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In the Matter of
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MUTUAL OF AMERICA LIFE INSURANCE COMPANY
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MUTUAL OF AMERICA SEPARATE ACCOUNT No. 2
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APPLICATION FOR AN
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MUTUAL OF AMERICA SEPARATE ACCOUNT No. 3
WILTON REASSURANCE LIFE COMPANY OF NEW YORK
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ORDER OF APPROVAL
PURSUANT TO
SECTION 26(c) OF THE
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AMERICAN SEPARATE ACCOUNT No. 2
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INVESTMENT COMPANY
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AMERICAN SEPARATE ACCOUNT No. 3
MUTUAL OF AMERICA INVESTMENT CORPORATION
320 Park Avenue
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ACT OF 1940
and
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New York, New York 10022-68391
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FOR AN ORDER PURSUANT TO SECTION 17(b)
OF THE INVESTMENT COMPANY ACT OF 1940
GRANTING EXEMPTIONS FROM SECTION 17(a)
OF THE INVESTMENT COMPANY ACT OF 1940
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File No. 812-_________
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I.
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DESCRIPTION OF THE APPLICANTS, THE FUNDS, AND THE CONTRACTS
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A.
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Applicants
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1.
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Mutual of America Life Insurance Company
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2.
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Wilton Reassurance Life Company of New York
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3.
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The Annuity Account
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4.
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The Life Account
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5.
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The American Annuity Account
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6.
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The American Life Account
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B.
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The Funds
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1.
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The DWS Fund
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2.
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The Vanguard Fund
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3.
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Investment Corporation
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C.
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The Contracts
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II.
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THE PROPOSED SUBSTITUTION
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A.
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Rationale for Proposed Substitution
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1.
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Replaced International Fund
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a. Competitive Fee Structure
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b. Competitive Long-Term Investment Returns
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c. Contract Owner Expectations
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2.
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Replaced Bond Fund
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a. Competitive Fee Structure
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b. Competitive Long-Term Investment Returns
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c. Contract Owner Expectations
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B.
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Comparison of Investment Objectives, Principal Investment Strategies, and Principal Investment Risks
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REPLACED INTERNATIONAL FUND
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REPLACEMENT INTERNATIONAL FUND
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DWS International VIP Fund
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Vanguard International Fund
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Investment Objective
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Investment Objective
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Long-term growth of capital.
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Long-term capital appreciation.
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Principal Investment Strategies
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Principal Investment Strategies
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The portfolio invests mainly in common stocks of established companies in countries with developed economies (other than the U.S.). The fund’s equity investments may also include preferred stocks, depositary receipts and other securities with equity characteristics, such as convertible securities and warrants.
Portfolio management seeks to add value through stock selection utilizing a proprietary investment process including fundamental research.
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The portfolio invests predominantly in the stocks of companies located outside the United States and is expected to diversify its assets across developed and emerging markets in Europe, the Far East, and Latin America. In selecting stocks, the Portfolio’s advisors evaluate foreign markets around the world and choose large-, mid-, and small-capitalization companies considered to have above-average growth potential. The Portfolio uses multiple investment advisors.
The Portfolio may invest in foreign issuers through American depositary receipts, European depositary receipts, global depositary receipts, or similar investment vehicles. The Portfolio may also invest in convertible securities.
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REPLACED INTERNATIONAL FUIND
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REPLACEMENT INTERNATIONAL FUND
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Principal Investment Risks
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Principal Investment Risks
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Foreign investment risk. The fund faces the risks inherent in foreign investing. Adverse political, economic or social developments could undermine the value of the fund’s investments or prevent the fund from realizing their full value. Financial reporting standards for companies based in foreign markets differ from those in the U.S. Additionally, foreign securities markets generally are smaller and less liquid than U.S. markets. To the extent that the fund invests in non-U.S. dollar denominated foreign securities, changes in currency exchange rates may affect the U.S. dollar value of foreign securities or the income or gain received on these securities.
