 1,051,555
01/01/2006 to 12/31/2006 $9.04 $10.96 1,002,727
01/01/2007 to 12/31/2007 $10.96 $11.84 985,495
01/01/2008 to 12/31/2008 $11.84 $6.85 614,606
---------------------------------------------------------------------------------------------------
AST International Growth Portfolio
01/01/2000 to 12/31/2000 -- $18.68 6,782
01/01/2001 to 12/31/2001 $18.68 $14.10 5,277
01/01/2002 to 12/31/2002 $14.10 $10.35 7,064
01/01/2003 to 12/31/2003 $10.35 $14.32 1,166,396
01/01/2004 to 12/31/2004 $14.32 $16.42 1,953,908
01/01/2005 to 12/31/2005 $16.42 $18.90 2,113,594
01/01/2006 to 12/31/2006 $18.90 $22.58 1,664,525
01/01/2007 to 12/31/2007 $22.58 $26.55 1,428,930
01/01/2008 to 12/31/2008 $26.55 $13.05 942,837
A-1
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST International Value Portfolio
01/01/2000 to 12/31/2000 -- $8.08 20,311
01/01/2001 to 12/31/2001 $8.08 $5.41 29,954
01/01/2002 to 12/31/2002 $5.41 $4.43 32,967
01/01/2003 to 12/31/2003 $4.43 $5.86 91,736
01/01/2004 to 12/31/2004 $5.86 $7.01 233,045
01/01/2005 to 12/31/2005 $7.01 $7.87 402,498
01/01/2006 to 12/31/2006 $7.87 $9.90 593,100
01/01/2007 to 12/31/2007 $9.90 $11.52 794,549
01/01/2008 to 12/31/2008 $11.52 $6.37 641,680
-------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
01/01/2000 to 12/31/2000 -- $9.72 23,151
01/01/2001 to 12/31/2001 $9.72 $8.64 49,536
01/01/2002 to 12/31/2002 $8.64 $7.48 46,925
01/01/2003 to 12/31/2003 $7.48 $9.40 123,219
01/01/2004 to 12/31/2004 $9.40 $10.98 213,485
01/01/2005 to 12/31/2005 $10.98 $11.67 218,706
01/01/2006 to 12/31/2006 $11.67 $14.32 349,460
01/01/2007 to 12/31/2007 $14.32 $15.47 339,584
01/01/2008 to 12/31/2008 $15.47 $10.09 263,096
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $20.25 978
01/01/2001 to 12/31/2001 $20.25 $18.70 2,439
01/01/2002 to 12/31/2002 $18.70 $12.12 6,331
01/01/2003 to 12/31/2003 $12.12 $17.38 145,364
01/01/2004 to 12/31/2004 $17.38 $15.97 107,136
01/01/2005 to 12/31/2005 $15.97 $16.00 126,824
01/01/2006 to 12/31/2006 $16.00 $17.80 111,114
01/01/2007 to 12/31/2007 $17.80 $18.83 118,021
01/01/2008 to 12/31/2008 $18.83 $12.09 187,342
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $9.17 35,743
01/01/2001 to 12/31/2001 $9.17 $6.48 41,602
01/01/2002 to 12/31/2002 $6.48 $4.71 44,611
01/01/2003 to 12/31/2003 $4.71 $6.86 258,089
01/01/2004 to 12/31/2004 $6.86 $7.41 293,384
01/01/2005 to 12/31/2005 $7.41 $7.35 267,925
01/01/2006 to 12/31/2006 $7.35 $7.82 344,893
01/01/2007 to 12/31/2007 $7.82 $9.17 382,635
01/01/2008 to 12/31/2008 $9.17 $5.20 242,993
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
01/01/2000 to 12/31/2000 -- $9.08 243
01/01/2001 to 12/31/2001 $9.08 $7.12 10,912
01/01/2002 to 12/31/2002 $7.12 $4.98 25,040
01/01/2003 to 12/31/2003 $4.98 $8.33 859,909
01/01/2004 to 12/31/2004 $8.33 $10.12 1,169,995
01/01/2005 to 12/31/2005 $10.12 $10.94 1,386,930
01/01/2006 to 12/31/2006 $10.94 $12.20 1,165,926
01/01/2007 to 12/31/2007 $12.20 $13.39 1,078,773
01/01/2008 to 12/31/2008 $13.39 $7.39 767,197
A-2
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
01/01/2000 to 12/31/2000 -- $11.41 15,339
01/01/2001 to 12/31/2001 $11.41 $12.06 33,608
01/01/2002 to 12/31/2002 $12.06 $10.79 66,744
01/01/2003 to 12/31/2003 $10.79 $14.47 962,965
01/01/2004 to 12/31/2004 $14.47 $16.64 1,293,786
01/01/2005 to 12/31/2005 $16.64 $17.52 1,484,713
01/01/2006 to 12/31/2006 $17.52 $20.77 1,198,255
01/01/2007 to 12/31/2007 $20.77 $19.36 1,176,566
01/01/2008 to 12/31/2008 $19.36 $13.44 760,721
---------------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $7.69 124
01/01/2003 to 12/31/2003 $7.69 $10.89 131,066
01/01/2004 to 12/31/2004 $10.89 $13.13 138,078
01/01/2005 to 12/31/2005 $13.13 $13.12 187,207
01/01/2006 to 12/31/2006 $13.12 $15.54 201,904
01/01/2007 to 12/31/2007 $15.54 $12.62 180,260
01/01/2008 to 07/18/2008 $12.62 $11.59 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $7.03 2,473
01/01/2001 to 12/31/2001 $7.03 $4.15 17,882
01/01/2002 to 12/31/2002 $4.15 $2.98 28,812
01/01/2003 to 12/31/2003 $2.98 $3.87 1,535,565
01/01/2004 to 12/31/2004 $3.87 $4.44 2,232,502
01/01/2005 to 12/31/2005 $4.44 $4.60 2,666,931
01/01/2006 to 12/31/2006 $4.60 $4.83 2,231,991
01/01/2007 to 12/31/2007 $4.83 $5.69 2,097,846
01/01/2008 to 12/31/2008 $5.69 $3.32 1,540,597
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $9.71 36,882
01/01/2001 to 12/31/2001 $9.71 $7.11 51,711
01/01/2002 to 12/31/2002 $7.11 $4.83 56,712
01/01/2003 to 12/31/2003 $4.83 $6.23 371,267
01/01/2004 to 12/31/2004 $6.23 $7.14 555,160
01/01/2005 to 12/31/2005 $7.14 $8.00 771,461
01/01/2006 to 12/31/2006 $8.00 $9.01 697,877
01/01/2007 to 12/31/2007 $9.01 $10.88 971,242
01/01/2008 to 12/31/2008 $10.88 $6.10 610,828
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
01/01/2000 to 12/31/2000 -- $12.13 16,574
01/01/2001 to 12/31/2001 $12.13 $11.62 56,219
01/01/2002 to 12/31/2002 $11.62 $10.26 69,657
01/01/2003 to 12/31/2003 $10.26 $13.82 781,348
01/01/2004 to 12/31/2004 $13.82 $16.76 1,116,503
01/01/2005 to 12/31/2005 $16.76 $18.55 1,303,740
01/01/2006 to 12/31/2006 $18.55 $20.28 1,086,861
01/01/2007 to 12/31/2007 $20.28 $20.66 975,347
01/01/2008 to 12/31/2008 $20.66 $11.78 570,591
A-3
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-----------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $8.68 30,915
01/01/2001 to 12/31/2001 $8.68 $7.14 56,649
01/01/2002 to 12/31/2002 $7.14 $4.53 61,001
01/01/2003 to 12/31/2003 $4.53 $6.06 200,264
01/01/2004 to 12/31/2004 $6.06 $6.49 214,092
01/01/2005 to 12/02/2005 $6.49 $7.48 0
-----------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
01/01/2000 to 12/31/2000 -- $10.07 12,895
01/01/2001 to 12/31/2001 $10.07 $9.72 26,857
01/01/2002 to 12/31/2002 $9.72 $7.61 38,982
01/01/2003 to 12/31/2003 $7.61 $10.21 140,873
01/01/2004 to 12/31/2004 $10.21 $11.63 256,401
01/01/2005 to 12/31/2005 $11.63 $12.11 192,419
01/01/2006 to 12/31/2006 $12.11 $13.66 174,411
01/01/2007 to 12/31/2007 $13.66 $13.86 156,606
01/01/2008 to 12/31/2008 $13.86 $8.47 191,791
-----------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
01/01/2000 to 12/31/2000 -- $11.24 0
01/01/2001 to 12/31/2001 $11.24 $11.18 1,879
01/01/2002 to 12/31/2002 $11.18 $10.42 4,994
01/01/2003 to 12/31/2003 $10.42 $13.75 75,013
01/01/2004 to 12/31/2004 $13.75 $17.81 192,336
01/01/2005 to 12/31/2005 $17.81 $23.11 254,041
01/01/2006 to 12/31/2006 $23.11 $26.44 291,510
01/01/2007 to 12/31/2007 $26.44 $36.68 378,258
01/01/2008 to 12/31/2008 $36.68 $18.12 317,719
-----------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
01/01/2000 to 12/31/2000 -- $8.46 97,356
01/01/2001 to 12/31/2001 $8.46 $7.12 106,762
01/01/2002 to 12/31/2002 $7.12 $4.86 106,056
01/01/2003 to 12/31/2003 $4.86 $5.93 263,698
01/01/2004 to 12/31/2004 $5.93 $6.19 326,194
01/01/2005 to 12/31/2005 $6.19 $7.12 512,014
01/01/2006 to 12/31/2006 $7.12 $7.43 608,747
01/01/2007 to 12/31/2007 $7.43 $7.94 919,355
01/01/2008 to 12/31/2008 $7.94 $4.66 1,074,328
-----------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
01/01/2000 to 12/31/2000 -- $9.68 3,089
01/01/2001 to 12/31/2001 $9.68 $7.48 47,656
01/01/2002 to 12/31/2002 $7.48 $5.31 112,701
01/01/2003 to 12/31/2003 $5.31 $6.44 893,170
01/01/2004 to 12/31/2004 $6.44 $7.04 791,823
01/01/2005 to 12/31/2005 $7.04 $7.39 1,025,239
01/01/2006 to 12/31/2006 $7.39 $8.01 758,550
01/01/2007 to 12/31/2007 $8.01 $9.10 686,498
01/01/2008 to 12/31/2008 $9.10 $5.72 700,352
A-4
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
01/01/2000 to 12/31/2000 -- $10.09 114,992
01/01/2001 to 12/31/2001 $10.09 $7.80 182,904
01/01/2002 to 12/31/2002 $7.80 $6.50 228,033
01/01/2003 to 12/31/2003 $6.50 $8.46 4,075,719
01/01/2004 to 12/31/2004 $8.46 $9.67 5,717,404
01/01/2005 to 12/31/2005 $9.67 $10.20 7,048,023
01/01/2006 to 12/31/2006 $10.20 $10.80 5,983,458
01/01/2007 to 12/31/2007 $10.80 $12.26 5,638,342
01/01/2008 to 12/31/2008 $12.26 $6.82 3,539,119
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
01/01/2000 to 12/31/2000 -- $7.90 235,747
01/01/2001 to 12/31/2001 $7.90 $5.33 404,404
01/01/2002 to 12/31/2002 $5.33 $3.69 405,437
01/01/2003 to 12/31/2003 $3.69 $4.57 604,491
01/01/2004 to 12/31/2004 $4.57 $4.68 733,920
01/01/2005 to 12/31/2005 $4.68 $4.77 657,831
01/01/2006 to 12/31/2006 $4.77 $5.18 791,152
01/01/2007 to 12/31/2007 $5.18 $5.84 1,134,004
01/01/2008 to 12/31/2008 $5.84 $3.44 756,326
-------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
01/01/2000 to 12/31/2000 -- $9.83 442
01/01/2001 to 12/31/2001 $9.83 $9.17 1,696
01/01/2002 to 12/31/2002 $9.17 $7.67 7,126
01/01/2003 to 12/31/2003 $7.67 $9.58 85,554
01/01/2004 to 12/31/2004 $9.58 $11.18 191,637
01/01/2005 to 12/31/2005 $11.18 $12.07 242,790
01/01/2006 to 12/31/2006 $12.07 $14.51 524,592
01/01/2007 to 12/31/2007 $14.51 $14.50 421,188
01/01/2008 to 12/31/2008 $14.50 $8.98 486,765
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
01/01/2001 to 12/31/2001 -- $9.64 0
01/01/2002 to 12/31/2002 $9.64 $7.14 37,810
01/01/2003 to 12/31/2003 $7.14 $8.89 137,293
01/01/2004 to 12/31/2004 $8.89 $9.66 194,363
01/01/2005 to 12/02/2005 $9.66 $10.72 0
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
01/01/2001 to 12/31/2001 -- $10.05 18,453
01/01/2002 to 12/31/2002 $10.05 $8.61 82,054
01/01/2003 to 12/31/2003 $8.61 $10.91 453,569
01/01/2004 to 12/31/2004 $10.91 $12.28 603,508
01/01/2005 to 12/31/2005 $12.28 $12.79 635,233
01/01/2006 to 12/31/2006 $12.79 $15.33 815,109
01/01/2007 to 12/31/2007 $15.33 $14.60 776,427
01/01/2008 to 12/31/2008 $14.60 $8.38 424,531
A-5
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
01/01/2000 to 12/31/2000 -- $11.57 16,557
01/01/2001 to 12/31/2001 $11.57 $11.75 16,487
01/01/2002 to 12/31/2002 $11.75 $11.91 25,464
01/01/2003 to 12/31/2003 $11.91 $16.17 149,582
01/01/2004 to 12/31/2004 $16.17 $22.03 281,181
01/01/2005 to 12/31/2005 $22.03 $24.98 223,265
01/01/2006 to 12/31/2006 $24.98 $33.72 265,912
01/01/2007 to 12/31/2007 $33.72 $26.66 201,539
01/01/2008 to 12/31/2008 $26.66 $17.10 163,226
--------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
01/01/2000 to 12/31/2000 -- $9.46 9,941
01/01/2001 to 12/31/2001 $9.46 $8.41 39,414
01/01/2002 to 12/31/2002 $8.41 $6.59 90,506
01/01/2003 to 12/31/2003 $6.59 $8.28 554,156
01/01/2004 to 12/31/2004 $8.28 $8.99 642,882
01/01/2005 to 12/31/2005 $8.99 $9.20 851,019
01/01/2006 to 12/31/2006 $9.20 $10.23 842,745
01/01/2007 to 12/31/2007 $10.23 $10.31 958,429
01/01/2008 to 12/31/2008 $10.31 $6.24 452,522
--------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
01/01/2000 to 12/31/2000 -- $9.36 70,887
01/01/2001 to 12/31/2001 $9.36 $8.47 113,372
01/01/2002 to 12/31/2002 $8.47 $6.70 124,168
01/01/2003 to 12/31/2003 $6.70 $8.52 339,653
01/01/2004 to 12/31/2004 $8.52 $9.48 613,910
01/01/2005 to 12/31/2005 $9.48 $9.79 626,417
01/01/2006 to 12/31/2006 $9.79 $11.30 579,491
01/01/2007 to 12/31/2007 $11.30 $11.15 493,545
01/01/2008 to 12/31/2008 $11.15 $7.18 440,398
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
01/01/2000 to 12/31/2000 -- $10.53 34,439
01/01/2001 to 12/31/2001 $10.53 $10.35 205,232
01/01/2002 to 12/31/2002 $10.35 $7.84 142,152
01/01/2003 to 12/31/2003 $7.84 $10.25 3,076,626
01/01/2004 to 12/31/2004 $10.25 $11.24 4,119,501
01/01/2005 to 12/31/2005 $11.24 $11.63 5,200,125
01/01/2006 to 12/31/2006 $11.63 $13.46 3,863,961
01/01/2007 to 12/31/2007 $13.46 $13.98 3,567,122
01/01/2008 to 12/31/2008 $13.98 $8.19 2,148,857
--------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
01/01/2000 to 12/31/2000 -- $10.32 8,596
01/01/2001 to 12/31/2001 $10.32 $9.31 44,212
01/01/2002 to 12/31/2002 $9.31 $7.59 44,419
01/01/2003 to 12/31/2003 $7.59 $8.99 204,589
01/01/2004 to 12/31/2004 $8.99 $10.25 417,314
01/01/2005 to 12/31/2005 $10.25 $10.77 694,885
01/01/2006 to 12/31/2006 $10.77 $12.60 680,203
01/01/2007 to 12/31/2007 $12.60 $12.07 680,350
01/01/2008 to 12/31/2008 $12.07 $6.97 649,783
A-6
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
01/01/2000 to 12/31/2000 -- $10.14 30,678
01/01/2001 to 12/31/2001 $10.14 $8.84 38,208
01/01/2002 to 12/31/2002 $8.84 $7.38 34,451
01/01/2003 to 12/31/2003 $7.38 $8.71 61,801
01/01/2004 to 12/31/2004 $8.71 $9.55 78,619
01/01/2005 to 12/31/2005 $9.55 $10.09 80,895
01/01/2006 to 12/31/2006 $10.09 $11.07 97,906
01/01/2007 to 12/31/2007 $11.07 $11.15 378,693
01/01/2008 to 12/31/2008 $11.15 $9.07 2,914,005
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
01/01/2000 to 12/31/2000 -- $9.87 1,725
01/01/2001 to 12/31/2001 $9.87 $9.38 4,905
01/01/2002 to 12/31/2002 $9.38 $8.36 5,490
01/01/2003 to 12/31/2003 $8.36 $9.81 115,095
01/01/2004 to 12/31/2004 $9.81 $10.56 146,721
01/01/2005 to 12/31/2005 $10.56 $10.91 173,191
01/01/2006 to 12/31/2006 $10.91 $11.82 174,226
01/01/2007 to 12/31/2007 $11.82 $12.71 214,498
01/01/2008 to 12/31/2008 $12.71 $8.76 613,791
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
01/01/2000 to 12/31/2000 -- $10.12 2,412
01/01/2001 to 12/31/2001 $10.12 $9.52 13,152
01/01/2002 to 12/31/2002 $9.52 $8.47 13,799
01/01/2003 to 12/31/2003 $8.47 $10.37 222,150
01/01/2004 to 12/31/2004 $10.37 $11.39 357,085
01/01/2005 to 12/31/2005 $11.39 $11.77 558,394
01/01/2006 to 12/31/2006 $11.77 $13.08 665,726
01/01/2007 to 12/31/2007 $13.08 $13.73 949,867
01/01/2008 to 12/31/2008 $13.73 $10.04 2,067,659
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
01/01/2000 to 12/31/2000 -- $10.70 0
01/01/2001 to 12/31/2001 $10.70 $10.84 16,390
01/01/2002 to 12/31/2002 $10.84 $12.32 36,987
01/01/2003 to 12/31/2003 $12.32 $13.73 289,862
01/01/2004 to 12/31/2004 $13.73 $14.73 657,913
01/01/2005 to 12/31/2005 $14.73 $13.89 938,587
01/01/2006 to 12/31/2006 $13.89 $14.58 836,914
01/01/2007 to 12/31/2007 $14.58 $15.79 874,210
01/01/2008 to 12/31/2008 $15.79 $15.21 536,127
----------------------------------------------------------------------------------------------------------------------
AST High Yield Portfolio
01/01/2000 to 12/31/2000 -- $9.37 12,929
01/01/2001 to 12/31/2001 $9.37 $9.27 45,297
01/01/2002 to 12/31/2002 $9.27 $9.16 73,614
01/01/2003 to 12/31/2003 $9.16 $10.99 906,947
01/01/2004 to 12/31/2004 $10.99 $12.06 957,756
01/01/2005 to 12/31/2005 $12.06 $12.04 873,439
01/01/2006 to 12/31/2006 $12.04 $13.12 1,019,726
01/01/2007 to 12/31/2007 $13.12 $13.28 683,986
01/01/2008 to 12/31/2008 $13.28 $9.76 483,533
A-7
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
01/01/2000 to 12/31/2000 -- $10.13 425
01/01/2001 to 12/31/2001 $10.13 $10.30 16,628
01/01/2002 to 12/31/2002 $10.30 $10.22 43,077
01/01/2003 to 12/31/2003 $10.22 $11.98 814,135
01/01/2004 to 12/31/2004 $11.98 $12.71 1,012,739
01/01/2005 to 12/31/2005 $12.71 $12.69 1,294,706
01/01/2006 to 12/31/2006 $12.69 $13.76 1,196,608
01/01/2007 to 12/31/2007 $13.76 $14.42 1,051,089
01/01/2008 to 12/31/2008 $14.42 $10.93 929,322
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
01/01/2000 to 12/31/2000 -- $10.97 37,918
01/01/2001 to 12/31/2001 $10.97 $11.80 275,317
01/01/2002 to 12/31/2002 $11.80 $12.72 362,294
01/01/2003 to 12/31/2003 $12.72 $13.23 2,301,863
01/01/2004 to 12/31/2004 $13.23 $13.72 3,074,732
01/01/2005 to 12/31/2005 $13.72 $13.88 1,924,370
01/01/2006 to 12/31/2006 $13.88 $14.22 2,004,498
01/01/2007 to 12/31/2007 $14.22 $15.21 2,344,694
01/01/2008 to 12/31/2008 $15.21 $14.68 2,402,587
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
01/01/2000 to 12/31/2000 -- $10.59 1,940
01/01/2001 to 12/31/2001 $10.59 $11.29 112,948
01/01/2002 to 12/31/2002 $11.29 $10.09 38,260
01/01/2003 to 12/31/2003 $10.09 $12.08 956,856
01/01/2004 to 12/31/2004 $12.08 $12.18 2,189,975
01/01/2005 to 12/31/2005 $12.18 $12.22 2,996,256
01/01/2006 to 12/31/2006 $12.22 $12.53 2,687,532
01/01/2007 to 12/31/2007 $12.53 $13.21 2,594,813
01/01/2008 to 12/31/2008 $13.21 $13.19 1,654,958
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
01/01/2000 to 12/31/2000 -- $10.32 29,567
01/01/2001 to 12/31/2001 $10.32 $10.57 179,509
01/01/2002 to 12/31/2002 $10.57 $10.57 403,604
01/01/2003 to 12/31/2003 $10.57 $10.51 1,245,396
01/01/2004 to 12/31/2004 $10.51 $10.46 1,663,940
01/01/2005 to 12/31/2005 $10.46 $10.62 3,179,375
01/01/2006 to 12/31/2006 $10.62 $10.96 3,505,960
01/01/2007 to 12/31/2007 $10.96 $11.36 4,361,361
01/01/2008 to 12/31/2008 $11.36 $11.50 7,844,009
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
01/01/2000 to 12/31/2000 -- $8.19 3,293
01/01/2001 to 12/31/2001 $8.19 $7.53 6,555
01/01/2002 to 12/31/2002 $7.53 $6.71 6,530
01/01/2003 to 12/31/2003 $6.71 $10.59 122,136
01/01/2004 to 12/31/2004 $10.59 $12.52 264,541
01/01/2005 to 12/31/2005 $12.52 $16.26 351,335
01/01/2006 to 12/31/2006 $16.26 $21.61 316,324
01/01/2007 to 12/31/2007 $21.61 $30.63 435,146
01/01/2008 to 12/31/2008 $30.63 $12.74 289,778
A-8
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
01/01/2000 to 12/31/2000 -- $17.01 0
01/01/2001 to 12/31/2001 $17.01 $15.89 1,992
01/01/2002 to 12/31/2002 $15.89 $12.67 1,063
01/01/2003 to 12/31/2003 $12.67 $15.79 10,586
01/01/2004 to 12/31/2004 $15.79 $17.32 19,612
01/01/2005 to 12/31/2005 $17.32 $18.02 23,574
01/01/2006 to 12/31/2006 $18.02 $21.10 23,739
01/01/2007 to 12/31/2007 $21.10 $21.42 20,467
01/01/2008 to 12/31/2008 $21.42 $13.44 55,757
----------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
01/01/2000 to 12/31/2000 -- $9.99 22,264
01/01/2001 to 12/31/2001 $9.99 $6.80 15,825
01/01/2002 to 12/31/2002 $6.80 $4.57 18,808
01/01/2003 to 12/31/2003 $4.57 $6.22 137,600
01/01/2004 to 12/31/2004 $6.22 $6.96 188,184
01/01/2005 to 12/31/2005 $6.96 $7.61 135,001
01/01/2006 to 12/31/2006 $7.61 $8.73 124,196
01/01/2007 to 12/31/2007 $8.73 $9.67 132,861
01/01/2008 to 12/31/2008 $9.67 $4.96 78,078
----------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
01/01/2000 to 12/31/2000 -- $7.98 25,984
01/01/2001 to 12/31/2001 $7.98 $4.27 35,767
01/01/2002 to 12/31/2002 $4.27 $2.24 30,448
01/01/2003 to 12/31/2003 $2.24 $3.21 42,720
01/01/2004 to 12/31/2004 $3.21 $3.32 78,567
01/01/2005 to 12/31/2005 $3.32 $3.35 77,942
01/01/2006 to 12/31/2006 $3.35 $3.65 254,798
01/01/2007 to 12/31/2007 $3.65 $3.89 126,039
01/01/2008 to 12/31/2008 $3.89 $2.13 95,405
----------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
01/01/2000 to 12/31/2000 -- $13.14 32,969
01/01/2001 to 12/31/2001 $13.14 $11.35 27,104
01/01/2002 to 12/31/2002 $11.35 $8.46 19,405
01/01/2003 to 12/31/2003 $8.46 $10.68 59,116
01/01/2004 to 12/31/2004 $10.68 $11.34 92,506
01/01/2005 to 12/31/2005 $11.34 $12.12 106,295
01/01/2006 to 12/31/2006 $12.12 $12.59 110,470
01/01/2007 to 12/31/2007 $12.59 $13.91 109,826
01/01/2008 to 12/31/2008 $13.91 $9.80 81,377
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
01/01/2000 to 12/31/2000 -- $12.38 9,786
01/01/2001 to 12/31/2001 $12.38 $11.02 8,536
01/01/2002 to 12/31/2002 $11.02 $9.26 7,204
01/01/2003 to 12/31/2003 $9.26 $11.85 48,538
01/01/2004 to 12/31/2004 $11.85 $12.72 44,091
01/01/2005 to 12/31/2005 $12.72 $13.30 48,007
01/01/2006 to 12/31/2006 $13.30 $15.30 89,614
01/01/2007 to 12/31/2007 $15.30 $11.75 53,310
01/01/2008 to 12/31/2008 $11.75 $4.70 91,978
A-9
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
01/01/2003 to 12/31/2003 -- $10.46 24,847
01/01/2004 to 12/31/2004 $10.46 $12.31 62,400
01/01/2005 to 12/31/2005 $12.31 $14.10 130,749
01/01/2006 to 12/31/2006 $14.10 $17.15 182,002
01/01/2007 to 12/31/2007 $17.15 $19.47 167,896
01/01/2008 to 12/31/2008 $19.47 $11.25 150,691
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
01/01/2000 to 12/31/2000 -- $9.35 0
01/01/2001 to 12/31/2001 $9.35 $8.49 5,085
01/01/2002 to 12/31/2002 $8.49 $6.10 5,427
01/01/2003 to 12/31/2003 $6.10 $9.16 69,344
01/01/2004 to 12/31/2004 $9.16 $9.57 92,559
01/01/2005 to 04/15/2005 $9.57 $8.53 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
01/01/2001 to 12/31/2001 -- $9.04 0
01/01/2002 to 12/31/2002 $9.04 -- 0
01/01/2003 to 12/31/2003 -- $9.21 15,743
01/01/2004 to 12/31/2004 $9.21 $9.75 26,849
01/01/2005 to 12/31/2005 $9.75 $10.00 18,356
01/01/2006 to 12/31/2006 $10.00 $10.47 19,700
01/01/2007 to 12/31/2007 $10.47 $11.58 38,907
01/01/2008 to 12/31/2008 $11.58 $8.32 68,712
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.47 64,775
01/01/2006 to 12/31/2006 $11.47 $12.58 72,371
01/01/2007 to 12/31/2007 $12.58 $13.79 85,135
01/01/2008 to 12/31/2008 $13.79 $8.02 66,604
----------------------------------------------------------------------------------------------
ProFund VP Europe 30
01/01/2000 to 12/31/2000 -- $9.30 0
01/01/2001 to 12/31/2001 $9.30 $6.97 7,317
01/01/2002 to 12/31/2002 $6.97 $5.11 2,539
01/01/2003 to 12/31/2003 $5.11 $7.00 75,543
01/01/2004 to 12/31/2004 $7.00 $7.90 201,444
01/01/2005 to 12/31/2005 $7.90 $8.43 76,381
01/01/2006 to 12/31/2006 $8.43 $9.79 370,628
01/01/2007 to 12/31/2007 $9.79 $11.07 331,218
01/01/2008 to 12/31/2008 $11.07 $6.12 126,269
----------------------------------------------------------------------------------------------
ProFund VP Asia 30
01/01/2003 to 12/31/2003 -- $12.66 47,272
01/01/2004 to 12/31/2004 $12.66 $12.43 63,254
01/01/2005 to 12/31/2005 $12.43 $14.67 83,233
01/01/2006 to 12/31/2006 $14.67 $20.18 235,779
01/01/2007 to 12/31/2007 $20.18 $29.44 204,415
01/01/2008 to 12/31/2008 $29.44 $14.30 109,480
----------------------------------------------------------------------------------------------
ProFund VP Japan
01/01/2003 to 12/31/2003 -- $9.09 28,579
01/01/2004 to 12/31/2004 $9.09 $9.65 87,251
01/01/2005 to 12/31/2005 $9.65 $13.51 165,707
01/01/2006 to 12/31/2006 $13.51 $14.79 117,156
01/01/2007 to 12/31/2007 $14.79 $13.14 54,211
01/01/2008 to 12/31/2008 $13.14 $7.68 67,522
A-10
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Banks
01/01/2003 to 12/31/2003 -- $10.97 8,886
01/01/2004 to 12/31/2004 $10.97 $12.11 12,480
01/01/2005 to 12/31/2005 $12.11 $11.94 44,665
01/01/2006 to 12/31/2006 $11.94 $13.61 35,707
01/01/2007 to 12/31/2007 $13.61 $9.77 12,962
01/01/2008 to 12/31/2008 $9.77 $5.12 71,458
-------------------------------------------------------------------------------------------
ProFund VP Basic Materials
01/01/2003 to 12/31/2003 -- $11.02 53,759
01/01/2004 to 12/31/2004 $11.02 $12.00 42,597
01/01/2005 to 12/31/2005 $12.00 $12.13 53,592
01/01/2006 to 12/31/2006 $12.13 $13.84 67,645
01/01/2007 to 12/31/2007 $13.84 $17.86 199,608
01/01/2008 to 12/31/2008 $17.86 $8.57 114,858
-------------------------------------------------------------------------------------------
ProFund VP Biotechnology
01/01/2001 to 12/31/2001 -- $8.38 3,279
01/01/2002 to 12/31/2002 $8.38 $5.17 460
01/01/2003 to 12/31/2003 $5.17 $7.14 20,329
01/01/2004 to 12/31/2004 $7.14 $7.73 32,726
01/01/2005 to 12/31/2005 $7.73 $9.11 73,804
01/01/2006 to 12/31/2006 $9.11 $8.63 56,416
01/01/2007 to 12/31/2007 $8.63 $8.42 165,309
01/01/2008 to 12/31/2008 $8.42 $8.47 117,598
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
01/01/2003 to 12/31/2003 -- $9.10 13,935
01/01/2004 to 12/31/2004 $9.10 $9.67 20,288
01/01/2005 to 12/31/2005 $9.67 $9.10 3,866
01/01/2006 to 12/31/2006 $9.10 $10.06 15,819
01/01/2007 to 12/31/2007 $10.06 $9.12 5,165
01/01/2008 to 12/31/2008 $9.12 $6.18 16,093
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
01/01/2003 to 12/31/2003 -- $9.71 3,821
01/01/2004 to 12/31/2004 $9.71 $10.47 7,578
01/01/2005 to 12/31/2005 $10.47 $10.31 6,876
01/01/2006 to 12/31/2006 $10.31 $11.46 39,408
01/01/2007 to 12/31/2007 $11.46 $12.18 150,560
01/01/2008 to 12/31/2008 $12.18 $8.81 19,941
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
01/01/2001 to 12/31/2001 -- $9.20 0
01/01/2002 to 12/31/2002 $9.20 -- 0
01/01/2003 to 12/31/2003 -- $9.10 50,155
01/01/2004 to 12/31/2004 $9.10 $11.62 186,654
01/01/2005 to 12/31/2005 $11.62 $15.07 278,771
01/01/2006 to 12/31/2006 $15.07 $17.96 226,319
01/01/2007 to 12/31/2007 $17.96 $23.49 230,618
01/01/2008 to 12/31/2008 $23.49 $14.62 186,825
A-11
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Financials
01/01/2001 to 12/31/2001 -- $9.23 8,154
01/01/2002 to 12/31/2002 $9.23 $7.76 3,258
01/01/2003 to 12/31/2003 $7.76 $9.88 32,283
01/01/2004 to 12/31/2004 $9.88 $10.77 70,662
01/01/2005 to 12/31/2005 $10.77 $11.06 43,105
01/01/2006 to 12/31/2006 $11.06 $12.81 108,064
01/01/2007 to 12/31/2007 $12.81 $10.23 27,930
01/01/2008 to 12/31/2008 $10.23 $5.00 52,097
---------------------------------------------------------------------------------------
ProFund VP Health Care
01/01/2001 to 12/31/2001 -- $9.37 2,564
01/01/2002 to 12/31/2002 $9.37 $7.15 1,235
01/01/2003 to 12/31/2003 $7.15 $8.29 23,591
01/01/2004 to 12/31/2004 $8.29 $8.38 91,641
01/01/2005 to 12/31/2005 $8.38 $8.77 83,943
01/01/2006 to 12/31/2006 $8.77 $9.12 179,877
01/01/2007 to 12/31/2007 $9.12 $9.60 255,222
01/01/2008 to 12/31/2008 $9.60 $7.17 79,165
---------------------------------------------------------------------------------------
ProFund VP Industrials
01/01/2003 to 12/31/2003 -- $10.08 11,186
01/01/2004 to 12/31/2004 $10.08 $11.27 22,333
01/01/2005 to 12/31/2005 $11.27 $11.40 9,851
01/01/2006 to 12/31/2006 $11.40 $12.57 21,635
01/01/2007 to 12/31/2007 $12.57 $13.87 15,320
01/01/2008 to 12/31/2008 $13.87 $8.15 39,857
---------------------------------------------------------------------------------------
ProFund VP Internet
01/01/2003 to 12/31/2003 -- $15.10 8,287
01/01/2004 to 12/31/2004 $15.10 $18.08 20,851
01/01/2005 to 12/31/2005 $18.08 $19.18 46,724
01/01/2006 to 12/31/2006 $19.18 $19.20 6,326
01/01/2007 to 12/31/2007 $19.20 $20.89 16,744
01/01/2008 to 12/31/2008 $20.89 $11.38 7,505
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
01/01/2003 to 12/31/2003 -- $8.95 24,743
01/01/2004 to 12/31/2004 $8.95 $8.02 27,913
01/01/2005 to 12/31/2005 $8.02 $7.62 36,753
01/01/2006 to 12/31/2006 $7.62 $8.44 116,086
01/01/2007 to 12/31/2007 $8.44 $8.53 85,082
01/01/2008 to 12/31/2008 $8.53 $6.78 76,505
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
01/01/2002 to 12/31/2002 -- $9.73 1,179
01/01/2003 to 12/31/2003 $9.73 $13.38 89,687
01/01/2004 to 12/31/2004 $13.38 $11.90 102,230
01/01/2005 to 12/31/2005 $11.90 $14.84 200,314
01/01/2006 to 12/31/2006 $14.84 $15.74 233,772
01/01/2007 to 12/31/2007 $15.74 $19.03 203,953
01/01/2008 to 12/31/2008 $19.03 $13.01 256,815
A-12
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Real Estate
01/01/2001 to 12/31/2001 -- $10.78 2,306
01/01/2002 to 12/31/2002 $10.78 $10.65 2,230
01/01/2003 to 12/31/2003 $10.65 $14.00 18,355
01/01/2004 to 12/31/2004 $14.00 $17.58 53,006
01/01/2005 to 12/31/2005 $17.58 $18.54 31,980
01/01/2006 to 12/31/2006 $18.54 $24.25 61,873
01/01/2007 to 12/31/2007 $24.25 $19.25 39,817
01/01/2008 to 12/31/2008 $19.25 $11.17 46,281
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
01/01/2003 to 12/31/2003 -- $9.58 17,621
01/01/2004 to 12/31/2004 $9.58 $7.23 52,485
01/01/2005 to 12/31/2005 $7.23 $7.76 68,309
01/01/2006 to 12/31/2006 $7.76 $7.12 9,658
01/01/2007 to 12/31/2007 $7.12 $7.53 18,356
01/01/2008 to 12/31/2008 $7.53 $3.73 21,594
---------------------------------------------------------------------------------------
ProFund VP Technology
01/01/2001 to 12/31/2001 -- $5.92 12,704
01/01/2002 to 12/31/2002 $5.92 -- 0
01/01/2003 to 12/31/2003 -- $5.00 74,180
01/01/2004 to 12/31/2004 $5.00 $4.91 88,720
01/01/2005 to 12/31/2005 $4.91 $4.91 109,697
01/01/2006 to 12/31/2006 $4.91 $5.24 74,232
01/01/2007 to 12/31/2007 $5.24 $5.92 199,048
01/01/2008 to 12/31/2008 $5.92 $3.25 78,353
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
01/01/2001 to 12/31/2001 -- $7.11 0
01/01/2002 to 12/31/2002 $7.11 -- 0
01/01/2003 to 12/31/2003 -- $4.41 30,179
01/01/2004 to 12/31/2004 $4.41 $5.04 118,731
01/01/2005 to 12/31/2005 $5.04 $4.64 45,277
01/01/2006 to 12/31/2006 $4.64 $6.16 207,252
01/01/2007 to 12/31/2007 $6.16 $6.59 120,262
01/01/2008 to 12/31/2008 $6.59 $4.27 89,358
---------------------------------------------------------------------------------------
ProFund VP Utilities
01/01/2001 to 12/31/2001 -- $8.13 0
01/01/2002 to 12/31/2002 $8.13 $6.11 491
01/01/2003 to 12/31/2003 $6.11 $7.32 18,902
01/01/2004 to 12/31/2004 $7.32 $8.75 79,702
01/01/2005 to 12/31/2005 $8.75 $9.77 213,814
01/01/2006 to 12/31/2006 $9.77 $11.51 237,712
01/01/2007 to 12/31/2007 $11.51 $13.16 338,965
01/01/2008 to 12/31/2008 $13.16 $9.00 105,879
---------------------------------------------------------------------------------------
ProFund VP Bull
01/01/2003 to 12/31/2003 -- $9.91 394,427
01/01/2004 to 12/31/2004 $9.91 $10.65 412,259
01/01/2005 to 12/31/2005 $10.65 $10.80 384,501
01/01/2006 to 12/31/2006 $10.80 $12.12 306,353
01/01/2007 to 12/31/2007 $12.12 $12.40 217,866
01/01/2008 to 12/31/2008 $12.40 $7.63 184,775
A-13
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Bear
01/01/2001 to 12/31/2001 -- $11.55 0
01/01/2002 to 12/31/2002 $11.55 $13.78 2,012
01/01/2003 to 12/31/2003 $13.78 $10.26 28,299
01/01/2004 to 12/31/2004 $10.26 $9.09 16,155
01/01/2005 to 12/31/2005 $9.09 $8.86 35,611
01/01/2006 to 12/31/2006 $8.86 $8.09 56,286
01/01/2007 to 12/31/2007 $8.09 $8.04 56,088
01/01/2008 to 12/31/2008 $8.04 $11.10 157,817
---------------------------------------------------------------------------------------
ProFund VP UltraBull
01/01/2001 to 12/31/2001 -- $7.48 0
01/01/2002 to 12/31/2002 $7.48 $4.72 2,988
01/01/2003 to 12/31/2003 $4.72 $7.13 56,257
01/01/2004 to 12/31/2004 $7.13 $8.25 305,666
01/01/2005 to 12/31/2005 $8.25 $8.36 82,031
01/01/2006 to 12/31/2006 $8.36 $10.16 91,153
01/01/2007 to 12/31/2007 $10.16 $10.11 117,940
01/01/2008 to 12/31/2008 $10.11 $3.26 201,842
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
01/01/2001 to 12/31/2001 -- $5.77 0
01/01/2002 to 12/31/2002 $5.77 -- 0
01/01/2003 to 12/31/2003 -- $5.07 257,947
01/01/2004 to 12/31/2004 $5.07 $5.44 293,311
01/01/2005 to 12/31/2005 $5.44 $5.38 234,957
01/01/2006 to 12/31/2006 $5.38 $5.60 266,020
01/01/2007 to 12/31/2007 $5.60 $6.50 383,014
01/01/2008 to 12/31/2008 $6.50 $3.69 318,742
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
01/01/2002 to 12/31/2002 -- $11.03 934
01/01/2003 to 12/31/2003 $11.03 $6.83 40,617
01/01/2004 to 12/31/2004 $6.83 $5.99 77,280
01/01/2005 to 12/31/2005 $5.99 $5.97 77,758
01/01/2006 to 12/31/2006 $5.97 $5.81 53,401
01/01/2007 to 12/31/2007 $5.81 $5.08 37,820
01/01/2008 to 12/31/2008 $5.08 $7.43 61,822
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
01/01/2000 to 12/31/2000 -- $4.06 3,787
01/01/2001 to 12/31/2001 $4.06 $1.25 58,556
01/01/2002 to 12/31/2002 $1.25 -- 0
01/01/2003 to 12/31/2003 -- $0.77 890,270
01/01/2004 to 12/31/2004 $0.77 $0.87 6,405,048
01/01/2005 to 12/31/2005 $0.87 $0.82 7,044,313
01/01/2006 to 12/31/2006 $0.82 $0.85 6,941,343
01/01/2007 to 12/31/2007 $0.85 $1.08 6,538,979
01/01/2008 to 12/31/2008 $1.08 $0.29 2,231,878
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
01/01/2003 to 12/31/2003 -- $10.30 59,964
01/01/2004 to 12/31/2004 $10.30 $11.80 87,968
01/01/2005 to 12/31/2005 $11.80 $12.68 86,401
01/01/2006 to 12/31/2006 $12.68 $14.06 216,242
01/01/2007 to 12/31/2007 $14.06 $14.02 130,141
01/01/2008 to 12/31/2008 $14.02 $8.82 68,810
A-14
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
01/01/2003 to 12/31/2003 -- $9.75 24,107
01/01/2004 to 12/31/2004 $9.75 $10.70 80,520
01/01/2005 to 12/31/2005 $10.70 $11.75 181,173
01/01/2006 to 12/31/2006 $11.75 $12.06 55,706
01/01/2007 to 12/31/2007 $12.06 $13.31 89,654
01/01/2008 to 12/31/2008 $13.31 $8.04 62,780
-------------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
01/01/2003 to 12/31/2003 -- $9.62 34,556
01/01/2004 to 12/31/2004 $9.62 $12.13 115,073
01/01/2005 to 12/31/2005 $12.13 $14.12 150,869
01/01/2006 to 12/31/2006 $14.12 $15.42 133,297
01/01/2007 to 12/31/2007 $15.42 $16.14 93,025
01/01/2008 to 12/31/2008 $16.14 $5.18 149,958
-------------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
01/01/2003 to 12/31/2003 -- $9.46 105,751
01/01/2004 to 12/31/2004 $9.46 $11.22 123,988
01/01/2005 to 12/31/2005 $11.22 $11.52 53,564
01/01/2006 to 12/31/2006 $11.52 $13.36 181,265
01/01/2007 to 12/31/2007 $13.36 $12.24 56,109
01/01/2008 to 12/31/2008 $12.24 $8.38 63,921
-------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
01/01/2003 to 12/31/2003 -- $10.23 65,882
01/01/2004 to 12/31/2004 $10.23 $12.11 237,000
01/01/2005 to 12/31/2005 $12.11 $12.86 341,834
01/01/2006 to 12/31/2006 $12.86 $13.79 103,542
01/01/2007 to 12/31/2007 $13.79 $14.17 70,944
01/01/2008 to 12/31/2008 $14.17 $9.23 89,300
-------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
01/01/2000 to 12/31/2000 -- $9.32 3,174
01/01/2001 to 12/31/2001 $9.32 $8.50 0
01/01/2002 to 12/31/2002 $8.50 $4.82 953
01/01/2003 to 12/31/2003 $4.82 $9.49 60,051
01/01/2004 to 12/31/2004 $9.49 $12.28 143,175
01/01/2005 to 12/31/2005 $12.28 $12.10 52,922
01/01/2006 to 12/31/2006 $12.10 $15.06 56,197
01/01/2007 to 12/31/2007 $15.06 $12.91 55,859
01/01/2008 to 12/31/2008 $12.91 $4.31 126,179
-------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
01/01/2002 to 12/31/2002 -- $11.59 1,005
01/01/2003 to 12/31/2003 $11.59 $11.15 20,058
01/01/2004 to 12/31/2004 $11.15 $11.91 42,782
01/01/2005 to 12/31/2005 $11.91 $12.83 119,421
01/01/2006 to 12/31/2006 $12.83 $12.09 50,469
01/01/2007 to 12/31/2007 $12.09 $13.15 250,069
01/01/2008 to 12/31/2008 $13.15 $19.44 169,486
-------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
01/01/2003 to 12/31/2003 -- $7.61 78,428
01/01/2004 to 12/31/2004 $7.61 $6.70 266,169
01/01/2005 to 12/31/2005 $6.70 $6.09 302,979
01/01/2006 to 12/31/2006 $6.09 $6.63 268,688
01/01/2007 to 12/31/2007 $6.63 $6.20 268,294
01/01/2008 to 12/31/2008 $6.20 $3.80 202,541
A-15
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.59 299,885
01/01/2006 to 12/31/2006 $10.59 $11.46 27,550
01/01/2007 to 12/31/2007 $11.46 $11.90 350,487
01/01/2008 to 12/31/2008 $11.90 $11.21 85,000
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
01/01/2000 to 12/31/2000 -- $7.44 32,451
01/01/2001 to 12/31/2001 $7.44 $4.73 31,543
01/01/2002 to 12/31/2002 $4.73 $2.95 23,080
01/01/2003 to 12/31/2003 $2.95 $3.99 22,064
01/01/2004 to 12/31/2004 $3.99 $4.38 33,075
01/01/2005 to 12/31/2005 $4.38 $4.35 14,496
01/01/2006 to 12/31/2006 $4.35 $4.47 19,492
01/01/2007 to 12/31/2007 $4.47 $4.67 73,318
01/01/2008 to 12/31/2008 $4.67 $2.59 70,049
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
01/01/2003 to 12/31/2003 -- $13.20 476,951
01/01/2004 to 12/31/2004 $13.20 $14.64 695,591
01/01/2005 to 12/31/2005 $14.64 $15.50 732,183
01/01/2006 to 12/31/2006 $15.50 $17.07 751,781
01/01/2007 to 12/31/2007 $17.07 $18.45 676,438
01/01/2008 to 12/31/2008 $18.45 $10.05 229,477
--------------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
01/01/2003 to 12/31/2003 -- $12.05 10,069
01/01/2004 to 12/31/2004 $12.05 $12.35 24,245
01/01/2005 to 12/31/2005 $12.35 $11.81 25,001
01/01/2006 to 12/31/2006 $11.81 $14.64 50,230
01/01/2007 to 12/31/2007 $14.64 $14.55 42,707
01/01/2008 to 12/31/2008 $14.55 $10.27 13,353
--------------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.79 290,983
01/01/2006 to 12/31/2006 $9.79 $11.42 415,893
01/01/2007 to 12/31/2007 $11.42 $11.40 397,672
01/01/2008 to 12/31/2008 $11.40 $6.69 263,193
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
01/01/2003 to 12/31/2003 -- $12.96 8,569
01/01/2004 to 12/31/2004 $12.96 $16.05 22,405
01/01/2005 to 12/31/2005 $16.05 $17.46 52,338
01/01/2006 to 12/31/2006 $17.46 $23.87 152,515
01/01/2007 to 12/31/2007 $23.87 $26.71 239,619
01/01/2008 to 12/31/2008 $26.71 $15.09 114,200
--------------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
01/01/2003 to 12/31/2003 -- $11.89 5,532
01/01/2004 to 12/31/2004 $11.89 $13.34 43,536
01/01/2005 to 12/31/2005 $13.34 $13.72 46,537
01/01/2006 to 12/31/2006 $13.72 $13.94 45,207
01/01/2007 to 12/31/2007 $13.94 $14.35 57,244
01/01/2008 to 12/31/2008 $14.35 $10.21 32,217
A-16
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-----------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
01/01/2004 to 12/31/2004 -- $12.54 7,266
01/01/2005 to 12/31/2005 $12.54 $12.79 10,385
01/01/2006 to 12/31/2006 $12.79 $13.76 15,488
01/01/2007 to 12/31/2007 $13.76 $16.54 27,898
01/01/2008 to 12/31/2008 $16.54 $8.02 34,032
-----------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
01/01/2004 to 12/31/2004 -- $16.61 33,213
01/01/2005 to 12/31/2005 $16.61 $19.64 130,528
01/01/2006 to 12/31/2006 $19.64 $19.95 178,140
01/01/2007 to 12/31/2007 $19.95 $23.28 204,229
01/01/2008 to 12/31/2008 $23.28 $10.39 181,230
-----------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
01/01/2005 to 12/31/2005 $10.38 $10.35 98,334
01/01/2006 to 12/31/2006 $10.35 $11.14 87,853
01/01/2007 to 12/31/2007 $11.14 $11.77 111,093
01/01/2008 to 12/31/2008 $11.77 $7.49 123,085
-----------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
01/01/2004 to 12/31/2004 -- $10.37 3,839
01/01/2005 to 12/31/2005 $10.37 $10.55 131,174
01/01/2006 to 12/31/2006 $10.55 $12.37 296,094
01/01/2007 to 12/31/2007 $12.37 $12.23 172,527
01/01/2008 to 12/31/2008 $12.23 $7.19 138,391
-----------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
01/01/2004 to 12/31/2004 -- $9.70 571
01/01/2005 to 12/31/2005 $9.70 $8.67 975
01/01/2006 to 12/31/2006 $8.67 $8.26 4,948
01/01/2007 to 12/31/2007 $8.26 $7.92 17,295
01/01/2008 to 12/31/2008 $7.92 $10.31 19,300
-----------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
01/01/2004 to 12/31/2004 -- $9.55 7,859
01/01/2005 to 12/31/2005 $9.55 $9.15 11,578
01/01/2006 to 12/31/2006 $9.15 $7.97 6,984
01/01/2007 to 12/31/2007 $7.97 $8.23 35,184
01/01/2008 to 12/31/2008 $8.23 $10.08 25,904
-----------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
01/01/2004 to 12/31/2004 -- $10.53 18,568
01/01/2005 to 12/31/2005 $10.53 $12.10 32,119
01/01/2006 to 12/31/2006 $12.10 $14.47 100,114
01/01/2007 to 12/31/2007 $14.47 $17.08 109,207
01/01/2008 to 12/31/2008 $17.08 $8.38 53,085
-----------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 171,403
01/01/2006 to 12/31/2006 $10.00 $11.42 1,094,157
01/01/2007 to 12/31/2007 $11.42 $12.36 1,458,079
01/01/2008 to 12/31/2008 $12.36 $7.04 1,329,693
-----------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 403,183
01/01/2006 to 12/31/2006 $10.01 $11.24 4,226,992
01/01/2007 to 12/31/2007 $11.24 $12.18 5,738,690
01/01/2008 to 12/31/2008 $12.18 $7.82 6,696,087
A-17
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 405,782
01/01/2006 to 12/31/2006 $10.02 $11.06 3,716,970
01/01/2007 to 12/31/2007 $11.06 $11.93 5,006,440
01/01/2008 to 12/31/2008 $11.93 $8.03 6,104,215
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 53,897
01/01/2006 to 12/31/2006 $10.03 $10.95 1,008,771
01/01/2007 to 12/31/2007 $10.95 $11.79 1,635,321
01/01/2008 to 12/31/2008 $11.79 $8.30 3,896,032
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.04 215,280
01/01/2006 to 12/31/2006 $10.04 $10.70 443,968
01/01/2007 to 12/31/2007 $10.70 $11.49 649,597
01/01/2008 to 12/31/2008 $11.49 $9.14 3,492,156
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.69 795,953
01/01/2007 to 12/31/2007 $10.69 $11.56 1,509,134
01/01/2008 to 12/31/2008 $11.56 $8.02 2,921,992
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.61 563,523
01/01/2007 to 12/31/2007 $10.61 $11.38 1,273,685
01/01/2008 to 12/31/2008 $11.38 $7.36 2,512,483
--------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.52 510,953
01/01/2007 to 12/31/2007 $10.52 $11.57 1,352,476
01/01/2008 to 12/31/2008 $11.57 $6.77 2,352,959
--------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.51 31,450
01/01/2008 to 12/31/2008 $11.51 $7.37 468,660
--------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.04 0
01/01/2008 to 12/31/2008 $10.04 $7.19 1,187,445
--------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.19 0
01/01/2008 to 12/31/2008 $10.19 $6.98 399,983
--------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 0
01/01/2008 to 12/31/2008 $10.17 $7.62 580,121
--------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.00 7,406
01/01/2008 to 12/31/2008 $10.00 $7.19 357,647
--------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 48,832
01/01/2008 to 12/31/2008 $9.98 $9.35 677,200
--------------------------------------------------------------------------------------------------------------
AST Investment Grade Bond Portfolio
01/28/2008* to 12/31/2008 $10.00 $10.77 17,534,926
--------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2015
01/28/2008* to 12/31/2008 $10.00 $11.36 23,691
A-18
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2018
01/28/2008* to 12/31/2008 $10.00 $12.10 3,739
-------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2019
01/28/2008* to 12/31/2008 $10.00 $12.17 18,903
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.18 $6.12 18,489
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.58 25,631
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.49 330,061
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.66 1,369,089
* Denotes the start date of these sub-accounts.
