485BPOS 1 a2169395z485bpos.txt 485BPOS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. / / Post-Effective Amendment No. 39 (File No. 333-79311) /X/ and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 40 (File No. 811-07355) /X/ (Check appropriate box or boxes) IDS LIFE VARIABLE ACCOUNT 10 -------------------------------------------------------------------------------- (Exact Name of Registrant) IDS Life Insurance Company -------------------------------------------------------------------------------- (Name of Depositor) 70100 Ameriprise Financial Center, Minneapolis, MN 55474 -------------------------------------------------------------------------------- (Address of Depositor's Principal Executive Offices) (Zip Code) Depositor's Telephone Number, including Area Code (612) 671-3678 -------------------------------------------------------------------------------- Mary Ellyn Minenko, 50607 Ameriprise Financial Center, Minneapolis, MN 55474 -------------------------------------------------------------------------------- (Name and Address of Agent for Service) It is proposed that this filing will become effective (check appropriate box) / / immediately upon filing pursuant to paragraph (b) of Rule 485 /X/ on May 1, 2006 pursuant to paragraph (b) of Rule 485 / / 60 days after filing pursuant to paragraph (a)(1) of Rule 485 / / as soon as practicable pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: / / this post-effective amendment designates a new effective date for a previously filed post-effective amendment. The prospectuses and Statement of Additional Information filed electronically herewith are not intended to supersede the prospectus and Statement of Additional Information filed with Post-Effective Amendment No. 38 to Registration Statement No. 333-79311, filed on or about April 10, 2006. PROSPECTUS MAY 1, 2006 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY(SM) INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY NEW RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 Ameriprise Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 ameriprise.com/variableannuities IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. - American Century Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Columbia Funds Variable Insurance Trust - Credit Suisse Trust - Eaton Vance Variable Trust - Fidelity(R) Variable Insurance Products - Service Class - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Neuberger Berman Advisers Management Trust - Oppenheimer Variable Account Funds - Service Shares - PIMCO Variable Insurance Trust (VIT) - Putnam Variable Trust - Class IB Shares - RiverSource(SM) Variable Portfolio Funds (previously American Express(R) Variable Portfolio Funds) - Royce Capital Fund - Third Avenue Variable Series Trust - The Universal Institutional Funds, Inc. Van Kampen Life Investment Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Please read the prospectuses carefully and keep them for future reference. The contract provides for purchase payment credits which we may reverse under certain circumstances. Surrender charges from contracts with purchase payment credits may be higher than surrender charges for contracts without such credits. The amount of the credit may be more than offset by additional surrender charges associated with the credit. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are insurance products that are complex investment vehicles. Be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the Fund prospectuses. Do not rely on any such information or representations. -------------------------------------------------------------------------------- 1 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may or may not be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 6 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 11 FINANCIAL STATEMENTS 11 THE VARIABLE ACCOUNT AND THE FUNDS 12 THE FIXED ACCOUNT 24 BUYING YOUR CONTRACT 24 CHARGES 26 VALUING YOUR INVESTMENT 30 MAKING THE MOST OF YOUR CONTRACT 31 SURRENDERS 35 TSA -- SPECIAL PROVISIONS 36 CHANGING OWNERSHIP 36 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 37 OPTIONAL BENEFITS 39 THE ANNUITY PAYOUT PERIOD 43 TAXES 45 VOTING RIGHTS 48 SUBSTITUTION OF INVESTMENTS 48 ABOUT THE SERVICE PROVIDERS 48 APPENDIX: CONDENSED FINANCIAL INFORMATION (UNAUDITED) 50 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 60
CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: The time the New York Stock Exchange (NYSE) closes (4 p.m. Eastern time unless the NYSE closes earlier). CODE: The Internal Revenue Code of 1986, as amended. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB): This is an optional benefit you can add to your contract for an additional charge. It is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an additional charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. PURCHASE PAYMENT CREDITS: An addition we make to your contract value. We base the amount of the credit on the surrender charge schedule you elect and/or total purchase payments. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Code - Roth IRAs under Section 408 A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension IRA (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and investment only plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. -------------------------------------------------------------------------------- 3 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, on which the NYSE is open, up to the close of business. At the close of business, the next valuation date begins. We calculate the accumulation unit value of each subaccount on each valuation date. If we receive your purchase payment or any transaction request (such as a transfer or surrender request) at our home office before the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the valuation date we received your payment or transaction request. On the other hand, if we receive your purchase payment or transaction request at our home office at or after the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the next valuation date. If you make a transaction request by telephone (including by fax), you must have completed your transaction by the close of business in order for us to process it using the accumulation unit value we calculate on that valuation date. If you were not able to complete your transaction before the close of business for any reason, including telephone service interruptions or delays due to high call volume, we will process your transaction using the accumulation unit value we calculate on the next valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payout of your contract value (less any applicable premium tax). TAX-DEFERRED RETIREMENT PLANS: Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use a qualified annuity to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. A qualified annuity has features other than tax deferral that may help you reach your retirement goals. In addition, the Code subjects retirement plans to required withdrawals triggered at a certain age. These mandatory withdrawals are called required minimum distributions (RMDs). RMDs may reduce the value of certain death benefits and optional riders (see "Taxes - Qualified Annuities - Required Minimum Distributions"). You should consult your tax advisor before you purchase the contract as a qualified annuity for an explanation of the potential tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our home office within the time stated on the first page of your contract. You will receive a full refund of the contract value, less the amount of any purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") We will not deduct any other charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Generally, you may allocate your purchase payments among any or all of: - the subaccounts of the variable account, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 12) - the fixed account, which earns interest at a rate that we adjust periodically. Purchase payment allocations to the fixed account may be subject to special restrictions. (p. 24) BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 24) -------------------------------------------------------------------------------- 4 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS PURCHASE PAYMENTS: MINIMUM ALLOWABLE PURCHASE PAYMENTS: If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS: $100,000 through age 85 $50,000 for ages 86 to 89 TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 31) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and income taxes (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 35) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 36) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value, except in the case of a purchase payment credit reversal. (p. 37) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 39) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet IRS requirements. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 43) TAXES: Generally, income earned on your contract value grows tax-deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) The tax treatment of qualified and nonqualified annuities differs. Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. However, Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. (p. 45) LIMITATIONS ON USE OF CONTRACTS: If mandated by applicable law, including but not limited to, federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block an owner's access to contract values or to satisfy other statutory obligations. Under these circumstances we may refuse to implement requests for transfers, surrenders, or death benefits, until instructions are received from the appropriate governmental authority or a court of competent jurisdiction. -------------------------------------------------------------------------------- 5 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE (Contingent deferred sales load as a percentage of purchase payment surrendered) The owner selects either a seven-year or ten-year surrender charge schedule at the time of application.*
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7 0 7 4 8 3 9 2 10 0
* The ten-year surrender charge schedule is not available for contracts issued in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.")
ASSUMED INVESTMENT RATE 3.50% 5.00% Qualified annuity discount rate 4.72% 6.22% Nonqualified annuity discount rate 4.92% 6.42%
THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30 (We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) OPTIONAL RIDER FEES (As a percentage of the contract value charged annually at the contract anniversary. The fee applies only if you elect the optional rider.) MAV RIDER FEE 0.15% EEB RIDER FEE 0.30% ANNUAL VARIABLE ACCOUNT EXPENSES (Total annual variable account expenses as a percentage of average daily subaccount value.) MORTALITY AND EXPENSE RISK FEE FOR NONQUALIFIED ANNUITIES 0.95% FOR QUALIFIED ANNUITIES 0.75% -------------------------------------------------------------------------------- 6 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS FOR THE LAST FISCAL YEAR. THE SECOND TABLE SHOWS THE ACTUAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS(a) (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before fee waivers and/or expense reimbursements 0.53% 5.85%
(a) Each fund deducts management fees and other expenses from fund assets. Fund assets include amounts you allocate to a particular fund. Funds may also charge 12b-1 fees that are used to finance any activity that is primarily intended to result in the sale of fund shares. Because 12b-1 fees are paid out of fund assets on an on-going basis, you may pay more if you select subaccounts investing in funds that have adopted 12b-1 plans than if you select subaccounts investing in funds that have not adopted 12b-1 plans. The fund or the fund's affiliates may pay us and/or our affiliates for promoting and supporting the offer, sale and servicing of fund shares. In addition, the fund's distributor and/or investment adviser, transfer agent or their affiliates may pay us and/or our affiliates for various services we or our affiliates provide. The amount of these payments will vary by fund and may be significant. See "The Variable Account and the Funds" for additional information, including potential conflicts of interest these payments may create. For a more complete description of each fund's fees and expenses and important disclosure regarding payments the fund and/or its affiliates make, please review the fund's prospectus and SAI. TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AIM V.I. Capital Appreciation Fund, Series I Shares 0.61% --% 0.29% 0.90%(1),(2) AIM V.I. Capital Development Fund, Series I Shares 0.75 -- 0.34 1.09(1),(3) AIM V.I. Global Health Care Fund, Series II Shares 0.75 0.25 0.33 1.33(1),(3) AllianceBernstein VPS Global Technology Portfolio (Class B) 0.75 0.25 0.17 1.17(4) AllianceBernstein VPS Growth and Income Portfolio (Class B) 0.55 0.25 0.05 0.85(4) AllianceBernstein VPS International Value Portfolio (Class B) 0.75 0.25 0.12 1.12(4) American Century VP International, Class I 1.23 -- -- 1.23(4) American Century VP Ultra(R), Class II 0.90 0.25 0.01 1.16(4) American Century VP Value, Class I 0.93 -- -- 0.93(4) Calvert Variable Series, Inc. Social Balanced Portfolio 0.70 -- 0.22 0.92(5) Columbia Marsico Growth Fund, Variable Series 0.74 0.25 0.34 1.33(6) Columbia Marsico International Opportunities Fund, Variable Series 0.80 0.25 0.43 1.48(4) Credit Suisse Trust - Commodity Return Strategy Portfolio 0.50 0.25 0.55 1.30(7) Credit Suisse Trust - Mid-Cap Growth Portfolio 0.90 -- 0.47 1.37(7) Eaton Vance VT Floating-Rate Income Fund 0.58 -- 0.69 1.27(4) Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2 0.57 0.25 0.09 0.91(8) Fidelity(R) VIP Growth & Income Portfolio Service Class 0.47 0.10 0.12 0.69(8) Fidelity(R) VIP Mid Cap Portfolio Service Class 0.57 0.10 0.12 0.79(8) Fidelity(R) VIP Overseas Portfolio Service Class 0.72 0.10 0.17 0.99(8) FTVIPT Franklin Real Estate Fund - Class 2 0.47 0.25 0.02 0.74(9),(10) FTVIPT Franklin Small Cap Value Securities Fund - Class 2 0.52 0.25 0.17 0.94(10),(11) FTVIPT Templeton Foreign Securities Fund - Class 2 0.65 0.25 0.17 1.07(11) Goldman Sachs VIT Mid Cap Value Fund 0.80 -- 0.07 0.87(12) Goldman Sachs VIT Structured Small Cap Equity Fund 0.75 -- 0.18 0.93(12) (previously Goldman Sachs VIT CORE(SM) Small Cap Equity Fund) Goldman Sachs VIT Structured U.S. Equity Fund 0.65 -- 0.09 0.74(12) (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) Janus Aspen Series Global Technology Portfolio: Service Shares 0.64 0.25 0.09 0.98(13) Janus Aspen Series International Growth Portfolio: Service Shares 0.64 0.25 0.06 0.95(13) Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 0.64 0.25 0.03 0.92(13)
-------------------------------------------------------------------------------- 7 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Lazard Retirement International Equity Portfolio 0.75% 0.25% 0.21% 1.21%(14) MFS(R) Investors Growth Stock Series - Service Class 0.75 0.25 0.15 1.15(15),(16) MFS(R) New Discovery Series - Service Class 0.90 0.25 0.16 1.31(15),(16) MFS(R) Utilities Series - Service Class 0.75 0.25 0.15 1.15(15),(16) Neuberger Berman Advisers Management Trust International Portfolio (Class S) 1.15 0.25 4.45 5.85(17),(18) Oppenheimer Global Securities Fund/VA, Service Shares 0.63 0.25 0.04 0.92(19) Oppenheimer Main Street Small Cap Fund/VA, Service Shares 0.74 0.25 0.05 1.04(19) Oppenheimer Strategic Bond Fund/VA, Service Shares 0.69 0.25 0.02 0.96(19) PIMCO VIT All Asset Portfolio, Advisor Share Class 0.20 0.25 0.88 1.33(20) Putnam VT International New Opportunities Fund - Class IB Shares 1.00 0.25 0.25 1.50(21) Putnam VT Vista Fund - Class IB Shares 0.65 0.25 0.09 0.99(4) RiverSource(SM) Variable Portfolio - Balanced Fund 0.54 0.13 0.14 0.81(22),(23),(24) (previously AXP(R) Variable Portfolio - Managed Fund) RiverSource(SM) Variable Portfolio - Cash Management Fund 0.33 0.13 0.15 0.61(22),(23) (previously AXP(R) Variable Portfolio - Cash Management Fund) RiverSource(SM) Variable Portfolio - Core Bond Fund 0.48 0.13 0.33 0.94(22),(23),(25) (previously AXP(R) Variable Portfolio - Core Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.47 0.13 0.17 0.77(22),(23) (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.68 0.13 0.16 0.97(22),(23),(24) (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.05 0.13 0.34 1.52(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RiverSource(SM) Variable Portfolio - Fundamental Value Fund 0.73 0.13 0.16 1.02(23),((2)(6)) RiverSource(SM) Variable Portfolio - Global Bond Fund 0.71 0.13 0.20 1.04(22),(23) (previously AXP(R) Variable Portfolio - Global Bond Fund) RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.44 0.13 0.33 0.90(22),(23),(25) (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RiverSource(SM) Variable Portfolio - Growth Fund 0.66 0.13 0.17 0.96(22),(23),(24) (previously AXP(R) Variable Portfolio - Growth Fund) RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.59 0.13 0.16 0.88(22),(23) (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.61 0.13 0.34 1.08(22),(23),(25) (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.72 0.13 0.20 1.05(22),(23),(24) (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.56 0.13 0.14 0.83(22),(23),(24) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.60 0.13 1.86 2.59(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.63 0.13 0.17 0.93(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Equity Select Fund) RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.70 0.13 2.18 3.01(22),(23),(25) (previously AXP(R) Variable Portfolio - Mid Cap Value Fund) RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.22 0.13 0.18 0.53(22),(23),(25) (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RiverSource(SM) Variable Portfolio - Select Value Fund 0.77 0.13 0.30 1.20(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Select Value Fund)
-------------------------------------------------------------------------------- 8 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.48% 0.13% 0.17% 0.78%(22),(23) (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.80 0.13 0.22 1.15(22),(23),(24) (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.92 0.13 0.24 1.29(22),(23),(24),(25) Royce Micro-Cap Portfolio 1.25 -- 0.07 1.32(4) Third Avenue Value Portfolio 0.90 -- 0.29 1.19(4) Van Kampen Life Investment Trust Comstock Portfolio Class II Shares 0.56 0.25 0.03 0.84(4) Van Kampen UIF Global Real Estate Portfolio Class II Shares 0.85 0.35 0.62 1.82((2)(7)) Van Kampen UIF Mid Cap Growth Portfolio Class II Shares 0.75 0.35 0.34 1.44((2)(7)) Wanger International Small Cap 0.95 -- 0.18 1.13(4) Wanger U.S. Smaller Companies 0.90 -- 0.05 0.95(4) Wells Fargo Advantage VT Asset Allocation Fund 0.55 0.25 0.24 1.04((2)(8)) Wells Fargo Advantage VT International Core Fund 0.75 0.25 0.41 1.41((2)(8)) Wells Fargo Advantage VT Small Cap Growth Fund 0.75 0.25 0.24 1.24((2)(8))
(1) Figures shown in the table are for the year ended Dec. 31, 2005 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. The Fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares and Series II shares to the extent necessary to limit total annual expenses of Series I shares to 1.30% and Series II shares to 1.45% of average daily nets assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual expenses to exceed the limit stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganizations as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The expense limitation is in effect through April 30, 2007. (2) As a result of a reorganization of another Fund into the Fund, which will occur on or about May 1, 2006 for AIM V.I. Capital Appreciation Fund Series I Shares, the "Gross total annual expenses" have been restated to reflect such reorganization. (3) Effective Jan. 1, 2005 through June 30, 2006, the advisor has contractually agreed to waive a portion of its advisory fees. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2005. (5) Expenses are based on expenses for the Portfolio's most recent fiscal year. Management fees include the subadvisory fee paid by the Advisor, to the Subadvisors, and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of Calvert. (6) The Fund's Distributor has voluntarily agreed to waive 0.25% of its 12b-1 fees. (7) Fee waivers and/or expense reimbursement may reduce expenses for the Portfolio, without which performance would be lower. Waivers and/or expense reimbursements may be discontinued at any time. After fee waivers and expense reimbursements net expenses would be 0.95% for Credit Suisse Trust - Commodity Return Strategy Portfolio and 1.25% for Credit Suisse Trust - Mid-Cap Growth Portfolio. In addition, for the period beginning March 1, 2006 through Feb. 28, 2007 Credit Suisse Asset Management, LLC will voluntarily waive an additional 0.05% of its advisory fee for Credit Suisse Trust - Mid-Cap Growth Portfolio. (8) A portion of the brokerage commissions that the Fund pays may be reimbursed and used to reduce the Fund's expenses. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances are used to reduce the Fund's custodian expenses. Including these reductions, the total class operating expenses would have been 0.89% for Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2, 0.64% for Fidelity(R) VIP Growth & Income Portfolio Service Class, 0.74% for Fidelity(R) VIP Mid Cap Portfolio Service Class and 0.92% for Fidelity(R) VIP Overseas Portfolio Service Class. These offsets may be discontinued at any time. (9) The Fund's administration fee is paid indirectly through the management fee. (10) While the maximum amount payable under the Fund's class rule 12b-1 plan is 0.35% per year of the Fund's class average annual net assets, the Fund's Board of Trustees has set the current rate at 0.25% per year. (11) The Fund's manager has agreed in advance to reduce its fees with respect to assets invested by the Fund in a Franklin Templeton Money Market Fund. This reduction is required by the Fund's Board of Trustees and an exemptive order by the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.05%) and 0.89%, respectively for FTVIPT Franklin Small Cap Value Securities Fund - Class 2 and (0.05%) and 1.02%, respectively for FTVIPT Templeton Foreign Securities Fund - Class 2. (12) The Fund's annual operating expenses are based on actual expenses for the fiscal year ended Dec. 31, 2005. "Other expenses" include transfer agency fees and expenses equal on an annualized basis to 0.04% of the average daily net assets of the Fund plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to limit "Other expenses" (excluding management fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation and indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, 0.11% of the Fund's average daily net assets for Goldman Sachs VIT Structured Small Cap Equity Fund, 0.16% of the Fund's average daily net assets for Goldman Sachs VIT Structured U.S. Equity Fund and 0.25% of the Fund's average daily net assets for Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser may cease or modify the expense limitations at its discretion at anytime. If this occurs, other expenses and total annual operating expenses may increase without shareholder approval. In addition, for Goldman Sachs VIT Structured Small Cap Equity Fund, effective July 1, 2005, the Investment Adviser has voluntarily agreed to waive a portion of its management fee equal to 0.02% of the Fund's average daily net assets. (13) Janus Capital has contractually agreed to waive certain Portfolio's total annual operating expenses (excluding the distribution and shareholder servicing fee, the administrative services fee applicable to certain Portfolios, brokerage commissions, interest, taxes and extraordinary expenses) to certain limits until May 1, 2007. Because the 12b-1 fee is charged as an ongoing fee, over time the fee will increase the cost of your investment and may cost you more than paying other types of sales charges. -------------------------------------------------------------------------------- 9 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS (14) The Investment Manager has contractually agreed to waive its fees and, if necessary, reimburse the Portfolio through Dec. 31, 2006, to the extent "Gross total annual expenses" exceed 1.25% of average daily net assets for Lazard Retirement International Equity Portfolio. (15) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sale and distribution of service class shares (these fees are referred to as distribution fees). (16) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent, and may have entered into brokerage arrangements, that reduced or recaptured series' expenses. Any such expense reductions are not reflected in the table. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower. (17) Neuberger Berman Management Inc. ("NBMI") has undertaken through Dec. 31, 2009 to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Portfolio. The expense limitation arrangements for the Portfolio is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the Portfolio to exceed its limitation described above. (18) Class S shares of the International Portfolio have a redemption fee of 1.00% for exchanges or redemptions on shares held less than 60 days. The redemption fee is paid to the Portfolio. (19) Expenses may vary in future years. "Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to 0.35% per fiscal year. That undertaking may be amended or withdrawn at any time. For the Fund's fiscal year ended Dec. 31, 2005, the transfer agent fees did not exceed the expense limitation described above. (20) "Other expense" also includes Underlying Fund expenses. Underlying Fund Expenses for the Portfolio are estimated based upon an allocation of the Portfolio's assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. Underlying Fund expenses will vary with changes in the expenses of the Underlying Funds, as well as allocation of the Portfolio's assets, and may be higher or lower than those shown above. For a listing of the expenses associated with each Underlying Fund for the most recent fiscal year, please see "Fund of Funds Fees - Annual Underlying Fund Expenses" in the Portfolio's prospectus. PIMCO has contractually agreed, for the Portfolio's current fiscal year (12/31), to reduce its Advisory Fee to the extent that the Underlying Fund Expenses attributable to Advisory and Administrative Fees exceed 0.60% of the total assets invested in Underlying Funds. PIMCO may recoup these waivers in future periods, not exceeding three years, provided total expenses, including such recoupment, do not exceed the annual expense limit. (21) Putnam's Management has a contractual agreement to limit expenses through Dec. 31, 2006. After fee waivers and expense reimbursements net expenses would be 1.46% for Putnam VT International New Opportunities Fund - Class IB Shares. (22) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2005, adjusted to reflect current fees. (23) The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940. The Fund pays IDS Life Insurance Company an annual fee of up to 0.125% of average daily net assets as payment for distributing its shares and providing shareholder services. Because this fee is paid out of the Fund's assets on an on-going basis, over time this fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (24) Management fees include the impact of a performance incentive adjustment fee that decreased the management fee by 0.05% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.04% for RiverSource(SM) Variable Portfolio - International Opportunity Fund, 0.02% for RiverSource(SM) Variable Portfolio - Large Cap Equity Fund, 0.07% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 0.01% for RiverSource(SM) Variable Portfolio - Select Value Fund and 0.04% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. Management fees include the impact of a performance incentive adjustment fee that increased the management fee by 0.03% for RiverSource(SM) Variable Portfolio - Balanced Fund, 0.08% for RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund, 0.06% for RiverSource(SM) Variable Portfolio - Growth Fund, 0.002% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund and 0.01% for RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund. (25) RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2006, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed: 0.83% for RiverSource(SM) Variable Portfolio - Core Bond Fund, 1.75% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.72% for RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund, 0.99% for RiverSource(SM) Variable Portfolio - Income Opportunities Fund, 1.05% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund, 1.00% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 1.08% for RiverSource(SM) Variable Portfolio - Mid Cap Value Fund, 0.495% for RiverSource(SM) Variable Portfolio - S&P 500 Index Fund, 1.15% for RiverSource(SM) Variable Portfolio - Select Value Fund and 1.25% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. (26) The Fund's expense figures are based on estimated expenses, before fee waivers and expense reimbursements. RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed 1.07% for RiverSource(SM) Variable Portfolio - Fundamental Value Fund. (27) The fees disclosed reflect gross ratios prior to any voluntary waivers/reimbursements of expenses by the adviser. The adviser has voluntarily agreed to waive a portion of or all of its management fee and/or reimburse expenses to the extent necessary so that total annual operating expenses, excluding certain investment related expense such as foreign country tax expense and interest expense on borrowing, do not exceed 1.35%. The adviser may terminate these voluntary waivers at any time at its sole discretion. Additionally, the distributor has agreed to voluntarily waive a portion of the 12b-1 fee for Class II shares. The distributor may terminate these voluntary waivers at any time at its sole discretion. After these fee waivers/reimbursements, net expenses would have been 1.40% for Van Kampen UIF Global Real Estate Portfolio Class II Shares and 1.15% for Van Kampen UIF Mid Cap Growth Portfolio Class II Shares. In addition, Van Kampen UIF Global Real Estate Portfolio Class II Shares was not operational in 2005. Figures in the table are based on estimated assuming the average daily net assets of the Portfolio were not more than $75,000,000. (28) The Funds' investment adviser has implemented a break point schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. Other expenses for Wells Fargo Advantage VT Opportunity Fund are based on estimates for the current fiscal year. The adviser has committed through April 30, 2007 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio. After fee waivers and expense reimbursements net expenses would be 1.00% for Wells Fargo Advantage VT Asset Allocation Fund, 1.00% for Wells Fargo Advantage VT International Core Fund and 1.20% for Wells Fargo Advantage VT Small Cap Growth Fund. Please refer to the Fund's prospectus for additional details. -------------------------------------------------------------------------------- 10 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. These examples assume the most expensive combination of contract features and benefits and the maximum fees and expense of any of the funds for the last fiscal year. They assume that you select both the optional MAV and EEB. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $1,546.92 $2,885.88 $4,154.66 $6,691.61 $746.92 $2,185.88 $3,554.66 $6,691.61 RAVA with a seven-year surrender charge schedule 1,446.92 2,785.88 3,954.66 6,691.61 746.92 2,185.88 3,554.66 6,691.61 QUALIFIED ANNUITY RAVA with a ten-year surrender charge schedule $1,526.42 $2,830.28 $4,071.30 $6,567.01 $726.42 $2,130.28 $3,471.30 $6,567.01 RAVA with a seven-year surrender charge schedule 1,426.42 2,730.28 3,871.30 6,567.01 726.42 2,130.28 3,471.30 6,567.01
MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds for the last fiscal year. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA with a ten-year surrender charge schedule $955.49 $1,182.73 $1,432.91 $1,819.52 $155.49 $ 482.73 $ 832.91 $1,819.52 RAVA with a seven-year surrender charge schedule 855.49 1,082.73 1,232.91 1,819.52 155.49 482.73 832.91 1,819.52 QUALIFIED ANNUITY RAVA with a ten-year surrender charge schedule $934.99 $1,119.94 $1,326.07 $1,594.68 $134.99 $ 419.94 $ 726.07 $1,594.68 RAVA with a seven-year surrender charge schedule 834.99 1,019.94 1,126.07 1,594.68 134.99 419.94 726.07 1,594.68
* In these examples, the $30 contract administrative charge is approximated as a .037% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to the contract by the total average net assets that are attributable to the contract. CONDENSED FINANCIAL INFORMATION (UNAUDITED) You can find unaudited condensed financial information of the subaccounts in the Appendix. We do not include any condensed financial information for subaccounts that are new and did not have any activity as of the financial statements date. FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. The SAI does not include audited financial statements for subaccounts that are new and have no activity as of the financial statement date. -------------------------------------------------------------------------------- 11 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS THE VARIABLE ACCOUNT AND THE FUNDS THE VARIABLE ACCOUNT: The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. Although the Internal Revenue Service (IRS) has issued some guidance on investor control, the U.S. Treasury and the IRS may continue to examine this aspect of variable contracts and provide additional guidance on investor control. Their concern involves how many investment choices (subaccounts) may be offered by an insurance company and how many exchanges among those subaccounts may be allowed before the contract owner would be currently taxed on income earned within the contract. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FUNDS: The contract currently offers subaccounts investing in shares of the funds listed in the table below. - INVESTMENT OBJECTIVES: The investment managers and advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. - FUND NAME AND MANAGEMENT: A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. - ELIGIBLE PURCHASERS: All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. The funds are not available to the public (see "Fund name and management" above). Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future for tax, regulatory or other reasons, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although we and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of each fund will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. Each fund intends to comply with the diversification requirements under Section 817(h) of the Code. - REVENUE WE RECEIVE FROM THE FUNDS MAY CREATE POTENTIAL CONFLICTS OF INTEREST: We seek to provide a broad array of underlying funds taking into account the fees and charges imposed by each fund and the contract charges we impose. We select the underlying funds in which the subaccounts initially invest and upon any substitution (see "Substitution of Investments"). We also make all decisions regarding which funds to retain in a contract, which funds to add to a contract and which funds will no longer be offered in a contract. In making these decisions, we may consider various objective and subjective factors. Objective factors include, but are not limited to, fund performance, fund expenses, classes of fund shares available, size of the fund, and investment objectives and investing style of the fund. Subjective factors include, but are not limited to, investment sub-styles and process, management skill and history at other funds, and portfolio concentration and sector weightings. We also consider the levels and types of revenue a fund, its distributor, investment adviser, subadviser, transfer agent or their affiliates pay us and our affiliates. This revenue includes, but is not limited to, compensation for administrative services provided with respect to the fund and support of marketing and distribution expenses incurred with respect to the fund. -------------------------------------------------------------------------------- 12 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS We and/or our affiliates receive from each of the funds, or the funds' affiliates, varying levels and types of revenue. The amount of this revenue is most often based on a percentage of average daily net assets invested in the fund. For example, the revenue we receive from affiliates of funds other than the RiverSource Variable Portfolio Funds (unaffiliated funds) currently ranges up to 0.50% of the average daily net assets invested in the fund through this contract and other contracts we or our affiliates issue. In some cases, this revenue may be based, in part, on sales one of our affiliates makes of other securities including, but not limited to, publicly-traded retail mutual funds and/or the average daily net assets resulting from these sales. We or our affiliates may also receive revenue which is not based on a percentage of average daily net assets. The amount of this revenue varies by fund, may be significant and may create potential conflicts of interest. The greatest amount and percentage of revenue we and our affiliates receive comes from assets allocated to subaccounts investing in the RiverSource Variable Portfolio Funds (affiliated funds) that are managed by RiverSource Investments, LLC (RiverSource Investments), one of our affiliates. Employee compensation and operating goals at all levels are tied to the success of Ameriprise Financial, Inc. and its affiliates, including us. Certain employees may receive higher compensation and other benefits based, in part, on contract values that are invested in the RiverSource Variable Portfolio Funds. These revenue payments may also influence recommendations your sales representative makes regarding whether you should invest in the contract, and whether you should allocate purchase payments or contract value to a subaccount that invests in a particular fund (see "About the Service Providers"). The revenue we receive from a fund or its affiliates is in addition to revenue we receive from the charges you pay when buying, owning and surrendering the contract (see "Expense Summary"). However, the revenue we receive from a fund or its affiliates may come, at least in part, from the fund's fees and expenses you pay indirectly when you allocate contract value to the subaccount that invests in that fund. Please see the SAI for a table that ranks the unaffiliated funds according to total dollar amounts they and their affiliates paid to us and/or our affiliates in 2005. - WHY REVENUES ARE PAID TO US: In accordance with applicable laws, regulations and the terms of the agreements under which such revenue is paid, we or our affiliates may receive this revenue for various purposes including, but not limited to: - Compensating, training and educating sales representatives who sell the contracts. - Granting access to our employees whose job it is to promote sales of the contracts by authorized selling firms and their sales representatives, and granting access to sales representatives of our affiliated selling firms. - Activities or services we or our affiliates provide that assist in the promotion and distribution of the contracts including promoting the funds available under the contracts to prospective and existing contract owners, authorized selling firms and sales representatives. - Providing sub-transfer agency and shareholder servicing to contract owners. - Promoting, including and/or retaining the fund's investment portfolios as underlying investment options in the contracts. - Advertising, printing and mailing sales literature, and printing and distributing prospectuses and reports. - Furnishing personal services to contract owners, including education of contract owners, answering routine inquiries regarding a fund, maintaining accounts or providing such other services eligible for service fees as defined under the rules of the National Association of Securities Dealers, Inc. (NASD). - Subaccounting, transaction processing, recordkeeping and administration. - SOURCES OF REVENUE RECEIVED FROM AFFILIATED FUNDS: The affiliated funds are managed by RiverSource Investments. The sources of revenue we receive from these affiliated funds, or from affiliates of these funds, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser and transfer agent or an affiliate of these. The revenue resulting from these sources may be based either on a percentage of average daily net assets of the fund or on the actual cost of certain services we provide with respect to the fund. We may receive this revenue either in the form of a cash payment or it may be allocated to us. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. - SOURCES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS: The unaffiliated funds are not managed by an affiliate of ours. The sources of revenue we receive from these unaffiliated funds, or the funds' affiliates, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser, subadviser, transfer agent or an affiliate of these and assets of the fund's distributor or an affiliate. The revenue resulting from these sources usually is based on a percentage of average daily net assets of the fund but there may be other types of payment arrangements. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. -------------------------------------------------------------------------------- 13 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS YOU MAY ALLOCATE PURCHASE PAYMENTS AND TRANSFERS TO ANY OR ALL OF THE SUBACCOUNTS OF THE VARIABLE ACCOUNT THAT INVEST IN SHARES OF THE FOLLOWING FUNDS:
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Capital Growth of capital. Invests principally in common stocks of A I M Advisors, Inc. Appreciation Fund, companies likely to benefit from new or innovative products, Series I Shares services or processes as well as those with above-average growth and excellent prospects for future growth. The fund can invest up to 25% of its total assets in foreign securities that involve risks not associated with investing solely in the United States. AIM V.I. Capital Long-term growth of capital. Invests primarily in securities A I M Advisors, Inc. Development Fund, (including common stocks, convertible securities and bonds) of Series I Shares small- and medium-sized companies. The Fund may invest up to 25% of its total assets in foreign securities. AIM V.I. Global Capital growth. The fund seeks to meet its objective by A I M Advisors, Inc. Health Care Fund, investing, normally, at least 80% of its assets in securities of Series II Shares health care industry companies. The fund may invest up to 20% of its total assets in companies located in developing countries, i.e., those countries that are in the initial stages of their industrial cycles. The fund may also invest up to 5% of its total assets in lower-quality debt securities, i.e., junk bonds. AllianceBernstein VPS Long-term growth of capital. The Fund invests at least 80% of AllianceBernstein L.P. Global Technology its net assets in securities of companies that use technology Portfolio (Class B) extensively in the development of new or improved products or processes. Invests in a global portfolio of securities of U.S. and foreign companies selected for their growth potential. AllianceBernstein VPS Long-term growth of capital. Invests primarily in AllianceBernstein L.P. Growth and Income dividend-paying common stocks of large, well-established, "blue Portfolio (Class B) chip" companies. AllianceBernstein VPS Long-term growth of capital. Invests primarily in a diversified AllianceBernstein L.P. International Value portfolio of equity securities of established companies selected Portfolio (Class B) from more than 40 industries and from more than 40 developed and emerging market countries. American Century VP Capital growth, with income as a secondary objective. Invests American Century Global Investment International, Class I primarily in stocks of growing foreign companies in developed Management, Inc. countries. American Century VP Long-term capital growth. Invests primarily in U.S. companies, American Century Investment Ultra(R), Class II but there is no limit on the amount of assets the Fund can Management, Inc. invest in foreign companies. American Century VP Capital growth, with income as a secondary objective. Invests American Century Investment Value, Class I primarily in stocks of companies that management believes to be Management, Inc. undervalued at the time of purchase. Calvert Variable Income and capital growth. Invests primarily in stocks, bonds Calvert Asset Management Company, Series, Inc. Social and money market instruments which offer income and capital Inc. (CAMCO), investment adviser. Balanced Portfolio growth opportunity and which satisfy the investment and social SsgA Funds Management, Inc. and New criteria. Amsterdam Partners, LLP are the investment subadvisers.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Columbia Marsico Growth Long-term growth of capital. The Fund invests primarily in Columbia Management Advisors, LLC Fund, Variable Series equity securities of large-capitalization companies that are (advisor); Marsico Capital selected for their growth potential. It generally holds a core Management, LLC (sub-advisor) position of between 35 and 50 common stocks. It may hold up to 25% of its assets in foreign securities. Columbia Marsico Long-term growth of capital. The Fund normally invests at least Columbia Management Advisors, LLC International 65% of its assets in common stocks of foreign companies. While (advisor); Marsico Capital Opportunities Fund, the Fund may invest in companies of any size, it focuses on Management, LLC (sub-advisor) Variable Series large companies. These companies are selected for their long-term growth potential. The Fund normally invests in issuers from at least three different countries not including the United States and generally holds a core position of 35 to 50 common stocks. The Fund may invest in common stocks of companies operating in emerging markets. Credit Suisse Trust - Total return. Invests in commodity-linked derivative instruments Credit Suisse Asset Management, LLC Commodity Return Strategy backed by a portfolio of fixed-income securities. The portfolio Portfolio invests in commodity-linked derivative instruments, such as commodity-linked notes, swap agreements, commodity options, futures and options on futures that provide exposure to the investment returns of the commodities markets without investing directly in physical commodities. Credit Suisse Trust - Maximum capital appreciation. Invests in U.S. equity securities Credit Suisse Asset Management, LLC Mid-Cap Growth Portfolio of "mid-cap" growth companies with growth characteristics such as positive earnings and potential for accelerated growth. Eaton Vance VT High level of current income. Non-diversified mutual fund that Eaton Vance Management Floating-Rate Income Fund normally invests primarily in senior floating rate loans ("Senior Loans"). Senior Loans typically are of below investment grade quality and have below investment grade credit ratings, which ratings are associated with having high risk, speculative characteristics. Investments are actively managed, and may be bought or sold on a daily basis (although loans are generally held until repaid). The investment adviser's staff monitors the credit quality of the Fund holdings, as well as other investments that are available. Preservation of capital is considered when consistent with the Fund's objective. Fidelity(R) VIP Seeks long-term capital appreciation. Normally invests primarily Fidelity Management & Research Contrafund(R) Portfolio in common stocks. Invests in securities of companies whose value Company (FMR), investment manager; Service Class 2 it believes is not fully recognized by the public. Invests in FMR U.K. and FMR Far East, either "growth" stocks or "value" stocks or both. The fund sub-investment advisers. invests in domestic and foreign issuers. Fidelity(R) VIP Growth & Seeks high total return through a combination of current income FMR, investment manager; FMR U.K., Income Portfolio Service and capital appreciation. Normally invests a majority of assets FMR Far East, sub-investment Class in common stocks with a focus on those that pay current advisers. dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. Invests in domestic and foreign issuers. The Fund invests in either "growth" stocks or "value" stocks or both.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Fidelity(R) VIP Mid Cap Long-term growth of capital. Allocates assets across different FMR, investment manager; FMR U.K., Portfolio Service Class market sectors and maturities. Normally invests primarily in FMR Far East, sub-investment common stocks. Normally invests at least 80% of assets in advisers. securities of companies with medium market capitalizations. May invest in companies with smaller or larger market capitalizations. Invests in domestic and foreign issuers. The Fund invests in either "growth" or "value" common stocks or both. Fidelity(R) VIP Overseas Long-term growth of capital. Normally invests primarily in FMR, investment manager; FMR U.K., Portfolio Service Class common stocks of foreign securities. Normally invests at least FMR Far East, Fidelity International 80% of assets in non-U.S. securities. Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. FTVIPT Franklin Real Seeks capital appreciation, with current income as a secondary Franklin Advisers, Inc. Estate Fund - Class 2 goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. FTVIPT Franklin Small Cap Seeks long-term total return. The Fund normally invests at least Franklin Advisory Services, LLC Value Securities Fund - 80% of its net assets in investments of small capitalization Class 2 companies, and normally invests predominantly in equity securities. For this Fund, small-capitalization companies are those with market capitalization values not exceeding $2.5 billion, at the time of purchase. The Fund invests mainly in equity securities of companies that the manager believes are undervalued. FTVIPT Templeton Foreign Long-term capital growth. The Fund normally invests at least 80% Templeton Investment Counsel, LLC Securities Fund - Class 2 of its net assets in investments of issuers located outside the U.S., including those in emerging markets. Goldman Sachs VIT Mid Cap The Goldman Sachs VIT Mid Cap Value Fund seeks long-term capital Goldman Sachs Asset Management, L.P. Value Fund appreciation. The Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowings for investment purposes (measured at time of purchase) ("Net Assets") in a diversified portfolio of equity investments in mid-cap issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted basis) within the range of the market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investment. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell Midcap(R) Value Index is currently between $276 million and $14.9 billion. Although the Fund will invest primarily in publicly traded U.S. securities, it may invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and securities quoted in foreign currencies. The Fund may invest in the aggregate up to 20% of its Net Assets in companies with public stock market capitalizations outside the range of companies constituting the Russell Midcap(R) Value Index at the time of investment and in fixed-income securities, such as government, corporate and bank debt obligations.