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Investment style risk, which is the chance that returns from non-U.S. growth stocks, and, to the extent that the Portfolio is invested in them, small- and mid-capitalization stocks, will trail returns from global stock markets. Historically, non-U.S. small- and mid-cap stocks have been more volatile in price than the large-cap stocks that dominate the global markets, and they often perform quite differently.
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Emerging markets risk. Foreign investment risks are greater in emerging markets than in developed markets. Investments in emerging markets are often considered speculative.
Emerging market countries typically have economic and political systems that are less developed, and can be expected to be less stable than developed markets. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation.
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Country/regional risk, which is the chance that world events—such as political upheaval, financial troubles, or natural disasters—will adversely affect the value of securities issued by companies in foreign countries or regions. Because the Portfolio may invest a large portion of its assets in securities of companies located in any one country or region, including emerging markets, the Portfolio’s performance may be hurt disproportionately by the poor performance of its investments in that area. Country/regional risk is especially high in emerging markets.
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Stock market risk. When stock prices fall, investors should expect the value of their investment to fall as well. Stock prices can be hurt by poor management on the part of the stock’s issuer, shrinking product demand and other business risks. These may affect single companies as well as groups of companies. In addition, movements in financial markets may adversely affect a stock’s price, regardless of how well the company performs. To the extent that the fund invests in a particular geographic region or market sector, performance will be affected by that region’s general performance. | Stock market risk, which is the chance that stock prices overall will decline. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. In addition, investments in foreign stocks can be riskier than U.S. stock investments. The prices of foreign stocks and the prices of U.S. stocks have, at times, moved in opposite directions.
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REPLACED INTERNATIONAL FUND
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REPLACEMENT INTERNATIONAL FUND
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Principal Investment Risks
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Principal Investment Risks
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Security selection risk. The securities in the fund’s portfolio may decline in value. Portfolio management could be wrong in its analysis of industries, companies, economic trends, and the relative attractiveness of different securities or other matters.
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Manager risk, which is the chance that poor security selection or focus on securities in a particular sector, category, or group of companies will cause the Portfolio to underperform relevant benchmarks or other funds with a similar investment objective.
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Liquidity risk. In certain situations, it may be difficult or impossible to sell an investment in an orderly fashion at an acceptable price.
This risk can be ongoing for any security that does not trade actively or in large volumes, for any security that trades primarily on smaller markets, and for investments that typically trade only among a limited number of large investors (such as certain types of derivatives or restricted securities). In unusual market conditions, even normally liquid securities may be affected by a degree of liquidity risk. This may affect only certain securities or an overall securities market.
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Currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates. Currency risk is especially high in emerging markets.
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Derivatives risk. Risks associated with derivatives include the risk that the derivative is not well correlated with the security, index or currency to which it relates; the risk that derivatives may result in losses or missed opportunities; the risk that the fund will be unable to sell the derivative because of an illiquid secondary market; the risk that a counterparty is unwilling or unable to meet its obligation; and the risk that the derivative transaction could expose the fund to the effects of leverage, which could increase the fund’s exposure to the market and magnify potential losses.
There is no guarantee that derivatives, to the extent employed, will have the intended effect, and their use could cause lower returns or even losses to the fund. The use of derivatives by the fund to hedge risk may reduce the opportunity for gain by offsetting the positive effect of favorable price movements.
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Derivatives risk. The Portfolio may invest, to a limited extent, in derivatives. Investments in derivatives may subject the Portfolio to risks different from, and possibly greater than, those of the underlying securities, assets, or market indexes. The Portfolio will not use derivatives for speculation or for the purpose of leveraging (magnifying) investment returns. |
REPLACED INTERNATIONAL FUND
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REPLACEMENT INTERNATIONAL FUND
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Principal Investment Risks
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Principal Investment Risks
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Pricing risk. If market conditions make it difficult to value some investments, the fund may value these investments using more subjective methods, such as fair value pricing. In such cases, the value determined for an investment could be different than the value realized upon such investment’s sale. As a result, an investor could pay more than the market value when buying fund shares or receive less than the market value when selling fund shares.
Secondary markets may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods, which may prevent the fund from being able to realize full value and thus sell a security for its full valuation. This could cause a material decline in the fund’s net asset value.