ASAP III
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With LT5, HDV and EBP (2.60%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
03/14/2005 to 12/31/2005 $9.91 $10.57 0
01/01/2006 to 12/31/2006 $10.57 $12.64 0
01/01/2007 to 12/31/2007 $12.64 $13.47 0
01/01/2008 to 12/31/2008 $13.47 $7.69 142
---------------------------------------------------------------------------------------------------
AST International Growth Portfolio
03/14/2005 to 12/31/2005 $9.92 $11.20 0
01/01/2006 to 12/31/2006 $11.20 $13.19 0
01/01/2007 to 12/31/2007 $13.19 $15.30 0
01/01/2008 to 12/31/2008 $15.30 $7.41 1,600
---------------------------------------------------------------------------------------------------
AST International Value Portfolio
03/14/2005 to 12/31/2005 $9.92 $10.62 0
01/01/2006 to 12/31/2006 $10.62 $13.19 0
01/01/2007 to 12/31/2007 $13.19 $15.13 0
01/01/2008 to 12/31/2008 $15.13 $8.25 676
---------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
03/14/2005 to 12/31/2005 $9.97 $10.39 0
01/01/2006 to 12/31/2006 $10.39 $12.59 0
01/01/2007 to 12/31/2007 $12.59 $13.41 0
01/01/2008 to 12/31/2008 $13.41 $8.62 186
---------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.35 0
01/01/2006 to 12/31/2006 $10.35 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $11.84 0
01/01/2008 to 12/31/2008 $11.84 $7.50 729
A-19
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.23 0
01/01/2006 to 12/31/2006 $10.23 $10.74 0
01/01/2007 to 12/31/2007 $10.74 $12.41 0
01/01/2008 to 12/31/2008 $12.41 $6.95 0
---------------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.87 0
01/01/2006 to 12/31/2006 $10.87 $11.96 0
01/01/2007 to 12/31/2007 $11.96 $12.95 0
01/01/2008 to 12/31/2008 $12.95 $7.05 926
---------------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.56 0
01/01/2006 to 12/31/2006 $10.56 $12.35 0
01/01/2007 to 12/31/2007 $12.35 $11.35 0
01/01/2008 to 12/31/2008 $11.35 $7.77 1,446
---------------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.04 $9.94 0
01/01/2006 to 12/31/2006 $9.94 $11.61 0
01/01/2007 to 12/31/2007 $11.61 $9.30 0
01/01/2008 to 07/18/2008 $9.30 $8.47 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.49 0
01/01/2006 to 12/31/2006 $10.49 $10.86 0
01/01/2007 to 12/31/2007 $10.86 $12.63 0
01/01/2008 to 12/31/2008 $12.63 $7.28 838
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.05 $11.25 0
01/01/2006 to 12/31/2006 $11.25 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $14.87 0
01/01/2008 to 12/31/2008 $14.87 $8.23 2,895
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.02 $10.80 0
01/01/2006 to 12/31/2006 $10.80 $11.65 0
01/01/2007 to 12/31/2007 $11.65 $11.70 0
01/01/2008 to 12/31/2008 $11.70 $6.58 171
---------------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
03/14/2005 to 12/02/2005 $10.09 $11.63 0
---------------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.06 $10.27 0
01/01/2006 to 12/31/2006 $10.27 $11.43 0
01/01/2007 to 12/31/2007 $11.43 $11.44 0
01/01/2008 to 12/31/2008 $11.44 $6.89 17,449
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
03/14/2005 to 12/31/2005 $10.00 $11.65 0
01/01/2006 to 12/31/2006 $11.65 $13.14 0
01/01/2007 to 12/31/2007 $13.14 $17.98 0
01/01/2008 to 12/31/2008 $17.98 $8.76 14,678
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.02 $12.02 0
01/01/2006 to 12/31/2006 $12.02 $12.37 0
01/01/2007 to 12/31/2007 $12.37 $13.04 0
01/01/2008 to 12/31/2008 $13.04 $7.55 1,837
A-20
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.67 0
01/01/2006 to 12/31/2006 $10.67 $11.40 0
01/01/2007 to 12/31/2007 $11.40 $12.78 0
01/01/2008 to 12/31/2008 $12.78 $7.93 0
--------------------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
03/14/2005 to 12/31/2005 $10.13 $10.82 0
01/01/2006 to 12/31/2006 $10.82 $11.30 0
01/01/2007 to 12/31/2007 $11.30 $12.65 0
01/01/2008 to 12/31/2008 $12.65 $6.94 2,548
--------------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.67 0
01/01/2006 to 12/31/2006 $10.67 $11.44 0
01/01/2007 to 12/31/2007 $11.44 $12.69 0
01/01/2008 to 12/31/2008 $12.69 $7.39 3,903
--------------------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.63 0
01/01/2006 to 12/31/2006 $10.63 $12.60 0
01/01/2007 to 12/31/2007 $12.60 $12.42 0
01/01/2008 to 12/31/2008 $12.42 $7.58 644
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
03/14/2005 to 12/02/2005 $10.05 $11.24 0
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.23 0
01/01/2006 to 12/31/2006 $10.23 $12.09 0
01/01/2007 to 12/31/2007 $12.09 $11.36 0
01/01/2008 to 12/31/2008 $11.36 $6.43 168
--------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
03/14/2005 to 12/31/2005 $10.15 $11.92 0
01/01/2006 to 12/31/2006 $11.92 $15.88 0
01/01/2007 to 12/31/2007 $15.88 $12.38 0
01/01/2008 to 12/31/2008 $12.38 $7.83 14,578
--------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.32 0
01/01/2006 to 12/31/2006 $10.32 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $11.25 0
01/01/2008 to 12/31/2008 $11.25 $6.72 0
--------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
03/14/2005 to 12/31/2005 $10.07 $10.25 0
01/01/2006 to 12/31/2006 $10.25 $11.67 0
01/01/2007 to 12/31/2007 $11.67 $11.35 0
01/01/2008 to 12/31/2008 $11.35 $7.21 0
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.18 0
01/01/2006 to 12/31/2006 $10.18 $11.63 0
01/01/2007 to 12/31/2007 $11.63 $11.91 0
01/01/2008 to 12/31/2008 $11.91 $6.88 2,685
--------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.47 0
01/01/2006 to 12/31/2006 $10.47 $12.08 0
01/01/2007 to 12/31/2007 $12.08 $11.42 0
01/01/2008 to 12/31/2008 $11.42 $6.51 2,177
A-21
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $11.41 0
01/01/2007 to 12/31/2007 $11.41 $11.33 0
01/01/2008 to 12/31/2008 $11.33 $9.09 81,669
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.23 0
01/01/2006 to 12/31/2006 $10.23 $10.93 0
01/01/2007 to 12/31/2007 $10.93 $11.60 0
01/01/2008 to 12/31/2008 $11.60 $7.88 8,027
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.27 0
01/01/2006 to 12/31/2006 $10.27 $11.26 0
01/01/2007 to 12/31/2007 $11.26 $11.66 0
01/01/2008 to 12/31/2008 $11.66 $8.41 55,303
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
03/14/2005 to 12/31/2005 $9.95 $9.37 0
01/01/2006 to 12/31/2006 $9.37 $9.70 0
01/01/2007 to 12/31/2007 $9.70 $10.36 0
01/01/2008 to 12/31/2008 $10.36 $9.85 8,317
----------------------------------------------------------------------------------------------------------------------
AST High Yield Portfolio
03/14/2005 to 12/31/2005 $9.98 $9.78 0
01/01/2006 to 12/31/2006 $9.78 $10.51 0
01/01/2007 to 12/31/2007 $10.51 $10.49 0
01/01/2008 to 12/31/2008 $10.49 $7.61 427
----------------------------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.87 0
01/01/2006 to 12/31/2006 $9.87 $10.56 0
01/01/2007 to 12/31/2007 $10.56 $10.91 0
01/01/2008 to 12/31/2008 $10.91 $8.15 128
----------------------------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
03/14/2005 to 12/31/2005 $9.99 $10.07 0
01/01/2006 to 12/31/2006 $10.07 $10.17 0
01/01/2007 to 12/31/2007 $10.17 $10.73 0
01/01/2008 to 12/31/2008 $10.73 $10.22 46,623
----------------------------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.98 0
01/01/2006 to 12/31/2006 $9.98 $10.09 0
01/01/2007 to 12/31/2007 $10.09 $10.49 0
01/01/2008 to 12/31/2008 $10.49 $10.34 49,868
----------------------------------------------------------------------------------------------------------------------
AST Money Market Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.21 0
01/01/2007 to 12/31/2007 $10.21 $10.43 0
01/01/2008 to 12/31/2008 $10.43 $10.41 195,019
----------------------------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
03/14/2005 to 12/31/2005 $9.88 $11.97 0
01/01/2006 to 12/31/2006 $11.97 $15.69 0
01/01/2007 to 12/31/2007 $15.69 $21.92 0
01/01/2008 to 12/31/2008 $21.92 $9.00 1,371
A-22
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
03/14/2005 to 12/31/2005 $10.07 $10.12 0
01/01/2006 to 12/31/2006 $10.12 $11.68 0
01/01/2007 to 12/31/2007 $11.68 $11.70 0
01/01/2008 to 12/31/2008 $11.70 $7.24 0
----------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
03/14/2005 to 12/31/2005 $10.05 $10.83 0
01/01/2006 to 12/31/2006 $10.83 $12.25 0
01/01/2007 to 12/31/2007 $12.25 $13.38 0
01/01/2008 to 12/31/2008 $13.38 $6.77 221
----------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
03/14/2005 to 12/31/2005 $10.00 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.45 0
01/01/2007 to 12/31/2007 $11.45 $12.01 0
01/01/2008 to 12/31/2008 $12.01 $6.49 0
----------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
03/14/2005 to 12/31/2005 $10.06 $11.08 0
01/01/2006 to 12/31/2006 $11.08 $11.36 0
01/01/2007 to 12/31/2007 $11.36 $12.37 0
01/01/2008 to 12/31/2008 $12.37 $8.60 1,326
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
03/14/2005 to 12/31/2005 $10.06 $10.66 0
01/01/2006 to 12/31/2006 $10.66 $12.09 0
01/01/2007 to 12/31/2007 $12.09 $9.16 0
01/01/2008 to 12/31/2008 $9.16 $3.62 3,450
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
03/14/2005 to 12/31/2005 $9.90 $10.92 0
01/01/2006 to 12/31/2006 $10.92 $13.09 0
01/01/2007 to 12/31/2007 $13.09 $14.67 0
01/01/2008 to 12/31/2008 $14.67 $8.36 0
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
03/14/2005 to 04/15/2005 $10.03 $9.26 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
03/14/2005 to 12/31/2005 $10.02 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $10.87 0
01/01/2007 to 12/31/2007 $10.87 $11.86 0
01/01/2008 to 12/31/2008 $11.86 $8.41 103
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.36 0
01/01/2006 to 12/31/2006 $11.36 $12.29 0
01/01/2007 to 12/31/2007 $12.29 $13.29 0
01/01/2008 to 12/31/2008 $13.29 $7.62 0
----------------------------------------------------------------------------------------------
ProFund VP Europe 30
03/14/2005 to 12/31/2005 $9.99 $10.45 0
01/01/2006 to 12/31/2006 $10.45 $11.96 0
01/01/2007 to 12/31/2007 $11.96 $13.35 0
01/01/2008 to 12/31/2008 $13.35 $7.28 0
----------------------------------------------------------------------------------------------
ProFund VP Asia 30
03/14/2005 to 12/31/2005 $10.00 $11.13 0
01/01/2006 to 12/31/2006 $11.13 $15.11 0
01/01/2007 to 12/31/2007 $15.11 $21.73 0
01/01/2008 to 12/31/2008 $21.73 $10.41 0
A-23
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Japan
03/14/2005 to 12/31/2005 $9.95 $13.42 0
01/01/2006 to 12/31/2006 $13.42 $14.49 0
01/01/2007 to 12/31/2007 $14.49 $12.70 0
01/01/2008 to 12/31/2008 $12.70 $7.32 0
-------------------------------------------------------------------------------------------
ProFund VP Banks
03/14/2005 to 12/31/2005 $10.08 $10.13 0
01/01/2006 to 12/31/2006 $10.13 $11.39 0
01/01/2007 to 12/31/2007 $11.39 $8.07 0
01/01/2008 to 12/31/2008 $8.07 $4.17 0
-------------------------------------------------------------------------------------------
ProFund VP Basic Materials
03/14/2005 to 12/31/2005 $9.98 $9.51 0
01/01/2006 to 12/31/2006 $9.51 $10.70 0
01/01/2007 to 12/31/2007 $10.70 $13.61 0
01/01/2008 to 12/31/2008 $13.61 $6.44 0
-------------------------------------------------------------------------------------------
ProFund VP Biotechnology
03/14/2005 to 12/31/2005 $10.48 $13.53 0
01/01/2006 to 12/31/2006 $13.53 $12.64 0
01/01/2007 to 12/31/2007 $12.64 $12.17 0
01/01/2008 to 12/31/2008 $12.17 $12.07 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
03/14/2005 to 12/31/2005 $10.04 $9.70 0
01/01/2006 to 12/31/2006 $9.70 $10.58 0
01/01/2007 to 12/31/2007 $10.58 $9.45 0
01/01/2008 to 12/31/2008 $9.45 $6.32 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
03/14/2005 to 12/31/2005 $10.03 $9.76 0
01/01/2006 to 12/31/2006 $9.76 $10.71 0
01/01/2007 to 12/31/2007 $10.71 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $8.01 0
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
03/14/2005 to 12/31/2005 $10.07 $10.96 0
01/01/2006 to 12/31/2006 $10.96 $12.88 0
01/01/2007 to 12/31/2007 $12.88 $16.61 0
01/01/2008 to 12/31/2008 $16.61 $10.20 0
-------------------------------------------------------------------------------------------
ProFund VP Financials
03/14/2005 to 12/31/2005 $10.08 $10.56 0
01/01/2006 to 12/31/2006 $10.56 $12.07 0
01/01/2007 to 12/31/2007 $12.07 $9.51 0
01/01/2008 to 12/31/2008 $9.51 $4.58 0
-------------------------------------------------------------------------------------------
ProFund VP Health Care
03/14/2005 to 12/31/2005 $10.09 $10.49 0
01/01/2006 to 12/31/2006 $10.49 $10.76 0
01/01/2007 to 12/31/2007 $10.76 $11.17 0
01/01/2008 to 12/31/2008 $11.17 $8.23 0
-------------------------------------------------------------------------------------------
ProFund VP Industrials
03/14/2005 to 12/31/2005 $10.06 $10.10 0
01/01/2006 to 12/31/2006 $10.10 $10.98 0
01/01/2007 to 12/31/2007 $10.98 $11.95 0
01/01/2008 to 12/31/2008 $11.95 $6.92 0
A-24
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Internet
03/14/2005 to 12/31/2005 $9.94 $12.76 0
01/01/2006 to 12/31/2006 $12.76 $12.59 0
01/01/2007 to 12/31/2007 $12.59 $13.51 0
01/01/2008 to 12/31/2008 $13.51 $7.26 0
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
03/14/2005 to 12/31/2005 $10.02 $9.47 0
01/01/2006 to 12/31/2006 $9.47 $10.35 0
01/01/2007 to 12/31/2007 $10.35 $10.31 0
01/01/2008 to 12/31/2008 $10.31 $8.08 0
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
03/14/2005 to 12/31/2005 $9.89 $12.04 0
01/01/2006 to 12/31/2006 $12.04 $12.59 0
01/01/2007 to 12/31/2007 $12.59 $15.01 0
01/01/2008 to 12/31/2008 $15.01 $10.12 0
---------------------------------------------------------------------------------------
ProFund VP Real Estate
03/14/2005 to 12/31/2005 $10.15 $11.21 0
01/01/2006 to 12/31/2006 $11.21 $14.47 0
01/01/2007 to 12/31/2007 $14.47 $11.33 0
01/01/2008 to 12/31/2008 $11.33 $6.48 0
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
03/14/2005 to 12/31/2005 $10.04 $10.68 0
01/01/2006 to 12/31/2006 $10.68 $9.67 0
01/01/2007 to 12/31/2007 $9.67 $10.08 0
01/01/2008 to 12/31/2008 $10.08 $4.93 0
---------------------------------------------------------------------------------------
ProFund VP Technology
03/14/2005 to 12/31/2005 $10.03 $10.57 0
01/01/2006 to 12/31/2006 $10.57 $11.13 0
01/01/2007 to 12/31/2007 $11.13 $12.40 0
01/01/2008 to 12/31/2008 $12.40 $6.72 0
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
03/14/2005 to 12/31/2005 $10.03 $9.77 0
01/01/2006 to 12/31/2006 $9.77 $12.78 0
01/01/2007 to 12/31/2007 $12.78 $13.49 0
01/01/2008 to 12/31/2008 $13.49 $8.61 0
---------------------------------------------------------------------------------------
ProFund VP Utilities
03/14/2005 to 12/31/2005 $10.17 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $12.35 0
01/01/2007 to 12/31/2007 $12.35 $13.93 0
01/01/2008 to 12/31/2008 $13.93 $9.40 0
---------------------------------------------------------------------------------------
ProFund VP Bull
03/14/2005 to 12/31/2005 $10.05 $10.15 0
01/01/2006 to 12/31/2006 $10.15 $11.24 0
01/01/2007 to 12/31/2007 $11.24 $11.34 0
01/01/2008 to 12/31/2008 $11.34 $6.88 0
---------------------------------------------------------------------------------------
ProFund VP Bear
03/14/2005 to 12/31/2005 $9.94 $9.57 0
01/01/2006 to 12/31/2006 $9.57 $8.63 0
01/01/2007 to 12/31/2007 $8.63 $8.45 0
01/01/2008 to 12/31/2008 $8.45 $11.52 0
A-25
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP UltraBull
03/14/2005 to 12/31/2005 $10.11 $10.28 0
01/01/2006 to 12/31/2006 $10.28 $12.32 0
01/01/2007 to 12/31/2007 $12.32 $12.10 0
01/01/2008 to 12/31/2008 $12.10 $3.84 0
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
03/14/2005 to 12/31/2005 $10.06 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $10.88 0
01/01/2007 to 12/31/2007 $10.88 $12.46 0
01/01/2008 to 12/31/2008 $12.46 $6.98 0
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
03/14/2005 to 12/31/2005 $9.94 $9.17 0
01/01/2006 to 12/31/2006 $9.17 $8.81 0
01/01/2007 to 12/31/2007 $8.81 $7.59 0
01/01/2008 to 12/31/2008 $7.59 $10.95 0
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
03/14/2005 to 12/31/2005 $10.15 $11.08 0
01/01/2006 to 12/31/2006 $11.08 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $14.16 0
01/01/2008 to 12/31/2008 $14.16 $3.76 0
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
03/14/2005 to 12/31/2005 $10.10 $10.63 0
01/01/2006 to 12/31/2006 $10.63 $11.63 0
01/01/2007 to 12/31/2007 $11.63 $11.44 0
01/01/2008 to 12/31/2008 $11.44 $7.10 0
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
03/14/2005 to 12/31/2005 $10.06 $10.79 0
01/01/2006 to 12/31/2006 $10.79 $10.93 0
01/01/2007 to 12/31/2007 $10.93 $11.89 0
01/01/2008 to 12/31/2008 $11.89 $7.09 0
---------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
03/14/2005 to 12/31/2005 $10.15 $11.42 0
01/01/2006 to 12/31/2006 $11.42 $12.31 0
01/01/2007 to 12/31/2007 $12.31 $12.70 0
01/01/2008 to 12/31/2008 $12.70 $4.02 0
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
03/14/2005 to 12/31/2005 $10.04 $10.33 0
01/01/2006 to 12/31/2006 $10.33 $11.82 0
01/01/2007 to 12/31/2007 $11.82 $10.68 0
01/01/2008 to 12/31/2008 $10.68 $7.21 0
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
03/14/2005 to 12/31/2005 $10.04 $10.51 0
01/01/2006 to 12/31/2006 $10.51 $11.13 0
01/01/2007 to 12/31/2007 $11.13 $11.28 0
01/01/2008 to 12/31/2008 $11.28 $7.25 0
---------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
03/14/2005 to 12/31/2005 $10.12 $10.69 0
01/01/2006 to 12/31/2006 $10.69 $13.13 0
01/01/2007 to 12/31/2007 $13.13 $11.10 0
01/01/2008 to 12/31/2008 $11.10 $3.65 0
A-26
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
03/14/2005 to 12/31/2005 $10.08 $10.58 0
01/01/2006 to 12/31/2006 $10.58 $9.84 0
01/01/2007 to 12/31/2007 $9.84 $10.55 0
01/01/2008 to 12/31/2008 $10.55 $15.38 0
--------------------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
03/14/2005 to 12/31/2005 $9.92 $9.11 0
01/01/2006 to 12/31/2006 $9.11 $9.78 0
01/01/2007 to 12/31/2007 $9.78 $9.03 0
01/01/2008 to 12/31/2008 $9.03 $5.45 0
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.49 0
01/01/2006 to 12/31/2006 $10.49 $11.20 0
01/01/2007 to 12/31/2007 $11.20 $11.47 0
01/01/2008 to 12/31/2008 $11.47 $10.66 0
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.77 0
01/01/2006 to 12/31/2006 $9.77 $9.90 0
01/01/2007 to 12/31/2007 $9.90 $10.19 0
01/01/2008 to 12/31/2008 $10.19 $5.58 0
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
03/14/2005 to 12/31/2005 $10.02 $10.47 0
01/01/2006 to 12/31/2006 $10.47 $11.37 0
01/01/2007 to 12/31/2007 $11.37 $12.12 0
01/01/2008 to 12/31/2008 $12.12 $6.51 0
--------------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
03/14/2005 to 12/31/2005 $10.03 $9.56 0
01/01/2006 to 12/31/2006 $9.56 $11.70 0
01/01/2007 to 12/31/2007 $11.70 $11.47 0
01/01/2008 to 12/31/2008 $11.47 $7.98 0
--------------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.70 0
01/01/2006 to 12/31/2006 $9.70 $11.16 0
01/01/2007 to 12/31/2007 $11.16 $10.99 0
01/01/2008 to 12/31/2008 $10.99 $6.36 222
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
03/14/2005 to 12/31/2005 $10.03 $10.86 0
01/01/2006 to 12/31/2006 $10.86 $14.65 0
01/01/2007 to 12/31/2007 $14.65 $16.17 0
01/01/2008 to 12/31/2008 $16.17 $9.01 1,196
--------------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
03/14/2005 to 12/31/2005 $10.10 $10.51 0
01/01/2006 to 12/31/2006 $10.51 $10.54 0
01/01/2007 to 12/31/2007 $10.54 $10.69 0
01/01/2008 to 12/31/2008 $10.69 $7.51 0
A-27
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
03/14/2005 to 12/31/2005 $10.06 $10.78 0
01/01/2006 to 12/31/2006 $10.78 $11.44 0
01/01/2007 to 12/31/2007 $11.44 $13.56 0
01/01/2008 to 12/31/2008 $13.56 $6.48 0
----------------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
03/14/2005 to 12/31/2005 $10.00 $11.14 0
01/01/2006 to 12/31/2006 $11.14 $11.17 0
01/01/2007 to 12/31/2007 $11.17 $12.85 0
01/01/2008 to 12/31/2008 $12.85 $5.66 0
----------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
03/14/2005 to 12/31/2005 $10.03 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.64 0
01/01/2007 to 12/31/2007 $10.64 $11.09 0
01/01/2008 to 12/31/2008 $11.09 $6.96 0
----------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
03/14/2005 to 12/31/2005 $10.07 $10.23 0
01/01/2006 to 12/31/2006 $10.23 $11.83 0
01/01/2007 to 12/31/2007 $11.83 $11.54 0
01/01/2008 to 12/31/2008 $11.54 $6.69 0
----------------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
03/14/2005 to 12/31/2005 $9.93 $8.97 0
01/01/2006 to 12/31/2006 $8.97 $8.42 0
01/01/2007 to 12/31/2007 $8.42 $7.96 0
01/01/2008 to 12/31/2008 $7.96 $10.23 0
----------------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
03/14/2005 to 12/31/2005 $9.95 $9.20 0
01/01/2006 to 12/31/2006 $9.20 $7.90 0
01/01/2007 to 12/31/2007 $7.90 $8.05 0
01/01/2008 to 12/31/2008 $8.05 $9.72 0
----------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
03/14/2005 to 12/31/2005 $9.93 $11.21 0
01/01/2006 to 12/31/2006 $11.21 $13.22 0
01/01/2007 to 12/31/2007 $13.22 $15.39 0
01/01/2008 to 12/31/2008 $15.39 $7.45 0
----------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $11.26 0
01/01/2007 to 12/31/2007 $11.26 $12.01 0
01/01/2008 to 12/31/2008 $12.01 $6.75 12,663
----------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 0
01/01/2006 to 12/31/2006 $10.00 $11.07 0
01/01/2007 to 12/31/2007 $11.07 $11.83 0
01/01/2008 to 12/31/2008 $11.83 $7.50 258,438
----------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 0
01/01/2006 to 12/31/2006 $10.01 $10.90 0
01/01/2007 to 12/31/2007 $10.90 $11.59 0
01/01/2008 to 12/31/2008 $11.59 $7.70 65,805
A-28
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $11.46 0
01/01/2008 to 12/31/2008 $11.46 $7.96 157,625
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 0
01/01/2006 to 12/31/2006 $10.03 $10.55 0
01/01/2007 to 12/31/2007 $10.55 $11.17 0
01/01/2008 to 12/31/2008 $11.17 $8.76 212,163
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.58 0
01/01/2007 to 12/31/2007 $10.58 $11.28 0
01/01/2008 to 12/31/2008 $11.28 $7.71 46,482
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $11.10 0
01/01/2008 to 12/31/2008 $11.10 $7.08 52,619
--------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.40 0
01/01/2007 to 12/31/2007 $10.40 $11.29 0
01/01/2008 to 12/31/2008 $11.29 $6.52 78,978
--------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.49 0
01/01/2008 to 12/31/2008 $11.49 $7.25 16,806
--------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.03 0
01/01/2008 to 12/31/2008 $10.03 $7.08 61,969
--------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.18 0
01/01/2008 to 12/31/2008 $10.18 $6.87 32,247
--------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.16 0
01/01/2008 to 12/31/2008 $10.16 $7.50 18,380
--------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.99 0
01/01/2008 to 12/31/2008 $9.99 $7.08 3,294
--------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.97 0
01/01/2008 to 12/31/2008 $9.97 $9.20 10,755
--------------------------------------------------------------------------------------------------------------
AST Investment Grade Bond Portfolio
06/30/2008* to 12/31/2008 $10.01 $10.89 0
--------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2015
06/30/2008* to 12/31/2008 $10.04 $11.65 206,480
--------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2018
06/30/2008* to 12/31/2008 $10.06 $12.48 39,538
--------------------------------------------------------------------------------------------------------------
AST Bond Portfolio 2019
06/30/2008* to 12/31/2008 $10.08 $12.55 5,428
--------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.17 $6.09 1,891
A-29
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.55 0
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.44 7,405
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.60 131,309
* Denotes the start date of these sub-accounts.
APEX II
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With No Optional Benefits (1.65%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
01/01/2002 to 12/31/2002 -- $8.56 2,569,506
01/01/2003 to 12/31/2003 $8.56 $11.00 2,415,394
01/01/2004 to 12/31/2004 $11.00 $12.67 3,227,381
01/01/2005 to 12/31/2005 $12.67 $13.84 5,621,834
01/01/2006 to 12/31/2006 $13.84 $16.71 4,715,269
01/01/2007 to 12/31/2007 $16.71 $17.98 4,504,935
01/01/2008 to 12/31/2008 $17.98 $10.37 2,459,224
---------------------------------------------------------------------------------------------------
AST International Growth Portfolio
01/01/2002 to 12/31/2002 -- $9.72 835,523
01/01/2003 to 12/31/2003 $9.72 $13.39 5,547,558
01/01/2004 to 12/31/2004 $13.39 $15.30 11,265,469
01/01/2005 to 12/31/2005 $15.30 $17.54 12,141,521
01/01/2006 to 12/31/2006 $17.54 $20.87 9,628,446
01/01/2007 to 12/31/2007 $20.87 $24.43 8,347,423
01/01/2008 to 12/31/2008 $24.43 $11.96 6,129,240
---------------------------------------------------------------------------------------------------
AST International Value Portfolio
01/01/2002 to 12/31/2002 -- $8.19 269,995
01/01/2003 to 12/31/2003 $8.19 $10.79 1,201,268
01/01/2004 to 12/31/2004 $10.79 $12.84 1,897,469
01/01/2005 to 12/31/2005 $12.84 $14.36 2,013,543
01/01/2006 to 12/31/2006 $14.36 $18.00 3,305,654
01/01/2007 to 12/31/2007 $18.00 $20.85 4,044,519
01/01/2008 to 12/31/2008 $20.85 $11.48 2,393,870
---------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
01/01/2002 to 12/31/2002 -- $9.04 969,509
01/01/2003 to 12/31/2003 $9.04 $11.30 1,393,001
01/01/2004 to 12/31/2004 $11.30 $13.16 2,276,801
01/01/2005 to 12/31/2005 $13.16 $13.92 1,907,777
01/01/2006 to 12/31/2006 $13.92 $17.02 2,905,252
01/01/2007 to 12/31/2007 $17.02 $18.31 2,119,181
01/01/2008 to 12/31/2008 $18.31 $11.88 1,412,847
A-30
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.92 1,970,250
01/01/2003 to 12/31/2003 $6.92 $9.89 3,292,593
01/01/2004 to 12/31/2004 $9.89 $9.05 2,242,129
01/01/2005 to 12/31/2005 $9.05 $9.04 2,134,731
01/01/2006 to 12/31/2006 $9.04 $10.01 1,867,490
01/01/2007 to 12/31/2007 $10.01 $10.55 1,740,242
01/01/2008 to 12/31/2008 $10.55 $6.74 1,375,635
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 639,695
01/01/2003 to 12/31/2003 $7.67 $11.13 1,682,193
01/01/2004 to 12/31/2004 $11.13 $11.98 1,618,719
01/01/2005 to 12/31/2005 $11.98 $11.83 1,385,431
01/01/2006 to 12/31/2006 $11.83 $12.53 1,174,654
01/01/2007 to 12/31/2007 $12.53 $14.63 1,215,825
01/01/2008 to 12/31/2008 $14.63 $8.27 768,282
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.64 1,255,415
01/01/2003 to 12/31/2003 $7.64 $12.74 3,085,373
01/01/2004 to 12/31/2004 $12.74 $15.42 4,808,453
01/01/2005 to 12/31/2005 $15.42 $16.60 5,464,855
01/01/2006 to 12/31/2006 $16.60 $18.43 4,641,175
01/01/2007 to 12/31/2007 $18.43 $20.16 4,026,646
01/01/2008 to 12/31/2008 $20.16 $11.08 2,977,983
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.26 1,492,775
01/01/2003 to 12/31/2003 $9.26 $12.85 1,504,296
01/01/2004 to 12/31/2004 $12.85 $15.19 1,541,896
01/01/2005 to 12/31/2005 $15.19 $15.68 1,243,642
01/01/2006 to 12/31/2006 $15.68 $18.08 1,000,596
01/01/2007 to 12/31/2007 $18.08 $16.87 758,170
01/01/2008 to 12/31/2008 $16.87 $12.17 667,006
-------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.30 6,141,523
01/01/2003 to 12/31/2003 $9.30 $12.42 10,183,346
01/01/2004 to 12/31/2004 $12.42 $14.22 10,785,030
01/01/2005 to 12/31/2005 $14.22 $14.91 11,285,282
01/01/2006 to 12/31/2006 $14.91 $17.61 9,098,178
01/01/2007 to 12/31/2007 $17.61 $16.34 8,130,632
01/01/2008 to 12/31/2008 $16.34 $11.30 6,242,966
-------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $7.66 423,387
01/01/2003 to 12/31/2003 $7.66 $10.81 1,134,865
01/01/2004 to 12/31/2004 $10.81 $12.99 2,143,020
01/01/2005 to 12/31/2005 $12.99 $12.92 2,106,236
01/01/2006 to 12/31/2006 $12.92 $15.25 1,874,276
01/01/2007 to 12/31/2007 $15.25 $12.33 1,578,237
01/01/2008 to 07/18/2008 $12.33 $11.30 0
A-31
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.97 1,273,118
01/01/2003 to 12/31/2003 $7.97 $10.31 3,027,057
01/01/2004 to 12/31/2004 $10.31 $11.80 4,375,813
01/01/2005 to 12/31/2005 $11.80 $12.16 5,391,424
01/01/2006 to 12/31/2006 $12.16 $12.71 4,189,111
01/01/2007 to 12/31/2007 $12.71 $14.92 3,918,725
01/01/2008 to 12/31/2008 $14.92 $8.69 2,808,881
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.41 2,175,250
01/01/2003 to 12/31/2003 $7.41 $9.51 3,415,318
01/01/2004 to 12/31/2004 $9.51 $10.86 4,715,301
01/01/2005 to 12/31/2005 $10.86 $12.12 5,728,444
01/01/2006 to 12/31/2006 $12.12 $13.59 5,378,198
01/01/2007 to 12/31/2007 $13.59 $16.34 6,560,811
01/01/2008 to 12/31/2008 $16.34 $9.13 3,042,143
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.96 5,118,558
01/01/2003 to 12/31/2003 $8.96 $12.01 8,530,129
01/01/2004 to 12/31/2004 $12.01 $14.51 11,461,684
01/01/2005 to 12/31/2005 $14.51 $15.99 12,260,006
01/01/2006 to 12/31/2006 $15.99 $17.42 9,574,218
01/01/2007 to 12/31/2007 $17.42 $17.67 8,191,847
01/01/2008 to 12/31/2008 $17.67 $10.03 5,184,438
---------------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.80 658,419
01/01/2003 to 12/31/2003 $6.80 $9.07 2,002,166
01/01/2004 to 12/31/2004 $9.07 $9.67 1,798,457
01/01/2005 to 12/02/2005 $9.67 $11.10 0
---------------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.17 1,200,225
01/01/2003 to 12/31/2003 $8.17 $10.91 2,513,413
01/01/2004 to 12/31/2004 $10.91 $12.38 2,587,064
01/01/2005 to 12/31/2005 $12.38 $12.83 1,988,251
01/01/2006 to 12/31/2006 $12.83 $14.42 1,907,063
01/01/2007 to 12/31/2007 $14.42 $14.57 1,540,522
01/01/2008 to 12/31/2008 $14.57 $8.87 1,381,269
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
01/01/2002 to 12/31/2002 -- $9.59 724,670
01/01/2003 to 12/31/2003 $9.59 $12.59 2,011,627
01/01/2004 to 12/31/2004 $12.59 $16.25 2,040,188
01/01/2005 to 12/31/2005 $16.25 $21.00 3,677,613
01/01/2006 to 12/31/2006 $21.00 $23.93 2,942,718
01/01/2007 to 12/31/2007 $23.93 $33.07 3,950,105
01/01/2008 to 12/31/2008 $33.07 $16.27 2,088,027
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.46 1,869,353
01/01/2003 to 12/31/2003 $7.46 $9.08 2,098,873
01/01/2004 to 12/31/2004 $9.08 $9.44 2,378,881
01/01/2005 to 12/31/2005 $9.44 $10.81 3,925,742
01/01/2006 to 12/31/2006 $10.81 $11.23 4,132,529
01/01/2007 to 12/31/2007 $11.23 $11.96 5,137,246
01/01/2008 to 12/31/2008 $11.96 $6.99 4,437,756
A-32
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.58 2,930,432
01/01/2003 to 12/31/2003 $7.58 $9.16 4,784,269
01/01/2004 to 12/31/2004 $9.16 $9.97 4,529,834
01/01/2005 to 12/31/2005 $9.97 $10.43 5,915,443
01/01/2006 to 12/31/2006 $10.43 $11.25 4,572,301
01/01/2007 to 12/31/2007 $11.25 $12.73 3,902,210
01/01/2008 to 12/31/2008 $12.73 $7.98 3,159,245
-------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.32 10,144,317
01/01/2003 to 12/31/2003 $8.32 $10.78 20,138,164
01/01/2004 to 12/31/2004 $10.78 $12.26 28,117,310
01/01/2005 to 12/31/2005 $12.26 $12.88 32,140,125
01/01/2006 to 12/31/2006 $12.88 $13.59 26,497,526
01/01/2007 to 12/31/2007 $13.59 $15.36 23,963,028
01/01/2008 to 12/31/2008 $15.36 $8.51 16,673,165
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 1,349,939
01/01/2003 to 12/31/2003 $7.67 $9.45 2,053,023
01/01/2004 to 12/31/2004 $9.45 $9.64 2,785,100
01/01/2005 to 12/31/2005 $9.64 $9.80 2,531,901
01/01/2006 to 12/31/2006 $9.80 $10.60 2,498,654
01/01/2007 to 12/31/2007 $10.60 $11.88 2,806,534
01/01/2008 to 12/31/2008 $11.88 $6.98 1,877,493
-------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.66 664,649
01/01/2003 to 12/31/2003 $8.66 $10.78 1,072,256
01/01/2004 to 12/31/2004 $10.78 $12.53 2,351,197
01/01/2005 to 12/31/2005 $12.53 $13.47 2,585,881
01/01/2006 to 12/31/2006 $13.47 $16.13 4,397,725
01/01/2007 to 12/31/2007 $16.13 $16.05 3,751,417
01/01/2008 to 12/31/2008 $16.05 $9.90 2,589,179
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
01/01/2002 to 12/31/2002 -- $7.99 965,912
01/01/2003 to 12/31/2003 $7.99 $9.91 1,387,072
01/01/2004 to 12/31/2004 $9.91 $10.72 1,620,391
01/01/2005 to 12/02/2005 $10.72 $11.86 0
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
01/01/2002 to 12/31/2002 -- $8.76 6,005,922
01/01/2003 to 12/31/2003 $8.76 $11.06 3,621,862
01/01/2004 to 12/31/2004 $11.06 $12.39 4,643,022
01/01/2005 to 12/31/2005 $12.39 $12.86 4,311,857
01/01/2006 to 12/31/2006 $12.86 $15.34 5,318,094
01/01/2007 to 12/31/2007 $15.34 $14.55 4,469,636
01/01/2008 to 12/31/2008 $14.55 $8.32 2,874,755
-------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
01/01/2002 to 12/31/2002 -- $10.08 1,563,489
01/01/2003 to 12/31/2003 $10.08 $13.63 3,097,315
01/01/2004 to 12/31/2004 $13.63 $18.49 4,080,179
01/01/2005 to 12/31/2005 $18.49 $20.88 3,749,124
01/01/2006 to 12/31/2006 $20.88 $28.08 3,925,105
01/01/2007 to 12/31/2007 $28.08 $22.11 2,254,421
01/01/2008 to 12/31/2008 $22.11 $14.12 1,741,032
A-33
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
01/01/2002 to 12/31/2002 -- $8.17 3,662,406
01/01/2003 to 12/31/2003 $8.17 $10.23 5,442,511
01/01/2004 to 12/31/2004 $10.23 $11.07 6,845,369
01/01/2005 to 12/31/2005 $11.07 $11.27 6,774,077
01/01/2006 to 12/31/2006 $11.27 $12.48 6,255,253
01/01/2007 to 12/31/2007 $12.48 $12.53 5,371,782
01/01/2008 to 12/31/2008 $12.53 $7.55 2,747,511
----------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.25 1,751,136
01/01/2003 to 12/31/2003 $8.25 $10.45 2,115,438
01/01/2004 to 12/31/2004 $10.45 $11.57 4,670,846
01/01/2005 to 12/31/2005 $11.57 $11.90 4,205,656
01/01/2006 to 12/31/2006 $11.90 $13.68 3,984,557
01/01/2007 to 12/31/2007 $13.68 $13.44 3,435,528
01/01/2008 to 12/31/2008 $13.44 $8.62 2,803,150
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
01/01/2002 to 12/31/2002 -- $8.06 6,667,373
01/01/2003 to 12/31/2003 $8.06 $10.50 21,264,670
01/01/2004 to 12/31/2004 $10.50 $11.46 25,850,506
01/01/2005 to 12/31/2005 $11.46 $11.81 31,190,346
01/01/2006 to 12/31/2006 $11.81 $13.62 23,350,650
01/01/2007 to 12/31/2007 $13.62 $14.08 19,997,748
01/01/2008 to 12/31/2008 $14.08 $8.22 14,384,005
----------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.34 2,110,071
01/01/2003 to 12/31/2003 $8.34 $9.83 2,647,064
01/01/2004 to 12/31/2004 $9.83 $11.17 3,717,848
01/01/2005 to 12/31/2005 $11.17 $11.69 5,245,458
01/01/2006 to 12/31/2006 $11.69 $13.62 5,568,043
01/01/2007 to 12/31/2007 $13.62 $13.00 4,973,375
01/01/2008 to 12/31/2008 $13.00 $7.48 4,027,564
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
01/01/2002 to 12/31/2002 -- $8.71 847,517
01/01/2003 to 12/31/2003 $8.71 $10.24 898,161
01/01/2004 to 12/31/2004 $10.24 $11.19 1,061,887
01/01/2005 to 12/31/2005 $11.19 $11.77 1,055,034
01/01/2006 to 12/31/2006 $11.77 $12.86 1,120,866
01/01/2007 to 12/31/2007 $12.86 $12.90 2,745,236
01/01/2008 to 12/31/2008 $12.90 $10.45 15,430,642
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.14 1,126,058
01/01/2003 to 12/31/2003 $9.14 $10.69 2,045,205
01/01/2004 to 12/31/2004 $10.69 $11.46 2,335,598
01/01/2005 to 12/31/2005 $11.46 $11.79 2,294,529
01/01/2006 to 12/31/2006 $11.79 $12.72 2,165,859
01/01/2007 to 12/31/2007 $12.72 $13.62 2,277,264
01/01/2008 to 12/31/2008 $13.62 $9.35 3,074,479
A-34
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.09 921,329
01/01/2003 to 12/31/2003 $9.09 $11.09 2,243,566
01/01/2004 to 12/31/2004 $11.09 $12.13 3,551,315
01/01/2005 to 12/31/2005 $12.13 $12.49 4,192,627
01/01/2006 to 12/31/2006 $12.49 $13.82 4,776,442
01/01/2007 to 12/31/2007 $13.82 $14.45 6,387,795
01/01/2008 to 12/31/2008 $14.45 $10.52 10,697,390
----------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
01/01/2002 to 12/31/2002 -- $11.34 1,739,313
01/01/2003 to 12/31/2003 $11.34 $12.59 2,962,471
01/01/2004 to 12/31/2004 $12.59 $13.45 4,717,822
01/01/2005 to 12/31/2005 $13.45 $12.64 6,261,824
01/01/2006 to 12/31/2006 $12.64 $13.21 6,093,700
01/01/2007 to 12/31/2007 $13.21 $14.24 6,452,566
01/01/2008 to 12/31/2008 $14.24 $13.67 4,228,137
----------------------------------------------------------------------------------------------------
AST High Yield Portfolio
01/01/2002 to 12/31/2002 -- $9.71 5,592,940
01/01/2003 to 12/31/2003 $9.71 $11.61 12,201,163
01/01/2004 to 12/31/2004 $11.61 $12.69 13,717,128
01/01/2005 to 12/31/2005 $12.69 $12.62 9,658,908
01/01/2006 to 12/31/2006 $12.62 $13.70 9,653,937
01/01/2007 to 12/31/2007 $13.70 $13.80 6,461,538
01/01/2008 to 12/31/2008 $13.80 $10.11 5,931,752
----------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
01/01/2002 to 12/31/2002 -- $9.94 4,146,530
01/01/2003 to 12/31/2003 $9.94 $11.61 7,751,236
01/01/2004 to 12/31/2004 $11.61 $12.26 8,369,008
01/01/2005 to 12/31/2005 $12.26 $12.20 12,427,806
01/01/2006 to 12/31/2006 $12.20 $13.17 10,147,675
01/01/2007 to 12/31/2007 $13.17 $13.74 8,365,789
01/01/2008 to 12/31/2008 $13.74 $10.37 8,586,978
----------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.57 20,544,075
01/01/2003 to 12/31/2003 $10.57 $10.95 26,287,388
01/01/2004 to 12/31/2004 $10.95 $11.31 33,208,757
01/01/2005 to 12/31/2005 $11.31 $11.40 22,436,395
01/01/2006 to 12/31/2006 $11.40 $11.63 21,700,661
01/01/2007 to 12/31/2007 $11.63 $12.39 21,645,194
01/01/2008 to 12/31/2008 $12.39 $11.91 20,478,277
----------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.34 11,274,642
01/01/2003 to 12/31/2003 $10.34 $10.51 15,242,856
01/01/2004 to 12/31/2004 $10.51 $10.55 21,299,789
01/01/2005 to 12/31/2005 $10.55 $10.54 28,031,651
01/01/2006 to 12/31/2006 $10.54 $10.76 22,394,558
01/01/2007 to 12/31/2007 $10.76 $11.31 20,392,150
01/01/2008 to 12/31/2008 $11.31 $11.24 15,403,578
A-35
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AST Money Market Portfolio
01/01/2002 to 12/31/2002 -- $9.96 36,255,772
01/01/2003 to 12/31/2003 $9.96 $9.86 32,730,501
01/01/2004 to 12/31/2004 $9.86 $9.78 29,870,585
01/01/2005 to 12/31/2005 $9.78 $9.88 42,442,274
01/01/2006 to 12/31/2006 $9.88 $10.16 46,325,237
01/01/2007 to 12/31/2007 $10.16 $10.48 56,111,128
01/01/2008 to 12/31/2008 $10.48 $10.57 91,319,625
----------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
01/01/2002 to 12/31/2002 -- $8.66 283,466
01/01/2003 to 12/31/2003 $8.66 $13.60 1,763,660
01/01/2004 to 12/31/2004 $13.60 $16.02 2,103,950
01/01/2005 to 12/31/2005 $16.02 $20.72 3,395,891
01/01/2006 to 12/31/2006 $20.72 $27.43 2,835,328
01/01/2007 to 12/31/2007 $27.43 $38.71 3,344,620
01/01/2008 to 12/31/2008 $38.71 $16.04 1,630,334
----------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
01/01/2002 to 12/31/2002 -- $8.25 196,720
01/01/2003 to 12/31/2003 $8.25 $10.23 314,757
01/01/2004 to 12/31/2004 $10.23 $11.18 590,808
01/01/2005 to 12/31/2005 $11.18 $11.59 534,648
01/01/2006 to 12/31/2006 $11.59 $13.51 582,613
01/01/2007 to 12/31/2007 $13.51 $13.66 497,287
01/01/2008 to 12/31/2008 $13.66 $8.53 312,113
----------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
01/01/2002 to 12/31/2002 -- $7.09 543,762
01/01/2003 to 12/31/2003 $7.09 $9.61 889,464
01/01/2004 to 12/31/2004 $9.61 $10.72 668,032
01/01/2005 to 12/31/2005 $10.72 $11.67 602,063
01/01/2006 to 12/31/2006 $11.67 $13.33 605,730
01/01/2007 to 12/31/2007 $13.33 $14.70 631,476
01/01/2008 to 12/31/2008 $14.70 $7.51 384,426
----------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
01/01/2002 to 12/31/2002 -- $5.50 293,307
01/01/2003 to 12/31/2003 $5.50 $7.87 578,651
01/01/2004 to 12/31/2004 $7.87 $8.09 512,424
01/01/2005 to 12/31/2005 $8.09 $8.13 453,392
01/01/2006 to 12/31/2006 $8.13 $8.84 513,442
01/01/2007 to 12/31/2007 $8.84 $9.36 630,739
01/01/2008 to 12/31/2008 $9.36 $5.11 453,772
----------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
01/01/2002 to 12/31/2002 -- $8.00 475,873
01/01/2003 to 12/31/2003 $8.00 $10.05 698,364
01/01/2004 to 12/31/2004 $10.05 $10.64 937,586
01/01/2005 to 12/31/2005 $10.64 $11.31 1,131,376
01/01/2006 to 12/31/2006 $11.31 $11.71 1,250,782
01/01/2007 to 12/31/2007 $11.71 $12.88 1,163,277
01/01/2008 to 12/31/2008 $12.88 $9.04 849,932
A-36
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
01/01/2002 to 12/31/2002 -- $8.76 366,258
01/01/2003 to 12/31/2003 $8.76 $11.17 607,265
01/01/2004 to 12/31/2004 $11.17 $11.94 585,185
01/01/2005 to 12/31/2005 $11.94 $12.43 1,042,992
01/01/2006 to 12/31/2006 $12.43 $14.24 778,674
01/01/2007 to 12/31/2007 $14.24 $10.89 465,175
01/01/2008 to 12/31/2008 $10.89 $4.34 540,897
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
01/01/2002 to 12/31/2002 -- $8.15 113,389
01/01/2003 to 12/31/2003 $8.15 $11.65 189,143
01/01/2004 to 12/31/2004 $11.65 $13.66 414,631
01/01/2005 to 12/31/2005 $13.66 $15.59 689,816
01/01/2006 to 12/31/2006 $15.59 $18.88 1,081,552
01/01/2007 to 12/31/2007 $18.88 $21.35 1,401,663
01/01/2008 to 12/31/2008 $21.35 $12.29 984,931
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
01/01/2002 to 12/31/2002 -- $7.44 127,728
01/01/2003 to 12/31/2003 $7.44 $11.12 815,621
01/01/2004 to 12/31/2004 $11.12 $11.58 702,642
01/01/2005 to 04/15/2005 $11.58 $10.31 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
01/01/2002 to 12/31/2002 -- $7.78 39,943
01/01/2003 to 12/31/2003 $7.78 $10.71 404,789
01/01/2004 to 12/31/2004 $10.71 $11.29 570,123
01/01/2005 to 12/31/2005 $11.29 $11.53 281,775
01/01/2006 to 12/31/2006 $11.53 $12.03 241,307
01/01/2007 to 12/31/2007 $12.03 $13.24 249,298
01/01/2008 to 12/31/2008 $13.24 $9.48 271,517
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.44 606,613
01/01/2006 to 12/31/2006 $11.44 $12.49 553,827
01/01/2007 to 12/31/2007 $12.49 $13.64 604,401
01/01/2008 to 12/31/2008 $13.64 $7.90 346,210
----------------------------------------------------------------------------------------------
ProFund VP Europe 30
01/01/2002 to 12/31/2002 -- $7.93 292,396
01/01/2003 to 12/31/2003 $7.93 $10.83 2,116,400
01/01/2004 to 12/31/2004 $10.83 $12.17 1,812,435
01/01/2005 to 12/31/2005 $12.17 $12.94 1,133,420
01/01/2006 to 12/31/2006 $12.94 $14.95 2,790,577
01/01/2007 to 12/31/2007 $14.95 $16.85 1,487,885
01/01/2008 to 12/31/2008 $16.85 $9.28 649,001
----------------------------------------------------------------------------------------------
ProFund VP Asia 30
01/01/2002 to 12/31/2002 -- $7.75 281,993
01/01/2003 to 12/31/2003 $7.75 $12.57 942,605
01/01/2004 to 12/31/2004 $12.57 $12.30 896,010
01/01/2005 to 12/31/2005 $12.30 $14.45 1,723,105