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Goldman Sachs VIT The Fund seeks long-term growth of capital. The Fund seeks this Goldman Sachs Asset Management, L.P. Structured Small Cap objective through a broadly diversified portfolio of equity Equity Fund investments in U.S. issuers. The Fund invests, under normal circumstances, at least 80% of its net assets plus any (previously Goldman Sachs borrowings for investment purposes (measured at time of VIT CORE Small Cap Equity purchase) ("Net Assets") in a broadly diversified portfolio of Fund) equity investments in small-cap U.S. issuers, including foreign issuers that are traded in the United States. However, it is CORE is a registered currently anticipated that, under normal circumstances the Fund service mark of Goldman, will invest at least 95% of its Net Assets in such equity Sachs & Co. investments. These issuers will have public stock market capitalizations (based upon shares available for trading on an unrestricted basis) similar to that of the range of the market capitalization of companies constituting the Russell 2000(R) Index at the time of investment. The Fund is not required to limit its investments to securities in the Russell 2000(R) Index. In addition, if the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell 2000(R) Index is currently between $68 million and $2.4 billion. Goldman Sachs VIT The Fund seeks long-term growth of capital and dividend income. Goldman Sachs Asset Management, L.P. Structured U.S. Equity The Fund seeks this objective through a broadly diversified Fund portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. The Fund (previously Goldman Sachs invests, under normal circumstances, at least 90% of its total VIT CORE U.S. Equity assets (not including securities lending collateral and any Fund) investment of that collateral) measured at time of purchase ("Total Assets") in a diversified portfolio of equity CORE is a registered investments in U.S. issuers, including foreign companies that service mark of Goldman, are traded in the United States. However, it is currently Sachs & Co. anticipated that, under normal circumstances, the Fund will invest at least 95% of its net assets plus any borrowings for investment purposes (measured at the time of purchase) in such equity investments. The Fund's investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Fund's expected return, while maintaining risk, style, capitalization and industry characteristics similar to the S&P 500 Index. The Fund seeks a broad representation in most major sectors of the U.S. economy and a portfolio consisting of companies with average long-term earnings growth expectations and dividend yields. The Fund is not required to limit its investments to securities in the S&P 500 Index. The Fund's investments in fixed-income securities are limited to securities that are considered cash equivalents. Janus Aspen Series Global Long-term growth of capital. Invests, under normal Janus Capital Technology Portfolio: circumstances, at least 80% of its net assets in securities of Service Shares companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital International Growth circumstances, at least 80% of its net assets in securities of Portfolio: issuers from at least five different countries, excluding the Service Shares United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. Janus Aspen Series Seeks long-term growth of capital. Invests, under normal Janus Capital Mid Cap Growth Portfolio: circumstances, at least 80% of its net assets in equity Service Shares securities of mid-sized companies whose market capitalization falls, at the time of initial purchase, in the 12-month average of the capitalization ranges of the Russell Midcap Growth Index. Lazard Retirement Long-term capital appreciation. Invests primarily in equity Lazard Asset Management, LLC International Equity securities, principally common stocks, of relatively large Portfolio non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. MFS(R) Investors Long-term growth of capital and future income. Invests at least MFS Investment Management(R) Growth Stock Series - 80% of its net assets in common stocks and related securities of Service Class companies which MFS(R) believes offer better than average prospects for long-term growth. MFS(R) New Discovery Capital appreciation. Invests at least 65% of its net assets in MFS Investment Management(R) Series - Service Class equity securities of emerging growth companies. MFS(R) Utilities Series - Capital growth and current income. Invests primarily in equity MFS Investment Management(R) Service Class and debt securities of domestic and foreign companies in the utilities industry. Neuberger Berman Advisers Long-term growth of capital. The Fund invests mainly in foreign Neuberger Berman Management Inc. Management Trust companies of any size, including companies in developed and International Portfolio emerging industrialized markets. The Fund defines a foreign (Class S) company as one that is organized outside of the United States and conducts the majority of its business abroad. The Fund seeks to reduce risk by diversifying among many industries. Although it has the flexibility to invest a significant portion of its assets in one country or region, it generally intends to remain well-diversified across countries and geographical regions. Oppenheimer Global Long-term capital appreciation. Invests mainly in common stocks OppenheimerFunds, Inc. Securities Fund/VA, of U.S. and foreign issuers that are "growth-type" companies, Service Shares cyclical industries and special situations that are considered to have appreciation possibilities.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Seeks capital appreciation. Invests mainly in common stocks of OppenheimerFunds, Inc. Small Cap Fund/VA, small-capitalization U.S. companies that the fund's investment Service Shares manager believes have favorable business trends or prospects. Oppenheimer High level of current income principally derived from interest OppenheimerFunds, Inc. Strategic Bond Fund/VA, on debt securities. Invests mainly in three market sectors: debt Service Shares securities of foreign governments and companies, U.S. government securities and lower-rated high yield securities of U.S. and foreign companies. PIMCO VIT All Asset Seeks maximum real return consistent with preservation of real Pacific Investment Management Portfolio, Advisor Share capital and prudent investment management period. The Portfolio Company LLC Class seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). Though it is anticipated that the Portfolio will not currently invest in the European StockPLUS(R) TR Strategy, Far East (ex-Japan) StocksPLUS(R) TR Strategy, Japanese StocksPLUS(R) TR Strategy, StocksPLUS(R) Municipal-Backed and StocksPLUS(R) TR Short Strategy Funds, the Portfolio may invest in these Funds in the future, without shareholder approval, at the discretion of the Portfolio's asset allocation sub-adviser. Putnam VT International Seeks long-term capital appreciation. The fund pursues its goal Putnam Investment Management, LLC New Opportunities Fund - by investing mainly in common stocks of companies outside the Class IB Shares United States with a focus on growth stocks. Putnam VT Vista Seeks capital appreciation. The fund pursues its goal by Putnam Investment Management, LLC Fund - Class IB Shares investing mainly in common stocks of U.S. companies, with a focus on growth stocks. RiverSource Variable Maximum total investment return through a combination of capital RiverSource Investments Portfolio - Balanced Fund growth and current income. Invests primarily in a combination of common and preferred stocks, bonds and other debt securities. Under normal market conditions, at least 50% of the Fund's total assets are invested in common stocks and no less than 25% of the Fund's total assets are invested in debt securities. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable Maximum current income consistent with liquidity and stability RiverSource Investments Portfolio - Cash of principal. Invests primarily in money market instruments, Management Fund such as marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit, and commercial paper, including asset-backed commercial paper.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Core Bond appreciation. Under normal market conditions, the Fund invests Fund at least 80% of its net assets in bonds and other debt securities. Although the Fund is not an index fund, it invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index ("the Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. The Fund will not invest in securities rated below investment grade, although it may hold securities that have been downgraded. RiverSource Variable High level of current income while attempting to conserve the RiverSource Investments Portfolio - Diversified value of the investment and continuing a high level of income Bond Fund for the longest period of time. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. At least 50% of the Fund's net assets will be invested in securities like those included in the Lehman Brothers Aggregate Bond Index (Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes high- and medium-quality debt securities, it will assume some credit risk to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. RiverSource Variable High level of current income and, as a secondary goal, steady RiverSource Investments Portfolio - Diversified growth of capital. Under normal market conditions, the Fund Equity Income Fund invests at least 80% of its net assets in dividend-paying common and preferred stocks. RiverSource Variable Long-term capital growth. The Fund's assets are primarily RiverSource Investments, adviser; Portfolio - Emerging invested in equity securities of emerging market companies. Threadneedle International Limited, Markets Fund Under normal market conditions, at least 80% of the Fund's net an indirect wholly-owned subsidiary assets will be invested in securities of companies that are of Ameriprise Financial, subadviser. located in emerging market countries, or that earn 50% or more of their total revenues from goods and services produced in emerging market countries or from sales made in emerging market countries. RiverSource Variable Long-term capital growth The Fund's assets are primarily RiverSource Investments Portfolio -Fundamental invested in equity securities of U.S. companies. Under normal Value Fund market conditions, the Fund's net assets will be invested primarily in companies with market capitalizations of at least $5 billion. RiverSource Variable High total return through income and growth of capital. RiverSource Investments Portfolio - Global Bond Non-diversified mutual fund that invests primarily in debt Fund obligations of U.S. and foreign issuers (which may include issuers located in emerging markets). Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate or government debt obligations including money market instruments of issuers located in at least three different countries.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Total return that exceeds the rate of inflation over the RiverSource Investments Portfolio - Global long-term. Non-diversified mutual fund that, under normal market Inflation Protected conditions, invests at least 80% of its net assets in Securities Fund inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource Variable Long-term capital growth. Invests primarily in common stocks and RiverSource Investments Portfolio - Growth Fund securities convertible into common stocks that appear to offer growth opportunities. These growth opportunities could result from new management, market developments, or technological superiority. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable High current income, with capital growth as a secondary RiverSource Investments Portfolio - High Yield objective. Under normal market conditions, the Fund invests at Bond Fund least 80% of its net assets in high-yielding, high-risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Income appreciation. Under normal market conditions, invests primarily Opportunities Fund in income-producing debt securities with an emphasis on the higher rated segment of the high-yield (junk bond) market. The Fund will purchase only securities rated B or above, or unrated securities believed to be of the same quality. If a security falls below a B rating, the Fund may continue to hold the security. RiverSource Variable Capital appreciation. Invests primarily in equity securities of RiverSource Investments, adviser; Portfolio - International foreign issuers that offer strong growth potential. The Fund may Threadneedle International Limited, Opportunity Fund invest in developed and in emerging markets. an indirect wholly-owned subsidiary of Ameriprise Financial, subadviser. RiverSource Variable Capital appreciation. Under normal market conditions, the Fund RiverSource Investments Portfolio - Large Cap invests at least 80% of its net assets in equity securities of Equity Fund companies with market capitalization greater than $5 billion at the time of purchase. RiverSource Variable Long-term growth of capital. Under normal market conditions, the RiverSource Investments Portfolio - Large Cap Fund invests at least 80% of its net assets in equity securities Value Fund of companies with a market capitalization greater than $5 billion. The Fund may also invest in income-producing equity securities and preferred stocks. RiverSource Variable Growth of capital. Under normal market conditions, the Fund RiverSource Investments Portfolio - Mid Cap invests at least 80% of its net assets in equity securities of Growth Fund mid capitalization companies. The investment manager defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the range of the Russell Midcap(R) Growth Index. RiverSource Variable Under normal circumstances, the Fund invests at least 80% of its RiverSource Investments Portfolio - Mid Cap net assets (including the amount of any borrowings for Value Fund investment purposes) in equity securities of medium-sized companies. Medium-sized companies are those whose market capitalizations at the time of purchase fall within the range of the Russell Midcap(R) Value Index.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Long-term capital appreciation. The Fund seeks to provide RiverSource Investments Portfolio - S&P 500 investment results that correspond to the total return (the Index Fund combination of appreciation and income) of large-capitalization stocks of U.S. companies. The Fund invests in common stocks included in the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P 500 is made up primarily of large-capitalization companies that represent a broad spectrum of the U.S. economy. RiverSource Variable Long-term growth of capital. Invests primarily in common stocks, RiverSource Investments, adviser; Portfolio - Select Value preferred stocks and securities convertible into common stocks GAMCO Investors, Inc., subadvisor Fund that are listed on a nationally recognized securities exchange or traded on the NASDAQ National Market System of the National Association of Securities Dealers. The Fund invests in mid-cap companies as well as companies with larger and smaller market capitalizations. RiverSource Variable A high level of current income and safety of principal RiverSource Investments Portfolio - Short consistent with an investment in U.S. government and government Duration U.S. Government agency securities. Under normal market conditions, at least 80% Fund of the Fund's net assets are invested in securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. RiverSource Variable Long-term capital growth. Under normal market conditions, at RiverSource Investments, adviser; Portfolio - Small Cap least 80% of the Fund's net assets are invested in equity Kenwood Capital Management LLC, Advantage Fund securities of companies with market capitalization of up to $2 subadviser billion or that fall within the range of the Russell 2000(R) Index at the time of investment. RiverSource Variable Long-term capital appreciation. Invests primarily in equity RiverSource Investments, adviser; Portfolio - Small Cap securities. Under normal market conditions, at least 80% of the River Road Asset Management, LLC, Value Fund Fund's net assets will be invested in small cap companies with Donald Smith & Co., Inc., Franklin market capitalization, at the time of investment, of up to $2.5 Portfolio Associates LLC and Barrow, billion or that fall within the range of the Russell 2000(R) Hanley, Mewhinney & Strauss, Inc., Value Index. subadvisers. Royce Micro-Cap Portfolio Long-term growth of capital. Invests primarily in a broadly Royce & Associates, LLC diversified portfolio of equity securities issued by micro-cap companies (companies with stock market capitalizations below $500 million). Third Avenue Value Long-term capital appreciation. Invests primarily in common Third Avenue Management LLC Portfolio stocks of well-financed companies, meaning companies without significant liabilities in comparison to their liquid resources at a discount to what the Adviser believes is their intrinsic value. Van Kampen Life Capital growth and income through investments in equity Van Kampen Asset Management Investment Trust Comstock securities, including common stocks, preferred stocks and Portfolio, Class II securities convertible into common and preferred stocks. Shares Van Kampen UIF Global Current income and capital appreciation. Invests primarily in Morgan Stanley Investment Management Real Estate Portfolio, equity securities of companies in the real estate industry Inc., doing business as Van Kampen, Class II Shares located throughout the world, including real estate operating adviser; Morgan Stanley Investment companies, real estate investment trusts and foreign real estate Management and Morgan Stanley companies. Investment Management Company, sub-adviser
-------------------------------------------------------------------------------- 22 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------------------------------------------------------------------------------------------------------------------- Van Kampen UIF Mid Cap Long-term capital growth. Invests primarily in growth-oriented Morgan Stanley Investment Management Growth Portfolio, Class equity securities of U.S. mid cap companies and foreign Inc., doing business as Van Kampen II Shares companies, including emerging market securities. Wanger International Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Small Cap companies based outside the U.S. with market capitalizations of L.P. less than $5 billion at time of initial purchase. Wanger U.S. Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Smaller Companies small- and medium-size U.S. companies with market L.P. capitalizations of less than $5 billion at time of initial purchase. Wells Fargo Advantage VT Long-term total return consistent with reasonable risk. The Fund Wells Fargo Funds Management, LLC, Asset Allocation Fund invests in equity and fixed income securities with an emphasis adviser; Wells Capital Management on equity securities. The Fund does not select individual Incorporated, subadviser. securities for investment, rather, it buys substantially all of the securities of various indexes to replicate such indexes. The Fund invests the equity portion of its assets in common stocks to replicate the S&P 500 Index, and invests the fixed income portion of its assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes, before fees and expenses, regardless of market conditions. The Fund's "neutral" target allocation is 60% equity securities and 40% fixed income securities. Wells Fargo Advantage VT Long-term capital appreciation. The Fund seeks long-term capital Wells Fargo Funds Management, LLC, International Core Fund appreciation by investing principally in non-U.S. securities, adviser; New Star Institutional with focus on companies with strong growth potential that offer Managers Limited, subadviser. relative values. These companies typically have distinct competitive advantages, high or improving returns on invested capital and a potential for positive earnings surprises. The Fund may invest in emerging markets. Wells Fargo Advantage VT Long-term capital appreciation. Focus is on companies believed Wells Fargo Funds Management, LLC, Small Cap Growth Fund to have above-average growth potential or that may be involved adviser; Wells Capital Management in new or innovative products, services and processes. Invests Incorporated, subadviser. principally in securities of companies with market capitalizations equal to or lower than the company with the largest market capitalization in the Russell 2000 Index, which is considered a small capitalization index that is expected to change frequently.
-------------------------------------------------------------------------------- 23 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS THE FIXED ACCOUNT You also may allocate purchase payments and purchase payment credits or transfer contract value to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment or transfer to the fixed account is guaranteed for one year. Thereafter, we will change the rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and the IDS Life's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an owner or an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments and purchase payment credits to the subaccounts of the variable account and/or to the fixed account in even 1% increments. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum from the fixed account to the subaccounts, We applied your initial purchase payment within two business days after we received it at our home office. However, we will credit additional purchase payments you make to your accounts on the valuation date we receive them. If we receive an additional purchase payment at our home office before the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the valuation date we received the payment. If we receive an additional purchase payment at our home office at or after the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the next valuation date after we received the payment. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date as the maximum age (or contract anniversary if applicable) for nonqualified annuities and Roth IRAs and the date specified below for qualified annuities or you selected a date within the maximum limits. Your selected date can align with your actual retirement from a job, or it can be a different date, depending on your needs and goals and on certain restrictions. You also can change the settlement date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAS, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAS, to comply with IRS regulations, the settlement date generally must be: - for IRAs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you satisfy your RMDs in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later, or a date that has been otherwise agreed to by us. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) Contract owners of IRAs and TSAs may also be able to satisfy required minimum distributions using other IRAs or TSAs, and in that case, may delay the annuity payout start date for this contract. -------------------------------------------------------------------------------- 24 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then the default provisions of your contract apply. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 (1) If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS(2) $100,000 for ages through 85 $50,000 for ages 86 to 90 (2) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. Except for TSAs, purchase payments are limited and may not be made after the third contract anniversary in Massachusetts, Washington and Oregon. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. PURCHASE PAYMENT CREDITS We add a credit to your contract in the amount of: - 1% of each purchase payment received: -- if you elect the ten-year surrender charge schedule* for your contract; OR -- if you elect the seven-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. - 2% of each purchase payment received if you elect the ten-year surrender charge schedule* for your contract and your initial purchase payment to the contract is at least $100,000. We fund the credit from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief -- Free look period.") * The ten-year surrender charge is not available in Oregon. Contracts purchased in Oregon are only eligible for a 1% purchase payment credit if the initial purchase payment is at least $100,000. -------------------------------------------------------------------------------- 25 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS To the extent a death benefit or surrender payment includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits. The amount we pay to you under these circumstances will always equal or exceed your surrender value. Surrender charges under the contract may be higher than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated them. Because of higher charges, there could be circumstances where you may be worse off purchasing this contract with the credits than purchasing other contracts. All things being equal (such as fund performance and availability), this may occur if you select the ten-year surrender charge and you make a full withdrawal in years five through ten. We pay for the credits primarily through revenue from a higher and longer withdrawal charge schedule and through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. We reserve the right to increase the amount of the credit for certain groups of contract owners. The increase will not be greater than 8% of total net purchase payments. We would pay for increases in credit amounts primarily through reduced expenses expected from such groups. CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee. For nonqualified annuities the fee totals 0.95% of the average daily net assets on an annual basis. For qualified annuities the fee totals 0.75% of the average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. We do not expect that the surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.15% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. -------------------------------------------------------------------------------- 26 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you chose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select either the MAV or EEB riders. Or you may select the MAV and the EEB. Riders may not be available in all states. The MAV and EEB are only available if you and the annuitant are 75 or younger at the rider effective date. SURRENDER CHARGE If you surrender all or part of your contract, you may be subject to a surrender charge. A surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven or ten years before surrender. You select the surrender charge period at the time of your application for the contract. The surrender charge percentages that apply to you are shown in your contract. You may surrender an amount during any contract year without a surrender charge. We call this amount the Total Free Amount (TFA). The TFA is defined as the greater of: - 10% of the contract value on the prior contract anniversary; and - current contract earnings. NOTE: We determine current contract earnings by looking at the entire contract value, not the earnings of any particular subaccount, or the fixed account. Amounts surrendered in excess of the TFA may be subject to a surrender charge as described below. 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 3. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a first-in, first-out (FIFO) basis. We do assess a surrender charge on these payments. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected*:
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7 0 7 4 8 3 9 2 10 0
* The ten-year surrender charge schedule is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. -------------------------------------------------------------------------------- 27 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS PARTIAL SURRENDERS For a partial surrender that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge. The surrender charge percentage is applied to this total amount. We pay you the amount you requested. EXAMPLE: Assume you requested a surrender of $1,000 and there is a surrender charge of 7%. The total amount we actually deduct from your contract is $1,075.27. We determine this amount as follows: AMOUNT REQUESTED $1,000 ------------------------ OR ------ = $1,075.27 1.00 - SURRENDER CHARGE .93 By applying the 7% surrender charge to $1,075.27, the surrender charge is $75.27. We pay you the $1,000 you requested. If you make a full surrender of your contract, we also will deduct the applicable contract administrative charge. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate.
ASSUMED INVESTMENT RATE 3.50% 5.00% Qualified annuity discount rate 4.72% 6.22% Nonqualified annuity discount rate 4.92% 6.42%
SURRENDER CHARGE CALCULATION EXAMPLE The following is an example of the calculation we would make to determine the surrender charge on a contract that contains a seven-year surrender charge schedule with this history: - The contract date is July 1, 2001 with a contract year of July 1 through June 30 and with an anniversary date of July 1 each year; and - We received these payments: --$10,000 July 1, 2001; --$ 8,000 Dec. 31, 2006; --$ 6,000 Feb. 20, 2009; and - The owner surrenders the contract for its total contract value of $26,500 on Aug. 5, 2009 and had not made any other surrenders during that contract year; and - The prior anniversary July 1, 2009 contract value was $28,000.
SURRENDER CHARGE EXPLANATION $ 0 $2,500 is contract earnings surrendered without charge; and 0 $300 is 10% of the prior anniversary's contract value that is in excess of contract earnings surrendered without charge (from above). 10% of $28,000 = $2,800 - $2,500 = $300 0 $10,000 July 1, 2000 purchase payment was received eight or more years before surrender and is surrendered without surrender charge; and 480 $8,000 Dec. 31, 2006 purchase payment is surrendered with a 6% surrender charge since there have been 3 completed years from date of purchase payment; and 420 $6,000 Feb. 20, 2009 purchase payment is surrendered with a 7% surrender charge since there have been 1 completed year from date of purchase payment. ----- $900
-------------------------------------------------------------------------------- 28 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS WAIVER OF SURRENDER CHARGES We do not assess surrender charges for: - surrenders of any contract earnings; - surrenders of amounts totaling up to 10% of the contract value on the prior contract anniversary to the extent it exceeds contract earnings; - amounts surrendered after the tenth contract anniversary in Massachusetts, Washington and Oregon. - required minimum distributions from a qualified annuity provided the amount is not greater than the RMDs for the specific contract in force; - contracts settled using an annuity payout plan, unless an Annuity Payout Plan E is later surrendered; - amounts we refund to you during the free look period*; - death benefits*; and - surrenders you make under your contract's "Waiver of Surrender Charges for Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 at contract issue. Under this provision, we will waive surrender charges that we normally assess upon full or partial surrender if you provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home and have been for the prior 90 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits. (See "Buying your contract -- Purchase payment credits.") OTHER INFORMATION ON CHARGES: Ameriprise Financial, Inc. makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. Ameriprise Financial, Inc. will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. FUND FEES AND EXPENSES There are deductions from and expenses paid out of the assets of the funds that are described in the prospectus for those funds. (See "Annual Operating Expenses of the Funds.") PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon your state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you surrender your contract. -------------------------------------------------------------------------------- 29 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and purchase payment credits and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out, - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); and - minus any prorated portion of the EEB rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payments credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, we subtract a certain number of accumulation units from your contract each time you take a partial surrender, transfer amounts out of a subaccount or we assess a contract administrative charge, surrender charge or fee for any optional riders with annual charges (if applicable). The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - any purchase payment credits allocated to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - surrender charges; and a deduction of: - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); and/or - a prorated portion of the EEB rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in fund net asset value; - fund dividends distributed to the subaccounts; - fund capital gains or losses; - fund operating expenses; and/or - mortality and expense risk fees. -------------------------------------------------------------------------------- 30 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER By investing an equal number AMOUNT ACCUMULATION OF UNITS of dollars each month ... MONTH INVESTED UNIT VALUE PURCHASED Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ------> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ------> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semiannually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing or by any other method acceptable to us, to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. Certain restrictions apply to transfers involving the fixed account. When your request to transfer will be processed depends on when we receive it: - If we receive your transfer request at our home office before the close of business, we will process your transfer using the accumulation unit value we calculate on the valuation date we received your transfer request. - If we receive your transfer request at our home office at or after the close of business, we will process your transfer using the accumulation unit value we calculate on the next valuation date after we received your transfer request. -------------------------------------------------------------------------------- 31 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. WE SEEK TO PREVENT MARKET TIMING. MARKET TIMING IS FREQUENT OR SHORT-TERM TRADING ACTIVITY. WE DO NOT ACCOMMODATE SHORT-TERM TRADING ACTIVITIES. DO NOT INVEST IN THIS CONTRACT IF YOU WISH TO USE SHORT-TERM TRADING STRATEGIES TO MANAGE YOUR INVESTMENT. THE MARKET TIMING POLICIES AND PROCEDURES DESCRIBED BELOW APPLY TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN THE CONTRACT. THE UNDERLYING FUNDS IN WHICH THE SUBACCOUNTS INVEST HAVE THEIR OWN MARKET TIMING POLICIES AND PROCEDURES. THE MARKET TIMING POLICIES OF THE UNDERLYING FUNDS MAY BE MORE OR LESS RESTRICTIVE THAN THE MARKET TIMING POLICIES AND PROCEDURES WE APPLY TO TRANSFERS AMONG THE SUBACCOUNTS OF THE CONTRACT, AND MAY INCLUDE REDEMPTION FEES. WE RESERVE THE RIGHT TO MODIFY OUR MARKET TIMING POLICIES AND PROCEDURES AT ANY TIME WITHOUT PRIOR NOTICE TO YOU Market timing may hurt the performance of an underlying fund in which a subaccount invests in several ways, including but not necessarily limited to: - diluting the value of an investment in an underlying fund in which a subaccount invests; - increasing the transaction costs and expenses of an underlying fund in which a subaccount invests; and, - preventing the investment adviser(s) of an underlying fund in which a subaccount invests from fully investing the assets of the fund in accordance with the fund's investment objectives. Market timing can reduce the value of your investment in the contract. If market timing causes the returns of an underlying fund to suffer, contract value you have allocated to a subaccount that invests in that underlying fund will be lower, too. Market timing can cause you, any joint owner of the contract and your beneficiary(ies) under the contract a financial loss. IN ORDER TO HELP PROTECT YOU AND THE UNDERLYING FUNDS FROM THE POTENTIALLY HARMFUL EFFECTS OF MARKET TIMING ACTIVITY, WE APPLY THE FOLLOWING MARKET TIMING POLICY TO DISCOURAGE FREQUENT TRANSFERS OF CONTRACT VALUE AMONG THE SUBACCOUNTS OF THE VARIABLE ACCOUNT: We try to distinguish market timing from transfers that we believe are not harmful, such as dollar-cost averaging. There is no set number of transfers that constitutes market timing. Even one transfer in related accounts may be market timing. We seek to restrict the transfer privileges of a contract owner who makes more than three subaccount transfers in any 90 day period. We also reserve the right to refuse any transfer requests, if, in our sole judgment, the dollar amount of the transfer request would adversely affect unit values. If we determine, in our sole judgment, that your transfer activity constitutes market timing, we may modify, restrict or suspend your transfer privileges to the extent permitted by applicable law, which may vary based on the state law that applies to your contract and the terms of your contract. These restrictions or modifications may include, but not be limited to: - requiring transfer requests to be submitted only by first-class U.S. mail; - not accepting hand-delivered transfer requests or requests made by overnight mail; - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney; - limiting the dollar amount that you may transfer at any one time; or - suspending the transfer privilege. Subject to applicable state law and the terms of each contract, we will apply the policy described above to all contract owners uniformly in all cases. We will notify you in writing after we impose any modification, restriction or suspension of your transfer rights. We cannot guarantee that we will be able to identify and restrict all market timing activity. Because we exercise discretion in applying the restrictions described above, we cannot guarantee that we will be able to restrict all market timing activity. In addition, state law and the terms of some contracts may prevent us from stopping certain market timing activity. Market timing activity that we are unable to identify and/or restrict may impact the performance of the underlying funds and may result in lower contract values. -------------------------------------------------------------------------------- 32 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS IN ADDITION TO THE MARKET TIMING POLICY DESCRIBED ABOVE, WHICH APPLIES TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT, YOU SHOULD CAREFULLY REVIEW THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS. THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS MAY BE MATERIALLY DIFFERENT THAN THOSE WE IMPOSE ON TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT AND MAY INCLUDE MANDATORY REDEMPTION FEES AS WELL AS OTHER MEASURES TO DISCOURAGE FREQUENT TRANSFERS. AS AN INTERMEDIARY FOR THE UNDERLYING FUNDS, WE ARE REQUIRED TO ASSIST THEM IN APPLYING THEIR MARKET TIMING POLICIES AND PROCEDURES TO TRANSACTIONS INVOLVING THE PURCHASE, EXCHANGE AND REDEMPTION OF FUND SHARES. THIS ASSISTANCE MAY INCLUDE BUT NOT BE LIMITED TO PROVIDING THE UNDERLYING FUND UPON REQUEST WITH YOUR SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER AND THE DETAILS OF YOUR CONTRACT TRANSACTIONS INVOLVING THE UNDERLYING FUND. AN UNDERLYING FUND, IN ITS SOLE DISCRETION, MAY INSTRUCT US AT ANY TIME TO PROHIBIT YOU FROM MAKING FURTHER TRANSFERS OF CONTRACT VALUE TO OR FROM THE UNDERLYING FUND, AND WE MUST FOLLOW THIS INSTRUCTION. WE RESERVE THE RIGHT TO ADMINISTER AND COLLECT ON BEHALF OF AN UNDERLYING FUND ANY REDEMPTION FEE IMPOSED BY AN UNDERLYING FUND. MARKET TIMING POLICIES AND PROCEDURES ADOPTED BY UNDERLYING FUNDS MAY AFFECT YOUR INVESTMENT IN THE CONTRACT IN SEVERAL WAYS, INCLUDING BUT NOT LIMITED TO: - Each fund may restrict or refuse trading activity that the fund determines, in its sole discretion, represents market timing. - Even if we determine that your transfer activity does not constitute market timing under the market timing policies described above which we apply to transfers you make under the contract, it is possible that the underlying fund's market timing policies and procedures, including instructions we receive from a fund, may require us to reject your transfer request. Orders we place to purchase fund shares for the variable account are subject to acceptance by the fund. We reserve the right to reject without prior notice to you any transfer request if the fund does not accept our order. - Each underlying fund is responsible for its own market timing policies, and we cannot guarantee that we will be able to implement specific market timing policies and procedures that a fund has adopted. As a result, a fund's returns might be adversely affected, and a fund might terminate our right to offer its shares through the variable account. - Funds that are available as investment options under the contract may also be offered to other intermediaries who are eligible to purchase and hold shares of the fund, including without limitation, separate accounts of other insurance companies and certain retirement plans. Even if we are able to implement a fund's market timing policies, we cannot guarantee that other intermediaries purchasing that same fund's shares will do so, and the returns of that fund could be adversely affected as a result. Funds available as investment options under the contract that invest in securities that trade in overseas securities markets may be at greater risk of loss from market timing, as market timers may seek to take advantage of changes in the values of securities between the close of overseas markets and the close of U.S. markets. Further the risks of market timing may be greater for underlying funds that invest in securities, such as small cap stocks, high yield bonds, or municipal securities, that may be traded infrequently. FOR MORE INFORMATION ABOUT THE MARKET TIMING POLICIES AND PROCEDURES OF AN UNDERLYING FUND, THE RISKS THAT MARKET TIMING POSES TO THAT FUND, AND TO DETERMINE WHETHER AN UNDERLYING FUND HAS ADOPTED A REDEMPTION FEE, SEE THAT FUND'S PROSPECTUS. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts. You may also transfer contract values from the subaccounts to the fixed account. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. -------------------------------------------------------------------------------- 33 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number* and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance * Failure to provide your Social Security Number or Taxpayer Identification Number may result in mandatory tax withholding on the taxable portion of the distribution. 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 7 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. -------------------------------------------------------------------------------- 34 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. If we receive your surrender request at our home office before the close of business, we will process your surrender using the accumulation unit value we calculate on the valuation date we received your surrender request. If we receive your surrender request at our home office at or after the close of business, we will process your surrender using the accumulation unit value we calculate on the next valuation date after we received your surrender request. We may ask you to return the contract. You may have to pay contract administrative charges, surrender charges, or any applicable optional rider charges (see "Charges"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). Any partial surrenders you take under the contract will reduce your contract value. As a result, the value of your death benefit or any optional benefits you have elected also will be reduced. In addition, surrenders you are required to take to satisfy the RMDs under the Code may reduce the value of certain death benefits and optional benefits (see "Taxes -- Qualified Annuities -- Required Minimum Distributions"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: --the surrender amount includes a purchase payment check that has not cleared; --the NYSE is closed, except for normal holiday and weekend closings; --trading on the NYSE is restricted, according to SEC rules; --an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or --the SEC permits us to delay payment for the protection of security holders. -------------------------------------------------------------------------------- 35 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TSA -- SPECIAL PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The contract is not intended for use in connection with an employer sponsored 403(b) plan that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the event that the employer either by affirmative election or inadvertent action causes contributions under a plan that is subject to ERISA to be made to this contract, we will not be responsible for any obligations and requirements under ERISA and the regulations thereunder. You should consult with your employer to determine whether your 403(b) plan is subject to ERISA. The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: --you are at least age 59 1/2; --you are disabled as defined in the Code; --you severed employment with the employer who purchased the contract; or --the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our home office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV or EEB. The terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over". We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of the contract may be transferred to the annuitant. -------------------------------------------------------------------------------- 36 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = is the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND THE ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2001. - On Jan 1, 2007 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2007 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2007 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 x $30,000 -1,607.14 ---------------- ---------- $28,000 for a death benefit of: $28,392.86
-------------------------------------------------------------------------------- 37 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value using the next accumulation unit value we calculate on that valuation date. We pay interest, if any, at a rate no less than required by law. If requested, we will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If you elected any optional contract features and riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. If your beneficiary is not your spouse, we will pay the beneficiary in a lump sum unless you give us other written instructions. Generally, we must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year after your death, or other date as permitted by the IRS; and - the payout period does not extend beyond the beneficiary's life or life expectancy. QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. If you elected any optional contract features and riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your beneficiary does not elect a five year payout, or if your death occurs after attaining age 70 1/2, we will pay the beneficiary in a lump sum unless the beneficiary elects to receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. DEATH BENEFIT PAYMENT IN A LUMP SUM: We may pay all or part of the death benefit to your beneficiary in a lump sum under either a nonqualified or qualified annuity. We will pay the death benefit by check unless your beneficiary has chosen to have the death benefit directly deposited into a checking account. -------------------------------------------------------------------------------- 38 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract. We will determine the rider effective date for the MAV added after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date, we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You add the MAV on Jan. 1, 2001 when your contract value is $20,000. - On Jan. 1, 2002 (the first contract anniversary after the rider effective date) the contract value grows to $24,000. - On March 1, 2002 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2002 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: ($1,500 x $24,000) ------------------ = -1,636 $22,000 ------- for a death benefit of: $22,364
-------------------------------------------------------------------------------- 39 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to keep the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT (EEB) The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary after the rider effective date. The EEB also may result in reduced benefits if you take RMDs (see "Taxes - Qualified Annuities - Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract. We will determine the rider effective date for the EEB added after we issue the contract according to terms determined by us and at our sole discretion. The EEB provides that if you or the annuitant dies after the first contract anniversary after the rider effective date, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death - Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB: If the rider effective date for the EEB is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date. - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. -------------------------------------------------------------------------------- 40 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since the rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchased the contract on Jan. 1, 2001 with a purchase payment of $100,000. You add the EEB rider Jan. 1, 2003 when your contract value is $100,000 and both you and the annuitant are under age 70. You selected the seven-year surrender charge schedule, the MAV and the EEB. - On July 1, 2003 the contract value grows to $105,000. The death benefit on July 1, 2003 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary after the rider effective date so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2004 the contract value grows to $110,000. The death benefit on Jan. 1, 2004 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2005 the contract value falls to $105,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Feb. 1, 2005 the contract value remains at $105,000 and you request a partial surrender, including the applicable 5% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 5% surrender charge because your purchase payment is four years old, so we will surrender $39,500 ($37,525 + $1,975 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $48,025. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2005 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): ($50,000 x $110,000) $110,000 - ------------------- = $57,619 $105,000 plus the EEB (40% of earnings at death): 0.40 x ($57,619 - $55,000) = +1,048 ------- Total death benefit of: $58,667 - On Jan. 1, 2006 the contract value falls by $40,000. The death benefit on Jan. 1, 2007 equals the death benefit paid on Feb. 1, 2005. The reduction in contract value has no effect. -------------------------------------------------------------------------------- 41 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS - On Jan. 1, 2012 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2012 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) .40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2012 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2012 equals: MAV death benefit amount (contract value): $250,000 plus the EEB (40% of earnings at death, up to a maximum of 100% of purchase payments not previously surrendered that are one or more years old) 0.40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $305,000