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Counterparty risk. A financial institution or other counterparty with whom the fund does business, or that underwrites, distributes or guarantees any investments or contracts that the fund owns or is otherwise exposed to, may decline in financial health and become unable to honor its commitments, which could cause losses for the fund or could delay the return or delivery of collateral or other assets to the fund.
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Securities lending risk. Any decline in the value of a portfolio security that occurs while the security is out on loan is borne by the fund and will adversely affect performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while holding the security. |
REPLACED INTERNATIONAL FUND
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REPLACEMENT INTERNATIONAL FUND
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Principal Investment Risks
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Principal Investment Risks
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Credit risk. The fund’s performance could be hurt if an issuer of a debt security suffers an adverse change in financial condition that results in a payment default, security downgrade or inability to meet a financial obligation.
Because the issuers of high-yield debt securities or junk bonds (debt securities rated below the fourth highest credit rating category) may be in uncertain financial health, the prices of their debt securities can be more vulnerable to bad economic news or even the expectation of bad news, than investment –grade debt securities.
For securities that rely on third-party guarantors to support their credit quality, the same risks may apply if the financial condition of the guarantor deteriorates or the guarantor ceases insuring municipal bonds. Because guarantors may insure many types of bonds, including subprime mortgage bonds and other high-risk bonds, their financial condition could deteriorate as a result of events that have little or no connection to securities owned by the fund.
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Interest rate risk. When interest rates rise, prices of debt securities generally decline. The longer the duration of the fund’s debt securities, the more sensitive it will be to interest rate changes.
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REPLACED BOND FUND
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REPLACEMENT BOND FUND
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DWS Bond VIP Fund
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Mutual of America Bond Fund
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Investment Objective
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Investment Objective
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The Fund seeks to maximize total return consistent with preservation of capital and prudent investment management, by investing for both current income and capital appreciation.
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The Fund seeks current income, with preservation of shareholders’ capital a secondary objective.
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REPLACED BOND FUND
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REPLACEMENT BOND FUND
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DWS Bond VIP Fund
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Mutual of America Bond Fund
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Principal Investment Strategies
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Principal Investment Strategies
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Main Investments. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in bonds of any maturity. The fund invests mainly in U.S. dollar-denominated fixed income securities, including corporate bonds, U.S. government and agency bonds and mortgage- and asset - backed securities. The fund may also invest significantly in foreign investment grade fixed income securities, non-investment grade (high yield or junk bonds) securities of U.S. and foreign issuers (including issuers in countries with new or emerging securities markets), or to maintain liquidity, in cash or money market instruments.
The fund may invest up to 25% of total assets in foreign investment grade bonds (those in the top four grades of credit quality). The fund may also invest up to 35% of total assets in non-investment grade securities (junk bonds) of U.S. and foreign issuers that are rated as low as grade B, the sixth credit grade. Compared to investment-grade bonds, junk bonds generally pay higher yields but have higher volatility and higher risk of default on payments. The fund may invest up to 20% of total assets in U.S. dollar or foreign currency denominated bonds of issuers located in countries with new or emerging securities markets. The fund may have exposure of up to 15% of total assets in foreign currencies.
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The Fund invests primarily in publicly-traded, investment-grade debt securities.
Under normal circumstances, at least 80% of the Fund’s total assets are invested in investment grade bonds issued by U.S. corporations or by the U.S. Government or its agencies, such as bonds, notes, debentures, zero coupon securities, asset-backed securities and mortgage-backed securities with ratings that range from AAA to BBB at the time of purchase. Bonds are debt instruments that can be issued by the federal government, government agencies and subdivisions, states, cities, corporations and other institutions.
The Fund generally will invest a significant portion of its assets in a particular type of debt security, such as U.S. Government securities, securities rated BBB or higher and mortgage-backed securities and it is possible at any given time that certain corporate bonds in the Fund’s portfolio can be below investment grade. Below investment grade securities are commonly referred to as “junk bonds.”