01/01/2006 to 12/31/2006 $14.45 $19.80 3,073,769
01/01/2007 to 12/31/2007 $19.80 $28.77 2,473,589
01/01/2008 to 12/31/2008 $28.77 $13.91 1,337,672
A-37
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Japan
01/01/2002 to 12/31/2002 -- $7.24 65,845
01/01/2003 to 12/31/2003 $7.24 $9.03 426,718
01/01/2004 to 12/31/2004 $9.03 $9.55 710,879
01/01/2005 to 12/31/2005 $9.55 $13.31 3,413,954
01/01/2006 to 12/31/2006 $13.31 $14.51 1,650,266
01/01/2007 to 12/31/2007 $14.51 $12.85 552,230
01/01/2008 to 12/31/2008 $12.85 $7.47 553,832
-------------------------------------------------------------------------------------------
ProFund VP Banks
01/01/2002 to 12/31/2002 -- $8.56 101,136
01/01/2003 to 12/31/2003 $8.56 $10.90 93,067
01/01/2004 to 12/31/2004 $10.90 $11.98 229,711
01/01/2005 to 12/31/2005 $11.98 $11.77 351,876
01/01/2006 to 12/31/2006 $11.77 $13.35 402,883
01/01/2007 to 12/31/2007 $13.35 $9.55 389,926
01/01/2008 to 12/31/2008 $9.55 $4.99 2,409,143
-------------------------------------------------------------------------------------------
ProFund VP Basic Materials
01/01/2002 to 12/31/2002 -- $8.46 76,331
01/01/2003 to 12/31/2003 $8.46 $10.95 1,512,864
01/01/2004 to 12/31/2004 $10.95 $11.87 529,237
01/01/2005 to 12/31/2005 $11.87 $11.96 681,690
01/01/2006 to 12/31/2006 $11.96 $13.58 779,466
01/01/2007 to 12/31/2007 $13.58 $17.45 2,684,333
01/01/2008 to 12/31/2008 $17.45 $8.34 1,183,553
-------------------------------------------------------------------------------------------
ProFund VP Biotechnology
01/01/2002 to 12/31/2002 -- $7.09 130,082
01/01/2003 to 12/31/2003 $7.09 $9.75 208,971
01/01/2004 to 12/31/2004 $9.75 $10.52 757,678
01/01/2005 to 12/31/2005 $10.52 $12.34 697,687
01/01/2006 to 12/31/2006 $12.34 $11.64 393,923
01/01/2007 to 12/31/2007 $11.64 $11.31 609,746
01/01/2008 to 12/31/2008 $11.31 $11.33 1,249,287
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
01/01/2002 to 12/31/2002 -- $7.25 128,022
01/01/2003 to 12/31/2003 $7.25 $9.04 136,269
01/01/2004 to 12/31/2004 $9.04 $9.56 430,620
01/01/2005 to 12/31/2005 $9.56 $8.97 86,431
01/01/2006 to 12/31/2006 $8.97 $9.88 192,639
01/01/2007 to 12/31/2007 $9.88 $8.91 67,292
01/01/2008 to 12/31/2008 $8.91 $6.01 448,604
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
01/01/2002 to 12/31/2002 -- $8.28 148,446
01/01/2003 to 12/31/2003 $8.28 $9.64 58,425
01/01/2004 to 12/31/2004 $9.64 $10.36 369,007
01/01/2005 to 12/31/2005 $10.36 $10.15 161,038
01/01/2006 to 12/31/2006 $10.15 $11.25 548,567
01/01/2007 to 12/31/2007 $11.25 $11.90 715,235
01/01/2008 to 12/31/2008 $11.90 $8.58 609,574
A-38
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Oil & Gas
01/01/2002 to 12/31/2002 -- $8.71 299,833
01/01/2003 to 12/31/2003 $8.71 $10.48 1,225,844
01/01/2004 to 12/31/2004 $10.48 $13.33 1,856,882
01/01/2005 to 12/31/2005 $13.33 $17.22 2,573,777
01/01/2006 to 12/31/2006 $17.22 $20.43 2,251,126
01/01/2007 to 12/31/2007 $20.43 $26.61 2,322,451
01/01/2008 to 12/31/2008 $26.61 $16.50 1,351,549
---------------------------------------------------------------------------------------
ProFund VP Financials
01/01/2002 to 12/31/2002 -- $8.85 221,377
01/01/2003 to 12/31/2003 $8.85 $11.23 398,159
01/01/2004 to 12/31/2004 $11.23 $12.19 553,342
01/01/2005 to 12/31/2005 $12.19 $12.46 616,872
01/01/2006 to 12/31/2006 $12.46 $14.38 913,872
01/01/2007 to 12/31/2007 $14.38 $11.44 498,292
01/01/2008 to 12/31/2008 $11.44 $5.57 2,008,426
---------------------------------------------------------------------------------------
ProFund VP Health Care
01/01/2002 to 12/31/2002 -- $7.94 388,508
01/01/2003 to 12/31/2003 $7.94 $9.17 707,449
01/01/2004 to 12/31/2004 $9.17 $9.23 1,318,525
01/01/2005 to 12/31/2005 $9.23 $9.63 2,175,821
01/01/2006 to 12/31/2006 $9.63 $9.96 2,106,409
01/01/2007 to 12/31/2007 $9.96 $10.44 2,120,859
01/01/2008 to 12/31/2008 $10.44 $7.78 1,638,682
---------------------------------------------------------------------------------------
ProFund VP Industrials
01/01/2002 to 12/31/2002 -- $7.93 12,642
01/01/2003 to 12/31/2003 $7.93 $10.01 318,339
01/01/2004 to 12/31/2004 $10.01 $11.15 253,411
01/01/2005 to 12/31/2005 $11.15 $11.23 211,678
01/01/2006 to 12/31/2006 $11.23 $12.33 242,684
01/01/2007 to 12/31/2007 $12.33 $13.55 708,921
01/01/2008 to 12/31/2008 $13.55 $7.93 348,521
---------------------------------------------------------------------------------------
ProFund VP Internet
01/01/2002 to 12/31/2002 -- $8.57 306,572
01/01/2003 to 12/31/2003 $8.57 $15.00 206,876
01/01/2004 to 12/31/2004 $15.00 $17.89 992,879
01/01/2005 to 12/31/2005 $17.89 $18.90 467,320
01/01/2006 to 12/31/2006 $18.90 $18.84 200,072
01/01/2007 to 12/31/2007 $18.84 $20.42 435,015
01/01/2008 to 12/31/2008 $20.42 $11.08 116,246
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
01/01/2002 to 12/31/2002 -- $8.56 136,559
01/01/2003 to 12/31/2003 $8.56 $8.89 266,978
01/01/2004 to 12/31/2004 $8.89 $7.93 527,336
01/01/2005 to 12/31/2005 $7.93 $7.51 515,769
01/01/2006 to 12/31/2006 $7.51 $8.28 716,678
01/01/2007 to 12/31/2007 $8.28 $8.33 492,538
01/01/2008 to 12/31/2008 $8.33 $6.60 588,925
A-39
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
01/01/2002 to 12/31/2002 -- $9.70 1,175,651
01/01/2003 to 12/31/2003 $9.70 $13.29 1,329,806
01/01/2004 to 12/31/2004 $13.29 $11.77 1,479,384
01/01/2005 to 12/31/2005 $11.77 $14.62 2,426,531
01/01/2006 to 12/31/2006 $14.62 $15.44 2,487,596
01/01/2007 to 12/31/2007 $15.44 $18.60 3,177,702
01/01/2008 to 12/31/2008 $18.60 $12.66 2,709,868
---------------------------------------------------------------------------------------
ProFund VP Real Estate
01/01/2002 to 12/31/2002 -- $9.86 441,318
01/01/2003 to 12/31/2003 $9.86 $12.91 462,906
01/01/2004 to 12/31/2004 $12.91 $16.15 1,816,706
01/01/2005 to 12/31/2005 $16.15 $16.96 501,989
01/01/2006 to 12/31/2006 $16.96 $22.10 926,728
01/01/2007 to 12/31/2007 $22.10 $17.47 505,436
01/01/2008 to 12/31/2008 $17.47 $10.09 587,638
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
01/01/2002 to 12/31/2002 -- $5.14 93,241
01/01/2003 to 12/31/2003 $5.14 $9.51 423,958
01/01/2004 to 12/31/2004 $9.51 $7.15 694,352
01/01/2005 to 12/31/2005 $7.15 $7.64 746,084
01/01/2006 to 12/31/2006 $7.64 $6.98 339,250
01/01/2007 to 12/31/2007 $6.98 $7.35 272,048
01/01/2008 to 12/31/2008 $7.35 $3.63 166,664
---------------------------------------------------------------------------------------
ProFund VP Technology
01/01/2002 to 12/31/2002 -- $6.03 254,131
01/01/2003 to 12/31/2003 $6.03 $8.66 497,972
01/01/2004 to 12/31/2004 $8.66 $8.48 727,580
01/01/2005 to 12/31/2005 $8.48 $8.45 577,737
01/01/2006 to 12/31/2006 $8.45 $8.98 673,628
01/01/2007 to 12/31/2007 $8.98 $10.10 1,668,456
01/01/2008 to 12/31/2008 $10.10 $5.53 322,313
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
01/01/2002 to 12/31/2002 -- $7.15 272,408
01/01/2003 to 12/31/2003 $7.15 $7.21 398,350
01/01/2004 to 12/31/2004 $7.21 $8.19 460,848
01/01/2005 to 12/31/2005 $8.19 $7.52 456,586
01/01/2006 to 12/31/2006 $7.52 $9.93 1,277,316
01/01/2007 to 12/31/2007 $9.93 $10.59 1,098,402
01/01/2008 to 12/31/2008 $10.59 $6.83 840,295
---------------------------------------------------------------------------------------
ProFund VP Utilities
01/01/2002 to 12/31/2002 -- $7.83 521,419
01/01/2003 to 12/31/2003 $7.83 $9.34 618,427
01/01/2004 to 12/31/2004 $9.34 $11.13 1,060,939
01/01/2005 to 12/31/2005 $11.13 $12.37 1,996,877
01/01/2006 to 12/31/2006 $12.37 $14.51 2,195,309
01/01/2007 to 12/31/2007 $14.51 $16.52 3,808,582
01/01/2008 to 12/31/2008 $16.52 $11.26 1,279,942
A-40
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Bull
01/01/2002 to 12/31/2002 -- $7.97 954,792
01/01/2003 to 12/31/2003 $7.97 $9.84 3,563,562
01/01/2004 to 12/31/2004 $9.84 $10.53 8,215,357
01/01/2005 to 12/31/2005 $10.53 $10.64 7,846,866
01/01/2006 to 12/31/2006 $10.64 $11.90 7,031,661
01/01/2007 to 12/31/2007 $11.90 $12.12 4,013,033
01/01/2008 to 12/31/2008 $12.12 $7.43 2,963,943
---------------------------------------------------------------------------------------
ProFund VP Bear
01/01/2002 to 12/31/2002 -- $11.38 1,532,543
01/01/2003 to 12/31/2003 $11.38 $8.44 1,886,515
01/01/2004 to 12/31/2004 $8.44 $7.45 1,202,243
01/01/2005 to 12/31/2005 $7.45 $7.23 2,169,659
01/01/2006 to 12/31/2006 $7.23 $6.57 1,868,606
01/01/2007 to 12/31/2007 $6.57 $6.50 1,722,065
01/01/2008 to 12/31/2008 $6.50 $8.95 2,326,201
---------------------------------------------------------------------------------------
ProFund VP UltraBull
01/01/2002 to 12/31/2002 -- $6.78 297,435
01/01/2003 to 12/31/2003 $6.78 $10.20 1,431,345
01/01/2004 to 12/31/2004 $10.20 $11.76 2,817,803
01/01/2005 to 12/31/2005 $11.76 $11.87 1,158,024
01/01/2006 to 12/31/2006 $11.87 $14.36 1,596,920
01/01/2007 to 12/31/2007 $14.36 $14.24 1,964,725
01/01/2008 to 12/31/2008 $14.24 $4.57 8,061,341
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
01/01/2002 to 12/31/2002 -- $6.45 1,346,852
01/01/2003 to 12/31/2003 $6.45 $9.32 4,445,234
01/01/2004 to 12/31/2004 $9.32 $9.94 4,885,351
01/01/2005 to 12/31/2005 $9.94 $9.80 2,467,486
01/01/2006 to 12/31/2006 $9.80 $10.16 1,764,614
01/01/2007 to 12/31/2007 $10.16 $11.76 2,265,084
01/01/2008 to 12/31/2008 $11.76 $6.65 1,171,313
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
01/01/2002 to 12/31/2002 -- $11.00 433,181
01/01/2003 to 12/31/2003 $11.00 $6.78 1,535,439
01/01/2004 to 12/31/2004 $6.78 $5.93 908,064
01/01/2005 to 12/31/2005 $5.93 $5.88 2,494,108
01/01/2006 to 12/31/2006 $5.88 $5.70 1,891,265
01/01/2007 to 12/31/2007 $5.70 $4.96 860,024
01/01/2008 to 12/31/2008 $4.96 $7.23 722,924
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
01/01/2002 to 12/31/2002 -- $3.53 1,003,123
01/01/2003 to 12/31/2003 $3.53 $7.03 3,410,589
01/01/2004 to 12/31/2004 $7.03 $7.89 6,592,447
01/01/2005 to 12/31/2005 $7.89 $7.47 4,740,165
01/01/2006 to 12/31/2006 $7.47 $7.70 2,319,572
01/01/2007 to 12/31/2007 $7.70 $9.73 4,024,405
01/01/2008 to 12/31/2008 $9.73 $2.61 3,358,757
A-41
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
01/01/2002 to 12/31/2002 -- $7.66 438,387
01/01/2003 to 12/31/2003 $7.66 $10.23 1,455,513
01/01/2004 to 12/31/2004 $10.23 $11.67 2,632,869
01/01/2005 to 12/31/2005 $11.67 $12.49 2,164,543
01/01/2006 to 12/31/2006 $12.49 $13.80 1,978,580
01/01/2007 to 12/31/2007 $13.80 $13.70 1,436,105
01/01/2008 to 12/31/2008 $13.70 $8.58 733,971
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
01/01/2002 to 12/31/2002 -- $7.70 439,054
01/01/2003 to 12/31/2003 $7.70 $9.69 1,009,867
01/01/2004 to 12/31/2004 $9.69 $10.58 2,220,901
01/01/2005 to 12/31/2005 $10.58 $11.58 5,059,312
01/01/2006 to 12/31/2006 $11.58 $11.84 1,594,539
01/01/2007 to 12/31/2007 $11.84 $13.01 2,101,505
01/01/2008 to 12/31/2008 $13.01 $7.83 1,117,437
---------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
01/01/2002 to 12/31/2002 -- $5.71 477,953
01/01/2003 to 12/31/2003 $5.71 $9.55 1,112,311
01/01/2004 to 12/31/2004 $9.55 $11.99 3,106,849
01/01/2005 to 12/31/2005 $11.99 $13.91 1,935,489
01/01/2006 to 12/31/2006 $13.91 $15.14 1,588,771
01/01/2007 to 12/31/2007 $15.14 $15.77 1,072,846
01/01/2008 to 12/31/2008 $15.77 $5.04 2,684,256
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
01/01/2002 to 12/31/2002 -- $7.09 994,778
01/01/2003 to 12/31/2003 $7.09 $9.39 5,144,632
01/01/2004 to 12/31/2004 $9.39 $11.10 4,088,760
01/01/2005 to 12/31/2005 $11.10 $11.35 1,398,441
01/01/2006 to 12/31/2006 $11.35 $13.11 2,446,357
01/01/2007 to 12/31/2007 $13.11 $11.96 714,107
01/01/2008 to 12/31/2008 $11.96 $8.15 838,930
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
01/01/2002 to 12/31/2002 -- $7.69 772,260
01/01/2003 to 12/31/2003 $7.69 $10.16 3,868,951
01/01/2004 to 12/31/2004 $10.16 $11.98 4,677,820
01/01/2005 to 12/31/2005 $11.98 $12.67 4,579,886
01/01/2006 to 12/31/2006 $12.67 $13.54 1,643,633
01/01/2007 to 12/31/2007 $13.54 $13.85 676,467
01/01/2008 to 12/31/2008 $13.85 $8.99 990,289
---------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
01/01/2002 to 12/31/2002 -- $6.14 212,085
01/01/2003 to 12/31/2003 $6.14 $12.04 1,702,558
01/01/2004 to 12/31/2004 $12.04 $15.52 5,098,565
01/01/2005 to 12/31/2005 $15.52 $15.23 816,754
01/01/2006 to 12/31/2006 $15.23 $18.87 1,580,595
01/01/2007 to 12/31/2007 $18.87 $16.11 527,856
01/01/2008 to 12/31/2008 $16.11 $5.36 2,519,397
A-42
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
01/01/2002 to 12/31/2002 -- $11.56 2,486,854
01/01/2003 to 12/31/2003 $11.56 $11.08 731,470
01/01/2004 to 12/31/2004 $11.08 $11.79 1,051,158
01/01/2005 to 12/31/2005 $11.79 $12.64 2,312,868
01/01/2006 to 12/31/2006 $12.64 $11.86 821,668
01/01/2007 to 12/31/2007 $11.86 $12.85 2,443,725
01/01/2008 to 12/31/2008 $12.85 $18.92 2,696,273
--------------------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
01/01/2002 to 12/31/2002 -- $8.02 165,792
01/01/2003 to 12/31/2003 $8.02 $7.56 1,817,924
01/01/2004 to 12/31/2004 $7.56 $6.63 5,314,528
01/01/2005 to 12/31/2005 $6.63 $6.00 3,415,324
01/01/2006 to 12/31/2006 $6.00 $6.50 4,567,551
01/01/2007 to 12/31/2007 $6.50 $6.06 1,806,294
01/01/2008 to 12/31/2008 $6.06 $3.70 2,315,493
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.56 899,139
01/01/2006 to 12/31/2006 $10.56 $11.38 1,207,864
01/01/2007 to 12/31/2007 $11.38 $11.78 898,024
01/01/2008 to 12/31/2008 $11.78 $11.04 901,901
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
01/01/2002 to 12/31/2002 -- $6.80 19,826
01/01/2003 to 12/31/2003 $6.80 $9.16 66,435
01/01/2004 to 12/31/2004 $9.16 $10.03 91,924
01/01/2005 to 12/31/2005 $10.03 $9.92 87,726
01/01/2006 to 12/31/2006 $9.92 $10.15 100,227
01/01/2007 to 12/31/2007 $10.15 $10.55 106,856
01/01/2008 to 12/31/2008 $10.55 $5.83 190,718
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
01/01/2004 to 12/31/2004 -- $11.85 311,233
01/01/2005 to 12/31/2005 $11.85 $12.84 590,605
01/01/2006 to 12/31/2006 $12.84 $17.48 1,507,757
01/01/2007 to 12/31/2007 $17.48 $19.49 2,078,809
01/01/2008 to 12/31/2008 $19.49 $10.97 1,122,006
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
01/01/2004 to 12/31/2004 -- $11.32 1,777,316
01/01/2005 to 12/31/2005 $11.32 $11.94 2,420,874
01/01/2006 to 12/31/2006 $11.94 $13.10 2,772,210
01/01/2007 to 12/31/2007 $13.10 $14.10 2,203,754
01/01/2008 to 12/31/2008 $14.10 $7.65 1,345,285
--------------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
01/01/2004 to 12/31/2004 -- $10.66 82,809
01/01/2005 to 12/31/2005 $10.66 $10.83 134,177
01/01/2006 to 12/31/2006 $10.83 $11.60 199,508
01/01/2007 to 12/31/2007 $11.60 $13.88 403,709
01/01/2008 to 12/31/2008 $13.88 $6.71 199,304
A-43
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
01/01/2004 to 12/31/2004 -- $10.75 173,851
01/01/2005 to 12/31/2005 $10.75 $11.01 304,840
01/01/2006 to 12/31/2006 $11.01 $11.14 290,152
01/01/2007 to 12/31/2007 $11.14 $11.42 274,858
01/01/2008 to 12/31/2008 $11.42 $8.09 259,188
---------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
01/01/2004 to 12/31/2004 -- $10.48 155,695
01/01/2005 to 12/31/2005 $10.48 $9.98 194,864
01/01/2006 to 12/31/2006 $9.98 $12.32 481,064
01/01/2007 to 12/31/2007 $12.32 $12.20 235,030
01/01/2008 to 12/31/2008 $12.20 $8.58 249,670
---------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.76 1,240,525
01/01/2006 to 12/31/2006 $9.76 $11.34 2,310,768
01/01/2007 to 12/31/2007 $11.34 $11.28 2,000,024
01/01/2008 to 12/31/2008 $11.28 $6.59 1,374,063
---------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
01/01/2004 to 12/31/2004 -- $12.59 389,792
01/01/2005 to 12/31/2005 $12.59 $14.82 1,068,337
01/01/2006 to 12/31/2006 $14.82 $15.00 1,119,827
01/01/2007 to 12/31/2007 $15.00 $17.43 1,173,103
01/01/2008 to 12/31/2008 $17.43 $7.74 1,027,401
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
01/01/2004 to 12/31/2004 -- $10.37 72,725
01/01/2005 to 12/31/2005 $10.37 $10.30 2,620,748
01/01/2006 to 12/31/2006 $10.30 $11.05 2,181,106
01/01/2007 to 12/31/2007 $11.05 $11.62 2,009,820
01/01/2008 to 12/31/2008 $11.62 $7.37 1,340,839
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
01/01/2004 to 12/31/2004 -- $10.37 159,605
01/01/2005 to 12/31/2005 $10.37 $10.51 2,141,309
01/01/2006 to 12/31/2006 $10.51 $12.26 4,023,312
01/01/2007 to 12/31/2007 $12.26 $12.08 1,984,257
01/01/2008 to 12/31/2008 $12.08 $7.07 1,514,949
---------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
01/01/2004 to 12/31/2004 -- $9.70 39,360
01/01/2005 to 12/31/2005 $9.70 $8.64 364,782
01/01/2006 to 12/31/2006 $8.64 $8.18 254,207
01/01/2007 to 12/31/2007 $8.18 $7.82 131,223
01/01/2008 to 12/31/2008 $7.82 $10.14 177,441
---------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
01/01/2004 to 12/31/2004 -- $9.54 136,809
01/01/2005 to 12/31/2005 $9.54 $9.11 220,842
01/01/2006 to 12/31/2006 $9.11 $7.90 560,897
01/01/2007 to 12/31/2007 $7.90 $8.12 1,000,449
01/01/2008 to 12/31/2008 $8.12 $9.92 233,809
A-44
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
01/01/2004 to 12/31/2004 -- $10.53 269,671
01/01/2005 to 12/31/2005 $10.53 $12.05 672,243
01/01/2006 to 12/31/2006 $12.05 $14.35 742,865
01/01/2007 to 12/31/2007 $14.35 $16.87 828,104
01/01/2008 to 12/31/2008 $16.87 $8.25 357,600
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 649,828
01/01/2006 to 12/31/2006 $10.00 $11.38 5,212,589
01/01/2007 to 12/31/2007 $11.38 $12.26 8,022,912
01/01/2008 to 12/31/2008 $12.26 $6.95 5,663,091
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 2,586,013
01/01/2006 to 12/31/2006 $10.01 $11.19 23,048,850
01/01/2007 to 12/31/2007 $11.19 $12.07 31,465,957
01/01/2008 to 12/31/2008 $12.07 $7.73 32,624,883
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 2,726,484
01/01/2006 to 12/31/2006 $10.02 $11.01 21,829,919
01/01/2007 to 12/31/2007 $11.01 $11.83 30,616,578
01/01/2008 to 12/31/2008 $11.83 $7.93 35,995,508
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 685,724
01/01/2006 to 12/31/2006 $10.03 $10.90 7,315,279
01/01/2007 to 12/31/2007 $10.90 $11.70 12,873,620
01/01/2008 to 12/31/2008 $11.70 $8.20 24,018,186
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.04 115,215
01/01/2006 to 12/31/2006 $10.04 $10.66 3,303,256
01/01/2007 to 12/31/2007 $10.66 $11.40 7,359,596
01/01/2008 to 12/31/2008 $11.40 $9.02 24,830,005
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.66 5,258,474
01/01/2007 to 12/31/2007 $10.66 $11.48 8,525,849
01/01/2008 to 12/31/2008 $11.48 $7.93 16,229,117
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.58 3,781,525
01/01/2007 to 12/31/2007 $10.58 $11.30 7,801,920
01/01/2008 to 12/31/2008 $11.30 $7.28 13,486,356
--------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.48 3,795,562
01/01/2007 to 12/31/2007 $10.48 $11.49 7,899,326
01/01/2008 to 12/31/2008 $11.49 $6.70 13,640,692
--------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.51 120,901
01/01/2008 to 12/31/2008 $11.51 $7.33 2,184,002
--------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.04 74,936
01/01/2008 to 12/31/2008 $10.04 $7.15 5,507,286
A-45
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.19 157,014
01/01/2008 to 12/31/2008 $10.19 $6.94 1,952,838
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 39,143
01/01/2008 to 12/31/2008 $10.17 $7.58 3,825,075
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.00 50,892
01/01/2008 to 12/31/2008 $10.00 $7.16 2,156,002
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 213,630
01/01/2008 to 12/31/2008 $9.98 $9.30 4,064,760
-------------------------------------------------------------------------------------------------------------
AST Investment Grade Bond Portfolio
01/28/2008* to 12/31/2008 $10.00 $10.73 128,735,078
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.18 $6.11 100,170
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.57 126,548
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.47 1,469,632
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.64 5,636,967
* Denotes the start date of these sub-accounts.
APEX II
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With LT5, HDV, and EBP (3.00%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
03/14/2005 to 12/31/2005 $9.91 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $13.32 0
01/01/2008 to 12/31/2008 $13.32 $7.57 0
---------------------------------------------------------------------------------------------------
AST International Growth Portfolio
03/14/2005 to 12/31/2005 $9.92 $11.16 0
01/01/2006 to 12/31/2006 $11.16 $13.10 0
01/01/2007 to 12/31/2007 $13.10 $15.12 0
01/01/2008 to 12/31/2008 $15.12 $7.30 0
---------------------------------------------------------------------------------------------------
AST International Value Portfolio
03/14/2005 to 12/31/2005 $9.92 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $13.09 0
01/01/2007 to 12/31/2007 $13.09 $14.95 0
01/01/2008 to 12/31/2008 $14.95 $8.12 0
A-46
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
03/14/2005 to 12/31/2005 $9.96 $10.36 0
01/01/2006 to 12/31/2006 $10.36 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $13.25 0
01/01/2008 to 12/31/2008 $13.25 $8.49 0
---------------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.31 0
01/01/2006 to 12/31/2006 $10.31 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $11.71 0
01/01/2008 to 12/31/2008 $11.71 $7.38 0
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.66 0
01/01/2007 to 12/31/2007 $10.66 $12.27 0
01/01/2008 to 12/31/2008 $12.27 $6.84 0
---------------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.84 0
01/01/2006 to 12/31/2006 $10.84 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $12.80 0
01/01/2008 to 12/31/2008 $12.80 $6.94 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $10.92 0
01/01/2008 to 12/31/2008 $10.92 $7.77 0
---------------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.65 0
---------------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.04 $9.90 0
01/01/2006 to 12/31/2006 $9.90 $11.53 0
01/01/2007 to 12/31/2007 $11.53 $9.19 0
01/01/2008 to 07/18/2008 $9.19 $8.36 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.78 0
01/01/2007 to 12/31/2007 $10.78 $12.48 0
01/01/2008 to 12/31/2008 $12.48 $7.17 0
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.05 $11.21 0
01/01/2006 to 12/31/2006 $11.21 $12.40 0
01/01/2007 to 12/31/2007 $12.40 $14.70 0
01/01/2008 to 12/31/2008 $14.70 $8.10 0
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.02 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $11.56 0
01/01/2007 to 12/31/2007 $11.56 $11.57 0
01/01/2008 to 12/31/2008 $11.57 $6.48 0
A-47
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
03/14/2005 to 12/02/2005 $10.09 $11.59 0
-------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.06 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.34 0
01/01/2007 to 12/31/2007 $11.34 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.78 0
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
03/14/2005 to 12/31/2005 $10.00 $11.61 0
01/01/2006 to 12/31/2006 $11.61 $13.05 0
01/01/2007 to 12/31/2007 $13.05 $17.78 0
01/01/2008 to 12/31/2008 $17.78 $8.62 0
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.02 $11.98 0
01/01/2006 to 12/31/2006 $11.98 $12.28 0
01/01/2007 to 12/31/2007 $12.28 $12.89 0
01/01/2008 to 12/31/2008 $12.89 $7.43 0
-------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $12.63 0
01/01/2008 to 12/31/2008 $12.63 $7.81 0
-------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
03/14/2005 to 12/31/2005 $10.12 $10.78 0
01/01/2006 to 12/31/2006 $10.78 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $12.50 0
01/01/2008 to 12/31/2008 $12.50 $6.83 0
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $7.27 0
-------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $12.51 0
01/01/2007 to 12/31/2007 $12.51 $12.28 0
01/01/2008 to 12/31/2008 $12.28 $7.47 0
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
03/14/2005 to 12/02/2005 $10.05 $11.21 0
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $6.33 0
-------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
03/14/2005 to 12/31/2005 $10.15 $11.88 0
01/01/2006 to 12/31/2006 $11.88 $15.76 0
01/01/2007 to 12/31/2007 $15.76 $12.24 0
01/01/2008 to 12/31/2008 $12.24 $7.71 0
A-48
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.28 0
01/01/2006 to 12/31/2006 $10.28 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $11.12 0
01/01/2008 to 12/31/2008 $11.12 $6.61 0
----------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
03/14/2005 to 12/31/2005 $10.07 $10.22 0
01/01/2006 to 12/31/2006 $10.22 $11.58 0
01/01/2007 to 12/31/2007 $11.58 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.10 0
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.15 0
01/01/2006 to 12/31/2006 $10.15 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.77 0
01/01/2008 to 12/31/2008 $11.77 $6.77 0
----------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.99 0
01/01/2007 to 12/31/2007 $11.99 $11.29 0
01/01/2008 to 12/31/2008 $11.29 $6.40 0
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $8.95 0
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.46 0
01/01/2008 to 12/31/2008 $11.46 $7.76 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.17 0
01/01/2007 to 12/31/2007 $11.17 $11.52 0
01/01/2008 to 12/31/2008 $11.52 $8.28 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
03/14/2005 to 12/31/2005 $9.95 $9.34 0
01/01/2006 to 12/31/2006 $9.34 $9.63 0
01/01/2007 to 12/31/2007 $9.63 $10.24 0
01/01/2008 to 12/31/2008 $10.24 $9.69 0
----------------------------------------------------------------------------------------------------------------------
AST High Yield Portfolio
03/14/2005 to 12/31/2005 $9.98 $9.75 0
01/01/2006 to 12/31/2006 $9.75 $10.43 0
01/01/2007 to 12/31/2007 $10.43 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $7.49 0
----------------------------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.84 0
01/01/2006 to 12/31/2006 $9.84 $10.48 0
01/01/2007 to 12/31/2007 $10.48 $10.78 0
01/01/2008 to 12/31/2008 $10.78 $8.03 0
A-49
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
03/14/2005 to 12/31/2005 $9.99 $10.04 0
01/01/2006 to 12/31/2006 $10.04 $10.10 0
01/01/2007 to 12/31/2007 $10.10 $10.61 0
01/01/2008 to 12/31/2008 $10.61 $10.06 0
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.94 0
01/01/2006 to 12/31/2006 $9.94 $10.01 0
01/01/2007 to 12/31/2007 $10.01 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $10.17 0
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $10.13 0
01/01/2007 to 12/31/2007 $10.13 $10.31 0
01/01/2008 to 12/31/2008 $10.31 $10.25 0
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
03/14/2005 to 12/31/2005 $9.88 $11.93 0
01/01/2006 to 12/31/2006 $11.93 $15.57 0
01/01/2007 to 12/31/2007 $15.57 $21.67 0
01/01/2008 to 12/31/2008 $21.67 $8.86 0
-------------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
03/14/2005 to 12/31/2005 $10.07 $10.08 0
01/01/2006 to 12/31/2006 $10.08 $11.60 0
01/01/2007 to 12/31/2007 $11.60 $11.56 0
01/01/2008 to 12/31/2008 $11.56 $7.13 0
-------------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
03/14/2005 to 12/31/2005 $10.05 $10.80 0
01/01/2006 to 12/31/2006 $10.80 $12.16 0
01/01/2007 to 12/31/2007 $12.16 $13.23 0
01/01/2008 to 12/31/2008 $13.23 $6.66 0
-------------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
03/14/2005 to 12/31/2005 $10.00 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.36 0
01/01/2007 to 12/31/2007 $11.36 $11.87 0
01/01/2008 to 12/31/2008 $11.87 $6.39 0
-------------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
03/14/2005 to 12/31/2005 $10.06 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $12.23 0
01/01/2008 to 12/31/2008 $12.23 $8.47 0
-------------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
03/14/2005 to 12/31/2005 $10.06 $10.62 0
01/01/2006 to 12/31/2006 $10.62 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $9.05 0
01/01/2008 to 12/31/2008 $9.05 $3.56 0
-------------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
03/14/2005 to 12/31/2005 $9.90 $10.88 0
01/01/2006 to 12/31/2006 $10.88 $13.00 0
01/01/2007 to 12/31/2007 $13.00 $14.50 0
01/01/2008 to 12/31/2008 $14.50 $8.23 0
-------------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
03/14/2005 to 04/15/2005 $10.02 $9.26 0
A-50
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
03/14/2005 to 12/31/2005 $10.02 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $11.72 0
01/01/2008 to 12/31/2008 $11.72 $8.28 0
-------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.33 0
01/01/2006 to 12/31/2006 $11.33 $12.20 0
01/01/2007 to 12/31/2007 $12.20 $13.14 0
01/01/2008 to 12/31/2008 $13.14 $7.50 0
-------------------------------------------------------------------------------------------
ProFund VP Europe 30
03/14/2005 to 12/31/2005 $9.99 $10.41 0
01/01/2006 to 12/31/2006 $10.41 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $13.19 0
01/01/2008 to 12/31/2008 $13.19 $7.16 0
-------------------------------------------------------------------------------------------
ProFund VP Asia 30
03/14/2005 to 12/31/2005 $9.99 $11.10 0
01/01/2006 to 12/31/2006 $11.10 $14.99 0
01/01/2007 to 12/31/2007 $14.99 $21.48 0
01/01/2008 to 12/31/2008 $21.48 $10.25 0
-------------------------------------------------------------------------------------------
ProFund VP Japan
03/14/2005 to 12/31/2005 $9.95 $13.38 0
01/01/2006 to 12/31/2006 $13.38 $14.38 0
01/01/2007 to 12/31/2007 $14.38 $12.56 0
01/01/2008 to 12/31/2008 $12.56 $7.20 0
-------------------------------------------------------------------------------------------
ProFund VP Banks
03/14/2005 to 12/31/2005 $10.08 $10.10 0
01/01/2006 to 12/31/2006 $10.10 $11.31 0
01/01/2007 to 12/31/2007 $11.31 $7.98 0
01/01/2008 to 12/31/2008 $7.98 $4.11 0
-------------------------------------------------------------------------------------------
ProFund VP Basic Materials
03/14/2005 to 12/31/2005 $9.98 $9.48 0
01/01/2006 to 12/31/2006 $9.48 $10.62 0
01/01/2007 to 12/31/2007 $10.62 $13.46 0
01/01/2008 to 12/31/2008 $13.46 $6.34 0
-------------------------------------------------------------------------------------------
ProFund VP Biotechnology
03/14/2005 to 12/31/2005 $10.48 $13.48 0
01/01/2006 to 12/31/2006 $13.48 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $12.03 0
01/01/2008 to 12/31/2008 $12.03 $11.88 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
03/14/2005 to 12/31/2005 $10.04 $9.66 0
01/01/2006 to 12/31/2006 $9.66 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $9.34 0
01/01/2008 to 12/31/2008 $9.34 $6.22 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
03/14/2005 to 12/31/2005 $10.03 $9.73 0
01/01/2006 to 12/31/2006 $9.73 $10.63 0
01/01/2007 to 12/31/2007 $10.63 $11.09 0
01/01/2008 to 12/31/2008 $11.09 $7.89 0
A-51
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Oil & Gas
03/14/2005 to 12/31/2005 $10.07 $10.92 0
01/01/2006 to 12/31/2006 $10.92 $12.78 0
01/01/2007 to 12/31/2007 $12.78 $16.42 0
01/01/2008 to 12/31/2008 $16.42 $10.04 0
---------------------------------------------------------------------------------------
ProFund VP Financials
03/14/2005 to 12/31/2005 $10.08 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $11.98 0
01/01/2007 to 12/31/2007 $11.98 $9.40 0
01/01/2008 to 12/31/2008 $9.40 $4.51 0
---------------------------------------------------------------------------------------
ProFund VP Health Care
03/14/2005 to 12/31/2005 $10.09 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.68 0
01/01/2007 to 12/31/2007 $10.68 $11.04 0
01/01/2008 to 12/31/2008 $11.04 $8.11 0
---------------------------------------------------------------------------------------
ProFund VP Industrials
03/14/2005 to 12/31/2005 $10.06 $10.06 0
01/01/2006 to 12/31/2006 $10.06 $10.90 0
01/01/2007 to 12/31/2007 $10.90 $11.81 0
01/01/2008 to 12/31/2008 $11.81 $6.82 0
---------------------------------------------------------------------------------------
ProFund VP Internet
03/14/2005 to 12/31/2005 $9.94 $12.71 0
01/01/2006 to 12/31/2006 $12.71 $12.50 0
01/01/2007 to 12/31/2007 $12.50 $13.36 0
01/01/2008 to 12/31/2008 $13.36 $7.15 0
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
03/14/2005 to 12/31/2005 $10.02 $9.44 0
01/01/2006 to 12/31/2006 $9.44 $10.27 0
01/01/2007 to 12/31/2007 $10.27 $10.19 0
01/01/2008 to 12/31/2008 $10.19 $7.96 0
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
03/14/2005 to 12/31/2005 $9.89 $12.00 0
01/01/2006 to 12/31/2006 $12.00 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $14.84 0
01/01/2008 to 12/31/2008 $14.84 $9.96 0
---------------------------------------------------------------------------------------
ProFund VP Real Estate
03/14/2005 to 12/31/2005 $10.15 $11.17 0
01/01/2006 to 12/31/2006 $11.17 $14.36 0
01/01/2007 to 12/31/2007 $14.36 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $6.38 0
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
03/14/2005 to 12/31/2005 $10.04 $10.65 0
01/01/2006 to 12/31/2006 $10.65 $9.60 0
01/01/2007 to 12/31/2007 $9.60 $9.97 0
01/01/2008 to 12/31/2008 $9.97 $4.85 0
---------------------------------------------------------------------------------------
ProFund VP Technology
03/14/2005 to 12/31/2005 $10.03 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $12.26 0
01/01/2008 to 12/31/2008 $12.26 $6.62 0
A-52
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
03/14/2005 to 12/31/2005 $10.03 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $12.68 0
01/01/2007 to 12/31/2007 $12.68 $13.33 0
01/01/2008 to 12/31/2008 $13.33 $8.48 0
---------------------------------------------------------------------------------------
ProFund VP Utilities
03/14/2005 to 12/31/2005 $10.17 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $13.77 0
01/01/2008 to 12/31/2008 $13.77 $9.26 0
---------------------------------------------------------------------------------------
ProFund VP Bull
03/14/2005 to 12/31/2005 $10.05 $10.12 0
01/01/2006 to 12/31/2006 $10.12 $11.16 0
01/01/2007 to 12/31/2007 $11.16 $11.21 0
01/01/2008 to 12/31/2008 $11.21 $6.77 0
---------------------------------------------------------------------------------------
ProFund VP Bear
03/14/2005 to 12/31/2005 $9.94 $9.54 0
01/01/2006 to 12/31/2006 $9.54 $8.56 0
01/01/2007 to 12/31/2007 $8.56 $8.35 0
01/01/2008 to 12/31/2008 $8.35 $11.34 0
---------------------------------------------------------------------------------------
ProFund VP UltraBull
03/14/2005 to 12/31/2005 $10.11 $10.25 0
01/01/2006 to 12/31/2006 $10.25 $12.23 0
01/01/2007 to 12/31/2007 $12.23 $11.96 0
01/01/2008 to 12/31/2008 $11.96 $3.78 0
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
03/14/2005 to 12/31/2005 $10.06 $10.55 0
01/01/2006 to 12/31/2006 $10.55 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $12.31 0
01/01/2008 to 12/31/2008 $12.31 $6.87 0
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
03/14/2005 to 12/31/2005 $9.94 $9.14 0
01/01/2006 to 12/31/2006 $9.14 $8.75 0
01/01/2007 to 12/31/2007 $8.75 $7.50 0
01/01/2008 to 12/31/2008 $7.50 $10.78 0
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
03/14/2005 to 12/31/2005 $10.15 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $14.00 0
01/01/2008 to 12/31/2008 $14.00 $3.70 0
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
03/14/2005 to 12/31/2005 $10.09 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.99 0
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
03/14/2005 to 12/31/2005 $10.06 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.76 0
01/01/2008 to 12/31/2008 $11.76 $6.98 0
A-53
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
03/14/2005 to 12/31/2005 $10.15 $11.38 0
01/01/2006 to 12/31/2006 $11.38 $12.22 0
01/01/2007 to 12/31/2007 $12.22 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $3.96 0
--------------------------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
03/14/2005 to 12/31/2005 $10.04 $10.30 0
01/01/2006 to 12/31/2006 $10.30 $11.73 0
01/01/2007 to 12/31/2007 $11.73 $10.55 0
01/01/2008 to 12/31/2008 $10.55 $7.09 0
--------------------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
03/14/2005 to 12/31/2005 $10.04 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $11.15 0
01/01/2008 to 12/31/2008 $11.15 $7.13 0
--------------------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
03/14/2005 to 12/31/2005 $10.11 $10.66 0
01/01/2006 to 12/31/2006 $10.66 $13.03 0
01/01/2007 to 12/31/2007 $13.03 $10.97 0
01/01/2008 to 12/31/2008 $10.97 $3.60 0
--------------------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
03/14/2005 to 12/31/2005 $10.08 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $9.76 0
01/01/2007 to 12/31/2007 $9.76 $10.43 0
01/01/2008 to 12/31/2008 $10.43 $15.14 0
--------------------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
03/14/2005 to 12/31/2005 $9.91 $9.08 0
01/01/2006 to 12/31/2006 $9.08 $9.71 0
01/01/2007 to 12/31/2007 $9.71 $8.92 0
01/01/2008 to 12/31/2008 $8.92 $5.37 0
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.47 0
01/01/2006 to 12/31/2006 $10.47 $11.12 0
01/01/2007 to 12/31/2007 $11.12 $11.35 0
01/01/2008 to 12/31/2008 $11.35 $10.50 0
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $9.83 0
01/01/2007 to 12/31/2007 $9.83 $10.07 0
01/01/2008 to 12/31/2008 $10.07 $5.49 0
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
03/14/2005 to 12/31/2005 $10.03 $10.83 0
01/01/2006 to 12/31/2006 $10.83 $14.54 0
01/01/2007 to 12/31/2007 $14.54 $15.99 0
01/01/2008 to 12/31/2008 $15.99 $8.87 0
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
03/14/2005 to 12/31/2005 $10.02 $10.43 0
01/01/2006 to 12/31/2006 $10.43 $11.29 0
01/01/2007 to 12/31/2007 $11.29 $11.98 0
01/01/2008 to 12/31/2008 $11.98 $6.41 0
A-54
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
03/14/2005 to 12/31/2005 $10.06 $10.75 0
01/01/2006 to 12/31/2006 $10.75 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $13.40 0
01/01/2008 to 12/31/2008 $13.40 $6.38 0
---------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
03/14/2005 to 12/31/2005 $10.10 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $10.46 0
01/01/2007 to 12/31/2007 $10.46 $10.57 0
01/01/2008 to 12/31/2008 $10.57 $7.39 0
---------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
03/14/2005 to 12/31/2005 $10.03 $9.53 0
01/01/2006 to 12/31/2006 $9.53 $11.61 0
01/01/2007 to 12/31/2007 $11.61 $11.33 0
01/01/2008 to 12/31/2008 $11.33 $7.86 0
---------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.67 0
01/01/2006 to 12/31/2006 $9.67 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $10.87 0
01/01/2008 to 12/31/2008 $10.87 $6.27 0
---------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
03/14/2005 to 12/31/2005 $10.00 $11.11 0
01/01/2006 to 12/31/2006 $11.11 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $12.71 0
01/01/2008 to 12/31/2008 $12.71 $5.57 0
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
03/14/2005 to 12/31/2005 $10.03 $9.98 0
01/01/2006 to 12/31/2006 $9.98 $10.56 0
01/01/2007 to 12/31/2007 $10.56 $10.96 0
01/01/2008 to 12/31/2008 $10.96 $6.85 0
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
03/14/2005 to 12/31/2005 $10.07 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $11.74 0
01/01/2007 to 12/31/2007 $11.74 $11.40 0
01/01/2008 to 12/31/2008 $11.40 $6.59 0
---------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
03/14/2005 to 12/31/2005 $9.93 $8.94 0
01/01/2006 to 12/31/2006 $8.94 $8.36 0
01/01/2007 to 12/31/2007 $8.36 $7.87 0
01/01/2008 to 12/31/2008 $7.87 $10.07 0
---------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
03/14/2005 to 12/31/2005 $9.95 $9.17 0
01/01/2006 to 12/31/2006 $9.17 $7.84 0
01/01/2007 to 12/31/2007 $7.84 $7.95 0
01/01/2008 to 12/31/2008 $7.95 $9.57 0
A-55
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
03/14/2005 to 12/31/2005 $9.93 $11.18 0
01/01/2006 to 12/31/2006 $11.18 $13.12 0
01/01/2007 to 12/31/2007 $13.12 $15.22 0
01/01/2008 to 12/31/2008 $15.22 $7.34 0
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $11.91 0
01/01/2008 to 12/31/2008 $11.91 $6.66 0
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 0
01/01/2006 to 12/31/2006 $10.00 $11.02 2,672
01/01/2007 to 12/31/2007 $11.02 $11.73 10,225
01/01/2008 to 12/31/2008 $11.73 $7.40 11,699
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 0
01/01/2006 to 12/31/2006 $10.01 $10.85 18,249
01/01/2007 to 12/31/2007 $10.85 $11.49 19,931
01/01/2008 to 12/31/2008 $11.49 $7.60 38,177
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.74 0
01/01/2007 to 12/31/2007 $10.74 $11.36 4,610
01/01/2008 to 12/31/2008 $11.36 $7.86 4,379
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 0
01/01/2006 to 12/31/2006 $10.03 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $11.07 0
01/01/2008 to 12/31/2008 $11.07 $8.65 4,182
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.54 0
01/01/2007 to 12/31/2007 $10.54 $11.20 7,920
01/01/2008 to 12/31/2008 $11.20 $7.63 13,497
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.47 0
01/01/2007 to 12/31/2007 $10.47 $11.02 5,264
01/01/2008 to 12/31/2008 $11.02 $7.00 5,327
--------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.37 0
01/01/2007 to 12/31/2007 $10.37 $11.20 5,929
01/01/2008 to 12/31/2008 $11.20 $6.44 12,636
--------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.49 0
01/01/2008 to 12/31/2008 $11.49 $7.22 1,469
--------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.02 0
01/01/2008 to 12/31/2008 $10.02 $7.04 5,132
--------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 0
01/01/2008 to 12/31/2008 $10.17 $6.84 0
A-56
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.15 0
01/01/2008 to 12/31/2008 $10.15 $7.46 0
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 0
01/01/2008 to 12/31/2008 $9.98 $7.05 0
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.96 0
01/01/2008 to 12/31/2008 $9.96 $9.16 0
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.17 $6.08 0
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.54 0
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.43 0
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.58 0
* Denotes the start date of these sub-accounts.