- On July 1, 2013 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 x ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000
IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death " payable will be based on your spouse's age at the time he or she elects to continue the contract. - the rider charges described in "Charges - EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) . These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." -------------------------------------------------------------------------------- 42 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below except under Plan E. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. Fixed payouts remain the same from month to month. For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract (Table A and Table B) show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% assumed interest rate Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract value is used to purchase the payout plan: - PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. -------------------------------------------------------------------------------- 43 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS - PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If your contract is a qualified annuity, you must select a payout plan as of the settlement date set forth in your contract. You have the responsibility for electing a payout plan under your contract that complies with applicable law. Your contract describes your payout plan options. The options will generally meet certain IRS regulations governing RMDs if the payout plan meets the incidental distribution benefit requirements, if any, and the payouts are made: - in equal or substantially equal payments over a period not longer than your life or over the joint life of you and your designated beneficiary; or - in equal or substantially equal payments over a period not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary; or - over a period certain not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. -------------------------------------------------------------------------------- 44 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any withdrawals you request that represent ordinary income normally are taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. We will send you a tax information reporting form for any year in which we made a distribution according to our records. NONQUALIFIED ANNUITIES Tax law requires that all nonqualified deferred annuity contracts issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS: Generally, a portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. SURRENDERS: If you surrender part of your nonqualified annuity before your annuity payouts begin, your surrender payment will be taxed to the extent that the contract value immediately before the surrender exceeds the investment in the contract. If you surrender all of your nonqualified annuity before your annuity payouts begin, your surrender payment will be taxed to the extent that the surrender value immediately before the surrender exceeds the investment in the contract. You also may have to pay a 10% IRS penalty for surrenders of taxable income you make before reaching age 59 1/2 unless certain exceptions apply. WITHHOLDING: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver the payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract is not exempt from estate or income taxes. Any amount your beneficiary receives that represents deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities (nonnatural persons) generally will be treated as ordinary income received during that year. However, if the trust was set up for the benefit of a natural person only, the income will generally remain tax-deferred. PENALTIES: If you receive amounts from your nonqualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death, or in the event of nonnatural ownership, the death of annuitant; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if it is allocable to an investment before Aug. 14, 1982; or - if annuity payouts begin before the first contract anniversary. -------------------------------------------------------------------------------- 45 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TRANSFER OF OWNERSHIP: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses or former spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a withdrawal and you may have to pay a 10% IRS penalty. QUALIFIED ANNUITIES Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan's Summary Plan Description, your IRA disclosure statement, or consult a tax advisor for additional information about the distribution rules applicable to your situation. When you use your contract to fund a retirement plan or IRA that is already tax-deferred under the Code, the contract will not provide any necessary or additional tax deferral. If your contract is used to fund an employer sponsored plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. ANNUITY PAYOUTS: Under a qualified annuity except a Roth IRA, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS: Under a qualified annuity except a Roth IRA, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. REQUIRED MINIMUM DISTRIBUTIONS: Retirement plans are subject to required withdrawals called required minimum distributions (RMDs) generally beginning at age 70 1/2. In addition, a new tax regulation, effective for RMDs calculated in 2006 and after, may cause the RMDs for some contracts with certain death benefits and optional riders to increase. RMDs may reduce the value of certain death benefits and optional riders. You should consult your tax advisor prior to making a purchase for an explanation of the potential tax implications to you. WITHHOLDING FOR IRAS, ROTH IRAS, SEPS AND SIMPLE IRAS: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. -------------------------------------------------------------------------------- 46 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS WITHHOLDING FOR ALL OTHER QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity, mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is an RMD as defined under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments made to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. PENALTIES: If you receive amounts from your qualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty generally will not apply to any amount received: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if the distribution is made following severance from employment during the calendar year in which you attain age 55 (TSAs and annuities funding 401(a) and 401(k) plans only); or - to pay certain medical or education expenses (IRAs only). DEATH BENEFITS TO BENEFICIARIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract, or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the contract that represents after-tax contributions is not taxable as ordinary income to your beneficiary. You are responsible for keeping all records tracking your non-deductible contributions to an IRA. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. PURCHASE PAYMENT CREDITS: These are considered earnings and are taxed accordingly when surrendered or paid out. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV OR EEB): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial withdrawals if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on your death as an annuity death benefit distribution, not as proceeds from life insurance. COLLATERAL ASSIGNMENT: You may not collaterally assign or pledge a qualified annuity. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: We are taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of our company, although their operations are treated separately in accounting and financial statements. Investment income is reinvested in the fund in which each subaccount invests and becomes part of that subaccount's value. This investment income, including realized capital gains, is not taxed to us, and therefore no charge is made against the subaccounts for federal income taxes. We reserve the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. -------------------------------------------------------------------------------- 47 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute a fund currently listed in this prospectus (existing fund) for another fund (new fund). The new fund may have higher fees and/or operating expenses than the existing fund. Also, the new fund may have investment objectives and policies and/or investment advisers which differ from the existing fund. We may also: - add new subaccounts; - combine any two or more subaccounts; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. We will notify you of any substitution or change. If we notify you that a subaccount will be eliminated or closed, you will have a certain period of time to tell us where to reallocate purchase payments or contract value currently allocated to that subaccount. If we do not receive your reallocation instructions by the due date, we automatically will reallocate to the subaccount investing in the RiverSource Variable Portfolio - Cash Management Fund. You may then transfer this reallocated amount in accordance with the transfer provisions of your contract (see "Transferring Between Accounts" above). In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 Ameriprise Financial Center, Minneapolis, MN 55474. IDS Life is a wholly-owned subsidiary of Ameriprise Financial, Inc. IDS Life conducts a conventional life insurance business. It acts as a direct writer of fixed and variable insurance policies and annuities and is licensed in 49 states, the District of Columbia and American Samoa. IDS Life has four wholly-owned subsidiaries, two which serve New York residents and two which serve residents in states other than New York. IDS Life and its subsidiaries offer fixed and variable insurance policies and annuities through individual sales representatives, through insurance agencies and broker-dealers who may also be associated with financial institutions such as banks. -------------------------------------------------------------------------------- 48 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS IDS Life's primary life insurance products include variable life insurance, universal life insurance, traditional whole life insurance and disability income insurance. IDS Life's primary annuity products include variable and fixed deferred and immediate annuities. We are the sole distributor of the contract which we offer continuously. We pay time-of-sale commissions of up to 5.75% of purchase payments on the contract as well as service/trail commissions of up to 0.25% based on annual total contract value for as long as the contract remains in effect. We may pay our sales representatives a temporary additional sales commission of up to 1% of purchase payments for a period of time we select. For example, we may offer to pay a temporary additional sales commission to encourage sales representatives to market a new or enhanced contract or to increase sales during the period. The above commissions and service fees compensate our sales representative for selling and servicing the contract. These commissions do not change depending on which subaccounts you choose to allocate your purchase payments. We also may pay additional commissions to help compensate field leadership and to pay for other distribution expenses and benefits noted below. Our sales representatives may be required to return sales commissions under certain circumstances including, but not limited to, if a contact owner returns the contract under the free look period. From time to time and in accordance with applicable laws and regulations, sales representatives and field leaders are eligible for various benefits. These include cash benefits, such as bonuses and sales incentives, and non-cash benefits, such as conferences, seminars and trips (including travel, lodging and meals), entertainment, merchandise and other similar items. Sales of contracts may help sales representatives and/or their field leaders qualify for such benefits. SOURCES OF PAYMENTS TO SALES REPRESENTATIVES - We pay the commissions and other compensation described above from our assets. - Our assets may include: -- revenues we receive from fees and expenses that you will pay when buying, owning and surrendering the contract (see "Expense Summary"); -- compensation we or an affiliate receive from the underlying funds in the form of distribution and services fees (see "The Variable Account and the Funds -- The funds"); -- compensation we or an affiliate receive from a fund's investment adviser, subadviser, distributor or an affiliate of any of these (see "The Variable Account and the Funds -- The funds"); and -- revenues we receive from other contracts and policies we sell that are not securities and other businesses we conduct. - You do not directly pay the commissions and other compensation described above as the result of a specific charge or deduction under the contract. However, you may pay part or all of the commissions and other compensation described above indirectly through: -- fees and expenses we collect from contract owners, including surrender charges; and -- fees and expenses charged by the underlying funds in which the subaccounts you select invest, to the extent we or one of our affiliates receive revenue from the funds or an affiliated person. POTENTIAL CONFLICT OF INTEREST Our compensation arrangements with sales representatives can potentially give sales representatives a heightened financial incentive to sell you the contract offered in this prospectus over other alternative investments which may pay the sales representatives lower compensation. Ask your sales representative for further information about what he or she may receive in connection with your purchase of the contract. LEGAL PROCEEDINGS The SEC, the NASD and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information concerning some of these practices and is cooperating fully with these inquiries. IDS Life and its affiliates are involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of their respective business activities. IDS Life believes it has meritorious defenses to each of these actions and intends to defend them vigorously. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. There are no pending legal proceedings affecting the Variable Account. -------------------------------------------------------------------------------- 49 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS APPENDIX: CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount. The date in which operations commenced in each price level is noted in parentheses. We have not provided this information for subaccounts that were not available under your contract as of Dec. 31, 2005. VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.90 $ 0.85 $ 0.66 $ 0.88 $ 1.16 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.98 $ 0.90 $ 0.85 $ 0.66 $ 0.88 $ 1.16 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 42,185 44,154 44,599 46,932 49,574 37,379 4,337 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 1.50 $ 1.31 $ 0.98 $ 1.25 $ 1.37 $ 1.26 $ 1.00 Accumulation unit value at end of period $ 1.64 $ 1.50 $ 1.31 $ 0.98 $ 1.25 $ 1.37 $ 1.26 Number of accumulation units outstanding at end of period (000 omitted) 16,329 18,834 19,915 21,745 23,324 16,977 1,678 ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.08 $ 0.98 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.08 $ 0.98 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 149,316 125,010 82,114 43,189 5,550 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.63 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.88 $ 1.63 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 153,107 70,504 34,604 12,313 805 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 0.93 $ 0.81 $ 0.66 $ 0.83 $ 1.19 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.93 $ 0.81 $ 0.66 $ 0.83 $ 1.19 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 28,073 28,284 27,256 26,878 25,459 15,533 1,791 AMERICAN CENTURY VP VALUE, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 1.52 $ 1.34 $ 1.05 $ 1.21 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.59 $ 1.52 $ 1.34 $ 1.05 $ 1.21 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 53,724 50,678 46,232 43,222 35,248 14,536 3,657 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.04 $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 23,850 20,551 15,315 9,520 4,490 1,283 -- CREDIT SUISSE TRUST - MID-CAP GROWTH PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 1.20 $ 1.07 $ 0.75 $ 1.07 $ 1.29 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 1.27 $ 1.20 $ 1.07 $ 0.75 $ 1.07 $ 1.29 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 12,277 14,837 16,665 17,821 20,158 17,825 1,838 FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.96 $ 0.92 $ 0.75 $ 0.90 $ 1.00 $ 1.05 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.96 $ 0.92 $ 0.75 $ 0.90 $ 1.00 $ 1.05 Number of accumulation units outstanding at end of period (000 omitted) 107,380 122,387 119,334 108,027 103,719 63,414 15,603 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 2.41 $ 1.94 $ 1.41 $ 1.58 $ 1.65 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 2.82 $ 2.41 $ 1.94 $ 1.41 $ 1.58 $ 1.65 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 72,759 73,206 67,863 63,268 59,393 38,193 5,709 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.97 $ 0.86 $ 0.61 $ 0.77 $ 0.98 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 1.15 $ 0.97 $ 0.86 $ 0.61 $ 0.77 $ 0.98 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 40,988 42,151 31,628 28,991 27,850 18,802 3,421 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.70 $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 139,618 120,456 87,330 59,317 24,477 6,879 885
-------------------------------------------------------------------------------- 50 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.11 $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 78,073 59,293 43,978 29,743 10,800 2,846 586 FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2 (3/1/2002) Accumulation unit value at beginning of period $ 1.30 $ 1.10 $ 0.84 $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.42 $ 1.30 $ 1.10 $ 0.84 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,595 15,352 11,165 8,386 -- -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.31 $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 174,918 115,616 83,015 56,079 23,748 7,622 1,634 GOLDMAN SACHS VIT STRUCTURED SMALL CAP EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.68 $ 1.45 $ 1.00 $ 1.19 $ 1.14 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.76 $ 1.68 $ 1.45 $ 1.00 $ 1.19 $ 1.14 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 10,823 12,173 13,511 14,285 14,153 10,252 1,876 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 248,935 128,074 83,166 71,820 60,343 42,626 8,981 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.36 $ 0.36 $ 0.25 $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.40 $ 0.36 $ 0.36 $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 32,606 37,258 40,520 37,200 34,767 20,288 -- JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.70 $ 0.60 $ 0.45 $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.92 $ 0.70 $ 0.60 $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 72,832 75,760 81,742 81,189 60,527 25,763 -- JANUS ASPEN SERIES MID CAP GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.48 $ 0.40 $ 0.30 $ 0.42 $ 0.70 $ 1.00 -- Accumulation unit value at end of period $ 0.54 $ 0.48 $ 0.40 $ 0.30 $ 0.42 $ 0.70 -- Number of accumulation units outstanding at end of period (000 omitted) 34,555 40,872 48,862 52,428 54,805 29,626 -- LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 101,054 90,221 62,349 29,532 15,860 7,958 1,981 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.66 $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 117,493 108,239 91,666 69,576 50,212 19,521 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.89 $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 62,995 77,406 74,690 59,272 34,072 12,308 -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.92 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.37 $ 1.18 $ 0.92 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 55,870 28,362 18,051 10,543 2,997 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.31 $ 1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 33,811 11,540 -- -- -- -- --
-------------------------------------------------------------------------------- 51 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.26 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,592 7,652 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.09 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 150,945 22,945 -- -- -- -- -- PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.83 $ 0.74 $ 0.56 $ 0.65 $ 0.92 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.98 $ 0.83 $ 0.74 $ 0.56 $ 0.65 $ 0.92 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 47,078 55,071 64,872 72,395 78,901 62,964 6,079 PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 49,747 57,095 67,224 72,033 74,819 49,764 5,084 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.08 $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 92,705 84,704 79,035 64,273 37,760 28,348 5,220 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 193,996 187,100 203,753 255,251 243,870 171,785 65,522 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.83% AND 2.87%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,450 7,405 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 332,677 221,377 188,939 154,530 83,968 30,783 7,186 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 408,559 255,776 134,486 86,442 43,328 12,124 3,149 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.54 $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 75,520 22,549 8,256 4,750 1,789 906 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.36 $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 130,135 82,347 51,936 31,133 16,572 8,968 1,552 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,038 2,274 -- -- -- -- --
-------------------------------------------------------------------------------- 52 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 323,849 191,140 192,314 135,693 129,186 97,754 16,891 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 262,154 242,254 177,150 93,845 58,348 31,722 7,774 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 29,477 1,052 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.91 $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 77,787 51,446 23,614 20,012 15,821 13,967 2,575 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.84 $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 263,828 130,790 69,981 52,124 26,327 24,003 5,333 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.14 $ 1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,232 3,498 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.04 $ 0.85 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.23 $ 1.12 $ 1.04 $ 0.85 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 47,283 53,376 42,780 16,388 2,489 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,605 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 325,031 464,000 464,876 373,715 276,054 177,036 31,537 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.87 $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 154,949 144,039 103,587 64,771 35,957 9,812 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,247 4,730 -- -- -- -- --
-------------------------------------------------------------------------------- 53 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.22 $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 145,087 160,725 155,718 124,866 50,510 16,258 11,135 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.60 $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 59,243 61,563 44,627 29,202 22,792 14,830 2,970 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 41,306 52,582 60,915 58,958 58,748 46,978 4,470 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. ROYCE MICRO-CAP PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 2.53 $ 2.24 $ 1.51 $ 1.75 $ 1.36 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 2.80 $ 2.53 $ 2.24 $ 1.51 $ 1.75 $ 1.36 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 22,799 26,803 26,590 25,593 20,056 8,005 1,228 THIRD AVENUE VALUE PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 2.54 $ 2.13 $ 1.51 $ 1.70 $ 1.51 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 2.89 $ 2.54 $ 2.13 $ 1.51 $ 1.70 $ 1.51 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 31,916 32,334 31,927 31,335 27,040 8,231 1,873 WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.67 $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 170,230 104,567 66,022 43,554 27,818 18,245 1,234 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.77 $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 241,623 184,961 129,824 78,311 40,791 23,813 2,476 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $ 1.10 $ 1.02 $ 0.84 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.15 $ 1.10 $ 1.02 $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,629 41,656 30,948 14,864 3,799 -- -- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.98 $ 0.90 $ 0.69 $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 0.98 $ 0.90 $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,021 10,390 8,227 4,703 1,200 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.97 $ 0.92 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 19,618 22,185 19,289 9,992 2,060 -- --
-------------------------------------------------------------------------------- 54 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.89 $ 0.85 $ 0.66 $ 0.88 $ 1.16 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.96 $ 0.89 $ 0.85 $ 0.66 $ 0.88 $ 1.16 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 37,608 41,803 44,130 48,704 55,044 46,419 5,160 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 1.49 $ 1.30 $ 0.97 $ 1.25 $ 1.37 $ 1.26 $ 1.00 Accumulation unit value at end of period $ 1.62 $ 1.49 $ 1.30 $ 0.97 $ 1.25 $ 1.37 $ 1.26 Number of accumulation units outstanding at end of period (000 omitted) 16,359 19,515 20,889 23,015 25,531 19,878 1,892 ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.07 $ 0.97 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.07 $ 0.97 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,924 75,935 54,358 29,770 4,363 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.61 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.86 $ 1.61 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,909 44,705 24,114 9,270 790 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.66 $ 0.83 $ 1.18 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.92 $ 0.81 $ 0.66 $ 0.83 $ 1.18 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 30,007 30,595 30,150 31,512 32,127 20,591 2,094 AMERICAN CENTURY VP VALUE, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 1.51 $ 1.33 $ 1.04 $ 1.20 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.57 $ 1.51 $ 1.33 $ 1.04 $ 1.20 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 53,403 50,775 49,145 49,161 41,460 21,041 4,775 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.02 $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 19,301 17,682 14,100 9,832 6,090 1,693 -- CREDIT SUISSE TRUST - MID-CAP GROWTH PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 1.18 $ 1.06 $ 0.74 $ 1.06 $ 1.28 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.18 $ 1.06 $ 0.74 $ 1.06 $ 1.28 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 12,660 15,543 17,844 20,303 24,697 22,624 2,872 FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.95 $ 0.91 $ 0.74 $ 0.90 $ 1.00 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.95 $ 0.91 $ 0.74 $ 0.90 $ 1.00 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 108,101 127,378 125,390 117,223 119,736 77,558 18,137 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 2.38 $ 1.93 $ 1.40 $ 1.57 $ 1.64 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 2.79 $ 2.38 $ 1.93 $ 1.40 $ 1.57 $ 1.64 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 70,537 72,884 69,808 68,203 67,132 48,251 6,945 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.96 $ 0.86 $ 0.60 $ 0.77 $ 0.98 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 1.14 $ 0.96 $ 0.86 $ 0.60 $ 0.77 $ 0.98 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 40,363 43,553 34,462 33,063 32,758 22,910 3,612 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.66 $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 88,911 80,587 63,047 44,591 19,803 6,181 683 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.09 $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 55,521 44,541 34,639 23,553 9,584 2,897 590 FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2 (3/1/2002) Accumulation unit value at beginning of period $ 1.29 $ 1.10 $ 0.84 $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.41 $ 1.29 $ 1.10 $ 0.84 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,421 15,951 12,608 9,570 -- -- --
-------------------------------------------------------------------------------- 55 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.29 $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 117,932 84,473 65,106 47,539 24,711 10,265 2,023 GOLDMAN SACHS VIT STRUCTURED SMALL CAP EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.66 $ 1.44 $ 1.00 $ 1.18 $ 1.14 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.74 $ 1.66 $ 1.44 $ 1.00 $ 1.18 $ 1.14 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 12,490 14,537 16,300 17,792 18,974 14,809 2,665 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 168,697 108,140 80,350 75,489 71,185 55,239 9,951 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.36 $ 0.36 $ 0.25 $ 0.42 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.40 $ 0.36 $ 0.36 $ 0.25 $ 0.42 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 24,131 27,479 30,159 31,354 34,050 22,949 -- JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.70 $ 0.59 $ 0.45 $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.91 $ 0.70 $ 0.59 $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 59,325 61,390 68,389 74,111 64,147 29,251 -- JANUS ASPEN SERIES MID CAP GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.48 $ 0.40 $ 0.30 $ 0.42 $ 0.70 $ 1.00 -- Accumulation unit value at end of period $ 0.53 $ 0.48 $ 0.40 $ 0.30 $ 0.42 $ 0.70 -- Number of accumulation units outstanding at end of period (000 omitted) 24,803 30,043 36,658 42,883 51,500 33,689 -- LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 73,982 66,844 53,159 28,853 19,727 10,774 2,504 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.65 $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 84,506 78,223 74,564 62,663 51,051 21,973 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.88 $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 48,503 60,214 61,988 53,383 36,822 15,060 -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.91 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.36 $ 1.18 $ 0.91 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35,163 18,264 12,519 7,093 2,778 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,721 6,121 -- -- -- -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.25 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,037 4,085 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.08 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,657 11,924 -- -- -- -- --
-------------------------------------------------------------------------------- 56 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.82 $ 0.73 $ 0.56 $ 0.65 $ 0.92 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.97 $ 0.82 $ 0.73 $ 0.56 $ 0.65 $ 0.92 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 43,047 51,671 62,780 74,769 90,196 80,679 8,200 PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 42,680 51,579 63,075 73,930 87,722 68,407 7,245 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.07 $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 77,525 74,540 73,310 64,613 53,096 39,810 6,539 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 147,452 148,915 178,580 228,237 265,455 203,922 87,424 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.61% AND 2 65%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 15,300 4,962 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.28 $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 257,273 190,125 176,013 159,405 106,760 43,920 11,675 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 278,737 181,318 99,776 67,958 41,299 14,227 3,441 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.53 $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 44,244 16,315 6,501 3,888 1,542 693 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.34 $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 102,876 72,702 54,100 36,626 23,970 14,137 2,368 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 51,906 1,504 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 212,229 135,373 147,485 118,986 130,764 106,410 13,813
-------------------------------------------------------------------------------- 57 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 237,711 236,566 197,358 122,784 88,813 52,655 10,137 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,068 783 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.90 $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 61,793 40,351 21,462 19,189 18,664 15,670 2,173 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 144,230 94,730 45,599 34,956 26,779 22,159 3,227 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,594 2,030 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.03 $ 0.85 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.22 $ 1.11 $ 1.03 $ 0.85 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 31,419 35,498 29,450 12,145 2,238 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,982 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.87 $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 234,424 352,273 387,251 347,841 307,320 219,316 32,483 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.86 $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 122,070 117,372 91,398 65,011 40,575 14,084 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,777 2,540 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 121,249 130,386 135,202 116,147 56,966 24,654 12,796
-------------------------------------------------------------------------------- 58 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.58 $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 46,718 51,057 39,709 29,341 24,346 16,349 3,029 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 31,424 41,862 50,934 55,183 65,574 58,414 3,901 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. ROYCE MICRO-CAP PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 2.50 $ 2.22 $ 1.50 $ 1.74 $ 1.35 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 2.76 $ 2.50 $ 2.22 $ 1.50 $ 1.74 $ 1.35 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 22,867 27,132 27,838 27,063 23,583 11,880 1,886 THIRD AVENUE VALUE PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 2.51 $ 2.12 $ 1.50 $ 1.69 $ 1.50 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 2.85 $ 2.51 $ 2.12 $ 1.50 $ 1.69 $ 1.50 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 32,580 33,905 34,897 35,110 31,848 11,524 2,043 WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.65 $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 114,381 79,981 56,466 42,309 30,297 21,844 1,343 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.74 $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 169,886 140,320 108,046 72,853 46,456 29,881 2,723 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $ 1.09 $ 1.01 $ 0.84 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.14 $ 1.09 $ 1.01 $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 32,466 31,201 22,278 11,859 3,224 -- -- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.97 $ 0.89 $ 0.69 $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 1.05 $ 0.97 $ 0.89 $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,690 7,049 5,248 2,781 1,031 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.91 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.96 $ 0.91 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,334 16,103 13,800 7,655 2,230 -- --
-------------------------------------------------------------------------------- 59 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements
-------------------------------------------------------------------------------- 60 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY -- PROSPECTUS [RIVERSOURCE ANNUITIES(SM) LOGO] IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 ameriprise.com IDS Life Insurance Company (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise FInancial). RiverSource(SM) insurance and annuity products are issued by IDS Life Insurance Company, an Ameriprise Financial company. (C) 2006 Ameriprise Financial, Inc. All rights reserved. S-6467 K (5/06) PROSPECTUS MAY 1, 2006 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY(SM) - BAND 3 INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY FOR: - current or retired employees of Ameriprise Financial, Inc. or its subsidiaries and their spouses (employees), - current or retired Ameriprise Financial, Inc. financial advisors and their spouses (advisors), and - individuals investing an initial purchase payment of $1 million (other individuals). NEW RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 Ameriprise Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 ameriprise.com/variableannuities IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. - American Century Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Columbia Variable Insurance Trust - Credit Suisse Trust - Eaton Vance Variable Trust - Fidelity(R) Variable Insurance Products Funds - Service Class - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Neuberger Berman Advisers Management Trust - Oppenheimer Variable Account Funds - Service Shares - PIMCO Variable Insurance Trust (VIT) - Putnam Variable Trust - Class IB Shares - RiverSource(SM) Variable Portfolio Funds (previously American Express(R) Variable Portfolio Funds) - Royce Capital Fund - Third Avenue Variable Series Trust - The Universal Institutional Funds, Inc. Van Kampen Life Investment Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Please read the prospectuses carefully and keep them for future reference. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are insurance products that are complex investment vehicles. Be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees. This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the Fund prospectuses. Do not rely on any such information or representations. -------------------------------------------------------------------------------- 1 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may or may not be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to your annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 5 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 10 FINANCIAL STATEMENTS 10 THE VARIABLE ACCOUNT AND THE FUNDS 11 THE FIXED ACCOUNT 23 BUYING YOUR CONTRACT 23 CHARGES 25 VALUING YOUR INVESTMENT 27 MAKING THE MOST OF YOUR CONTRACT 28 SURRENDERS 32 TSA -- SPECIAL PROVISIONS 33 CHANGING OWNERSHIP 33 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 34 OPTIONAL BENEFITS 35 THE ANNUITY PAYOUT PERIOD 39 TAXES 41 VOTING RIGHTS 44 SUBSTITUTION OF INVESTMENTS 44 ABOUT THE SERVICE PROVIDERS 44 APPENDIX: CONDENSED FINANCIAL INFORMATION (UNAUDITED) 46 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 51
CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: The time the New York Stock Exchange (NYSE) closes (4 p.m. Eastern time unless the NYSE closes earlier). CODE: The Internal Revenue Code of 1986, as amended. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB): This is an optional benefit you can add to your contract for an additional charge. It is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an additional charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Code - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension IRA (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and investment only plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. -------------------------------------------------------------------------------- 3 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VALUATION DATE: Any normal business day, Monday through Friday, on which the NYSE is open, up to the close of business. At the close of business, the next valuation date begins. We calculate the accumulation unit value of each subaccount on each valuation date. If we receive your purchase payment or any transaction request (such as a transfer or surrender request) at our home office before the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the valuation date we received your payment or transaction request. On the other hand, if we receive your purchase payment or transaction request at our home office at or after the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the next valuation date. If you make a transaction request by telephone (including by fax), you must have completed your transaction by the close of business in order for us to process it using the accumulation unit value we calculate on that valuation date. If you were not able to complete your transaction before the close of business for any reason, including telephone service interruptions or delays due to high call volume, we will process your transaction using the accumulation unit value we calculate on the next valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payout of your contract value (less any applicable premium tax). TAX-DEFERRED RETIREMENT PLANS: Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use a qualified annuity to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. A qualified annuity has features other than tax deferral that may help you reach your retirement goals. In addition, the Code subjects retirement plans to required withdrawals triggered at a certain age. These mandatory withdrawals are called required minimum distributions (RMDs). RMDs may reduce the value of certain death benefits and optional riders (see "Taxes - Qualified Annuities - Required Minimum Distributions"). You should consult your tax advisor before you purchase the contract as a qualified annuity for an explanation of the potential tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our home office within the time stated on the first page of your contract. You will receive a full refund of the contract value. We will not deduct any charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Generally, you may allocate your purchase payments among any or all of: - the subaccounts of the variable account, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 11) - the fixed account, which earns interest at a rate that we adjust periodically. Purchase payment allocations to the fixed account may be subject to special restrictions. (p. 23) BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 23) PURCHASE PAYMENTS: MINIMUM ALLOWABLE PURCHASE PAYMENTS: If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS: FOR EMPLOYEES/ADVISORS: $100,000 through age 85 $50,000 for ages 86 to 90 FOR OTHER INDIVIDUALS: $100,000 -------------------------------------------------------------------------------- 4 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 29) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and income taxes (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 32) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 33) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 34) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 35) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet IRS requirements. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 39) TAXES: Generally, income earned on your contract value grows tax deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) The tax treatment of qualified and nonqualified annuities differs. Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. However, Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. (p. 41) LIMITATIONS ON USE OF CONTRACTS: If mandated by applicable law, including but not limited to, federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block an owner's access to contract values or to satisfy other statutory obligations. Under these circumstances we may refuse to implement requests for transfers, surrenders, or death benefits, until instructions are received from the appropriate governmental authority or a court of competent jurisdiction. EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE 0%
SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.") THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30
(We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) OPTIONAL RIDER FEES (As a percentage of the contract value charged annually at the contract anniversary. The fee applies only if you elect the optional rider.) MAV RIDER FEE 0.15% EEB RIDER FEE 0.30%
ANNUAL VARIABLE ACCOUNT EXPENSES (Total annual variable account expenses as a percentage of average daily subaccount value.) MORTALITY AND EXPENSE RISK FEE 0.55%
-------------------------------------------------------------------------------- 5 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS FOR THE LAST FISCAL YEAR. THE SECOND TABLE SHOWS THE TOTAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS(a) (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before fee waivers and/or expense reimbursements 0.53% 5.85%
(a) Each fund deducts management fees and other expenses from fund assets. Fund assets include amounts you allocate to a particular fund. Funds may also charge 12b-1 fees that are used to finance any activity that is primarily intended to result in the sale of fund shares. Because 12b-1 fees are paid out of fund assets on an on-going basis, you may pay more if you select subaccounts investing in funds that have adopted 12b-1 plans than if you select subaccounts investing in funds that have not adopted 12b-1 plans. The fund or the fund's affiliates may pay us and/or our affiliates for promoting and supporting the offer, sale and servicing of fund shares. In addition, the fund's distributor and/or investment adviser, transfer agent or their affiliates may pay us and/or our affiliates for various services we or our affiliates provide. The amount of these payments will vary by fund and may be significant. See "The Variable Account and the Funds" for additional information, including potential conflicts of interest these payments may create. For a more complete description of each fund's fees and expenses and important disclosure regarding payments the fund and/or its affiliates make, please review the fund's prospectus and SAI. TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AIM V.I. Capital Appreciation Fund, Series I Shares 0.61% --% 0.29% 0.90%(1),(2) AIM V.I. Capital Development Fund, Series I Shares 0.75 -- 0.34 1.09(1),(3) AIM V.I. Global Health Care Fund, Series II Shares 0.75 0.25 0.33 1.33(1),(3) AllianceBernstein VPS Global Technology Portfolio (Class B) 0.75 0.25 0.17 1.17(4) AllianceBernstein VPS Growth and Income Portfolio (Class B) 0.55 0.25 0.05 0.85(4) AllianceBernstein VPS International Value Portfolio (Class B) 0.75 0.25 0.12 1.12(4) American Century VP International, Class I 1.23 -- -- 1.23(4) American Century VP Ultra(R), Class II 0.90 0.25 0.01 1.16(4) American Century VP Value, Class I 0.93 -- -- 0.93(4) Calvert Variable Series, Inc. Social Balanced Portfolio 0.70 -- 0.22 0.92(5) Columbia Marsico Growth Fund, Variable Series 0.74 0.25 0.34 1.33(6) Columbia Marsico International Opportunities Fund, Variable Series 0.80 0.25 0.43 1.48(4) Credit Suisse Trust - Commodity Return Strategy Portfolio 0.50 0.25 0.55 1.30(7) Credit Suisse Trust - Mid-Cap Growth Portfolio 0.90 -- 0.47 1.37(7) Eaton Vance VT Floating-Rate Income Fund 0.58 -- 0.69 1.27(4) Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2 0.57 0.25 0.09 0.91(8) Fidelity(R) VIP Growth & Income Portfolio Service Class 0.47 0.10 0.12 0.69(8) Fidelity(R) VIP Mid Cap Portfolio Service Class 0.57 0.10 0.12 0.79(8) Fidelity(R) VIP Overseas Portfolio Service Class 0.72 0.10 0.17 0.99(8) FTVIPT Franklin Real Estate Fund - Class 2 0.47 0.25 0.02 0.74(9),(10) FTVIPT Franklin Small Cap Value Securities Fund - Class 2 0.52 0.25 0.17 0.94(10),(11) FTVIPT Templeton Foreign Securities Fund - Class 2 0.65 0.25 0.17 1.07(11) Goldman Sachs VIT Mid Cap Value Fund 0.80 -- 0.07 0.87(12) Goldman Sachs VIT Structured Small Cap Equity Fund 0.75 -- 0.18 0.93(12) (previously Goldman Sachs VIT CORE(SM) Small Cap Equity Fund) Goldman Sachs VIT Structured U.S. Equity Fund 0.65 -- 0.09 0.74(12) (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) Janus Aspen Series Global Technology Portfolio: Service Shares 0.64 0.25 0.09 0.98(13) Janus Aspen Series International Growth Portfolio: Service Shares 0.64 0.25 0.06 0.95(13)
-------------------------------------------------------------------------------- 6 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 0.64% 0.25% 0.03% 0.92%(13) Lazard Retirement International Equity Portfolio 0.75 0.25 0.21 1.21(14) MFS(R) Investors Growth Stock Series - Service Class 0.75 0.25 0.15 1.15(15),(16) MFS(R) New Discovery Series - Service Class 0.90 0.25 0.16 1.31(15),(16) MFS(R) Utilities Series - Service Class 0.75 0.25 0.15 1.15(15),(16) Neuberger Berman Advisers Management Trust International Portfolio (Class S) 1.15 0.25 4.45 5.85(17),(18) Oppenheimer Global Securities Fund/VA, Service Shares 0.63 0.25 0.04 0.92(19) Oppenheimer Main Street Small Cap Fund/VA, Service Shares 0.74 0.25 0.05 1.04(19) Oppenheimer Strategic Bond Fund/VA, Service Shares 0.69 0.25 0.02 0.96(19) PIMCO VIT All Asset Portfolio, Advisor Share Class 0.20 0.25 0.88 1.33(20) Putnam VT International New Opportunities Fund - Class IB Shares 1.00 0.25 0.25 1.50(21) Putnam VT Vista Fund - Class IB Shares 0.65 0.25 0.09 0.99(4) RiverSource(SM) Variable Portfolio - Balanced Fund 0.54 0.13 0.14 0.81(22),(23),(24) (previously AXP(R) Variable Portfolio - Managed Fund) RiverSource(SM) Variable Portfolio - Cash Management Fund 0.33 0.13 0.15 0.61(22),(23) (previously AXP(R) Variable Portfolio - Cash Management Fund) RiverSource(SM) Variable Portfolio - Core Bond Fund 0.48 0.13 0.33 0.94(22),(23),(25) (previously AXP(R) Variable Portfolio - Core Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.47 0.13 0.17 0.77(22),(23) (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.68 0.13 0.16 0.97(22),(23),(24) (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.05 0.13 0.34 1.52(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RiverSource(SM) Variable Portfolio - Fundamental Value Fund 0.73 0.13 0.16 1.02(23),(26) RiverSource(SM) Variable Portfolio - Global Bond Fund 0.71 0.13 0.20 1.04(22),(23) (previously AXP(R) Variable Portfolio - Global Bond Fund) RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.44 0.13 0.33 0.90(22),(23),(25) (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RiverSource(SM) Variable Portfolio - Growth Fund 0.66 0.13 0.17 0.96(22),(23),(24) (previously AXP(R) Variable Portfolio - Growth Fund) RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.59 0.13 0.16 0.88(22),(23) (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.61 0.13 0.34 1.08(22),(23),(25) (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.72 0.13 0.20 1.05(22),(23),(24) (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.56 0.13 0.14 0.83(22),(23),(24) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.60 0.13 1.86 2.59(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.63 0.13 0.17 0.93(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Equity Select Fund) RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.70 0.13 2.18 3.01(22),(23),(25) (previously AXP(R) Variable Portfolio - Mid Cap Value Fund)