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REPLACED BOND FUND
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REPLACEMENT BOND FUND
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DWS Bond VIP Fund
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Mutual of America Bond Fund
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Principal Investment Strategies
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Principal Investment Strategies
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Management Process. In choosing securities, portfolio management uses distinct processes for various types of securities.
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The Adviser evaluates each security to be purchased and selects securities based in part on interest income anticipated to be generated.
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U.S. Investment Grade Securities. Portfolio management typically * ranks securities based on creditworthiness, cash flow and price
* determines the value of each security by examining the issuer’s credit quality, debt structure, option value and liquidity risks to identify any inefficiencies between this value and market trading price
* uses credit analysis to determine the issuer’s ability to fulfill its contracts
* uses a bottom-up approach that subordinates sector weightings to individual bonds that portfolio management believes may add above-market value.
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The Adviser uses a “bottom-up” approach in selecting debt securities for the Fund, which means that the Adviser places primary emphasis on the evaluation of an issuer of securities before purchasing those securities for the Fund, and less emphasis on possible changes in the general economy or the industry in which the issuer operates. The Adviser evaluates each security to be purchased and selects securities based in part on interest income to be generated. In selecting an individual security, it reviews historical financial measures and considers the price and yield relationship to other securities to determine a proper relative value for the security. The Fund may continue to hold securities that have been downgraded if the Adviser considers the securities to be undervalued due to factors such as lack of liquidity or uncertainty in the marketplace. |
Foreign investment grade and emerging markets high yield securities.
Portfolio management uses a relative value strategy to identify the most attractive foreign markets, then searches those markets for securities that portfolio management believes offer incremental value over U.S. Treasuries. With emerging market securities, portfolio management also considers short-term factors such as market sentiment, capital flows, and new issue programs.
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The Fund may invest in foreign securities.
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REPLACED BOND FUND
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REPLACEMENT BOND FUND
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DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Strategies | Principal Investment Strategies |
High yield securities (other than emerging markets). Portfolio management typically:
*analyzes economic conditions for improving or undervalued sectors and industries
*uses independent credit research and on-site management visits to evaluate individual issuer’s debt service, growth rate, and both downgrade and upgrade potential
*assesses new issues versus secondary market opportunities
*seeks issues within attractive industry sectors and with strong long-term fundamentals and improving credit.
Portfolio management generally sells securities (or exchanges currencies) when they reach their target prices, when other investments appear more attractive, or, particularly for high yield securities, when company fundamentals decline or when portfolio management believes an unexpected development will diminish a company’s competitive position or ability to generate adequate cash flow.
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REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Strategies | Principal Investment Strategies |
Derivatives. Portfolio management generally may use futures contracts, which are a type of derivative (a contract whose value is based on, for example, indices, currencies or securities), for duration management (i.e., reducing or increasing the sensitivity of the fund’s portfolio to interest rate changes) or for non-hedging purposes to seek to enhance potential gains. Portfolio management generally may also enter into total return swap transactions to enhance potential gains. In addition, portfolio management generally may use forward currency contracts (i) to hedge its exposure to changes in foreign currency exchange rates on its foreign currency denominated portfolio holdings; (ii) to facilitate transactions in foreign currency denominated securities; or (iii) for non-hedging purposes to seek to enhance potential gains. In addition, portfolio management generally may use credit default swaps to increase the fund’s income, to gain exposure to a bond issuer’s credit quality characteristics without directly investing in the bond, or to hedge the risk of default on bonds held in the fund’s portfolio.
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|
The fund may also use various types of derivatives (i) for hedging purposes; (ii) for risk management; (iii) for non-hedging purposes to seek to enhance potential gains; or (iv) as a substitute for direct investment in a particular asset class or to keep cash on hand to meet shareholder redemptions.
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Securities Lending. The fund may lend securities (up to one-third of total assets) to approved institutions.