ASXT SIX
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With No Optional Benefits (1.65%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
01/01/2002 to 12/31/2002 -- $8.56 2,569,506
01/01/2003 to 12/31/2003 $8.56 $11.00 2,415,394
01/01/2004 to 12/31/2004 $11.00 $12.67 3,227,381
01/01/2005 to 12/31/2005 $12.67 $13.84 5,621,834
01/01/2006 to 12/31/2006 $13.84 $16.71 4,715,269
01/01/2007 to 12/31/2007 $16.71 $17.98 4,504,935
01/01/2008 to 12/31/2008 $17.98 $10.37 2,459,224
---------------------------------------------------------------------------------------------------
AST International Growth Portfolio
01/01/2002 to 12/31/2002 -- $9.72 835,523
01/01/2003 to 12/31/2003 $9.72 $13.39 5,547,558
01/01/2004 to 12/31/2004 $13.39 $15.30 11,265,469
01/01/2005 to 12/31/2005 $15.30 $17.54 12,141,521
01/01/2006 to 12/31/2006 $17.54 $20.87 9,628,446
01/01/2007 to 12/31/2007 $20.87 $24.43 8,347,423
01/01/2008 to 12/31/2008 $24.43 $11.96 6,129,240
---------------------------------------------------------------------------------------------------
AST International Value Portfolio
01/01/2002 to 12/31/2002 -- $8.19 269,995
01/01/2003 to 12/31/2003 $8.19 $10.79 1,201,268
01/01/2004 to 12/31/2004 $10.79 $12.84 1,897,469
01/01/2005 to 12/31/2005 $12.84 $14.36 2,013,543
01/01/2006 to 12/31/2006 $14.36 $18.00 3,305,654
01/01/2007 to 12/31/2007 $18.00 $20.85 4,044,519
01/01/2008 to 12/31/2008 $20.85 $11.48 2,393,870
A-57
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
01/01/2002 to 12/31/2002 -- $9.04 969,509
01/01/2003 to 12/31/2003 $9.04 $11.30 1,393,001
01/01/2004 to 12/31/2004 $11.30 $13.16 2,276,801
01/01/2005 to 12/31/2005 $13.16 $13.92 1,907,777
01/01/2006 to 12/31/2006 $13.92 $17.02 2,905,252
01/01/2007 to 12/31/2007 $17.02 $18.31 2,119,181
01/01/2008 to 12/31/2008 $18.31 $11.88 1,412,847
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.92 1,970,250
01/01/2003 to 12/31/2003 $6.92 $9.89 3,292,593
01/01/2004 to 12/31/2004 $9.89 $9.05 2,242,129
01/01/2005 to 12/31/2005 $9.05 $9.04 2,134,731
01/01/2006 to 12/31/2006 $9.04 $10.01 1,867,490
01/01/2007 to 12/31/2007 $10.01 $10.55 1,740,242
01/01/2008 to 12/31/2008 $10.55 $6.74 1,375,635
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 639,695
01/01/2003 to 12/31/2003 $7.67 $11.13 1,682,193
01/01/2004 to 12/31/2004 $11.13 $11.98 1,618,719
01/01/2005 to 12/31/2005 $11.98 $11.83 1,385,431
01/01/2006 to 12/31/2006 $11.83 $12.53 1,174,654
01/01/2007 to 12/31/2007 $12.53 $14.63 1,215,825
01/01/2008 to 12/31/2008 $14.63 $8.27 768,282
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.64 1,255,415
01/01/2003 to 12/31/2003 $7.64 $12.74 3,085,373
01/01/2004 to 12/31/2004 $12.74 $15.42 4,808,453
01/01/2005 to 12/31/2005 $15.42 $16.60 5,464,855
01/01/2006 to 12/31/2006 $16.60 $18.43 4,641,175
01/01/2007 to 12/31/2007 $18.43 $20.16 4,026,646
01/01/2008 to 12/31/2008 $20.16 $11.08 2,977,983
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.26 1,492,775
01/01/2003 to 12/31/2003 $9.26 $12.85 1,504,296
01/01/2004 to 12/31/2004 $12.85 $15.19 1,541,896
01/01/2005 to 12/31/2005 $15.19 $15.68 1,243,642
01/01/2006 to 12/31/2006 $15.68 $18.08 1,000,596
01/01/2007 to 12/31/2007 $18.08 $16.87 758,170
01/01/2008 to 12/31/2008 $16.87 $12.17 667,006
-------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.30 6,141,523
01/01/2003 to 12/31/2003 $9.30 $12.42 10,183,346
01/01/2004 to 12/31/2004 $12.42 $14.22 10,785,030
01/01/2005 to 12/31/2005 $14.22 $14.91 11,285,282
01/01/2006 to 12/31/2006 $14.91 $17.61 9,098,178
01/01/2007 to 12/31/2007 $17.61 $16.34 8,130,632
01/01/2008 to 12/31/2008 $16.34 $11.30 6,242,966
A-58
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $7.66 423,387
01/01/2003 to 12/31/2003 $7.66 $10.81 1,134,865
01/01/2004 to 12/31/2004 $10.81 $12.99 2,143,020
01/01/2005 to 12/31/2005 $12.99 $12.92 2,106,236
01/01/2006 to 12/31/2006 $12.92 $15.25 1,874,276
01/01/2007 to 12/31/2007 $15.25 $12.33 1,578,237
01/01/2008 to 07/18/2008 $12.33 $11.30 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.97 1,273,118
01/01/2003 to 12/31/2003 $7.97 $10.31 3,027,057
01/01/2004 to 12/31/2004 $10.31 $11.80 4,375,813
01/01/2005 to 12/31/2005 $11.80 $12.16 5,391,424
01/01/2006 to 12/31/2006 $12.16 $12.71 4,189,111
01/01/2007 to 12/31/2007 $12.71 $14.92 3,918,725
01/01/2008 to 12/31/2008 $14.92 $8.69 2,808,881
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.41 2,175,250
01/01/2003 to 12/31/2003 $7.41 $9.51 3,415,318
01/01/2004 to 12/31/2004 $9.51 $10.86 4,715,301
01/01/2005 to 12/31/2005 $10.86 $12.12 5,728,444
01/01/2006 to 12/31/2006 $12.12 $13.59 5,378,198
01/01/2007 to 12/31/2007 $13.59 $16.34 6,560,811
01/01/2008 to 12/31/2008 $16.34 $9.13 3,042,143
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman / LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.96 5,118,558
01/01/2003 to 12/31/2003 $8.96 $12.01 8,530,129
01/01/2004 to 12/31/2004 $12.01 $14.51 11,461,684
01/01/2005 to 12/31/2005 $14.51 $15.99 12,260,006
01/01/2006 to 12/31/2006 $15.99 $17.42 9,574,218
01/01/2007 to 12/31/2007 $17.42 $17.67 8,191,847
01/01/2008 to 12/31/2008 $17.67 $10.03 5,184,438
---------------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.80 658,419
01/01/2003 to 12/31/2003 $6.80 $9.07 2,002,166
01/01/2004 to 12/31/2004 $9.07 $9.67 1,798,457
01/01/2005 to 12/02/2005 $9.67 $11.10 0
---------------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.17 1,200,225
01/01/2003 to 12/31/2003 $8.17 $10.91 2,513,413
01/01/2004 to 12/31/2004 $10.91 $12.38 2,587,064
01/01/2005 to 12/31/2005 $12.38 $12.83 1,988,251
01/01/2006 to 12/31/2006 $12.83 $14.42 1,907,063
01/01/2007 to 12/31/2007 $14.42 $14.57 1,540,522
01/01/2008 to 12/31/2008 $14.57 $8.87 1,381,269
A-59
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
01/01/2002 to 12/31/2002 -- $9.59 724,670
01/01/2003 to 12/31/2003 $9.59 $12.59 2,011,627
01/01/2004 to 12/31/2004 $12.59 $16.25 2,040,188
01/01/2005 to 12/31/2005 $16.25 $21.00 3,677,613
01/01/2006 to 12/31/2006 $21.00 $23.93 2,942,718
01/01/2007 to 12/31/2007 $23.93 $33.07 3,950,105
01/01/2008 to 12/31/2008 $33.07 $16.27 2,088,027
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.46 1,869,353
01/01/2003 to 12/31/2003 $7.46 $9.08 2,098,873
01/01/2004 to 12/31/2004 $9.08 $9.44 2,378,881
01/01/2005 to 12/31/2005 $9.44 $10.81 3,925,742
01/01/2006 to 12/31/2006 $10.81 $11.23 4,132,529
01/01/2007 to 12/31/2007 $11.23 $11.96 5,137,246
01/01/2008 to 12/31/2008 $11.96 $6.99 4,437,756
-------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.58 2,930,432
01/01/2003 to 12/31/2003 $7.58 $9.16 4,784,269
01/01/2004 to 12/31/2004 $9.16 $9.97 4,529,834
01/01/2005 to 12/31/2005 $9.97 $10.43 5,915,443
01/01/2006 to 12/31/2006 $10.43 $11.25 4,572,301
01/01/2007 to 12/31/2007 $11.25 $12.73 3,902,210
01/01/2008 to 12/31/2008 $12.73 $7.98 3,159,245
-------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.32 10,144,317
01/01/2003 to 12/31/2003 $8.32 $10.78 20,138,164
01/01/2004 to 12/31/2004 $10.78 $12.26 28,117,310
01/01/2005 to 12/31/2005 $12.26 $12.88 32,140,125
01/01/2006 to 12/31/2006 $12.88 $13.59 26,497,526
01/01/2007 to 12/31/2007 $13.59 $15.36 23,963,028
01/01/2008 to 12/31/2008 $15.36 $8.51 16,673,165
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 1,349,939
01/01/2003 to 12/31/2003 $7.67 $9.45 2,053,023
01/01/2004 to 12/31/2004 $9.45 $9.64 2,785,100
01/01/2005 to 12/31/2005 $9.64 $9.80 2,531,901
01/01/2006 to 12/31/2006 $9.80 $10.60 2,498,654
01/01/2007 to 12/31/2007 $10.60 $11.88 2,806,534
01/01/2008 to 12/31/2008 $11.88 $6.98 1,877,493
-------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.66 664,649
01/01/2003 to 12/31/2003 $8.66 $10.78 1,072,256
01/01/2004 to 12/31/2004 $10.78 $12.53 2,351,197
01/01/2005 to 12/31/2005 $12.53 $13.47 2,585,881
01/01/2006 to 12/31/2006 $13.47 $16.13 4,397,725
01/01/2007 to 12/31/2007 $16.13 $16.05 3,751,417
01/01/2008 to 12/31/2008 $16.05 $9.90 2,589,179
-------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
01/01/2002 to 12/31/2002 -- $7.99 965,912
01/01/2003 to 12/31/2003 $7.99 $9.91 1,387,072
01/01/2004 to 12/31/2004 $9.91 $10.72 1,620,391
01/01/2005 to 12/02/2005 $10.72 $11.86 0
A-60
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
01/01/2002 to 12/31/2002 -- $8.76 6,005,922
01/01/2003 to 12/31/2003 $8.76 $11.06 3,621,862
01/01/2004 to 12/31/2004 $11.06 $12.39 4,643,022
01/01/2005 to 12/31/2005 $12.39 $12.86 4,311,857
01/01/2006 to 12/31/2006 $12.86 $15.34 5,318,094
01/01/2007 to 12/31/2007 $15.34 $14.55 4,469,636
01/01/2008 to 12/31/2008 $14.55 $8.32 2,874,755
--------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
01/01/2002 to 12/31/2002 -- $10.08 1,563,489
01/01/2003 to 12/31/2003 $10.08 $13.63 3,097,315
01/01/2004 to 12/31/2004 $13.63 $18.49 4,080,179
01/01/2005 to 12/31/2005 $18.49 $20.88 3,749,124
01/01/2006 to 12/31/2006 $20.88 $28.08 3,925,105
01/01/2007 to 12/31/2007 $28.08 $22.11 2,254,421
01/01/2008 to 12/31/2008 $22.11 $14.12 1,741,032
--------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
01/01/2002 to 12/31/2002 -- $8.17 3,662,406
01/01/2003 to 12/31/2003 $8.17 $10.23 5,442,511
01/01/2004 to 12/31/2004 $10.23 $11.07 6,845,369
01/01/2005 to 12/31/2005 $11.07 $11.27 6,774,077
01/01/2006 to 12/31/2006 $11.27 $12.48 6,255,253
01/01/2007 to 12/31/2007 $12.48 $12.53 5,371,782
01/01/2008 to 12/31/2008 $12.53 $7.55 2,747,511
--------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.25 1,751,136
01/01/2003 to 12/31/2003 $8.25 $10.45 2,115,438
01/01/2004 to 12/31/2004 $10.45 $11.57 4,670,846
01/01/2005 to 12/31/2005 $11.57 $11.90 4,205,656
01/01/2006 to 12/31/2006 $11.90 $13.68 3,984,557
01/01/2007 to 12/31/2007 $13.68 $13.44 3,435,528
01/01/2008 to 12/31/2008 $13.44 $8.62 2,803,150
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
01/01/2002 to 12/31/2002 -- $8.06 6,667,373
01/01/2003 to 12/31/2003 $8.06 $10.50 21,264,670
01/01/2004 to 12/31/2004 $10.50 $11.46 25,850,506
01/01/2005 to 12/31/2005 $11.46 $11.81 31,190,346
01/01/2006 to 12/31/2006 $11.81 $13.62 23,350,650
01/01/2007 to 12/31/2007 $13.62 $14.08 19,997,748
01/01/2008 to 12/31/2008 $14.08 $8.22 14,384,005
--------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.34 2,110,071
01/01/2003 to 12/31/2003 $8.34 $9.83 2,647,064
01/01/2004 to 12/31/2004 $9.83 $11.17 3,717,848
01/01/2005 to 12/31/2005 $11.17 $11.69 5,245,458
01/01/2006 to 12/31/2006 $11.69 $13.62 5,568,043
01/01/2007 to 12/31/2007 $13.62 $13.00 4,973,375
01/01/2008 to 12/31/2008 $13.00 $7.48 4,027,564
A-61
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
01/01/2002 to 12/31/2002 -- $8.71 847,517
01/01/2003 to 12/31/2003 $8.71 $10.24 898,161
01/01/2004 to 12/31/2004 $10.24 $11.19 1,061,887
01/01/2005 to 12/31/2005 $11.19 $11.77 1,055,034
01/01/2006 to 12/31/2006 $11.77 $12.86 1,120,866
01/01/2007 to 12/31/2007 $12.86 $12.90 2,745,236
01/01/2008 to 12/31/2008 $12.90 $10.45 15,430,642
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.14 1,126,058
01/01/2003 to 12/31/2003 $9.14 $10.69 2,045,205
01/01/2004 to 12/31/2004 $10.69 $11.46 2,335,598
01/01/2005 to 12/31/2005 $11.46 $11.79 2,294,529
01/01/2006 to 12/31/2006 $11.79 $12.72 2,165,859
01/01/2007 to 12/31/2007 $12.72 $13.62 2,277,264
01/01/2008 to 12/31/2008 $13.62 $9.35 3,074,479
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.09 921,329
01/01/2003 to 12/31/2003 $9.09 $11.09 2,243,566
01/01/2004 to 12/31/2004 $11.09 $12.13 3,551,315
01/01/2005 to 12/31/2005 $12.13 $12.49 4,192,627
01/01/2006 to 12/31/2006 $12.49 $13.82 4,776,442
01/01/2007 to 12/31/2007 $13.82 $14.45 6,387,795
01/01/2008 to 12/31/2008 $14.45 $10.52 10,697,390
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
01/01/2002 to 12/31/2002 -- $11.34 1,739,313
01/01/2003 to 12/31/2003 $11.34 $12.59 2,962,471
01/01/2004 to 12/31/2004 $12.59 $13.45 4,717,822
01/01/2005 to 12/31/2005 $13.45 $12.64 6,261,824
01/01/2006 to 12/31/2006 $12.64 $13.21 6,093,700
01/01/2007 to 12/31/2007 $13.21 $14.24 6,452,566
01/01/2008 to 12/31/2008 $14.24 $13.67 4,228,137
----------------------------------------------------------------------------------------------------------------------
AST High Yield Portfolio
01/01/2002 to 12/31/2002 -- $9.71 5,592,940
01/01/2003 to 12/31/2003 $9.71 $11.61 12,201,163
01/01/2004 to 12/31/2004 $11.61 $12.69 13,717,128
01/01/2005 to 12/31/2005 $12.69 $12.62 9,658,908
01/01/2006 to 12/31/2006 $12.62 $13.70 9,653,937
01/01/2007 to 12/31/2007 $13.70 $13.80 6,461,538
01/01/2008 to 12/31/2008 $13.80 $10.11 5,931,752
----------------------------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
01/01/2002 to 12/31/2002 -- $9.94 4,146,530
01/01/2003 to 12/31/2003 $9.94 $11.61 7,751,236
01/01/2004 to 12/31/2004 $11.61 $12.26 8,369,008
01/01/2005 to 12/31/2005 $12.26 $12.20 12,427,806
01/01/2006 to 12/31/2006 $12.20 $13.17 10,147,675
01/01/2007 to 12/31/2007 $13.17 $13.74 8,365,789
01/01/2008 to 12/31/2008 $13.74 $10.37 8,586,978
A-62
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.57 20,544,075
01/01/2003 to 12/31/2003 $10.57 $10.95 26,287,388
01/01/2004 to 12/31/2004 $10.95 $11.31 33,208,757
01/01/2005 to 12/31/2005 $11.31 $11.40 22,436,395
01/01/2006 to 12/31/2006 $11.40 $11.63 21,700,661
01/01/2007 to 12/31/2007 $11.63 $12.39 21,645,194
01/01/2008 to 12/31/2008 $12.39 $11.91 20,478,277
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.34 11,274,642
01/01/2003 to 12/31/2003 $10.34 $10.51 15,242,856
01/01/2004 to 12/31/2004 $10.51 $10.55 21,299,789
01/01/2005 to 12/31/2005 $10.55 $10.54 28,031,651
01/01/2006 to 12/31/2006 $10.54 $10.76 22,394,558
01/01/2007 to 12/31/2007 $10.76 $11.31 20,392,150
01/01/2008 to 12/31/2008 $11.31 $11.24 15,403,578
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
01/01/2002 to 12/31/2002 -- $9.96 36,255,772
01/01/2003 to 12/31/2003 $9.96 $9.86 32,730,501
01/01/2004 to 12/31/2004 $9.86 $9.78 29,870,585
01/01/2005 to 12/31/2005 $9.78 $9.88 42,442,274
01/01/2006 to 12/31/2006 $9.88 $10.16 46,325,237
01/01/2007 to 12/31/2007 $10.16 $10.48 56,111,128
01/01/2008 to 12/31/2008 $10.48 $10.57 91,319,625
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
01/01/2002 to 12/31/2002 -- $8.66 283,466
01/01/2003 to 12/31/2003 $8.66 $13.60 1,763,660
01/01/2004 to 12/31/2004 $13.60 $16.02 2,103,950
01/01/2005 to 12/31/2005 $16.02 $20.72 3,395,891
01/01/2006 to 12/31/2006 $20.72 $27.43 2,835,328
01/01/2007 to 12/31/2007 $27.43 $38.71 3,344,620
01/01/2008 to 12/31/2008 $38.71 $16.04 1,630,334
-------------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
01/01/2002 to 12/31/2002 -- $8.25 196,720
01/01/2003 to 12/31/2003 $8.25 $10.23 314,757
01/01/2004 to 12/31/2004 $10.23 $11.18 590,808
01/01/2005 to 12/31/2005 $11.18 $11.59 534,648
01/01/2006 to 12/31/2006 $11.59 $13.51 582,613
01/01/2007 to 12/31/2007 $13.51 $13.66 497,287
01/01/2008 to 12/31/2008 $13.66 $8.53 312,113
-------------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
01/01/2002 to 12/31/2002 -- $7.09 543,762
01/01/2003 to 12/31/2003 $7.09 $9.61 889,464
01/01/2004 to 12/31/2004 $9.61 $10.72 668,032
01/01/2005 to 12/31/2005 $10.72 $11.67 602,063
01/01/2006 to 12/31/2006 $11.67 $13.33 605,730
01/01/2007 to 12/31/2007 $13.33 $14.70 631,476
01/01/2008 to 12/31/2008 $14.70 $7.51 384,426
A-63
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
01/01/2002 to 12/31/2002 -- $5.50 293,307
01/01/2003 to 12/31/2003 $5.50 $7.87 578,651
01/01/2004 to 12/31/2004 $7.87 $8.09 512,424
01/01/2005 to 12/31/2005 $8.09 $8.13 453,392
01/01/2006 to 12/31/2006 $8.13 $8.84 513,442
01/01/2007 to 12/31/2007 $8.84 $9.36 630,739
01/01/2008 to 12/31/2008 $9.36 $5.11 453,772
----------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
01/01/2002 to 12/31/2002 -- $8.00 475,873
01/01/2003 to 12/31/2003 $8.00 $10.05 698,364
01/01/2004 to 12/31/2004 $10.05 $10.64 937,586
01/01/2005 to 12/31/2005 $10.64 $11.31 1,131,376
01/01/2006 to 12/31/2006 $11.31 $11.71 1,250,782
01/01/2007 to 12/31/2007 $11.71 $12.88 1,163,277
01/01/2008 to 12/31/2008 $12.88 $9.04 849,932
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
01/01/2002 to 12/31/2002 -- $8.76 366,258
01/01/2003 to 12/31/2003 $8.76 $11.17 607,265
01/01/2004 to 12/31/2004 $11.17 $11.94 585,185
01/01/2005 to 12/31/2005 $11.94 $12.43 1,042,992
01/01/2006 to 12/31/2006 $12.43 $14.24 778,674
01/01/2007 to 12/31/2007 $14.24 $10.89 465,175
01/01/2008 to 12/31/2008 $10.89 $4.34 540,897
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
01/01/2002 to 12/31/2002 -- $8.15 113,389
01/01/2003 to 12/31/2003 $8.15 $11.65 189,143
01/01/2004 to 12/31/2004 $11.65 $13.66 414,631
01/01/2005 to 12/31/2005 $13.66 $15.59 689,816
01/01/2006 to 12/31/2006 $15.59 $18.88 1,081,552
01/01/2007 to 12/31/2007 $18.88 $21.35 1,401,663
01/01/2008 to 12/31/2008 $21.35 $12.29 984,931
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
01/01/2002 to 12/31/2002 -- $7.44 127,728
01/01/2003 to 12/31/2003 $7.44 $11.12 815,621
01/01/2004 to 12/31/2004 $11.12 $11.58 702,642
01/01/2005 to 04/15/2005 $11.58 $10.31 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
01/01/2002 to 12/31/2002 -- $7.78 39,943
01/01/2003 to 12/31/2003 $7.78 $10.71 404,789
01/01/2004 to 12/31/2004 $10.71 $11.29 570,123
01/01/2005 to 12/31/2005 $11.29 $11.53 281,775
01/01/2006 to 12/31/2006 $11.53 $12.03 241,307
01/01/2007 to 12/31/2007 $12.03 $13.24 249,298
01/01/2008 to 12/31/2008 $13.24 $9.48 271,517
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.44 606,613
01/01/2006 to 12/31/2006 $11.44 $12.49 553,827
01/01/2007 to 12/31/2007 $12.49 $13.64 604,401
01/01/2008 to 12/31/2008 $13.64 $7.90 346,210
A-64
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Europe 30
01/01/2002 to 12/31/2002 -- $7.93 292,396
01/01/2003 to 12/31/2003 $7.93 $10.83 2,116,400
01/01/2004 to 12/31/2004 $10.83 $12.17 1,812,435
01/01/2005 to 12/31/2005 $12.17 $12.94 1,133,420
01/01/2006 to 12/31/2006 $12.94 $14.95 2,790,577
01/01/2007 to 12/31/2007 $14.95 $16.85 1,487,885
01/01/2008 to 12/31/2008 $16.85 $9.28 649,001
---------------------------------------------------------------------------------------
ProFund VP Asia 30
01/01/2002 to 12/31/2002 -- $7.75 281,993
01/01/2003 to 12/31/2003 $7.75 $12.57 942,605
01/01/2004 to 12/31/2004 $12.57 $12.30 896,010
01/01/2005 to 12/31/2005 $12.30 $14.45 1,723,105
01/01/2006 to 12/31/2006 $14.45 $19.80 3,073,769
01/01/2007 to 12/31/2007 $19.80 $28.77 2,473,589
01/01/2008 to 12/31/2008 $28.77 $13.91 1,337,672
---------------------------------------------------------------------------------------
ProFund VP Japan
01/01/2002 to 12/31/2002 -- $7.24 65,845
01/01/2003 to 12/31/2003 $7.24 $9.03 426,718
01/01/2004 to 12/31/2004 $9.03 $9.55 710,879
01/01/2005 to 12/31/2005 $9.55 $13.31 3,413,954
01/01/2006 to 12/31/2006 $13.31 $14.51 1,650,266
01/01/2007 to 12/31/2007 $14.51 $12.85 552,230
01/01/2008 to 12/31/2008 $12.85 $7.47 553,832
---------------------------------------------------------------------------------------
ProFund VP Banks
01/01/2002 to 12/31/2002 -- $8.56 101,136
01/01/2003 to 12/31/2003 $8.56 $10.90 93,067
01/01/2004 to 12/31/2004 $10.90 $11.98 229,711
01/01/2005 to 12/31/2005 $11.98 $11.77 351,876
01/01/2006 to 12/31/2006 $11.77 $13.35 402,883
01/01/2007 to 12/31/2007 $13.35 $9.55 389,926
01/01/2008 to 12/31/2008 $9.55 $4.99 2,409,143
---------------------------------------------------------------------------------------
ProFund VP Basic Materials
01/01/2002 to 12/31/2002 -- $8.46 76,331
01/01/2003 to 12/31/2003 $8.46 $10.95 1,512,864
01/01/2004 to 12/31/2004 $10.95 $11.87 529,237
01/01/2005 to 12/31/2005 $11.87 $11.96 681,690
01/01/2006 to 12/31/2006 $11.96 $13.58 779,466
01/01/2007 to 12/31/2007 $13.58 $17.45 2,684,333
01/01/2008 to 12/31/2008 $17.45 $8.34 1,183,553
---------------------------------------------------------------------------------------
ProFund VP Biotechnology
01/01/2002 to 12/31/2002 -- $7.09 130,082
01/01/2003 to 12/31/2003 $7.09 $9.75 208,971
01/01/2004 to 12/31/2004 $9.75 $10.52 757,678
01/01/2005 to 12/31/2005 $10.52 $12.34 697,687
01/01/2006 to 12/31/2006 $12.34 $11.64 393,923
01/01/2007 to 12/31/2007 $11.64 $11.31 609,746
01/01/2008 to 12/31/2008 $11.31 $11.33 1,249,287
A-65
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
01/01/2002 to 12/31/2002 -- $7.25 128,022
01/01/2003 to 12/31/2003 $7.25 $9.04 136,269
01/01/2004 to 12/31/2004 $9.04 $9.56 430,620
01/01/2005 to 12/31/2005 $9.56 $8.97 86,431
01/01/2006 to 12/31/2006 $8.97 $9.88 192,639
01/01/2007 to 12/31/2007 $9.88 $8.91 67,292
01/01/2008 to 12/31/2008 $8.91 $6.01 448,604
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
01/01/2002 to 12/31/2002 -- $8.28 148,446
01/01/2003 to 12/31/2003 $8.28 $9.64 58,425
01/01/2004 to 12/31/2004 $9.64 $10.36 369,007
01/01/2005 to 12/31/2005 $10.36 $10.15 161,038
01/01/2006 to 12/31/2006 $10.15 $11.25 548,567
01/01/2007 to 12/31/2007 $11.25 $11.90 715,235
01/01/2008 to 12/31/2008 $11.90 $8.58 609,574
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
01/01/2002 to 12/31/2002 -- $8.71 299,833
01/01/2003 to 12/31/2003 $8.71 $10.48 1,225,844
01/01/2004 to 12/31/2004 $10.48 $13.33 1,856,882
01/01/2005 to 12/31/2005 $13.33 $17.22 2,573,777
01/01/2006 to 12/31/2006 $17.22 $20.43 2,251,126
01/01/2007 to 12/31/2007 $20.43 $26.61 2,322,451
01/01/2008 to 12/31/2008 $26.61 $16.50 1,351,549
-------------------------------------------------------------------------------------------
ProFund VP Financials
01/01/2002 to 12/31/2002 -- $8.85 221,377
01/01/2003 to 12/31/2003 $8.85 $11.23 398,159
01/01/2004 to 12/31/2004 $11.23 $12.19 553,342
01/01/2005 to 12/31/2005 $12.19 $12.46 616,872
01/01/2006 to 12/31/2006 $12.46 $14.38 913,872
01/01/2007 to 12/31/2007 $14.38 $11.44 498,292
01/01/2008 to 12/31/2008 $11.44 $5.57 2,008,426
-------------------------------------------------------------------------------------------
ProFund VP Health Care
01/01/2002 to 12/31/2002 -- $7.94 388,508
01/01/2003 to 12/31/2003 $7.94 $9.17 707,449
01/01/2004 to 12/31/2004 $9.17 $9.23 1,318,525
01/01/2005 to 12/31/2005 $9.23 $9.63 2,175,821
01/01/2006 to 12/31/2006 $9.63 $9.96 2,106,409
01/01/2007 to 12/31/2007 $9.96 $10.44 2,120,859
01/01/2008 to 12/31/2008 $10.44 $7.78 1,638,682
-------------------------------------------------------------------------------------------
ProFund VP Industrials
01/01/2002 to 12/31/2002 -- $7.93 12,642
01/01/2003 to 12/31/2003 $7.93 $10.01 318,339
01/01/2004 to 12/31/2004 $10.01 $11.15 253,411
01/01/2005 to 12/31/2005 $11.15 $11.23 211,678
01/01/2006 to 12/31/2006 $11.23 $12.33 242,684
01/01/2007 to 12/31/2007 $12.33 $13.55 708,921
01/01/2008 to 12/31/2008 $13.55 $7.93 348,521
A-66
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Internet
01/01/2002 to 12/31/2002 -- $8.57 306,572
01/01/2003 to 12/31/2003 $8.57 $15.00 206,876
01/01/2004 to 12/31/2004 $15.00 $17.89 992,879
01/01/2005 to 12/31/2005 $17.89 $18.90 467,320
01/01/2006 to 12/31/2006 $18.90 $18.84 200,072
01/01/2007 to 12/31/2007 $18.84 $20.42 435,015
01/01/2008 to 12/31/2008 $20.42 $11.08 116,246
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
01/01/2002 to 12/31/2002 -- $8.56 136,559
01/01/2003 to 12/31/2003 $8.56 $8.89 266,978
01/01/2004 to 12/31/2004 $8.89 $7.93 527,336
01/01/2005 to 12/31/2005 $7.93 $7.51 515,769
01/01/2006 to 12/31/2006 $7.51 $8.28 716,678
01/01/2007 to 12/31/2007 $8.28 $8.33 492,538
01/01/2008 to 12/31/2008 $8.33 $6.60 588,925
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
01/01/2002 to 12/31/2002 -- $9.70 1,175,651
01/01/2003 to 12/31/2003 $9.70 $13.29 1,329,806
01/01/2004 to 12/31/2004 $13.29 $11.77 1,479,384
01/01/2005 to 12/31/2005 $11.77 $14.62 2,426,531
01/01/2006 to 12/31/2006 $14.62 $15.44 2,487,596
01/01/2007 to 12/31/2007 $15.44 $18.60 3,177,702
01/01/2008 to 12/31/2008 $18.60 $12.66 2,709,868
---------------------------------------------------------------------------------------
ProFund VP Real Estate
01/01/2002 to 12/31/2002 -- $9.86 441,318
01/01/2003 to 12/31/2003 $9.86 $12.91 462,906
01/01/2004 to 12/31/2004 $12.91 $16.15 1,816,706
01/01/2005 to 12/31/2005 $16.15 $16.96 501,989
01/01/2006 to 12/31/2006 $16.96 $22.10 926,728
01/01/2007 to 12/31/2007 $22.10 $17.47 505,436
01/01/2008 to 12/31/2008 $17.47 $10.09 587,638
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
01/01/2002 to 12/31/2002 -- $5.14 93,241
01/01/2003 to 12/31/2003 $5.14 $9.51 423,958
01/01/2004 to 12/31/2004 $9.51 $7.15 694,352
01/01/2005 to 12/31/2005 $7.15 $7.64 746,084
01/01/2006 to 12/31/2006 $7.64 $6.98 339,250
01/01/2007 to 12/31/2007 $6.98 $7.35 272,048
01/01/2008 to 12/31/2008 $7.35 $3.63 166,664
---------------------------------------------------------------------------------------
ProFund VP Technology
01/01/2002 to 12/31/2002 -- $6.03 254,131
01/01/2003 to 12/31/2003 $6.03 $8.66 497,972
01/01/2004 to 12/31/2004 $8.66 $8.48 727,580
01/01/2005 to 12/31/2005 $8.48 $8.45 577,737
01/01/2006 to 12/31/2006 $8.45 $8.98 673,628
01/01/2007 to 12/31/2007 $8.98 $10.10 1,668,456
01/01/2008 to 12/31/2008 $10.10 $5.53 322,313
A-67
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
01/01/2002 to 12/31/2002 -- $7.15 272,408
01/01/2003 to 12/31/2003 $7.15 $7.21 398,350
01/01/2004 to 12/31/2004 $7.21 $8.19 460,848
01/01/2005 to 12/31/2005 $8.19 $7.52 456,586
01/01/2006 to 12/31/2006 $7.52 $9.93 1,277,316
01/01/2007 to 12/31/2007 $9.93 $10.59 1,098,402
01/01/2008 to 12/31/2008 $10.59 $6.83 840,295
---------------------------------------------------------------------------------------
ProFund VP Utilities
01/01/2002 to 12/31/2002 -- $7.83 521,419
01/01/2003 to 12/31/2003 $7.83 $9.34 618,427
01/01/2004 to 12/31/2004 $9.34 $11.13 1,060,939
01/01/2005 to 12/31/2005 $11.13 $12.37 1,996,877
01/01/2006 to 12/31/2006 $12.37 $14.51 2,195,309
01/01/2007 to 12/31/2007 $14.51 $16.52 3,808,582
01/01/2008 to 12/31/2008 $16.52 $11.26 1,279,942
---------------------------------------------------------------------------------------
ProFund VP Bull
01/01/2002 to 12/31/2002 -- $7.97 954,792
01/01/2003 to 12/31/2003 $7.97 $9.84 3,563,562
01/01/2004 to 12/31/2004 $9.84 $10.53 8,215,357
01/01/2005 to 12/31/2005 $10.53 $10.64 7,846,866
01/01/2006 to 12/31/2006 $10.64 $11.90 7,031,661
01/01/2007 to 12/31/2007 $11.90 $12.12 4,013,033
01/01/2008 to 12/31/2008 $12.12 $7.43 2,963,943
---------------------------------------------------------------------------------------
ProFund VP Bear
01/01/2002 to 12/31/2002 -- $11.38 1,532,543
01/01/2003 to 12/31/2003 $11.38 $8.44 1,886,515
01/01/2004 to 12/31/2004 $8.44 $7.45 1,202,243
01/01/2005 to 12/31/2005 $7.45 $7.23 2,169,659
01/01/2006 to 12/31/2006 $7.23 $6.57 1,868,606
01/01/2007 to 12/31/2007 $6.57 $6.50 1,722,065
01/01/2008 to 12/31/2008 $6.50 $8.95 2,326,201
---------------------------------------------------------------------------------------
ProFund VP UltraBull
01/01/2002 to 12/31/2002 -- $6.78 297,435
01/01/2003 to 12/31/2003 $6.78 $10.20 1,431,345
01/01/2004 to 12/31/2004 $10.20 $11.76 2,817,803
01/01/2005 to 12/31/2005 $11.76 $11.87 1,158,024
01/01/2006 to 12/31/2006 $11.87 $14.36 1,596,920
01/01/2007 to 12/31/2007 $14.36 $14.24 1,964,725
01/01/2008 to 12/31/2008 $14.24 $4.57 8,061,341
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
01/01/2002 to 12/31/2002 -- $6.45 1,346,852
01/01/2003 to 12/31/2003 $6.45 $9.32 4,445,234
01/01/2004 to 12/31/2004 $9.32 $9.94 4,885,351
01/01/2005 to 12/31/2005 $9.94 $9.80 2,467,486
01/01/2006 to 12/31/2006 $9.80 $10.16 1,764,614
01/01/2007 to 12/31/2007 $10.16 $11.76 2,265,084
01/01/2008 to 12/31/2008 $11.76 $6.65 1,171,313
A-68
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
01/01/2002 to 12/31/2002 -- $11.00 433,181
01/01/2003 to 12/31/2003 $11.00 $6.78 1,535,439
01/01/2004 to 12/31/2004 $6.78 $5.93 908,064
01/01/2005 to 12/31/2005 $5.93 $5.88 2,494,108
01/01/2006 to 12/31/2006 $5.88 $5.70 1,891,265
01/01/2007 to 12/31/2007 $5.70 $4.96 860,024
01/01/2008 to 12/31/2008 $4.96 $7.23 722,924
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
01/01/2002 to 12/31/2002 -- $3.53 1,003,123
01/01/2003 to 12/31/2003 $3.53 $7.03 3,410,589
01/01/2004 to 12/31/2004 $7.03 $7.89 6,592,447
01/01/2005 to 12/31/2005 $7.89 $7.47 4,740,165
01/01/2006 to 12/31/2006 $7.47 $7.70 2,319,572
01/01/2007 to 12/31/2007 $7.70 $9.73 4,024,405
01/01/2008 to 12/31/2008 $9.73 $2.61 3,358,757
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
01/01/2002 to 12/31/2002 -- $7.66 438,387
01/01/2003 to 12/31/2003 $7.66 $10.23 1,455,513
01/01/2004 to 12/31/2004 $10.23 $11.67 2,632,869
01/01/2005 to 12/31/2005 $11.67 $12.49 2,164,543
01/01/2006 to 12/31/2006 $12.49 $13.80 1,978,580
01/01/2007 to 12/31/2007 $13.80 $13.70 1,436,105
01/01/2008 to 12/31/2008 $13.70 $8.58 733,971
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
01/01/2002 to 12/31/2002 -- $7.70 439,054
01/01/2003 to 12/31/2003 $7.70 $9.69 1,009,867
01/01/2004 to 12/31/2004 $9.69 $10.58 2,220,901
01/01/2005 to 12/31/2005 $10.58 $11.58 5,059,312
01/01/2006 to 12/31/2006 $11.58 $11.84 1,594,539
01/01/2007 to 12/31/2007 $11.84 $13.01 2,101,505
01/01/2008 to 12/31/2008 $13.01 $7.83 1,117,437
---------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
01/01/2002 to 12/31/2002 -- $5.71 477,953
01/01/2003 to 12/31/2003 $5.71 $9.55 1,112,311
01/01/2004 to 12/31/2004 $9.55 $11.99 3,106,849
01/01/2005 to 12/31/2005 $11.99 $13.91 1,935,489
01/01/2006 to 12/31/2006 $13.91 $15.14 1,588,771
01/01/2007 to 12/31/2007 $15.14 $15.77 1,072,846
01/01/2008 to 12/31/2008 $15.77 $5.04 2,684,256
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
01/01/2002 to 12/31/2002 -- $7.09 994,778
01/01/2003 to 12/31/2003 $7.09 $9.39 5,144,632
01/01/2004 to 12/31/2004 $9.39 $11.10 4,088,760
01/01/2005 to 12/31/2005 $11.10 $11.35 1,398,441
01/01/2006 to 12/31/2006 $11.35 $13.11 2,446,357
01/01/2007 to 12/31/2007 $13.11 $11.96 714,107
01/01/2008 to 12/31/2008 $11.96 $8.15 838,930
A-69
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
01/01/2002 to 12/31/2002 -- $7.69 772,260
01/01/2003 to 12/31/2003 $7.69 $10.16 3,868,951
01/01/2004 to 12/31/2004 $10.16 $11.98 4,677,820
01/01/2005 to 12/31/2005 $11.98 $12.67 4,579,886
01/01/2006 to 12/31/2006 $12.67 $13.54 1,643,633
01/01/2007 to 12/31/2007 $13.54 $13.85 676,467
01/01/2008 to 12/31/2008 $13.85 $8.99 990,289
--------------------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
01/01/2002 to 12/31/2002 -- $6.14 212,085
01/01/2003 to 12/31/2003 $6.14 $12.04 1,702,558
01/01/2004 to 12/31/2004 $12.04 $15.52 5,098,565
01/01/2005 to 12/31/2005 $15.52 $15.23 816,754
01/01/2006 to 12/31/2006 $15.23 $18.87 1,580,595
01/01/2007 to 12/31/2007 $18.87 $16.11 527,856
01/01/2008 to 12/31/2008 $16.11 $5.36 2,519,397
--------------------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
01/01/2002 to 12/31/2002 -- $11.56 2,486,854
01/01/2003 to 12/31/2003 $11.56 $11.08 731,470
01/01/2004 to 12/31/2004 $11.08 $11.79 1,051,158
01/01/2005 to 12/31/2005 $11.79 $12.64 2,312,868
01/01/2006 to 12/31/2006 $12.64 $11.86 821,668
01/01/2007 to 12/31/2007 $11.86 $12.85 2,443,725
01/01/2008 to 12/31/2008 $12.85 $18.92 2,696,273
--------------------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
01/01/2002 to 12/31/2002 -- $8.02 165,792
01/01/2003 to 12/31/2003 $8.02 $7.56 1,817,924
01/01/2004 to 12/31/2004 $7.56 $6.63 5,314,528
01/01/2005 to 12/31/2005 $6.63 $6.00 3,415,324
01/01/2006 to 12/31/2006 $6.00 $6.50 4,567,551
01/01/2007 to 12/31/2007 $6.50 $6.06 1,806,294
01/01/2008 to 12/31/2008 $6.06 $3.70 2,315,493
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.56 899,139
01/01/2006 to 12/31/2006 $10.56 $11.38 1,207,864
01/01/2007 to 12/31/2007 $11.38 $11.78 898,024
01/01/2008 to 12/31/2008 $11.78 $11.04 901,901
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
01/01/2002 to 12/31/2002 -- $6.80 19,826
01/01/2003 to 12/31/2003 $6.80 $9.16 66,435
01/01/2004 to 12/31/2004 $9.16 $10.03 91,924
01/01/2005 to 12/31/2005 $10.03 $9.92 87,726
01/01/2006 to 12/31/2006 $9.92 $10.15 100,227
01/01/2007 to 12/31/2007 $10.15 $10.55 106,856
01/01/2008 to 12/31/2008 $10.55 $5.83 190,718
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
01/01/2004 to 12/31/2004 -- $11.85 311,233
01/01/2005 to 12/31/2005 $11.85 $12.84 590,605
01/01/2006 to 12/31/2006 $12.84 $17.48 1,507,757
01/01/2007 to 12/31/2007 $17.48 $19.49 2,078,809
01/01/2008 to 12/31/2008 $19.49 $10.97 1,122,006
A-70
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
01/01/2004 to 12/31/2004 -- $11.32 1,777,316
01/01/2005 to 12/31/2005 $11.32 $11.94 2,420,874
01/01/2006 to 12/31/2006 $11.94 $13.10 2,772,210
01/01/2007 to 12/31/2007 $13.10 $14.10 2,203,754
01/01/2008 to 12/31/2008 $14.10 $7.65 1,345,285
---------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
01/01/2004 to 12/31/2004 -- $10.66 82,809
01/01/2005 to 12/31/2005 $10.66 $10.83 134,177
01/01/2006 to 12/31/2006 $10.83 $11.60 199,508
01/01/2007 to 12/31/2007 $11.60 $13.88 403,709
01/01/2008 to 12/31/2008 $13.88 $6.71 199,304
---------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
01/01/2004 to 12/31/2004 -- $10.75 173,851
01/01/2005 to 12/31/2005 $10.75 $11.01 304,840
01/01/2006 to 12/31/2006 $11.01 $11.14 290,152
01/01/2007 to 12/31/2007 $11.14 $11.42 274,858
01/01/2008 to 12/31/2008 $11.42 $8.09 259,188
---------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
01/01/2004 to 12/31/2004 -- $10.48 155,695
01/01/2005 to 12/31/2005 $10.48 $9.98 194,864
01/01/2006 to 12/31/2006 $9.98 $12.32 481,064
01/01/2007 to 12/31/2007 $12.32 $12.20 235,030
01/01/2008 to 12/31/2008 $12.20 $8.58 249,670
---------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.76 1,240,525
01/01/2006 to 12/31/2006 $9.76 $11.34 2,310,768
01/01/2007 to 12/31/2007 $11.34 $11.28 2,000,024
01/01/2008 to 12/31/2008 $11.28 $6.59 1,374,063
---------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
01/01/2004 to 12/31/2004 -- $12.59 389,792
01/01/2005 to 12/31/2005 $12.59 $14.82 1,068,337
01/01/2006 to 12/31/2006 $14.82 $15.00 1,119,827
01/01/2007 to 12/31/2007 $15.00 $17.43 1,173,103
01/01/2008 to 12/31/2008 $17.43 $7.74 1,027,401
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
01/01/2004 to 12/31/2004 -- $10.37 72,725
01/01/2005 to 12/31/2005 $10.37 $10.30 2,620,748
01/01/2006 to 12/31/2006 $10.30 $11.05 2,181,106
01/01/2007 to 12/31/2007 $11.05 $11.62 2,009,820
01/01/2008 to 12/31/2008 $11.62 $7.37 1,340,839
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
01/01/2004 to 12/31/2004 -- $10.37 159,605
01/01/2005 to 12/31/2005 $10.37 $10.51 2,141,309
01/01/2006 to 12/31/2006 $10.51 $12.26 4,023,312
01/01/2007 to 12/31/2007 $12.26 $12.08 1,984,257
01/01/2008 to 12/31/2008 $12.08 $7.07 1,514,949
A-71
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
01/01/2004 to 12/31/2004 -- $9.70 39,360
01/01/2005 to 12/31/2005 $9.70 $8.64 364,782
01/01/2006 to 12/31/2006 $8.64 $8.18 254,207
01/01/2007 to 12/31/2007 $8.18 $7.82 131,223
01/01/2008 to 12/31/2008 $7.82 $10.14 177,441
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
01/01/2004 to 12/31/2004 -- $9.54 136,809
01/01/2005 to 12/31/2005 $9.54 $9.11 220,842
01/01/2006 to 12/31/2006 $9.11 $7.90 560,897
01/01/2007 to 12/31/2007 $7.90 $8.12 1,000,449
01/01/2008 to 12/31/2008 $8.12 $9.92 233,809
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
01/01/2004 to 12/31/2004 -- $10.53 269,671
01/01/2005 to 12/31/2005 $10.53 $12.05 672,243
01/01/2006 to 12/31/2006 $12.05 $14.35 742,865
01/01/2007 to 12/31/2007 $14.35 $16.87 828,104
01/01/2008 to 12/31/2008 $16.87 $8.25 357,600
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 649,828
01/01/2006 to 12/31/2006 $10.00 $11.38 5,212,589
01/01/2007 to 12/31/2007 $11.38 $12.26 8,022,912
01/01/2008 to 12/31/2008 $12.26 $6.95 5,663,091
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 2,586,013
01/01/2006 to 12/31/2006 $10.01 $11.19 23,048,850
01/01/2007 to 12/31/2007 $11.19 $12.07 31,465,957
01/01/2008 to 12/31/2008 $12.07 $7.73 32,624,883
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 2,726,484
01/01/2006 to 12/31/2006 $10.02 $11.01 21,829,919
01/01/2007 to 12/31/2007 $11.01 $11.83 30,616,578
01/01/2008 to 12/31/2008 $11.83 $7.93 35,995,508
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 685,724
01/01/2006 to 12/31/2006 $10.03 $10.90 7,315,279
01/01/2007 to 12/31/2007 $10.90 $11.70 12,873,620
01/01/2008 to 12/31/2008 $11.70 $8.20 24,018,186
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.04 115,215
01/01/2006 to 12/31/2006 $10.04 $10.66 3,303,256
01/01/2007 to 12/31/2007 $10.66 $11.40 7,359,596
01/01/2008 to 12/31/2008 $11.40 $9.02 24,830,005
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.66 5,258,474
01/01/2007 to 12/31/2007 $10.66 $11.48 8,525,849
01/01/2008 to 12/31/2008 $11.48 $7.93 16,229,117
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.58 3,781,525
01/01/2007 to 12/31/2007 $10.58 $11.30 7,801,920
01/01/2008 to 12/31/2008 $11.30 $7.28 13,486,356
A-72
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.48 3,795,562
01/01/2007 to 12/31/2007 $10.48 $11.49 7,899,326
01/01/2008 to 12/31/2008 $11.49 $6.70 13,640,692
-------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.51 120,901
01/01/2008 to 12/31/2008 $11.51 $7.33 2,184,002
-------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.04 74,936
01/01/2008 to 12/31/2008 $10.04 $7.15 5,507,286
-------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.19 157,014
01/01/2008 to 12/31/2008 $10.19 $6.94 1,952,838
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 39,143
01/01/2008 to 12/31/2008 $10.17 $7.58 3,825,075
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.00 50,892
01/01/2008 to 12/31/2008 $10.00 $7.16 2,156,002
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 213,630
01/01/2008 to 12/31/2008 $9.98 $9.30 4,064,760
-------------------------------------------------------------------------------------------------------------
AST Investment Grade Bond Portfolio
01/28/2008* to 12/31/2008 $10.00 $10.73 128,735,078
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.18 $6.11 100,170
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.57 126,548
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.47 1,469,632
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.64 5,636,967
* Denotes the start date of these sub-accounts.
ASXT SIX
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With LT5, HDV, and EBP (3.00%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
03/14/2005 to 12/31/2005 $9.91 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $13.32 0
01/01/2008 to 12/31/2008 $13.32 $7.57 0
A-73
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST International Growth Portfolio
03/14/2005 to 12/31/2005 $9.92 $11.16 0
01/01/2006 to 12/31/2006 $11.16 $13.10 0
01/01/2007 to 12/31/2007 $13.10 $15.12 0
01/01/2008 to 12/31/2008 $15.12 $7.30 0
-------------------------------------------------------------------------------------------------------
AST International Value Portfolio
03/14/2005 to 12/31/2005 $9.92 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $13.09 0
01/01/2007 to 12/31/2007 $13.09 $14.95 0
01/01/2008 to 12/31/2008 $14.95 $8.12 0
-------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
03/14/2005 to 12/31/2005 $9.96 $10.36 0
01/01/2006 to 12/31/2006 $10.36 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $13.25 0
01/01/2008 to 12/31/2008 $13.25 $8.49 0
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.31 0
01/01/2006 to 12/31/2006 $10.31 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $11.71 0
01/01/2008 to 12/31/2008 $11.71 $7.38 0
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.66 0
01/01/2007 to 12/31/2007 $10.66 $12.27 0
01/01/2008 to 12/31/2008 $12.27 $6.84 0
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.84 0
01/01/2006 to 12/31/2006 $10.84 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $12.80 0
01/01/2008 to 12/31/2008 $12.80 $6.94 0
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $10.92 0
01/01/2008 to 12/31/2008 $10.92 $7.77 0
-------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.65 0
-------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.04 $9.90 0
01/01/2006 to 12/31/2006 $9.90 $11.53 0
01/01/2007 to 12/31/2007 $11.53 $9.19 0
01/01/2008 to 07/18/2008 $9.19 $8.36 0
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.78 0
01/01/2007 to 12/31/2007 $10.78 $12.48 0
01/01/2008 to 12/31/2008 $12.48 $7.17 0
A-74
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.05 $11.21 0
01/01/2006 to 12/31/2006 $11.21 $12.40 0
01/01/2007 to 12/31/2007 $12.40 $14.70 0
01/01/2008 to 12/31/2008 $14.70 $8.10 0
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.02 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $11.56 0
01/01/2007 to 12/31/2007 $11.56 $11.57 0
01/01/2008 to 12/31/2008 $11.57 $6.48 0
---------------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
03/14/2005 to 12/02/2005 $10.09 $11.59 0
---------------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.06 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.34 0
01/01/2007 to 12/31/2007 $11.34 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.78 0
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
03/14/2005 to 12/31/2005 $10.00 $11.61 0
01/01/2006 to 12/31/2006 $11.61 $13.05 0
01/01/2007 to 12/31/2007 $13.05 $17.78 0
01/01/2008 to 12/31/2008 $17.78 $8.62 0
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.02 $11.98 0
01/01/2006 to 12/31/2006 $11.98 $12.28 0
01/01/2007 to 12/31/2007 $12.28 $12.89 0
01/01/2008 to 12/31/2008 $12.89 $7.43 0
---------------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $12.63 0
01/01/2008 to 12/31/2008 $12.63 $7.81 0
---------------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
03/14/2005 to 12/31/2005 $10.12 $10.78 0
01/01/2006 to 12/31/2006 $10.78 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $12.50 0
01/01/2008 to 12/31/2008 $12.50 $6.83 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $7.27 0
---------------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $12.51 0
01/01/2007 to 12/31/2007 $12.51 $12.28 0
01/01/2008 to 12/31/2008 $12.28 $7.47 0
---------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
03/14/2005 to 12/02/2005 $10.05 $11.21 0
A-75
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $6.33 0
----------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
03/14/2005 to 12/31/2005 $10.15 $11.88 0
01/01/2006 to 12/31/2006 $11.88 $15.76 0
01/01/2007 to 12/31/2007 $15.76 $12.24 0
01/01/2008 to 12/31/2008 $12.24 $7.71 0
----------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.28 0
01/01/2006 to 12/31/2006 $10.28 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $11.12 0
01/01/2008 to 12/31/2008 $11.12 $6.61 0
----------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
03/14/2005 to 12/31/2005 $10.07 $10.22 0
01/01/2006 to 12/31/2006 $10.22 $11.58 0
01/01/2007 to 12/31/2007 $11.58 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.10 0
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.15 0
01/01/2006 to 12/31/2006 $10.15 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.77 0
01/01/2008 to 12/31/2008 $11.77 $6.77 0
----------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.99 0
01/01/2007 to 12/31/2007 $11.99 $11.29 0
01/01/2008 to 12/31/2008 $11.29 $6.40 0
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $8.95 0
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.46 0
01/01/2008 to 12/31/2008 $11.46 $7.76 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.17 0
01/01/2007 to 12/31/2007 $11.17 $11.52 0
01/01/2008 to 12/31/2008 $11.52 $8.28 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
03/14/2005 to 12/31/2005 $9.95 $9.34 0
01/01/2006 to 12/31/2006 $9.34 $9.63 0
01/01/2007 to 12/31/2007 $9.63 $10.24 0
01/01/2008 to 12/31/2008 $10.24 $9.69 0
A-76
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST High Yield Portfolio
03/14/2005 to 12/31/2005 $9.98 $9.75 0
01/01/2006 to 12/31/2006 $9.75 $10.43 0
01/01/2007 to 12/31/2007 $10.43 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $7.49 0
-------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.84 0
01/01/2006 to 12/31/2006 $9.84 $10.48 0
01/01/2007 to 12/31/2007 $10.48 $10.78 0
01/01/2008 to 12/31/2008 $10.78 $8.03 0
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
03/14/2005 to 12/31/2005 $9.99 $10.04 0
01/01/2006 to 12/31/2006 $10.04 $10.10 0
01/01/2007 to 12/31/2007 $10.10 $10.61 0
01/01/2008 to 12/31/2008 $10.61 $10.06 0
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.94 0
01/01/2006 to 12/31/2006 $9.94 $10.01 0
01/01/2007 to 12/31/2007 $10.01 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $10.17 0
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $10.13 0
01/01/2007 to 12/31/2007 $10.13 $10.31 0
01/01/2008 to 12/31/2008 $10.31 $10.25 0
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
03/14/2005 to 12/31/2005 $9.88 $11.93 0
01/01/2006 to 12/31/2006 $11.93 $15.57 0
01/01/2007 to 12/31/2007 $15.57 $21.67 0
01/01/2008 to 12/31/2008 $21.67 $8.86 0
-------------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
03/14/2005 to 12/31/2005 $10.07 $10.08 0
01/01/2006 to 12/31/2006 $10.08 $11.60 0
01/01/2007 to 12/31/2007 $11.60 $11.56 0
01/01/2008 to 12/31/2008 $11.56 $7.13 0
-------------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
03/14/2005 to 12/31/2005 $10.05 $10.80 0
01/01/2006 to 12/31/2006 $10.80 $12.16 0
01/01/2007 to 12/31/2007 $12.16 $13.23 0
01/01/2008 to 12/31/2008 $13.23 $6.66 0
-------------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
03/14/2005 to 12/31/2005 $10.00 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.36 0
01/01/2007 to 12/31/2007 $11.36 $11.87 0
01/01/2008 to 12/31/2008 $11.87 $6.39 0
-------------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
03/14/2005 to 12/31/2005 $10.06 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $12.23 0
01/01/2008 to 12/31/2008 $12.23 $8.47 0
A-77
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
03/14/2005 to 12/31/2005 $10.06 $10.62 0
01/01/2006 to 12/31/2006 $10.62 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $9.05 0
01/01/2008 to 12/31/2008 $9.05 $3.56 0
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
03/14/2005 to 12/31/2005 $9.90 $10.88 0
01/01/2006 to 12/31/2006 $10.88 $13.00 0
01/01/2007 to 12/31/2007 $13.00 $14.50 0
01/01/2008 to 12/31/2008 $14.50 $8.23 0
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
03/14/2005 to 04/15/2005 $10.02 $9.26 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
03/14/2005 to 12/31/2005 $10.02 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $11.72 0
01/01/2008 to 12/31/2008 $11.72 $8.28 0
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.33 0
01/01/2006 to 12/31/2006 $11.33 $12.20 0
01/01/2007 to 12/31/2007 $12.20 $13.14 0
01/01/2008 to 12/31/2008 $13.14 $7.50 0
----------------------------------------------------------------------------------------------
ProFund VP Europe 30
03/14/2005 to 12/31/2005 $9.99 $10.41 0
01/01/2006 to 12/31/2006 $10.41 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $13.19 0
01/01/2008 to 12/31/2008 $13.19 $7.16 0
----------------------------------------------------------------------------------------------
ProFund VP Asia 30
03/14/2005 to 12/31/2005 $9.99 $11.10 0
01/01/2006 to 12/31/2006 $11.10 $14.99 0
01/01/2007 to 12/31/2007 $14.99 $21.48 0
01/01/2008 to 12/31/2008 $21.48 $10.25 0
----------------------------------------------------------------------------------------------
ProFund VP Japan
03/14/2005 to 12/31/2005 $9.95 $13.38 0
01/01/2006 to 12/31/2006 $13.38 $14.38 0
01/01/2007 to 12/31/2007 $14.38 $12.56 0
01/01/2008 to 12/31/2008 $12.56 $7.20 0
----------------------------------------------------------------------------------------------
ProFund VP Banks
03/14/2005 to 12/31/2005 $10.08 $10.10 0
01/01/2006 to 12/31/2006 $10.10 $11.31 0
01/01/2007 to 12/31/2007 $11.31 $7.98 0
01/01/2008 to 12/31/2008 $7.98 $4.11 0
----------------------------------------------------------------------------------------------
ProFund VP Basic Materials
03/14/2005 to 12/31/2005 $9.98 $9.48 0
01/01/2006 to 12/31/2006 $9.48 $10.62 0
01/01/2007 to 12/31/2007 $10.62 $13.46 0
01/01/2008 to 12/31/2008 $13.46 $6.34 0
----------------------------------------------------------------------------------------------
ProFund VP Biotechnology
03/14/2005 to 12/31/2005 $10.48 $13.48 0
01/01/2006 to 12/31/2006 $13.48 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $12.03 0
01/01/2008 to 12/31/2008 $12.03 $11.88 0
A-78
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
03/14/2005 to 12/31/2005 $10.04 $9.66 0
01/01/2006 to 12/31/2006 $9.66 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $9.34 0
01/01/2008 to 12/31/2008 $9.34 $6.22 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
03/14/2005 to 12/31/2005 $10.03 $9.73 0
01/01/2006 to 12/31/2006 $9.73 $10.63 0
01/01/2007 to 12/31/2007 $10.63 $11.09 0
01/01/2008 to 12/31/2008 $11.09 $7.89 0
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
03/14/2005 to 12/31/2005 $10.07 $10.92 0
01/01/2006 to 12/31/2006 $10.92 $12.78 0
01/01/2007 to 12/31/2007 $12.78 $16.42 0
01/01/2008 to 12/31/2008 $16.42 $10.04 0
-------------------------------------------------------------------------------------------
ProFund VP Financials
03/14/2005 to 12/31/2005 $10.08 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $11.98 0
01/01/2007 to 12/31/2007 $11.98 $9.40 0
01/01/2008 to 12/31/2008 $9.40 $4.51 0
-------------------------------------------------------------------------------------------
ProFund VP Health Care
03/14/2005 to 12/31/2005 $10.09 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.68 0
01/01/2007 to 12/31/2007 $10.68 $11.04 0
01/01/2008 to 12/31/2008 $11.04 $8.11 0
-------------------------------------------------------------------------------------------
ProFund VP Industrials
03/14/2005 to 12/31/2005 $10.06 $10.06 0
01/01/2006 to 12/31/2006 $10.06 $10.90 0
01/01/2007 to 12/31/2007 $10.90 $11.81 0
01/01/2008 to 12/31/2008 $11.81 $6.82 0
-------------------------------------------------------------------------------------------
ProFund VP Internet
03/14/2005 to 12/31/2005 $9.94 $12.71 0
01/01/2006 to 12/31/2006 $12.71 $12.50 0
01/01/2007 to 12/31/2007 $12.50 $13.36 0
01/01/2008 to 12/31/2008 $13.36 $7.15 0
-------------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
03/14/2005 to 12/31/2005 $10.02 $9.44 0
01/01/2006 to 12/31/2006 $9.44 $10.27 0
01/01/2007 to 12/31/2007 $10.27 $10.19 0
01/01/2008 to 12/31/2008 $10.19 $7.96 0
-------------------------------------------------------------------------------------------
ProFund VP Precious Metals
03/14/2005 to 12/31/2005 $9.89 $12.00 0
01/01/2006 to 12/31/2006 $12.00 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $14.84 0
01/01/2008 to 12/31/2008 $14.84 $9.96 0
-------------------------------------------------------------------------------------------
ProFund VP Real Estate
03/14/2005 to 12/31/2005 $10.15 $11.17 0
01/01/2006 to 12/31/2006 $11.17 $14.36 0
01/01/2007 to 12/31/2007 $14.36 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $6.38 0
A-79
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
03/14/2005 to 12/31/2005 $10.04 $10.65 0
01/01/2006 to 12/31/2006 $10.65 $9.60 0
01/01/2007 to 12/31/2007 $9.60 $9.97 0
01/01/2008 to 12/31/2008 $9.97 $4.85 0
---------------------------------------------------------------------------------------
ProFund VP Technology
03/14/2005 to 12/31/2005 $10.03 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $12.26 0
01/01/2008 to 12/31/2008 $12.26 $6.62 0
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
03/14/2005 to 12/31/2005 $10.03 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $12.68 0
01/01/2007 to 12/31/2007 $12.68 $13.33 0
01/01/2008 to 12/31/2008 $13.33 $8.48 0
---------------------------------------------------------------------------------------
ProFund VP Utilities
03/14/2005 to 12/31/2005 $10.17 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $13.77 0
01/01/2008 to 12/31/2008 $13.77 $9.26 0
---------------------------------------------------------------------------------------
ProFund VP Bull
03/14/2005 to 12/31/2005 $10.05 $10.12 0
01/01/2006 to 12/31/2006 $10.12 $11.16 0
01/01/2007 to 12/31/2007 $11.16 $11.21 0
01/01/2008 to 12/31/2008 $11.21 $6.77 0
---------------------------------------------------------------------------------------
ProFund VP Bear
03/14/2005 to 12/31/2005 $9.94 $9.54 0
01/01/2006 to 12/31/2006 $9.54 $8.56 0
01/01/2007 to 12/31/2007 $8.56 $8.35 0
01/01/2008 to 12/31/2008 $8.35 $11.34 0
---------------------------------------------------------------------------------------
ProFund VP UltraBull
03/14/2005 to 12/31/2005 $10.11 $10.25 0
01/01/2006 to 12/31/2006 $10.25 $12.23 0
01/01/2007 to 12/31/2007 $12.23 $11.96 0
01/01/2008 to 12/31/2008 $11.96 $3.78 0
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
03/14/2005 to 12/31/2005 $10.06 $10.55 0
01/01/2006 to 12/31/2006 $10.55 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $12.31 0
01/01/2008 to 12/31/2008 $12.31 $6.87 0
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
03/14/2005 to 12/31/2005 $9.94 $9.14 0
01/01/2006 to 12/31/2006 $9.14 $8.75 0
01/01/2007 to 12/31/2007 $8.75 $7.50 0
01/01/2008 to 12/31/2008 $7.50 $10.78 0
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
03/14/2005 to 12/31/2005 $10.15 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $14.00 0
01/01/2008 to 12/31/2008 $14.00 $3.70 0
A-80
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-----------------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
03/14/2005 to 12/31/2005 $10.09 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.99 0
-----------------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
03/14/2005 to 12/31/2005 $10.06 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.76 0
01/01/2008 to 12/31/2008 $11.76 $6.98 0
-----------------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
03/14/2005 to 12/31/2005 $10.15 $11.38 0
01/01/2006 to 12/31/2006 $11.38 $12.22 0
01/01/2007 to 12/31/2007 $12.22 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $3.96 0
-----------------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
03/14/2005 to 12/31/2005 $10.04 $10.30 0
01/01/2006 to 12/31/2006 $10.30 $11.73 0
01/01/2007 to 12/31/2007 $11.73 $10.55 0
01/01/2008 to 12/31/2008 $10.55 $7.09 0
-----------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
03/14/2005 to 12/31/2005 $10.04 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $11.15 0
01/01/2008 to 12/31/2008 $11.15 $7.13 0
-----------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
03/14/2005 to 12/31/2005 $10.11 $10.66 0
01/01/2006 to 12/31/2006 $10.66 $13.03 0
01/01/2007 to 12/31/2007 $13.03 $10.97 0
01/01/2008 to 12/31/2008 $10.97 $3.60 0
-----------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
03/14/2005 to 12/31/2005 $10.08 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $9.76 0
01/01/2007 to 12/31/2007 $9.76 $10.43 0
01/01/2008 to 12/31/2008 $10.43 $15.14 0
-----------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
03/14/2005 to 12/31/2005 $9.91 $9.08 0
01/01/2006 to 12/31/2006 $9.08 $9.71 0
01/01/2007 to 12/31/2007 $9.71 $8.92 0
01/01/2008 to 12/31/2008 $8.92 $5.37 0
-----------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.47 0
01/01/2006 to 12/31/2006 $10.47 $11.12 0
01/01/2007 to 12/31/2007 $11.12 $11.35 0
01/01/2008 to 12/31/2008 $11.35 $10.50 0
-----------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $9.83 0
01/01/2007 to 12/31/2007 $9.83 $10.07 0
01/01/2008 to 12/31/2008 $10.07 $5.49 0
A-81
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
03/14/2005 to 12/31/2005 $10.03 $10.83 0
01/01/2006 to 12/31/2006 $10.83 $14.54 0
01/01/2007 to 12/31/2007 $14.54 $15.99 0
01/01/2008 to 12/31/2008 $15.99 $8.87 0
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
03/14/2005 to 12/31/2005 $10.02 $10.43 0
01/01/2006 to 12/31/2006 $10.43 $11.29 0
01/01/2007 to 12/31/2007 $11.29 $11.98 0
01/01/2008 to 12/31/2008 $11.98 $6.41 0
--------------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
03/14/2005 to 12/31/2005 $10.06 $10.75 0
01/01/2006 to 12/31/2006 $10.75 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $13.40 0
01/01/2008 to 12/31/2008 $13.40 $6.38 0
--------------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
03/14/2005 to 12/31/2005 $10.10 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $10.46 0
01/01/2007 to 12/31/2007 $10.46 $10.57 0
01/01/2008 to 12/31/2008 $10.57 $7.39 0
--------------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
03/14/2005 to 12/31/2005 $10.03 $9.53 0
01/01/2006 to 12/31/2006 $9.53 $11.61 0
01/01/2007 to 12/31/2007 $11.61 $11.33 0
01/01/2008 to 12/31/2008 $11.33 $7.86 0
--------------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.67 0
01/01/2006 to 12/31/2006 $9.67 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $10.87 0
01/01/2008 to 12/31/2008 $10.87 $6.27 0
--------------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
03/14/2005 to 12/31/2005 $10.00 $11.11 0
01/01/2006 to 12/31/2006 $11.11 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $12.71 0
01/01/2008 to 12/31/2008 $12.71 $5.57 0
--------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
03/14/2005 to 12/31/2005 $10.03 $9.98 0
01/01/2006 to 12/31/2006 $9.98 $10.56 0
01/01/2007 to 12/31/2007 $10.56 $10.96 0
01/01/2008 to 12/31/2008 $10.96 $6.85 0
--------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
03/14/2005 to 12/31/2005 $10.07 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $11.74 0
01/01/2007 to 12/31/2007 $11.74 $11.40 0
01/01/2008 to 12/31/2008 $11.40 $6.59 0
A-82
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
03/14/2005 to 12/31/2005 $9.93 $8.94 0
01/01/2006 to 12/31/2006 $8.94 $8.36 0
01/01/2007 to 12/31/2007 $8.36 $7.87 0
01/01/2008 to 12/31/2008 $7.87 $10.07 0
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
03/14/2005 to 12/31/2005 $9.95 $9.17 0
01/01/2006 to 12/31/2006 $9.17 $7.84 0
01/01/2007 to 12/31/2007 $7.84 $7.95 0
01/01/2008 to 12/31/2008 $7.95 $9.57 0
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
03/14/2005 to 12/31/2005 $9.93 $11.18 0
01/01/2006 to 12/31/2006 $11.18 $13.12 0
01/01/2007 to 12/31/2007 $13.12 $15.22 0
01/01/2008 to 12/31/2008 $15.22 $7.34 0
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $11.91 0
01/01/2008 to 12/31/2008 $11.91 $6.66 0
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 0
01/01/2006 to 12/31/2006 $10.00 $11.02 2,672
01/01/2007 to 12/31/2007 $11.02 $11.73 10,225
01/01/2008 to 12/31/2008 $11.73 $7.40 11,699
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 0
01/01/2006 to 12/31/2006 $10.01 $10.85 18,249
01/01/2007 to 12/31/2007 $10.85 $11.49 19,931
01/01/2008 to 12/31/2008 $11.49 $7.60 38,177
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.74 0
01/01/2007 to 12/31/2007 $10.74 $11.36 4,610
01/01/2008 to 12/31/2008 $11.36 $7.86 4,379
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 0
01/01/2006 to 12/31/2006 $10.03 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $11.07 0
01/01/2008 to 12/31/2008 $11.07 $8.65 4,182
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.54 0
01/01/2007 to 12/31/2007 $10.54 $11.20 7,920
01/01/2008 to 12/31/2008 $11.20 $7.63 13,497
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.47 0
01/01/2007 to 12/31/2007 $10.47 $11.02 5,264
01/01/2008 to 12/31/2008 $11.02 $7.00 5,327
A-83
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.37 0
01/01/2007 to 12/31/2007 $10.37 $11.20 5,929
01/01/2008 to 12/31/2008 $11.20 $6.44 12,636
-------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.49 0
01/01/2008 to 12/31/2008 $11.49 $7.22 1,469
-------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.02 0
01/01/2008 to 12/31/2008 $10.02 $7.04 5,132
-------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 0
01/01/2008 to 12/31/2008 $10.17 $6.84 0
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.15 0
01/01/2008 to 12/31/2008 $10.15 $7.46 0
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 0
01/01/2008 to 12/31/2008 $9.98 $7.05 0
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.96 0
01/01/2008 to 12/31/2008 $9.96 $9.16 0
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.17 $6.08 0
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.54 0
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.43 0
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.58 0
* Denotes the start date of these sub-accounts.