-------------------------------------------------------------------------------- 7 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.22% 0.13% 0.18% 0.53%(22),(23),(25) (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RiverSource(SM) Variable Portfolio - Select Value Fund 0.77 0.13 0.30 1.20(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Select Value Fund) RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.48 0.13 0.17 0.78(22),(23) (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.80 0.13 0.22 1.15(22),(23),(24) (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.92 0.13 0.24 1.29(22),(23),(24),(25) Royce Micro-Cap Portfolio 1.25 -- 0.07 1.32(4) Third Avenue Value Portfolio 0.90 -- 0.29 1.19(4) Van Kampen Life Investment Trust Comstock Portfolio Class II Shares 0.56 0.25 0.03 0.84(4) Van Kampen UIF Global Real Estate Portfolio Class II Shares 0.85 0.35 0.62 1.82(27) Van Kampen UIF Mid Cap Growth Portfolio Class II Shares 0.75 0.35 0.34 1.44(27) Wanger International Small Cap 0.95 -- 0.18 1.13(4) Wanger U.S. Smaller Companies 0.90 -- 0.05 0.95(4) Wells Fargo Advantage VT Asset Allocation Fund 0.55 0.25 0.24 1.04(28) Wells Fargo Advantage VT International Core Fund 0.75 0.25 0.41 1.41(28) Wells Fargo Advantage VT Small Cap Growth Fund 0.75 0.25 0.24 1.24(28)
(1) Figures shown in the table are for the year ended Dec. 31, 2005 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. The Fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares and Series II shares to the extent necessary to limit total annual expenses of Series I shares to 1.30% and Series II shares to 1.45% of average daily nets assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual expenses to exceed the limit stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganizations as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The expense limitation is in effect through April 30, 2007. (2) As a result of a reorganization of another Fund into the Fund, which will occur on or about May 1, 2006 for AIM V.I. Capital Appreciation Fund Series I Shares, the "Gross total annual expenses" have been restated to reflect such reorganization. (3) Effective Jan. 1, 2005 through June 30, 2006, the advisor has contractually agreed to waive a portion of its advisory fees. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2005. (5) Expenses are based on expenses for the Portfolio's most recent fiscal year. Management fees include the subadvisory fee paid by the Advisor, to the Subadvisors, and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of Calvert. (6) The Fund's Distributor has voluntarily agreed to waive 0.25% of its 12b-1 fees. (7) Fee waivers and/or expense reimbursement may reduce expenses for the Portfolio, without which performance would be lower. Waivers and/or expense reimbursements may be discontinued at any time. After fee waivers and expense reimbursements net expenses would be 0.95% for Credit Suisse Trust - Commodity Return Strategy Portfolio and 1.25% for Credit Suisse Trust - Mid-Cap Growth Portfolio. In addition, for the period beginning March 1, 2006 through Feb. 28, 2007 Credit Suisse Asset Management, LLC will voluntarily waive an additional 0.05% of its advisory fee for Credit Suisse Trust - Mid-Cap Growth Portfolio. (8) A portion of the brokerage commissions that the Fund pays may be reimbursed and used to reduce the Fund's expenses. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances are used to reduce the Fund's custodian expenses. Including these reductions, the total class operating expenses would have been 0.89% for Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2, 0.64% for Fidelity(R) VIP Growth & Income Portfolio Service Class, 0.74% for Fidelity(R) VIP Mid Cap Portfolio Service Class and 0.92% for Fidelity(R) VIP Overseas Portfolio Service Class. These offsets may be discontinued at any time. (9) The Fund's administration fee is paid indirectly through the management fee. (10) While the maximum amount payable under the Fund's class rule 12b-1 plan is 0.35% per year of the Fund's class average annual net assets, the Fund's Board of Trustees has set the current rate at 0.25% per year. (11) The Fund's manager has agreed in advance to reduce its fees with respect to assets invested by the Fund in a Franklin Templeton Money Market Fund. This reduction is required by the Fund's Board of Trustees and an exemptive order by the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.05%) and 0.89%, respectively for FTVIPT Franklin Small Cap Value Securities Fund - Class 2 and (0.05%) and 1.02%, respectively for FTVIPT Templeton Foreign Securities Fund - Class 2. (12) The Fund's annual operating expenses are based on actual expenses for the fiscal year ended Dec. 31, 2005. "Other expenses" include transfer agency fees and expenses equal on an annualized basis to 0.04% of the average daily net assets of the Fund plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to limit "Other expenses" (excluding management fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation and indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, 0.11% of the Fund's average daily net assets for Goldman Sachs VIT Structured Small Cap Equity Fund, 0.16% of the Fund's average daily net assets for Goldman Sachs VIT Structured U.S. Equity Fund and 0.25% of the Fund's average daily net assets for Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser may cease or modify the expense limitations at its discretion at anytime. If this occurs, other expenses and total annual operating expenses may increase without shareholder approval. In addition, for Goldman Sachs VIT Structured Small Cap Equity Fund, effective July 1, 2005, the Investment Adviser has voluntarily agreed to waive a portion of its management fee equal to 0.02% of the Fund's average daily net assets. -------------------------------------------------------------------------------- 8 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS (13) Janus Capital has contractually agreed to waive certain Portfolio's total annual operating expenses (excluding the distribution and shareholder servicing fee, the administrative services fee applicable to certain Portfolios, brokerage commissions, interest, taxes and extraordinary expenses) to certain limits until May 1, 2007. Because the 12b-1 fee is charged as an ongoing fee, over time the fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (14) The Investment Manager has contractually agreed to waive its fees and, if necessary, reimburse the Portfolio through Dec. 31, 2006, to the extent "Gross total annual expenses" exceed 1.25% of average daily net assets for Lazard Retirement International Equity Portfolio. (15) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sale and distribution of service class shares (these fees are referred to as distribution fees). (16) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent, and may have entered into brokerage arrangements, that reduced or recaptured series' expenses. Any such expense reductions are not reflected in the table. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower. (17) Neuberger Berman Management Inc. ("NBMI") has undertaken through Dec. 31, 2009 to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Portfolio. The expense limitation arrangements for the Portfolio is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the Portfolio to exceed its limitation described above. (18) Class S shares of the International Portfolio have a redemption fee of 1.00% for exchanges or redemptions on shares held less than 60 days. The redemption fee is paid to the Portfolio. (19) Expenses may vary in future years. "Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to 0.35% per fiscal year. That undertaking may be amended or withdrawn at any time. For the Fund's fiscal year ended Dec. 31, 2005, the transfer agent fees did not exceed the expense limitation described above. (20) "Other expense" also includes Underlying Fund expenses. Underlying Fund Expenses for the Portfolio are estimated based upon an allocation of the Portfolio's assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. Underlying Fund expenses will vary with changes in the expenses of the Underlying Funds, as well as allocation of the Portfolio's assets, and may be higher or lower than those shown above. For a listing of the expenses associated with each Underlying Fund for the most recent fiscal year, please see "Fund of Funds Fees - Annual Underlying Fund Expenses" in the Portfolio's prospectus. PIMCO has contractually agreed, for the Portfolio's current fiscal year (12/31), to reduce its Advisory Fee to the extent that the Underlying Fund Expenses attributable to Advisory and Administrative Fees exceed 0.60% of the total assets invested in Underlying Funds. PIMCO may recoup these waivers in future periods, not exceeding three years, provided total expenses, including such recoupment, do not exceed the annual expense limit. (21) Putnam's Management has a contractual agreement to limit expenses through Dec. 31, 2006. After fee waivers and expense reimbursements net expenses would be 1.46% for Putnam VT International New Opportunities Fund - Class IB Shares. (22) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2005, adjusted to reflect current fees. (23) The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940. The Fund pays IDS Life Insurance Company an annual fee of up to 0.125% of average daily net assets as payment for distributing its shares and providing shareholder services. Because this fee is paid out of the Fund's assets on an on-going basis, over time this fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (24) Management fees include the impact of a performance incentive adjustment fee that decreased the management fee by 0.05% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.04% for RiverSource(SM) Variable Portfolio - International Opportunity Fund, 0.02% for RiverSource(SM) Variable Portfolio - Large Cap Equity Fund, 0.07% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 0.01% for RiverSource(SM) Variable Portfolio - Select Value Fund and 0.04% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. Management fees include the impact of a performance incentive adjustment fee that increased the management fee by 0.03% for RiverSource(SM) Variable Portfolio - Balanced Fund, 0.08% for RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund, 0.06% for RiverSource(SM) Variable Portfolio - Growth Fund, 0.002% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund and 0.01% for RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund. (25) RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2006, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed: 0.83% for RiverSource(SM) Variable Portfolio - Core Bond Fund, 1.75% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.72% for RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund, 0.99% for RiverSource(SM) Variable Portfolio - Income Opportunities Fund, 1.05% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund, 1.00% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 1.08% for RiverSource(SM) Variable Portfolio - Mid Cap Value Fund, 0.495% for RiverSource(SM) Variable Portfolio - S&P 500 Index Fund, 1.15% for RiverSource(SM) Variable Portfolio - Select Value Fund and 1.25% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. (26) The Fund's expense figures are based on estimated expenses, before fee waivers and expense reimbursements. RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed 1.07% for RiverSource(SM) Variable Portfolio - Fundamental Value Fund. (27) The fees disclosed reflect gross ratios prior to any voluntary waivers/reimbursements of expenses by the adviser. The adviser has voluntarily agreed to waive a portion of or all of its management fee and/or reimburse expenses to the extent necessary so that total annual operating expenses, excluding certain investment related expense such as foreign country tax expense and interest expense on borrowing, do not exceed 1.35%. The adviser may terminate these voluntary waivers at any time at its sole discretion. Additionally, the distributor has agreed to voluntarily waive a portion of the 12b-1 fee for Class II shares. The distributor may terminate these voluntary waivers at any time at its sole discretion. After these fee waivers/reimbursements, net expenses would have been 1.40% for Van Kampen UIF Global Real Estate Portfolio Class II Shares and 1.15% for Van Kampen UIF Mid Cap Growth Portfolio Class II Shares. In addition, Van Kampen UIF Global Real Estate Portfolio Class II Shares was not operational in 2005. Figures in the table are based on estimated assuming the average daily net assets of the Portfolio were not more than $75,000,000. (28) The Funds' investment adviser has implemented a break point schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. Other expenses for Wells Fargo Advantage VT Opportunity Fund are based on estimates for the current fiscal year. The adviser has committed through April 30, 2007 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio. After fee waivers and expense reimbursements net expenses would be 1.00% for Wells Fargo Advantage VT Asset Allocation Fund, 1.00% for Wells Fargo Advantage VT International Core Fund and 1.20% for Wells Fargo Advantage VT Small Cap Growth Fund. Please refer to the Fund's prospectus for additional details. -------------------------------------------------------------------------------- 9 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. This example assumes the maximum fees and expenses of any of the funds for the last fiscal year. It assumes that you select both the optional MAV and EEB. Although your actual costs may be higher or lower, based on this assumption your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $705.92 $2,074.44 $3,387.19 $6,439.71
MINIMUM EXPENSES. This example assumes the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds for the last fiscal year. It assumes that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $114.49 $356.89 $618.33 $1,365.41
* In these examples, the $30 contract administrative charge is approximated as a .037% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to this contract by the total average net assets that are attributable to the contract. CONDENSED FINANCIAL INFORMATION (UNAUDITED) You can find unaudited condensed financial information for the subaccounts in the Appendix. We do not include condensed financial information for subaccounts that are new and have no activity as of the financial statement date. FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. The SAI does not include audited financial statements for subaccounts that are new and have no activity as of the financial statement date. -------------------------------------------------------------------------------- 10 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE VARIABLE ACCOUNT AND THE FUNDS THE VARIABLE ACCOUNT: The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. Although the Internal Revenue Service (IRS) has issued some guidance on investor control, the U.S. Treasury and the IRS may continue to examine this aspect of variable contracts and provide additional guidance on investor control. Their concern involves how many investment choices (subaccounts) may be offered by an insurance company and how many exchanges among those subaccounts may be allowed before the contract owner would be currently taxed on income earned within the contract. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FUNDS: The contract currently offers subaccounts investing in shares of the funds listed in the table below. - INVESTMENT OBJECTIVES: The investment managers and advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. - FUND NAME AND MANAGEMENT: A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. - ELIGIBLE PURCHASERS: All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. The funds are not available to the public (see "Fund name and management" above). Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future for tax, regulatory or other reasons, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although we and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of each fund will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. Each fund intends to comply with the diversification requirements under Section 817(h) of the Code. - REVENUE WE RECEIVE FROM THE FUNDS MAY CREATE POTENTIAL CONFLICTS OF INTEREST: We seek to provide a broad array of underlying funds taking into account the fees and charges imposed by each fund and the contract charges we impose. We select the underlying funds in which the subaccounts initially invest and upon any substitution (see "Substitution of Investments"). We also make all decisions regarding which funds to retain in a contract, which funds to add to a contract and which funds will no longer be offered in a contract. In making these decisions, we may consider various objective and subjective factors. Objective factors include, but are not limited to, fund performance, fund expenses, classes of fund shares available, size of the fund, and investment objectives and investing style of the fund. Subjective factors include, but are not limited to, investment sub-styles and process, management skill and history at other funds, and portfolio concentration and sector weightings. We also consider the levels and types of revenue a fund, its distributor, investment adviser, subadviser, transfer agent or their affiliates pay us and our affiliates. This revenue includes, but is not limited to, compensation for administrative services provided with respect to the fund and support of marketing and distribution expenses incurred with respect to the fund. -------------------------------------------------------------------------------- 11 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS We and/or our affiliates receive from each of the funds, or the funds' affiliates, varying levels and types of revenue. The amount of this revenue is most often based on a percentage of average daily net assets invested in the fund. For example, the revenue we receive from affiliates of funds other than the RiverSource Variable Portfolio Funds (unaffiliated funds) currently ranges up to 0.50% of the average daily net assets invested in the fund through this contract and other contracts we or our affiliates issue. In some cases, this revenue may be based, in part, on sales one of our affiliates makes of other securities including, but not limited to, publicly-traded retail mutual funds and/or the average daily net assets resulting from these sales. We or our affiliates may also receive revenue which is not based on a percentage of average daily net assets. The amount of this revenue varies by fund, may be significant and may create potential conflicts of interest. The greatest amount and percentage of revenue we and our affiliates receive comes from assets allocated to subaccounts investing in the RiverSource Variable Portfolio Funds (affiliated funds) that are managed by RiverSource Investments, LLC (RiverSource Investments), one of our affiliates. Employee compensation and operating goals at all levels are tied to the success of Ameriprise Financial, Inc. and its affiliates, including us. Certain employees may receive higher compensation and other benefits based, in part, on contract values that are invested in the RiverSource Variable Portfolio Funds. These revenue payments may also influence recommendations your sales representative makes regarding whether you should invest in the contract, and whether you should allocate purchase payments or contract value to a subaccount that invests in a particular fund (see "About the Service Providers"). The revenue we receive from a fund or its affiliates is in addition to revenue we receive from the charges you pay when buying, owning and surrendering the contract (see "Expense Summary"). However, the revenue we receive from a fund or its affiliates may come, at least in part, from the fund's fees and expenses you pay indirectly when you allocate contract value to the subaccount that invests in that fund. Please see the SAI for a table that ranks the unaffiliated funds according to total dollar amounts they and their affiliates paid to us and/or our affiliates in 2005. - WHY REVENUES ARE PAID TO US: In accordance with applicable laws, regulations and the terms of the agreements under which such revenue is paid, we or our affiliates may receive this revenue for various purposes including, but not limited to: - Compensating, training and educating sales representatives who sell the contracts. - Granting access to our employees whose job it is to promote sales of the contracts by authorized selling firms and their sales representatives, and granting access to sales representatives of our affiliated selling firms. - Activities or services we or our affiliates provide that assist in the promotion and distribution of the contracts including promoting the funds available under the contracts to prospective and existing contract owners, authorized selling firms and sales representatives. - Providing sub-transfer agency and shareholder servicing to contract owners. - Promoting, including and/or retaining the fund's investment portfolios as underlying investment options in the contracts. - Advertising, printing and mailing sales literature, and printing and distributing prospectuses and reports. - Furnishing personal services to contract owners, including education of contract owners, answering routine inquiries regarding a fund, maintaining accounts or providing such other services eligible for service fees as defined under the rules of the National Association of Securities Dealers, Inc. (NASD). - Subaccounting, transaction processing, recordkeeping and administration. - SOURCES OF REVENUE RECEIVED FROM AFFILIATED FUNDS: The affiliated funds are managed by RiverSource Investments. The sources of revenue we receive from these affiliated funds, or from affiliates of these funds, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser and transfer agent or an affiliate of these. The revenue resulting from these sources may be based either on a percentage of average daily net assets of the fund or on the actual cost of certain services we provide with respect to the fund. We may receive this revenue either in the form of a cash payment or it may be allocated to us. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. - SOURCES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS: The unaffiliated funds are not managed by an affiliate of ours. The sources of revenue we receive from these unaffiliated funds, or the funds' affiliates, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser, subadviser, transfer agent or an affiliate of these and assets of the fund's distributor or an affiliate. The revenue resulting from these sources usually is based on a percentage of average daily net assets of the fund but there may be other types of payment arrangements. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. -------------------------------------------------------------------------------- 12 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS YOU MAY ALLOCATE PURCHASE PAYMENTS AND TRANSFERS TO ANY OR ALL OF THE SUBACCOUNTS OF THE VARIABLE ACCOUNT THAT INVEST IN SHARES OF THE FOLLOWING FUNDS:
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Capital Growth of capital. Invests principally in common stocks of A I M Advisors, Inc. Appreciation Fund, companies likely to benefit from new or innovative products, Series I Shares services or processes as well as those with above-average growth and excellent prospects for future growth. The fund can invest up to 25% of its total assets in foreign securities that involve risks not associated with investing solely in the United States. AIM V.I. Capital Long-term growth of capital. Invests primarily in securities A I M Advisors, Inc. Development Fund, (including common stocks, convertible securities and bonds) of Series I Shares small- and medium-sized companies. The Fund may invest up to 25% of its total assets in foreign securities. AIM V.I. Global Health Capital growth. The fund seeks to meet its objective by A I M Advisors, Inc. Care Fund, Series II investing, normally, at least 80% of its assets in securities Shares of health care industry companies. The fund may invest up to 20% of its total assets in companies located in developing countries, i.e., those countries that are in the initial stages of their industrial cycles. The fund may also invest up to 5% of its total assets in lower-quality debt securities, i.e., junk bonds. AllianceBernstein VPS Long-term growth of capital. The Fund invests at least 80% of AllianceBernstein L.P. Global Technology its net assets in securities of companies that use technology Portfolio (Class B) extensively in the development of new or improved products or processes. Invests in a global portfolio of securities of U.S. and foreign companies selected for their growth potential. AllianceBernstein VPS Long-term growth of capital. Invests primarily in AllianceBernstein L.P. Growth and Income dividend-paying common stocks of large, well-established, "blue Portfolio (Class B) chip" companies. AllianceBernstein VPS Long-term growth of capital. Invests primarily in a diversified AllianceBernstein L.P. International Value portfolio of equity securities of established companies Portfolio (Class B) selected from more than 40 industries and from more than 40 developed and emerging market countries. American Century VP Capital growth, with income as a secondary objective. Invests American Century Global Investment International, Class I primarily in stocks of growing foreign companies in developed Management, Inc. countries. American Century VP Long-term capital growth. Invests primarily in U.S. companies, American Century Investment Ultra(R), Class II but there is no limit on the amount of assets the Fund can Management, Inc. invest in foreign companies. American Century VP Capital growth, with income as a secondary objective. Invests American Century Investment Value, Class I primarily in stocks of companies that management believes to be Management, Inc. undervalued at the time of purchase. Calvert Variable Income and capital growth. Invests primarily in stocks, bonds Calvert Asset Management Company, Series, Inc. Social and money market instruments which offer income and capital Inc. (CAMCO), investment adviser. Balanced Portfolio growth opportunity and which satisfy the investment and social SsgA Funds Management, Inc. and New criteria. Amsterdam Partners, LLP are the investment subadvisers.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Columbia Marsico Growth Long-term growth of capital. The Fund invests primarily in Columbia Management Advisors, LLC Fund, Variable Series equity securities of large-capitalization companies that are (advisor); Marsico Capital selected for their growth potential. It generally holds a core Management, LLC (sub-advisor) position of between 35 and 50 common stocks. It may hold up to 25% of its assets in foreign securities. Columbia Marsico Long-term growth of capital. The Fund normally invests at least Columbia Management Advisors, LLC International 65% of its assets in common stocks of foreign companies. While (advisor); Marsico Capital Opportunities Fund, the Fund may invest in companies of any size, it focuses on Management, LLC (sub-advisor) Variable Series large companies. These companies are selected for their long-term growth potential. The Fund normally invests in issuers from at least three different countries not including the United States and generally holds a core position of 35 to 50 common stocks. The Fund may invest in common stocks of companies operating in emerging markets. Credit Suisse Trust - Total return. Invests in commodity-linked derivative Credit Suisse Asset Management, LLC Commodity Return instruments backed by a portfolio of fixed-income securities. Strategy Portfolio The portfolio invests in commodity-linked derivative instruments, such as commodity-linked notes, swap agreements, commodity options, futures and options on futures that provide exposure to the investment returns of the commodities markets without investing directly in physical commodities. Credit Suisse Trust Maximum capital appreciation. Invests in U.S. equity securities Credit Suisse Asset Management, LLC Mid-Cap Growth of "mid-cap" growth companies with growth characteristics such Portfolio as positive earnings and potential for accelerated growth. Eaton Vance VT High level of current income. Non-diversified mutual fund that Eaton Vance Management Floating-Rate Income normally invests primarily in senior floating rate loans Fund ("Senior Loans"). Senior Loans typically are of below investment grade quality and have below investment grade credit ratings, which ratings are associated with having high risk, speculative characteristics. Investments are actively managed, and may be bought or sold on a daily basis (although loans are generally held until repaid). The investment adviser's staff monitors the credit quality of the Fund holdings, as well as other investments that are available. Preservation of capital is considered when consistent with the Fund's objective. Fidelity(R) VIP Seeks long-term capital appreciation. Normally invests Fidelity Management & Research Contrafund(R) Portfolio primarily in common stocks. Invests in securities of companies Company (FMR), investment manager; Service Class 2 whose value it believes is not fully recognized by the public. FMR U.K. and FMR Far East, Invests in either "growth" stocks or "value" stocks or both. sub-investment advisers. The fund invests in domestic and foreign issuers. Fidelity(R) VIP Growth Seeks high total return through a combination of current income FMR, investment manager; FMR U.K., & Income Portfolio and capital appreciation. Normally invests a majority of assets FMR Far East, sub-investment Service Class in common stocks with a focus on those that pay current advisers. dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. Invests in domestic and foreign issuers. The Fund invests in either "growth" stocks or "value" stocks or both.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Fidelity(R) VIP Mid Cap Long-term growth of capital. Allocates assets across different FMR, investment manager; FMR U.K., Portfolio Service Class market sectors and maturities. Normally invests primarily in FMR Far East, sub-investment common stocks. Normally invests at least 80% of assets in advisers. securities of companies with medium market capitalizations. May invest in companies with smaller or larger market capitalizations. Invests in domestic and foreign issuers. The Fund invests in either "growth" or "value" common stocks or both. Fidelity(R) VIP Long-term growth of capital. Normally invests primarily in FMR, investment manager; FMR U.K., Overseas Portfolio common stocks of foreign securities. Normally invests at least FMR Far East, Fidelity International Service Class 80% of assets in non-U.S. securities. Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. FTVIPT Franklin Real Seeks capital appreciation, with current income as a secondary Franklin Advisers, Inc. Estate Fund - Class 2 goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. FTVIPT Franklin Small Seeks long-term total return. The Fund normally invests at Franklin Advisory Services, LLC Cap Value Securities least 80% of its net assets in investments of small Fund - Class 2 capitalization companies, and normally invests predominantly in equity securities. For this Fund, small-capitalization companies are those with market capitalization values not exceeding $2.5 billion, at the time of purchase. The Fund invests mainly in equity securities of companies that the manager believes are undervalued. FTVIPT Templeton Long-term capital growth. The Fund normally invests at least Templeton Investment Counsel, LLC Foreign Securities Fund 80% of its net assets in investments of issuers located outside - Class 2 the U.S., including those in emerging markets. Goldman Sachs VIT Mid The Goldman Sachs VIT Mid Cap Value Fund seeks long-term Goldman Sachs Asset Management, L.P. Cap Value Fund capital appreciation. The Fund invests, under normal circumstances, at least 80% of its net assets plus any borrowings for investment purposes (measured at time of purchase) ("Net Assets") in a diversified portfolio of equity investments in mid-cap issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted basis) within the range of the market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investment. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell Midcap(R) Value Index is currently between $276 million and $14.9 billion. Although the Fund will invest primarily in publicly traded U.S. securities, it may invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and securities quoted in foreign currencies. The Fund may invest in the aggregate up to 20% of its Net Assets in companies with public stock market capitalizations outside the range of companies constituting the Russell Midcap(R) Value Index at the time of investment and in fixed-income securities, such as government, corporate and bank debt obligations.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Goldman Sachs VIT The Fund seeks long-term growth of capital. The Fund seeks this Goldman Sachs Asset Management, L.P. Structured Small Cap objective through a broadly diversifies portfolio of equity Equity Fund investments in U.S. issuers. The Fund invests, under normal circumstances, at least 80% of its net assets plus any (previously Goldman borrowings for investment purposes (measured at time of Sachs VIT CORE Small purchase) ("Net Assets") in a broadly diversified portfolio of Cap Equity Fund) equity investments in small-cap U.S. issuers, including foreign issuers that are traded in the United States. However, it is CORE is a registered currently anticipated that, under normal circumstances the Fund service mark of will invest at least 95% of its Net Assets in such equity Goldman, Sachs & Co. investments. These issuers will have public stock market capitalizations (based upon shares available for trading on an unrestricted basis) similar to that of the range of the market capitalization of companies constituting the Russell 2000(R) Index at the time of investment. The Fund is not required to limit its investments to securities in the Russell 2000(R) Index. In addition, if the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell 2000(R) Index is currently between $68 million and $2.4 billion. Goldman Sachs VIT The Fund seeks long-term growth of capital and dividend income. Goldman Sachs Asset Management, L.P. Structured U.S. Equity The Fund seeks this objective through a broadly diversified Fund portfolio of large-cap and blue chip equity investments representing all major sectors of the U.S. economy. The Fund (previously Goldman invests, under normal circumstances, at least 90% of its total Sachs VIT CORE U.S. assets (not including securities lending collateral and any Equity Fund) investment of that collateral) measured at time of purchase ("Total Assets") in a diversified portfolio of equity CORE is a registered investments in U.S. issuers, including foreign companies that service mark of are traded in the United States. However, it is currently Goldman, Sachs & Co. anticipated that, under normal circumstances, the Fund will invest at least 95% of its net assets plus any borrowings for investment purposes (measured at the time of purchase) in such equity investments. The Fund's investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Fund's expected return, while maintaining risk, style, capitalization and industry characteristics similar to the S&P 500 Index. The Fund seeks a broad representation in most major sectors of the U.S. economy and a portfolio consisting of companies with average long-term earnings growth expectations and dividend yields. The Fund is not required to limit its investments to securities in the S&P 500 Index. The Fund's investments in fixed-income securities are limited to securities that are considered cash equivalents. Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital Global Technology circumstances, at least 80% of its net assets in securities of Portfolio: Service companies that the portfolio manager believes will benefit Shares significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital International Growth circumstances, at least 80% of its net assets in securities of Portfolio: Service issuers from at least five different countries, excluding the Shares United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. Janus Aspen Series Mid Seeks long-term growth of capital. Invests, under normal Janus Capital Cap Growth Portfolio: circumstances, at least 80% of its net assets in equity Service Shares securities of mid-sized companies whose market capitalization falls, at the time of initial purchase, in the 12-month average of the capitalization ranges of the Russell Midcap Growth Index. Lazard Retirement Long-term capital appreciation. Invests primarily in equity Lazard Asset Management, LLC International Equity securities, principally common stocks, of relatively large Portfolio non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. MFS(R) Investors Growth Long-term growth of capital and future income. Invests at least MFS Investment Management(R) Stock Series - Service 80% of its net assets in common stocks and related securities Class of companies which MFS(R) believes offer better than average prospects for long-term growth. MFS(R) New Discovery Capital appreciation. Invests at least 65% of its net assets in MFS Investment Management(R) Series - Service Class equity securities of emerging growth companies. MFS(R) Utilities Series Capital growth and current income. Invests primarily in equity MFS Investment Management(R) - Service Class and debt securities of domestic and foreign companies in the utilities industry. Neuberger Berman Long-term growth of capital. The Fund invests mainly in foreign Neuberger Berman Management Inc. Advisers Management companies of any size, including companies in developed and Trust International emerging industrialized markets. The Fund defines a foreign Portfolio (Class S) company as one that is organized outside of the United States and conducts the majority of its business abroad. The Fund seeks to reduce risk by diversifying among many industries. Although it has the flexibility to invest a significant portion of its assets in one country or region, it generally intends to remain well-diversified across countries and geographical regions. Oppenheimer Global Long-term capital appreciation. Invests mainly in common stocks OppenheimerFunds, Inc. Securities Fund/VA, of U.S. and foreign issuers that are "growth-type" companies, Service Shares cyclical industries and special situations that are considered to have appreciation possibilities.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Seeks capital appreciation. Invests mainly in common stocks of OppenheimerFunds, Inc. Small Cap Fund/VA, small-capitalization U.S. companies that the fund's investment Service Shares manager believes have favorable business trends or prospects. Oppenheimer Strategic High level of current income principally derived from interest OppenheimerFunds, Inc. Bond Fund/VA, Service on debt securities. Invests mainly in three market sectors: Shares debt securities of foreign governments and companies, U.S. government securities and lower-rated high yield securities of U.S. and foreign companies. PIMCO VIT All Asset Seeks maximum real return consistent with preservation of real Pacific Investment Management Portfolio, Advisor capital and prudent investment management period. The Portfolio Company LLC Share Class seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). Though it is anticipated that the Portfolio will not currently invest in the European StockPLUS(R) TR Strategy, Far East (ex-Japan) StocksPLUS(R) TR Strategy, Japanese StocksPLUS(R) TR Strategy, StocksPLUS(R) Municipal-Backed and StocksPLUS(R) TR Short Strategy Funds, the Portfolio may invest in these Funds in the future, without shareholder approval, at the discretion of the Portfolio's asset allocation sub-adviser. Putnam VT International Seeks long-term capital appreciation. The fund pursues its goal Putnam Investment Management, LLC New Opportunities Fund by investing mainly in common stocks of companies outside the - Class IB Shares United States with a focus on growth stocks. Putnam VT Vista Fund - Seeks capital appreciation. The fund pursues its goal by Putnam Investment Management, LLC Class IB Shares investing mainly in common stocks of U.S. companies, with a focus on growth stocks. RiverSource Variable Maximum total investment return through a combination of RiverSource Investments Portfolio - Balanced capital growth and current income. Invests primarily in a Fund combination of common and preferred stocks, bonds and other debt securities. Under normal market conditions, at least 50% of the Fund's total assets are invested in common stocks and no less than 25% of the Fund's total assets are invested in debt securities. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable Maximum current income consistent with liquidity and stability RiverSource Investments Portfolio - Cash of principal. Invests primarily in money market instruments, Management Fund such as marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit, and commercial paper, including asset-backed commercial paper.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Core Bond appreciation. Under normal market conditions, the Fund invests Fund at least 80% of its net assets in bonds and other debt securities. Although the Fund is not an index fund, it invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index ("the Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. The Fund will not invest in securities rated below investment grade, although it may hold securities that have been downgraded. RiverSource Variable High level of current income while attempting to conserve the RiverSource Investments Portfolio - Diversified value of the investment and continuing a high level of income Bond Fund for the longest period of time. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. At least 50% of the Fund's net assets will be invested in securities like those included in the Lehman Brothers Aggregate Bond Index (Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes high- and medium-quality debt securities, it will assume some credit risk to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. RiverSource Variable High level of current income and, as a secondary goal, steady RiverSource Investments Portfolio - Diversified growth of capital. Under normal market conditions, the Fund Equity Income Fund invests at least 80% of its net assets in dividend-paying common and preferred stocks. RiverSource Variable Long-term capital growth. The Fund's assets are primarily RiverSource Investments, adviser; Portfolio - Emerging invested in equity securities of emerging market companies. Threadneedle International Limited, Markets Fund Under normal market conditions, at least 80% of the Fund's net an indirect wholly-owned subsidiary assets will be invested in securities of companies that are of Ameriprise Financial, subadviser. located in emerging market countries, or that earn 50% or more of their total revenues from goods and services produced in emerging market countries or from sales made in emerging market countries. RiverSource Variable Long-term capital growth. The Fund's assets are primarily RiverSource Investments Portfolio - Fundamental invested in equity securities of U.S. companies. Under normal Value Fund market conditions, the Fund's net assets will be invested primarily in companies with market capitalizations of at least $5 billion. RiverSource Variable High total return through income and growth of capital. RiverSource Investments Portfolio - Global Bond Non-diversified mutual fund that invests primarily in debt Fund obligations of U.S. and foreign issuers (which may include issuers located in emerging markets). Under normal market conditions, the Fund invests at least 80% of its net assets in investment - grade corporate or government debt obligations including money market instruments of issuers located in at least three different countries.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Total return that exceeds the rate of inflation over the RiverSource Investments Portfolio - Global long-term. Non-diversified mutual fund that, under normal Inflation Protected market conditions, invests at least 80% of its net assets in Securities Fund inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource Variable Long-term capital growth. Invests primarily in common stocks RiverSource Investments Portfolio - Growth Fund and securities convertible into common stocks that appear to offer growth opportunities. These growth opportunities could result from new management, market developments, or technological superiority. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable High current income, with capital growth as a secondary RiverSource Investments Portfolio - High Yield objective. Under normal market conditions, the Fund invests at Bond Fund least 80% of its net assets in high-yielding, high-risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Income appreciation. Under normal market conditions, invests primarily Opportunities Fund in income-producing debt securities with an emphasis on the higher rated segment of the high-yield (junk bond) market. The Fund will purchase only securities rated B or above, or unrated securities believed to be of the same quality. If a security falls below a B rating, the Fund may continue to hold the security. RiverSource Variable Capital appreciation. Invests primarily in equity securities of RiverSource Investments, adviser; Portfolio - foreign issuers that offer strong growth potential. The Fund Threadneedle International Limited, International may invest in developed and in emerging markets. an indirect wholly-owned subsidiary Opportunity Fund of Ameriprise Financial, subadviser. RiverSource Variable Capital appreciation. Under normal market conditions, the Fund RiverSource Investments Portfolio - Large Cap invests at least 80% of its net assets in equity securities of Equity Fund companies with market capitalization greater than $5 billion at the time of purchase. RiverSource Variable Long-term growth of capital. Under normal market conditions, RiverSource Investments Portfolio - Large Cap the Fund invests at least 80% of its net assets in equity Value Fund securities of companies with a market capitalization greater than $5 billion. The Fund may also invest in income-producing equity securities and preferred stocks. RiverSource Variable Growth of capital. Under normal market conditions, the Fund RiverSource Investments Portfolio - Mid Cap invests at least 80% of its net assets in equity securities of Growth Fund mid capitalization companies. The investment manager defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the range of the Russell Midcap(R) Growth Index. RiverSource Variable Under normal circumstances, the Fund invests at least 80% of RiverSource Investments Portfolio - Mid Cap its net assets (including the amount of any borrowings for Value Fund investment purposes) in equity securities of medium-sized companies. Medium-sized companies are those whose market capitalizations at the time of purchase fall within the range of the Russell Midcap(R) Value Index.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Long-term capital appreciation. The Fund seeks to provide RiverSource Investments Portfolio - S&P 500 investment results that correspond to the total return (the Index Fund combination of appreciation and income) of large-capitalization stocks of U.S. companies. The Fund invests in common stocks included in the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P 500 is made up primarily of large-capitalization companies that represent a broad spectrum of the U.S. economy. RiverSource Variable Long-term growth of capital. Invests primarily in common RiverSource Investments, adviser; Portfolio - Select stocks, preferred stocks and securities convertible into common GAMCO Investors, Inc., subadvisor Value Fund stocks that are listed on a nationally recognized securities exchange or traded on the NASDAQ National Market System of the National Association of Securities Dealers. The Fund invests in mid-cap companies as well as companies with larger and smaller market capitalizations. RiverSource Variable A high level of current income and safety of principal RiverSource Investments Portfolio - Short consistent with an investment in U.S. government and government Duration U.S. agency securities. Under normal market conditions, at least 80% Government Fund of the Fund's net assets are invested in securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. RiverSource Variable Long-term capital growth. Under normal market conditions, at RiverSource Investments, adviser; Portfolio - Small Cap least 80% of the Fund's net assets are invested in equity Kenwood Capital Management LLC, Advantage Fund securities of companies with market capitalization of up to $2 subadviser billion or that fall within the range of the Russell 2000(R) Index at the time of investment. RiverSource Variable Long-term capital appreciation. Invests primarily in equity RiverSource Investments, adviser; Portfolio - Small Cap securities. Under normal market conditions, at least 80% of the River Road Asset Management, LLC, Value Fund Fund's net assets will be invested in small cap companies with Donald Smith & Co., Inc., Franklin market capitalization, at the time of investment, of up to $2.5 Portfolio Associates LLC and Barrow, billion or that fall within the range of the Russell 2000(R) Hanley, Mewhinney & Strauss, Inc., Value Index. subadvisers. Royce Micro-Cap Portfolio Long-term growth of capital. Invests primarily in a broadly Royce & Associates, LLC diversified portfolio of equity securities issued by micro-cap companies (companies with stock market capitalizations below $500 million). Third Avenue Value Long-term capital appreciation. Invests primarily in common Third Avenue Management LLC Portfolio stocks of well-financed companies, meaning companies without significant liabilities in comparison to their liquid resources at a discount to what the Adviser believes is their intrinsic value. Van Kampen Life Capital growth and income through investments in equity Van Kampen Asset Management Investment Trust securities, including common stocks, preferred stocks and Comstock Portfolio, securities convertible into common and preferred stocks. Class II Shares Van Kampen UIF Global Current income and capital appreciation. Invests primarily in Morgan Stanley Investment Management Real Estate Portfolio, equity securities of companies in the real estate industry Inc., doing business as Van Kampen, Class II Shares located throughout the world, including real estate operating adviser; Morgan Stanley Investment companies, real estate investment trusts and foreign real Management and Morgan Stanley estate companies. Investment Management Company, sub-adviser.