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REPLACED BOND FUND
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REPLACEMENT BOND FUND
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DWS Bond VIP Fund
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Mutual of America Bond Fund
|
Principal Investment Strategies | Principal Investment Strategies |
Active Trading. The fund may trade actively. This could raise transaction costs (thus lowering returns).
|
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Principal Investment Risks
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Principal Investment Risks
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Interest rate risk. When interest rates rise, prices of debt securities generally decline. The longer the duration of the fund’s debt securities, the more sensitive it will be to interest rate changes.
|
Interest Rate risk. Fixed income securities are subject to the risk that securities could lose value because of interest rate changes. For example, bonds tend to decrease in value if interest rates rise. Debt obligations with longer maturities sometimes offer higher yields, but are subject to greater price shifts as a result of interest rate changes than debt obligations with shorter maturities.
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Credit risk. The fund’s performance could be hurt if an issuer of a debt security suffers an adverse change in financial condition that results in a payment default, security downgrade or inability to meet a financial obligation. Credit risk is greater for lower-rated securities.
Because the issuers of high-yield debt securities or junk bonds (debt securities rated below the fourth highest credit rating category) may be in uncertain financial health, the prices of their debt securities can be more vulnerable to bad economic news or even the expectation of bad news than investment-grade debt securities.
|
Credit risk. Debt obligations are generally subject to the risk that the issuer may be unable to make principal and interest payments when they are due. There is also the risk that the securities could lose value because of a loss of confidence in the ability of the borrower to pay back debt. Securities rated BBB or lower generally have more credit risk than higher-rated securities. Non-investment grade debt – also known as “High-yield bonds” and “junk bonds” – have a higher risk of default and tend to be less liquid than higher-rated securities.
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REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Prepayment and extension risk. When interest rates fall, issuers of high interest debt obligations may pay off the debts earlier than expected (prepayment risk), and the fund may have to reinvest the proceeds at lower yields. When interest rates rise, issuers of lower interest debt obligations may pay off the debts later than expected (extension risk), thus keeping the fund’s assets tied up in lower interest debt obligations. Ultimately, any unexpected behavior in interest rates could increase the volatility of the fund’s share price and yield and could hurt fund performance.
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Fixed Income risk. The value of an investment will go up or down depending on movements in the bond markets. The Fund’s investment results may differ from the results of a comparable bond market and from the results of other funds that invest in the same types of securities. Mortgage-backed securities or certificates are subject to prepayment or extension risk when interest rates fall or rise, respectively. The prices of debt securities may be subject to significant volatility. Fixed income securities have an inverse relationship to interest rates, such that as interest rates rise, bond values decrease. During economic uncertainty, the value of corporate debt securities may decline relative to the value of U.S. government debt securities. Debt obligations are subject to the risk that issuers may not be able to pay off the principal and interest when due. Non-investment grade debt obligations, known as “junk bonds”, have a higher risk of default and tend to be less liquid than higher-rated securities. Adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in the junk bond category than in higher-rated categories.
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REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Foreign investment risk. The fund faces the risks inherent in foreign investing. Adverse political, economic or social developments could undermine the value of the fund’s investments or prevent the fund from realizing their full value. Financial reporting standards for companies based in foreign markets differ from those in the U.S. Additionally, foreign securities markets generally are smaller and less liquid than U.S. markets. To the extent that the fund invests in non-U.S. dollar denominated foreign securities, changes in currency exchange rates may affect the U.S. dollar value of foreign securities or the income or gain received on these securities.
Foreign governments may restrict investment by foreigners, limit withdrawal of trading profit or currency from the country, restrict currency exchange or seize foreign investments. The investments of the fund may also be subject to foreign withholding taxes. Foreign brokerage commissions and other fees are generally higher than those for U.S. investments, and the transactions and custody of foreign assets may involve delays in payment, delivery or recovery of money or investments.
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Foreign Investment risk: Foreign markets are subject to the risk of change in currency or exchange rates, economic and political trends in foreign countries, less liquidity, more volatility, more difficulty in enforcing contractual obligations, higher transaction costs and less government supervision and other reporting regulations and requirements than domestic markets.