ASL II
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With No Optional Benefits (1.65%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
01/01/2002 to 12/31/2002 -- $8.56 2,569,506
01/01/2003 to 12/31/2003 $8.56 $11.00 2,415,394
01/01/2004 to 12/31/2004 $11.00 $12.67 3,227,381
01/01/2005 to 12/31/2005 $12.67 $13.84 5,621,834
01/01/2006 to 12/31/2006 $13.84 $16.71 4,715,269
01/01/2007 to 12/31/2007 $16.71 $17.98 4,504,935
01/01/2008 to 12/31/2008 $17.98 $10.37 2,459,224
A-84
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST International Growth Portfolio
01/01/2002 to 12/31/2002 -- $9.72 835,523
01/01/2003 to 12/31/2003 $9.72 $13.39 5,547,558
01/01/2004 to 12/31/2004 $13.39 $15.30 11,265,469
01/01/2005 to 12/31/2005 $15.30 $17.54 12,141,521
01/01/2006 to 12/31/2006 $17.54 $20.87 9,628,446
01/01/2007 to 12/31/2007 $20.87 $24.43 8,347,423
01/01/2008 to 12/31/2008 $24.43 $11.96 6,129,240
-------------------------------------------------------------------------------------------------------
AST International Value Portfolio
01/01/2002 to 12/31/2002 -- $8.19 269,995
01/01/2003 to 12/31/2003 $8.19 $10.79 1,201,268
01/01/2004 to 12/31/2004 $10.79 $12.84 1,897,469
01/01/2005 to 12/31/2005 $12.84 $14.36 2,013,543
01/01/2006 to 12/31/2006 $14.36 $18.00 3,305,654
01/01/2007 to 12/31/2007 $18.00 $20.85 4,044,519
01/01/2008 to 12/31/2008 $20.85 $11.48 2,393,870
-------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
01/01/2002 to 12/31/2002 -- $9.04 969,509
01/01/2003 to 12/31/2003 $9.04 $11.30 1,393,001
01/01/2004 to 12/31/2004 $11.30 $13.16 2,276,801
01/01/2005 to 12/31/2005 $13.16 $13.92 1,907,777
01/01/2006 to 12/31/2006 $13.92 $17.02 2,905,252
01/01/2007 to 12/31/2007 $17.02 $18.31 2,119,181
01/01/2008 to 12/31/2008 $18.31 $11.88 1,412,847
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.92 1,970,250
01/01/2003 to 12/31/2003 $6.92 $9.89 3,292,593
01/01/2004 to 12/31/2004 $9.89 $9.05 2,242,129
01/01/2005 to 12/31/2005 $9.05 $9.04 2,134,731
01/01/2006 to 12/31/2006 $9.04 $10.01 1,867,490
01/01/2007 to 12/31/2007 $10.01 $10.55 1,740,242
01/01/2008 to 12/31/2008 $10.55 $6.74 1,375,635
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 639,695
01/01/2003 to 12/31/2003 $7.67 $11.13 1,682,193
01/01/2004 to 12/31/2004 $11.13 $11.98 1,618,719
01/01/2005 to 12/31/2005 $11.98 $11.83 1,385,431
01/01/2006 to 12/31/2006 $11.83 $12.53 1,174,654
01/01/2007 to 12/31/2007 $12.53 $14.63 1,215,825
01/01/2008 to 12/31/2008 $14.63 $8.27 768,282
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.64 1,255,415
01/01/2003 to 12/31/2003 $7.64 $12.74 3,085,373
01/01/2004 to 12/31/2004 $12.74 $15.42 4,808,453
01/01/2005 to 12/31/2005 $15.42 $16.60 5,464,855
01/01/2006 to 12/31/2006 $16.60 $18.43 4,641,175
01/01/2007 to 12/31/2007 $18.43 $20.16 4,026,646
01/01/2008 to 12/31/2008 $20.16 $11.08 2,977,983
A-85
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.26 1,492,775
01/01/2003 to 12/31/2003 $9.26 $12.85 1,504,296
01/01/2004 to 12/31/2004 $12.85 $15.19 1,541,896
01/01/2005 to 12/31/2005 $15.19 $15.68 1,243,642
01/01/2006 to 12/31/2006 $15.68 $18.08 1,000,596
01/01/2007 to 12/31/2007 $18.08 $16.87 758,170
01/01/2008 to 12/31/2008 $16.87 $12.17 667,006
---------------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $9.30 6,141,523
01/01/2003 to 12/31/2003 $9.30 $12.42 10,183,346
01/01/2004 to 12/31/2004 $12.42 $14.22 10,785,030
01/01/2005 to 12/31/2005 $14.22 $14.91 11,285,282
01/01/2006 to 12/31/2006 $14.91 $17.61 9,098,178
01/01/2007 to 12/31/2007 $17.61 $16.34 8,130,632
01/01/2008 to 12/31/2008 $16.34 $11.30 6,242,966
---------------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $7.66 423,387
01/01/2003 to 12/31/2003 $7.66 $10.81 1,134,865
01/01/2004 to 12/31/2004 $10.81 $12.99 2,143,020
01/01/2005 to 12/31/2005 $12.99 $12.92 2,106,236
01/01/2006 to 12/31/2006 $12.92 $15.25 1,874,276
01/01/2007 to 12/31/2007 $15.25 $12.33 1,578,237
01/01/2008 to 07/18/2008 $12.33 $11.30 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.97 1,273,118
01/01/2003 to 12/31/2003 $7.97 $10.31 3,027,057
01/01/2004 to 12/31/2004 $10.31 $11.80 4,375,813
01/01/2005 to 12/31/2005 $11.80 $12.16 5,391,424
01/01/2006 to 12/31/2006 $12.16 $12.71 4,189,111
01/01/2007 to 12/31/2007 $12.71 $14.92 3,918,725
01/01/2008 to 12/31/2008 $14.92 $8.69 2,808,881
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.41 2,175,250
01/01/2003 to 12/31/2003 $7.41 $9.51 3,415,318
01/01/2004 to 12/31/2004 $9.51 $10.86 4,715,301
01/01/2005 to 12/31/2005 $10.86 $12.12 5,728,444
01/01/2006 to 12/31/2006 $12.12 $13.59 5,378,198
01/01/2007 to 12/31/2007 $13.59 $16.34 6,560,811
01/01/2008 to 12/31/2008 $16.34 $9.13 3,042,143
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.96 5,118,558
01/01/2003 to 12/31/2003 $8.96 $12.01 8,530,129
01/01/2004 to 12/31/2004 $12.01 $14.51 11,461,684
01/01/2005 to 12/31/2005 $14.51 $15.99 12,260,006
01/01/2006 to 12/31/2006 $15.99 $17.42 9,574,218
01/01/2007 to 12/31/2007 $17.42 $17.67 8,191,847
01/01/2008 to 12/31/2008 $17.67 $10.03 5,184,438
A-86
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $6.80 658,419
01/01/2003 to 12/31/2003 $6.80 $9.07 2,002,166
01/01/2004 to 12/31/2004 $9.07 $9.67 1,798,457
01/01/2005 to 12/02/2005 $9.67 $11.10 0
-------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.17 1,200,225
01/01/2003 to 12/31/2003 $8.17 $10.91 2,513,413
01/01/2004 to 12/31/2004 $10.91 $12.38 2,587,064
01/01/2005 to 12/31/2005 $12.38 $12.83 1,988,251
01/01/2006 to 12/31/2006 $12.83 $14.42 1,907,063
01/01/2007 to 12/31/2007 $14.42 $14.57 1,540,522
01/01/2008 to 12/31/2008 $14.57 $8.87 1,381,269
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
01/01/2002 to 12/31/2002 -- $9.59 724,670
01/01/2003 to 12/31/2003 $9.59 $12.59 2,011,627
01/01/2004 to 12/31/2004 $12.59 $16.25 2,040,188
01/01/2005 to 12/31/2005 $16.25 $21.00 3,677,613
01/01/2006 to 12/31/2006 $21.00 $23.93 2,942,718
01/01/2007 to 12/31/2007 $23.93 $33.07 3,950,105
01/01/2008 to 12/31/2008 $33.07 $16.27 2,088,027
-------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.46 1,869,353
01/01/2003 to 12/31/2003 $7.46 $9.08 2,098,873
01/01/2004 to 12/31/2004 $9.08 $9.44 2,378,881
01/01/2005 to 12/31/2005 $9.44 $10.81 3,925,742
01/01/2006 to 12/31/2006 $10.81 $11.23 4,132,529
01/01/2007 to 12/31/2007 $11.23 $11.96 5,137,246
01/01/2008 to 12/31/2008 $11.96 $6.99 4,437,756
-------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.58 2,930,432
01/01/2003 to 12/31/2003 $7.58 $9.16 4,784,269
01/01/2004 to 12/31/2004 $9.16 $9.97 4,529,834
01/01/2005 to 12/31/2005 $9.97 $10.43 5,915,443
01/01/2006 to 12/31/2006 $10.43 $11.25 4,572,301
01/01/2007 to 12/31/2007 $11.25 $12.73 3,902,210
01/01/2008 to 12/31/2008 $12.73 $7.98 3,159,245
-------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.32 10,144,317
01/01/2003 to 12/31/2003 $8.32 $10.78 20,138,164
01/01/2004 to 12/31/2004 $10.78 $12.26 28,117,310
01/01/2005 to 12/31/2005 $12.26 $12.88 32,140,125
01/01/2006 to 12/31/2006 $12.88 $13.59 26,497,526
01/01/2007 to 12/31/2007 $13.59 $15.36 23,963,028
01/01/2008 to 12/31/2008 $15.36 $8.51 16,673,165
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
01/01/2002 to 12/31/2002 -- $7.67 1,349,939
01/01/2003 to 12/31/2003 $7.67 $9.45 2,053,023
01/01/2004 to 12/31/2004 $9.45 $9.64 2,785,100
01/01/2005 to 12/31/2005 $9.64 $9.80 2,531,901
01/01/2006 to 12/31/2006 $9.80 $10.60 2,498,654
01/01/2007 to 12/31/2007 $10.60 $11.88 2,806,534
01/01/2008 to 12/31/2008 $11.88 $6.98 1,877,493
A-87
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.66 664,649
01/01/2003 to 12/31/2003 $8.66 $10.78 1,072,256
01/01/2004 to 12/31/2004 $10.78 $12.53 2,351,197
01/01/2005 to 12/31/2005 $12.53 $13.47 2,585,881
01/01/2006 to 12/31/2006 $13.47 $16.13 4,397,725
01/01/2007 to 12/31/2007 $16.13 $16.05 3,751,417
01/01/2008 to 12/31/2008 $16.05 $9.90 2,589,179
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
01/01/2002 to 12/31/2002 -- $7.99 965,912
01/01/2003 to 12/31/2003 $7.99 $9.91 1,387,072
01/01/2004 to 12/31/2004 $9.91 $10.72 1,620,391
01/01/2005 to 12/02/2005 $10.72 $11.86 0
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
01/01/2002 to 12/31/2002 -- $8.76 6,005,922
01/01/2003 to 12/31/2003 $8.76 $11.06 3,621,862
01/01/2004 to 12/31/2004 $11.06 $12.39 4,643,022
01/01/2005 to 12/31/2005 $12.39 $12.86 4,311,857
01/01/2006 to 12/31/2006 $12.86 $15.34 5,318,094
01/01/2007 to 12/31/2007 $15.34 $14.55 4,469,636
01/01/2008 to 12/31/2008 $14.55 $8.32 2,874,755
--------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
01/01/2002 to 12/31/2002 -- $10.08 1,563,489
01/01/2003 to 12/31/2003 $10.08 $13.63 3,097,315
01/01/2004 to 12/31/2004 $13.63 $18.49 4,080,179
01/01/2005 to 12/31/2005 $18.49 $20.88 3,749,124
01/01/2006 to 12/31/2006 $20.88 $28.08 3,925,105
01/01/2007 to 12/31/2007 $28.08 $22.11 2,254,421
01/01/2008 to 12/31/2008 $22.11 $14.12 1,741,032
--------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
01/01/2002 to 12/31/2002 -- $8.17 3,662,406
01/01/2003 to 12/31/2003 $8.17 $10.23 5,442,511
01/01/2004 to 12/31/2004 $10.23 $11.07 6,845,369
01/01/2005 to 12/31/2005 $11.07 $11.27 6,774,077
01/01/2006 to 12/31/2006 $11.27 $12.48 6,255,253
01/01/2007 to 12/31/2007 $12.48 $12.53 5,371,782
01/01/2008 to 12/31/2008 $12.53 $7.55 2,747,511
--------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
01/01/2002 to 12/31/2002 -- $8.25 1,751,136
01/01/2003 to 12/31/2003 $8.25 $10.45 2,115,438
01/01/2004 to 12/31/2004 $10.45 $11.57 4,670,846
01/01/2005 to 12/31/2005 $11.57 $11.90 4,205,656
01/01/2006 to 12/31/2006 $11.90 $13.68 3,984,557
01/01/2007 to 12/31/2007 $13.68 $13.44 3,435,528
01/01/2008 to 12/31/2008 $13.44 $8.62 2,803,150
--------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
01/01/2002 to 12/31/2002 -- $8.06 6,667,373
01/01/2003 to 12/31/2003 $8.06 $10.50 21,264,670
01/01/2004 to 12/31/2004 $10.50 $11.46 25,850,506
01/01/2005 to 12/31/2005 $11.46 $11.81 31,190,346
01/01/2006 to 12/31/2006 $11.81 $13.62 23,350,650
01/01/2007 to 12/31/2007 $13.62 $14.08 19,997,748
01/01/2008 to 12/31/2008 $14.08 $8.22 14,384,005
A-88
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
01/01/2002 to 12/31/2002 -- $8.34 2,110,071
01/01/2003 to 12/31/2003 $8.34 $9.83 2,647,064
01/01/2004 to 12/31/2004 $9.83 $11.17 3,717,848
01/01/2005 to 12/31/2005 $11.17 $11.69 5,245,458
01/01/2006 to 12/31/2006 $11.69 $13.62 5,568,043
01/01/2007 to 12/31/2007 $13.62 $13.00 4,973,375
01/01/2008 to 12/31/2008 $13.00 $7.48 4,027,564
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
01/01/2002 to 12/31/2002 -- $8.71 847,517
01/01/2003 to 12/31/2003 $8.71 $10.24 898,161
01/01/2004 to 12/31/2004 $10.24 $11.19 1,061,887
01/01/2005 to 12/31/2005 $11.19 $11.77 1,055,034
01/01/2006 to 12/31/2006 $11.77 $12.86 1,120,866
01/01/2007 to 12/31/2007 $12.86 $12.90 2,745,236
01/01/2008 to 12/31/2008 $12.90 $10.45 15,430,642
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.14 1,126,058
01/01/2003 to 12/31/2003 $9.14 $10.69 2,045,205
01/01/2004 to 12/31/2004 $10.69 $11.46 2,335,598
01/01/2005 to 12/31/2005 $11.46 $11.79 2,294,529
01/01/2006 to 12/31/2006 $11.79 $12.72 2,165,859
01/01/2007 to 12/31/2007 $12.72 $13.62 2,277,264
01/01/2008 to 12/31/2008 $13.62 $9.35 3,074,479
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
01/01/2002 to 12/31/2002 -- $9.09 921,329
01/01/2003 to 12/31/2003 $9.09 $11.09 2,243,566
01/01/2004 to 12/31/2004 $11.09 $12.13 3,551,315
01/01/2005 to 12/31/2005 $12.13 $12.49 4,192,627
01/01/2006 to 12/31/2006 $12.49 $13.82 4,776,442
01/01/2007 to 12/31/2007 $13.82 $14.45 6,387,795
01/01/2008 to 12/31/2008 $14.45 $10.52 10,697,390
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
01/01/2002 to 12/31/2002 -- $11.34 1,739,313
01/01/2003 to 12/31/2003 $11.34 $12.59 2,962,471
01/01/2004 to 12/31/2004 $12.59 $13.45 4,717,822
01/01/2005 to 12/31/2005 $13.45 $12.64 6,261,824
01/01/2006 to 12/31/2006 $12.64 $13.21 6,093,700
01/01/2007 to 12/31/2007 $13.21 $14.24 6,452,566
01/01/2008 to 12/31/2008 $14.24 $13.67 4,228,137
----------------------------------------------------------------------------------------------------------------------
AST High Yield Portfolio
01/01/2002 to 12/31/2002 -- $9.71 5,592,940
01/01/2003 to 12/31/2003 $9.71 $11.61 12,201,163
01/01/2004 to 12/31/2004 $11.61 $12.69 13,717,128
01/01/2005 to 12/31/2005 $12.69 $12.62 9,658,908
01/01/2006 to 12/31/2006 $12.62 $13.70 9,653,937
01/01/2007 to 12/31/2007 $13.70 $13.80 6,461,538
01/01/2008 to 12/31/2008 $13.80 $10.11 5,931,752
A-89
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
01/01/2002 to 12/31/2002 -- $9.94 4,146,530
01/01/2003 to 12/31/2003 $9.94 $11.61 7,751,236
01/01/2004 to 12/31/2004 $11.61 $12.26 8,369,008
01/01/2005 to 12/31/2005 $12.26 $12.20 12,427,806
01/01/2006 to 12/31/2006 $12.20 $13.17 10,147,675
01/01/2007 to 12/31/2007 $13.17 $13.74 8,365,789
01/01/2008 to 12/31/2008 $13.74 $10.37 8,586,978
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.57 20,544,075
01/01/2003 to 12/31/2003 $10.57 $10.95 26,287,388
01/01/2004 to 12/31/2004 $10.95 $11.31 33,208,757
01/01/2005 to 12/31/2005 $11.31 $11.40 22,436,395
01/01/2006 to 12/31/2006 $11.40 $11.63 21,700,661
01/01/2007 to 12/31/2007 $11.63 $12.39 21,645,194
01/01/2008 to 12/31/2008 $12.39 $11.91 20,478,277
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
01/01/2002 to 12/31/2002 -- $10.34 11,274,642
01/01/2003 to 12/31/2003 $10.34 $10.51 15,242,856
01/01/2004 to 12/31/2004 $10.51 $10.55 21,299,789
01/01/2005 to 12/31/2005 $10.55 $10.54 28,031,651
01/01/2006 to 12/31/2006 $10.54 $10.76 22,394,558
01/01/2007 to 12/31/2007 $10.76 $11.31 20,392,150
01/01/2008 to 12/31/2008 $11.31 $11.24 15,403,578
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
01/01/2002 to 12/31/2002 -- $9.96 36,255,772
01/01/2003 to 12/31/2003 $9.96 $9.86 32,730,501
01/01/2004 to 12/31/2004 $9.86 $9.78 29,870,585
01/01/2005 to 12/31/2005 $9.78 $9.88 42,442,274
01/01/2006 to 12/31/2006 $9.88 $10.16 46,325,237
01/01/2007 to 12/31/2007 $10.16 $10.48 56,111,128
01/01/2008 to 12/31/2008 $10.48 $10.57 91,319,625
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
01/01/2002 to 12/31/2002 -- $8.66 283,466
01/01/2003 to 12/31/2003 $8.66 $13.60 1,763,660
01/01/2004 to 12/31/2004 $13.60 $16.02 2,103,950
01/01/2005 to 12/31/2005 $16.02 $20.72 3,395,891
01/01/2006 to 12/31/2006 $20.72 $27.43 2,835,328
01/01/2007 to 12/31/2007 $27.43 $38.71 3,344,620
01/01/2008 to 12/31/2008 $38.71 $16.04 1,630,334
-------------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
01/01/2002 to 12/31/2002 -- $8.25 196,720
01/01/2003 to 12/31/2003 $8.25 $10.23 314,757
01/01/2004 to 12/31/2004 $10.23 $11.18 590,808
01/01/2005 to 12/31/2005 $11.18 $11.59 534,648
01/01/2006 to 12/31/2006 $11.59 $13.51 582,613
01/01/2007 to 12/31/2007 $13.51 $13.66 497,287
01/01/2008 to 12/31/2008 $13.66 $8.53 312,113
A-90
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
01/01/2002 to 12/31/2002 -- $7.09 543,762
01/01/2003 to 12/31/2003 $7.09 $9.61 889,464
01/01/2004 to 12/31/2004 $9.61 $10.72 668,032
01/01/2005 to 12/31/2005 $10.72 $11.67 602,063
01/01/2006 to 12/31/2006 $11.67 $13.33 605,730
01/01/2007 to 12/31/2007 $13.33 $14.70 631,476
01/01/2008 to 12/31/2008 $14.70 $7.51 384,426
----------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
01/01/2002 to 12/31/2002 -- $5.50 293,307
01/01/2003 to 12/31/2003 $5.50 $7.87 578,651
01/01/2004 to 12/31/2004 $7.87 $8.09 512,424
01/01/2005 to 12/31/2005 $8.09 $8.13 453,392
01/01/2006 to 12/31/2006 $8.13 $8.84 513,442
01/01/2007 to 12/31/2007 $8.84 $9.36 630,739
01/01/2008 to 12/31/2008 $9.36 $5.11 453,772
----------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
01/01/2002 to 12/31/2002 -- $8.00 475,873
01/01/2003 to 12/31/2003 $8.00 $10.05 698,364
01/01/2004 to 12/31/2004 $10.05 $10.64 937,586
01/01/2005 to 12/31/2005 $10.64 $11.31 1,131,376
01/01/2006 to 12/31/2006 $11.31 $11.71 1,250,782
01/01/2007 to 12/31/2007 $11.71 $12.88 1,163,277
01/01/2008 to 12/31/2008 $12.88 $9.04 849,932
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
01/01/2002 to 12/31/2002 -- $8.76 366,258
01/01/2003 to 12/31/2003 $8.76 $11.17 607,265
01/01/2004 to 12/31/2004 $11.17 $11.94 585,185
01/01/2005 to 12/31/2005 $11.94 $12.43 1,042,992
01/01/2006 to 12/31/2006 $12.43 $14.24 778,674
01/01/2007 to 12/31/2007 $14.24 $10.89 465,175
01/01/2008 to 12/31/2008 $10.89 $4.34 540,897
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
01/01/2002 to 12/31/2002 -- $8.15 113,389
01/01/2003 to 12/31/2003 $8.15 $11.65 189,143
01/01/2004 to 12/31/2004 $11.65 $13.66 414,631
01/01/2005 to 12/31/2005 $13.66 $15.59 689,816
01/01/2006 to 12/31/2006 $15.59 $18.88 1,081,552
01/01/2007 to 12/31/2007 $18.88 $21.35 1,401,663
01/01/2008 to 12/31/2008 $21.35 $12.29 984,931
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
01/01/2002 to 12/31/2002 -- $7.44 127,728
01/01/2003 to 12/31/2003 $7.44 $11.12 815,621
01/01/2004 to 12/31/2004 $11.12 $11.58 702,642
01/01/2005 to 04/15/2005 $11.58 $10.31 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
01/01/2002 to 12/31/2002 -- $7.78 39,943
01/01/2003 to 12/31/2003 $7.78 $10.71 404,789
01/01/2004 to 12/31/2004 $10.71 $11.29 570,123
01/01/2005 to 12/31/2005 $11.29 $11.53 281,775
01/01/2006 to 12/31/2006 $11.53 $12.03 241,307
01/01/2007 to 12/31/2007 $12.03 $13.24 249,298
01/01/2008 to 12/31/2008 $13.24 $9.48 271,517
A-91
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.44 606,613
01/01/2006 to 12/31/2006 $11.44 $12.49 553,827
01/01/2007 to 12/31/2007 $12.49 $13.64 604,401
01/01/2008 to 12/31/2008 $13.64 $7.90 346,210
----------------------------------------------------------------------------------------
ProFund VP Europe 30
01/01/2002 to 12/31/2002 -- $7.93 292,396
01/01/2003 to 12/31/2003 $7.93 $10.83 2,116,400
01/01/2004 to 12/31/2004 $10.83 $12.17 1,812,435
01/01/2005 to 12/31/2005 $12.17 $12.94 1,133,420
01/01/2006 to 12/31/2006 $12.94 $14.95 2,790,577
01/01/2007 to 12/31/2007 $14.95 $16.85 1,487,885
01/01/2008 to 12/31/2008 $16.85 $9.28 649,001
----------------------------------------------------------------------------------------
ProFund VP Asia 30
01/01/2002 to 12/31/2002 -- $7.75 281,993
01/01/2003 to 12/31/2003 $7.75 $12.57 942,605
01/01/2004 to 12/31/2004 $12.57 $12.30 896,010
01/01/2005 to 12/31/2005 $12.30 $14.45 1,723,105
01/01/2006 to 12/31/2006 $14.45 $19.80 3,073,769
01/01/2007 to 12/31/2007 $19.80 $28.77 2,473,589
01/01/2008 to 12/31/2008 $28.77 $13.91 1,337,672
----------------------------------------------------------------------------------------
ProFund VP Japan
01/01/2002 to 12/31/2002 -- $7.24 65,845
01/01/2003 to 12/31/2003 $7.24 $9.03 426,718
01/01/2004 to 12/31/2004 $9.03 $9.55 710,879
01/01/2005 to 12/31/2005 $9.55 $13.31 3,413,954
01/01/2006 to 12/31/2006 $13.31 $14.51 1,650,266
01/01/2007 to 12/31/2007 $14.51 $12.85 552,230
01/01/2008 to 12/31/2008 $12.85 $7.47 553,832
----------------------------------------------------------------------------------------
ProFund VP Banks
01/01/2002 to 12/31/2002 -- $8.56 101,136
01/01/2003 to 12/31/2003 $8.56 $10.90 93,067
01/01/2004 to 12/31/2004 $10.90 $11.98 229,711
01/01/2005 to 12/31/2005 $11.98 $11.77 351,876
01/01/2006 to 12/31/2006 $11.77 $13.35 402,883
01/01/2007 to 12/31/2007 $13.35 $9.55 389,926
01/01/2008 to 12/31/2008 $9.55 $4.99 2,409,143
----------------------------------------------------------------------------------------
ProFund VP Basic Materials
01/01/2002 to 12/31/2002 -- $8.46 76,331
01/01/2003 to 12/31/2003 $8.46 $10.95 1,512,864
01/01/2004 to 12/31/2004 $10.95 $11.87 529,237
01/01/2005 to 12/31/2005 $11.87 $11.96 681,690
01/01/2006 to 12/31/2006 $11.96 $13.58 779,466
01/01/2007 to 12/31/2007 $13.58 $17.45 2,684,333
01/01/2008 to 12/31/2008 $17.45 $8.34 1,183,553
----------------------------------------------------------------------------------------
ProFund VP Biotechnology
01/01/2002 to 12/31/2002 -- $7.09 130,082
01/01/2003 to 12/31/2003 $7.09 $9.75 208,971
01/01/2004 to 12/31/2004 $9.75 $10.52 757,678
01/01/2005 to 12/31/2005 $10.52 $12.34 697,687
01/01/2006 to 12/31/2006 $12.34 $11.64 393,923
01/01/2007 to 12/31/2007 $11.64 $11.31 609,746
01/01/2008 to 12/31/2008 $11.31 $11.33 1,249,287
A-92
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
01/01/2002 to 12/31/2002 -- $7.25 128,022
01/01/2003 to 12/31/2003 $7.25 $9.04 136,269
01/01/2004 to 12/31/2004 $9.04 $9.56 430,620
01/01/2005 to 12/31/2005 $9.56 $8.97 86,431
01/01/2006 to 12/31/2006 $8.97 $9.88 192,639
01/01/2007 to 12/31/2007 $9.88 $8.91 67,292
01/01/2008 to 12/31/2008 $8.91 $6.01 448,604
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
01/01/2002 to 12/31/2002 -- $8.28 148,446
01/01/2003 to 12/31/2003 $8.28 $9.64 58,425
01/01/2004 to 12/31/2004 $9.64 $10.36 369,007
01/01/2005 to 12/31/2005 $10.36 $10.15 161,038
01/01/2006 to 12/31/2006 $10.15 $11.25 548,567
01/01/2007 to 12/31/2007 $11.25 $11.90 715,235
01/01/2008 to 12/31/2008 $11.90 $8.58 609,574
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
01/01/2002 to 12/31/2002 -- $8.71 299,833
01/01/2003 to 12/31/2003 $8.71 $10.48 1,225,844
01/01/2004 to 12/31/2004 $10.48 $13.33 1,856,882
01/01/2005 to 12/31/2005 $13.33 $17.22 2,573,777
01/01/2006 to 12/31/2006 $17.22 $20.43 2,251,126
01/01/2007 to 12/31/2007 $20.43 $26.61 2,322,451
01/01/2008 to 12/31/2008 $26.61 $16.50 1,351,549
-------------------------------------------------------------------------------------------
ProFund VP Financials
01/01/2002 to 12/31/2002 -- $8.85 221,377
01/01/2003 to 12/31/2003 $8.85 $11.23 398,159
01/01/2004 to 12/31/2004 $11.23 $12.19 553,342
01/01/2005 to 12/31/2005 $12.19 $12.46 616,872
01/01/2006 to 12/31/2006 $12.46 $14.38 913,872
01/01/2007 to 12/31/2007 $14.38 $11.44 498,292
01/01/2008 to 12/31/2008 $11.44 $5.57 2,008,426
-------------------------------------------------------------------------------------------
ProFund VP Health Care
01/01/2002 to 12/31/2002 -- $7.94 388,508
01/01/2003 to 12/31/2003 $7.94 $9.17 707,449
01/01/2004 to 12/31/2004 $9.17 $9.23 1,318,525
01/01/2005 to 12/31/2005 $9.23 $9.63 2,175,821
01/01/2006 to 12/31/2006 $9.63 $9.96 2,106,409
01/01/2007 to 12/31/2007 $9.96 $10.44 2,120,859
01/01/2008 to 12/31/2008 $10.44 $7.78 1,638,682
-------------------------------------------------------------------------------------------
ProFund VP Industrials
01/01/2002 to 12/31/2002 -- $7.93 12,642
01/01/2003 to 12/31/2003 $7.93 $10.01 318,339
01/01/2004 to 12/31/2004 $10.01 $11.15 253,411
01/01/2005 to 12/31/2005 $11.15 $11.23 211,678
01/01/2006 to 12/31/2006 $11.23 $12.33 242,684
01/01/2007 to 12/31/2007 $12.33 $13.55 708,921
01/01/2008 to 12/31/2008 $13.55 $7.93 348,521
A-93
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Internet
01/01/2002 to 12/31/2002 -- $8.57 306,572
01/01/2003 to 12/31/2003 $8.57 $15.00 206,876
01/01/2004 to 12/31/2004 $15.00 $17.89 992,879
01/01/2005 to 12/31/2005 $17.89 $18.90 467,320
01/01/2006 to 12/31/2006 $18.90 $18.84 200,072
01/01/2007 to 12/31/2007 $18.84 $20.42 435,015
01/01/2008 to 12/31/2008 $20.42 $11.08 116,246
---------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
01/01/2002 to 12/31/2002 -- $8.56 136,559
01/01/2003 to 12/31/2003 $8.56 $8.89 266,978
01/01/2004 to 12/31/2004 $8.89 $7.93 527,336
01/01/2005 to 12/31/2005 $7.93 $7.51 515,769
01/01/2006 to 12/31/2006 $7.51 $8.28 716,678
01/01/2007 to 12/31/2007 $8.28 $8.33 492,538
01/01/2008 to 12/31/2008 $8.33 $6.60 588,925
---------------------------------------------------------------------------------------
ProFund VP Precious Metals
01/01/2002 to 12/31/2002 -- $9.70 1,175,651
01/01/2003 to 12/31/2003 $9.70 $13.29 1,329,806
01/01/2004 to 12/31/2004 $13.29 $11.77 1,479,384
01/01/2005 to 12/31/2005 $11.77 $14.62 2,426,531
01/01/2006 to 12/31/2006 $14.62 $15.44 2,487,596
01/01/2007 to 12/31/2007 $15.44 $18.60 3,177,702
01/01/2008 to 12/31/2008 $18.60 $12.66 2,709,868
---------------------------------------------------------------------------------------
ProFund VP Real Estate
01/01/2002 to 12/31/2002 -- $9.86 441,318
01/01/2003 to 12/31/2003 $9.86 $12.91 462,906
01/01/2004 to 12/31/2004 $12.91 $16.15 1,816,706
01/01/2005 to 12/31/2005 $16.15 $16.96 501,989
01/01/2006 to 12/31/2006 $16.96 $22.10 926,728
01/01/2007 to 12/31/2007 $22.10 $17.47 505,436
01/01/2008 to 12/31/2008 $17.47 $10.09 587,638
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
01/01/2002 to 12/31/2002 -- $5.14 93,241
01/01/2003 to 12/31/2003 $5.14 $9.51 423,958
01/01/2004 to 12/31/2004 $9.51 $7.15 694,352
01/01/2005 to 12/31/2005 $7.15 $7.64 746,084
01/01/2006 to 12/31/2006 $7.64 $6.98 339,250
01/01/2007 to 12/31/2007 $6.98 $7.35 272,048
01/01/2008 to 12/31/2008 $7.35 $3.63 166,664
---------------------------------------------------------------------------------------
ProFund VP Technology
01/01/2002 to 12/31/2002 -- $6.03 254,131
01/01/2003 to 12/31/2003 $6.03 $8.66 497,972
01/01/2004 to 12/31/2004 $8.66 $8.48 727,580
01/01/2005 to 12/31/2005 $8.48 $8.45 577,737
01/01/2006 to 12/31/2006 $8.45 $8.98 673,628
01/01/2007 to 12/31/2007 $8.98 $10.10 1,668,456
01/01/2008 to 12/31/2008 $10.10 $5.53 322,313
A-94
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
01/01/2002 to 12/31/2002 -- $7.15 272,408
01/01/2003 to 12/31/2003 $7.15 $7.21 398,350
01/01/2004 to 12/31/2004 $7.21 $8.19 460,848
01/01/2005 to 12/31/2005 $8.19 $7.52 456,586
01/01/2006 to 12/31/2006 $7.52 $9.93 1,277,316
01/01/2007 to 12/31/2007 $9.93 $10.59 1,098,402
01/01/2008 to 12/31/2008 $10.59 $6.83 840,295
---------------------------------------------------------------------------------------
ProFund VP Utilities
01/01/2002 to 12/31/2002 -- $7.83 521,419
01/01/2003 to 12/31/2003 $7.83 $9.34 618,427
01/01/2004 to 12/31/2004 $9.34 $11.13 1,060,939
01/01/2005 to 12/31/2005 $11.13 $12.37 1,996,877
01/01/2006 to 12/31/2006 $12.37 $14.51 2,195,309
01/01/2007 to 12/31/2007 $14.51 $16.52 3,808,582
01/01/2008 to 12/31/2008 $16.52 $11.26 1,279,942
---------------------------------------------------------------------------------------
ProFund VP Bull
01/01/2002 to 12/31/2002 -- $7.97 954,792
01/01/2003 to 12/31/2003 $7.97 $9.84 3,563,562
01/01/2004 to 12/31/2004 $9.84 $10.53 8,215,357
01/01/2005 to 12/31/2005 $10.53 $10.64 7,846,866
01/01/2006 to 12/31/2006 $10.64 $11.90 7,031,661
01/01/2007 to 12/31/2007 $11.90 $12.12 4,013,033
01/01/2008 to 12/31/2008 $12.12 $7.43 2,963,943
---------------------------------------------------------------------------------------
ProFund VP Bear
01/01/2002 to 12/31/2002 -- $11.38 1,532,543
01/01/2003 to 12/31/2003 $11.38 $8.44 1,886,515
01/01/2004 to 12/31/2004 $8.44 $7.45 1,202,243
01/01/2005 to 12/31/2005 $7.45 $7.23 2,169,659
01/01/2006 to 12/31/2006 $7.23 $6.57 1,868,606
01/01/2007 to 12/31/2007 $6.57 $6.50 1,722,065
01/01/2008 to 12/31/2008 $6.50 $8.95 2,326,201
---------------------------------------------------------------------------------------
ProFund VP UltraBull
01/01/2002 to 12/31/2002 -- $6.78 297,435
01/01/2003 to 12/31/2003 $6.78 $10.20 1,431,345
01/01/2004 to 12/31/2004 $10.20 $11.76 2,817,803
01/01/2005 to 12/31/2005 $11.76 $11.87 1,158,024
01/01/2006 to 12/31/2006 $11.87 $14.36 1,596,920
01/01/2007 to 12/31/2007 $14.36 $14.24 1,964,725
01/01/2008 to 12/31/2008 $14.24 $4.57 8,061,341
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
01/01/2002 to 12/31/2002 -- $6.45 1,346,852
01/01/2003 to 12/31/2003 $6.45 $9.32 4,445,234
01/01/2004 to 12/31/2004 $9.32 $9.94 4,885,351
01/01/2005 to 12/31/2005 $9.94 $9.80 2,467,486
01/01/2006 to 12/31/2006 $9.80 $10.16 1,764,614
01/01/2007 to 12/31/2007 $10.16 $11.76 2,265,084
01/01/2008 to 12/31/2008 $11.76 $6.65 1,171,313
A-95
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
01/01/2002 to 12/31/2002 -- $11.00 433,181
01/01/2003 to 12/31/2003 $11.00 $6.78 1,535,439
01/01/2004 to 12/31/2004 $6.78 $5.93 908,064
01/01/2005 to 12/31/2005 $5.93 $5.88 2,494,108
01/01/2006 to 12/31/2006 $5.88 $5.70 1,891,265
01/01/2007 to 12/31/2007 $5.70 $4.96 860,024
01/01/2008 to 12/31/2008 $4.96 $7.23 722,924
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
01/01/2002 to 12/31/2002 -- $3.53 1,003,123
01/01/2003 to 12/31/2003 $3.53 $7.03 3,410,589
01/01/2004 to 12/31/2004 $7.03 $7.89 6,592,447
01/01/2005 to 12/31/2005 $7.89 $7.47 4,740,165
01/01/2006 to 12/31/2006 $7.47 $7.70 2,319,572
01/01/2007 to 12/31/2007 $7.70 $9.73 4,024,405
01/01/2008 to 12/31/2008 $9.73 $2.61 3,358,757
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
01/01/2002 to 12/31/2002 -- $7.66 438,387
01/01/2003 to 12/31/2003 $7.66 $10.23 1,455,513
01/01/2004 to 12/31/2004 $10.23 $11.67 2,632,869
01/01/2005 to 12/31/2005 $11.67 $12.49 2,164,543
01/01/2006 to 12/31/2006 $12.49 $13.80 1,978,580
01/01/2007 to 12/31/2007 $13.80 $13.70 1,436,105
01/01/2008 to 12/31/2008 $13.70 $8.58 733,971
---------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
01/01/2002 to 12/31/2002 -- $7.70 439,054
01/01/2003 to 12/31/2003 $7.70 $9.69 1,009,867
01/01/2004 to 12/31/2004 $9.69 $10.58 2,220,901
01/01/2005 to 12/31/2005 $10.58 $11.58 5,059,312
01/01/2006 to 12/31/2006 $11.58 $11.84 1,594,539
01/01/2007 to 12/31/2007 $11.84 $13.01 2,101,505
01/01/2008 to 12/31/2008 $13.01 $7.83 1,117,437
---------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
01/01/2002 to 12/31/2002 -- $5.71 477,953
01/01/2003 to 12/31/2003 $5.71 $9.55 1,112,311
01/01/2004 to 12/31/2004 $9.55 $11.99 3,106,849
01/01/2005 to 12/31/2005 $11.99 $13.91 1,935,489
01/01/2006 to 12/31/2006 $13.91 $15.14 1,588,771
01/01/2007 to 12/31/2007 $15.14 $15.77 1,072,846
01/01/2008 to 12/31/2008 $15.77 $5.04 2,684,256
---------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
01/01/2002 to 12/31/2002 -- $7.09 994,778
01/01/2003 to 12/31/2003 $7.09 $9.39 5,144,632
01/01/2004 to 12/31/2004 $9.39 $11.10 4,088,760
01/01/2005 to 12/31/2005 $11.10 $11.35 1,398,441
01/01/2006 to 12/31/2006 $11.35 $13.11 2,446,357
01/01/2007 to 12/31/2007 $13.11 $11.96 714,107
01/01/2008 to 12/31/2008 $11.96 $8.15 838,930
A-96
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
01/01/2002 to 12/31/2002 -- $7.69 772,260
01/01/2003 to 12/31/2003 $7.69 $10.16 3,868,951
01/01/2004 to 12/31/2004 $10.16 $11.98 4,677,820
01/01/2005 to 12/31/2005 $11.98 $12.67 4,579,886
01/01/2006 to 12/31/2006 $12.67 $13.54 1,643,633
01/01/2007 to 12/31/2007 $13.54 $13.85 676,467
01/01/2008 to 12/31/2008 $13.85 $8.99 990,289
--------------------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
01/01/2002 to 12/31/2002 -- $6.14 212,085
01/01/2003 to 12/31/2003 $6.14 $12.04 1,702,558
01/01/2004 to 12/31/2004 $12.04 $15.52 5,098,565
01/01/2005 to 12/31/2005 $15.52 $15.23 816,754
01/01/2006 to 12/31/2006 $15.23 $18.87 1,580,595
01/01/2007 to 12/31/2007 $18.87 $16.11 527,856
01/01/2008 to 12/31/2008 $16.11 $5.36 2,519,397
--------------------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
01/01/2002 to 12/31/2002 -- $11.56 2,486,854
01/01/2003 to 12/31/2003 $11.56 $11.08 731,470
01/01/2004 to 12/31/2004 $11.08 $11.79 1,051,158
01/01/2005 to 12/31/2005 $11.79 $12.64 2,312,868
01/01/2006 to 12/31/2006 $12.64 $11.86 821,668
01/01/2007 to 12/31/2007 $11.86 $12.85 2,443,725
01/01/2008 to 12/31/2008 $12.85 $18.92 2,696,273
--------------------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
01/01/2002 to 12/31/2002 -- $8.02 165,792
01/01/2003 to 12/31/2003 $8.02 $7.56 1,817,924
01/01/2004 to 12/31/2004 $7.56 $6.63 5,314,528
01/01/2005 to 12/31/2005 $6.63 $6.00 3,415,324
01/01/2006 to 12/31/2006 $6.00 $6.50 4,567,551
01/01/2007 to 12/31/2007 $6.50 $6.06 1,806,294
01/01/2008 to 12/31/2008 $6.06 $3.70 2,315,493
--------------------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.56 899,139
01/01/2006 to 12/31/2006 $10.56 $11.38 1,207,864
01/01/2007 to 12/31/2007 $11.38 $11.78 898,024
01/01/2008 to 12/31/2008 $11.78 $11.04 901,901
--------------------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
01/01/2002 to 12/31/2002 -- $6.80 19,826
01/01/2003 to 12/31/2003 $6.80 $9.16 66,435
01/01/2004 to 12/31/2004 $9.16 $10.03 91,924
01/01/2005 to 12/31/2005 $10.03 $9.92 87,726
01/01/2006 to 12/31/2006 $9.92 $10.15 100,227
01/01/2007 to 12/31/2007 $10.15 $10.55 106,856
01/01/2008 to 12/31/2008 $10.55 $5.83 190,718
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
01/01/2004 to 12/31/2004 -- $11.85 311,233
01/01/2005 to 12/31/2005 $11.85 $12.84 590,605
01/01/2006 to 12/31/2006 $12.84 $17.48 1,507,757
01/01/2007 to 12/31/2007 $17.48 $19.49 2,078,809
01/01/2008 to 12/31/2008 $19.49 $10.97 1,122,006
A-97
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
01/01/2004 to 12/31/2004 -- $11.32 1,777,316
01/01/2005 to 12/31/2005 $11.32 $11.94 2,420,874
01/01/2006 to 12/31/2006 $11.94 $13.10 2,772,210
01/01/2007 to 12/31/2007 $13.10 $14.10 2,203,754
01/01/2008 to 12/31/2008 $14.10 $7.65 1,345,285
---------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
01/01/2004 to 12/31/2004 -- $10.66 82,809
01/01/2005 to 12/31/2005 $10.66 $10.83 134,177
01/01/2006 to 12/31/2006 $10.83 $11.60 199,508
01/01/2007 to 12/31/2007 $11.60 $13.88 403,709
01/01/2008 to 12/31/2008 $13.88 $6.71 199,304
---------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
01/01/2004 to 12/31/2004 -- $10.75 173,851
01/01/2005 to 12/31/2005 $10.75 $11.01 304,840
01/01/2006 to 12/31/2006 $11.01 $11.14 290,152
01/01/2007 to 12/31/2007 $11.14 $11.42 274,858
01/01/2008 to 12/31/2008 $11.42 $8.09 259,188
---------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
01/01/2004 to 12/31/2004 -- $10.48 155,695
01/01/2005 to 12/31/2005 $10.48 $9.98 194,864
01/01/2006 to 12/31/2006 $9.98 $12.32 481,064
01/01/2007 to 12/31/2007 $12.32 $12.20 235,030
01/01/2008 to 12/31/2008 $12.20 $8.58 249,670
---------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.76 1,240,525
01/01/2006 to 12/31/2006 $9.76 $11.34 2,310,768
01/01/2007 to 12/31/2007 $11.34 $11.28 2,000,024
01/01/2008 to 12/31/2008 $11.28 $6.59 1,374,063
---------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
01/01/2004 to 12/31/2004 -- $12.59 389,792
01/01/2005 to 12/31/2005 $12.59 $14.82 1,068,337
01/01/2006 to 12/31/2006 $14.82 $15.00 1,119,827
01/01/2007 to 12/31/2007 $15.00 $17.43 1,173,103
01/01/2008 to 12/31/2008 $17.43 $7.74 1,027,401
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
01/01/2004 to 12/31/2004 -- $10.37 72,725
01/01/2005 to 12/31/2005 $10.37 $10.30 2,620,748
01/01/2006 to 12/31/2006 $10.30 $11.05 2,181,106
01/01/2007 to 12/31/2007 $11.05 $11.62 2,009,820
01/01/2008 to 12/31/2008 $11.62 $7.37 1,340,839
---------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
01/01/2004 to 12/31/2004 -- $10.37 159,605
01/01/2005 to 12/31/2005 $10.37 $10.51 2,141,309
01/01/2006 to 12/31/2006 $10.51 $12.26 4,023,312
01/01/2007 to 12/31/2007 $12.26 $12.08 1,984,257
01/01/2008 to 12/31/2008 $12.08 $7.07 1,514,949
A-98
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
01/01/2004 to 12/31/2004 -- $9.70 39,360
01/01/2005 to 12/31/2005 $9.70 $8.64 364,782
01/01/2006 to 12/31/2006 $8.64 $8.18 254,207
01/01/2007 to 12/31/2007 $8.18 $7.82 131,223
01/01/2008 to 12/31/2008 $7.82 $10.14 177,441
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
01/01/2004 to 12/31/2004 -- $9.54 136,809
01/01/2005 to 12/31/2005 $9.54 $9.11 220,842
01/01/2006 to 12/31/2006 $9.11 $7.90 560,897
01/01/2007 to 12/31/2007 $7.90 $8.12 1,000,449
01/01/2008 to 12/31/2008 $8.12 $9.92 233,809
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
01/01/2004 to 12/31/2004 -- $10.53 269,671
01/01/2005 to 12/31/2005 $10.53 $12.05 672,243
01/01/2006 to 12/31/2006 $12.05 $14.35 742,865
01/01/2007 to 12/31/2007 $14.35 $16.87 828,104
01/01/2008 to 12/31/2008 $16.87 $8.25 357,600
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 649,828
01/01/2006 to 12/31/2006 $10.00 $11.38 5,212,589
01/01/2007 to 12/31/2007 $11.38 $12.26 8,022,912
01/01/2008 to 12/31/2008 $12.26 $6.95 5,663,091
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 2,586,013
01/01/2006 to 12/31/2006 $10.01 $11.19 23,048,850
01/01/2007 to 12/31/2007 $11.19 $12.07 31,465,957
01/01/2008 to 12/31/2008 $12.07 $7.73 32,624,883
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 2,726,484
01/01/2006 to 12/31/2006 $10.02 $11.01 21,829,919
01/01/2007 to 12/31/2007 $11.01 $11.83 30,616,578
01/01/2008 to 12/31/2008 $11.83 $7.93 35,995,508
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 685,724
01/01/2006 to 12/31/2006 $10.03 $10.90 7,315,279
01/01/2007 to 12/31/2007 $10.90 $11.70 12,873,620
01/01/2008 to 12/31/2008 $11.70 $8.20 24,018,186
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.04 115,215
01/01/2006 to 12/31/2006 $10.04 $10.66 3,303,256
01/01/2007 to 12/31/2007 $10.66 $11.40 7,359,596
01/01/2008 to 12/31/2008 $11.40 $9.02 24,830,005
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.66 5,258,474
01/01/2007 to 12/31/2007 $10.66 $11.48 8,525,849
01/01/2008 to 12/31/2008 $11.48 $7.93 16,229,117
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.58 3,781,525
01/01/2007 to 12/31/2007 $10.58 $11.30 7,801,920
01/01/2008 to 12/31/2008 $11.30 $7.28 13,486,356
A-99
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.48 3,795,562
01/01/2007 to 12/31/2007 $10.48 $11.49 7,899,326
01/01/2008 to 12/31/2008 $11.49 $6.70 13,640,692
-------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.51 120,901
01/01/2008 to 12/31/2008 $11.51 $7.33 2,184,002
-------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.04 74,936
01/01/2008 to 12/31/2008 $10.04 $7.15 5,507,286
-------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.19 157,014
01/01/2008 to 12/31/2008 $10.19 $6.94 1,952,838
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 39,143
01/01/2008 to 12/31/2008 $10.17 $7.58 3,825,075
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.00 50,892
01/01/2008 to 12/31/2008 $10.00 $7.16 2,156,002
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 213,630
01/01/2008 to 12/31/2008 $9.98 $9.30 4,064,760
-------------------------------------------------------------------------------------------------------------
AST Investment Grade Bond Portfolio
01/28/2008* to 12/31/2008 $10.00 $10.73 128,735,078
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.18 $6.11 100,170
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.57 126,548
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.47 1,469,632
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.64 5,636,967
* Denotes the start date of these sub-accounts.