-------------------------------------------------------------------------------- 21 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Van Kampen UIF Mid Cap Long-term capital growth. Invests primarily in growth-oriented Morgan Stanley Investment Management Growth Portfolio, Class equity securities of U.S. mid cap companies and foreign Inc., doing business as Van Kampen II Shares companies, including emerging market securities. Wanger International Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Small Cap companies based outside the U.S. with market capitalizations of L.P. less than $5 billion at a time of initial purchase. Wanger U.S. Smaller Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Companies small- and medium-size U.S. companies with market L.P. capitalizations of less than $5 billion at time of initial purchase. Wells Fargo Advantage Long-term total return consistent with reasonable risk. The Wells Fargo Funds Management, LLC, VT Asset Allocation Fund invests in equity and fixed income securities with an adviser; Wells Capital Management Fund emphasis on equity securities. The Fund does not select Incorporated, subadviser. individual securities for investment, rather, it buys substantially all of the securities of various indexes to replicate such indexes. The Fund invests the equity portion of its assets in common stocks to replicate the S&P 500 Index, and invests the fixed income portion of its assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes, before fees and expenses, regardless of market conditions. The Fund's "neutral" target allocation is 60% equity securities and 40% fixed income securities. Wells Fargo Advantage Long-term capital appreciation. The Fund seeks long-term Wells Fargo Funds Management, LLC, VT International Core capital appreciation by investing principally in non-U.S. adviser; New Star Institutional Fund securities, with focus on companies with strong growth Managers Limited, subadviser. potential that offer relative values. These companies typically have distinct competitive advantages, high or improving returns on invested capital and a potential for positive earnings surprises. The Fund may invest in emerging markets. Wells Fargo Advantage Long-term capital appreciation. Focus is on companies believed Wells Fargo Funds Management, LLC, VT Small Cap Growth to have above-average growth potential or that may be involved adviser; Wells Capital Management Fund in new or innovative products, services and processes. Invests Incorporated, subadviser. principally in securities of companies with market capitalizations equal to or lower than the company with the largest market capitalization in the Russell 2000 Index, which is considered a small capitalization index that is expected to change frequently.
-------------------------------------------------------------------------------- 22 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE FIXED ACCOUNT You also may allocate purchase payments and transfer contract value to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate for your fixed account is guaranteed for 12 months from the contract issue date. Thereafter, we will change rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and the IDS Life's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract - Transfer Policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an owner or an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following: (1) a partial surrender from the fixed account; or (2) a lump sum from the fixed account to the subaccounts, We applied your initial purchase payment within two business days after we received it at our home office. However, we will credit additional purchase payments you make to your accounts on the valuation date we receive them. If we receive an additional purchase payment at our home office before the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the valuation date we received the payment. If we receive an additional purchase payment at our home office at or after the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the next valuation date after we received the payment. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date as the maximum age (or contract anniversary if applicable) for nonqualified annuities and Roth IRAs and the date specified below for qualified annuities or you selected a date within the maximum limits. Your selected date can align with your actual retirement from a job, or it can be a different date, depending on your needs and goals and on certain restrictions. You also can change the settlement date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to comply with IRS regulations, the settlement date generally must be: - for IRAs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you satisfy your RMDs in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later, or a date that has been otherwise agreed to by us. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) Contract owners of IRAs and TSAs may also be able to satisfy required minimum distributions using other IRAs and TSAs, and in that case, may delay the annuity payouts start date for this contract. -------------------------------------------------------------------------------- 23 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then the default provisions of your contract will apply. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $50 (1) Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE ANNUAL PURCHASE PAYMENTS(2) FOR EMPLOYEES/ADVISORS: $100,000 for ages through 85 $50,000 for ages 86 to 90 FOR OTHER INDIVIDUALS: $100,000 (2) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN FOR EMPLOYEES/ADVISORS ONLY We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. -------------------------------------------------------------------------------- 24 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee and it totals 0.55% of the average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.15% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. -------------------------------------------------------------------------------- 25 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you chose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select either the MAV or EEB riders. Or you may select the MAV and the EEB. Riders may not be available in all states. The MAV and EEB are only available if you and the annuitant are 75 or younger at the rider effective date. SURRENDER CHARGE There is no charge if you surrender all or part of your contract. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.") OTHER INFORMATION ON CHARGES: Ameriprise Financial, Inc. makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. Ameriprise Financial, Inc. will charge a termination fee for owners under age 59 1/2 (waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. FUND FEES AND EXPENSES There are deductions from and expenses paid out of the assets of the funds that are described in the prospectuses for those funds. (See "Annual Operating Expenses of the Funds.") PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon the state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract. -------------------------------------------------------------------------------- 26 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); and - minus any prorated portion of the EEB rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, we subtract a certain number of accumulation units from your contract each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge, or fee for any optional riders with annual charges (if applicable). The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; and/or a deduction of: - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); and/or - a prorated portion of the EEB rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in fund net asset value; - fund dividends distributed to the subaccounts; - fund capital gains or losses; - fund operating expenses; and - mortality and expense risk fees. -------------------------------------------------------------------------------- 27 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER By investing an equal number AMOUNT ACCUMULATION OF UNITS of dollars each month ... MONTH INVESTED UNIT VALUE PURCHASED Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ------> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ------> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semiannually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing or by any other method acceptable to us, to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. -------------------------------------------------------------------------------- 28 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. Certain restrictions apply to transfers involving the fixed account. When your request to transfer will be processed depends on when we receive it: - If we receive your transfer request at our home office before the close of business, we will process your transfer using the accumulation unit value we calculate on the valuation date we received your transfer request. - If we receive your transfer request at our home office at or after the close of business, we will process your transfer using the accumulation unit value we calculate on the next valuation date after we received your transfer request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. WE SEEK TO PREVENT MARKET TIMING. MARKET TIMING IS FREQUENT OR SHORT-TERM TRADING ACTIVITY. WE DO NOT ACCOMMODATE SHORT-TERM TRADING ACTIVITIES. THE MARKET TIMING POLICIES AND PROCEDURES DESCRIBED BELOW APPLY TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN THE CONTRACT. THE UNDERLYING FUNDS IN WHICH THE SUBACCOUNTS INVEST HAVE THEIR OWN MARKET TIMING POLICIES AND PROCEDURES. THE MARKET TIMING POLICIES OF THE UNDERLYING FUNDS MAY BE MORE OR LESS RESTRICTIVE THAN THE MARKET TIMING POLICIES AND PROCEDURES WE APPLY TO TRANSFERS AMONG THE SUBACCOUNTS OF THE CONTRACT, AND MAY INCLUDE REDEMPTION FEES. WE RESERVE THE RIGHT TO MODIFY OUR MARKET TIMING POLICIES AND PROCEDURES AT ANY TIME WITHOUT PRIOR NOTICE TO YOU. Market timing may hurt the performance of an underlying fund in which a subaccount invests in several ways, including but not necessarily limited to: - diluting the value of an investment in an underlying fund in which a subaccount invests; - increasing the transaction costs and expenses of an underlying fund in which a subaccount invests; and, - preventing the investment adviser(s) of an underlying fund in which a subaccount invests from fully investing the assets of the fund in accordance with the fund's investment objectives. Market timing can reduce the value of your investment in the contract. If market timing causes the returns of an underlying fund to suffer, contract value you have allocated to a subaccount that invests in that underlying fund will be lower, too. Market timing can cause you, any joint owner of the contract and your beneficiary(ies) under the contract a financial loss. IN ORDER TO HELP PROTECT YOU AND THE UNDERLYING FUNDS FROM THE POTENTIALLY HARMFUL EFFECTS OF MARKET TIMING ACTIVITY, WE APPLY THE FOLLOWING MARKET TIMING POLICY TO DISCOURAGE FREQUENT TRANSFERS OF CONTRACT VALUE AMONG THE SUBACCOUNTS OF THE VARIABLE ACCOUNT: We try to distinguish market timing from transfers that we believe are not harmful, such as dollar-cost averaging. There is no set number of transfers that constitutes market timing. Even one transfer in related accounts may be market timing. We seek to restrict the transfer privileges of a contract owner who makes more than three subaccount transfers in any 90 day period. We also reserve the right to refuse any transfer requests, if, in our sole judgment, the dollar amount of the transfer request would adversely affect unit values. If we determine, in our sole judgment, that your transfer activity constitutes market timing, we may modify, restrict or suspend your transfer privileges to the extent permitted by applicable law, which may vary based on the state law that applies to your contract and the terms of your contract. These restrictions or modifications may include, but not be limited to: - requiring transfer requests to be submitted only by first-class U.S. mail; - not accepting hand-delivered transfer requests or requests made by overnight mail; - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney; - limiting the dollar amount that you may transfer at any one time; or - suspending the transfer privilege. Subject to applicable state law and the terms of each contract, we will apply the policy described above to all contract owners uniformly in all cases. We will notify you in writing after we impose any modification, restriction or suspension of your transfer rights. We cannot guarantee that we will be able to identify and restrict all market timing activity. Because we exercise discretion in applying the restrictions described above, we cannot guarantee that we will be able to restrict all market timing activity. In addition, state law and the terms of some contracts may prevent us from stopping certain market timing activity. Market timing activity that we are unable to identify and/or restrict may impact the performance of the underlying funds and may result in lower contract values. -------------------------------------------------------------------------------- 29 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS IN ADDITION TO THE MARKET TIMING POLICY DESCRIBED ABOVE, WHICH APPLIES TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT, YOU SHOULD CAREFULLY REVIEW THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS. THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS MAY BE MATERIALLY DIFFERENT THAN THOSE WE IMPOSE ON TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT AND MAY INCLUDE MANDATORY REDEMPTION FEES AS WELL AS OTHER MEASURES TO DISCOURAGE FREQUENT TRANSFERS. AS AN INTERMEDIARY FOR THE UNDERLYING FUNDS, WE ARE REQUIRED TO ASSIST THEM IN APPLYING THEIR MARKET TIMING POLICIES AND PROCEDURES TO TRANSACTIONS INVOLVING THE PURCHASE, EXCHANGE AND REDEMPTION OF FUND SHARES. THIS ASSISTANCE MAY INCLUDE BUT NOT BE LIMITED TO PROVIDING THE UNDERLYING FUND UPON REQUEST WITH YOUR SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER AND THE DETAILS OF YOUR CONTRACT TRANSACTIONS INVOLVING THE UNDERLYING FUND. AN UNDERLYING FUND, IN ITS SOLE DISCRETION, MAY INSTRUCT US AT ANY TIME TO PROHIBIT YOU FROM MAKING FURTHER TRANSFERS OF CONTRACT VALUE TO OR FROM THE UNDERLYING FUND, AND WE MUST FOLLOW THIS INSTRUCTION. WE RESERVE THE RIGHT TO ADMINISTER AND COLLECT ON BEHALF OF AN UNDERLYING FUND ANY REDEMPTION FEE IMPOSED BY AN UNDERLYING FUND. MARKET TIMING POLICIES AND PROCEDURES ADOPTED BY UNDERLYING FUNDS MAY AFFECT YOUR INVESTMENT IN THE CONTRACT IN SEVERAL WAYS, INCLUDING BUT NOT LIMITED TO: - Each fund may restrict or refuse trading activity that the fund determines, in its sole discretion, represents market timing. - Even if we determine that your transfer activity does not constitute market timing under the market timing policies described above which we apply to transfers you make under the contract, it is possible that the underlying fund's market timing policies and procedures, including instructions we receive from a fund, may require us to reject your transfer request. Orders we place to purchase fund shares for the variable account are subject to acceptance by the fund. We reserve the right to reject without prior notice to you any transfer request if the fund does not accept our order. - Each underlying fund is responsible for its own market timing policies, and we cannot guarantee that we will be able to implement specific market timing policies and procedures that a fund has adopted. As a result, a fund's returns might be adversely affected, and a fund might terminate our right to offer its shares through the variable account. - Funds that are available as investment options under the contract may also be offered to other intermediaries who are eligible to purchase and hold shares of the fund, including without limitation, separate accounts of other insurance companies and certain retirement plans. Even if we are able to implement a fund's market timing policies, we cannot guarantee that other intermediaries purchasing that same fund's shares will do so, and the returns of that fund could be adversely affected as a result. Funds available as investment options under the contract that invest in securities that trade in overseas securities markets may be at greater risk of loss from market timing, as market timers may seek to take advantage of changes in the values of securities between the close of overseas markets and the close of U.S. markets. Further the risks of market timing may be greater for underlying funds that invest in securities, such as small cap stocks, high yield bonds, or municipal securities, that may be traded infrequently. FOR MORE INFORMATION ABOUT THE MARKET TIMING POLICIES AND PROCEDURES OF AN UNDERLYING FUND, THE RISKS THAT MARKET TIMING POSES TO THAT FUND, AND TO DETERMINE WHETHER AN UNDERLYING FUND HAS ADOPTED A REDEMPTION FEE, SEE THAT FUND'S PROSPECTUS. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts. You may also transfer contract values from the subaccounts to the fixed account. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. -------------------------------------------------------------------------------- 30 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number* and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance * Failure to provide your Social Security Number or Taxpayer Identification Number may result in mandatory tax withholding on the taxable portion of the distribution. 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 7 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. -------------------------------------------------------------------------------- 31 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. If we receive your surrender request at our home office before the close of business, we will process your surrender using the accumulation unit value we calculate on the valuation date we received your surrender request. If we receive your surrender request at our home office at or after the close of business, we will process your surrender using the accumulation unit value we calculate on the next valuation date after we received your surrender request. We may ask you to return the contract. You may have to pay contract administrative charges, or any applicable optional rider charges (see "Charges"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). Any partial surrenders you take under the contract will reduce your contract value. As a result, the value of your death benefit or any optional benefits you have elected also will be reduced. In addition, surrenders you are required to take to satisfy the RMDs under the Code may reduce the value of certain death benefits and optional benefits (see "Taxes -- Qualified Annuities - Required Minimum Distributions"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: - the surrender amount includes a purchase payment check that has not cleared; - the NYSE is closed, except for normal holiday and weekend closings; - trading on the NYSE is restricted, according to SEC rules; - an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or - the SEC permits us to delay payment for the protection of security holders. -------------------------------------------------------------------------------- 32 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TSA -- SPECIAL PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The contract is not intended for use in connection with an employer sponsored 403(b) plan that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the event that the employer either by affirmative election or inadvertent action causes contributions under a plan that is subject to ERISA to be made to this contract, we will not be responsible for any obligations and requirements under ERISA and the regulations thereunder. You should consult with your employer to determine whether your 403(b) plan is subject to ERISA. The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: - you are at least age 59 1/2; - you are disabled as defined in the Code; - you severed employment with the employer who purchased the contract; or - the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our home office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV or EEB. The terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over". We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in a similar capacity, ownership of the contract may be transferred to the annuitant. -------------------------------------------------------------------------------- 33 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = is the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND THE ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2001. - On Jan 1, 2007 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2007 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2007 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 x $30,000 ---------------- $28,000 -1,607.14 ---------- for a death benefit of: $28,392.86 IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value using the next accumulation unit value we calculate on that valuation date. We pay interest, if any, at a rate no less than required by law. If requested, we will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If you elected any optional contract features and riders your spouse and the next annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. If your beneficiary is not your spouse, we will pay the beneficiary in a lump sum unless you give us other written instructions. Generally, we must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year after your death, or other date as permitted by the IRS; and - the payout period does not extend beyond the beneficiary's life or life expectancy. -------------------------------------------------------------------------------- 34 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. If you elected any optional contract features and riders your spouse and the next annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your beneficiary does not elect a five year payout, or if your death occurs after attaining age 70 1/2, we will pay the beneficiary in a lump sum unless the beneficiary elects to receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. DEATH BENEFIT PAYMENT IN A LUMP SUM: We may pay all or part of the death benefit to your beneficiary in a lump sum under either a nonqualified or qualified annuity. We will pay the death benefit by check unless your beneficiary has chosen to have the death benefit directly deposited into a checking account. OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract. We will determine the rider effective date for the MAV added after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date, we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. -------------------------------------------------------------------------------- 35 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. EXAMPLE - You add the MAV on Jan. 1, 2001 when your contract value is $20,000. - On Jan. 1, 2002 (the first contract anniversary after the rider effective date) the contract value grows to $24,000. - On March 1, 2002 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2002 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: $1,500 x $24,000 = ---------------- $22,000 -1,636 ------- for a death benefit of: $22,364 IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to keep the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the MAV rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT (EEB) The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary after the rider effective date. The EEB also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract. We will determine the rider effective date for the EEB added after we issue the contract according to terms determined by us and at our sole discretion. The EEB provides that if you or the annuitant dies after the first contract anniversary after the rider effective date, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death - Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. -------------------------------------------------------------------------------- 36 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EARNINGS AT DEATH FOR THE EEB: If the rider effective date for the EEB is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date. - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since the rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. EXAMPLE OF THE EEB - You purchased the contract on Jan. 1, 2001 with a purchase payment of $100,000 and both you and the annuitant are under age 70. You selected the MAV and the EEB. - On July 1, 2001 the contract value grows to $105,000. The death benefit on July 1, 2001 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary after the rider effective date so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2002 the contract value grows to $110,000. The death benefit on Jan. 1, 2002 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000 - On Jan. 1, 2003 the contract value falls to $105,000. The death benefit on Jan. 1, 2003 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000 -------------------------------------------------------------------------------- 37 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS - On Feb. 1, 2003 the contract value remains at $105, 000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2003 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 x $110,000) = $57,619 ------------------- $105,000 plus the EEB (40% of earnings at death): 0.40 x ($57,619 - $55,000) = +1,048 ------- Total death benefit of: $58,667 - On Jan. 1, 2004 the contract value falls by $40,000. The death benefit on Jan. 1, 2004 equals the death benefit paid on Feb. 1, 2003. The reduction in contract value has no effect. - On Jan. 1, 2010 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2010 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) 0.40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $255,000 - On July 1, 2010 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2010 equals: MAV death benefit amount (contract value): $250,000 plus the EEB (40% of earnings at death) 0.40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $305,000 - On July 1, 2011 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2011 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 x ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000 IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the rider charges described in "Charges - EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." -------------------------------------------------------------------------------- 38 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below except under Plan E. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. Fixed payouts remain the same from month to month. For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract (Table A and Table B) show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% assumed interest rate Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract value is used to purchase the payout plan: - PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. -------------------------------------------------------------------------------- 39 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS - PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY - NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If your contract is a qualified annuity, you must select a payout plan as of the settlement date set forth in your contract. You have the responsibility for electing a payout plan under your contract that complies with applicable law. Your contract describes your payout plan options. The options will generally meet certain IRS regulations governing RMDs if the payout plan meets the incidental distribution benefit requirements, if any, and the payouts are made: - in equal or substantially equal payments over a period not longer than your life or over the joint life of you and your designated beneficiary; or - in equal or substantially equal payments over a period not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary; or - over a period certain not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. -------------------------------------------------------------------------------- 40 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any withdrawals you request that represent ordinary income normally are taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. We will send you a tax information reporting form for any year in which we made a distribution according to our records. NONQUALIFIED ANNUITIES Tax law requires that all nonqualified deferred annuity contracts issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS: Generally, a portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. SURRENDERS: If you surrender part or all of your nonqualified annuity before your annuity payouts begin, your surrender payment will be taxed to the extent that the contract value immediately before the surrender exceeds the investment in the contract. If you surrender all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the surrender value immediately before the surrender exceeds the investment in the contract. You also may have to pay a 10% IRS penalty for surrenders of taxable income you make before reaching age 59 1/2 unless certain exceptions apply. WITHHOLDING: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver the payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract is not exempt from estate or income taxes. Any amount your beneficiary receives that represents deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities (nonnatural persons) generally will be treated as ordinary income received during that year. However, if the trust was set up for the benefit of a natural person only, the income will generally remain tax-deferred. PENALTIES: If you receive amounts from your nonqualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death, or in the event of nonnatural ownership, the death of annuitant; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if it is allocable to an investment before Aug. 14, 1982; or - if the annuity payouts begin before the first contract anniversary. -------------------------------------------------------------------------------- 41 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TRANSFER OF OWNERSHIP: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses or former spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a withdrawal and you may have to pay a 10% IRS penalty. QUALIFIED ANNUITIES Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan's Summary Plan Description, your IRA disclosure statement, or consult a tax advisor for additional information about the distribution rules applicable to your situation. When you use your contract to fund a retirement plan or IRA that is already tax-deferred under the Code, the contract will not provide any necessary or additional tax deferral. If your contract is used to fund an employer sponsored plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. ANNUITY PAYOUTS: Under a qualified annuity except a Roth IRA, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS: Under a qualified annuity except a Roth IRA, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. REQUIRED MINIMUM DISTRIBUTIONS: Retirement plans are subject to required withdrawals called required minimum distributions (RMDs) generally beginning at age 70 1/2. In addition, a new tax regulation, effective for RMDs calculated in 2006 and after, may cause the RMDs for some contracts with certain death benefits and optional riders to increase. RMDs may reduce the value of certain death benefits and optional riders. You should consult your tax advisor prior to making a purchase for an explanation of the potential tax implications to you. WITHHOLDING FOR IRAs, ROTH IRAs, SEPs AND SIMPLE IRAs: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. -------------------------------------------------------------------------------- 42 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS WITHHOLDING FOR ALL OTHER QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity, mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is an RMD as defined under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments made to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. PENALTIES: If you receive amounts from your qualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if the distribution is made following severance from employment during the calendar year in which you attain age 55 (TSAs and annuities funding 401(a) and 401(k) plans only); or - to pay certain medical or education expenses (IRAs only). DEATH BENEFITS TO BENEFICIARIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract, or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the contract that represents after-tax contributions is not taxable as ordinary income to your beneficiary. You are responsible for keeping all records tracking your non-deductible contributions to an IRA. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV OR EEB): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial withdrawals if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on the death of you or the annuitant as an annuity death benefit distribution, not as proceeds from life insurance. COLLATERAL ASSIGNMENT: You may not collaterally assign or pledge a qualified annuity. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: We are taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of our company, although their operations are treated separately in accounting and financial statements. Investment income is reinvested in the fund in which each subaccount invests and becomes part of that subaccount's value. This investment income, including realized capital gains, is not taxed to us, and therefore no charge is made against the subaccounts for federal income taxes. We reserve the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. -------------------------------------------------------------------------------- 43 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute a fund currently listed in this prospectus (existing fund) for another fund (new fund). The new fund may have higher fees and/or operating expenses than the existing fund. Also, the new fund may have investment objectives and policies and/or investment advisers which differ from the existing fund. We may also: - add new subaccounts; - combine any two or more subaccounts; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. We will notify you of any substitution or change. If we notify you that a subaccount will be eliminated or closed, you will have a certain period of time to tell us where to reallocate purchase payments or contract value currently allocated to that subaccount. If we do not receive your reallocation instructions by the due date, we automatically will reallocate to the subaccount investing in the RiverSource Variable Portfolio - Cash Management Fund. You may then transfer this reallocated amount in accordance with the transfer provisions of your contract (see "Transferring Between Accounts" above). In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 Ameriprise Financial Center, Minneapolis, MN 55474. IDS Life is a wholly-owned subsidiary of Ameriprise Financial, Inc. IDS Life conducts a conventional life insurance business. It acts as a direct writer of fixed and variable insurance policies and annuities and is licensed in 49 states, the District of Columbia and American Samoa. IDS Life has four wholly-owned subsidiaries, two which serve New York residents and two which serve residents in states other than New York. IDS Life and its subsidiaries offer fixed and variable insurance policies and annuities through individual sales representatives, through insurance agencies and broker-dealers who may also be associated with financial institutions such as banks. -------------------------------------------------------------------------------- 44 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS IDS Life's primary life insurance products include variable life insurance, universal life insurance, traditional whole life insurance and disability income insurance. IDS Life's primary annuity products include variable and fixed deferred and immediate annuities. We are the sole distributor of the contract which we offer continuously. We pay time-of-sale commissions of up to 1.15% of purchase payments on the contract as well as service/trail commissions of up to 0.25% based on annual total contract value for as long as the contract remains in effect. We may pay our sales representatives a temporary additional sales commission of up to 1% of purchase payments for a period of time we select. For example, we may offer to pay a temporary additional sales commission to encourage sales representatives to market a new or enhanced contract or to increase sales during the period. The above commissions and service fees compensate our sales representative for selling and servicing the contract. These commissions do not change depending on which subaccounts you choose to allocate your purchase payments. We also may pay additional commissions to help compensate field leadership and to pay for other distribution expenses and benefits noted below. Our sales representatives may be required to return sales commissions under certain circumstances including, but not limited to, if a contact owner returns the contract under the free look period. From time to time and in accordance with applicable laws and regulations, sales representatives and field leaders are eligible for various benefits. These include cash benefits, such as bonuses and sales incentives, and non-cash benefits, such as conferences, seminars and trips (including travel, lodging and meals), entertainment, merchandise and other similar items. Sales of contracts may help sales representatives and/or their field leaders qualify for such benefits. SOURCES OF PAYMENTS TO SALES REPRESENTATIVES - We pay the commissions and other compensation described above from our assets. - Our assets may include: - revenues we receive from fees and expenses that you will pay when buying, owning and surrendering the contract (see "Expense Summary"); - compensation we or an affiliate receive from the underlying funds in the form of distribution and services fees (see "The Variable Account and the Funds -- The funds"); - compensation we or an affiliate receive from a fund's investment adviser, subadviser, distributor or an affiliate of any of these (see "The Variable Account and the Funds -- The funds"); and - revenues we receive from other contracts and policies we sell that are not securities and other businesses we conduct. - You do not directly pay the commissions and other compensation described above as the result of a specific charge or deduction under the contract. However, you may pay part or all of the commissions and other compensation described above indirectly through: - fees and expenses we collect from contract owners, including surrender charges; and - fees and expenses charged by the underlying funds in which the subaccounts you select invest, to the extent we or one of our affiliates receive revenue from the funds or an affiliated person. POTENTIAL CONFLICT OF INTEREST Our compensation arrangements with sales representatives can potentially give sales representatives a heightened financial incentive to sell you the contract offered in this prospectus over other alternative investments which may pay the sales representatives lower compensation. Ask your sales representative for further information about what he or she may receive in connection with your purchase of the contract. LEGAL PROCEEDINGS The SEC, the NASD and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information concerning some of these practices and is cooperating fully with these inquiries. IDS Life and its affiliates are involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of their respective business activities. IDS Life believes it has meritorious defenses to each of these actions and intends to defend them vigorously. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. There are no pending legal proceedings affecting the Variable Account. -------------------------------------------------------------------------------- 45 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS APPENDIX: CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount. The date in which operations commenced in each price level is noted in parentheses. We have not provided this information for subaccounts that were not available under your contract as of Dec. 31, 2005. VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.91 $ 0.86 $ 0.67 $ 0.89 $ 1.17 $ 1.31 $ 1.00 Accumulation unit value at end of period $ 0.99 $ 0.91 $ 0.86 $ 0.67 $ 0.89 $ 1.17 $ 1.31 Number of accumulation units outstanding at end of period (000 omitted) 910 866 867 1,024 1,358 1,343 185 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES I SHARES (9/15/1999) Accumulation unit value at beginning of period $ 1.52 $ 1.32 $ 0.98 $ 1.26 $ 1.38 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 1.66 $ 1.52 $ 1.32 $ 0.98 $ 1.26 $ 1.38 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 283 298 274 302 394 318 4 ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B)(8/13/2001) Accumulation unit value at beginning of period $ 1.09 $ 0.98 $ 0.75 $ 0.97 $ 1.00 - - Accumulation unit value at end of period $ 1.13 $ 1.09 $ 0.98 $ 0.75 $ 0.97 - - Number of accumulation units outstanding at end of period (000 omitted) 1,186 726 969 310 136 - - ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.64 $ 1.32 $ 0.92 $ 0.98 $ 1.00 - - Accumulation unit value at end of period $ 1.90 $ 1.64 $ 1.32 $ 0.92 $ 0.98 - - Number of accumulation units outstanding at end of period (000 omitted) 2,607 984 472 606 210 - - AMERICAN CENTURY VP INTERNATIONAL, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 0.94 $ 0.82 $ 0.66 $ 0.84 $ 1.19 $ 1.44 $ 1.00 Accumulation unit value at end of period $ 1.06 $ 0.94 $ 0.82 $ 0.66 $ 0.84 $ 1.19 $ 1.44 Number of accumulation units outstanding at end of period (000 omitted) 594 675 517 634 781 532 9 AMERICAN CENTURY VP VALUE, CLASS I (9/15/1999) Accumulation unit value at beginning of period $ 1.54 $ 1.35 $ 1.06 $ 1.21 $ 1.08 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.61 $ 1.54 $ 1.35 $ 1.06 $ 1.21 $ 1.08 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 1,037 1,067 904 766 506 435 59 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 1.00 $ 0.93 $ 0.78 $ 0.89 $ 0.96 $ 1.00 - Accumulation unit value at end of period $ 1.05 $ 1.00 $ 0.93 $ 0.78 $ 0.89 $ 0.96 - Number of accumulation units outstanding at end of period (000 omitted) 5 54 8 8 6 5 - CREDIT SUISSE TRUST - MID-CAP GROWTH PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 1.21 $ 1.08 $ 0.75 $ 1.07 $ 1.29 $ 1.32 $ 1.00 Accumulation unit value at end of period $ 1.29 $ 1.21 $ 1.08 $ 0.75 $ 1.07 $ 1.29 $ 1.32 Number of accumulation units outstanding at end of period (000 omitted) 281 378 431 421 467 891 17 FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.97 $ 0.92 $ 0.75 $ 0.91 $ 1.00 $ 1.05 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.97 $ 0.92 $ 0.75 $ 0.91 $ 1.00 $ 1.05 Number of accumulation units outstanding at end of period (000 omitted) 1,103 1,370 1,249 1,172 1,090 764 445 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 2.43 $ 1.96 $ 1.42 $ 1.59 $ 1.65 $ 1.24 $ 1.00 Accumulation unit value at end of period $ 2.86 $ 2.43 $ 1.96 $ 1.42 $ 1.59 $ 1.65 $ 1.24 Number of accumulation units outstanding at end of period (000 omitted) 915 1,023 984 862 781 616 102 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS (9/15/1999) Accumulation unit value at beginning of period $ 0.98 $ 0.87 $ 0.61 $ 0.77 $ 0.99 $ 1.23 $ 1.00 Accumulation unit value at end of period $ 1.16 $ 0.98 $ 0.87 $ 0.61 $ 0.77 $ 0.99 $ 1.23 Number of accumulation units outstanding at end of period (000 omitted) 605 429 144 82 114 116 25 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.42 $ 1.85 $ 1.37 $ 1.35 $ 1.26 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.73 $ 2.42 $ 1.85 $ 1.37 $ 1.35 $ 1.26 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 667 487 349 205 211 148 4
-------------------------------------------------------------------------------- 46 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.98 $ 1.61 $ 1.22 $ 1.35 $ 1.20 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.14 $ 1.98 $ 1.61 $ 1.22 $ 1.35 $ 1.20 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 593 414 242 282 150 9 2 FTVIPT TEMPLETON FOREIGN SECURITIES FUND - CLASS 2 (3/1/2002) Accumulation unit value at beginning of period $ 1.30 $ 1.11 $ 0.84 $ 1.00 - - - Accumulation unit value at end of period $ 1.43 $ 1.30 $ 1.11 $ 0.84 - - - Number of accumulation units outstanding at end of period (000 omitted) 357 348 232 182 - - - GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.09 $ 1.67 $ 1.31 $ 1.38 $ 1.24 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.34 $ 2.09 $ 1.67 $ 1.31 $ 1.38 $ 1.24 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 1,930 834 639 450 200 15 8 GOLDMAN SACHS VIT STRUCTURED SMALL CAP EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) SMALL CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.69 $ 1.46 $ 1.01 $ 1.19 $ 1.15 $ 1.13 $ 1.00 Accumulation unit value at end of period $ 1.79 $ 1.69 $ 1.46 $ 1.01 $ 1.19 $ 1.15 $ 1.13 Number of accumulation units outstanding at end of period (000 omitted) 119 150 104 87 97 100 41 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.87 $ 0.67 $ 0.87 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 0.99 $ 0.87 $ 0.67 $ 0.87 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 3,019 1,522 735 694 943 577 170 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.37 $ 0.37 $ 0.25 $ 0.43 $ 0.68 $ 1.00 - Accumulation unit value at end of period $ 0.41 $ 0.37 $ 0.37 $ 0.25 $ 0.43 $ 0.68 - Number of accumulation units outstanding at end of period (000 omitted) 200 333 426 343 202 310 - JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.71 $ 0.60 $ 0.45 $ 0.61 $ 0.80 $ 1.00 - Accumulation unit value at end of period $ 0.93 $ 0.71 $ 0.60 $ 0.45 $ 0.61 $ 0.80 - Number of accumulation units outstanding at end of period (000 omitted) 250 132 295 875 606 556 - JANUS ASPEN SERIES MID CAP GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.49 $ 0.41 $ 0.30 $ 0.42 $ 0.70 $ 1.00 - Accumulation unit value at end of period $ 0.54 $ 0.49 $ 0.41 $ 0.30 $ 0.42 $ 0.70 - Number of accumulation units outstanding at end of period (000 omitted) 125 144 215 246 280 343 - LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.94 $ 0.83 $ 0.65 $ 0.73 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.94 $ 0.83 $ 0.65 $ 0.73 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 1,238 1,236 2,397 636 253 57 8 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.64 $ 0.59 $ 0.49 $ 0.68 $ 0.91 $ 1.00 - Accumulation unit value at end of period $ 0.67 $ 0.64 $ 0.59 $ 0.49 $ 0.68 $ 0.91 - Number of accumulation units outstanding at end of period (000 omitted) 640 522 874 785 913 533 - MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.86 $ 0.81 $ 0.61 $ 0.90 $ 0.96 $ 1.00 - Accumulation unit value at end of period $ 0.90 $ 0.86 $ 0.81 $ 0.61 $ 0.90 $ 0.96 - Number of accumulation units outstanding at end of period (000 omitted) 558 576 622 485 548 352 - MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.19 $ 0.92 $ 0.68 $ 0.89 $ 1.00 - - Accumulation unit value at end of period $ 1.38 $ 1.19 $ 0.92 $ 0.68 $ 0.89 - - Number of accumulation units outstanding at end of period (000 omitted) 588 211 139 139 138 - - OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.31 $ 1.16 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 756 158 - - - - - OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.26 $ 1.16 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 643 432 - - - - -