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REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Foreign markets can have liquidity risks beyond those typical of U.S. markets. Because foreign exchanges generally are smaller and less liquid than U.S. exchanges, buying and selling foreign investments can be more difficult and costly. Relatively small transactions can sometimes materially affect the price and availability of securities. In certain situations, it may become virtually impossible to sell an investment in an orderly fashion at a price that approaches portfolio management’s estimate of its value. For the same reason, it may at times be difficult to value the fund’s foreign investments.
|
|
Emerging markets risk. Foreign investment risks are greater in emerging markets than in developed markets. Investments in emerging markets are often considered speculative.
Emerging market countries typically have economic and political systems that are less developed, and can be expected to be less stable than developed markets. For example, the economies of such countries can be subject to rapid and unpredictable rates of inflation or deflation.
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Market risk. The risk that prices of securities will go down because of the interplay of market forces may affect a single issuer, industry or sector of the economy or may affect the market as a whole.
|
REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Derivatives risk. Risks associated with derivatives include the risk that the derivative is not well correlated with the security, index or currency to which it relates; the risk that derivatives may result in losses or missed opportunities; the risk that the fund will be unable to sell the derivative because of an illiquid secondary market; the risk that a counterparty is unwilling or unable to meet its obligation; and the risk that the derivative transaction could expose the fund to the effects of leverage, which could increase the fund’s exposure to the market and magnify potential losses.
There is no guarantee that derivatives, to the extent employed, will have the intended effect, and their use could cause lower returns or even losses to the fund. The use of derivatives by the fund to hedge risk may reduce the opportunity for gain by offsetting the positive effect of favorable price movements.
|
Mortgage risk. The duration of mortgage-related securities tends to be inversely related to changes in interest rates. As interest rates rise, the duration of mortgage-related securities extends and as interest rates fall, mortgage-related securities are prepaid at a faster rate. Because of interest rate changes, it is not possible to predict the realized yield or average life of a mortgage-backed security. Mortgage-backed securities issued by private corporations generally have more credit risk than securities issued by U.S. Government agencies.
|
Counterparty risk. A financial institution or other counterparty with whom the fund does business, or that underwrites, distributes or guarantees any investments or contracts that the fund owns or is otherwise exposed to, may decline in financial health and become unable to honor its commitments, which could cause losses for the fund or could delay the return or delivery of collateral or other assets to the fund.
|
Corporate Debt risk. In periods of economic uncertainty, investors may favor U.S. government debt securities over debt securities of corporate issuers, in which case the value of corporate debt securities would decline in relation to the value of U.S. government debt securities.
|
REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Pricing risk. If market conditions make it difficult to value some investments, the fund may value these investments using more subjective methods, such as fair value pricing. In such cases, the value determined for an investment could be different than the value realized upon such investment’s sale. As a result, investors could pay more than the market value when buying fund shares or receive less than the market value when selling fund shares.
Secondary markets may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods, which may prevent the fund from being able to realize full value and thus sell a security for its full valuation. This could cause a material decline in the fund’s net asset value.
|
Call risk. When interest rates decline, an issuer may have an option to call the securities before maturity. This would result in reduced income.
|
Security selection risk. The securities in the fund’s portfolio may decline in value. Portfolio management could be wrong in its analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters.
|
Lower rated investment-grade debt securities. Junk bonds are subject to a greater market risk than higher rated debt securities, with adverse economic conditions or changing circumstances more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher-rated categories.
|
REPLACED BOND FUND
|
REPLACEMENT BOND FUND
|
DWS Bond VIP Fund
|
Mutual of America Bond Fund
|
Principal Investment Risks | Principal Investment Risks |
Liquidity risk. In certain situations, it may be difficult or impossible to sell an investment in an orderly fashion at an acceptable price.
This risk can be ongoing for any security that does not trade actively or in large volumes, for any security that trades primarily on smaller markets, and for investments that typically trade only among a limited number of large investors (such as certain types of derivatives or restricted securities). In unusual market conditions, even normally liquid securities may be affected by a degree of liquidity risk. This may affect only certain securities or an overall securities market.
|
Zero Coupon risk. Zero coupon securities and discount notes do not pay interest, and they may fluctuate more in market value and be more difficult for the Fund to resell during periods of interest rate changes than comparable securities that pay interest in cash at regular intervals. For example, a fund may lose a portion of the principal amount of a zero coupon security if it sells the security after an increase in interest rates.