ASL II
Prudential Annuities Life Assurance Corporation
Prospectus
ACCUMULATION UNIT VALUES: With LT5, HDV, and EBP (3.00%)
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------
AST JPMorgan International Equity Portfolio
03/14/2005 to 12/31/2005 $9.91 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $13.32 0
01/01/2008 to 12/31/2008 $13.32 $7.57 0
A-100
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------
AST International Growth Portfolio
03/14/2005 to 12/31/2005 $9.92 $11.16 0
01/01/2006 to 12/31/2006 $11.16 $13.10 0
01/01/2007 to 12/31/2007 $13.10 $15.12 0
01/01/2008 to 12/31/2008 $15.12 $7.30 0
-------------------------------------------------------------------------------------------------------
AST International Value Portfolio
03/14/2005 to 12/31/2005 $9.92 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $13.09 0
01/01/2007 to 12/31/2007 $13.09 $14.95 0
01/01/2008 to 12/31/2008 $14.95 $8.12 0
-------------------------------------------------------------------------------------------------------
AST MFS Global Equity Portfolio
03/14/2005 to 12/31/2005 $9.96 $10.36 0
01/01/2006 to 12/31/2006 $10.36 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $13.25 0
01/01/2008 to 12/31/2008 $13.25 $8.49 0
-------------------------------------------------------------------------------------------------------
AST Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.31 0
01/01/2006 to 12/31/2006 $10.31 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $11.71 0
01/01/2008 to 12/31/2008 $11.71 $7.38 0
-------------------------------------------------------------------------------------------------------
AST Neuberger Berman Small-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.66 0
01/01/2007 to 12/31/2007 $10.66 $12.27 0
01/01/2008 to 12/31/2008 $12.27 $6.84 0
-------------------------------------------------------------------------------------------------------
AST Federated Aggressive Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.84 0
01/01/2006 to 12/31/2006 $10.84 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $12.80 0
01/01/2008 to 12/31/2008 $12.80 $6.94 0
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $10.92 0
01/01/2008 to 12/31/2008 $10.92 $7.77 0
-------------------------------------------------------------------------------------------------------
AST Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.65 0
-------------------------------------------------------------------------------------------------------
AST DeAm Small-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.04 $9.90 0
01/01/2006 to 12/31/2006 $9.90 $11.53 0
01/01/2007 to 12/31/2007 $11.53 $9.19 0
01/01/2008 to 07/18/2008 $9.19 $8.36 0
-------------------------------------------------------------------------------------------------------
AST Goldman Sachs Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.00 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.78 0
01/01/2007 to 12/31/2007 $10.78 $12.48 0
01/01/2008 to 12/31/2008 $12.48 $7.17 0
A-101
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman Mid-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.05 $11.21 0
01/01/2006 to 12/31/2006 $11.21 $12.40 0
01/01/2007 to 12/31/2007 $12.40 $14.70 0
01/01/2008 to 12/31/2008 $14.70 $8.10 0
---------------------------------------------------------------------------------------------------------------
AST Neuberger Berman/LSV Mid-Cap Value Portfolio
formerly, AST Neuberger Berman Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.02 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $11.56 0
01/01/2007 to 12/31/2007 $11.56 $11.57 0
01/01/2008 to 12/31/2008 $11.57 $6.48 0
---------------------------------------------------------------------------------------------------------------
AST Alger All-Cap Growth Portfolio
03/14/2005 to 12/02/2005 $10.09 $11.59 0
---------------------------------------------------------------------------------------------------------------
AST Mid-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.06 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.34 0
01/01/2007 to 12/31/2007 $11.34 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.78 0
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Natural Resources Portfolio
03/14/2005 to 12/31/2005 $10.00 $11.61 0
01/01/2006 to 12/31/2006 $11.61 $13.05 0
01/01/2007 to 12/31/2007 $13.05 $17.78 0
01/01/2008 to 12/31/2008 $17.78 $8.62 0
---------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Large-Cap Growth Portfolio
03/14/2005 to 12/31/2005 $10.02 $11.98 0
01/01/2006 to 12/31/2006 $11.98 $12.28 0
01/01/2007 to 12/31/2007 $12.28 $12.89 0
01/01/2008 to 12/31/2008 $12.89 $7.43 0
---------------------------------------------------------------------------------------------------------------
AST MFS Growth Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $12.63 0
01/01/2008 to 12/31/2008 $12.63 $7.81 0
---------------------------------------------------------------------------------------------------------------
AST Marsico Capital Growth Portfolio
03/14/2005 to 12/31/2005 $10.12 $10.78 0
01/01/2006 to 12/31/2006 $10.78 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $12.50 0
01/01/2008 to 12/31/2008 $12.50 $6.83 0
---------------------------------------------------------------------------------------------------------------
AST Goldman Sachs Concentrated Growth Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.64 0
01/01/2006 to 12/31/2006 $10.64 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $7.27 0
---------------------------------------------------------------------------------------------------------------
AST DeAm Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.59 0
01/01/2006 to 12/31/2006 $10.59 $12.51 0
01/01/2007 to 12/31/2007 $12.51 $12.28 0
01/01/2008 to 12/31/2008 $12.28 $7.47 0
---------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth + Value Portfolio
03/14/2005 to 12/02/2005 $10.05 $11.21 0
A-102
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Core Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $6.33 0
----------------------------------------------------------------------------------------------------------------------
AST Cohen & Steers Realty Portfolio
03/14/2005 to 12/31/2005 $10.15 $11.88 0
01/01/2006 to 12/31/2006 $11.88 $15.76 0
01/01/2007 to 12/31/2007 $15.76 $12.24 0
01/01/2008 to 12/31/2008 $12.24 $7.71 0
----------------------------------------------------------------------------------------------------------------------
AST QMA US Equity Alpha
formerly, AST AllianceBernstein Managed Index 500 Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.28 0
01/01/2006 to 12/31/2006 $10.28 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $11.12 0
01/01/2008 to 12/31/2008 $11.12 $6.61 0
----------------------------------------------------------------------------------------------------------------------
AST American Century Income & Growth Portfolio
03/14/2005 to 12/31/2005 $10.07 $10.22 0
01/01/2006 to 12/31/2006 $10.22 $11.58 0
01/01/2007 to 12/31/2007 $11.58 $11.22 0
01/01/2008 to 12/31/2008 $11.22 $7.10 0
----------------------------------------------------------------------------------------------------------------------
AST AllianceBernstein Growth & Income Portfolio
03/14/2005 to 12/31/2005 $10.05 $10.15 0
01/01/2006 to 12/31/2006 $10.15 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.77 0
01/01/2008 to 12/31/2008 $11.77 $6.77 0
----------------------------------------------------------------------------------------------------------------------
AST Large-Cap Value Portfolio
03/14/2005 to 12/31/2005 $10.08 $10.44 0
01/01/2006 to 12/31/2006 $10.44 $11.99 0
01/01/2007 to 12/31/2007 $11.99 $11.29 0
01/01/2008 to 12/31/2008 $11.29 $6.40 0
----------------------------------------------------------------------------------------------------------------------
AST UBS Dynamic Alpha Portfolio
03/14/2005 to 12/31/2005 $10.01 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $11.32 0
01/01/2007 to 12/31/2007 $11.32 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $8.95 0
----------------------------------------------------------------------------------------------------------------------
AST Schroders Multi-Asset World Strategies Portfolio
formerly, AST American Century Strategic Allocation Portfolio
03/14/2005 to 12/31/2005 $10.04 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.46 0
01/01/2008 to 12/31/2008 $11.46 $7.76 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Asset Allocation Portfolio
03/14/2005 to 12/31/2005 $10.03 $10.24 0
01/01/2006 to 12/31/2006 $10.24 $11.17 0
01/01/2007 to 12/31/2007 $11.17 $11.52 0
01/01/2008 to 12/31/2008 $11.52 $8.28 0
----------------------------------------------------------------------------------------------------------------------
AST T. Rowe Price Global Bond Portfolio
03/14/2005 to 12/31/2005 $9.95 $9.34 0
01/01/2006 to 12/31/2006 $9.34 $9.63 0
01/01/2007 to 12/31/2007 $9.63 $10.24 0
01/01/2008 to 12/31/2008 $10.24 $9.69 0
A-103
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------
AST High Yield Portfolio
03/14/2005 to 12/31/2005 $9.98 $9.75 0
01/01/2006 to 12/31/2006 $9.75 $10.43 0
01/01/2007 to 12/31/2007 $10.43 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $7.49 0
-------------------------------------------------------------------------------------------------
AST Lord Abbett Bond-Debenture Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.84 0
01/01/2006 to 12/31/2006 $9.84 $10.48 0
01/01/2007 to 12/31/2007 $10.48 $10.78 0
01/01/2008 to 12/31/2008 $10.78 $8.03 0
-------------------------------------------------------------------------------------------------
AST PIMCO Total Return Bond Portfolio
03/14/2005 to 12/31/2005 $9.99 $10.04 0
01/01/2006 to 12/31/2006 $10.04 $10.10 0
01/01/2007 to 12/31/2007 $10.10 $10.61 0
01/01/2008 to 12/31/2008 $10.61 $10.06 0
-------------------------------------------------------------------------------------------------
AST PIMCO Limited Maturity Bond Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.94 0
01/01/2006 to 12/31/2006 $9.94 $10.01 0
01/01/2007 to 12/31/2007 $10.01 $10.37 0
01/01/2008 to 12/31/2008 $10.37 $10.17 0
-------------------------------------------------------------------------------------------------
AST Money Market Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $10.13 0
01/01/2007 to 12/31/2007 $10.13 $10.31 0
01/01/2008 to 12/31/2008 $10.31 $10.25 0
-------------------------------------------------------------------------------------------------
Gartmore NVIT Developing Markets
03/14/2005 to 12/31/2005 $9.88 $11.93 0
01/01/2006 to 12/31/2006 $11.93 $15.57 0
01/01/2007 to 12/31/2007 $15.57 $21.67 0
01/01/2008 to 12/31/2008 $21.67 $8.86 0
-------------------------------------------------------------------------------------------------
Wells Fargo Advantage VT Equity Income
03/14/2005 to 12/31/2005 $10.07 $10.08 0
01/01/2006 to 12/31/2006 $10.08 $11.60 0
01/01/2007 to 12/31/2007 $11.60 $11.56 0
01/01/2008 to 12/31/2008 $11.56 $7.13 0
-------------------------------------------------------------------------------------------------
AIM V.I. Dynamics Fund
03/14/2005 to 12/31/2005 $10.05 $10.80 0
01/01/2006 to 12/31/2006 $10.80 $12.16 0
01/01/2007 to 12/31/2007 $12.16 $13.23 0
01/01/2008 to 12/31/2008 $13.23 $6.66 0
-------------------------------------------------------------------------------------------------
AIM V.I. Technology Fund
03/14/2005 to 12/31/2005 $10.00 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.36 0
01/01/2007 to 12/31/2007 $11.36 $11.87 0
01/01/2008 to 12/31/2008 $11.87 $6.39 0
-------------------------------------------------------------------------------------------------
AIM V.I. Global Health Care
03/14/2005 to 12/31/2005 $10.06 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.27 0
01/01/2007 to 12/31/2007 $11.27 $12.23 0
01/01/2008 to 12/31/2008 $12.23 $8.47 0
A-104
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
----------------------------------------------------------------------------------------------
AIM V.I. Financial Services Fund
03/14/2005 to 12/31/2005 $10.06 $10.62 0
01/01/2006 to 12/31/2006 $10.62 $12.00 0
01/01/2007 to 12/31/2007 $12.00 $9.05 0
01/01/2008 to 12/31/2008 $9.05 $3.56 0
----------------------------------------------------------------------------------------------
Evergreen VA International Equity Fund
03/14/2005 to 12/31/2005 $9.90 $10.88 0
01/01/2006 to 12/31/2006 $10.88 $13.00 0
01/01/2007 to 12/31/2007 $13.00 $14.50 0
01/01/2008 to 12/31/2008 $14.50 $8.23 0
----------------------------------------------------------------------------------------------
Evergreen VA Special Equity Fund
03/14/2005 to 04/15/2005 $10.02 $9.26 0
----------------------------------------------------------------------------------------------
Evergreen VA Omega Fund
03/14/2005 to 12/31/2005 $10.02 $10.50 0
01/01/2006 to 12/31/2006 $10.50 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $11.72 0
01/01/2008 to 12/31/2008 $11.72 $8.28 0
----------------------------------------------------------------------------------------------
Evergreen VA Growth Fund
04/15/2005* to 12/31/2005 $9.82 $11.33 0
01/01/2006 to 12/31/2006 $11.33 $12.20 0
01/01/2007 to 12/31/2007 $12.20 $13.14 0
01/01/2008 to 12/31/2008 $13.14 $7.50 0
----------------------------------------------------------------------------------------------
ProFund VP Europe 30
03/14/2005 to 12/31/2005 $9.99 $10.41 0
01/01/2006 to 12/31/2006 $10.41 $11.87 0
01/01/2007 to 12/31/2007 $11.87 $13.19 0
01/01/2008 to 12/31/2008 $13.19 $7.16 0
----------------------------------------------------------------------------------------------
ProFund VP Asia 30
03/14/2005 to 12/31/2005 $9.99 $11.10 0
01/01/2006 to 12/31/2006 $11.10 $14.99 0
01/01/2007 to 12/31/2007 $14.99 $21.48 0
01/01/2008 to 12/31/2008 $21.48 $10.25 0
----------------------------------------------------------------------------------------------
ProFund VP Japan
03/14/2005 to 12/31/2005 $9.95 $13.38 0
01/01/2006 to 12/31/2006 $13.38 $14.38 0
01/01/2007 to 12/31/2007 $14.38 $12.56 0
01/01/2008 to 12/31/2008 $12.56 $7.20 0
----------------------------------------------------------------------------------------------
ProFund VP Banks
03/14/2005 to 12/31/2005 $10.08 $10.10 0
01/01/2006 to 12/31/2006 $10.10 $11.31 0
01/01/2007 to 12/31/2007 $11.31 $7.98 0
01/01/2008 to 12/31/2008 $7.98 $4.11 0
----------------------------------------------------------------------------------------------
ProFund VP Basic Materials
03/14/2005 to 12/31/2005 $9.98 $9.48 0
01/01/2006 to 12/31/2006 $9.48 $10.62 0
01/01/2007 to 12/31/2007 $10.62 $13.46 0
01/01/2008 to 12/31/2008 $13.46 $6.34 0
----------------------------------------------------------------------------------------------
ProFund VP Biotechnology
03/14/2005 to 12/31/2005 $10.48 $13.48 0
01/01/2006 to 12/31/2006 $13.48 $12.55 0
01/01/2007 to 12/31/2007 $12.55 $12.03 0
01/01/2008 to 12/31/2008 $12.03 $11.88 0
A-105
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------
ProFund VP Consumer Services
03/14/2005 to 12/31/2005 $10.04 $9.66 0
01/01/2006 to 12/31/2006 $9.66 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $9.34 0
01/01/2008 to 12/31/2008 $9.34 $6.22 0
-------------------------------------------------------------------------------------------
ProFund VP Consumer Goods Portfolio
03/14/2005 to 12/31/2005 $10.03 $9.73 0
01/01/2006 to 12/31/2006 $9.73 $10.63 0
01/01/2007 to 12/31/2007 $10.63 $11.09 0
01/01/2008 to 12/31/2008 $11.09 $7.89 0
-------------------------------------------------------------------------------------------
ProFund VP Oil & Gas
03/14/2005 to 12/31/2005 $10.07 $10.92 0
01/01/2006 to 12/31/2006 $10.92 $12.78 0
01/01/2007 to 12/31/2007 $12.78 $16.42 0
01/01/2008 to 12/31/2008 $16.42 $10.04 0
-------------------------------------------------------------------------------------------
ProFund VP Financials
03/14/2005 to 12/31/2005 $10.08 $10.53 0
01/01/2006 to 12/31/2006 $10.53 $11.98 0
01/01/2007 to 12/31/2007 $11.98 $9.40 0
01/01/2008 to 12/31/2008 $9.40 $4.51 0
-------------------------------------------------------------------------------------------
ProFund VP Health Care
03/14/2005 to 12/31/2005 $10.09 $10.46 0
01/01/2006 to 12/31/2006 $10.46 $10.68 0
01/01/2007 to 12/31/2007 $10.68 $11.04 0
01/01/2008 to 12/31/2008 $11.04 $8.11 0
-------------------------------------------------------------------------------------------
ProFund VP Industrials
03/14/2005 to 12/31/2005 $10.06 $10.06 0
01/01/2006 to 12/31/2006 $10.06 $10.90 0
01/01/2007 to 12/31/2007 $10.90 $11.81 0
01/01/2008 to 12/31/2008 $11.81 $6.82 0
-------------------------------------------------------------------------------------------
ProFund VP Internet
03/14/2005 to 12/31/2005 $9.94 $12.71 0
01/01/2006 to 12/31/2006 $12.71 $12.50 0
01/01/2007 to 12/31/2007 $12.50 $13.36 0
01/01/2008 to 12/31/2008 $13.36 $7.15 0
-------------------------------------------------------------------------------------------
ProFund VP Pharmaceuticals
03/14/2005 to 12/31/2005 $10.02 $9.44 0
01/01/2006 to 12/31/2006 $9.44 $10.27 0
01/01/2007 to 12/31/2007 $10.27 $10.19 0
01/01/2008 to 12/31/2008 $10.19 $7.96 0
-------------------------------------------------------------------------------------------
ProFund VP Precious Metals
03/14/2005 to 12/31/2005 $9.89 $12.00 0
01/01/2006 to 12/31/2006 $12.00 $12.49 0
01/01/2007 to 12/31/2007 $12.49 $14.84 0
01/01/2008 to 12/31/2008 $14.84 $9.96 0
-------------------------------------------------------------------------------------------
ProFund VP Real Estate
03/14/2005 to 12/31/2005 $10.15 $11.17 0
01/01/2006 to 12/31/2006 $11.17 $14.36 0
01/01/2007 to 12/31/2007 $14.36 $11.20 0
01/01/2008 to 12/31/2008 $11.20 $6.38 0
A-106
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
---------------------------------------------------------------------------------------
ProFund VP Semiconductor
03/14/2005 to 12/31/2005 $10.04 $10.65 0
01/01/2006 to 12/31/2006 $10.65 $9.60 0
01/01/2007 to 12/31/2007 $9.60 $9.97 0
01/01/2008 to 12/31/2008 $9.97 $4.85 0
---------------------------------------------------------------------------------------
ProFund VP Technology
03/14/2005 to 12/31/2005 $10.03 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $12.26 0
01/01/2008 to 12/31/2008 $12.26 $6.62 0
---------------------------------------------------------------------------------------
ProFund VP Telecommunications
03/14/2005 to 12/31/2005 $10.03 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $12.68 0
01/01/2007 to 12/31/2007 $12.68 $13.33 0
01/01/2008 to 12/31/2008 $13.33 $8.48 0
---------------------------------------------------------------------------------------
ProFund VP Utilities
03/14/2005 to 12/31/2005 $10.17 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $12.26 0
01/01/2007 to 12/31/2007 $12.26 $13.77 0
01/01/2008 to 12/31/2008 $13.77 $9.26 0
---------------------------------------------------------------------------------------
ProFund VP Bull
03/14/2005 to 12/31/2005 $10.05 $10.12 0
01/01/2006 to 12/31/2006 $10.12 $11.16 0
01/01/2007 to 12/31/2007 $11.16 $11.21 0
01/01/2008 to 12/31/2008 $11.21 $6.77 0
---------------------------------------------------------------------------------------
ProFund VP Bear
03/14/2005 to 12/31/2005 $9.94 $9.54 0
01/01/2006 to 12/31/2006 $9.54 $8.56 0
01/01/2007 to 12/31/2007 $8.56 $8.35 0
01/01/2008 to 12/31/2008 $8.35 $11.34 0
---------------------------------------------------------------------------------------
ProFund VP UltraBull
03/14/2005 to 12/31/2005 $10.11 $10.25 0
01/01/2006 to 12/31/2006 $10.25 $12.23 0
01/01/2007 to 12/31/2007 $12.23 $11.96 0
01/01/2008 to 12/31/2008 $11.96 $3.78 0
---------------------------------------------------------------------------------------
ProFund VP NASDAQ-100
03/14/2005 to 12/31/2005 $10.06 $10.55 0
01/01/2006 to 12/31/2006 $10.55 $10.79 0
01/01/2007 to 12/31/2007 $10.79 $12.31 0
01/01/2008 to 12/31/2008 $12.31 $6.87 0
---------------------------------------------------------------------------------------
ProFund VP Short NASDAQ-100
03/14/2005 to 12/31/2005 $9.94 $9.14 0
01/01/2006 to 12/31/2006 $9.14 $8.75 0
01/01/2007 to 12/31/2007 $8.75 $7.50 0
01/01/2008 to 12/31/2008 $7.50 $10.78 0
---------------------------------------------------------------------------------------
ProFund VP UltraNASDAQ-100
03/14/2005 to 12/31/2005 $10.15 $11.04 0
01/01/2006 to 12/31/2006 $11.04 $11.23 0
01/01/2007 to 12/31/2007 $11.23 $14.00 0
01/01/2008 to 12/31/2008 $14.00 $3.70 0
A-107
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-----------------------------------------------------------------------------------------------
ProFund VP Mid-Cap Value
03/14/2005 to 12/31/2005 $10.09 $10.60 0
01/01/2006 to 12/31/2006 $10.60 $11.55 0
01/01/2007 to 12/31/2007 $11.55 $11.31 0
01/01/2008 to 12/31/2008 $11.31 $6.99 0
-----------------------------------------------------------------------------------------------
ProFund VP Mid-Cap Growth
03/14/2005 to 12/31/2005 $10.06 $10.76 0
01/01/2006 to 12/31/2006 $10.76 $10.85 0
01/01/2007 to 12/31/2007 $10.85 $11.76 0
01/01/2008 to 12/31/2008 $11.76 $6.98 0
-----------------------------------------------------------------------------------------------
ProFund VP UltraMid-Cap
03/14/2005 to 12/31/2005 $10.15 $11.38 0
01/01/2006 to 12/31/2006 $11.38 $12.22 0
01/01/2007 to 12/31/2007 $12.22 $12.55 0
01/01/2008 to 12/31/2008 $12.55 $3.96 0
-----------------------------------------------------------------------------------------------
ProFund VP Small-Cap Value
03/14/2005 to 12/31/2005 $10.04 $10.30 0
01/01/2006 to 12/31/2006 $10.30 $11.73 0
01/01/2007 to 12/31/2007 $11.73 $10.55 0
01/01/2008 to 12/31/2008 $10.55 $7.09 0
-----------------------------------------------------------------------------------------------
ProFund VP Small-Cap Growth
03/14/2005 to 12/31/2005 $10.04 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $11.05 0
01/01/2007 to 12/31/2007 $11.05 $11.15 0
01/01/2008 to 12/31/2008 $11.15 $7.13 0
-----------------------------------------------------------------------------------------------
ProFund VP UltraSmall-Cap
03/14/2005 to 12/31/2005 $10.11 $10.66 0
01/01/2006 to 12/31/2006 $10.66 $13.03 0
01/01/2007 to 12/31/2007 $13.03 $10.97 0
01/01/2008 to 12/31/2008 $10.97 $3.60 0
-----------------------------------------------------------------------------------------------
ProFund VP U.S. Government Plus
03/14/2005 to 12/31/2005 $10.08 $10.54 0
01/01/2006 to 12/31/2006 $10.54 $9.76 0
01/01/2007 to 12/31/2007 $9.76 $10.43 0
01/01/2008 to 12/31/2008 $10.43 $15.14 0
-----------------------------------------------------------------------------------------------
ProFund VP Rising Rates Opportunity
03/14/2005 to 12/31/2005 $9.91 $9.08 0
01/01/2006 to 12/31/2006 $9.08 $9.71 0
01/01/2007 to 12/31/2007 $9.71 $8.92 0
01/01/2008 to 12/31/2008 $8.92 $5.37 0
-----------------------------------------------------------------------------------------------
ACCESS VP High Yield Fund
05/02/2005* to 12/31/2005 $10.00 $10.47 0
01/01/2006 to 12/31/2006 $10.47 $11.12 0
01/01/2007 to 12/31/2007 $11.12 $11.35 0
01/01/2008 to 12/31/2008 $11.35 $10.50 0
-----------------------------------------------------------------------------------------------
First Trust Target Focus Four Portfolio
03/14/2005 to 12/31/2005 $10.00 $9.74 0
01/01/2006 to 12/31/2006 $9.74 $9.83 0
01/01/2007 to 12/31/2007 $9.83 $10.07 0
01/01/2008 to 12/31/2008 $10.07 $5.49 0
A-108
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------
Global Dividend Target 15
formerly, First Trust Global Dividend Target 15
03/14/2005 to 12/31/2005 $10.03 $10.83 0
01/01/2006 to 12/31/2006 $10.83 $14.54 0
01/01/2007 to 12/31/2007 $14.54 $15.99 0
01/01/2008 to 12/31/2008 $15.99 $8.87 0
--------------------------------------------------------------------------------------------------------
Target Managed VIP Portfolio
formerly, First Trust Managed VIP
03/14/2005 to 12/31/2005 $10.02 $10.43 0
01/01/2006 to 12/31/2006 $10.43 $11.29 0
01/01/2007 to 12/31/2007 $11.29 $11.98 0
01/01/2008 to 12/31/2008 $11.98 $6.41 0
--------------------------------------------------------------------------------------------------------
NASDAQ Target 15 Portfolio
formerly, First Trust NASDAQ Target 15
03/14/2005 to 12/31/2005 $10.06 $10.75 0
01/01/2006 to 12/31/2006 $10.75 $11.35 0
01/01/2007 to 12/31/2007 $11.35 $13.40 0
01/01/2008 to 12/31/2008 $13.40 $6.38 0
--------------------------------------------------------------------------------------------------------
S&P Target 24 Portfolio
formerly, First Trust S&P Target 24
03/14/2005 to 12/31/2005 $10.10 $10.48 0
01/01/2006 to 12/31/2006 $10.48 $10.46 0
01/01/2007 to 12/31/2007 $10.46 $10.57 0
01/01/2008 to 12/31/2008 $10.57 $7.39 0
--------------------------------------------------------------------------------------------------------
The DOW DART 10 Portfolio
formerly, First Trust Dow Target 10
03/14/2005 to 12/31/2005 $10.03 $9.53 0
01/01/2006 to 12/31/2006 $9.53 $11.61 0
01/01/2007 to 12/31/2007 $11.61 $11.33 0
01/01/2008 to 12/31/2008 $11.33 $7.86 0
--------------------------------------------------------------------------------------------------------
The DOW Target Dividend Portfolio
formerly, First Trust Dow Target Dividend
05/02/2005* to 12/31/2005 $10.00 $9.67 0
01/01/2006 to 12/31/2006 $9.67 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $10.87 0
01/01/2008 to 12/31/2008 $10.87 $6.27 0
--------------------------------------------------------------------------------------------------------
Value Line Target 25 Portfolio
formerly, First Trust Value Line Target 25
03/14/2005 to 12/31/2005 $10.00 $11.11 0
01/01/2006 to 12/31/2006 $11.11 $11.08 0
01/01/2007 to 12/31/2007 $11.08 $12.71 0
01/01/2008 to 12/31/2008 $12.71 $5.57 0
--------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Growth
03/14/2005 to 12/31/2005 $10.03 $9.98 0
01/01/2006 to 12/31/2006 $9.98 $10.56 0
01/01/2007 to 12/31/2007 $10.56 $10.96 0
01/01/2008 to 12/31/2008 $10.96 $6.85 0
--------------------------------------------------------------------------------------------------------
ProFund VP Large-Cap Value
03/14/2005 to 12/31/2005 $10.07 $10.20 0
01/01/2006 to 12/31/2006 $10.20 $11.74 0
01/01/2007 to 12/31/2007 $11.74 $11.40 0
01/01/2008 to 12/31/2008 $11.40 $6.59 0
A-109
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Mid-Cap
03/14/2005 to 12/31/2005 $9.93 $8.94 0
01/01/2006 to 12/31/2006 $8.94 $8.36 0
01/01/2007 to 12/31/2007 $8.36 $7.87 0
01/01/2008 to 12/31/2008 $7.87 $10.07 0
--------------------------------------------------------------------------------------------------------------
ProFund VP Short Small-Cap
03/14/2005 to 12/31/2005 $9.95 $9.17 0
01/01/2006 to 12/31/2006 $9.17 $7.84 0
01/01/2007 to 12/31/2007 $7.84 $7.95 0
01/01/2008 to 12/31/2008 $7.95 $9.57 0
--------------------------------------------------------------------------------------------------------------
Prudential SP International Growth Portfolio
03/14/2005 to 12/31/2005 $9.93 $11.18 0
01/01/2006 to 12/31/2006 $11.18 $13.12 0
01/01/2007 to 12/31/2007 $13.12 $15.22 0
01/01/2008 to 12/31/2008 $15.22 $7.34 0
--------------------------------------------------------------------------------------------------------------
AST Aggressive Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $9.99 0
01/01/2006 to 12/31/2006 $9.99 $11.21 0
01/01/2007 to 12/31/2007 $11.21 $11.91 0
01/01/2008 to 12/31/2008 $11.91 $6.66 0
--------------------------------------------------------------------------------------------------------------
AST Capital Growth Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.00 0
01/01/2006 to 12/31/2006 $10.00 $11.02 2,672
01/01/2007 to 12/31/2007 $11.02 $11.73 10,225
01/01/2008 to 12/31/2008 $11.73 $7.40 11,699
--------------------------------------------------------------------------------------------------------------
AST Academic Strategies Asset Allocation Portfolio
formerly, AST Balanced Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.01 0
01/01/2006 to 12/31/2006 $10.01 $10.85 18,249
01/01/2007 to 12/31/2007 $10.85 $11.49 19,931
01/01/2008 to 12/31/2008 $11.49 $7.60 38,177
--------------------------------------------------------------------------------------------------------------
AST Balanced Asset Allocation Portfolio
formerly, AST Conservative Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.02 0
01/01/2006 to 12/31/2006 $10.02 $10.74 0
01/01/2007 to 12/31/2007 $10.74 $11.36 4,610
01/01/2008 to 12/31/2008 $11.36 $7.86 4,379
--------------------------------------------------------------------------------------------------------------
AST Preservation Asset Allocation Portfolio
12/05/2005* to 12/31/2005 $10.00 $10.03 0
01/01/2006 to 12/31/2006 $10.03 $10.50 0
01/01/2007 to 12/31/2007 $10.50 $11.07 0
01/01/2008 to 12/31/2008 $11.07 $8.65 4,182
--------------------------------------------------------------------------------------------------------------
AST Advanced Strategies Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.54 0
01/01/2007 to 12/31/2007 $10.54 $11.20 7,920
01/01/2008 to 12/31/2008 $11.20 $7.63 13,497
--------------------------------------------------------------------------------------------------------------
AST First Trust Balanced Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.47 0
01/01/2007 to 12/31/2007 $10.47 $11.02 5,264
01/01/2008 to 12/31/2008 $11.02 $7.00 5,327
A-110
Number of
Accumulation Accumulation Accumulation
Unit Value at Unit Value at Units Outstanding at
Sub Accounts Beginning of Period End of Period End of Period
-------------------------------------------------------------------------------------------------------------
AST First Trust Capital Appreciation Target Portfolio
03/20/2006* to 12/31/2006 $10.00 $10.37 0
01/01/2007 to 12/31/2007 $10.37 $11.20 5,929
01/01/2008 to 12/31/2008 $11.20 $6.44 12,636
-------------------------------------------------------------------------------------------------------------
AST CLS Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $11.49 0
01/01/2008 to 12/31/2008 $11.49 $7.22 1,469
-------------------------------------------------------------------------------------------------------------
AST CLS Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.02 0
01/01/2008 to 12/31/2008 $10.02 $7.04 5,132
-------------------------------------------------------------------------------------------------------------
AST Horizon Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.17 0
01/01/2008 to 12/31/2008 $10.17 $6.84 0
-------------------------------------------------------------------------------------------------------------
AST Horizon Moderate Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $10.15 0
01/01/2008 to 12/31/2008 $10.15 $7.46 0
-------------------------------------------------------------------------------------------------------------
AST Niemann Capital Growth Asset Allocation Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.98 0
01/01/2008 to 12/31/2008 $9.98 $7.05 0
-------------------------------------------------------------------------------------------------------------
AST Western Asset Core Plus Bond Portfolio
11/19/2007* to 12/31/2007 $10.00 $9.96 0
01/01/2008 to 12/31/2008 $9.96 $9.16 0
-------------------------------------------------------------------------------------------------------------
AST Global Real Estate Portfolio
07/21/2008* to 12/31/2008 $10.17 $6.08 0
-------------------------------------------------------------------------------------------------------------
AST Parametric Emerging Markets Equity Portfolio
07/21/2008* to 12/31/2008 $10.10 $5.54 0
-------------------------------------------------------------------------------------------------------------
AST Focus Four Plus Portfolio
07/21/2008* to 12/31/2008 $10.00 $7.43 0
-------------------------------------------------------------------------------------------------------------
Franklin Templeton VIP Founding Funds Allocation Fund
05/01/2008* to 12/31/2008 $10.08 $6.58 0
* Denotes the start date of these sub-accounts.
A-111
APPENDIX B - CALCULATION OF OPTIONAL DEATH BENEFITS
Examples of Enhanced Beneficiary Protection Optional Death Benefit Calculation
The following are examples of how the Enhanced Beneficiary Protection Optional
Death Benefit is calculated. Each example assumes that a $50,000 initial
Purchase Payment is made. Each example assumes that there is one Owner who is
age 50 on the Issue Date and that all Account Value is maintained in the
variable investment options. The formula for determining the Enhanced
Beneficiary Protection Optional Death Benefit is as follows:
Growth = Account Value of variable minus purchase payments -
investment options plus Interim proportional withdrawals
Value of Fixed Allocations
(no MVA applies)
Example with market increase
Assume that the Owner has made no withdrawals and that the Account Value has
been increasing due to positive market performance. On the date we receive due
proof of death, the Account Value is $75,000. The basic Death Benefit is
calculated as purchase payments minus proportional withdrawals, or Account
Value, which ever is greater. Therefore, the basic Death Benefit is equal to
$75,000. The Enhanced Beneficiary Protection Optional Death Benefit is equal
to the amount payable under the basic Death Benefit ($75,000) PLUS 40% of the
"Growth" under the Annuity.
Growth = $75,000 - [$50,000 - $0]
= $25,000
Benefit Payable under Enhanced Beneficiary Protection Optional Death Benefit = 40% of Growth
= $25,000 * 0.40
= $10,000
Benefit Payable under Basic Death Benefit PLUS Enhanced Beneficiary Protection Optional Death Benefit
= $85,000
Examples with market decline
Assume that the Owner has made no withdrawals and that the Account Value has
been decreasing due to declines in market performance. On the date we receive
due proof of death, the Account Value is $45,000. The basic Death Benefit is
calculated as purchase payments minus proportional withdrawals, or Account
Value, which ever is greater. Therefore, the basic Death Benefit is equal to
$50,000. The Enhanced Beneficiary Protection Optional Death Benefit is equal
to the amount payable under the basic Death Benefit ($50,000) PLUS the
"Growth" under the Annuity.
Growth = $45,000 - [$50,000 - $0]
= $-5,000
Benefit Payable under Enhanced Beneficiary Protection Optional Death Benefit = 40% of Growth
NO BENEFIT IS PAYABLE
Benefit Payable under Basic Death Benefit PLUS Enhanced Beneficiary Protection Optional Death Benefit
= $50,000
In this example you would receive no additional benefit from purchasing the
Enhanced Beneficiary Protection Optional Death Benefit.
B-1
Example with market increase and withdrawals
Assume that the Account Value has been increasing due to positive market
performance and the Owner made a withdrawal of $15,000 in Annuity Year 5 when
the Account Value was $75,000. On the date we receive due proof of death, the
Account Value is $90,000. The basic Death Benefit is calculated as purchase
payments minus proportional withdrawals, or Account Value, which ever is
greater. Therefore, the basic Death Benefit is equal to $90,000. The Enhanced
Beneficiary Protection Optional Death Benefit is equal to the amount payable
under the basic Death Benefit ($90,000) PLUS 40% of the "Growth" under the
Annuity.
Growth = $90,000 - [$50,000 - ($50,000 * $15,000/$75,000)]
= $90,000 - [$50,000 - $10,000]
= $90,000 - $40,000
= $50,000
Benefit Payable under Enhanced Beneficiary Protection Optional Death Benefit = 40% of Growth
= $50,000 * 0.40
= $20,000
Benefit Payable under Basic Death Benefit PLUS Enhanced Beneficiary Protection Optional Death Benefit
= $110,000
Examples of Highest Anniversary Value Death Benefit Calculation
The following are examples of how the Highest Anniversary Value Death Benefit
is calculated. Each example assumes an initial Purchase Payment of $50,000.
Each example assumes that there is one Owner who is age 70 on the Issue Date
and that all Account Value is maintained in the variable investment options.
Example with market increase and death before Death Benefit Target Date
Assume that the Owner's Account Value has generally been increasing due to
positive market performance and that no withdrawals have been made. On the
date we receive due proof of death, the Account Value is $75,000; however, the
Anniversary Value on the 5/th/ anniversary of the Issue Date was $90,000.
Assume as well that the Owner has died before the Death Benefit Target Date.
The Death Benefit is equal to the greater of the Highest Anniversary Value or
the basic Death Benefit. The Death Benefit would be the Highest Anniversary
Value ($90,000) because it is greater than the amount that would have been
payable under the basic Death Benefit ($75,000).
Example with withdrawals
Assume that the Account Value has been increasing due to positive market
performance and the Owner made a withdrawal of $15,000 in Annuity Year 7 when
the Account Value was $75,000. On the date we receive due proof of death, the
Account Value is $80,000; however, the Anniversary Value on the 5/th/
anniversary of the Issue Date was $90,000. Assume as well that the Owner has
died before the Death Benefit Target Date. The Death Benefit is equal to the
greater of the Highest Anniversary Value or the basic Death Benefit.
Highest Anniversary Value = $90,000 - [$90,000 * $15,000/$75,000]
= $90,000 - $18,000
= $72,000
Basic Death Benefit = max [$80,000, $50,000 - ($50,000 * $15,000/$75,000)]
= max [$80,000, $40,000]
= $80,000
The Death Benefit therefore is $80,000.
B-2
Example with death after Death Benefit Target Date
Assume that the Owner's Account Value has generally been increasing due to
positive market performance and that no withdrawals had been made prior to the
Death Benefit Target Date. Further assume that the Owner dies after the Death
Benefit Target Date, when the Account Value is $75,000. The Highest
Anniversary Value on the Death Benefit Target Date was $80,000; however,
following the Death Benefit Target Date, the Owner made a Purchase Payment of
$15,000 and later had taken a withdrawal of $5,000 when the Account Value was
$70,000. The Death Benefit is equal to the greater of the Highest Anniversary
Value plus purchase payments minus proportional withdrawals after the Death
Benefit Target Date or the basic Death Benefit.
Highest Anniversary Value = $80,000 + $15,000 - [($80,000 + $15,000) * $5,000/$70,000]
= $80,000 + $15,000 - $6,786
= $88,214
Basic Death Benefit = max [$75,000, ($50,000 + $15,000) - {($50,000 + $15,000) * $5,000/$70,000}]
= max [$75,000, $60,357]
= $75,000
The Death Benefit therefore is $88,214.
Examples of Combination 5% Roll-Up and Highest Anniversary Value Death Benefit
Calculation
The following are examples of how the Combination 5% Roll-Up and Highest
Anniversary Value Death Benefit are calculated. Each example assumes an
initial Purchase Payment of $50,000. Each example assumes that there is one
Owner who is age 70 on the Issue Date and that all Account Value is maintained
in the variable investment options.
Example with market increase and death before Death Benefit Target Date
Assume that the Owner's Account Value has generally been increasing due to
positive market performance and that no withdrawals have been made. On the
7/th/ anniversary of the Issue Date we receive due proof of death, at which
time the Account Value is $75,000; however, the Anniversary Value on the 5/th/
anniversary of the Issue Date was $90,000. Assume as well that the Owner has
died before the Death Benefit Target Date. The Roll-Up Value is equal to
initial Purchase Payment accumulated at 5% for 6 years, or $67,005. The Death
Benefit is equal to the greatest of the Roll-Up Value, Highest Anniversary
Value or the basic Death Benefit. The Death Benefit would be the Highest
Anniversary Value ($90,000) because it is greater than both the Roll-Up Value
($67,005) and the amount that would have been payable under the basic Death
Benefit ($75,000).
Example with withdrawals
Assume that the Owner made a withdrawal of $5,000 on the 6/th/ anniversary of
the Issue Date when the Account Value was $45,000. The Roll-Up Value on the
6/th/ anniversary of the Issue Date is equal to initial Purchase Payment
accumulated at 5% for 6 years, or $67,005. The 5% Dollar-for-Dollar Withdrawal
Limit for the 7/th/ annuity year is equal to 5% of the Roll-Up Value as of the
6/th/ anniversary of the Issue Date, or $3,350. Therefore, the remaining
$1,650 of the withdrawal results in a proportional reduction to the Roll-Up
Value. On the 7/th/ anniversary of the Issue Date we receive due proof of
death, at which time the Account Value is $43,000; however, the Anniversary
Value on the 2nd anniversary of the Issue Date was $70,000. Assume as well
that the Owner has died before the Death Benefit Target Date. The Death
Benefit is equal to the greatest of the Roll-Up Value, Highest Anniversary
Value or the basic Death Benefit.
Roll-Up Value = {(67,005 - $3,350) - [($67,005 - $3,350) * $1,650/($45,000 - $3,350)]} * 1.05
= ($63,655 - $2,522) * 1.05
= $64,190
Highest Anniversary Value = $70,000 - [$70,000 * $5,000/$45,000]
= $70,000 - $7,778
= $62,222
Basic Death Benefit = max [$43,000, $50,000 - ($50,000 * $5,000/$45,000)]
= max [$43,000, $44,444]
= $44,444
The Death Benefit therefore is $64,190.
B-3
Example with death after Death Benefit Target Date
Assume that the Owner has not made any withdrawals prior to the Death Benefit
Target Date. Further assume that the Owner dies after the Death Benefit Target
Date, when the Account Value is $75,000. The Roll-Up Value on the Death
Benefit Target Date (the contract anniversary on or following the Owner's
80/th/ birthday) is equal to initial Purchase Payment accumulated at 5% for 10
years, or $81,445. The Highest Anniversary Value on the Death Benefit Target
Date was $85,000; however, following the Death Benefit Target Date, the Owner
made a Purchase Payment of $15,000 and later had taken a withdrawal of $5,000
when the Account Value was $70,000. The Death Benefit is equal to the greatest
of the Roll-Up Value, Highest Anniversary Value or the basic Death Benefit as
of the Death Benefit Target Date; each increased by subsequent purchase
payments and reduced proportionally for subsequent withdrawals.
Roll-Up Value = $81,445 + $15,000 - [($81,445 + 15,000) * $5,000/$70,000]
= $81,445 + $15,000 - $6,889
= $89,556
Highest Anniversary Value = $85,000 + $15,000 - [($85,000 + 15,000) * $5,000/$70,000]
= $85,000 + $15,000 - $7,143
= $92,857
Basic Death Benefit = max [$75,000, $50,000 + $15,000 - {(50,000 + $15,000) * $5,000/$70,000}]
= max [$75,000, $60,357]
= $75,000
The Death Benefit therefore is $92,857.
Examples of Highest Daily Value Death Benefit Calculation
The following are examples of how the HDV Death Benefit is calculated. Each
example assumes an initial Purchase Payment of $50,000. Each example assumes
that there is one Owner who is age 70 on the Issue Date.
Example with market increase and death before Death Benefit Target Date
Assume that the Owner's Account Value has generally been increasing due to
positive market performance and that no withdrawals have been made. On the
date we receive due proof of death, the Account Value is $75,000; however, the
Highest Daily Value was $90,000. Assume as well that the Owner has died before
the Death Benefit Target Date. The Death Benefit is equal to the greater of
the Highest Daily Value or the basic Death Benefit. The Death Benefit would be
the HDV ($90,000) because it is greater than the amount that would have been
payable under the basic Death Benefit ($75,000).
Example with withdrawals
Assume that the Account Value has been increasing due to positive market
performance and the Owner made a withdrawal of $15,000 in Annuity Year 7 when
the Account Value was $75,000. On the date we receive due proof of death, the
Account Value is $80,000; however, the Highest Daily Value ($90,000) was
attained during the fifth Annuity Year. Assume as well that the Owner has died
before the Death Benefit Target Date. The Death Benefit is equal to the
greater of the Highest Daily Value (proportionally reduced by the subsequent
withdrawal) or the basic Death Benefit.
Highest Daily Value = $90,000 - [$90,000 * $15,000/$75,000]
= $90,000 - $18,000
= $72,000
Basic Death Benefit = max [$80,000, $50,000 - ($50,000 * $15,000/$75,000)]
= max [$80,000, $40,000]
= $80,000
The Death Benefit therefore is $80,000.
B-4
Example with death after Death Benefit Target Date
Assume that the Owner's Account Value has generally been increasing due to
positive market performance and that no withdrawals had been made prior to the
Death Benefit Target Date. Further assume that the Owner dies after the Death
Benefit Target Date, when the Account Value is $75,000. The Highest Daily
Value on the Death Benefit Target Date was $80,000; however, following the
Death Benefit Target Date, the Owner made a Purchase Payment of $15,000 and
later had taken a withdrawal of $5,000 when the Account Value was $70,000. The
Death Benefit is equal to the greater of the Highest Daily Value on the Death
Benefit Target Date plus purchase payments minus proportional withdrawals
after the Death Benefit Target Date or the basic Death Benefit.
Highest Daily Value = $80,000 + $15,000 - [($80,000 + $15,000) * $5,000/$70,000]
= $80,000 + $15,000 - $6,786
= $88,214
Basic Death Benefit = max [$75,000, ($50,000 + $15,000) - {($50,000 + $15,000) * $5,000/$70,000}]
= max [$75,000, $60,357]
= $75,000
The Death Benefit therefore is $88,214.
B-5
APPENDIX C - PLUS40/(TM)/ OPTIONAL LIFE INSURANCE RIDER
Prudential Annuities' Plus40/(TM)/ Optional Life Insurance Rider was offered,
in those states where approved, between November 18, 2002 for ASAP III,
January 17, 2002 for ASL II and APEX II, and January 23, 2002 for XT6 and
May 1, 2003. The description below of the Plus40/(TM)/ benefit applies to
those Contract Owners who purchased an Annuity during that time period and
elected the Plus40/(TM)/ benefit.