-------------------------------------------------------------------------------- 47 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.09 $ 1.07 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 3,173 403 - - - - - PUTNAM VT INTERNATIONAL NEW OPPORTUNITIES FUND - CLASS IB SHARES(9/15/1999) Accumulation unit value at beginning of period $ 0.84 $ 0.75 $ 0.56 $ 0.66 $ 0.92 $ 1.52 $ 1.00 Accumulation unit value at end of period $ 0.99 $ 0.84 $ 0.75 $ 0.56 $ 0.66 $ 0.92 $ 1.52 Number of accumulation units outstanding at end of period (000 omitted) 507 592 707 914 1,347 1,802 87 PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.78 $ 0.59 $ 0.86 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.92 $ 0.78 $ 0.59 $ 0.86 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 374 375 431 525 1,092 1,330 183 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.06 $ 0.97 $ 0.81 $ 0.94 $ 1.06 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.06 $ 0.97 $ 0.81 $ 0.94 $ 1.06 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 623 257 221 120 296 145 10 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.11 $ 1.11 $ 1.10 $ 1.07 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.11 $ 1.11 $ 1.11 $ 1.10 $ 1.07 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 4,504 2,098 447 3,911 5,658 6,615 2,266 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 3.04% AND 3.09%, RESPECTIVELY RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.04 $ 1.02 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 100 73 - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.29 $ 1.24 $ 1.20 $ 1.14 $ 1.06 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.29 $ 1.24 $ 1.20 $ 1.14 $ 1.06 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 3,619 2,145 1,691 762 985 410 47 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.36 $ 1.16 $ 0.82 $ 1.02 $ 1.01 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 1.53 $ 1.36 $ 1.16 $ 0.82 $ 1.02 $ 1.01 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 5,165 3,041 1,239 1,262 281 218 23 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.19 $ 0.96 $ 0.69 $ 0.73 $ 0.75 $ 1.00 - Accumulation unit value at end of period $ 1.58 $ 1.19 $ 0.96 $ 0.69 $ 0.73 $ 0.75 - Number of accumulation units outstanding at end of period (000 omitted) 1,491 475 115 277 3 1 - RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.46 $ 1.33 $ 1.18 $ 1.04 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.38 $ 1.46 $ 1.33 $ 1.18 $ 1.04 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 1,377 741 714 251 249 4 3 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.05 $ 1.03 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 1,455 5,004 - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.62 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.17 $ 1.00 Accumulation unit value at end of period $ 0.67 $ 0.62 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.17 Number of accumulation units outstanding at end of period (000 omitted) 6,193 2,153 1,664 1,064 1,285 1,762 401
-------------------------------------------------------------------------------- 48 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.22 $ 1.10 $ 0.89 $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.22 $ 1.10 $ 0.89 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 2,397 2,886 4,230 1,480 1,549 1,186 48 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.07 $ 1.04 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 493 - - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.70 $ 0.55 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.92 $ 0.82 $ 0.70 $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 1,252 848 143 488 65 81 133 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.80 $ 0.76 $ 0.59 $ 0.76 $ 0.94 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.85 $ 0.80 $ 0.76 $ 0.59 $ 0.76 $ 0.94 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 3,121 1,484 172 202 291 266 872 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.14 $ 1.10 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 92 65 - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.06 $ 0.87 $ 1.01 $ 1.00 - - Accumulation unit value at end of period $ 1.26 $ 1.15 $ 1.06 $ 0.87 $ 1.01 - - Number of accumulation units outstanding at end of period (000 omitted) 655 523 578 328 38 - - *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 - - - - - - Accumulation unit value at end of period $ 1.20 - - - - - - Number of accumulation units outstanding at end of period (000 omitted) 115 - - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.88 $ 0.86 $ 0.69 $ 0.89 $ 1.08 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.89 $ 0.88 $ 0.86 $ 0.69 $ 0.89 $ 1.08 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 1,645 3,017 3,155 3,029 3,252 3,919 426 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.85 $ 0.77 $ 0.61 $ 0.79 $ 0.90 $ 1.00 - Accumulation unit value at end of period $ 0.88 $ 0.85 $ 0.77 $ 0.61 $ 0.79 $ 0.90 - Number of accumulation units outstanding at end of period (000 omitted) 2,054 1,958 1,381 973 770 285 - RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.00 - - - - - Accumulation unit value at end of period $ 1.13 $ 1.13 - - - - - Number of accumulation units outstanding at end of period (000 omitted) 235 182 - - - - - RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.23 $ 1.22 $ 1.21 $ 1.15 $ 1.09 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.23 $ 1.22 $ 1.21 $ 1.15 $ 1.09 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 688 870 1,097 1,275 592 1 10
-------------------------------------------------------------------------------- 49 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.54 $ 1.31 $ 0.89 $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.61 $ 1.54 $ 1.31 $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 514 779 660 393 378 286 28 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.77 $ 0.71 $ 0.55 $ 0.81 $ 1.22 $ 1.52 $ 1.00 Accumulation unit value at end of period $ 0.83 $ 0.77 $ 0.71 $ 0.55 $ 0.81 $ 1.22 $ 1.52 Number of accumulation units outstanding at end of period (000 omitted) 147 192 221 386 607 798 33 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 ROYCE MICRO-CAP PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 2.55 $ 2.26 $ 1.52 $ 1.75 $ 1.36 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 2.83 $ 2.55 $ 2.26 $ 1.52 $ 1.75 $ 1.36 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 539 591 516 453 344 193 19 THIRD AVENUE VALUE PORTFOLIO (9/21/1999) Accumulation unit value at beginning of period $ 2.57 $ 2.15 $ 1.52 $ 1.71 $ 1.51 $ 1.08 $ 1.00 Accumulation unit value at end of period $ 2.92 $ 2.57 $ 2.15 $ 1.52 $ 1.71 $ 1.51 $ 1.08 Number of accumulation units outstanding at end of period (000 omitted) 371 347 311 279 314 70 120 WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.40 $ 1.08 $ 0.73 $ 0.85 $ 1.09 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.69 $ 1.40 $ 1.08 $ 0.73 $ 0.85 $ 1.09 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 2,814 1,701 1,136 1,484 769 599 112 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.62 $ 1.37 $ 0.96 $ 1.17 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.79 $ 1.62 $ 1.37 $ 0.96 $ 1.17 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 2,709 1,415 1,250 847 820 990 125 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $ 1.11 $ 1.02 $ 0.84 $ 0.97 $ 1.00 - - Accumulation unit value at end of period $ 1.16 $ 1.11 $ 1.02 $ 0.84 $ 0.97 - - Number of accumulation units outstanding at end of period (000 omitted) 355 91 66 29 8 - - WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.99 $ 0.90 $ 0.69 $ 0.90 $ 1.00 - - Accumulation unit value at end of period $ 1.07 $ 0.99 $ 0.90 $ 0.69 $ 0.90 - - Number of accumulation units outstanding at end of period (000 omitted) 82 84 4 144 1 - - WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.93 $ 0.82 $ 0.58 $ 0.94 $ 1.00 - - Accumulation unit value at end of period $ 0.98 $ 0.93 $ 0.82 $ 0.58 $ 0.94 - - Number of accumulation units outstanding at end of period (000 omitted) 35 10 10 6 2 - -
-------------------------------------------------------------------------------- 50 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements
-------------------------------------------------------------------------------- 51 RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY - BAND 3 -- PROSPECTUS [RIVERSOURCE ANNUITIES(SM) LOGO] IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 IDS Life Insurance Company (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). RiverSource(SM) insurance and annuity products are issued by IDS Life Insurance Company, an Ameriprise Financial company. (C) 2006 Ameriprise Financial, Inc. All rights reserved. S-6477 K (5/06) PROSPECTUS MAY 1, 2006 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE(SM) VARIABLE ANNUITY RIVERSOURCE RETIREMENT ADVISOR SELECT(SM) VARIABLE ANNUITY INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITIES NEW CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 Ameriprise Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 ameriprise.com/variableannuities IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing in the RiverSource Retirement Advisor Advantage Variable Annuity (RAVA Advantage) or the RiverSource Retirement Advisor Select Variable Annuity (RAVA Select). Prospectuses are also available for: - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. - American Century Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Columbia Funds Variable Insurance Trust - Credit Suisse Trust - Eaton Vance Variable Trust - Evergreen Variable Annuity Trust - Fidelity(R) Variable Insurance Products - Service Class 2 - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Neuberger Berman Advisers Management Trust - Oppenheimer Variable Account Funds - Service Shares - Pioneer Variable Contracts Trust (VCT), Class II Shares - PIMCO Variable Insurance Trust (VIT) - Putnam Variable Trust - Class IB Shares - RiverSource(SM) Variable Portfolio Funds (previously American Express(R) Variable Portfolio Funds) - The Universal Institutional Funds, Inc. Van Kampen Life Investment Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Please read the prospectuses carefully and keep them for future reference. The contracts provide for purchase payment credits which we may reverse under certain circumstances. Expenses and surrender charges from contracts with purchase payment credits may be higher than those for contracts without such credits. The amount of the credit may be more than offset by additional charges associated with the credit. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are insurance products that are complex investment vehicles. Before you invest, be sure to ask your sales representative about the variable annuities' features, benefits, risks and fees, and whether the variable annuity is appropriate for you, based upon your financial situation and objectives. -------------------------------------------------------------------------------- 1 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the fund prospectuses. Do not rely on any such information or representations. IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may or may not be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 6 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 13 FINANCIAL STATEMENTS 13 THE VARIABLE ACCOUNT AND THE FUNDS 14 THE FIXED ACCOUNT 26 BUYING YOUR CONTRACT 26 CHARGES 29 VALUING YOUR INVESTMENT 33 MAKING THE MOST OF YOUR CONTRACT 34 SURRENDERS 38 TSA -- SPECIAL PROVISIONS 39 CHANGING OWNERSHIP 39 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 40 OPTIONAL BENEFITS 41 THE ANNUITY PAYOUT PERIOD 45 TAXES 47 VOTING RIGHTS 50 SUBSTITUTION OF INVESTMENTS 50 ABOUT THE SERVICE PROVIDERS 50 APPENDIX A: EXAMPLE -- SURRENDER CHARGES 53 APPENDIX B: EXAMPLE -- OPTIONAL BENEFITS 54 APPENDIX C: CONDENSED FINANCIAL INFORMATION (UNAUDITED) 57 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 78
CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: The time the New York Stock Exchange (NYSE) closes (4 p.m. Eastern time unless the NYSE closes earlier). CODE: The Internal Revenue Code of 1986, as amended. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB) AND ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP): These are optional benefits you can add to your contract for an additional charge. Each is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. You can elect to purchase either the EEB or the EEP. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an additional charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. PURCHASE PAYMENT CREDITS: An addition we make to your contract value. We base the amount of the credit on the surrender charge schedule you elect and/or total purchase payments. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Code - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension IRA (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and investment only plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax-deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB, EEP and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. -------------------------------------------------------------------------------- 3 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, on which the NYSE is open, up to the close of business. At the close of business, the next valuation date begins. We calculate the accumulation unit value of each subaccount on each valuation date. If we receive your purchase payment or any transaction request (such as a transfer or surrender request) at our home office before the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the valuation date we received your payment or transaction request. On the other hand, if we receive your purchase payment or transaction request at our home office at or after the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the next valuation date. If you make a transaction request by telephone (including by fax), you must have completed your transaction by the close of business in order for us to process it using the accumulation unit value we calculate on that valuation date. If you were not able to complete your transaction before the close of business for any reason, including telephone service interruptions or delays due to high call volume, we will process your transaction using the accumulation unit value we calculate on the next valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. THE CONTRACT IN BRIEF This prospectus describes two contracts. RAVA Advantage offers a choice of a seven-year or a ten-year surrender charge schedule and relatively lower expenses. RAVA Select offers a three-year surrender charge schedule and relatively higher expenses. The information in this prospectus applies to both contracts unless stated otherwise. Your sales representative can help you determine which contract is best suited to your needs based on factors such as your investment goals and how long you intend to invest. PURPOSE: The purpose of each contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed accounts and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). It may not be advantageous for you to purchase this contract in exchange for, or in addition to, an existing annuity or life insurance policy. Generally, you can exchange one annuity for another in a "tax-free" exchange under Section 1035 of the Code. You also generally can exchange a life insurance policy for an annuity. However, before making an exchange, you should compare both contracts carefully because the features and benefits may be different. Fees and charges may be higher or lower on your old contract than on this contract. You may have to pay a surrender charge when you exchange out of your old contract and a new surrender charge period will begin when you exchange into this contract. If the exchange does not qualify for Section 1035 treatment, you also may have to pay federal income tax on the exchange. You should not exchange your old contract for this contract, or buy this contract in addition to your old contract, unless you determine it is in your best interest. TAX-DEFERRED RETIREMENT PLANS: Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use a qualified annuity to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. A qualified annuity has features other than tax deferral that may help you reach your retirement goals. In addition, the Code subjects retirement plans to required withdrawals triggered at a certain age. These mandatory withdrawals are called required minimum distributions (RMDs). RMDs may reduce the value of certain death benefits and optional riders (see "Taxes - Qualified Annuities - Required Minimum Distributions"). You should consult your tax advisor before you purchase the contract as a qualified annuity for an explanation of the potential tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our home office within the time stated on the first page of your contract. Under RAVA Advantage you will receive a full refund of the contract value, less the amount of any purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") We will not deduct any other charges. Under RAVA Select you will receive a refund of your contract value less the value of the purchase payment credit. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Generally, you may allocate your purchase payments among any or all of: - the subaccounts of the variable account, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 14) - the fixed account, which earns interest at a rate that we adjust periodically. Purchase payment allocations to the fixed account may be subject to special restrictions. (p. 26) -------------------------------------------------------------------------------- 4 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 26) PURCHASE PAYMENTS: MINIMUM ALLOWABLE PURCHASE PAYMENTS: If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE RAVA SELECT If paying by any other method: initial payment for qualified annuities $1,000 $ 2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
MAXIMUM ALLOWABLE PURCHASE PAYMENTS based on the age of you or the annuitant, whoever is older, on the effective date of the contract:
RAVA ADVANTAGE RAVA SELECT through age 85 100,000 100,000 for ages 86 to 90 50,000 50,000
* For RAVA Advantage contracts with initial purchase payments of more than $999,999, our home office approval is required. TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 35) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and income taxes (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 38) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 39) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value, except in the case of a purchase payment credit reversal. (p. 40) OPTIONAL BENEFITS: These contracts offer optional features that are available for additional charges if you meet certain criteria. (p. 41) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet IRS requirements. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 45) TAXES: Generally, income earned on your contract value grows tax-deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) The tax treatment of qualified and nonqualified annuities differs. Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. However, Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. (p. 47) LIMITATIONS ON USE OF CONTRACTS: If mandated by applicable law, including but not limited to, federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block an owner's access to contract values or to satisfy other statutory obligations. Under these circumstances we may refuse to implement requests for transfers, surrenders, or death benefits, until instructions are received from the appropriate governmental authority or a court of competent jurisdiction. -------------------------------------------------------------------------------- 5 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE FOR RAVA ADVANTAGE (Contingent deferred sales load as a percentage of purchase payment surrendered) You select either a seven-year or ten-year surrender charge schedule at the time of application.*
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF NUMBER OF COMPLETED YEARS COMPLETED YEARS FROM DATE OF EACH SURRENDER CHARGE FROM DATE OF EACH SURRENDER CHARGE PURCHASE PAYMENT PERCENTAGE PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7 0 7 4 8 3 9 2 10 0
* The ten-year surrender charge schedule is not available for contracts issued in Oregon. For contracts issued in Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. SURRENDER CHARGE FOR RAVA SELECT (EXCEPT TEXAS) (Contingent deferred sales load as a percentage of purchase payment surrendered)
YEARS FROM SURRENDER CHARGE CONTRACT DATE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
SURRENDER CHARGE FOR RAVA SELECT IN TEXAS (Contingent deferred sales load)
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
-------------------------------------------------------------------------------- 6 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.")
ASSUMED INVESTMENT RATE 3.50% 5.00% Qualified annuity discount rate 4.72% 6.22% Nonqualified annuity discount rate 4.92% 6.42%
THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30
(We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) OPTIONAL RIDER FEES (As a percentage of the contract value charged annually at the contract anniversary. The fee applies only if you elect the optional rider.) MAV RIDER FEE 0.25%* EEB RIDER FEE 0.30% EEP RIDER FEE 0.40%
* For contracts purchased before May 1, 2003, the MAV rider fee is 0.15%. ANNUAL VARIABLE ACCOUNT EXPENSES (Total annual variable account expenses as a percentage of average daily subaccount value)
MORTALITY AND EXPENSE RISK FEE: RAVA ADVANTAGE RAVA SELECT For nonqualified annuities 0.95% 1.20% For qualified annuities 0.75% 1.00%
-------------------------------------------------------------------------------- 7 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS FOR THE LAST FISCAL YEAR. THE SECOND TABLE SHOWS THE FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS(a) (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before fee waivers and/or expense reimbursements 0.53% 5.85%
(a) Each fund deducts management fees and other expenses from fund assets. Fund assets include amounts you allocate to a particular fund. Funds may also charge 12b-1 fees that are used to finance any activity that is primarily intended to result in the sale of fund shares. Because 12b-1 fees are paid out of fund assets on an on-going basis, you may pay more if you select subaccounts investing in funds that have adopted 12b-1 plans than if you select subaccounts investing in funds that have not adopted 12b-1 plans. The fund or the fund's affiliates may pay us and/or our affiliates for promoting and supporting the offer, sale and servicing of fund shares. In addition, the fund's distributor and/or investment adviser, transfer agent or their affiliates may pay us and/or our affiliates for various services we or our affiliates provide. The amount of these payments will vary by fund and may be significant. See "The Variable Account and the Funds" for additional information, including potential conflicts of interest these payments may create. For a more complete description of each fund's fees and expenses and important disclosure regarding payments the fund and/or its affiliates make, please review the fund's prospectus and SAI. TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AIM V.I. Capital Appreciation Fund, Series II Shares 0.61% 0.25% 0.29% 1.15%(1),(2) AIM V.I. Capital Development Fund, Series II Shares 0.75 0.25 0.34 1.34(1),(3) AIM V.I. Dynamics Fund, Series I Shares 0.75 -- 0.42 1.17(1),(3) AIM V.I. Financial Services Fund, Series I Shares 0.75 -- 0.37 1.12(1) AIM V.I. Global Health Care Fund, Series II Shares 0.75 0.25 0.33 1.33(1),(3) AIM V.I. Technology Fund, Series I Shares 0.75 -- 0.37 1.12(1) AllianceBernstein VPS Global Technology Portfolio (Class B) 0.75 0.25 0.17 1.17(4) AllianceBernstein VPS Growth and Income Portfolio (Class B) 0.55 0.25 0.05 0.85(4) AllianceBernstein VPS International Value Portfolio (Class B) 0.75 0.25 0.12 1.12(4) American Century VP International, Class II 1.13 0.25 -- 1.38(4) American Century VP Ultra(R), Class II 0.90 0.25 0.01 1.16(4) American Century VP Value, Class II 0.83 0.25 -- 1.08(4) Calvert Variable Series, Inc. Social Balanced Portfolio 0.70 -- 0.22 0.92(5) Columbia Marsico Growth Fund, Variable Series 0.74 0.25 0.34 1.33(6) Columbia Marsico International Opportunities Fund, Variable Series 0.80 0.25 0.43 1.48(4) Credit Suisse Trust - Commodity Return Strategy Portfolio 0.50 0.25 0.55 1.30(7) Eaton Vance VT Floating-Rate Income Fund 0.58 -- 0.69 1.27(4) Evergreen VA Fundamental Large Cap Fund - Class 2 0.58 0.25 0.18 1.01(8) Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2 0.57 0.25 0.09 0.91(9) Fidelity(R) VIP Growth & Income Portfolio Service Class 2 0.47 0.25 0.12 0.84(9) Fidelity(R) VIP Mid Cap Portfolio Service Class 2 0.57 0.25 0.12 0.94(9) Fidelity(R) VIP Overseas Portfolio Service Class 2 0.72 0.25 0.17 1.14(9) FTVIPT Franklin Real Estate Fund - Class 2 0.47 0.25 0.02 0.74(10),(11) FTVIPT Franklin Small Cap Value Securities Fund - Class 2 0.52 0.25 0.17 0.94(11),(12) FTVIPT Mutual Shares Securities Fund - Class 2 0.60 0.25 0.18 1.03(11) Goldman Sachs VIT Mid Cap Value Fund 0.80 -- 0.07 0.87(13) Goldman Sachs VIT Structured U.S. Equity Fund 0.65 -- 0.09 0.74(13) (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) Janus Aspen Series Global Technology Portfolio: Service Shares 0.64 0.25 0.09 0.98(14) Janus Aspen Series International Growth Portfolio: Service Shares 0.64 0.25 0.06 0.95(14)
-------------------------------------------------------------------------------- 8 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Lazard Retirement International Equity Portfolio 0.75% 0.25% 0.21% 1.21%(15) MFS(R) Investors Growth Stock Series - Service Class 0.75 0.25 0.15 1.15(16),(17) MFS(R) New Discovery Series - Service Class 0.90 0.25 0.16 1.31(16),(17) MFS(R) Utilities Series - Service Class 0.75 0.25 0.15 1.15(16),(17) Neuberger Berman Advisers Management Trust International Portfolio (Class S) 1.15 0.25 4.45 5.85(18),(19) Oppenheimer Global Securities Fund/VA, Service Shares 0.63 0.25 0.04 0.92(20) Oppenheimer Main Street Small Cap Fund/VA, Service Shares 0.74 0.25 0.05 1.04(20) Oppenheimer Strategic Bond Fund/VA, Service Shares 0.69 0.25 0.02 0.96(20) PIMCO VIT All Asset Portfolio, Advisor Share Class 0.20 0.25 0.88 1.33(21) Pioneer Equity Income VCT Portfolio - Class II Shares 0.65 0.25 0.06 0.96(4) Pioneer Europe VCT Portfolio - Class II Shares 0.85 0.25 0.76 1.86(4) Putnam VT Health Sciences Fund - Class IB Shares 0.70 0.25 0.11 1.06(4) Putnam VT International Equity Fund - Class IB Shares 0.75 0.25 0.18 1.18(4) Putnam VT Vista Fund - Class IB Shares 0.65 0.25 0.09 0.99(4) RiverSource(SM) Variable Portfolio - Balanced Fund 0.54 0.13 0.14 0.81(22),(23),(24) (previously AXP(R) Variable Portfolio - Managed Fund) RiverSource(SM) Variable Portfolio - Cash Management Fund 0.33 0.13 0.15 0.61(22),(23) (previously AXP(R) Variable Portfolio - Cash Management Fund) RiverSource(SM) Variable Portfolio - Core Bond Fund 0.48 0.13 0.33 0.94(22),(23),(25) (previously AXP(R) Variable Portfolio - Core Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.47 0.13 0.17 0.77(22),(23) (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.68 0.13 0.16 0.97(22),(23),(24) (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.05 0.13 0.34 1.52(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RiverSource(SM) Variable Portfolio - Fundamental Value Fund 0.73 0.13 0.16 1.02(23),(26) RiverSource(SM) Variable Portfolio - Global Bond Fund 0.71 0.13 0.20 1.04(22),(23) (previously AXP(R) Variable Portfolio - Global Bond Fund) RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.44 0.13 0.33 0.90(22),(23),(25) (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RiverSource(SM) Variable Portfolio - Growth Fund 0.66 0.13 0.17 0.96(22),(23),(24) (previously AXP(R) Variable Portfolio - Growth Fund) RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.59 0.13 0.16 0.88(22),(23) (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.61 0.13 0.34 1.08(22),(23),(25) (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.72 0.13 0.20 1.05(22),(23),(24) (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.56 0.13 0.14 0.83(22),(23),(24) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.60 0.13 1.86 2.59(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.63 0.13 0.17 0.93(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Equity Select Fund) RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.70 0.13 2.18 3.01(22),(23),(25) (previously AXP(R) Variable Portfolio - Mid Cap Value Fund)
-------------------------------------------------------------------------------- 9 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE AND RAVA SELECT (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.22% 0.13% 0.18% 0.53%(22),(23),(25) (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RiverSource(SM) Variable Portfolio - Select Value Fund 0.77 0.13 0.30 1.20(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Select Value Fund) RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.48 0.13 0.17 0.78(22),(23) (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.80 0.13 0.22 1.15(22),(23),(24) (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.92 0.13 0.24 1.29(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Small Cap Value Fund) Van Kampen Life Investment Trust Comstock Portfolio, Class II Shares 0.56 0.25 0.03 0.84(4) Van Kampen UIF Global Real Estate Portfolio Class II Shares 0.85 0.35 0.62 1.82(27) Van Kampen UIF Mid Cap Growth Portfolio Class II Shares 0.75 0.35 0.34 1.44(27) Wanger International Small Cap 0.95 -- 0.18 1.13(4) Wanger U.S. Smaller Companies 0.90 -- 0.05 0.95(4) Wells Fargo Advantage VT Asset Allocation Fund 0.55 0.25 0.24 1.04(28) Wells Fargo Advantage VT International Core Fund 0.75 0.25 0.41 1.41(28) Wells Fargo Advantage VT Opportunity Fund 0.72 0.25 0.21 1.18(28) Wells Fargo Advantage VT Small Cap Growth Fund 0.75 0.25 0.24 1.24(28)
(1) Figures shown in the table are for the year ended Dec. 31, 2005 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. The Fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares and Series II shares to the extent necessary to limit total annual expenses of Series I shares to 1.30% and Series II shares to 1.45% of average daily nets assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual expenses to exceed the limit stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganizations as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The expense limitation is in effect through April 30, 2007. (2) As a result of a reorganization of another Fund into the Fund, which will occur on or about May 1, 2006 for AIM V.I. Capital Appreciation Fund, Series II Shares the "Gross total annual expenses" have been restated to reflect such reorganization. (3) Effective Jan. 1, 2005 through June 30, 2006, the advisor has contractually agreed to waive a portion of its advisory fees. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2005. (5) Expenses are based on expenses for the Portfolio's most recent fiscal year. Management fees include the subadvisory fee paid by the Advisor, to the Subadvisors, and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of Calvert. (6) The Fund's Distributor has voluntarily agreed to waive 0.25% of its 12b-1 fees. (7) Fee waivers and/or expense reimbursement may reduce expenses for the Portfolio, without which performance would be lower. Waivers and/or expense reimbursements may be discontinued at any time. After fee waivers and expense reimbursements net expenses would be 0.95% for Credit Suisse Trust - Commodity Return Strategy Portfolio. (8) The "Gross total annual expenses" exclude expense reductions and fee waivers. These fees have been restated to reflect current fees. (9) A portion of the brokerage commissions that the Fund pays may be reimbursed and used to reduce the Fund's expenses. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances are used to reduce the Fund's custodian expenses. Including these reductions, the total class operating expenses would have been 0.89% for Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2, 0.79% for Fidelity(R) VIP Growth & Income Portfolio Service Class 2, 0.89% for Fidelity(R) VIP Mid Cap Portfolio Service Class 2 and 1.07% for Fidelity(R) VIP Overseas Portfolio Service Class 2. These offsets may be discontinued at any time. (10) The Fund administration fee is paid indirectly through the management fee. (11) While the maximum amount payable under the Fund's class rule 12b-1 plan is 0.35% per year of the Fund's class average annual net assets, the Fund's Board of Trustees has set the current rate at 0.25% per year. (12) The Fund's manager has agreed in advance to reduce its fees with respect to assets invested by the Fund in a Franklin Templeton Money Market Fund. This reduction is required by the Fund's Board of Trustees and an exemptive order by the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.05%) and 0.89%, respectively for FTVIPT Franklin Small Cap Value Securities Fund - Class 2. (13) The Fund's annual operating expenses are based on actual expenses for the fiscal year ended Dec. 31, 2005. "Other expenses" include transfer agency fees and expenses equal on an annualized basis to 0.04% of the average daily net assets of the Fund plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to limit "Other expenses" (excluding management fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation and indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, 0.16% of the Fund's average daily net assets for Goldman Sachs VIT Structured U.S. Equity Fund and 0.25% of the Fund's average daily net assets for Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser may cease or modify the expense limitations at its discretion at anytime. If this occurs, other expenses and total annual operating expenses may increase without shareholder approval. (14) Janus Capital has contractually agreed to waive certain Portfolio's total annual operating expenses (excluding the distribution and shareholder servicing fee, the administrative services fee applicable to certain Portfolios, brokerage commissions, interest, taxes and extraordinary expenses) to certain limits until May 1, 2007. Because the 12b-1 fee is charged as an ongoing fee, over time the fee will increase the cost of your investment and may cost you more than paying other types of sales charges. -------------------------------------------------------------------------------- 10 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS (15) The Investment Manager has contractually agreed to waive its fees and, if necessary, reimburse the Portfolio through Dec. 31, 2006, to the extent "Gross total annual expenses" exceed 1.25% of average daily net assets for Lazard Retirement International Equity Portfolio. (16) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sale and distribution of service class shares (these fees are referred to as distribution fees). (17) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent, and may have entered into brokerage arrangements, that reduced or recaptured series' expenses. Any such expense reductions are not reflected in the table. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower. (18) Neuberger Berman Management Inc. ("NBMI") has undertaken through Dec. 31, 2009 to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Portfolio. The expense limitation arrangements for the Portfolio is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the Portfolio to exceed its limitation described above. (19) Class S shares of the International Portfolio have a redemption fee of 1.00% for exchanges or redemptions on shares held less than 60 days. The redemption fee is paid to the Portfolio. (20) Expenses may vary in future years. "Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to 0.35% per fiscal year. That undertaking may be amended or withdrawn at any time. For the Fund's fiscal year ended Dec. 31, 2005, the transfer agent fees did not exceed the expense limitation described above. (21) "Other expense" also includes Underlying Fund expenses. Underlying Fund Expenses for the Portfolio are estimated based upon an allocation of the Portfolio's assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. Underlying Fund expenses will vary with changes in the expenses of the Underlying Funds, as well as allocation of the Portfolio's assets, and may be higher or lower than those shown above. For a listing of the expenses associated with each Underlying Fund for the most recent fiscal year, please see "Fund of Funds Fees - Annual Underlying Fund Expenses" in the Portfolio's prospectus. PIMCO has contractually agreed, for the Portfolio's current fiscal year (12/31), to reduce its Advisory Fee to the extent that the Underlying Fund Expenses attributable to Advisory and Administrative Fees exceed 0.60% of the total assets invested in Underlying Funds. PIMCO may recoup these waivers in future periods, not exceeding three years, provided total expenses, including such recoupment, do not exceed the annual expense limit. (22) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2005, adjusted to reflect current fees. (23) The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940. The Fund pays IDS Life Insurance Company an annual fee of up to 0.125% of average daily net assets as payment for distributing its shares and providing shareholder services. Because this fee is paid out of the Fund's assets on an on-going basis, over time this fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (24) Management fees include the impact of a performance incentive adjustment fee that decreased the management fee by 0.05% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.04% for RiverSource(SM) Variable Portfolio - International Opportunity Fund, 0.02% for RiverSource(SM) Variable Portfolio - Large Cap Equity Fund, 0.07% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 0.01% for RiverSource(SM) Variable Portfolio - Select Value Fund and 0.04% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. Management fees include the impact of a performance incentive adjustment fee that increased the management fee by 0.03% for RiverSource(SM) Variable Portfolio - Balanced Fund, 0.08% for RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund, 0.06% for RiverSource(SM) Variable Portfolio - Growth Fund, 0.002% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund and 0.01% for RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund. (25) RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2006, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed: 0.83% for RiverSource(SM) Variable Portfolio - Core Bond Fund, 1.75% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.72% for RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund, 0.99% for RiverSource(SM) Variable Portfolio - Income Opportunities Fund, 1.05% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund, 1.00% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 1.08% for RiverSource(SM) Variable Portfolio - Mid Cap Value Fund, 0.495% for RiverSource(SM) Variable Portfolio - S&P 500 Index Fund, 1.15% for RiverSource(SM) Variable Portfolio - Select Value Fund and 1.25% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. (26) The Fund's expense figures are based on estimated expenses, before fee waivers and expense reimbursements. RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed 1.07% for RiverSource(SM) Variable Portfolio - Fundamental Value Fund. (27) The fees disclosed reflect gross ratios prior to any voluntary waivers/reimbursements of expenses by the adviser. The adviser has voluntarily agreed to waive a portion of or all of its management fee and/or reimburse expenses to the extent necessary so that total annual operating expenses, excluding certain investment related expense such as foreign country tax expense and interest expense on borrowing, do not exceed 1.35%. The adviser may terminate these voluntary waivers at any time at its sole discretion. Additionally, the distributor has agreed to voluntarily waive a portion of the 12B-1 fee for Class II shares. The distributor may terminate these voluntary waivers at any time at its sole discretion. After these fee waivers/reimbursements, net expenses would have been 1.40% for Van Kampen UIF Global Real Estate Portfolio Class II Shares and 1.15% for Van Kampen UIF Mid Cap Growth Portfolio Class II Shares. In addition, Van Kampen UIF Global Real Estate Portfolio Class II Shares was not operational in 2005. Figures in the table are based on estimated assuming the average daily net assets of the Portfolio were not more than $75,000,000. (28) The Funds' investment adviser has implemented a break point schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. Other expenses for Wells Fargo Advantage VT Opportunity Fund are based on estimates for the current fiscal year. The adviser has committed through April 30, 2007 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio. After fee waivers and expense reimbursements net expenses would be 1.00% for Wells Fargo Advantage VT Asset Allocation Fund, 1.00% for Wells Fargo Advantage VT International Core Fund, 1.07% for Wells Fargo Advantage VT Opportunity Fund and 1.20% for Wells Fargo Advantage VT Small Cap Growth Fund. Please refer to the Fund's prospectus for additional details. -------------------------------------------------------------------------------- 11 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THESE CONTRACTS WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. These examples assume the most expensive combination of contract features and benefits and the maximum fees and expense of any of the funds for the last fiscal year. They assume that you select both the optional MAV and EEP. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $1,566.39 $2,938.47 $4,233.17 $6,807.52 $766.39 $2,238.47 $3,633.17 $6,807.52 RAVA ADVANTAGE With a seven-year surrender charge schedule 1,466.39 2,838.47 4,033.17 6,807.52 766.39 2,238.47 3,633.17 6,807.52 RAVA SELECT 1,429.84 3,009.54 3,738.71 6,961.15 792.84 2,309.54 3,738.71 6,961.15 RAVA SELECT - TEXAS 1,592.84 2,909.54 3,738.71 6,961.15 792.84 2,309.54 3,738.71 6,961.15 IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $1,545.89 $2,883.11 $4,150.51 $6,685.44 $745.89 $2,183.11 $3,550.51 $6,685.44 RAVA ADVANTAGE With a seven-year surrender charge schedule 1,445.89 2,783.11 3,950.51 6,685.44 745.89 2,183.11 3,550.51 6,685.44 RAVA SELECT 1,472.34 2,954.48 3,657.00 6,842.43 772.34 2,254.48 3,657.00 6,842.43 RAVA SELECT - TEXAS 1,572.34 2,854.48 3,657.00 6,842.43 772.34 2,254.48 3,657.00 6,842.43
-------------------------------------------------------------------------------- 12 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds for the last fiscal year. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $954.47 $1,179.60 $1,427.59 $1,808.38 $154.47 $479.60 $827.59 $1,808.38 RAVA ADVANTAGE With a seven-year surrender charge schedule 854.47 1,079.60 1,227.59 1,808.38 154.47 479.60 827.59 1,808.38 RAVA SELECT 880.91 1,260.24 964.16 2,092.28 180.91 560.24 964.16 2,092.28 RAVA SELECT - TEXAS 980.91 1,160.24 964.16 2,092.28 180.91 560.24 964.16 2,092.28 IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE With a ten-year surrender charge schedule $933.97 $1,116.79 $1,320.70 $1,583.32 $133.97 $416.79 $720.70 $1,583.32 RAVA ADVANTAGE With a seven-year surrender charge schedule 833.97 1,016.79 1,120.70 1,583.32 133.97 416.79 720.70 1,583.32 RAVA SELECT 860.41 1,197.76 858.42 1,872.83 160.41 497.76 858.42 1,872.83 RAVA SELECT - TEXAS 960.41 1,097.76 858.42 1,872.83 160.41 497.76 858.42 1,872.83
* In these examples, the $30 contract administrative charge is approximated as a .027% charge for RAVA Advantage, a .035% charge for RAVA Select and a .035% for RAVA Select - Texas. These percentages were determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to each contract by the total average net assets that are attributable to that contract. CONDENSED FINANCIAL INFORMATION (UNAUDITED) You can find unaudited condensed financial information for the subaccounts in Appendix C. We do not include any condensed financial information for subaccounts that are new and did not have any activity as of the financial statement date. FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. The SAI does not include audited financial statements for subaccounts that are new and did not have any activity as of the financial statement date. -------------------------------------------------------------------------------- 13 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS THE VARIABLE ACCOUNT AND THE FUNDS THE VARIABLE ACCOUNT: The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. Although the Internal Revenue Service (IRS) has issued some guidance on investor control, the U.S. Treasury and the IRS may continue to examine this aspect of variable contracts and provide additional guidance on investor control. Their concern involves how many investment choices (subaccounts) may be offered by an insurance company and how many exchanges among those subaccounts may be allowed before the contract owner would be currently taxed on income earned within the contract. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FUNDS: The contract currently offers subaccounts investing in shares of the funds listed in the table below. - INVESTMENT OBJECTIVES: The investment managers and advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. - FUND NAME AND MANAGEMENT: A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. - ELIGIBLE PURCHASERS: All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. The funds are not available to the public (see "Fund name and management" above). Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future for tax, regulatory or other reasons, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although we and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of each fund will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. Each fund intends to comply with the diversification requirements under Section 817(h) of the Code. - REVENUE WE RECEIVE FROM THE FUNDS MAY CREATE POTENTIAL CONFLICTS OF INTEREST: We seek to provide a broad array of underlying funds taking into account the fees and charges imposed by each fund and the contract charges we impose. We select the underlying funds in which the subaccounts initially invest and upon any substitution (see "Substitution of Investments"). We also make all decisions regarding which funds to retain in a contract, which funds to add to a contract and which funds will no longer be offered in a contract. In making these decisions, we may consider various objective and subjective factors. Objective factors include, but are not limited to, fund performance, fund expenses, classes of fund shares available, size of the fund, and investment objectives and investing style of the fund. Subjective factors include, but are not limited to, investment sub-styles and process, management skill and history at other funds, and portfolio concentration and sector weightings. We also consider the levels and types of revenue a fund, its distributor, investment adviser, subadviser, transfer agent or their affiliates pay us and our affiliates. This revenue includes, but is not limited to, compensation for administrative services provided with respect to the fund and support of marketing and distribution expenses incurred with respect to the fund. -------------------------------------------------------------------------------- 14 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS We and/or our affiliates receive from each of the funds, or the funds' affiliates, varying levels and types of revenue. The amount of this revenue is most often based on a percentage of average daily net assets invested in the fund. For example, the revenue we receive from affiliates of funds other than the RiverSource Variable Portfolio Funds (unaffiliated funds) currently ranges up to 0.50% of the average daily net assets invested in the fund through this contract and other contracts we or our affiliates issue. In some cases, this revenue may be based, in part, on sales one of our affiliates makes of other securities including, but not limited to, publicly-traded retail mutual funds and/or the average daily net assets resulting from these sales. We or our affiliates may also receive revenue which is not based on a percentage of average daily net assets. The amount of this revenue varies by fund, may be significant and may create potential conflicts of interest. The greatest amount and percentage of revenue we and our affiliates receive comes from assets allocated to subaccounts investing in the RiverSource Variable Portfolio Funds (affiliated funds) that are managed by RiverSource Investments, LLC (RiverSource Investments), one of our affiliates. Employee compensation and operating goals at all levels are tied to the success of Ameriprise Financial, Inc. and its affiliates, including us. Certain employees may receive higher compensation and other benefits based, in part, on contract values that are invested in the RiverSource Variable Portfolio Funds. These revenue payments may also influence recommendations your sales representative makes regarding whether you should invest in the contract, and whether you should allocate purchase payments or contract value to a subaccount that invests in a particular fund (see "About the Service Providers"). The revenue we receive from a fund or its affiliates is in addition to revenue we receive from the charges you pay when buying, owning and surrendering the contract (see "Expense Summary"). However, the revenue we receive from a fund or its affiliates may come, at least in part, from the fund's fees and expenses you pay indirectly when you allocate contract value to the subaccount that invests in that fund. Please see the SAI for a table that ranks the unaffiliated funds according to total dollar amounts they and their affiliates paid to us and/or our affiliates in 2005. - WHY REVENUES ARE PAID TO US: In accordance with applicable laws, regulations and the terms of the agreements under which such revenue is paid, we or our affiliates may receive this revenue for various purposes including, but not limited to: - Compensating, training and educating sales representatives who sell the contracts. - Granting access to our employees whose job it is to promote sales of the contracts by authorized selling firms and their sales representatives, and granting access to sales representatives of our affiliated selling firms. - Activities or services we or our affiliates provide that assist in the promotion and distribution of the contracts including promoting the funds available under the contracts to prospective and existing contract owners, authorized selling firms and sales representatives. - Providing sub-transfer agency and shareholder servicing to contract owners. - Promoting, including and/or retaining the fund's investment portfolios as underlying investment options in the contracts. - Advertising, printing and mailing sales literature, and printing and distributing prospectuses and reports. - Furnishing personal services to contract owners, including education of contract owners, answering routine inquiries regarding a fund, maintaining accounts or providing such other services eligible for service fees as defined under the rules of the National Association of Securities Dealers, Inc. (NASD). - Subaccounting, transaction processing, recordkeeping and administration. - SOURCES OF REVENUE RECEIVED FROM AFFILIATED FUNDS: The affiliated funds are managed by RiverSource Investments. The sources of revenue we receive from these affiliated funds, or from affiliates of these funds, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser and transfer agent or an affiliate of these. The revenue resulting from these sources may be based either on a percentage of average daily net assets of the fund or on the actual cost of certain services we provide with respect to the fund. We may receive this revenue either in the form of a cash payment or it may be allocated to us. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. - SOURCES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS: The unaffiliated funds are not managed by an affiliate of ours. The sources of revenue we receive from these unaffiliated funds, or the funds' affiliates, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser, subadviser, transfer agent or an affiliate of these and assets of the fund's distributor or an affiliate. The revenue resulting from these sources usually is based on a percentage of average daily net assets of the fund but there may be other types of payment arrangements. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. -------------------------------------------------------------------------------- 15 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS YOU MAY ALLOCATE PURCHASE PAYMENTS AND TRANSFERS TO ANY OR ALL OF THE SUBACCOUNTS OF THE VARIABLE ACCOUNT THAT INVEST IN SHARES OF THE FOLLOWING FUNDS:
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- AIM V.I. Capital Growth of capital. Invests principally in common stocks of A I M Advisors, Inc. Appreciation Fund, companies likely to benefit from new or innovative products, Series II Shares services or processes as well as those with above-average long-term growth and excellent prospects for future growth. The fund can invest up to 25% of its total assets in foreign securities that involve risks not associated with investing solely in the United States. AIM V.I. Capital Long-term growth of capital. Invests primarily in securities A I M Advisors, Inc. Development Fund, (including common stocks, convertible securities and bonds) of Series II Shares small- and medium-sized companies. The Fund may invest up to 25% of its total assets in foreign securities. AIM V.I. Dynamics Fund, Capital growth. Invests at least 65% of its net assets A I M Advisors, Inc. Series I Shares primarily in common stocks of mid-sized companies, companies included in the Russell Midcap(R) Growth Index at the time of purchase. The Fund also has the flexibility to invest in other types of securities, including preferred stocks, convertible securities and bonds. AIM V.I. Financial Capital growth. Actively managed. Invests at least 80% of its A I M Advisors, Inc. Services Fund, Series I net assets in the equity securities and equity-related Shares instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks, insurance companies, investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies and suppliers to financial services companies). AIM V.I. Global Health Capital growth. The fund seeks to meet its objective by A I M Advisors, Inc. Care Fund, Series II investing, normally, at least 80% of its assets in securities Shares of health care industry companies. The fund may invest up to 20% of its total assets in companies located in developing countries, i.e., those countries that are in the initial stages of their industrial cycles. The fund may also invest up to 5% of its total assets in lower-quality debt securities, i.e., junk bonds. AIM V.I. Technology Capital growth. The Fund is actively managed. Invests at least A I M Advisors, Inc. Fund, Series I Shares 80% of its net assets in equity securities and equity-related instruments of companies engaged in technology-related industries. These include, but are not limited to, various applied technologies, hardware, software, semiconductors, telecommunications equipment and services, and service-related companies in information technology. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. AllianceBernstein VPS Long-term growth of capital. The Fund invests at least 80% of AllianceBernstein L.P. Global Technology its net assets in securities of companies that use technology Portfolio (Class B) extensively in the development of new or improved products or processes. Invests in a global portfolio of securities of U.S. and foreign companies selected for their growth potential. AllianceBernstein VPS Long-term growth of capital. Invests primarily in AllianceBernstein L.P. Growth and Income dividend-paying common stocks of large, well-established, "blue Portfolio (Class B) chip" companies.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- AllianceBernstein VPS Long-term growth of capital. Invests primarily in a diversified AllianceBernstein L.P. International Value portfolio of equity securities of established companies Portfolio (Class B) selected from more than 40 industries and from more than 40 developed and emerging market countries. American Century VP Capital growth. Invests primarily in stocks of growing foreign American Century Global Investment International, Class II companies in developed countries. Management, Inc. American Century VP Long-term capital growth. Invests primarily in U.S. companies, American Century Investment Ultra(R), Class II but there is no limit on the amount of assets the Fund can Management, Inc. invest in foreign companies. American Century VP Long-term capital growth, with income as a secondary objective. American Century Investment Value, Class II Invests primarily in stocks of companies that management Management, Inc. believes to be undervalued at the time of purchase. Calvert Variable Income and capital growth. Invests primarily in stocks, bonds Calvert Asset Management Company, Series, Inc. Social and money market instruments which offer income and capital Inc. (CAMCO), investment adviser. Balanced Portfolio growth opportunity and which satisfy the investment and social SsgA Funds Management, Inc. and New criteria. Amsterdam Partners, LLP are the investment subadvisers. Columbia Marsico Growth Long-term growth of capital. The Fund invests primarily in Columbia Management Advisors, LLC Fund, Variable Series equity securities of large-capitalization companies that are (advisor); Marsico Capital selected for their growth potential. It generally holds a core Management, LLC (sub-advisor) position of between 35 and 50 common stocks. It may hold up to 25% of its assets in foreign securities. Columbia Marsico Long-term growth of capital. The Fund normally invests at least Columbia Management Advisors, LLC International 65% of its assets in common stocks of foreign companies. While (advisor); Marsico Capital Opportunities Fund, the Fund may invest in companies of any size, it focuses on Management, LLC (sub-advisor) Variable Series large companies. These companies are selected for their long-term growth potential. The Fund normally invests in issuers from at least three different countries not including the United States and generally holds a core position of 35 to 50 common stocks. The Fund may invest in common stocks of companies operating in emerging markets. Credit Suisse Trust - Total return. Invests in commodity-linked derivative Credit Suisse Asset Management, LLC Commodity Return instruments backed by a portfolio of fixed-income securities. Strategy Portfolio The portfolio invests in commodity-linked derivative instruments, such as commodity-linked notes, swap agreements, commodity options, futures and options on futures that provide exposure to the investment returns of the commodities markets without investing directly in physical commodities.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Eaton Vance VT High level of current income. Non-diversified mutual fund that Eaton Vance Management Floating-Rate Income normally invests primarily in senior floating rate loans Fund ("Senior Loans"). Senior Loans typically are of below investment grade quality and have below investment grade credit ratings, which ratings are associated with having high risk, speculative characteristics. Investments are actively managed, and may be bought or sold on a daily basis (although loans are generally held until repaid). The investment adviser's staff monitors the credit quality of the Fund holdings, as well as other investments that are available. The Fund may invest up to 25% of its total assets in foreign securities and may engage in certain hedging transactions. Evergreen VA Capital growth with the potential for current income. Invests Evergreen Investment Management Fundamental Large Cap primarily in common stocks of large U.S. companies whose market Company, LLC Fund - Class 2 capitalizations measured at time of purchase fall within the market capitalization range of the companies tracked by the Russell 1000(R) Index. Fidelity(R) VIP Seeks long-term capital appreciation. Normally invests Fidelity Management & Research Contrafund(R) Portfolio primarily in common stocks. Invests in securities of companies Company (FMR), investment manager; Service Class 2 whose value it believes is not fully recognized by the public. FMR U.K. and FMR Far East, Invests in either "growth" stocks or "value" stocks or both. sub-investment advisers. The fund invests in domestic and foreign issuers. Fidelity(R) VIP Growth Seeks high total return through a combination of current income FMR, investment manager; FMR U.K., & Income Portfolio and capital appreciation. Normally invests a majority of assets FMR Far East, sub-investment Service Class 2 in common stocks with a focus on those that pay current advisers. dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. Invests in domestic and foreign issuers. The Fund invests in either "growth" stocks or "value" stocks or both. Fidelity(R) VIP Mid Cap Long-term growth of capital. Normally invests primarily in FMR, investment manager; FMR U.K., Portfolio Service Class 2 common stocks. Normally invests at least 80% of assets in FMR Far East, sub-investment securities of companies with medium market capitalizations. May advisers. invest in companies with smaller or larger market capitalizations. Invests in domestic and foreign issuers. The Fund invests in either "growth" or "value" common stocks or both. Fidelity(R) VIP Long-term growth of capital. Normally invests primarily in FMR, investment manager; FMR U.K., Overseas Portfolio common stocks of foreign securities. Normally invests at least FMR Far East, Fidelity International Service Class 2 80% of assets in non-U.S. securities. Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers. FTVIPT Franklin Real Seeks capital appreciation, with current income as a secondary Franklin Advisers, Inc. Estate Fund - Class 2 goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- FTVIPT Franklin Small Seeks long-term total return. The Fund normally invests at Franklin Advisory Services, LLC Cap Value Securities least 80% of its net assets in investments of small Fund - Class 2 capitalization companies, and normally invests predominantly in equity securities. For this Fund, small-capitalization companies are those with market capitalization values not exceeding $2.5 billion, at the time of purchase. The Fund invests mainly in equity securities of companies that the manager believes are undervalued. FTVIPT Mutual Shares Seeks capital appreciation, with income as a secondary goal. Franklin Mutual Advisers, LLC Securities Fund - Class 2 The Fund normally invests mainly in equity securities that the manager believes are undervalued. The Fund normally invests primarily in undervalued stocks and to a lesser extent in risk arbitrage securities and distressed companies. Goldman Sachs VIT Mid Seeks long-term capital appreciation. The Fund invests, under Goldman Sachs Asset Management, L.P. Cap Value Fund normal circumstances, at least 80% of its net assets plus any borrowings for investment purposes (measured at time of purchase) ("Net Assets") in a diversified portfolio of equity investments in mid-cap issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted basis) within the range of the market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investment. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell Midcap(R) Value Index is currently between $276 million and $14.9 billion. Although the Fund will invest primarily in publicly traded U.S. securities, it may invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and securities quoted in foreign currencies. The Fund may invest in the aggregate up to 20% of its Net Assets in companies with public stock market capitalizations outside the range of companies constituting the Russell Midcap(R) Value Index at the time of investment and in fixed-income securities, such as government, corporate and bank debt obligations. Goldman Sachs VIT The Fund seeks long-term growth of capital and dividend income. Goldman Sachs Asset Management, L.P. Structured U.S. Equity The Fund invests, under normal circumstances, at least 90% of Fund its total assets (not including securities lending collateral and any investment of that collateral) measured at time of (previously Goldman purchase ("Total Assets") in a diversified portfolio of equity Sachs VIT CORE U.S. investments in U.S. issuers, including foreign companies that Equity Fund) are traded in the United States. However, it is currently anticipated that, under normal circumstances, the Fund will CORE is a registered invest at least 95% of its net assets plus any borrowings for service mark of investment purposes (measured at the time of purchase) in such Goldman, Sachs & Co. equity investments. The Fund's investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Fund's expected return, while maintaining risk, style, capitalization and industry characteristics similar to the S&P 500 Index. The Fund seeks a broad representation in most major sectors of the U.S. economy and a portfolio consisting of companies with average long-term earnings growth expectations and dividend yields. The Fund is not required to limit its investments to securities in the S&P 500 Index. The Fund's investments in fixed-income securities are limited to securities that are considered cash equivalents.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital Global Technology circumstances, at least 80% of its net assets in securities of Portfolio: Service companies that the portfolio manager believes will benefit Shares significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital International Growth circumstances, at least 80% of its net assets in securities of Portfolio: Service issuers from at least five different countries, excluding the Shares United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. Lazard Retirement Long-term capital appreciation. Invests primarily in equity Lazard Asset Management, LLC International Equity securities, principally common stocks, of relatively large Portfolio non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. MFS(R) Investors Growth Long-term growth of capital and future income. Invests at least MFS Investment Management(R) Stock Series - Service 80% of its net assets in common stocks and related securities Class of companies which MFS(R) believes offer better than average prospects for long-term growth. MFS(R) New Discovery Capital appreciation. Invests at least 65% of its net assets in MFS Investment Management(R) Series - Service Class equity securities of emerging growth companies. MFS(R) Utilities Series Capital growth and current income. Invests primarily in equity MFS Investment Management(R) - Service Class and debt securities of domestic and foreign companies in the utilities industry. Neuberger Berman Long-term growth of capital. The Fund invests mainly in foreign Neuberger Berman Management Inc. Advisers Management companies of any size, including companies in developed and Trust International emerging industrialized markets. The Fund defines a foreign Portfolio (Class S) company as one that is organized outside of the United States and conducts the majority of its business abroad. The Fund seeks to reduce risk by diversifying among many industries. Although it has the flexibility to invest a significant portion of its assets in one country or region, it generally intends to remain well-diversified across countries and geographical regions. Oppenheimer Global Long-term capital appreciation. Invests mainly in common stocks OppenheimerFunds, Inc. Securities Fund/VA, of U.S. and foreign issuers that are "growth-type" companies, Service Shares cyclical industries and special situations that are considered to have appreciation possibilities. Oppenheimer Main Street Seeks capital appreciation. Invests mainly in common stocks of OppenheimerFunds, Inc. Small Cap Fund/VA, small-capitalization U.S. companies that the fund's investment Service Shares manager believes have favorable business trends or prospects. Oppenheimer Strategic High level of current income principally derived from interest OppenheimerFunds, Inc. Bond Fund/VA, Service on debt securities. Invests mainly in three market sectors: Shares debt securities of foreign governments and companies, U.S. government securities and lower-rated high yield securities of U.S. and foreign companies.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- PIMCO VIT All Asset Seeks maximum real return consistent with preservation of real Pacific Investment Management Portfolio, Advisor capital and prudent investment management period. The Portfolio Company LLC Share Class seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). Though it is anticipated that the Portfolio will not currently invest in the European StockPLUS(R) TR Strategy, Far East (ex-Japan) StocksPLUS(R) TR Strategy, Japanese StocksPLUS(R) TR Strategy, StocksPLUS(R) Municipal-Backed and StocksPLUS(R) TR Short Strategy Funds, the Portfolio may invest in these Funds in the future, without shareholder approval, at the discretion of the Portfolio's asset allocation sub-adviser. Pioneer Equity Income Current income and long-term growth of capital from a portfolio Pioneer Investment Management, Inc. VCT Portfolio - Class consisting primarily of income producing equity securities of II Shares U.S. corporations. Normally, the portfolio invests at least 80% of its total assets in income producing equity securities of U.S. issuers. The income producing equity securities in which the portfolio may invest include common stocks, preferred stocks and interests in real estate investment trusts (REITs). The remainder of the portfolio may be invested in debt securities, most of which are expected to be convertible into common stocks. The portfolio may invest up to 25% of its total assets in REITs. Pioneer Europe VCT Long-term growth of capital. Normally, the portfolio invests at Pioneer Investment Management, Inc. Portfolio - Class II least 80% of its total assets in equity securities of European Shares issuers. For purposes of the portfolio's investment policies, equity investments include common stocks, convertible debt and securities with common stock characteristics, such as preferred stocks, rights, depositary receipts and warrants. The portfolio may also purchase and sell forward foreign currency exchange contracts in European currencies in connection with its investments. Putnam VT Health Seeks capital appreciation. The fund pursues its goal by Putnam Investment Management, LLC Sciences Fund - Class investing mainly in common stocks of companies in the health IB Shares sciences industries, with a focus on growth stocks. Under normal circumstances, the fund invests at least 80% of its net assets in securities of (a) companies that derive at least 50% of their assets, revenues or profits from the pharmaceutical, health care services, applied research and development and medical equipment and supplies industries, or (b) companies Putnam Management thinks have the potential for growth as a result of their particular products, technology, patents or other market advantages in the health sciences industries. Putnam VT International Seeks capital appreciation. The fund pursues its goal by Putnam Investment Management, LLC Equity Fund - Class IB investing mainly in common stocks of companies outside the Shares United States that Putnam Management believes have favorable investment potential. Under normal circumstances, the fund invests at least 80% of its net assets in equity investments. Putnam VT Vista Fund - Seeks capital appreciation. The fund pursues its goal by Putnam Investment Management, LLC Class IB Shares investing mainly in common stocks of U.S. companies, with a focus on growth stocks.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Maximum total investment return through a combination of RiverSource Investments Portfolio - Balanced capital growth and current income. Invests primarily in a Fund combination of common and preferred stocks, bonds and other debt securities. Under normal market conditions, at least 50% of the Fund's total assets are invested in common stocks and no less than 25% of the Fund's total assets are invested in debt securities. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable Maximum current income consistent with liquidity and stability RiverSource Investments Portfolio - Cash of principal. Invests primarily in money market instruments, Management Fund such as marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit, and commercial paper, including asset-backed commercial paper. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Core Bond appreciation. Under normal market conditions, the Fund invests Fund at least 80% of its net assets in bonds and other debt securities. Although the Fund is not an index fund, it invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index ("the Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. The Fund will not invest in securities rated below investment grade, although it may hold securities that have been downgraded. RiverSource Variable High level of current income while attempting to conserve the RiverSource Investments Portfolio - Diversified value of the investment and continuing a high level of income Bond Fund for the longest period of time. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. At least 50% of the Fund's net assets will be invested in securities like those included in the Lehman Brothers Aggregate Bond Index (Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes high- and medium-quality debt securities, it will assume some credit risk to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. RiverSource Variable High level of current income and, as a secondary goal, steady RiverSource Investments Portfolio - Diversified growth of capital. Under normal market conditions, the Fund Equity Income Fund invests at least 80% of its net assets in dividend-paying common and preferred stocks. RiverSource Variable Long-term capital growth. The Fund's assets are primarily RiverSource Investments, adviser; Portfolio - Emerging invested in equity securities of emerging market companies. Threadneedle International Limited, Markets Fund Under normal market conditions, at least 80% of the Fund's net an indirect wholly-owned subsidiary assets will be invested in securities of companies that are of Ameriprise Financial, subadviser. located in emerging market countries, or that earn 50% or more of their total revenues from goods and services produced in emerging market countries or from sales made in emerging market countries.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Long-term capital growth. The Fund's assets are primarily RiverSource Investments Portfolio - Fundamental invested in equity securities of U.S. companies. Under normal Value Fund market conditions, the Fund's net assets will be invested primarily in companies with market capitalizations of at least $5 billion. RiverSource Variable High total return through income and growth of capital. RiverSource Investments Portfolio - Global Bond Non-diversified mutual fund that invests primarily in debt Fund obligations of U.S. and foreign issuers (which may include issuers located in emerging markets). Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate or government debt obligations including money market instruments of issuers located in at least three different countries. RiverSource Variable Total return that exceeds the rate of inflation over the RiverSource Investments Portfolio - Global long-term. Non-diversified mutual fund that, under normal Inflation Protected market conditions, invests at least 80% of its net assets in Securities Fund inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource Variable Long-term capital growth. Invests primarily in common stocks RiverSource Investments Portfolio - Growth Fund and securities convertible into common stocks that appear to offer growth opportunities. These growth opportunities could result from new management, market developments, or technological superiority. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable High current income, with capital growth as a secondary RiverSource Investments Portfolio - High Yield objective. Under normal market conditions, the Fund invests at Bond Fund least 80% of its net assets in high-yielding, high-risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Income appreciation. Under normal market conditions, invests primarily Opportunities Fund in income-producing debt securities with an emphasis on the higher rated segment of the high-yield (junk bond) market. The Fund will purchase only securities rated B or above, or unrated securities believed to be of the same quality. If a security falls below a B rating, the Fund may continue to hold the security. RiverSource Variable Capital appreciation. Invests primarily in equity securities of RiverSource Investments, adviser; Portfolio - foreign issuers that offer strong growth potential. The Fund Threadneedle International Limited, International may invest in developed and in emerging markets. an indirect wholly-owned subsidiary Opportunity Fund of Ameriprise Financial, subadviser. RiverSource Variable Capital appreciation. Under normal market conditions, the Fund RiverSource Investments Portfolio - Large Cap invests at least 80% of its net assets in equity securities of Equity Fund companies with market capitalization greater than $5 billion at the time of purchase. RiverSource Variable Long-term growth of capital. Under normal market conditions, RiverSource Investments Portfolio - Large Cap the Fund invests at least 80% of its net assets in equity Value Fund securities of companies with a market capitalization greater than $5 billion. The Fund may also invest in income-producing equity securities and preferred stocks.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- RiverSource Variable Growth of capital. Under normal market conditions, the Fund RiverSource Investments Portfolio - Mid Cap invests at least 80% of its net assets in equity securities of Growth Fund mid capitalization companies. The investment manager defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the range of the Russell Midcap(R) Growth Index. RiverSource Variable Under normal circumstances, the Fund invests at least 80% of RiverSource Investments Portfolio - Mid Cap its net assets (including the amount of any borrowings for Value Fund investment purposes) in equity securities of medium-sized companies. Medium-sized companies are those whose market capitalizations at the time of purchase fall within the range of the Russell Midcap(R) Value Index. RiverSource Variable Long-term capital appreciation. The Fund seeks to provide RiverSource Investments Portfolio - S&P 500 investment results that correspond to the total return (the Index Fund combination of appreciation and income) of large-capitalization stocks of U.S. companies. The Fund invests in common stocks included in the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P 500 is made up primarily of large-capitalization companies that represent a broad spectrum of the U.S. economy. RiverSource Variable Long-term growth of capital. Invests primarily in common RiverSource Investments, adviser; Portfolio - Select stocks, preferred stocks and securities convertible into common GAMCO Investors, Inc., subadviser Value Fund stocks that are listed on a nationally recognized securities exchange or traded on the NASDAQ National Market System of the National Association of Securities Dealers. The Fund invests in mid-cap companies as well as companies with larger and smaller market capitalizations. RiverSource Variable A high level of current income and safety of principal RiverSource Investments Portfolio - Short consistent with an investment in U.S. government and government Duration U.S. agency securities. Under normal market conditions, at least 80% Government Fund of the Fund's net assets are invested in securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. RiverSource Variable Long-term capital growth. Under normal market conditions, at RiverSource Investments, adviser; Portfolio - Small Cap least 80% of the Fund's net assets are invested in equity Kenwood Capital Management LLC, Advantage Fund securities of companies with market capitalization of up to $2 subadviser billion or that fall within the range of the Russell 2000(R) Index at the time of investment. RiverSource Variable Long-term capital appreciation. Invests primarily in equity RiverSource Investments, adviser; Portfolio - Small Cap securities. Under normal market conditions, at least 80% of the River Road Asset Management, LLC, Value Fund Fund's net assets will be invested in small cap companies with Donald Smith & Co., Inc., Franklin market capitalization, at the time of investment, of up to $2.5 Portfolio Associates LLC and Barrow, billion or that fall within the range of the Russell 2000(R) Hanley, Mewhinney & Strauss, Inc., Value Index. subadvisers. Van Kampen Life Capital growth and income through investments in equity Van Kampen Asset Management Investment Trust securities, including common stocks, preferred stocks and Comstock Portfolio, securities convertible into common and preferred stocks. Class II Shares Van Kampen UIF Global Current income and capital appreciation. Invests primarily in Morgan Stanley Investment Management Real Estate Portfolio, equity securities of companies in the real estate industry Inc., doing business as Van Kampen, Class II Shares located throughout the world, including real estate operating adviser; Morgan Stanley Investment companies, real estate investment trusts and foreign real Management and Morgan Stanley estate companies. Investment Management Company, sub-adviser
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------------------------------------------------------------------------------------------------------------------- Van Kampen UIF Mid Cap Long-term capital growth. Invests primarily in growth-oriented Morgan Stanley Investment Management Growth Portfolio, Class equity securities of U.S. mid cap companies and foreign Inc., doing business as Van Kampen II Shares companies, including emerging market securities. Wanger International Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Small Cap companies based outside the U.S. with market capitalizations of L.P. less than $5 billion at time of initial purchase. Wanger U.S. Smaller Long-term growth of capital. Invests primarily in stocks of Columbia Wanger Asset Management, Companies small- and medium-size U.S. companies with market L.P. capitalizations of less than $5 billion at time of initial purchase. Wells Fargo Advantage Long-term total return consistent with reasonable risk. The Wells Fargo Funds Management, LLC, VT Asset Allocation Fund invests in equity and fixed income securities with an adviser; Wells Capital Management Fund emphasis on equity securities. The Fund does not select Incorporated, subadviser. individual securities for investment, rather, it buys substantially all of the securities of various indexes to replicate such indexes. The Fund invests the equity portion of its assets in common stocks to replicate the S&P 500 Index, and invests the fixed income portion of its assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes, before fees and expenses, regardless of market conditions. The Fund's "neutral" target allocation is 60% equity securities and 40% fixed income securities. Wells Fargo Advantage Long-term capital appreciation. The Fund seeks long-term Wells Fargo Funds Management, LLC, VT International Core capital appreciation by investing principally in non-U.S. adviser; New Star Institutional Fund securities, with focus on companies with strong growth Managers Limited, subadviser. potential that offer relative values. These companies typically have distinct competitive advantages, high or improving returns on invested capital and a potential for positive earnings surprises. The Fund may invest in emerging markets. Wells Fargo Advantage Seeks long-term capital appreciation. We invest in equity Wells Fargo Funds Management, LLC, VT Opportunity Fund securities of medium-capitalization companies that we believe adviser; Wells Capital Management are under-priced yet, have attractive growth prospects. Incorporated, subadviser. Wells Fargo Advantage Long-term capital appreciation. Focus is on companies believed Wells Fargo Funds Management, LLC, VT Small Cap Growth to have above-average growth potential or that may be involved adviser; Wells Capital Management Fund in new or innovative products, services and processes. Invests Incorporated, subadviser. principally in securities of companies with market capitalizations equal to or lower than the company with the largest market capitalization in the Russell 2000 Index, which is considered a small capitalization index that is expected to change frequently.
-------------------------------------------------------------------------------- 25 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS THE FIXED ACCOUNT You also may allocate purchase payments and purchase payment credits or transfer contract value to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment or transfer to the fixed account is guaranteed for one year. Thereafter, we will change the rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and IDS Life's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments and purchase payment credits to the subaccounts of the variable account and/or to the fixed account in even 1% increments. For contracts issued on or after July 1, 2003, the amount of any purchase payment allocated to the fixed account cannot exceed 30% of the purchase payment. More than 30% of a purchase payment may be so allocated if you establish a dollar cost averaging arrangement with respect to the purchase payment according to procedures currently in effect. We applied your initial purchase payment and purchase payment credits to the fixed account and subaccounts you selected within two business days after we received it at our home office. We will credit additional purchase payments you make to your accounts on the valuation date we receive them. If we receive an additional purchase payment at our home office before the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the valuation date we received the payment. If we receive an additional purchase payment at our home office at or after the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the next valuation date after we received the payment. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date as the maximum age (or contract anniversary if applicable) for nonqualified annuities and Roth IRAs and the date specified below for qualified annuities. Your selected date can align with your actual retirement from a job, or it can be a different date, depending on your needs and goals and on certain restrictions. You also can change the settlement date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to comply with IRS regulations, the settlement date generally must be: - for IRAs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you satisfy your RMDs in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later, or a date that has been otherwise agreed to by us. Contract owners of IRAs and TSAs may also be able to satisfy required minimum distributions using other IRAs or TSAs, and in that case, may delay the annuity payout start date for these contracts. -------------------------------------------------------------------------------- 26 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then the default provisions of your contract will apply. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS* If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE RAVA SELECT If paying by any other method: initial payment for qualified annuities $1,000 $ 2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
* Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. MAXIMUM ALLOWABLE PURCHASE PAYMENTS** based on the age of you or the annuitant, whoever is older, on the effective date of the contract:
RAVA ADVANTAGE RAVA SELECT through age 85 100,000 100,000 for ages 86 to 90 50,000 50,000
** These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. *** For RAVA Advantage contracts with initial purchase payments of more than $999,999, our home office approval is required. Purchase payment amounts and purchase payment timing may vary by state and may be limited under the terms of your contract. For RAVA Advantage, except for TSAs, purchase payments are limited and may not be made after the third contract anniversary in Massachusetts, Washington and Oregon. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. -------------------------------------------------------------------------------- 27 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS PURCHASE PAYMENT CREDITS FOR RAVA ADVANTAGE: we add a credit to your contract in the amount of: - 1% of each purchase payment received: - if you elect the ten-year surrender charge schedule for your contract*; OR - if you elect the seven-year surrender charge schedule for your contract AND your initial purchase payment to the contract is at least $100,000. - 2% of each purchase payment received if you elect the ten-year surrender charge schedule for your contract* AND your initial purchase payment to the contract is at least $100,000. To the extent a death benefit or surrender payment includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits.* The amount we pay to you under these circumstances will always equal or exceed your surrender value. Surrender charges under RAVA Advantage may be higher and longer than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated with them. Because of higher charges, there could be circumstances where you may be worse off purchasing one of these contracts with the credits than purchasing other contracts. All things being equal (such as fund performance and availability), this may occur if you select the ten-year surrender charge and you make a full surrender in years five through ten. We pay for the credits under RAVA Advantage primarily through revenue from a higher and longer surrender charge schedule and through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. FOR RAVA SELECT: we add a credit to your contract in the amount of 1% of each purchase payment received in the first contract year if your initial purchase payment to the contract is at least $250,000. To the extent a death benefit or surrender payment includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; or (2) a request for surrender charge waiver due to Nursing Home Confinement, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits.* The amount we pay to you under these circumstances will always equal or exceed your surrender value. Expenses under RAVA Select may be higher than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated with them. Because of higher charges, you may be worse off purchasing this contract. We pay for the credits under RAVA Select primarily through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. We fund all credits from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. * The ten-year surrender charge under RAVA Advantage is not available in Oregon. Contracts purchased in Oregon are only eligible for a 1% purchase payment credit if the initial purchase payment is at least $100,000. For contracts purchased in Oregon, we will not assess a charge equal to the amount of the purchase payment credits upon payment of a death benefit or surrender. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief - Free look period.") We reserve the right to increase the amount of the credit for certain groups of contract owners. The increase will not be greater than 8% of total net purchase payments. We would pay for increases in credit amounts primarily through reduced expenses expected from such groups. -------------------------------------------------------------------------------- 28 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee, which is a percentage of their average daily net assets, on an annual basis as follows:
RAVA ADVANTAGE RAVA SELECT For nonqualified annuities 0.95% 1.20% For qualified annuities 0.75% 1.00%
This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. We do not expect that the surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.25%(2) of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date, and it does not apply after annuity payouts begin or when we pay death benefits. -------------------------------------------------------------------------------- 29 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS EEB RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.30% of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEP RIDER FEE We charge a fee for the optional feature only if you select it(1). If selected, we deduct an annual fee of 0.40% of your contract value of RAVA Advantage or RAVA Select on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select any one of the MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and the EEP. Riders may not be available in all states. The MAV, EEB and EEP riders are only available if you and the annuitant are age 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. (2) For contracts purchased before May 1, 2003, the MAV rider fee for RAVA Advantage and RAVA Select is 0.15%. SURRENDER CHARGE If you surrender all or part of your contract, you may be subject to a surrender charge. For RAVA Advantage, a surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven or ten years before surrender. For RAVA Select, a surrender charge applies if you surrender all or part of your purchase payments in the first three contract years. You select the surrender charge period at the time of your application for the contract. The surrender charge percentages that apply to you are shown in your contract. You may surrender an amount during any contract year without a surrender charge. We call this amount the Total Free Amount (TFA). The TFA is defined as the greater of: - 10% of the contract value on the prior contract anniversary, and - current contract earnings. NOTE: We determine current contract earnings by looking at the entire contract value, not the earnings of any particular subaccount or the fixed account. Amounts surrendered in excess of the TFA may be subject to a surrender charge as described below. SURRENDER CHARGE UNDER RAVA ADVANTAGE: For purposes of calculating any surrender charge under RAVA Advantage, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA.We do not assess a surrender charge on the TFA. 2. Next, we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 3. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a first-in, first-out (FIFO) basis. We do assess a surrender charge on these payments. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. -------------------------------------------------------------------------------- 30 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected*:
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE NUMBER OF COMPLETED YEARS FROM SURRENDER CHARGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE DATE OF EACH PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7 0 7 4 8 3 9 2 10 0
* The ten-year surrender charge schedule under RAVA Advantage is not available in Oregon. For contracts issued in Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. SURRENDER CHARGE UNDER RAVA SELECT (EXCEPT TEXAS): For purposes of calculating any surrender charge under RAVA Select, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next, if necessary, we surrender purchase payments. We do assess a surrender charge on these payments during the first three contract years as follows:
CONTRACT YEAR SURRENDER CHARGE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
SURRENDER CHARGE UNDER RAVA SELECT IN TEXAS: For purposes of calculating any surrender charge under RAVA Select in Texas, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next, if necessary, we surrender purchase payments. We surrender amounts from the oldest purchase payments first. We do assess a surrender charge on these payments during the first three contract years as follows:
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
PARTIAL SURRENDERS UNDER RAVA ADVANTAGE AND RAVA SELECT For a partial surrender that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge. The surrender charge percentage is applied to this total amount. We pay you the amount you requested. For an example, see Appendix A. -------------------------------------------------------------------------------- 31 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate.