Zero coupon securities and discount notes may fluctuate more in market value and be more difficult for a Fund to resell during periods of interest rate changes in the market place than comparable securities that pay interest in cash at regular intervals. The market values of outstanding debt securities generally decline when interest rates are rising, and during such periods a Fund may lose more if it sells zero coupon securities prior to their maturity date or expected redemption date than if it sells comparable interest-bearing securities. In general, the longer the remaining term to maturity or expected redemption of a security, the grater the impact on market value from rising interest rates.
|
Securities lending risk. Any decline in the value of a portfolio security that occurs while the security is out on loan is borne by the fund and will adversely affect performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while holding the security.
|
General risk: The Fund may not achieve its investment objective. An investment in the Fund could decline in value, and an investor could lose money by investing in the Fund.
|
C.
|
Comparison of Advisory Fees, Other Expenses, and Performance
|
Replaced International Fund
|
Replacement International Fund
|
|
DWS International VIP Fund
|
Vanguard International Fund
|
|
Year ended 12/31/11
|
Year ended 12/31/11
|
|
Advisory Fees
|
0.79%
|
0.46%
|
Distribution/Service (12b-1) Fee
|
0.00%
|
0.00%
|
Other Expenses
|
0.21%
|
0.05%
|
Total Annual Fund Operating Expenses
|
1.00%
|
0.51%
|
Less Contractual Fee Waivers and Expense Reimbursements
|
0.00%
|
0.00%
|
Net Annual Fund Operating Expenses
|
1.00%
|
0.51%
|
Portfolio Turnover Rate
|
174%
|
33%
|
DWS International VIP Fund
|
Net Assets at End of Period (rounded to nearest million)
|
Expense Ratio
|
Total Investment Return
|
2009
|
$344,000,000
|
0.94%
|
33.52%
|
2010
|
$288,000,000
|
0.99%
|
1.62%
|
2011
|
$211,000,000
|
1.00%
|
(16.67)%
|
Vanguard International Fund
|
Net Assets at End of Period (rounded to nearest million)
|
Expense Ratio
|
Total Investment Return
|
2009
|
$1,627,000,000
|
0.52%
|
42.57%
|
2010
|
$1,789,000,000
|
0.51%
|
15.79%
|
2011
|
$1,507,000,000
|
0.51%
|
(13.54)%
|
Fund
|
1 year
|
5 year
|
10 year
|
DWS International VIP Fund
|
(16.67)%
|
(7.67)%
|
1.78%
|
Vanguard International Fund
|
(13.54)%
|
(1.57)%
|
6.14%
|
Replaced Bond Fund
|
Replacement Bond Fund
|
|
DWS Bond Fund
|
Mutual of America Bond Fund
|
|
Year ended 12/31/11
|
Year ended 12/31/11
|
|
Advisory Fees
|
0.39%
|
0.40%3
|
Distribution/Service (12b-1) Fee
|
0.00%
|
0.00%
|
Other Expenses
|
0.23%
|
0.15%
|
Total Annual Fund Operating Expenses
|
0.62%
|
0.55%
|
Less Contractual Fee Waivers and Expense Reimbursements
|
0.00%
|
0.00%
|
Net Annual Fund Operating Expenses
|
0.62%
|
0.55%
|
Portfolio Turnover
|
219%
|
30%
|
DWS Bond Fund
|
Net Assets at End of Period (rounded to nearest million)
|
Expense Ratio
|
Total Investment Return
|
2009
|
$159,000,000
|
0.59%
|
10.07%
|
2010
|
$155,000,000
|
0.59%
|
6.79%
|
2011
|
$112,000,000
|
0.62%
|
5.68%
|
Mutual of America Bond Fund
|
Net Assets at End of Period (rounded to nearest million)
|
Expense Ratio
|
Total Investment Return
|
2009
|
$488,000,000
|
0.58%
|
14.61%
|
2010
|
$597,000,000
|
0.57%
|
7.29%
|
2011
|
$635,000,000
|
0.55%
|
7.30%
|
Fund
|
1 year
|
5 year
|
10 year
|
DWS Bond Fund
|
5.68%
|
1.50%
|
3.27%
|
Mutual of America Bond Fund
|
7.30%
|
6.54%
|
5.73%
|
D.