The life insurance coverage provided under the Plus40 Optional Life Insurance
Rider ("Plus40 rider" or the "Rider") is supported by Prudential Annuities'
general account and is not subject to, or registered as a security under,
either the Securities Act of 1933 or the Investment Company Act of 1940.
Information about the Plus40 rider is included as an Appendix to this
Prospectus to help you understand the Rider and the relationship between the
Rider and the value of your Annuity. It is also included because you can elect
to pay for the Rider with taxable withdrawals from your Annuity. The staff of
the Securities and Exchange Commission has not reviewed this information.
However, the information may be subject to certain generally applicable
provisions of the Federal securities laws regarding accuracy and completeness.
The income tax-free life insurance payable to your Beneficiary(ies) under the
Plus40 rider is equal to 40% of the Account Value of your Annuity as of the
date we receive due proof of death, subject to certain adjustments,
restrictions and limitations described below.
ELIGIBILITY
The Plus40 rider may be purchased as a rider on your Annuity. The Rider must
cover those persons upon whose death the Annuity's death benefit becomes
payable - the Annuity's owner or owners, or the Annuitant (in the case of an
entity owned Annuity). If the Annuity has two Owners, the Rider's death
benefit is payable upon the first death of such persons. If the Annuity is
owned by an entity, the Rider's death benefit is payable upon the death of the
Annuitant, even if a Contingent Annuitant is named.
The minimum allowable age to purchase the Plus40 rider is 40; the maximum
allowable age is 75. If the Rider is purchased on two lives, both persons must
meet the age eligibility requirements. The Plus40 rider is not available to
purchasers who use their Annuity as a funding vehicle for a Tax Sheltered
Annuity (or 403(b)) or as a funding vehicle for a qualified plan under
Section 401 of the Internal Revenue Code ("Code").
ADJUSTMENTS, RESTRICTIONS & LIMITATIONS
. If you die during the first 24 months following the effective date of
the Plus40 rider (generally, the Issue Date of your Annuity), the death
benefit will be limited to the amount of any charges paid for the Rider
while it was in effect. While we will return the charges you have paid
during the applicable period as the death benefit, your Beneficiary(ies)
will receive no additional life insurance benefit from the Plus40 rider
if you die within 24 months of its effective date.
. If you make a Purchase Payment within 24 months prior to the date of
death, the Account Value used to determine the amount of the death
benefit will be reduced by the amount of such Purchase Payment(s). If we
reduce the death benefit payable under the Plus40 rider based on this
provision, we will return 50% of any charges paid for the Rider based on
those purchase payments as an additional amount included in the death
benefit under the Rider.
. If we apply Credits to your Annuity based on purchase payments, such
Credits are treated as Account Value for purposes of determining the
death benefit payable under the Plus40 rider. However, if Credits were
applied to purchase payments made within 24 months prior to the date of
death, the Account Value used to determine the amount of the death
benefit will be reduced by the amount of such Credits. If we reduce the
death benefit payable under the Plus40 rider based on this provision, we
will return 50% of any charges paid for the Rider based on such Credits
as an additional amount included in the death benefit under the Rider.
. If you become terminally ill (as defined in the Rider) and elect to
receive a portion of the Plus40 rider's death benefit under the
Accelerated Death Benefit provision, the amount that will be payable
under the Rider upon your death will be reduced. Please refer to the
Accelerated Death Benefit provision described below.
. If charges for the Plus40 rider are due and are unpaid as of the date
the death benefit is being determined, such charges will be deducted
from the amount paid to your Beneficiary(ies).
. If the age of any person covered under the Plus40 rider is misstated, we
will adjust any coverage under the Rider to conform to the facts. For
example, if, due to the misstatement, we overcharged you for coverage
under the Rider, we will add any additional charges paid to the amount
payable to your Beneficiary(ies). If, due to the misstatement, we
undercharged you for coverage under the Rider, we will reduce the death
benefit in proportion to the charges not paid as compared to the charges
that would have been paid had there been no misstatement.
C-1
. On or after an Owner reaches the expiry date of the Rider (the
anniversary of the Annuity's Issue Date on or immediately after the
95/th/ birthday), coverage will terminate. No charge will be made for an
Owner following the expiry date. If there are two Owners, the expiry
date applies separately to each Owner; therefore, coverage may continue
for one Owner and terminate as to the other Owner.
MAXIMUM BENEFIT
The Plus40 rider is subject to a Maximum Death Benefit Amount based on the
purchase payments applied to your Annuity. The Plus40 rider may also be
subject to a Per Life Maximum Benefit that is based on all amounts paid under
any annuity contract we issue to you under which you have elected the Plus40
rider or similar life insurance coverage.
. The Maximum Death Benefit Amount is 100% of the purchase payments
increasing at 5% per year following the date each Purchase Payment is
applied to the Annuity until the date of death. If purchase payments are
applied to the Annuity within 24 months prior to the date of death, the
Maximum Death Benefit Amount is decreased by the amount of such purchase
payments.
. The Per Life Maximum Benefit applies to purchase payments applied to any
such annuity contracts more than 24 months from the date of death that
exceed $1,000,000. If you make purchase payments in excess of
$1,000,000, we will reduce the aggregate death benefit payable under all
Plus40 riders, or similar riders issued by us, based on the combined
amount of purchase payments in excess of $1,000,000 multiplied by 40%.
If the Per Life Maximum Benefit applies, we will reduce the amount
payable under each applicable Plus40 rider on a pro-rata basis. If the
Per Life Maximum Benefit applies upon your death, we will return any
excess charges that you paid on the portion of your Account Value on
which no benefit is payable. The Per Life Maximum Benefit does not limit
the amount of purchase payments that you may apply to your Annuity.
ACCELERATED DEATH BENEFIT PROVISION
If you become terminally ill, you may request that a portion of the death
benefit payable under the Plus40 rider be prepaid instead of being paid to
your Beneficiary(ies) upon your death. Subject to our requirements and where
allowed by law, we will make a one time, lump sum payment. Our requirements
include proof satisfactory to us, in writing, of terminal illness after the
Rider's Effective Date.
The maximum we will pay, before any reduction, is the lesser of 50% of the
Rider's death benefit or $100,000. If you elect to accelerate payment of a
portion of the death benefit under the Plus40 rider, the amount of the
remaining death benefit is reduced by the prepaid amount accumulating at an
annualized interest rate of 6.0%. Eligibility for an accelerated payout of a
portion of your Plus40 rider death benefit may be more restrictive than any
medically-related surrender provision that may be applicable to you under the
Annuity.
CHARGES FOR THE PLUS40 RIDER
The Plus40 rider has a current charge and a guaranteed maximum charge. The
current charge for the Plus40 rider is based on a percentage of your Account
Value as of the anniversary of the Issue Date of your Annuity. The applicable
percentages differ based on the attained age, last birthday of the Owner(s) or
Annuitant (in the case of an entity owned Annuity) as of the date the charge
is due. We reserve the right to change the current charge, at any time,
subject to regulatory approval where required. If there are two Owners, we
calculate the current charge that applies to each Owner individually and
deduct the combined amount as the charge for the Rider. There is no charge
based on a person's life after coverage expires as to that person. However, a
charge will still apply to the second of two Owners (and coverage will
continue for such Owner) if such Owner has not reached the expiry date.
Percentage of
Attained Age Account Value
----------------------------
Age 40-75 .80%
----------------------------
Age 76-80 1.60%
----------------------------
Age 81-85 3.20%
----------------------------
Age 86-90 4.80%
----------------------------
Age 91 6.50%
----------------------------
Age 92 7.50%
----------------------------
Age 93 8.50%
----------------------------
Age 94 9.50%
----------------------------
Age 95 10.50%
----------------------------
C-2
The charge for the Plus40 rider may also be subject to a guaranteed maximum
charge that will apply if the current charge, when applied to the Account
Value, exceeds the guaranteed maximum charge. The guaranteed maximum charge is
based on a charge per $1,000 of insurance.
We determine the charge for the Rider annually, in arrears. We deduct the
charge: (1) upon your death; (2) on each anniversary of the Issue Date; (3) on
the date that you begin receiving annuity payments; (4) if you surrender your
Annuity other than a medically-related surrender; or (5) if you choose to
terminate the Rider. If the Rider terminates for any of the preceding reasons
on a date other than the anniversary of the Annuity's Issue Date, the charge
will be prorated. During the first year after the Annuity's Issue Date, the
charge will be prorated from the Issue Date. In all subsequent years, the
charge will be prorated from the last anniversary of the Issue Date.
You can elect to pay the annual charge through a redemption from your
Annuity's Account Value or through funds other than those within the Annuity.
If you do not elect a method of payment, we will automatically deduct the
annual charge from your Annuity's Account Value. The manner in which you elect
to pay for the Rider may have tax implications.
. If you elect to pay the charge through a redemption of your Annuity's
Account Value, the withdrawal will be treated as a taxable distribution,
and will generally be subject to ordinary income tax on the amount of
any investment gain withdrawn. If you are under age 59 1/2, the
distribution may also be subject to a 10% penalty on any gain withdrawn,
in addition to ordinary income taxes. We first deduct the amount of the
charge pro-rata from the Account Value in the variable investment
options. We only deduct the charge pro-rata from the Fixed Allocations
to the extent there is insufficient Account Value in the variable
investment options to pay the charge.
. If you elect to pay the charge through funds other than those from your
Annuity, we require that payment be made electronically in U.S. currency
through a U.S. financial institution. If you elect to pay the charge
through electronic transfer of funds and payment has not been received
within 31 days from the due date, we will deduct the charge as a
redemption from your Annuity, as described above.
TERMINATION
You can terminate the Plus40 rider at any time. Upon termination, you will be
required to pay a pro-rata portion of the annual charge for the Rider. The
Plus40 rider will terminate automatically on the date your Account Value is
applied to begin receiving annuity payments, on the date you surrender the
Annuity or, on the expiry date with respect to such person who reaches the
expiry date. We may also terminate the Plus40 rider, if necessary, to comply
with our interpretation of the Code and applicable regulations. Once
terminated, you may not reinstate your coverage under the Plus40 rider.
CHANGES IN ANNUITY DESIGNATIONS
Changes in ownership and annuitant designations under the Annuity may result
in changes in eligibility and charges under the Plus40 rider. These changes
may include termination of the Rider. Please refer to the Rider for specific
details.
SPOUSAL ASSUMPTION
A spousal beneficiary may elect to assume ownership of the Annuity instead of
taking the Annuity's Death Benefit. However, regardless of whether a spousal
beneficiary assumes ownership of the Annuity, the death benefit under the
Plus40 rider will be paid despite the fact that the Annuity will continue. The
spousal beneficiary can apply the death benefit proceeds under the Plus40
rider to the Annuity as a new Purchase Payment, can purchase a new annuity
contract or use the death benefit proceeds for any other purpose. Certain
restrictions may apply to an Annuity that is used as a qualified investment.
Spousal beneficiaries may also be eligible to purchase the Plus40 rider, in
which case the Annuity's Account Value, as of the date the assumption is
effective, will be treated as the initial Purchase Payment under applicable
provisions of the Rider.
TAX CONSIDERATION
The Plus40 rider was designed to qualify as a life insurance contract under
the Code. As life insurance, under most circumstances, the Beneficiary(ies)
does not pay any Federal income tax on the death benefit payable under the
Rider.
If your Annuity is being used as an Individual Retirement Annuity (IRA), we
consider the Plus40 rider to be outside of your IRA, since premium for the
Rider is paid for either with funds outside of your Annuity or with
withdrawals previously subject to tax and any applicable tax penalty.
We believe payments under the accelerated payout provision of the Rider will
meet the requirements of the Code and the regulations in order to qualify as
tax-free payments. To the extent permitted by law, we will change our
procedures in relation to the Rider, or the definition of terminally ill, or
any other applicable term in order to maintain the tax-free status of any
amounts paid out under the accelerated payout provision.
C-3
APPENDIX D - ADDITIONAL INFORMATION ON ASSET ALLOCATION PROGRAM
PROGRAM RULES
. Prior to December 5, 2005, you could elect an asset allocation program
where the Sub-accounts for each asset class in each model portfolio were
designated based on an evaluation of available Sub-accounts. Effective
December 5, 2005, you can no longer enroll in an asset allocation
program, but you will be permitted to remain in the program if you
enrolled prior to the date. These program Rules reflect how the asset
allocation program will be administered as of December 5, 2005 for those
Owners who have chosen to remain in their program. Asset allocation is a
sophisticated method of diversification that allocates assets among
asset classes in order to manage investment risk and potentially enhance
returns over the long term. However, asset allocation does not guarantee
a profit or protect against a loss.
HOW THE ASSET ALLOCATION PROGRAM WORKS
. Amounts will automatically be allocated in accordance with the
percentages and to Sub-accounts indicated for the model portfolio that
you previously chose. If you allocate your Account Value or transfer
your Account Value among any Sub-accounts that are outside of your model
portfolio, we will allocate these amounts according to the allocation
percentages of the applicable model portfolio upon the next rebalancing.
You will not be permitted to change from one model portfolio to another.
Upon each rebalance, 100% of your Account Value allocated to the
variable Sub-accounts will be allocated to the asset allocation program.
Any Account Value not invested in the Sub-accounts will not be part of
the program.
. Additional Purchase Payments: Unless otherwise requested, any additional
purchase payments applied to the variable Sub-accounts in the Annuity
will be allocated to the Sub-accounts according to the allocation
percentages for the model portfolio you chose. Allocation of additional
purchase payments outside of your model portfolio but into a
Sub-account, will be reallocated according to the allocation percentages
of the applicable model portfolio upon the next rebalancing.
. Rebalancing Your Model Portfolio: Changes in the value of the
Sub-account will cause your Account Value allocated to the Sub-accounts
to vary from the percentage allocations of the model portfolio you
select. By selecting the asset allocation program, you have directed us
to periodically (e.g., quarterly) rebalance your Account Value allocated
to the Sub-accounts in accordance with the percentage allocations
assigned to each Sub-account within your model portfolio at the time you
elected the program or had later been modified with your consent. Some
asset allocation programs will only require that a rebalancing occur
when the percent of your Account Value allocated to the Sub-accounts are
outside of the acceptable range permitted under such asset allocation
program. Note - Any Account Value not invested in the Sub-accounts will
not be affected by any rebalance.
. Sub-account Changes Within the Model Portfolios: From time to time there
may be a change in a Sub-account within your model portfolio. Unless
directed by you or your Financial Professional to reallocate to the new
Sub-account, rebalancing will continue in accordance with your unchanged
model portfolio, unless the Sub-account is no longer available under
your Annuity. If the Sub-account is no longer available we will notify
you. If you do not consent to the new Sub-account, your lack of consent
will be deemed a request to terminate the asset allocation program and
the provisions under "Termination or Modification of the Asset
Allocation Program" will apply.
. Owner Changes in Choice of Model Portfolio: You may not change from the
model portfolio that you have elected to any other model portfolio.
TERMINATION OR MODIFICATION OF THE ASSET ALLOCATION PROGRAM:
. You may request to terminate your asset allocation program at any time.
Once you terminate your asset allocation program, you will not be
permitted to re-enroll in the program. Any termination will be effective
on the date that Prudential Annuities receives your termination request
in good order. If you are enrolled in certain optional benefits,
termination of your asset allocation program must coincide with (i) the
enrollment in a then currently available and approved asset allocation
program or other approved option, or (ii) the allocation of your entire
account value to the then required investment option(s) available with
these benefits. However, if you are enrolled in certain optional
benefits, you may terminate the benefit in order to then terminate your
asset allocation program. Prudential Annuities reserves the right to
terminate or modify the asset allocation program at any time.
RESTRICTIONS ON ELECTING THE ASSET ALLOCATION:
. You cannot participate in auto-rebalancing or a DCA program while
enrolled in an asset allocation program and Systematic Withdrawals can
only be made as flat dollar amounts.
D-1
APPENDIX E - DESCRIPTION AND CALCULATION OF PREVIOUSLY OFFERED OPTIONAL DEATH
BENEFITS (THIS APPLIES SOLELY TO APEX II, ASL II AND XT6)
If you purchased your Annuity before November 18, 2002 and were not a resident
of the State of New York, the following optional death benefits were offered:
ENHANCED BENEFICIARY PROTECTION OPTIONAL DEATH BENEFIT
The Enhanced Beneficiary Protection Optional Death Benefit can provide
additional amounts to your Beneficiary that may be used to offset federal and
state taxes payable on any taxable gains in your Annuity at the time of your
death. Whether this benefit is appropriate for you may depend on your
particular circumstances, including other financial resources that may be
available to your Beneficiary to pay taxes on your Annuity should you die
during the accumulation period. No benefit is payable if death occurs on or
after the Annuity Date.
The Enhanced Beneficiary Protection Optional Death Benefit provides a benefit
that is payable in addition to the basic Death Benefit. If the Annuity has one
Owner, the Owner must be age 75 or less at the time the benefit is purchased.
If the Annuity has joint Owners, the oldest Owner must be age 75 or less. If
the Annuity is owned by an entity, the Annuitant must be age 75 or less.
Calculation of Enhanced Beneficiary Protection Optional Death Benefit
If you purchase the Enhanced Beneficiary Protection Optional Death Benefit,
the Death Benefit is calculated as follows:
1. the basic Death Benefit described above
PLUS
2. 50% of the "Death Benefit Amount" less purchase payments reduced by
proportional withdrawals.
"Death Benefit Amount" includes your Account Value and any amounts added to
your Account Value under the Annuity's basic Death Benefit when the Death
Benefit is calculated. Under the basic Death Benefit, amounts are added to
your Account Value when the Account Value is less than purchase payments minus
proportional withdrawals.
"Proportional withdrawals" are determined by calculating the percentage of
your Account Value that each prior withdrawal represented when withdrawn.
The amount calculated in Items 1 & 2 above may be reduced by any Credits
under certain circumstances.
The Enhanced Beneficiary Protection Optional Death Benefit is subject to a
maximum of 50% of all purchase payments applied to the Annuity at least 12
months prior to the death of the decedent that triggers the payment of the
Death Benefit.
Please refer to the section entitled "Tax Considerations" for a discussion of
special tax considerations for purchasers of this benefit.
NOTE: You may not elect the Enhanced Beneficiary Protection Optional Death
Benefit if you have elected any other Optional Death Benefit.
Guaranteed Minimum Death Benefit
If the Annuity has one Owner, the Owner must be age 80 or less at the time the
optional Death Benefit is purchased. If the Annuity has joint Owners, the
oldest Owner must be age 80 or less. If the Annuity is owned by an entity, the
Annuitant must be age 80 or less.
Key Terms Used with the Guaranteed Minimum Death Benefit
. The Death Benefit Target Date is the contract anniversary on or after
the 80/th/ birthday of the current Owner, the oldest of either joint
Owner or the Annuitant, if entity owned.
. The Highest Anniversary Value equals the highest of all previous
"Anniversary Values" on or before the earlier of the Owner's date of
death and the "Death Benefit Target Date".
. The Anniversary Value is the Account Value as of each anniversary of the
Issue Date plus the sum of all purchase payments on or after such
anniversary less the sum of all "Proportional Reductions" since such
anniversary.
. A Proportional Reduction is a reduction to the value being measured
caused by a withdrawal, equaling the percentage of the withdrawal as
compared to the Account Value as of the date of the withdrawal. For
example, if your Account Value is $10,000 and you withdraw $2,000 (a 20%
reduction), we will reduce both your Anniversary Value and the amount
determined by purchase payments increasing at the appropriate interest
rate by 20%.
E-1
Calculation of Guaranteed Minimum Death Benefit
The Guaranteed Minimum Death Benefit depends on whether death occurs before or
after the Death Benefit Target Date.
If the Owner dies before the Death Benefit Target Date, the Death Benefit
equals the greatest of:
1. the Account Value in the Sub-accounts plus the Interim Value of any Fixed
Allocations (no MVA) as of the date we receive in writing "due proof of
death"; and
2. the sum of all purchase payments minus the sum of all Proportional
Reductions, each increasing daily until the Owner's date of death at a rate
of 5.0%, subject to a limit of 200% of the difference between the sum of
all purchase payments and the sum of all withdrawals as of the Owner's date
of death; and
3. the "Highest Anniversary Value" on or immediately preceding the Owner's
date of death.
The amount determined by this calculation is increased by any purchase
payments received after the Owner's date of death and decreased by any
Proportional Reductions since such date. The amount calculated in Items 1 & 3
above may be reduced by any Credits under certain circumstances.
If the Owner dies on or after the Death Benefit Target Date, the Death Benefit
equals the greater of:
1. the Account Value as of the date we receive in writing "due proof of death"
(an MVA may be applicable to amounts in any Fixed Allocations); and
2. the greater of Item 2 & 3 above on the Death Benefit Target Date plus the
sum of all purchase payments less the sum of all Proportional Reductions
since the Death Benefit Target Date.
The amount calculated in Item 1 above may be reduced by any Credits under
certain circumstances.
Annuities with Joint Owners
For Annuities with Joint Owners, the Death Benefit is calculated as shown
above except that the age of the oldest of the Joint Owners is used to
determine the Death Benefit Target Date. NOTE: If you and your spouse own the
Annuity jointly, we will pay the Death Benefit to the Beneficiary. If the sole
primary Beneficiary is the surviving spouse, then the surviving spouse can
elect to assume ownership of the Annuity and continue the contract instead of
receiving the Death Benefit.
Annuities owned by entities
For Annuities owned by an entity, the Death Benefit is calculated as shown
above except that the age of the Annuitant is used to determine the Death
Benefit Target Date. Payment of the Death Benefit is based on the death of the
Annuitant (or Contingent Annuitant, if applicable).
Can I terminate the optional Death Benefits? Do the optional Death Benefits
terminate under other circumstances?
You can terminate the Enhanced Beneficiary Protection Optional Death Benefit
and the Guaranteed Minimum Death Benefit at any time. Upon termination, you
will be required to pay a pro-rata portion of the annual charge for the
benefit. Both optional Death Benefits will terminate automatically on the
Annuity Date. We may also terminate any optional Death Benefit if necessary to
comply with our interpretation of the Code and applicable regulations.
What Are The Charges For The Optional Death Benefits?
We deduct a charge from your Account Value if you elect to purchase either
optional Death Benefit. The Enhanced Beneficiary Protection Death Benefit
costs 0.25% of Account Value. The Guaranteed Minimum Death Benefit costs 0.30%
of the current Death Benefit. The charges for these death benefits are
deducted in arrears each Annuity Year. No charge applies after the Annuity
Date. We deduct the charge:
1. on each anniversary of the Issue Date;
2. when Account Value is transferred to our general account prior to the
Annuity Date;
3. if you surrender your Annuity; and
4. if you choose to terminate the benefit (Enhanced Beneficiary Protection
Optional Death Benefit only)
If you surrender the Annuity, elect to begin receiving annuity payments or
terminate the benefit on a date other than an anniversary of the Issue Date,
the charge will be prorated. During the first year after the Issue Date, the
charge will be prorated from the Issue Date. In all subsequent years, it would
be prorated from the last anniversary of the Issue Date.
E-2
We first deduct the amount of the charge pro-rata from the Account Value in
the variable investment options. We only deduct the charge pro-rata from the
Fixed Allocations to the extent there is insufficient Account Value in the
variable investment options to pay the charge. If your Annuity's Account Value
is insufficient to pay the charge, we may deduct your remaining Account Value
and terminate your Annuity. We will notify you if your Account Value is
insufficient to pay the charge and allow you to submit an additional Purchase
Payment to continue your Annuity.
Please refer to the section entitled "Tax Considerations" for additional
considerations in relation to the optional Death Benefit.
ADDITIONAL CALCULATIONS
Examples of Enhanced Beneficiary Protection Optional Death Benefit Calculation
The following are examples of how the Enhanced Beneficiary Protection Optional
Death Benefit is calculated. Each example assumes that a $50,000 initial
Purchase Payment is made and that no withdrawals are made prior to the Owner's
death. Each example assumes that there is one Owner who is age 50 on the Issue
Date and that all Account Value is maintained in the variable investment
options.
NOTE: The examples below do not include Credits which may be recovered by
Prudential Annuities under certain circumstances.
Example with market increase
Assume that the Owner's Account Value has been increasing due to positive
market performance. On the date we receive due proof of death, the Account
Value is $75,000. The basic Death Benefit is calculated as purchase payments
minus proportional withdrawals, or Account Value less the amount of any
Credits applied within 12-months prior to the date of death, whichever is
greater. Therefore, the basic Death Benefit is equal to $75,000. The Enhanced
Beneficiary Protection Optional Death Benefit is equal to the amount payable
under the basic Death Benefit ($75,000) PLUS 50% of the "Death Benefit Amount"
less purchase payments reduced by proportional withdrawals.
purchase payments = $50,000
Account Value = $75,000
Basic Death Benefit = $75,000
Death Benefit Amount = $75,000 - $50,000 = $25,000
Amount Payable Under Enhanced Beneficiary Protection Optional Death Benefit
= $75,000 + $12,500 = $87,500
Examples with market decline
Assume that the Owner's Account Value has been decreasing due to declines in
market performance. On the date we receive due proof of death, the Account
Value is $45,000. The basic Death Benefit is calculated as purchase payments
minus proportional withdrawals, or Account Value less the amount of any
Credits applied within 12-months prior to the date of death, whichever is
greater. Therefore, the basic Death Benefit is equal to $50,000. The Enhanced
Beneficiary Protection Optional Death Benefit is equal to the amount payable
under the basic Death Benefit ($50,000) PLUS 50% of the "Death Benefit Amount"
less purchase payments reduced by proportional withdrawals.
purchase payments = $50,000
Account Value = $40,000
Basic Death Benefit = $50,000
Death Benefit Amount = $50,000 - $50,000 = $0
Amount Payable Under Enhanced Beneficiary Protection Optional Death Benefit
= $50,000 + $0 = $50,000
In this example you would receive no additional benefit from purchasing the
Enhanced Beneficiary Protection Optional Death Benefit.
Examples of Guaranteed Minimum Death Benefit Calculation
The following are examples of how the Guaranteed Minimum Death Benefit is
calculated. Each example assumes that a $50,000 initial Purchase Payment is
made and that no withdrawals are made prior to the Owner's death. Each example
assumes that there is one Owner who is age 50 on the Issue Date and that all
Account Value is maintained in the variable investment options.
NOTE: The examples below do not include Credits which may be recovered by
Prudential Annuities under certain circumstances.
E-3
Example of market increase
Assume that the Owner's Account Value has generally been increasing due to
positive market performance. On the date we receive due proof of death, the
Account Value is $90,000. The Highest Anniversary Value at the end of any
previous period is $72,000. The Death Benefit would be the Account Value
($90,000) because it is greater than the Highest Anniversary Value ($72,000)
or the sum of prior purchase payments increased by 5.0% annually ($73,872.77).
Example of market decrease
Assume that the Owner's Account Value generally increased until the fifth
anniversary but generally has been decreasing since the fifth contract
anniversary. On the date we receive due proof of death, the Account Value is
$48,000. The Highest Anniversary Value at the end of any previous period is
$54,000. The Death Benefit would be the sum of prior purchase payments
increased by 5.0% annually ($73,872.77) because it is greater than the Highest
Anniversary Value ($54,000) or the Account Value ($48,000).
Example of market increase followed by decrease
Assume that the Owner's Account Value increased significantly during the first
six years following the Issue Date. On the sixth anniversary date the Account
Value is $90,000. During the seventh Annuity Year, the Account Value increases
to as high as $100,000 but then subsequently falls to $80,000 on the date we
receive due proof of death. The Death Benefit would be the Highest Anniversary
Value at the end of any previous period ($90,000), which occurred on the sixth
anniversary, although the Account Value was higher during the subsequent
period. The Account Value on the date we receive due proof of death ($80,000)
is lower, as is the sum of all prior purchase payments increased by 5.0%
annually ($73,872.77).
E-4
APPENDIX F - SELECTING THE VARIABLE ANNUITY THAT'S RIGHT FOR YOU
Prudential Annuities Life Assurance Corporation offers several deferred
variable annuity products. Each annuity has different features and benefits
that may be appropriate for you based on your individual financial situation
and how you intend to use the annuity. Not all of these annuities may be
available to you, depending on your state of residence and/or the
broker-dealer through which your annuity was sold. You can verify which of
these annuities is available to you by speaking to your Financial Professional
or calling 1-800-752-6342.
The different features and benefits may include variations on your ability to
access funds in your Annuity without the imposition of a withdrawal charge as
well as different ongoing fees and charges you pay to stay in the Annuity.
Additionally, differences may exist on various optional benefits such as
guaranteed living benefits or death benefit protection.
Among the factors you should consider when choosing which annuity product may
be most appropriate for your individual needs are the following:
.. Your age;
.. The amount of your investment and any planned future deposits into the
Annuity;
.. How long you intend to hold the Annuity (also referred to as investment
time horizon);
.. Your desire to make withdrawals from the Annuity, and the timing thereof;
.. Your investment return objectives;
.. The effect of optional benefits that may be elected,
.. The value of being able to "lock-in" growth in your Annuity after the
initial withdrawal charge period for purposes of calculating the death
benefit payable from the Annuity; and
.. Your desire to minimize costs and/or maximize return associated with the
Annuity.
The following chart outlines some of the different features for each Annuity
sold through this prospectus. The availability of optional features, such as
those noted in the chart, may increase the cost of the Annuity. Therefore you
should carefully consider which features you plan to use when selecting your
Annuity. You should also consider the investment objectives, risks, charges
and expenses of an investment carefully before investing.
In addition, the hypothetical illustrations below reflect the account value
and Surrender Value of each variable annuity over a variety of holding
periods. These charts are meant to reflect how your Annuities can grow or
decrease depending on market conditions and the comparable value of each of
the Annuities (which reflects the charges associated with the Annuities) under
the assumptions noted.
You can compare the costs of each Annuity by examining the section in this
prospectus entitled "Summary of Contract Fees and Charges." For example, XT6
has the highest contingent deferred sales charge ("CDSC") and has an Insurance
charge/Distribution charge that is the same as the Insurance charge of APEX II
and ASL II (in Annuity Years 1-10). However, XT6 offers purchase credits that
the other Annuities do not. ASAP III has the lowest Insurance Charge in
Annuity Years 1-10, but does not offer purchase credits. APEX II has the same
Insurance charge as ASL II and as the Insurance charge/Distribution charge of
XT6 (in Annuity Years 1-10), and offers the shortest CDSC period among the
three Annuities that have a CDSC. APEX II also offers greater access to
Profund VP portfolios than the other Annuities. ASL II does not have any CDSC,
but offers neither a purchase credit (like XT6) nor a loyalty credit (like
ASAP III and APEX II). As you can see, there are trade-offs associated with
the costs and benefits provided by each of the Annuities. In choosing the
Annuity to purchase, you should consider which features are most important to
you, and whether the associated costs offer the greatest value to you.
Prudential Annuities' Annuity Product Comparison. Below is a summary of
Prudential Annuities' annuity products sold through this prospectus. You
should consider the investment objectives, risks, charges and expenses of an
investment in any Annuity carefully before investing. The prospectus for the
Annuities as well as the underlying portfolio prospectuses contain this and
other information about the variable annuities and underlying investment
options. Your registered Financial Professional can provide you with
prospectuses for the Annuities and the underlying portfolios and can guide you
through Selecting the Variable Annuity That's Right for you, and help you
decide upon the Annuity that would be most advantageous for you given your
individual needs. Please read the prospectuses carefully before investing.
Note that not all of the optional benefits listed are currently offered.
F-1
ASL II APEX II ASAP III XTra Credit SIX
-----------------------------------------------------------------------------
Minimum $15,000 $10,000 $1,000 $10,000
Investment
-----------------------------------------------------------------------------
Maximum No Maximum Age 85 80 75
Issue Age
-----------------------------------------------------------------------------
None 4 Years (8.5%, 8 Years (7.5%, 10 Years (9%,
Contingent 8%, 7%, 6%) 7%, 6.5%, 6%, 9%, 8%, 7%,
Deferred 5%, 4%, 3%, 2%) 6%, 5%, 4%,
Sales 3%, 2%, 1%)
Charge (for Annuities
Schedule issued after
11/20/06)
-----------------------------------------------------------------------------
Insurance 1.65% 1.65% 1.25% years 1.65% years
and 1-8; 0.65% 1-10; 0.65%
Distribution years 9+ years 11+
Charge
-----------------------------------------------------------------------------
Annual Lesser of $35 Lesser of $35 Lesser of $35 Lesser of $35
Maintenance or 2% of or 2% of or 2% of or 2% of
Fee Account Value Account Value Account Value Account Value
(if Account (if Account (if Account
Value is less Value is less Value is less
than $100,000) than $100,000) than $100,000)
-----------------------------------------------------------------------------
Contract No Yes. Yes. Yes. The
Credit Generally, we Generally, we amount of the
apply a apply a credit applied
Loyalty Credit Loyalty Credit to a Purchase
to your to your Payment is
Annuity's Annuity's based on the
Account Value Account Value year the
at the end of at the end of Purchase
your fifth your fifth Payment is
Annuity year Annuity year received, for
(i.e., on your (i.e., on your the first 6
fifth Contract fifth Annuity years of the
Anniversary). Anniversary). contract as
The Loyalty The Loyalty follows: the
Credit is Credit is credit
equal to 2.75% equal to 0.50% percentages
of total of total for each year,
purchase purchase starting with
payments made payments made the first, are
during the during the 6.50%, 5.00%,
first four first four 4.00%, 3.00%,
Annuity years Annuity years 2.00%, and
less the less the 1.00%.
cumulative cumulative Recaptured in
amount of amount of certain
withdrawals withdrawals circumstances.
made made (Above figures
(including the (including the applicable to
deduction of deduction of new issues).
any CDSC any CDSC
amounts) amounts)
through the through the
fifth Annuity fifth Annuity
Anniversary. Anniversary.
(Above figures (Above figures
applicable to applicable to
new issues). new issues).
-----------------------------------------------------------------------------
Fixed Fixed Fixed Fixed Fixed
Allocation Allocation Allocation Allocation Allocation
(early Available Available Available Available
withdrawals (currently (currently (currently (currently
are offering offering offering offering
subject durations of: durations of: durations of: durations of:
to a 1,2,3,5,7,10 1,2,3,5,7,10 1,2,3,5,7,10 1,2,3,5,7,10
Market years) years) years) years)
Value
Adjustment)
-----------------------------------------------------------------------------
Variable See See See See
Investment "Investment "Investment "Investment "Investment
Options Options" Options" Options" Options"
section of section of section of section of
Prospectus. Prospectus. Prospectus. Prospectus.
Not all Not all Not all Not all
options options options options
available with available with available with available with
certain certain certain certain
optional optional optional optional
benefits. benefits. benefits. benefits.
-----------------------------------------------------------------------------
Basic If issued on The greater The greater The greater
Death or after of: purchase of: purchase of: purchase
Benefit July 21, 2008: payments less payments less payments less
The greater proportional proportional proportional
of: purchase withdrawals or withdrawals or withdrawals or
payments less account value account value account value
proportional (no MVA (no MVA (no MVA
withdrawals or Applied). Applied). Applied) less
account value an amount
(no MVA equal to the
Applied). credits
applied within
the 12 months
prior to date
of death.
-----------------------------------------------------------------------------
Optional Enhanced EBP II, EBP II, EBP II,
Death Beneficiary HDV, HDV, HDV,
Benefits Protection HAV, HAV, HAV,
(for an (EBPII), Combo 5% Combo 5% Combo 5%
additional Highest Daily Roll-up/HAV Roll-up/HAV Roll-up/HAV
cost) Value (HDV),
Highest
Anniversary
Value (HAV),
Combo 5% Roll
Up/HAV
-----------------------------------------------------------------------------
F-2
ASL II APEX II ASAP III XTra Credit SIX
---------------------------------------------------------------------------
Living GRO/ GRO Plus, GRO/ GRO Plus, GRO/ GRO Plus, GRO/ GRO Plus,
Benefits HD GRO, HD GRO, HD GRO, HD GRO,
(for an Guaranteed GMWB, GMWB, GMWB,
additional Minimum GMIB, GMIB, Lifetime GMIB,
cost) Withdrawal Lifetime Five, Five, Lifetime Five,
Benefit Spousal Spousal Spousal
(GMWB), Lifetime Five, Lifetime Five, Lifetime Five,
Guaranteed Highest Daily Highest Daily Highest Daily
Minimum Income Lifetime Five, Lifetime Five, Lifetime Five,
Benefit Highest Daily Highest Daily Highest Daily
(GMIB), Lifetime Seven, Lifetime Seven, Lifetime
Lifetime Five, Spousal Spousal Seven, Spousal
Spousal Highest Daily Highest Daily Highest Daily
Lifetime Five, Lifetime Seven Lifetime Seven Lifetime
Highest Daily (including (including Seven,
Lifetime Five, "Plus" "Plus" (including
Highest Daily versions) versions) "Plus"
Lifetime versions)
Seven, Spousal
Highest Daily
Lifetime Seven
(including
"Plus"
versions)
---------------------------------------------------------------------------
Annuity Not Available Available Available Available
Rewards after initial after initial after initial
withdrawal withdrawal withdrawal
period period period
---------------------------------------------------------------------------
HYPOTHETICAL ILLUSTRATION
The following examples outline the value of each Annuity as well as the amount
that would be available to an investor as a result of full surrender at the
end of each of the Annuity years specified. The values shown below are based
on the following assumptions:
An initial investment of $100,000 is made into each Annuity earning a gross
rate of return of 0%, 6% and 10% respectively.
. No subsequent deposits or withdrawals are made from the Annuity.
. The hypothetical gross rates of return are reduced by the arithmetic
average of the fees and expenses of the underlying portfolios and the
charges that are deducted from the Annuity at the Separate Account level
as follows:
. 1.21% (for ASL II, ASAP III, and XT6) and 1.41% for APEX II. based on
the fees and expenses of the underlying portfolios as of December 31,
2008. The arithmetic average of all fund expenses is computed by adding
portfolio management fees, 12b-1 fees and other expenses of all of the
underlying portfolios and then dividing by the number of portfolios. For
purposes of the illustrations, we do not reflect any expense
reimbursements or expense waivers that might apply and are described in
the prospectus fee table.
. The Separate Account level charges include the Insurance Charge and
Distribution Charge (as applicable).
. The Account Value and Surrender Value are further reduced by the annual
maintenance fee. For XTra Credit SIX, APEX II, and ASAP III, the Account
Value and Surrender Value also reflect the addition of any applicable
credits.
F-3
The Account Value assumes no surrender, while the Surrender Value assumes a
100% surrender two days prior to the anniversary of the Issue Date of the
Annuity ("Annuity Anniversary"), therefore reflecting the withdrawal charge
applicable to that Annuity year. Note that a withdrawal on the Annuity
Anniversary would be subject to the withdrawal charge applicable to the next
Annuity year, which usually is lower. The values that you actually experience
under an Annuity will be different than what is depicted here if any of the
assumptions we make here differ from your circumstances, however the relative
values for each Annuity reflected below will remain the same. (We will provide
you with a personalized illustration upon request).
------------------------------------------------------------------------
0% Gross Rate of Return 6% Gross Rate of Return 10% Gross Rate of Return
APEX II APEX II APEX II
------------------------------------------------------------------------
Net rate return of Net rate of return Net rate of return
All years -3.04% All years 2.78% All years 6.66%
------------------------------------------------------------------------
Account Surrender Account Surrender Account Surrender
Year Value Value Value Value Value Value
-----------------------------------------------------------------------------
1 96,971 88,471 102,773 94,273 106,641 98,141
-----------------------------------------------------------------------------
2 93,993 85,993 105,632 97,632 113,743 105,743
-----------------------------------------------------------------------------
3 91,105 84,105 108,569 101,569 121,317 114,317
-----------------------------------------------------------------------------
4 88,304 82,304 111,589 105,589 129,397 123,397
-----------------------------------------------------------------------------
5 85,588 85,588 114,692 114,692 138,014 138,014
-----------------------------------------------------------------------------
6 85,622 85,622 120,708 120,708 150,138 150,138
-----------------------------------------------------------------------------
7 82,988 82,988 124,065 124,065 160,136 160,136
-----------------------------------------------------------------------------
8 80,434 80,434 127,515 127,515 170,801 170,801
-----------------------------------------------------------------------------
9 77,958 77,958 131,061 131,061 182,175 182,175
-----------------------------------------------------------------------------
10 75,556 75,556 134,706 134,706 194,307 194,307
-----------------------------------------------------------------------------
11 73,228 73,228 138,453 138,453 207,248 207,248
-----------------------------------------------------------------------------
12 70,970 70,970 142,303 142,303 221,049 221,049
-----------------------------------------------------------------------------
13 68,781 68,781 146,261 146,261 235,770 235,770
-----------------------------------------------------------------------------
14 66,658 66,658 150,328 150,328 251,472 251,472
-----------------------------------------------------------------------------
15 64,600 64,600 154,509 154,509 268,219 268,219
-----------------------------------------------------------------------------
16 62,605 62,605 158,806 158,806 286,081 286,081
-----------------------------------------------------------------------------
17 60,669 60,669 163,222 163,222 305,133 305,133
-----------------------------------------------------------------------------
18 58,793 58,793 167,762 167,762 325,453 325,453
-----------------------------------------------------------------------------
19 56,974 56,974 172,427 172,427 347,127 347,127
-----------------------------------------------------------------------------
20 55,210 55,210 177,222 177,222 370,244 370,244
-----------------------------------------------------------------------------
21 53,499 53,499 182,151 182,151 394,901 394,901
-----------------------------------------------------------------------------
22 51,841 51,841 187,217 187,217 421,200 421,200
-----------------------------------------------------------------------------
23 50,232 50,232 192,424 192,424 449,250 449,250
-----------------------------------------------------------------------------
24 48,673 48,673 197,775 197,775 479,168 479,168
-----------------------------------------------------------------------------
25 47,161 47,161 203,275 203,275 511,079 511,079
-----------------------------------------------------------------------------
Assumptions:
a. $100,000 initial investment
b. Fund Expenses = 1.41%
c. No optional death benefits or living benefits elected
d. Annuity was issued on or after February 13, 2006
e. Surrender value assumes surrender 2 days before Annuity anniversary
F-4
------------------------------------------------------------------------
0% Gross Rate of Return 6% Gross Rate of Return 10% Gross Rate of Return
ASAP III ASAP III ASAP III
------------------------------------------------------------------------
Net rate of return Net rate of return Net rate of return
Yrs 1-8 -2.44% Yrs 1-8 3.41% Yrs 1-8 7.31%
Yrs 9+ -1.85% Yrs 9+ 4.04% Yrs 9+ 7.96%
------------------------------------------------------------------------
Account Surrender Account Surrender Account Surrender
Year Value Value Value Value Value Value
-----------------------------------------------------------------------------
1 97,562 89,062 103,399 94,899 107,290 98,790
-----------------------------------------------------------------------------
2 95,142 88,142 106,923 99,923 115,133 108,133
-----------------------------------------------------------------------------
3 92,782 86,282 110,568 104,068 123,550 117,050
-----------------------------------------------------------------------------
4 90,480 84,480 114,336 108,336 132,583 126,583
-----------------------------------------------------------------------------
5 88,233 83,233 118,233 113,233 142,275 137,275
-----------------------------------------------------------------------------
6 86,530 82,530 122,780 118,780 153,213 149,213
-----------------------------------------------------------------------------
7 84,380 81,380 126,965 123,965 164,414 161,414
-----------------------------------------------------------------------------
8 82,283 80,283 131,293 129,293 176,434 174,434
-----------------------------------------------------------------------------
9 80,723 80,723 136,590 136,590 190,479 190,479
-----------------------------------------------------------------------------
10 79,194 79,194 142,104 142,104 205,647 205,647
-----------------------------------------------------------------------------
11 77,693 77,693 147,840 147,840 222,021 222,021
-----------------------------------------------------------------------------
12 76,219 76,219 153,808 153,808 239,700 239,700
-----------------------------------------------------------------------------
13 74,773 74,773 160,017 160,017 258,787 258,787
-----------------------------------------------------------------------------
14 73,354 73,354 166,477 166,477 279,393 279,393
-----------------------------------------------------------------------------
15 71,961 71,961 173,197 173,197 301,640 301,640
-----------------------------------------------------------------------------
16 70,594 70,594 180,188 180,188 325,659 325,659
-----------------------------------------------------------------------------
17 69,252 69,252 187,462 187,462 351,590 351,590
-----------------------------------------------------------------------------
18 67,935 67,935 195,030 195,030 379,586 379,586
-----------------------------------------------------------------------------
19 66,642 66,642 202,902 202,902 409,811 409,811
-----------------------------------------------------------------------------
20 65,374 65,374 211,093 211,093 442,442 442,442
-----------------------------------------------------------------------------
21 64,129 64,129 219,614 219,614 477,673 477,673
-----------------------------------------------------------------------------
22 62,907 62,907 228,479 228,479 515,708 515,708
-----------------------------------------------------------------------------
23 61,707 61,707 237,703 237,703 556,772 556,772
-----------------------------------------------------------------------------
24 60,530 60,530 247,298 247,298 601,106 601,106
-----------------------------------------------------------------------------
25 59,374 59,374 257,281 257,281 648,970 648,970
-----------------------------------------------------------------------------
Assumptions:
a. $100,000 initial investment
b. Fund Expenses = 1.21%
c. No optional death benefits or living benefits elected
d. Annuity was issued on or after February 13, 2006
e. Surrender value assumes surrender 2 days before Annuity anniversary
F-5
------------------------------------------------------------------------
0% Gross Rate of Return 6% Gross Rate of Return 10% Gross Rate of Return
Xtra Credit 6 Xtra Credit 6 Xtra Credit 6
------------------------------------------------------------------------
Net rate of return Net rate of return Net rate of return
Yrs 1-10 -2.84% Yrs 1-10 2.99% Yrs 1-10 6.88%
Yrs 11+ -1.85% Yrs 11+ 4.04% Yrs 11+ 7.96%
------------------------------------------------------------------------
Account Surrender Account Surrender Account Surrender
Year Value Value Value Value Value Value
-----------------------------------------------------------------------------
1 103,484 94,484 109,675 100,675 113,802 104,802
-----------------------------------------------------------------------------
2 100,511 91,511 112,918 103,918 121,590 112,590
-----------------------------------------------------------------------------
3 97,622 89,622 116,257 108,257 129,913 121,913
-----------------------------------------------------------------------------
4 94,816 87,816 119,697 112,697 138,808 131,808
-----------------------------------------------------------------------------
5 92,089 86,089 123,239 117,239 148,315 142,315
-----------------------------------------------------------------------------
6 89,439 84,439 126,888 121,888 158,476 153,476
-----------------------------------------------------------------------------
7 86,865 82,865 130,645 126,645 169,335 165,335
-----------------------------------------------------------------------------
8 84,364 81,364 134,515 131,515 180,941 177,941
-----------------------------------------------------------------------------
9 81,934 79,934 138,500 136,500 193,345 191,345
-----------------------------------------------------------------------------
10 79,573 78,573 142,605 141,605 206,602 205,602
-----------------------------------------------------------------------------
11 78,063 78,063 148,321 148,321 223,009 223,009
-----------------------------------------------------------------------------
12 76,583 76,583 154,272 154,272 240,729 240,729
-----------------------------------------------------------------------------
13 75,130 75,130 160,463 160,463 259,860 259,860
-----------------------------------------------------------------------------
14 73,704 73,704 166,904 166,904 280,514 280,514
-----------------------------------------------------------------------------
15 72,305 72,305 173,605 173,605 302,812 302,812
-----------------------------------------------------------------------------
16 70,931 70,931 180,576 180,576 326,886 326,886
-----------------------------------------------------------------------------
17 69,583 69,583 187,829 187,829 352,877 352,877
-----------------------------------------------------------------------------
18 68,260 68,260 195,375 195,375 380,938 380,938
-----------------------------------------------------------------------------
19 66,961 66,961 203,225 203,225 411,233 411,233
-----------------------------------------------------------------------------
20 65,687 65,687 211,393 211,393 443,940 443,940
-----------------------------------------------------------------------------
21 64,436 64,436 219,890 219,890 479,252 479,252
-----------------------------------------------------------------------------
22 63,208 63,208 228,730 228,730 517,375 517,375
-----------------------------------------------------------------------------
23 62,003 62,003 237,926 237,926 558,534 558,534
-----------------------------------------------------------------------------
24 60,820 60,820 247,494 247,494 602,970 602,970
-----------------------------------------------------------------------------
25 59,659 59,659 257,449 257,449 650,945 650,945
-----------------------------------------------------------------------------
Assumptions:
a. $100,000 initial investment
b. Fund Expenses = 1.21%
c. No optional death benefits or living benefits elected
d. Annuity was issued on or after February 13, 2006
e. Surrender value assumes surrender 2 days before Annuity anniversary
F-6
------------------------------------------------------------------------
0% Gross Rate of Return 6% Gross Rate of Return 10% Gross Rate of Return
ASL II ASL II ASL II
------------------------------------------------------------------------
Net rate of return Net rate of return Net rate of return
All years -2.84% All years 2.99% All years 6.88%
------------------------------------------------------------------------
Account Surrender Account Surrender Account Surrender
Year Value Value Value Value Value Value
-----------------------------------------------------------------------------
1 97,168 97,168 102,981 102,981 106,856 106,856
-----------------------------------------------------------------------------
2 94,374 94,374 106,060 106,060 114,204 114,204
-----------------------------------------------------------------------------
3 91,660 91,660 109,231 109,231 122,057 122,057
-----------------------------------------------------------------------------
4 89,023 89,023 112,496 112,496 130,449 130,449
-----------------------------------------------------------------------------
5 86,460 86,460 115,859 115,859 139,419 139,419
-----------------------------------------------------------------------------
6 83,971 83,971 119,323 119,323 149,005 149,005
-----------------------------------------------------------------------------
7 81,552 81,552 122,890 122,890 159,251 159,251
-----------------------------------------------------------------------------
8 79,202 79,202 126,564 126,564 170,201 170,201
-----------------------------------------------------------------------------
9 76,919 76,919 130,348 130,348 181,904 181,904
-----------------------------------------------------------------------------
10 74,700 74,700 134,245 134,245 194,411 194,411
-----------------------------------------------------------------------------
11 72,544 72,544 138,258 138,258 207,779 207,779
-----------------------------------------------------------------------------
12 70,450 70,450 142,391 142,391 222,066 222,066
-----------------------------------------------------------------------------
13 68,415 68,415 146,648 146,648 237,335 237,335
-----------------------------------------------------------------------------
14 66,438 66,438 151,032 151,032 253,654 253,654
-----------------------------------------------------------------------------
15 64,517 64,517 155,548 155,548 271,095 271,095
-----------------------------------------------------------------------------
16 62,651 62,651 160,198 160,198 289,735 289,735
-----------------------------------------------------------------------------
17 60,838 60,838 164,987 164,987 309,657 309,657
-----------------------------------------------------------------------------
18 59,076 59,076 169,919 169,919 330,949 330,949
-----------------------------------------------------------------------------
19 57,364 57,364 174,999 174,999 353,705 353,705
-----------------------------------------------------------------------------
20 55,701 55,701 180,231 180,231 378,026 378,026
-----------------------------------------------------------------------------
21 54,085 54,085 185,619 185,619 404,019 404,019
-----------------------------------------------------------------------------
22 52,515 52,515 191,168 191,168 431,799 431,799
-----------------------------------------------------------------------------
23 50,990 50,990 196,883 196,883 461,489 461,489
-----------------------------------------------------------------------------
24 49,507 49,507 202,769 202,769 493,221 493,221
-----------------------------------------------------------------------------
25 48,067 48,067 208,831 208,831 527,135 527,135
-----------------------------------------------------------------------------
Assumptions:
a. $100,000 initial investment
b. Fund Expenses = 1.21%
c. No optional death benefits or living benefits elected
d. Annuity was issued on or after February 13, 2006
e. Surrender value assumes surrender 2 days before Annuity anniversary
F-7
APPENDIX G - FORMULA UNDER HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT
We set out below the current formula under which we may transfer amounts
between the variable investment options and the Benefit Fixed Rate Account.
Upon your election of Highest Daily Lifetime Five, we will not alter the
formula that applies to your Annuity. However, as discussed in the "Living
Benefits" section, we reserve the right to modify this formula with respect to
those who elect Highest Daily Lifetime Five in the future.
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULA:
. C\\u\\ - the upper target is established on the effective date of the
Highest Daily Lifetime Five benefit (the "Effective Date") and is not
changed for the life of the guarantee. Currently, it is 83%.
. C\\t\\ - the target is established on the Effective Date and is not
changed for the life of the guarantee. Currently, it is 80%.
. C\\l\\ - the lower target is established on the Effective Date and is
not changed for the life of the guarantee. Currently, it is 77%.
. L - the target value as of the current Valuation Day.
. r - the target ratio.
. a - the factors used in calculating the target value. These factors are
established on the Effective Date and are not changed for the life of
the guarantee. The factors that we use currently are derived from the
a2000 Individual Annuity Mortality Table with an assumed interest rate
of 3%. Each number in the table "a" factors (which appears below)
represents a factor, which when multiplied by the Highest Daily Annual
Income Amount, projects our total liability for the purpose of asset
transfers under the guarantee.
. Q - age based factors used in calculating the target value. These
factors are established on the Effective Date and are not changed for
the life of the guarantee. The factor is currently set equal to 1.
. V - the total value of all Permitted Sub-accounts in the Annuity.
. F - the total value of all Benefit Fixed Rate Account allocations.
. I - the income value prior to the first withdrawal. The income value is
equal to what the Highest Daily Annual Income Amount would be if the
first withdrawal were taken on the date of calculation. After the first
withdrawal the income value equals the greater of the Highest Daily
Annual Income Amount, the quarterly step-up amount times the annual
income percentage, and the Account Value times the annual income
percentage.
. T - the amount of a transfer into or out of the Benefit Fixed Rate
Account.
. I% - annual income amount percentage. This factor is established on the
Effective Date and is not changed for the life of the guarantee.