|
Merits of the Proposed Substitution
|
1.
|
Comparison of Replacement International Fund and Replaced International Fund
|
a. Investment Objectives and Principal Investment Strategies
|
b. Principal Investment Risks
|
c. Expenses
|
d. Investment Performance and Assets
|
2.
|
Comparison of Replacement Bond Fund and Replaced Bond Fund
|
a. Investment Objectives and Principal Investment Strategies
|
b. Principal Investment Risks
|
c. Expenses
|
d. Investment Performance and Assets
|
|
E.
|
Communications with Contract Owners
|
F.
|
Implementation
|
III.
|
REQUEST FOR ORDER OF APPROVAL UNDER SECTION 26(c)
|
A.
|
Applicable Law
|
B.
|
Basis for an Order
|
IV.
|
APPLICATION FOR AN ORDER OF EXEMPTION PURSUANT TO SECTION 17(b) OF THE ACT
|
A.
|
Applicable Law
|
B.
|
Basis for an Order
|
C.
|
Specific Representations and Request for an Order
|
V.
|
COMMUNICATIONS
|
VI.
|
AUTHORIZATIONS
|
MUTUAL OF AMERICA LIFE INSURANCE COMPANY
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 3
|
||
By:
|
MUTUAL OF AMERICA LIFE INSURANCE COMPANY
|
|
/S/John R. Greed
|
||
By: John R. Greed
|
||
Title:
|
Senior Executive Vice President and Chief Financial Officer
|
|
(Seal)
|
Attest:
|
/S/ Diane M. Aramony
|
By: Diane M. Aramony
|
|
Title:
|
Executive Vice President and Secretary
|
WILTON REASSURANCE LIFE COMPANY OF NEW YORK
AMERICAN SEPARATE ACCOUNT NO. 2
AMERICAN SEPARATE ACCOUNT NO. 3
|
||
By:
|
WILTON REASSURANCE LIFE COMPANY OF NEW YORK
By: Mutual of America Life Insurance Company, authorized signatory
|
|
By:
|
||
/S/John R. Greed
|
||
By: John R. Greed
|
||
Title:
|
Senior Executive Vice President and Chief Financial Officer
|
|
(Seal)
|
Attest:
|
/S/ Diane M. Aramony
|
By: Diane M. Aramony
|
|
Title:
|
Executive Vice President and Secretary
|
By:
|
By:
|
MUTUAL OF AMERICA INVESTMENT CORPORATION
|
|
/S/John R. Greed
|
|||
By: John R. Greed
|
|||
Title:
|
Title: |
Chairman of the Board, President and Chief Executive Officer
|
|
(Seal)
|
Attest:
|
/S/ Thomas L. Martin
|
By: Thomas L. Martin
|
|
Title:
|
Executive Vice President, Deputy General Counsel and Secretary
|
/S/John R. Greed
|
|
John R. Greed
|
|
Senior Executive Vice President and Chief Financial Officer
|
/S/John R. Greed
|
|
John R. Greed
|
|
Senior Executive Vice President and Chief Financial Officer
|
/S/John R. Greed
|
|
John R. Greed
|
|
Chairman of the Board, President and Chief Executive Officer
|
|
EXHIBIT A-1
|
Resolutions of Mutual of America Life Company Authorizing the Filing of the Application
|
|
EXHIBIT A-2
|
Resolutions of Wilton Reassurance Life Company of New York Authorizing the Filing of the Application
|
|
EXHIBIT A-3
|
Resolutions of Mutual of America Investment Corporation Authorizing the Filing of the Application
|
|
Name:
|
Mark R. Sarlitto
|
|
Title:
|
Senior Vice President, General Counsel and Secretary
|
|
Name:
|
Thomas L. Martin
|
|
Title:
|
Executive Vice President, Deputy General Counsel and Secretary
|