Currently, this percentage is equal to 5%
TARGET VALUE CALCULATION:
On each Valuation Day, a target value (L) is calculated, according to the
following formula. If the variable Account Value (V) is equal to zero, no
calculation is necessary.
L = I * Q * a
TRANSFER CALCULATION:
The following formula, which is set on the Effective Date and is not changed
for the life of the guarantee, determines when a transfer is required:
Target Ratio r = (L - F) / V.
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to Benefit Fixed Rate Account.
. If r (less than) C\\l\\, and there are currently assets in the
Benefit Fixed Rate Account (F (greater than) 0), assets in the
Benefit Fixed Rate Account are transferred to the Permitted
Sub-accounts.
G-1
The following formula, which is set on the Effective Date and is not changed
for the life of the guarantee, determines the transfer amount:
T = {Min(V, [L - F - V * C\\t\\] / (1 - C\\t\\))} T(greater than)0, Money moving from the Permitted
Sub-accounts to the Benefit Fixed Rate Account
T = {Min(F, [L - F - V * C\\t\\] / (1 - C\\t\\))} T(less than)0, Money moving from the Benefit Fixed Rate
Account to the Permitted Sub-accounts]
Example:
Male age 65 contributes $100,000 into the Permitted Sub accounts and the value
drops to $92,300 during year one, end of day one. A table of values for "a"
appears below.
Target Value Calculation:
L = I * Q * a
= 5000.67 * 1 * 15.34
= 76,710.28
Target Ratio:
r = (L - F) / V
= (76,710.28 - 0) / 92,300.00
= 83.11%
Since r (greater than) Cu ( because 83.11% (greater than) 83%) a transfer into
the Benefit Fixed rate Account occurs.
T = {Min (V, [L - F - V * Ct] / (1 - Ct))}
= {Min (92,300.00, [76,710.28 - 0 - 92,300.00 * 0.80] / (1 - 0.80))}
= {Min (92,300.00,14,351.40)}
= 14,351.40
FORMULA FOR CONTRACTS WITH 90% CAP FEATURE
TARGET VALUE CALCULATION:
On each Valuation Day, a target value (L) is calculated, according to the
following formula. If the variable Account Value (V) is equal to zero, no
calculation is necessary.
L = I * Q * a
If you elect this feature, the following replaces the "Transfer Calculation"
above.
Transfer Calculation:
The following formula, which is set on the effective date of this feature and
is not changed for the life of the guarantee, determines when a transfer is
required: On the effective date of this feature (and only on the effective
date of this feature), the following asset transfer calculation is performed
to determine the amount of Account Value allocated to the Benefit Fixed Rate
Account:
If (F / (V + F) (greater than) .90) then T = F - (V + F) * .90
If T is greater than $0 as described above, then no additional transfer
calculations are performed on the effective date.
On each Valuation Day thereafter (including the effective date of this feature
provided F / (V + F) (less than)= .90), the following asset transfer
calculation is performed
Target Ratio r = (L - F) / V
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to the Benefit Fixed Rate Account (subject to the 90% cap
rule described above).
. If r (less than) C\\l\\ and there are currently assets in the Benefit
Fixed Rate Account (F (greater than) 0), assets in the Benefit Fixed
Rate Account are transferred to the Permitted Sub-accounts.
G-2
The following formula, which is set on the Effective Date of this feature and
is not changed for the life of the guarantee, determines the transfer amount:
T = Min(MAX (0, (0.90 * (V + F)) - F), [L - F - V * Money is transferred from the elected Permitted
C\\t\\] / (1 - C\\t\\)) Sub-accounts to Benefit Fixed Rate Account
T = Min(F, - [L - F - V * C\\t\\] / (1 - C\\t\\)), Money is transferred from the Benefit Fixed Rate
Account to the Permitted Sub-accounts
Age 65 "a" Factors for Liability Calculations
(in Years and Months since Benefit Effective Date)*
Months
Years 1 2 3 4 5 6 7 8 9 10 11 12
----- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
1 15.34 15.31 15.27 15.23 15.20 15.16 15.13 15.09 15.05 15.02 14.98 14.95
2 14.91 14.87 14.84 14.80 14.76 14.73 14.69 14.66 14.62 14.58 14.55 14.51
3 14.47 14.44 14.40 14.36 14.33 14.29 14.26 14.22 14.18 14.15 14.11 14.07
4 14.04 14.00 13.96 13.93 13.89 13.85 13.82 13.78 13.74 13.71 13.67 13.63
5 13.60 13.56 13.52 13.48 13.45 13.41 13.37 13.34 13.30 13.26 13.23 13.19
6 13.15 13.12 13.08 13.04 13.00 12.97 12.93 12.89 12.86 12.82 12.78 12.75
7 12.71 12.67 12.63 12.60 12.56 12.52 12.49 12.45 12.41 12.38 12.34 12.30
8 12.26 12.23 12.19 12.15 12.12 12.08 12.04 12.01 11.97 11.93 11.90 11.86
9 11.82 11.78 11.75 11.71 11.67 11.64 11.60 11.56 11.53 11.49 11.45 11.42
10 11.38 11.34 11.31 11.27 11.23 11.20 11.16 11.12 11.09 11.05 11.01 10.98
11 10.94 10.90 10.87 10.83 10.79 10.76 10.72 10.69 10.65 10.61 10.58 10.54
12 10.50 10.47 10.43 10.40 10.36 10.32 10.29 10.25 10.21 10.18 10.14 10.11
13 10.07 10.04 10.00 9.96 9.93 9.89 9.86 9.82 9.79 9.75 9.71 9.68
14 9.64 9.61 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26
15 9.22 9.19 9.15 9.12 9.08 9.05 9.02 8.98 8.95 8.91 8.88 8.84
16 8.81 8.77 8.74 8.71 8.67 8.64 8.60 8.57 8.54 8.50 8.47 8.44
17 8.40 8.37 8.34 8.30 8.27 8.24 8.20 8.17 8.14 8.10 8.07 8.04
18 8.00 7.97 7.94 7.91 7.88 7.84 7.81 7.78 7.75 7.71 7.68 7.65
19 7.62 7.59 7.55 7.52 7.49 7.46 7.43 7.40 7.37 7.33 7.30 7.27
20 7.24 7.21 7.18 7.15 7.12 7.09 7.06 7.03 7.00 6.97 6.94 6.91
21 6.88 6.85 6.82 6.79 6.76 6.73 6.70 6.67 6.64 6.61 6.58 6.55
22 6.52 6.50 6.47 6.44 6.41 6.38 6.36 6.33 6.30 6.27 6.24 6.22
23 6.19 6.16 6.13 6.11 6.08 6.05 6.03 6.00 5.97 5.94 5.92 5.89
24 5.86 5.84 5.81 5.79 5.76 5.74 5.71 5.69 5.66 5.63 5.61 5.58
25 5.56 5.53 5.51 5.48 5.46 5.44 5.41 5.39 5.36 5.34 5.32 5.29
26 5.27 5.24 5.22 5.20 5.18 5.15 5.13 5.11 5.08 5.06 5.04 5.01
27 4.99 4.97 4.95 4.93 4.91 4.88 4.86 4.84 4.82 4.80 4.78 4.75
28 4.73 4.71 4.69 4.67 4.65 4.63 4.61 4.59 4.57 4.55 4.53 4.51
29 4.49 4.47 4.45 4.43 4.41 4.39 4.37 4.35 4.33 4.32 4.30 4.28
30 4.26 4.24 4.22 4.20 4.18 4.17 4.15 4.13 4.11 4.09 4.07 4.06
31 4.04 4.02 4.00 3.98 3.97 3.95 3.93 3.91 3.90 3.88 3.86 3.84
32 3.83 3.81 3.79 3.78 3.76 3.74 3.72 3.71 3.69 3.67 3.66 3.64
33 3.62 3.61 3.59 3.57 3.55 3.54 3.52 3.50 3.49 3.47 3.45 3.44
34 3.42 3.40 3.39 3.37 3.35 3.34 3.32 3.30 3.29 3.27 3.25 3.24
35 3.22 3.20 3.18 3.17 3.15 3.13 3.12 3.10 3.08 3.07 3.05 3.03
36 3.02 3.00 2.98 2.96 2.95 2.93 2.91 2.90 2.88 2.86 2.85 2.83
37 2.81 2.79 2.78 2.76 2.74 2.73 2.71 2.69 2.68 2.66 2.64 2.62
38 2.61 2.59 2.57 2.56 2.54 2.52 2.51 2.49 2.47 2.45 2.44 2.42
39 2.40 2.39 2.37 2.35 2.34 2.32 2.30 2.29 2.27 2.25 2.24 2.22
40 2.20 2.19 2.17 2.15 2.14 2.12 2.11 2.09 2.07 2.06 2.04 2.02
41 2.01 1.84 1.67 1.51 1.34 1.17 1.00 0.84 0.67 0.50 0.33 0.17
* The values set forth in this table are applied to all ages, and apply
whether or not the 90% cap is elected.
G-3
APPENDIX H - ANNUITIES APPROVED FOR SALE BY THE NEW YORK STATE INSURANCE
DEPARTMENT
ASL II NY APEX II NY
-----------------------------------------------------------------------------------------------------
Minimum Investment $15,000 $10,000
-----------------------------------------------------------------------------------------------------
Maximum Issue Age Annuitant 85; Annuitant 85
Owner None Oldest Owner 85
-----------------------------------------------------------------------------------------------------
Contingent Deferred Sales None 4 Years
Charge Schedule (7%, 6%, 5%, 4%)
(Applied to purchase
payments based on the
inception date of the
Annuity)
-----------------------------------------------------------------------------------------------------
Insurance Charge 1.65% 1.65%
-----------------------------------------------------------------------------------------------------
Distribution Charge N/A N/A
-----------------------------------------------------------------------------------------------------
Annual Maintenance Fee Lesser of $30 or 2% of Lesser of $30 or 2% of
Account Value Waived for Account Value Waived for
Account Values exceeding Account Values exceeding
$100,000 $100,000
-----------------------------------------------------------------------------------------------------
Transfer Fee $10 after twenty in any $10 after twenty in any
annuity year. May be annuity year.
increased to $15 after eight
in any annuity year
-----------------------------------------------------------------------------------------------------
Contract Credit No Yes. Effective for
Contracts issued on or after
June 20, 2005. Generally
we apply a Loyalty Credit
to your Annuity's Account
Value at the end of your
fifth contract year (i.e. on
your fifth Contract
Anniversary). Currently
the Loyalty Credit is equal
to 2.75% of total purchase
payments made during the
first four contract years
less the cumulative amount
of withdrawals made
(including the deduction of
any CDSC amounts)
through the fifth Contract
Anniversary
-----------------------------------------------------------------------------------------------------
Fixed Allocation (If Fixed Allocations Fixed Allocations
available, early Available (Currently Available (Currently
withdrawals are subject offering durations of: 5, 7, offering durations of: 5, 7,
to a Market Value and 10 years) The MVA and 10 years) The MVA
Adjustment) ("MVA") formula for NY is [(1+I)/ formula for NY is [(1+I)/
(1+J)] N/365 The MVA (1+J)] N/365 The MVA
formula does not apply formula does not apply
during the 30 day period during the 30 day period
immediately before the end immediately before the end
of the Guarantee Period. of the Guarantee Period.
-----------------------------------------------------------------------------------------------------
Variable Investment All options generally All options generally
Options available except where available except where
restrictions apply when restrictions apply when
certain riders are certain riders are
purchased. ProFund purchased. ProFund
Portfolios are restricted for Portfolios are restricted for
ASL II, ASAP III, and ASL II, ASAP III, and
XTra Credit SIX. XTra Credit SIX.
-----------------------------------------------------------------------------------------------------
ASAP III NY XTra Credit SIX NY
-------------------------------------------------------------------------------------------------------------
Minimum Investment $1,000 $10,000
-------------------------------------------------------------------------------------------------------------
Maximum Issue Age Annuitant 85 Annuitant 85
Oldest Owner 80 Oldest Owner 75
-------------------------------------------------------------------------------------------------------------
Contingent Deferred Sales 7 Years 10 Years
Charge Schedule (7%, 6%, 5%, 4%, 3%, (9%, 9%, 8%, 7%, 6%,
2%, 1%) (Applied to 5%, 4%, 3%, 2%, 1%)
purchase payments based (Applied to purchase
on the inception date of the payments based on the
Annuity) inception date of the
Annuity)
-------------------------------------------------------------------------------------------------------------
Insurance Charge 0.65% 0.65%
-------------------------------------------------------------------------------------------------------------
Distribution Charge 0.60% annuity years 1-7 1.00% annuity years 1-10
0.0% annuity years 8+ 0.00% annuity years 11+
-------------------------------------------------------------------------------------------------------------
Annual Maintenance Fee Lesser of $30 or 2% of Lesser of $30 or 2% of
Account Value Waived for Account Value
Account Values exceeding
$100,000
-------------------------------------------------------------------------------------------------------------
Transfer Fee $10 after twenty in any $10 after twenty in any
annuity year. May be annuity year
increased to $15 after eight
in any annuity year
-------------------------------------------------------------------------------------------------------------
Contract Credit Yes. Effective for Yes The amount of the
Contracts issued on or after credit applied to a Purchase
July 24, 2006. Generally Payment is based on the
we apply a Loyalty Credit year the Purchase Payment
to your Annuity's Account is received, for the first 6
Value at the end of your years of the contract.
fifth contract year (i.e. on Currently the credit
your fifth Contract percentages for each year
Anniversary). Currently starting with the first year
the Loyalty Credit is equal are: 6.50%, 5.00%, 4.00%,
to 0.50% of total purchase 3.00%, 2.00%, and 1.00%.
payments made during the
first four contract years
less the cumulative amount
of withdrawals made
(including the deduction of
any CDSC amounts)
through the fifth Contract
Anniversary
-------------------------------------------------------------------------------------------------------------
Fixed Allocation (If Fixed Allocations No
available, early Available (Currently
withdrawals are subject offering durations of: 2, 3,
to a Market Value 5, 7, and 10 years) The
Adjustment) ("MVA") MVA formula for NY is
[(1+I)/(1+J)] N/365 The
MVA formula does not
apply during the 30 day
period immediately before
the end of the Guarantee
Period.
-------------------------------------------------------------------------------------------------------------
Variable Investment All options generally All options generally
Options available except where available except where
restrictions apply when restrictions apply when
certain riders are certain riders are
purchased. ProFund purchased. ProFund
Portfolios are restricted for Portfolios are restricted for
ASL II, ASAP III, and ASL II, ASAP III, and
XTra Credit SIX. XTra Credit SIX.
-------------------------------------------------------------------------------------------------------------
H-1
ASL II NY APEX II NY
-------------------------------------------------------------------------------------------------------
Basic Death Benefit The greater of: purchase The greater of: purchase
payments less proportional payments less proportional
withdrawals or Account withdrawals or Account
Value (variable) plus Value (variable) plus
Interim Value (fixed). (No Interim Value (fixed). (No
MVA applied) MVA applied)
-------------------------------------------------------------------------------------------------------
Optional Death Benefits Highest Anniversary Value HAV
(for an additional cost)/1/ (HAV)
-------------------------------------------------------------------------------------------------------
Optional Living Benefits GRO Plus, GRO Plus 2008 GRO Plus, GRO Plus 2008
(for an additional cost)/2/ Guaranteed Minimum GMWB, GMIB, Lifetime
Withdrawal Benefit, Five, Spousal Lifetime
(GMWB), Guaranteed Five, Highest Daily
Minimum Income Benefit Lifetime Five, Highest
(GMIB), Lifetime Five, Daily Lifetime Seven,
Spousal Lifetime Five, Spousal Highest Daily
Highest Daily Lifetime Lifetime Seven, Highest
Five, Highest Daily Daily GRO, (Highest Daily
Lifetime Seven, Spousal Lifetime 7 Plus and
Highest Daily Lifetime Spousal Highest Daily
Seven, Highest Daily Lifetime 7 Plus
GRO, (Highest Daily
Lifetime 7 Plus and
Spousal Highest Daily
Lifetime 7 Plus
-------------------------------------------------------------------------------------------------------
Annuity Rewards/3/ No Available after initial
CDSC period
-------------------------------------------------------------------------------------------------------
Annuitization Options Fixed option only Annuity Fixed option only Annuity
date cannot exceed the first date cannot exceed the first
day of the calendar month day of the calendar month
following Annuitant's 90/th/ following Annuitant's 90/th/
birthday. The maximum birthday. The maximum
Annuity Date is based on Annuity Date is based on
the first Owner or the first Owner or
Annuitant to reach the Annuitant to reach the
maximum age, as indicated maximum age, as indicated
in your Annuity. in your Annuity.
-------------------------------------------------------------------------------------------------------
ASAP III NY XTra Credit SIX NY
---------------------------------------------------------------------------------------------------------------
Basic Death Benefit The greater of: purchase The greater of: purchase
payments less proportional payments less proportional
withdrawals or Account withdrawals or Account
Value (variable) plus Value (variable) (No MVA
Interim Value (fixed). (No applied) (No recapture of
MVA applied) credits applied within 12
months prior to date of
death)
---------------------------------------------------------------------------------------------------------------
Optional Death Benefits HAV HAV
(for an additional cost)/1/
---------------------------------------------------------------------------------------------------------------
Optional Living Benefits GRO Plus, GRO Plus 2008 GRO Plus, GRO Plus 2008
(for an additional cost)/2/ GMWB, GMIB, Lifetime GMWB, GMIB, Lifetime
Five, Spousal Lifetime Five, Spousal Lifetime
Five, Highest Daily Five, Highest Daily
Lifetime Five, Highest Lifetime Five, Highest
Daily Lifetime Seven, Daily Lifetime Seven,
Spousal Highest Daily Spousal Highest Daily
Lifetime Seven, Highest Lifetime Seven, Highest
Daily GRO, (Highest Daily Daily GRO, (Highest Daily
Lifetime 7 Plus and Lifetime 7 Plus and
Spousal Highest Daily Spousal Highest Daily
Lifetime 7 Plus Lifetime 7 Plus
---------------------------------------------------------------------------------------------------------------
Annuity Rewards/3/ Available after initial Available after initial
CDSC period CDSC period
---------------------------------------------------------------------------------------------------------------
Annuitization Options Fixed option only Annuity Fixed option only Annuity
date cannot exceed the first date cannot exceed the first
day of the calendar month day of the calendar month
following Annuitant's 90/th/ following Annuitant's 90/th/
birthday. The maximum birthday. The maximum
Annuity Date is based on Annuity Date is based on
the first Owner or the first Owner or
Annuitant to reach the Annuitant to reach the
maximum age, as indicated maximum age, as indicated
in your Annuity. in your Annuity.
---------------------------------------------------------------------------------------------------------------
(1)For more information on these benefits, refer to the "Death Benefit"
section in the Prospectus.
(2)For more information on these benefits, refer to the "Living Benefits"
section in the Prospectus. Highest Daily Lifetime Seven with Beneficiary
Income Option (BIO), Spousal Highest Daily Lifetime Seven with Beneficiary
Income Option (BIO), Highest Daily Lifetime Seven with Lifetime Income
Accelerator (LIA), Highest Daily Lifetime 7 Plus with BIO, Spousal Highest
Daily Lifetime 7 Plus with BIO and Highest Daily Lifetime 7 Plus with LIA
are not currently available in New York.
(3)The Annuity rewards benefit offers Owners an ability to increase the
guaranteed death benefit so that the death benefit will at least equal the
Annuity's Account Value on the effective date of the Annuity Rewards
benefits, if the terms of the Annuity Rewards benefit are met.
For more information about variations applicable to annuities approved for
sale by the New York State Insurance Department, please refer to your annuity
contract.
H-2
APPENDIX I - FORMULA UNDER GRO PLUS 2008 AND HIGHEST DAILY GRO
THE FOLLOWING ARE THE TERMS AND DEFINITIONS REFERENCED IN THE TRANSFER
CALCULATION FORMULA:
. AV is the current Account Value of the Annuity
. V is the current Account Value of the elected Sub-accounts of the Annuity
. B is the total current value of the AST bond portfolio Sub-account
. C\\l\\ is the lower target value. Currently, it is 79%.
. C\\t\\ is the middle target value. Currently, it is 82%.
. C\\u\\ is the upper target value. Currently, it is 85%.
For each guarantee provided under the benefit,
. G\\i\\ is the guarantee amount
. N\\i\\ is the number of days until the maturity date
. d\\i\\ is the discount rate applicable to the number of days until the
maturity date. It is determined with reference to a benchmark index,
reduced by the Discount Rate Adjustment. Once selected, we will not
change the applicable benchmark index. However, if the benchmark index
is discontinued, we will substitute a successor benchmark index, if
there is one. Otherwise we will substitute a comparable benchmark index.
We will obtain any required regulatory approvals prior to substitution
of the benchmark index.
The formula, which is set on the Effective Date and is not changed while the
Rider is in effect, determines, on each Valuation Day, when a transfer is
required.
The formula begins by determining the value on that Valuation Day that, if
appreciated at the applicable discount rate, would equal the guarantee amount
at the end of the Base Guarantee Period or Step-Up Guarantee Period. We call
the greatest of these values the "current liability (L)."
L = MAX(L\\i\\), where L\\i\\ = G\\i\\ / (1 + d\\i\\) / (Ni/365) /.
Next the formula calculates the following formula ratio:
r = (L - B) / V.
If the formula ratio exceeds an upper target value, then all or a portion of
the Account Value will be transferred to the bond fund Sub-account associated
with the current liability. If at the time we make a transfer to the bond fund
Sub-account associated with the current liability there is Account Value
allocated to a bond fund Sub-account not associated with the current
liability, we will transfer all assets from that bond fund Sub-account to the
bond fund Sub-account associated with the current liability.
The formula will transfer assets into the Transfer Account if r (greater than)
C\\u\\.
The transfer amount is calculated by the following formula:
T = {Min(V, [L - B - V * C\\t\\] / (1 - C\\t\\))}
If the formula ratio is less than a lower target value and there are assets in
the Transfer Account, then the formula will transfer assets out of the
Transfer Account into the elected Sub-accounts.
The transfer amount is calculated by the following formula:
T = {Min(B, - [L - B - V * C\\t\\] / (1 - C\\t\\))}
If following a transfer to the elected Sub-accounts, there are assets
remaining in a bond fund Sub-account not associated with the current
liability, we will transfer all assets from that bond fund Sub-account to the
bond fund Sub-account associated with the current liability.
I-1
APPENDIX J - FORMULA UNDER HIGHEST DAILY LIFETIME SEVEN INCOME BENEFIT AND
SPOUSAL HIGHEST DAILY LIFETIME SEVEN INCOME BENEFIT
(including Highest Daily Lifetime Seven with BIO, Highest Daily Lifetime Seven
with LIA and Spousal Highest Daily Lifetime Seven with BIO)
1. Formula for Contracts Issued on or after July 21, 2008
(Without Election of 90% Cap Feature)
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULA:
. C\\u\\ - the upper target is established on the effective date of the
Highest Daily Lifetime Seven benefit (the "Effective Date") and is not
changed for the life of the guarantee. Currently, it is 83%.
. C\\t\\ - the target is established on the Effective Date and is not
changed for the life of the guarantee. Currently, it is 80%.
. C\\l\\ - the lower target is established on the Effective Date and is
not changed for the life of the guarantee. Currently, it is 77%.
. L - the target value as of the current business day.
. r - the target ratio.
. a - factors used in calculating the target value. These factors are
established on the Effective Date and are not changed for the life of
the guarantee.
. V\\v\\ - the total value of all Permitted Sub-accounts in the Annuity.
. V\\F\\ - the total value of all elected Fixed Rate Options in the
Annuity.
. B - the total value of the AST Investment Grade Bond Portfolio
Sub-account.
. P - Income Basis. Prior to the first withdrawal, the Income Basis is the
Protected Withdrawal Value calculated as if the first withdrawal were
taken on the date of calculation. After the first withdrawal, the Income
Basis is equal to the greater of (1) the Protected Withdrawal Value at
the time of the first withdrawal, adjusted for additional purchase
payments including the amount of any associated Credits, and adjusted
proportionally for excess withdrawals*, (2) any highest quarterly value
increased for additional purchase payments including the amount of any
associated Credits, and adjusted for withdrawals, and (3) the Account
Value.
. T - the amount of a transfer into or out of the AST Investment Grade
Bond Portfolio Sub-account.
* Note: withdrawals of less than the Annual Income Amount do not reduce the
Income Basis.
TARGET VALUE CALCULATION:
On each business day, a target value (L) is calculated, according to the
following formula. If the Account Value (V\\V\\ + V\\F\\) is equal to zero, no
calculation is necessary.
L = 0.05 * P * a
TRANSFER CALCULATION:
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines when a transfer is required:
Target Ratio r = (L - B) / (V\\V\\ + V\\F\\).
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to the AST Investment Grade Bond Portfolio Sub-account.
. If r (less than) C\\l\\, and there are currently assets in the AST
Investment Grade Bond Portfolio Sub-account (B (greater than) 0),
assets in the AST Investment Grade Bond Portfolio Sub-account are
transferred to the Permitted Sub-accounts according to most recent
allocation instructions.
J-1
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines the transfer amount:
T = {Min (V\\V\\ + V\\F\\), [L - B - (V\\V\\ + V\\F\\) * C\\t\\] / (1 - Money is transferred from the Permitted
C\\t\\))} Sub-accounts and Fixed Rate Options to the AST
Investment Grade Bond Sub-account
T = {Min (B, - [L - B - (V\\V\\ + V\\F\\)* C\\t\\] / (1 - C\\t\\))} Money is transferred from the AST Investment
Grade Bond Sub-account to the Permitted Sub-
accounts
{Min (V\\V\\ + V\\F\\), [L - B - (V\\V\\ + V\\F\\) * C\\t\\] / (1 - Money is transferred from the Permitted
C\\t\\))} Sub-accounts and Fixed Rate Options to the AST
Investment Grade Bond Sub-account
{Min (B, - [L - B - (V\\V\\ + V\\F\\)* C\\t\\] / (1 - C\\t\\))} Money is transferred from the AST Investment
Grade Bond Sub-account to the Permitted Sub-
accounts
2. Formula for Contracts Issued Prior to 7/21/08
(Without Election of 90% Cap Feature)
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULA:
. C\\u \\- the upper target is established on the effective date of
the Highest Daily Lifetime Seven benefit (the "Effective Date") and
is not changed for the life of the guarantee. Currently, it is 83%.
. C\\t\\ - the target is established on the Effective Date and is not
changed for the life of the guarantee. Currently, it is 80%.
. C\\l\\ - the lower target is established on the Effective Date and
is not changed for the life of the guarantee. Currently, it is 77%.
. L - the target value as of the current business day.
. r - the target ratio.
. a - factors used in calculating the target value. These factors are
established on the Effective Date and are not changed for the life
of the guarantee.
. V - the total value of all Permitted Sub-accounts in the annuity.
. B - the total value of the AST Investment Grade Bond Portfolio
Sub-account.
. P - Income Basis. Prior to the first withdrawal, the Income Basis is
the Protected Withdrawal Value calculated as if the first withdrawal
were taken on the date of calculation. After the first withdrawal,
the Income Basis is equal to the greater of (1) the Protected
Withdrawal Value at the time of the first withdrawal, adjusted for
additional purchase payments including the amount of any associated
Credits, and adjusted proportionally for excess withdrawals*,
(2) any highest quarterly value increased for additional purchase
payments including the amount of any associated Credits, and
adjusted for withdrawals, and (3) the Account Value.
. T - the amount of a transfer into or out of the AST Investment Grade
Bond Portfolio Sub-account
* Note: withdrawals of less than the Annual Income Amount do not reduce the
Income Basis.
TARGET VALUE CALCULATION:
On each business day, a target value (L) is calculated, according to the
following formula. If the variable account value (V) is equal to zero, no
calculation is necessary.
L = 0.05 * P * a
TRANSFER CALCULATION:
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines when a transfer is required:
Target Ratio r = (L - B) / V.
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to the AST Investment Grade Bond Portfolio Sub-account.
. If r (less than) C\\l\\, and there are currently assets in the AST
Investment Grade Bond Portfolio Sub-account (B (greater than) 0),
assets in the AST Investment Grade Bond Portfolio Sub-account are
transferred to the Permitted Sub-accounts according to most recent
allocation instructions.
J-2
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines the transfer amount:
T = {Min(V, [L - B - V * C\\t\\] / (1 - C\\t\\))}, Money is transferred from the Permitted
Sub-accounts to the AST Investment Grade Bond
Portfolio Sub-account
T = {Min(B, - [L - B - V * C\\t\\] / (1 - C\\t\\))}, Money is transferred from the AST Investment
Grade Bond Portfolio Sub-account to the
Permitted Sub- accounts
"a" Factors for Liability Calculations
(in Years and Months since Benefit Effective Date)*
Months
Years 1 2 3 4 5 6 7 8 9 10 11 12
----- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
1 15.34 15.31 15.27 15.23 15.20 15.16 15.13 15.09 15.05 15.02 14.98 14.95
2 14.91 14.87 14.84 14.80 14.76 14.73 14.69 14.66 14.62 14.58 14.55 14.51
3 14.47 14.44 14.40 14.36 14.33 14.29 14.26 14.22 14.18 14.15 14.11 14.07
4 14.04 14.00 13.96 13.93 13.89 13.85 13.82 13.78 13.74 13.71 13.67 13.63
5 13.60 13.56 13.52 13.48 13.45 13.41 13.37 13.34 13.30 13.26 13.23 13.19
6 13.15 13.12 13.08 13.04 13.00 12.97 12.93 12.89 12.86 12.82 12.78 12.75
7 12.71 12.67 12.63 12.60 12.56 12.52 12.49 12.45 12.41 12.38 12.34 12.30
8 12.26 12.23 12.19 12.15 12.12 12.08 12.04 12.01 11.97 11.93 11.90 11.86
9 11.82 11.78 11.75 11.71 11.67 11.64 11.60 11.56 11.53 11.49 11.45 11.42
10 11.38 11.34 11.31 11.27 11.23 11.20 11.16 11.12 11.09 11.05 11.01 10.98
11 10.94 10.90 10.87 10.83 10.79 10.76 10.72 10.69 10.65 10.61 10.58 10.54
12 10.50 10.47 10.43 10.40 10.36 10.32 10.29 10.25 10.21 10.18 10.14 10.11
13 10.07 10.04 10.00 9.96 9.93 9.89 9.86 9.82 9.79 9.75 9.71 9.68
14 9.64 9.61 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26
15 9.22 9.19 9.15 9.12 9.08 9.05 9.02 8.98 8.95 8.91 8.88 8.84
16 8.81 8.77 8.74 8.71 8.67 8.64 8.60 8.57 8.54 8.50 8.47 8.44
17 8.40 8.37 8.34 8.30 8.27 8.24 8.20 8.17 8.14 8.10 8.07 8.04
18 8.00 7.97 7.94 7.91 7.88 7.84 7.81 7.78 7.75 7.71 7.68 7.65
19 7.62 7.59 7.55 7.52 7.49 7.46 7.43 7.40 7.37 7.33 7.30 7.27
20 7.24 7.21 7.18 7.15 7.12 7.09 7.06 7.03 7.00 6.97 6.94 6.91
21 6.88 6.85 6.82 6.79 6.76 6.73 6.70 6.67 6.64 6.61 6.58 6.55
22 6.52 6.50 6.47 6.44 6.41 6.38 6.36 6.33 6.30 6.27 6.24 6.22
23 6.19 6.16 6.13 6.11 6.08 6.05 6.03 6.00 5.97 5.94 5.92 5.89
24 5.86 5.84 5.81 5.79 5.76 5.74 5.71 5.69 5.66 5.63 5.61 5.58
25 5.56 5.53 5.51 5.48 5.46 5.44 5.41 5.39 5.36 5.34 5.32 5.29
26 5.27 5.24 5.22 5.20 5.18 5.15 5.13 5.11 5.08 5.06 5.04 5.01
27 4.99 4.97 4.95 4.93 4.91 4.88 4.86 4.84 4.82 4.80 4.78 4.75
28 4.73 4.71 4.69 4.67 4.65 4.63 4.61 4.59 4.57 4.55 4.53 4.51
29 4.49 4.47 4.45 4.43 4.41 4.39 4.37 4.35 4.33 4.32 4.30 4.28
30 4.26 4.24 4.22 4.20 4.18 4.17 4.15 4.13 4.11 4.09 4.07 4.06
31 4.04 4.02 4.00 3.98 3.97 3.95 3.93 3.91 3.90 3.88 3.86 3.84
32 3.83 3.81 3.79 3.78 3.76 3.74 3.72 3.71 3.69 3.67 3.66 3.64
33 3.62 3.61 3.59 3.57 3.55 3.54 3.52 3.50 3.49 3.47 3.45 3.44
34 3.42 3.40 3.39 3.37 3.35 3.34 3.32 3.30 3.29 3.27 3.25 3.24
35 3.22 3.20 3.18 3.17 3.15 3.13 3.12 3.10 3.08 3.07 3.05 3.03
36 3.02 3.00 2.98 2.96 2.95 2.93 2.91 2.90 2.88 2.86 2.85 2.83
37 2.81 2.79 2.78 2.76 2.74 2.73 2.71 2.69 2.68 2.66 2.64 2.62
38 2.61 2.59 2.57 2.56 2.54 2.52 2.51 2.49 2.47 2.45 2.44 2.42
39 2.40 2.39 2.37 2.35 2.34 2.32 2.30 2.29 2.27 2.25 2.24 2.22
40 2.20 2.19 2.17 2.15 2.14 2.12 2.11 2.09 2.07 2.06 2.04 2.02
41 2.01 1.84 1.67 1.51 1.34 1.17 1.00 0.84 0.67 0.50 0.33 0.17
* The values set forth in this table are applied to all ages, and apply to
each formula set out in this Appendix.
J-3
3. Formula for Contracts with 90% Cap Feature on or after July 21, 2008
See above for the Terms and Definitions Referenced in the Calculation Formula.
The following formula, which is set on the effective date of this feature and
is not changed for the life of the guarantee, determines when a transfer is
required:
On the effective date of this feature (and only on the effective date of this
feature), the following asset transfer calculation is performed to determine
the amount of Account Value allocated to the AST Investment Grade Bond
sub-account:
If (B / (V\\v\\ + V\\f\\ + B) (greater than) .90) then
T = B - [(V\\v\\ + V\\f\\ + B) * .90]
If T is greater than $0 as described above, then no additional transfer
calculations are performed on the effective date and future transfers to the
AST Investment Grade Bond Sub-account will not occur at least until there is
first a transfer out of the AST Investment Grade Bond Sub-account.
On each Valuation Day thereafter (including the effective date of this feature
provided B / ( V\\v\\ + V\\f\\ + B) (less than) = .90), the following asset
transfer calculation is performed
Target Ratio r = (L - B) / (V\\V\\ + V\\F\\).
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to the AST Investment Grade Bond Portfolio Sub-account
(subject to the 90% cap rule described above).
. If r (less than) C\\l\\, and there are currently assets in the AST
Investment Grade Bond Portfolio Sub-account (B (greater than) 0),
assets in the AST Investment Grade Bond Portfolio Sub-account are
transferred to the Permitted Sub-accounts according to most recent
allocation instructions.
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines the transfer amount:
T = Min (MAX(0, (0.90 * (V\\V\\ + V\\F\\ + B)) - B), Money is transferred from the elected Sub-accounts
[L - B - (V\\V\\ + V\\F\\) * C\\t\\] / (1 - C\\t\\)) to the AST Investment Grade Bond Sub-account
T = Min (B, - [L - B - ( V\\v\\ + V\\f\\ ) * C\\t\\] / (1 - C\\t\\)) Money is transferred from the AST Investment
Grade Sub-account to the elected Sub-accounts
Min (MAX(0, (0.90 * (V\\V\\ + V\\F\\ + B)) - B), Money is transferred from the elected Sub-accounts
[L - B - (V\\V\\ + V\\F\\) * C\\t\\] / (1 - C\\t\\)) to the AST Investment Grade Bond Sub-account
Min (B, - [L - B - ( V\\v\\ + V\\f\\ ) * C\\t\\] / (1 - C\\t\\)) Money is transferred from the AST Investment
Grade Sub-account to the elected Sub-accounts
4. Formula for Contracts with 90% Cap Feature if Benefit was Elected Prior to
July 21, 2008
See above for the Terms and Definitions Referenced in the Calculation Formula.
The following formula, which is set on the effective date of this feature and
is not changed for the life of the guarantee, determines when a transfer is
required:
On the effective date of this feature (and only on the effective date of this
feature), the following asset transfer calculation is performed to determine
the amount of Account Value allocated to the AST Investment Grade Bond
Sub-account:
If (B / (V + B) (greater than) .90) then
T = B - [(V + B) * .90]
If T is greater than $0 as described above, then no additional transfer
calculations are performed on the effective date.
On each Valuation Day thereafter (including the effective date of this feature
provided B / (V + B) (less than)= .90), the following asset transfer
calculation is performed
Target Ratio r = (L - B) / V.
. If r (greater than) C\\u\\, assets in the Permitted Sub-accounts are
transferred to AST Investment Grade Bond Sub-account.
. If r (less than) C\\l\\ and there are currently assets in the AST
Investment Grade Bond Sub-account (F (greater than) 0), assets in
the AST Investment Grade Bond Sub-account are transferred to the
Permitted Sub-accounts.
J-4
The following formula, which is set on the Effective Date of this feature and
is not changed for the life of the guarantee, determines the transfer amount:
T = Min(MAX (0, (0.90 * (V + B)) - B), [L - B - V * Money is transferred from the elected Permitted
C\\t\\] / (1 - C\\t\\)) Sub-accounts to AST Investment Grade Bond
Sub-Account
T = {Min(B, - [L - B - V * C\\t\\] / (1 - C\\t\\))}, Money is transferred from the AST Investment
Grade Bond Sub-account to the Permitted Sub-
accounts.
J-5
APPENDIX K - FORMULA FOR HIGHEST DAILY LIFETIME 7 PLUS INCOME BENEFIT AND
SPOUSAL HIGHEST DAILY LIFETIME 7 PLUS INCOME BENEFIT
(including Highest Daily Lifetime 7 Plus with BIO, Highest Daily Lifetime 7
Plus with LIA and Spousal Highest Daily Lifetime 7 Plus with BIO)
TRANSFERS OF ACCOUNT VALUE BETWEEN YOUR PERMITTED SUB-ACCOUNTS AND THE AST
INVESTMENT GRADE BOND SUB-ACCOUNT
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULAS:
. C\\u\\ - the upper target is established on the effective date of the
Highest Daily Lifetime 7 Plus/Spousal Highest Daily Lifetime 7 Plus
benefit (the "Effective Date") and is not changed for the life of the
guarantee. Currently, it is 83%.
. Cu\\s\\ - The secondary upper target is established on the effective
date of the Highest Daily Lifetime 7 Plus/Spousal Highest Daily Lifetime
7 Plus benefit (the "Effective Date") and is not changed for the life of
the guarantee. Currently it is 84.5%
. C\\t\\ - the target is established on the Effective Date and is not
changed for the life of the guarantee. Currently, it is 80%.
. C\\l\\ - the lower target is established on the Effective Date and is
not changed for the life of the guarantee. Currently, it is 78%.
. L - the target value as of the current Valuation Day.
. r - the target ratio.
. a - factors used in calculating the target value. These factors are
established on the Effective Date and are not changed for the life of
the guarantee. (See below for the table of "a" factors)
. V\\v\\ - the total value of all Permitted Sub-accounts in the Annuity.
. V\\F\\ - the total value of all elected Fixed Rate Options in the Annuity
. B - the total value of the AST Investment Grade Bond Portfolio
Sub-account.
. P - Income Basis. Prior to the first Lifetime Withdrawal, the Income
Basis is equal to the Protected Withdrawal Value calculated as if the
first Lifetime Withdrawal were taken on the date of calculation. After
the first Lifetime Withdrawal, the Income Basis is equal to the greater
of (1) the Protected Withdrawal Value on the date of the first Lifetime
Withdrawal, increased for additional purchase payments, including the
amount of any associated Credits, and adjusted proportionally for excess
withdrawals*, and (2) any highest daily Account Value occurring on or
after the date of the first Lifetime Withdrawal and prior to or
including the date of this calculation increased for additional purchase
payments including the amount of any associated Credits, and adjusted
for Lifetime Withdrawals.
. T - the amount of a transfer into or out of the AST Investment Grade
Bond Portfolio Sub-account
. T\\M\\ - the amount of a monthly transfer out of the AST Investment
Grade Bond Portfolio
* Note: Lifetime Withdrawals of less than or equal to the Annual Income
Amount do not reduce the Income Basis.
Daily Calculations
TARGET VALUE CALCULATION:
On each Valuation Day, a target value (L) is calculated, according to the
following formula. If the variable Account Value (V\\V\\+ V\\F\\) is equal to
zero, no calculation is necessary.
L = 0.05 * P * a
TRANSFER CALCULATION:
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines when a transfer is required:
Target Ratio r = (L - B) / (V\\V\\ + V\\F\\).
. If on the third consecutive Valuation Day r (greater than) Cu and r
(less or =) Cu\\s\\ or if on any day r (greater than) Cu\\s\\, and
subject to the 90% cap rule described above, assets in the Permitted
Sub-accounts (including DCA Fixed Rate Options used with any
applicable 6 or 12 Month DCA Program) are transferred to the AST
Investment Grade Bond Portfolio Sub-account.
K-1
. If r (less than) C\\l\\, and there are currently assets in the AST
Investment Grade Bond Portfolio Sub-account (B (greater than) 0),
assets in the AST Investment Grade Bond Portfolio Sub-account are
transferred to the Permitted Sub-accounts according to most recent
allocation instructions.
The following formula, which is set on the Benefit Effective Date and is not
changed for the life of the guarantee, determines the transfer amount:
T = Min (MAX (0, (0.90 * (V\\V\\ + V\\F\\ + B)) - B), Money is transferred from the Permitted
[L - B - (V\\V\\ + V\\F\\) * C\\t\\]/(1 - C\\t\\)) Sub-accounts and Fixed Rate Options to the AST
Investment Grade Bond Sub-account
T = {Min (B, - [L - B - (V\\V\\ + V\\F\\)* C\\t\\]/(1 - C\\t\\))} Money is transferred from the AST Investment
Grade Bond Sub-account to the Permitted Sub-
accounts
MONTHLY CALCULATION
On each monthly anniversary of the Annuity Issue Date and following the daily
Transfer Calculation above, the following formula determines if a transfer
from the AST Investment Grade Bond Sub-account to the Permitted Sub-Accounts
will occur:
If, after the daily Transfer Calculation is performed,
{Min (B, .05 * (V\\V\\ + V\\F\\ + B))} (less than) (C\\u\\ * (V\\V\\ + V\\F\\)
- L + B) / (1 - C\\u\\), then
T\\M\\ = {Min (B, .05 * (V\\V\\ + V\\F\\ + B))} Money is transferred from the AST Investment
Grade Bond Sub-account to the Permitted Sub-
accounts.
"a" Factors for Liability Calculations
(in Years and Months since Benefit Effective Date)*
Months
Years 1 2 3 4 5 6 7 8 9 10 11 12
----- ------ ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
1 15.34 15.31 15.27 15.23 15.20 15.16 15.13 15.09 15.05 15.02 14.98 14.95
2 14.91 14.87 14.84 14.80 14.76 14.73 14.69 14.66 14.62 14.58 14.55 14.51
3 14.47 14.44 14.40 14.36 14.33 14.29 14.26 14.22 14.18 14.15 14.11 14.07
4 14.04 14.00 13.96 13.93 13.89 13.85 13.82 13.78 13.74 13.71 13.67 13.63
5 13.60 13.56 13.52 13.48 13.45 13.41 13.37 13.34 13.30 13.26 13.23 13.19
6 13.15 13.12 13.08 13.04 13.00 12.97 12.93 12.89 12.86 12.82 12.78 12.75
7 12.71 12.67 12.63 12.60 12.56 12.52 12.49 12.45 12.41 12.38 12.34 12.30
8 12.26 12.23 12.19 12.15 12.12 12.08 12.04 12.01 11.97 11.93 11.90 11.86
9 11.82 11.78 11.75 11.71 11.67 11.64 11.60 11.56 11.53 11.49 11.45 11.42
10 11.38 11.34 11.31 11.27 11.23 11.20 11.16 11.12 11.09 11.05 11.01 10.98
11 10.94 10.90 10.87 10.83 10.79 10.76 10.72 10.69 10.65 10.61 10.58 10.54
12 10.50 10.47 10.43 10.40 10.36 10.32 10.29 10.25 10.21 10.18 10.14 10.11
13 10.07 10.04 10.00 9.96 9.93 9.89 9.86 9.82 9.79 9.75 9.71 9.68
14 9.64 9.61 9.57 9.54 9.50 9.47 9.43 9.40 9.36 9.33 9.29 9.26
15 9.22 9.19 9.15 9.12 9.08 9.05 9.02 8.98 8.95 8.91 8.88 8.84
16 8.81 8.77 8.74 8.71 8.67 8.64 8.60 8.57 8.54 8.50 8.47 8.44
17 8.40 8.37 8.34 8.30 8.27 8.24 8.20 8.17 8.14 8.10 8.07 8.04
18 8.00 7.97 7.94 7.91 7.88 7.84 7.81 7.78 7.75 7.71 7.68 7.65
19 7.62 7.59 7.55 7.52 7.49 7.46 7.43 7.40 7.37 7.33 7.30 7.27
20 7.24 7.21 7.18 7.15 7.12 7.09 7.06 7.03 7.00 6.97 6.94 6.91
21 6.88 6.85 6.82 6.79 6.76 6.73 6.70 6.67 6.64 6.61 6.58 6.55
22 6.52 6.50 6.47 6.44 6.41 6.38 6.36 6.33 6.30 6.27 6.24 6.22
23 6.19 6.16 6.13 6.11 6.08 6.05 6.03 6.00 5.97 5.94 5.92 5.89
24 5.86 5.84 5.81 5.79 5.76 5.74 5.71 5.69 5.66 5.63 5.61 5.58
25 5.56 5.53 5.51 5.48 5.46 5.44 5.41 5.39 5.36 5.34 5.32 5.29
26 5.27 5.24 5.22 5.20 5.18 5.15 5.13 5.11 5.08 5.06 5.04 5.01
27 4.99 4.97 4.95 4.93 4.91 4.88 4.86 4.84 4.82 4.80 4.78 4.75
28 4.73 4.71 4.69 4.67 4.65 4.63 4.61 4.59 4.57 4.55 4.53 4.51
29 4.49 4.47 4.45 4.43 4.41 4.39 4.37 4.35 4.33 4.32 4.30 4.28
30 4.26 4.24 4.22 4.20 4.18 4.17 4.15 4.13 4.11 4.09 4.07 4.06**
* The values set forth in this table are applied to all ages.
** In all subsequent years and months thereafter, the annuity factor is 4.06
K-2
APPENDIX L - SPECIAL CONTRACT PROVISIONS FOR ANNUITIES ISSUED IN CERTAIN STATES
Certain features of your Annuity may be different than the features described
earlier in this prospectus if your Annuity is issued in certain states
described below. For Annuities issued in New York, please see Appendix H.
Jurisdiction Special Provisions
-------------------------------------------------------------------------------------------------------------------------
Maryland Fixed Allocations are not available.
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Massachusetts If your Annuity is issued in Massachusetts after January 1, 2009, the annuity rates we
use to calculate annuity payments are available only on a gender-neutral basis under any
Annuity Option or any lifetime withdrawal optional benefit (except the Guaranteed Minimum
Withdrawal Benefit).
Medically Related Surrenders are not available.
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Montana If your Annuity is issued in Montana, the annuity rates we use to calculate annuity
payments are available only on a gender-neutral basis under any Annuity Option or any
lifetime withdrawal optional benefit (except the Guaranteed Minimum Withdrawal Benefit).
-------------------------------------------------------------------------------------------------------------------------
Nevada Fixed Allocations are not available.
-------------------------------------------------------------------------------------------------------------------------
North Dakota Fixed Allocations are not available.
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Vermont Fixed Allocations are not available.
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Washington If you elect Highest Daily Lifetime Five, or any version of Highest Daily Lifetime Seven,
the Guaranteed Minimum Account Value Credit otherwise available with these optional
benefits is not available.
Fixed Allocations are not available.
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L-1
APPENDIX M - FORMULA UNDER THE GUARANTEED RETURN OPTION PLUS BENEFIT
We set out below the current formula under which we may transfer amounts
between the Sub-accounts and the Fixed Allocations. We will not alter the
formula.
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULA:
. AV is the current Account Value of the Annuity (including any Market
Value Adjustment on Fixed Allocations)
. V is the current Account Value of the elected Sub-accounts of the Annuity
. F is the current Account Value of the Fixed Allocations
For each guarantee provided under the program,
. G\\i\\ is the Principal Value of the guarantee
. t\\i\\ is the number of whole and partial years until the maturity date
of the guarantee.
. r\\i\\ is the current fixed rate associated with Fixed Allocations of
length t\\i\\ (t\\i\\ is rounded to the next highest integer to
determine this rate).
The formula determines, on each Valuation Day, when a transfer is required.
The formula begins by determining for each guarantee the value (L\\i\\) that,
if appreciated at the current fixed rate, would equal the Principal Value on
the applicable maturity date. We call the greatest of these values the
"current liability (L)."
L = MAX (L\\i\\), where L\\i\\ = G\\i\\ / (1 + r\\i\\)/ti/
Next, the formula determines whether or not a transfer to or from the Fixed
Allocations is needed:
A transfer into the Fixed Allocations will occur if L (greater than) (AV - 0.2
* V), and V (greater than) 0.
The transfer amount is calculated by the following formula:
T = MIN(V, (V - (1 / 0.23) * (AV - L))
A transfer from the Fixed Allocations to the Sub-accounts will occur if L
(less than) (AV - 0.26 * V), and F (greater than) 0.
The transfer amount is calculated by the following formula:
T = MIN(F, ((1 / 0.23) * (AV - L) - V)
M-1
APPENDIX N - FORMULA UNDER THE GUARANTEED RETURN OPTION BENEFIT
We set out below the current formula under which we may transfer amounts
between the Sub-accounts and the Fixed Allocations. We will not alter the
asset transfer formula.
TERMS AND DEFINITIONS REFERENCED IN THE CALCULATION FORMULA:
. AV is the current Account Value of the Annuity (including any Market
Value Adjustment on Fixed Allocations)
. V is the current Account Value of the elected Sub-accounts of the Annuity
. F is the current Account Value of the Fixed Allocations
. G is the Principal Value of the guarantee
. t is the number of whole and partial years between the current Valuation
Day and the maturity date.
. t\\i\\ is the number of whole and partial years between the next
Valuation Day (i.e., the Valuation Day immediately following the current
Valuation Day) and the maturity date.
. r is the fixed rate associated with Fixed Allocations of length t
(t\\1\\ is rounded to the next highest whole number to determine this
rate) as of the current Valuation Day.
. r\\i\\ is the fixed rate associated with Fixed Allocations of length
t\\1\\ (t\\1\\ is rounded to the next highest whole number to determine
this rate) as of the next Valuation Day.
. M is the total maturity value of all Fixed Allocations, i.e., the total
value that the Fixed Allocations will have on the maturity date of the
guarantee if no subsequent transactions occur.
The formula determines, on each Valuation Day, when a transfer is required.
The formula begins by determining a "cushion", D:
D = 1 - [(G - M) / (1 + r)/t/] / V
Next, the formula determines whether or not a transfer to or from the Fixed
Allocations is needed:
A transfer into the Fixed Allocations will occur if D (less than) 0.20, V
(greater than) 0, and V (greater than) 0.02 * AV.
The transfer amount is calculated by the following formula:
T = MIN(V, (V * (0.75 * (1 + r\\i\\)/ti/ - G + M) / (0.75 * (1 + r\\i\\)/ti/ - (1 + r)/t/))
A transfer from the Fixed Allocations to the Sub-accounts will occur if D
(greater than) 0.30 and F (greater than) 0.
The transfer amount is calculated by the following formula:
T = MIN(F, (V * (0.75 * (1 + r\\i\\)/ti/ - G + M) / ((1 + r)/t/ - 0.75 * (1 + r\\i\\)/ti/))
N-1
PLEASE SEND ME A STATEMENT OF ADDITIONAL INFORMATION THAT CONTAINS
FURTHER DETAILS ABOUT THE PRUDENTIAL ANNUITIES ANNUITY DESCRIBED IN
PROSPECTUS (PLEASE CHECK ONE) ASAPIIIPROS (05/2009) , APEX2PROS
(05/2009) , ASL2PROS (05/2009) , XT6PROS (05/2009) .
------------------------------------------
(print your name)
------------------------------------------
(address)
------------------------------------------
(city/state/zip code)
Variable Annuity Issued by: Variable Annuity Distributed by:
PRUDENTIAL ANNUITIES LIFE PRUDENTIAL ANNUITIES
ASSURANCE CORPORATION DISTRIBUTORS, INC.
A Prudential Financial Company A Prudential Financial Company
One Corporate Drive One Corporate Drive
Shelton, Connecticut 06484 Shelton, Connecticut 06484
Telephone: 1-800-752-6342 Telephone: 203-926-1888
http://www.prudentialannuities.com http://www.prudentialannuities.com
MAILING ADDRESSES:
PRUDENTIAL ANNUITIES - VARIABLE ANNUITIES
P.O. Box 7960
Philadelphia, PA 19176
EXPRESS MAIL:
PRUDENTIAL ANNUITIES - VARIABLE ANNUITIES
2101 Welsh Road
Dresher, PA 19025
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The Prudential Insurance Company of America U.S. POSTAGE
751 Broad Street PAID
Newark, NJ 07102-3777 LANCASTER, PA
PERMIT NO. 1793
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