ASSUMED INVESTMENT RATE 3.50% 5.00% Qualified annuity discount rate 4.72% 6.22% Nonqualified annuity discount rate 4.92% 6.42%
WAIVER OF SURRENDER CHARGES We do not assess surrender charges for: - surrenders of any contract earnings; - surrenders of amounts totaling up to 10% of the contract value on the prior contract anniversary to the extent it exceeds contract earnings; - amounts surrendered after the tenth contract anniversary in Massachusetts, Washington and Oregon; - required minimum distributions from a qualified annuity provided the amount is no greater than the RMDs for the specific contract in force; - contracts settled using an annuity payout plan, unless an Annuity Payout Plan E is later surrendered; - amounts we refund to you during the free look period*; - death benefits*; and - surrenders you make under your contract's "Waiver of Surrender Charges for Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 on the date that we issue the contract. Under this provision, we will waive surrender charges that we normally assess upon full or partial surrender. Under RAVA Advantage, you must provide proof satisfactory to us that, as of the date you request the surrender, you or the annuitant are confined to a nursing home and have been for the prior 90 days and the confinement began after the contract date. Under RAVA Select, you must provide proof satisfactory to us that, as of the date you request the surrender, you or your spouse are confined to a nursing home or hospital and have been for the prior 90 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits. (See "Buying your contract -- Purchase payment credits.") OTHER INFORMATION ON CHARGES: Ameriprise Financial, Inc. makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. Ameriprise Financial, Inc. will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. FUND FEES AND EXPENSES There are deductions from and expenses paid out of the assets of the funds that are described in the prospectuses for those funds. (See "Annual Operating Expenses of the Funds.") PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon your state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you surrender your contract. -------------------------------------------------------------------------------- 32 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and purchase payment credits and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); - minus any prorated portion of the EEB rider fee (if selected); and - minus any prorated portion of the EEP rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payment credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, we subtract a certain number of accumulation units from your contract each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge or fee for any optional riders with annual charges (if applicable). The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - any purchase payment credits allocated to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - surrender charges; and a deduction of: - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); - a prorated portion of the EEB rider fee (if selected); and/or - a prorated portion of the EEP rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in fund net asset value; - fund dividends distributed to the subaccounts; - fund capital gains or losses; - fund operating expenses; and - mortality and expense risk fees. -------------------------------------------------------------------------------- 33 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER By investing an equal number AMOUNT ACCUMULATION OF UNITS of dollars each month ... MONTH INVESTED UNIT VALUE PURCHASED Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ------> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ------> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semiannually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing or by any other method acceptable to us, to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. -------------------------------------------------------------------------------- 34 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. Certain restrictions apply to transfers involving the fixed account. When your request to transfer will be processed depends on when we receive it: - If we receive your transfer request at our home office before the close of business, we will process your transfer using the accumulation unit value we calculate on the valuation date we received your transfer request. - If we receive your transfer request at our home office at or after the close of business, we will process your transfer using the accumulation unit value we calculate on the next valuation date after we received your transfer request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. WE SEEK TO PREVENT MARKET TIMING. MARKET TIMING IS FREQUENT OR SHORT-TERM TRADING ACTIVITY. WE DO NOT ACCOMMODATE SHORT-TERM TRADING ACTIVITIES. DO NOT BUY A CONTRACT IF YOU WISH TO USE SHORT-TERM TRADING STRATEGIES TO MANAGE YOUR INVESTMENT. THE MARKET TIMING POLICIES AND PROCEDURES DESCRIBED BELOW APPLY TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN THE CONTRACT. THE UNDERLYING FUNDS IN WHICH THE SUBACCOUNTS INVEST HAVE THEIR OWN MARKET TIMING POLICIES AND PROCEDURES. THE MARKET TIMING POLICIES OF THE UNDERLYING FUNDS MAY BE MORE OR LESS RESTRICTIVE THAN THE MARKET TIMING POLICIES AND PROCEDURES WE APPLY TO TRANSFERS AMONG THE SUBACCOUNTS OF THE CONTRACT, AND MAY INCLUDE REDEMPTION FEES. WE RESERVE THE RIGHT TO MODIFY OUR MARKET TIMING POLICIES AND PROCEDURES AT ANY TIME WITHOUT PRIOR NOTICE TO YOU. Market timing may hurt the performance of an underlying fund in which a subaccount invests in several ways, including but not necessarily limited to: - diluting the value of an investment in an underlying fund in which a subaccount invests; - increasing the transaction costs and expenses of an underlying fund in which a subaccount invests; and, - preventing the investment adviser(s) of an underlying fund in which a subaccount invests from fully investing the assets of the fund in accordance with the fund's investment objectives. Market timing can reduce the value of your investment in the contract. If market timing causes the returns of an underlying fund to suffer, contract value you have allocated to a subaccount that invests in that underlying fund will be lower, too. Market timing can cause you, any joint owner of the contract and your beneficiary(ies) under the contract a financial loss. IN ORDER TO HELP PROTECT YOU AND THE UNDERLYING FUNDS FROM THE POTENTIALLY HARMFUL EFFECTS OF MARKET TIMING ACTIVITY, WE APPLY THE FOLLOWING MARKET TIMING POLICY TO DISCOURAGE FREQUENT TRANSFERS OF CONTRACT VALUE AMONG THE SUBACCOUNTS OF THE VARIABLE ACCOUNT: We try to distinguish market timing from transfers that we believe are not harmful, such as dollar-cost averaging. There is no set number of transfers that constitutes market timing. Even one transfer in related accounts may be market timing. We seek to restrict the transfer privileges of a contract owner who makes more than three subaccount transfers in any 90 day period. We also reserve the right to refuse any transfer requests, if, in our sole judgment, the dollar amount of the transfer request would adversely affect unit values. If we determine, in our sole judgment, that your transfer activity constitutes market timing, we may modify, restrict or suspend your transfer privileges to the extent permitted by applicable law, which may vary based on the state law that applies to your contract and the terms of your contract. These restrictions or modifications may include, but not be limited to: - requiring transfer requests to be submitted only by first-class U.S. mail; - not accepting hand-delivered transfer requests or requests made by overnight mail; - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney; - limiting the dollar amount that you may transfer at any one time; or - suspending the transfer privilege. Subject to applicable state law and the terms of each contract, we will apply the policy described above to all contract owners uniformly in all cases. We will notify you in writing after we impose any modification, restriction or suspension of your transfer rights. We cannot guarantee that we will be able to identify and restrict all market timing activity. Because we exercise discretion in applying the restrictions described above, we cannot guarantee that we will be able to restrict all market timing activity. In addition, state law and the terms of some contracts may prevent us from stopping certain market timing activity. Market timing activity that we are unable to identify and/or restrict may impact the performance of the underlying funds and may result in lower contract values. -------------------------------------------------------------------------------- 35 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS IN ADDITION TO THE MARKET TIMING POLICY DESCRIBED ABOVE, WHICH APPLIES TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT, YOU SHOULD CAREFULLY REVIEW THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS. THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS MAY BE MATERIALLY DIFFERENT THAN THOSE WE IMPOSE ON TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT AND MAY INCLUDE MANDATORY REDEMPTION FEES AS WELL AS OTHER MEASURES TO DISCOURAGE FREQUENT TRANSFERS. AS AN INTERMEDIARY FOR THE UNDERLYING FUNDS, WE ARE REQUIRED TO ASSIST THEM IN APPLYING THEIR MARKET TIMING POLICIES AND PROCEDURES TO TRANSACTIONS INVOLVING THE PURCHASE, EXCHANGE AND REDEMPTION OF FUND SHARES. THIS ASSISTANCE MAY INCLUDE BUT NOT BE LIMITED TO PROVIDING THE UNDERLYING FUND UPON REQUEST WITH YOUR SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER AND THE DETAILS OF YOUR CONTRACT TRANSACTIONS INVOLVING THE UNDERLYING FUND. AN UNDERLYING FUND, IN ITS SOLE DISCRETION, MAY INSTRUCT US AT ANY TIME TO PROHIBIT YOU FROM MAKING FURTHER TRANSFERS OF CONTRACT VALUE TO OR FROM THE UNDERLYING FUND, AND WE MUST FOLLOW THIS INSTRUCTION. WE RESERVE THE RIGHT TO ADMINISTER AND COLLECT ON BEHALF OF AN UNDERLYING FUND ANY REDEMPTION FEE IMPOSED BY AN UNDERLYING FUND. MARKET TIMING POLICIES AND PROCEDURES ADOPTED BY UNDERLYING FUNDS MAY AFFECT YOUR INVESTMENT IN THE CONTRACT IN SEVERAL WAYS, INCLUDING BUT NOT LIMITED TO: - Each fund may restrict or refuse trading activity that the fund determines, in its sole discretion, represents market timing. - Even if we determine that your transfer activity does not constitute market timing under the market timing policies described above which we apply to transfers you make under the contract, it is possible that the underlying fund's market timing policies and procedures, including instructions we receive from a fund, may require us to reject your transfer request. Orders we place to purchase fund shares for the variable account are subject to acceptance by the fund. We reserve the right to reject without prior notice to you any transfer request if the fund does not accept our order. - Each underlying fund is responsible for its own market timing policies, and we cannot guarantee that we will be able to implement specific market timing policies and procedures that a fund has adopted. As a result, a fund's returns might be adversely affected, and a fund might terminate our right to offer its shares through the variable account. - Funds that are available as investment options under the contract may also be offered to other intermediaries who are eligible to purchase and hold shares of the fund, including without limitation, separate accounts of other insurance companies and certain retirement plans. Even if we are able to implement a fund's market timing policies, we cannot guarantee that other intermediaries purchasing that same fund's shares will do so, and the returns of that fund could be adversely affected as a result. Funds available as investment options under the contract that invest in securities that trade in overseas securities markets may be at greater risk of loss from market timing, as market timers may seek to take advantage of changes in the values of securities between the close of overseas markets and the close of U.S. markets. Further the risks of market timing may be greater for underlying funds that invest in securities, such as small cap stocks, high yield bonds, or municipal securities, that may be traded infrequently. FOR MORE INFORMATION ABOUT THE MARKET TIMING POLICIES AND PROCEDURES OF AN UNDERLYING FUND, THE RISKS THAT MARKET TIMING POSES TO THAT FUND, AND TO DETERMINE WHETHER AN UNDERLYING FUND HAS ADOPTED A REDEMPTION FEE, SEE THAT FUND'S PROSPECTUS. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts. You may also transfer contract values from the subaccounts to the fixed account. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. For contracts issued on or after July 1, 2003, the amount of contract value transferred to the fixed account cannot result in the value of the fixed account being greater than 30% of the contract value. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). For contracts issued on or after July 1, 2003, the transfers out of the fixed account are limited to the greater of: a) 30% of the fixed account value at the beginning of the contract year, or b) the amount transferred out of the fixed account in the previous contract year, excluding any automated transfer amounts. - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. -------------------------------------------------------------------------------- 36 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number* and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance * Failure to provide your Social Security Number or Taxpayer Identification Number may result in mandatory tax withholding on the taxable portion of the distribution. 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 7 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. -------------------------------------------------------------------------------- 37 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. If we receive your surrender request at our home office before the close of business, we will process your surrender using the accumulation unit value we calculate on the valuation date we received your surrender request. If we receive your surrender request at our home office at or after the close of business, we will process your surrender using the accumulation unit value we calculate on the next valuation date after we received your surrender request. We may ask you to return the contract. You may have to pay contract administrative charges, surrender charges, or any applicable optional rider charges (see "Charges"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). Any partial surrenders you take under the contract will reduce your contract value. As a result, the value of your death benefit or any optional benefits you have elected also will be reduced. In addition, surrenders you are required to take to satisfy the RMDs under the Code may reduce the value of certain death benefits and optional benefits (see "Taxes -- Qualified Annuities -- Required Minimum Distributions"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: - the surrender amount includes a purchase payment check that has not cleared; - the NYSE is closed, except for normal holiday and weekend closings; - trading on the NYSE is restricted, according to SEC rules; - an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or - the SEC permits us to delay payment for the protection of security holders. -------------------------------------------------------------------------------- 38 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TSA -- SPECIAL PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The contract is not intended for use in connection with an employer sponsored 403(b) plan that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the event that the employer either by affirmative election or inadvertent action causes contributions under a plan that is subject to ERISA to be made to this contract, we will not be responsible for any obligations and requirements under ERISA and the regulations thereunder. You should consult with your employer to determine whether your 403(b) plan is subject to ERISA. The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: - you are at least age 59 1/2; - you are disabled as defined in the Code; - you severed employment with the employer who purchased the contract; or - the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our home office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV, EEB or EEP. If you change ownership of your contract, we will terminate the EEP. This includes both the EEP Part I benefits and the EEP Part II benefits. (See the description of these terms in "Optional Benefits.") In addition, the terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over". We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, the MAV will be set equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in similar capacity, ownership of the contract may be transferred to the annuitant. -------------------------------------------------------------------------------- 39 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = is the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND THE ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2006. - On Jan 1, 2012 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2012 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2012 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 X $30,000 ---------------- $28,000 -1,607.14 ---------- for a death benefit of: $28,392.86
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value using the next accumulation unit value we calculate on that valuation date. We pay interest, if any, at a rate no less than required by law. If requested, we will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If you elected any optional contract features and riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. If your beneficiary is not your spouse, we will pay the beneficiary in a lump sum unless you give us other written instructions. Generally, we must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year after your death, or other date as permitted by the IRS; and - the payout period does not extend beyond the beneficiary's life or life expectancy. -------------------------------------------------------------------------------- 40 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. If you elected any optional contract features and riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your beneficiary does not elect a five year payout, or if your death occurs after attaining age 70 1/2, we will pay the beneficiary in a lump sum unless the beneficiary elects to receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. DEATH BENEFIT PAYMENT IN A LUMP SUM: We may pay all or part of the death benefit to your beneficiary in a lump sum under either a nonqualified or qualified annuity. We will pay the death benefit by check unless your beneficiary has chosen to have the death benefit directly deposited into a checking account. OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. -------------------------------------------------------------------------------- 41 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. For an example, see Appendix B. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to continue the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the MAV rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT (EEB) The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides for reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary. The EEB also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract according to terms determined by us and at our sole discretion. You may not select this rider if you select the EEP. The EEB provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB AND EEP: If the rider effective date for the EEB or EEP is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. -------------------------------------------------------------------------------- 42 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. For an example, see Appendix B. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract, he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." -------------------------------------------------------------------------------- 43 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP) The EEP is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEP provides for reduced benefits if you or the annuitant is age 70 or older at the rider effective date. It does not provide any additional benefit before the first contract anniversary and it does not provide any benefit beyond what is offered under the EEB during the second contract year. The EEP also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because part of the benefit paid by the EEP is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEP is appropriate for your situation. If this EEP rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the EEP to your contract. You must elect the EEP at the time you purchase your contract and your rider effective date will be the contract issue date. THIS RIDER IS ONLY AVAILABLE UNDER ANNUITIES PURCHASED THROUGH AN EXCHANGE OR DIRECT TRANSFER FROM ANOTHER ANNUITY OR A LIFE INSURANCE POLICY. You may not select this rider if you select the EEB. The EEP provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - EEP Part I benefits, which equal the benefits payable under the EEB described above; PLUS - EEP Part II benefits, which equal a percentage of exchange purchase payments identified at issue not previously surrendered as follows:
PERCENTAGE IF YOU AND THE ANNUITANT ARE PERCENTAGE IF YOU OR THE ANNUITANT ARE CONTRACT YEAR UNDER AGE 70 ON THE RIDER EFFECTIVE DATE 70 OR OLDER ON THE RIDER EFFECTIVE DATE One and Two 0% 0% Three and Four 10% 3.75% Five or more 20% 7.5%
Additional death benefits payable under the EEP are not included in the adjusted partial surrender calculation. If after 6 months, no exchange purchase payments have been received, we will contact you and you will have an additional 30 days to follow-up on exchange purchase payments identified at issue but not received by us. If after these 30 days we have not received any exchange purchase payments, we will convert the EEP rider into an EEB. Another way to describe the benefits payable under the EEP rider is as follows: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit") or the MAV death benefit amount, if applicable PLUS
IF YOU AND THE ANNUITANT ARE UNDER AGE 70 IF YOU OR THE ANNUITANT ARE AGE 70 CONTRACT YEAR ON THE RIDER EFFECTIVE DATE, ADD ... OR OLDER ON THE RIDER EFFECTIVE DATE, ADD ... 1 Zero Zero 2 40% X earnings at death (see above) 15% X earnings at death 3 & 4 40% X (earnings at death + 25% of 15% X (earnings at death + 25% of exchange purchase payment*) exchange purchase payment*) 5+ 40% X (earnings at death + 50% of 15% X (earnings at death + 50% of exchange purchase payment*) exchange purchase payment*)
* Exchange purchase payments are purchase payments exchanged from another contract that are identified at issue and not previously surrendered. We are not responsible for identifying exchange purchase payments if we did not receive proper notification from the company from which the purchase payments are exchanged. -------------------------------------------------------------------------------- 44 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TERMINATING THE EEP - You may terminate the EEP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The EEP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEP rider will terminate in the case of an ownership change. - The EEP rider will terminate in the case of the spousal continuation if the new owner is age 76 or older. For an example, see Appendix B. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEP. If your spouse at the time he or she elects to continue the contract has reached age 76, the EEP rider will terminate. If your spouse at the time he or she elects to continue the contract has not yet reached age 76, he or she cannot continue the EEP. However, he or she may choose to convert the EEP rider into an EEB. In this case, the following conditions will apply: - the EEB rider will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the EEB rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEP rider. If your spouse chooses not to convert the EEP rider into an EEB, the standard death benefit amount (or the MAV death benefit amount, if applicable) will apply. NOTE: For special tax considerations associated with the EEP, see "Taxes." THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below except under Plan E. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. Fixed payouts remain the same from month to month. For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract (Table A and Table B) show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% assumed interest rate Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. -------------------------------------------------------------------------------- 45 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract value is used to purchase the payout plan: - PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If your contract is a qualified annuity, you must select a payout plan as of the settlement date set forth in your contract. You have the responsibility for electing a payout plan under your contract that complies with applicable law. Your contract describes your payout plan options. The options will generally meet certain IRS regulations governing RMDs if the payout plan meets the incidental distribution benefit requirements, if any, and the payouts are made: - in equal or substantially equal payments over a period not longer than your life or over the joint life of you and your designated beneficiary; or - in equal or substantially equal payments over a period not longer than your life expectancy of the annuitant or over the joint life expectancy of you and your designated beneficiary; or - over a period certain not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. -------------------------------------------------------------------------------- 46 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any withdrawals you request that represent ordinary income normally are taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. We will send you a tax information reporting form for any year in which we made a distribution according to our records. NONQUALIFIED ANNUITIES Tax law requires that all nonqualified deferred annuity contracts issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS: Generally, a portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. SURRENDERS: If you surrender part of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the contract value immediately before the surrender exceeds the investment in the contract. If you surrender all of your nonqualified contract before your annuity payouts begin, your surrender payment will be taxed to the extent that the surrender value immediately before the surrender exceeds the investment in the contract. You also may have to pay a 10% IRS penalty for surrenders of taxable income you make before reaching age 59 1/2 unless certain exceptions apply. WITHHOLDING: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver the payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract is not exempt from estate or income taxes. Any amount your beneficiary receives that represents deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities (nonnatural persons) generally will be treated as ordinary income received during that year. However, if the trust was set up for the benefit of a natural person only, the income will generally remain tax-deferred. PENALTIES: If you receive amounts from your nonqualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death, or in the event of nonnatural ownership, the death of annuitant; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if it is allocable to an investment before Aug. 14, 1982; or - if annuity payouts begin before the first contract anniversary. -------------------------------------------------------------------------------- 47 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TRANSFER OF OWNERSHIP: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses or former spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a withdrawal and you may have to pay a 10% IRS penalty. QUALIFIED ANNUITIES Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan's Summary Plan Description, your IRA disclosure statement, or consult a tax advisor for additional information about the distribution rules applicable to your situation. When you use your contract to fund a retirement plan or IRA that is already tax-deferred under the Code, the contract will not provide any necessary or additional tax deferral. If your contract is used to fund an employer sponsored plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. ANNUITY PAYOUTS: Under a qualified annuity except a Roth IRA, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS: Under a qualified annuity except a Roth IRA, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAS: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. REQUIRED MINIMUM DISTRIBUTIONS: Retirement plans are subject to required withdrawals called required minimum distributions (RMDs) generally beginning at age 70 1/2. In addition, a new tax regulation, effective for RMDs calculated in 2006 and after, may cause the RMDs for some contracts with certain death benefits and optional riders to increase. RMDs may reduce the value of certain death benefits and optional riders. You should consult your tax advisor prior to making a purchase for an explanation of the potential tax implications to you. WITHHOLDING FOR IRAS, ROTH IRAS, SEPS AND SIMPLE IRAS: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. -------------------------------------------------------------------------------- 48 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS WITHHOLDING FOR ALL OTHER QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity, mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is an RMD as defined under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments made to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. PENALTIES: If you receive amounts from your qualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if the distribution is made following severance from employment during the calendar year in which you attain age 55 (TSAs and annuities funding 401(a) and 401(k) plans only); or - to pay certain medical or education expenses (IRAs only). DEATH BENEFITS TO BENEFICIARIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract, or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the contract that represents after-tax contributions is not taxable as ordinary income to your beneficiary. You are responsible for keeping all records tracking your non-deductible contributions to an IRA. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. PURCHASE PAYMENT CREDITS: These are considered earnings and are taxed accordingly when surrendered or paid out. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV, EEB AND EEP): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial withdrawals if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on your death as an annuity death benefit distribution, not as proceeds from life insurance. COLLATERAL ASSIGNMENT: You may not collaterally assign or pledge a qualified annuity. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: We are taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of our company, although their operations are treated separately in accounting and financial statements. Investment income is reinvested in the fund in which each subaccount invests and becomes part of that subaccount's value. This investment income, including realized capital gains, is not taxed to us, and therefore no charge is made against the subaccounts for federal income taxes. We reserve the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. -------------------------------------------------------------------------------- 49 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute a fund currently listed in this prospectus (existing fund) for another fund (new fund). The new fund may have higher fees and/or operating expenses than the existing fund. Also, the new fund may have investment objectives and policies and/or investment advisers which differ from the existing fund. We may also: - add new subaccounts; - combine any two or more subaccounts; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. We will notify you of any substitution or change. If we notify you that a subaccount will be eliminated or closed, you will have a certain period of time to tell us where to reallocate purchase payments or contract value currently allocated to that subaccount. If we do not receive your reallocation instructions by the due date, we automatically will reallocate to the subaccount investing in the RiverSource Variable Portfolio - Cash Management Fund. You may then transfer this reallocated amount in accordance with the transfer provisions of your contract (see "Transferring Between Accounts" above). In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 Ameriprise Financial Center, Minneapolis, MN 55474. IDS Life is a wholly-owned subsidiary of Ameriprise Financial, Inc. IDS Life conducts a conventional life insurance business. It acts as a direct writer of fixed and variable insurance policies and annuities and is licensed in 49 states, the District of Columbia and American Samoa. IDS Life has four wholly-owned subsidiaries, two which serve New York residents and two which serve residents in states other than New York. IDS Life and its subsidiaries offer fixed and variable insurance policies and annuities through individual sales representatives, through insurance agencies and broker-dealers who may also be associated with financial institutions such as banks. -------------------------------------------------------------------------------- 50 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS IDS Life's primary life insurance products include variable life insurance, universal life insurance, traditional whole life insurance and disability income insurance. IDS Life's primary annuity products include variable and fixed deferred and immediate annuities. We are the sole distributor of the contract which we offer continuously. We pay time-of-sale commissions of up to 5.75% of purchase payments on the contract as well as service/trail commissions of up to 1% based on annual total contract value for as long as the contract remains in effect. We may pay our sales representatives a temporary additional sales commission of up to 1% of purchase payments for a period of time we select. For example, we may offer to pay a temporary additional sales commission to encourage sales representatives to market a new or enhanced contract or to increase sales during the period. The above commissions and service fees compensate our sales representative for selling and servicing the contract. These commissions do not change depending on which subaccounts you choose to allocate your purchase payments. We also may pay additional commissions to help compensate field leadership and to pay for other distribution expenses and benefits noted below. Our sales representatives may be required to return sales commissions under certain circumstances including, but not limited to, if a contact owner returns the contract under the free look period. From time to time and in accordance with applicable laws and regulations, sales representatives and field leaders are eligible for various benefits. These include cash benefits, such as bonuses and sales incentives, and non-cash benefits, such as conferences, seminars and trips (including travel, lodging and meals), entertainment, merchandise and other similar items. Sales of contracts may help sales representatives and/or their field leaders qualify for such benefits. SOURCES OF PAYMENTS TO SALES REPRESENTATIVES - We pay the commissions and other compensation described above from our assets. - Our assets may include: - revenues we receive from fees and expenses that you will pay when buying, owning and surrendering the contract (see "Expense Summary"); - compensation we or an affiliate receive from the underlying funds in the form of distribution and services fees (see "The Variable Account and the Funds -- The funds"); - compensation we or an affiliate receive from a fund's investment adviser, subadviser, distributor or an affiliate of any of these (see "The Variable Account and the Funds -- The funds"); and - revenues we receive from other contracts and policies we sell that are not securities and other businesses we conduct. - You do not directly pay the commissions and other compensation described above as the result of a specific charge or deduction under the contract. However, you may pay part or all of the commissions and other compensation described above indirectly through: - fees and expenses we collect from contract owners, including surrender charges; and - fees and expenses charged by the underlying funds in which the subaccounts you select invest, to the extent we or one of our affiliates receive revenue from the funds or an affiliated person. POTENTIAL CONFLICT OF INTEREST Our compensation arrangements with sales representatives can potentially give sales representatives a heightened financial incentive to sell you the contract offered in this prospectus over other alternative investments which may pay the sales representatives lower compensation. Ask your sales representative for further information about what he or she may receive in connection. with your purchase of the contract. LEGAL PROCEEDINGS The SEC, the NASD and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information concerning some of these practices and is cooperating fully with these inquiries. IDS Life and its affiliates are involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of their respective business activities. IDS Life believes it has meritorious defenses to each of these actions and intends to defend them vigorously. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. There are no pending legal proceedings affecting the Variable Account. -------------------------------------------------------------------------------- 51 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS APPENDICES THE PURPOSE OF THESE APPENDICES IS TO ILLUSTRATE THE OPERATION OF VARIOUS CONTRACT FEATURES AND RIDERS AND TO PROVIDE CONDENSED FINANCIAL HISTORY DISCLOSURE REGARDING THE SUBACCOUNTS. IN ORDER TO DEMONSTRATE THESE CONTRACT FEATURES AND RIDERS, AN EXAMPLE MAY SHOW HYPOTHETICAL CONTRACT VALUES. THESE CONTRACT VALUES DO NOT REPRESENT PAST OR FUTURE PERFORMANCE. ACTUAL CONTRACT VALUES MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING BUT NOT LIMITED TO THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, FIXED ACCOUNT AND THE FEES AND CHARGES THAT APPLY TO YOUR CONTRACT. THE EXAMPLES OF THE OPTIONAL DEATH BENEFITS IN APPENDIX B INCLUDE PARTIAL SURRENDERS TO ILLUSTRATE THE EFFECT OF THESE PARTIAL SURRENDERS ON THE PARTICULAR BENEFIT. THESE EXAMPLES ARE INTENDED TO SHOW HOW THE OPTIONAL DEATH BENEFITS OPERATE, AND DO NOT TAKE INTO ACCOUNT WHETHER A PARTICULAR OPTIONAL DEATH BENEFIT IS PART OF A QUALIFIED ANNUITY. QUALIFIED ANNUITIES ARE SUBJECT TO REQUIRED MINIMUM DISTRIBUTIONS AT CERTAIN AGES (SEE "TAXES -- QUALIFIED ANNUITIES -- REQUIRED MINIMUM DISTRIBUTIONS") WHICH MAY REQUIRE YOU TO TAKE PARTIAL SURRENDERS FROM THE CONTRACT. IF YOU ARE CONSIDERING THE ADDITION OF CERTAIN OPTIONAL DEATH BENEFITS TO A QUALIFIED ANNUITY, YOU SHOULD CONSULT YOUR TAX ADVISOR PRIOR TO MAKING A PURCHASE FOR AN EXPLANATION OF THE POTENTIAL TAX IMPLICATION TO YOU. -------------------------------------------------------------------------------- 52 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS APPENDIX A: EXAMPLE -- SURRENDER CHARGES PARTIAL SURRENDER CHARGE CALCULATION EXAMPLE Assume you requested a surrender of $1,000 and there is a surrender charge of 7%. The total amount we actually deduct from your contract is $1,075.27. We determine this amount as follows: AMOUNT REQUESTED $1,000 ------------------------ OR ------ = $1,075.27 1.00 - SURRENDER CHARGE .93 By applying the 7% surrender charge to $1,075.27, the surrender charge is $75.27. We pay you the $1,000 you requested. If you make a full surrender of your contract, we also will deduct the applicable contract administrative charge and the applicable prorated MAV, EEB or EEP charge. SURRENDER CHARGE CALCULATION EXAMPLE The following is an example of the calculation we would make to determine the surrender charge on a RAVA Advantage contract that contains a seven-year surrender charge schedule with this history: - The contract date is July 1, 2004 with a contract year of July 1 through June 30 and with an anniversary date of July 1 each year; and - We received these payments: - $10,000 July 1, 2004; - $ 8,000 Dec. 31, 2009; - $ 6,000 Feb. 20, 2012; and - The owner surrenders the contract for its total contract value of $26,500 on Aug. 5, 2013 and had not made any other surrenders during that contract year; and - The prior anniversary July 1, 2013 contract value was $28,000.
SURRENDER CHARGE EXPLANATION $ 0 $2,500 is contract earnings surrendered without charge; and 0 $300 is 10% of the prior anniversary contract value that is in excess of contract earnings surrendered without charge (from above). 10% of $28,000 = $2,800 - $2,500 = $300 0 $10,000 July 1, 2006 payment was received eight or more years before surrender and is surrendered without surrender charge; and 480 $8,000 Dec. 31, 2009 payment is surrendered with a 6% surrender charge since there have been 3 completed years from date of purchase payment; and 420 $6,000 Feb. 20, 2012 payment is surrendered with a 7% surrender charge since there have been 1 completed year from date of purchase payment. ---- $900
-------------------------------------------------------------------------------- 53 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS APPENDIX B: EXAMPLE -- OPTIONAL BENEFITS EXAMPLE -- MAV DEATH BENEFIT - You purchase the contract (with the MAV rider) with a payment of $20,000 on Jan. 1, 2004. - On Jan. 1, 2005 (the first contract anniversary) the contract value grows to $24,000. - On March 1, 2005 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2005 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: ($1,500 X $24,000) = -1,636 ------------------ ------- $22,000 for a death benefit of: $22,364
EXAMPLE -- EEB DEATH BENEFIT - You purchase the contract with a payment of $100,000 on Jan. 1, 2004 and both you and the annuitant are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEB. - On July 1, 2004 the contract value grows to $105,000. The death benefit on July 1, 2004 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2005 the contract value grows to $110,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2006 the contract value falls to $105,000. The death benefit on Jan. 1, 2006 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Feb. 1, 2006 the contract value remains at $105,000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $48,025. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2009 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $57,619 -------------------- $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 ------- Total death benefit of: $58,667
- On Jan. 1, 2007 the contract value falls by $40,000. The death benefit on Jan. 1, 2007 equals the death benefit on Feb. 1, 2006. The reduction in contract value has no effect. -------------------------------------------------------------------------------- 54 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS - On Jan. 1, 2013 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2013 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2013 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $305,000
- On July 1, 2014 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2014 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000
EXAMPLE -- EEP DEATH BENEFIT - You purchase the contract with an exchange purchase payment of $100,000 on Jan. 01, 2004 and both you and the annuitant are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEP. - On July 1, 2004 the contract value grows to $105,000. The death benefit on July 1, 2004 equals the standard death benefit amount, which is the contract value, or $105,000. You have not reached the first contract anniversary so neither the EEP Part I nor Part II provides any additional benefit at this time. - On Jan. 1, 2005 the contract value grows to $110,000. You have not reached the second contract anniversary so the EEP Part II does not provide any additional benefit at this time. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (contract value): $110,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit amount minus purchase payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2006 the contract value falls to $105,000. The death benefit on Jan. 1, 2006 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $100,000 = +10,000 -------- Total death benefit of: $124,000
-------------------------------------------------------------------------------- 55 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS - On Feb. 1, 2006 the contract value remains at $105,000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2006 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 X $110,000) = $57,619 -------------------- $105,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $55,000 = +5,500 ------- Total death benefit of: $64,167
- On Jan. 1, 2007 the contract value falls by $40,000. The death benefit on Jan. 1, 2007 equals the death benefit on Feb. 1, 2006. The reduction in contract value has no effect. - On Jan. 1, 2013 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. Because we are beyond the fourth contract anniversary the EEP also reaches its maximum of 20%. The death benefit on Jan. 1, 2013 equals: MAV death benefit amount (contract value): $200,000 plus the EEP Part I (40% of earnings at death) 0.40 X (2.50 X $55,000) = +55,000 plus the EEP Part II which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 -------- Total death benefit of: $266,000
- On July 1, 2013 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on either the EEP Part I or EEP Part II. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEP Part I (40% of earnings at death) 0.40 X (2.50 X $55,000) = +55,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 -------- Total death benefit of: $316,000
- On July 1, 2014 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEP Part I changes but the value of the EEP Part II remains constant. The death benefit on July 1, 2014 equals: MAV death benefit amount (contract value): $250,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit minus payments not previously surrendered): 0.40 X ($250,000 - $105,000) = +58,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 X $55,000 = +11,000 -------- Total death benefit of: $319,000
-------------------------------------------------------------------------------- 56 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS APPENDIX C: CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount. The date in which operations commenced in each price level is noted in parentheses. We have not provided this information for subaccounts that were not available under your contract as of Dec. 31, 2005. VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.99 $ 0.94 $ 0.73 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.07 $ 0.99 $ 0.94 $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 134,591 39,117 20,015 11,313 1,710 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.02 $ 0.76 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.27 $ 1.17 $ 1.02 $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 24,349 20,043 10,924 6,981 1,459 -- -- AIM V.I. DYNAMICS FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.00 $ 0.89 $ 0.65 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.10 $ 1.00 $ 0.89 $ 0.65 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 8,602 10,118 10,880 6,887 1,550 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 1.05 $ 0.82 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.19 $ 1.14 $ 1.05 $ 0.82 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,621 10,625 8,724 5,572 1,081 -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.72 $ 0.69 $ 0.48 $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.72 $ 0.69 $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 31,926 14,454 7,882 3,769 490 -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B)(8/13/2001) Accumulation unit value at beginning of period $ 1.08 $ 0.98 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.08 $ 0.98 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 149,316 125,010 82,114 43,189 5,550 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.63 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.88 $ 1.63 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 153,107 70,504 34,604 12,313 805 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.03 $ 0.91 $ 0.73 $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 1.16 $ 1.03 $ 0.91 $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,612 34,180 21,555 11,378 1,950 -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.30 $ 1.15 $ 0.90 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.35 $ 1.30 $ 1.15 $ 0.90 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 142,660 110,681 74,984 42,497 7,356 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.04 $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 23,850 20,551 15,315 9,520 4,490 1,283 -- EVERGREEN VA FUNDAMENTAL LARGE CAP FUND - CLASS 2 (12/8/2003) Accumulation unit value at beginning of period $ 0.93 $ 0.86 $ 0.83 -- -- -- -- Accumulation unit value at end of period $ 1.00 $ 0.93 $ 0.86 -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 16,191 11,992 9,885 -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.06 $ 1.01 $ 0.82 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.06 $ 1.01 $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 189,109 187,351 119,284 48,686 6,363 -- --
-------------------------------------------------------------------------------- 57 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.58 $ 1.27 $ 0.93 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.85 $ 1.58 $ 1.27 $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 260,492 188,565 109,647 50,458 6,903 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.19 $ 1.06 $ 0.75 $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 1.40 $ 1.19 $ 1.06 $ 0.75 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 70,878 66,935 31,322 13,157 2,147 -- -- FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.70 $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 139,618 120,456 87,330 59,317 24,477 6,879 885 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.11 $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 78,073 59,293 43,978 29,743 10,800 2,846 586 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.05 $ 0.85 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.29 $ 1.17 $ 1.05 $ 0.85 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 69,986 45,710 26,370 10,942 942 -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.31 $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 174,918 115,616 83,015 56,079 23,748 7,622 1,634 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 248,935 128,074 83,166 71,820 60,343 42,626 8,981 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.36 $ 0.36 $ 0.25 $ 0.43 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.40 $ 0.36 $ 0.36 $ 0.25 $ 0.43 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 32,606 37,258 40,520 37,200 34,767 20,288 -- JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.70 $ 0.60 $ 0.45 $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.92 $ 0.70 $ 0.60 $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 72,832 75,760 81,742 81,189 60,527 25,763 -- LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 101,054 90,221 62,349 29,532 15,860 7,958 1,981 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.66 $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 117,493 108,239 91,666 69,576 50,212 19,521 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.89 $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 62,995 77,406 74,690 59,272 34,072 12,308 -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.92 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.37 $ 1.18 $ 0.92 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 55,870 28,362 18,051 10,543 2,997 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.31 $ 1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 33,811 11,540 -- -- -- -- --
-------------------------------------------------------------------------------- 58 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.26 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,592 7,652 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.09 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 150,945 22,945 -- -- -- -- -- PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 0.99 $ 0.81 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.19 $ 1.14 $ 0.99 $ 0.81 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,263 24,442 21,608 11,651 1,316 -- -- PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.21 $ 1.04 $ 0.78 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.21 $ 1.04 $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,034 3,035 2,402 1,312 121 -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.97 $ 0.91 $ 0.78 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.09 $ 0.97 $ 0.91 $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,299 21,518 18,023 11,416 2,137 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.15 $ 1.00 $ 0.78 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.29 $ 1.15 $ 1.00 $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 37,980 40,598 38,012 20,773 2,460 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 49,747 57,095 67,224 72,033 74,819 49,764 5,084 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.08 $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 92,705 84,704 79,035 64,273 37,760 28,348 5,220 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 193,996 187,100 203,753 255,251 243,870 171,785 65,522 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.84% AND 2.88%, RESPECTIVELY RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,450 7,405 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 332,677 221,377 188,939 154,530 83,968 30,783 7,186 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 408,559 255,776 134,486 86,442 43,328 12,124 3,149
-------------------------------------------------------------------------------- 59 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.54 $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 75,520 22,549 8,256 4,750 1,789 906 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.36 $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 130,135 82,347 51,936 31,133 16,572 8,968 1,552 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,038 2,274 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 323,849 191,140 192,314 135,693 129,186 97,754 16,891 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 262,154 242,254 177,150 93,845 58,348 31,722 7,774 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 29,477 1,052 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.91 $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 77,787 51,446 23,614 20,012 15,821 13,967 2,575 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.84 $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 263,828 130,790 69,981 52,124 26,327 24,003 5,333 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.14 $ 1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,232 3,498 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.04 $ 0.85 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.23 $ 1.12 $ 1.04 $ 0.85 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 47,283 53,376 42,780 16,388 2,489 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,605 -- -- -- -- -- --
-------------------------------------------------------------------------------- 60 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 325,031 464,000 464,876 373,715 276,054 177,036 31,537 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.87 $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 154,949 144,039 103,587 64,771 35,957 9,812 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,247 4,730 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.22 $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 145,087 160,725 155,718 124,866 50,510 16,258 11,135 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.60 $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 59,243 61,563 44,627 29,202 22,792 14,830 2,970 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.52 $ 1.28 $ 0.93 $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.60 $ 1.52 $ 1.28 $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 127,559 90,541 67,609 43,199 6,885 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 41,306 52,582 60,915 58,958 58,748 46,978 4,470 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.67 $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 170,230 104,567 66,022 43,554 27,818 18,245 1,234 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.77 $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 241,623 184,961 129,824 78,311 40,791 23,813 2,476 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $ 1.10 $ 1.02 $ 0.84 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.15 $ 1.10 $ 1.02 $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,629 41,656 30,948 14,864 3,799 -- -- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.98 $ 0.90 $ 0.69 $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 0.98 $ 0.90 $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,021 10,390 8,227 4,703 1,200 -- -- WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 0.97 $ 0.72 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.22 $ 1.14 $ 0.97 $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 41,049 43,145 38,865 25,397 3,701 -- --
-------------------------------------------------------------------------------- 61 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.97 $ 0.92 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 19,618 22,185 19,289 9,992 2,060 -- --
-------------------------------------------------------------------------------- 62 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.98 $ 0.93 $ 0.73 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 0.98 $ 0.93 $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 64,800 21,785 12,215 7,624 1,711 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.16 $ 1.02 $ 0.76 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.26 $ 1.16 $ 1.02 $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 13,500 12,074 7,348 4,808 1,224 -- -- AIM V.I. DYNAMICS FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.99 $ 0.88 $ 0.65 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.09 $ 0.99 $ 0.88 $ 0.65 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,924 5,936 6,700 4,845 1,426 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.13 $ 1.05 $ 0.82 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.18 $ 1.13 $ 1.05 $ 0.82 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,396 6,649 5,460 3,709 901 -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.71 $ 0.69 $ 0.48 $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.72 $ 0.71 $ 0.69 $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,960 8,076 5,212 2,845 911 -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.07 $ 0.97 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.07 $ 0.97 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,924 75,935 54,358 29,770 4,363 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.61 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.86 $ 1.61 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,909 44,705 24,114 9,270 790 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.03 $ 0.90 $ 0.73 $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 1.15 $ 1.03 $ 0.90 $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,136 22,031 15,471 8,200 1,927 -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.29 $ 1.14 $ 0.89 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.34 $ 1.29 $ 1.14 $ 0.89 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 95,710 71,318 50,607 30,523 7,298 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.02 $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 19,301 17,682 14,100 9,832 6,090 1,693 -- EVERGREEN VA FUNDAMENTAL LARGE CAP FUND - CLASS 2 (12/8/2003) Accumulation unit value at beginning of period $ 0.92 $ 0.86 $ 0.82 -- -- -- -- Accumulation unit value at end of period $ 1.00 $ 0.92 $ 0.86 -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,001 8,036 6,384 -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.05 $ 1.00 $ 0.82 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.05 $ 1.00 $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 121,317 119,521 81,919 36,320 8,177 -- -- FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.57 $ 1.27 $ 0.93 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.83 $ 1.57 $ 1.27 $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 157,678 117,171 72,124 35,541 6,689 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 1.05 $ 0.74 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 1.39 $ 1.18 $ 1.05 $ 0.74 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 48,642 42,672 21,405 10,123 2,157 -- --
-------------------------------------------------------------------------------- 63 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.66 $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 88,911 80,587 63,047 44,591 19,803 6,181 683 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.09 $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 55,521 44,541 34,639 23,553 9,584 2,897 590 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.04 $ 0.84 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.28 $ 1.17 $ 1.04 $ 0.84 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 50,166 33,241 21,294 9,151 1,114 -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.29 $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 117,932 84,473 65,106 47,539 24,711 10,265 2,023 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 168,697 108,140 80,350 75,489 71,185 55,239 9,951 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.36 $ 0.36 $ 0.25 $ 0.42 $ 0.68 $ 1.00 -- Accumulation unit value at end of period $ 0.40 $ 0.36 $ 0.36 $ 0.25 $ 0.42 $ 0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 24,131 27,479 30,159 31,354 34,050 22,949 -- JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $ 0.70 $ 0.59 $ 0.45 $ 0.61 $ 0.80 $ 1.00 -- Accumulation unit value at end of period $ 0.91 $ 0.70 $ 0.59 $ 0.45 $ 0.61 $ 0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 59,325 61,390 68,389 74,111 64,147 29,251 -- LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 73,982 66,844 53,159 28,853 19,727 10,774 2,504 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.65 $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 84,506 78,223 74,564 62,663 51,051 21,973 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.88 $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 48,503 60,214 61,988 53,383 36,822 15,060 -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.91 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.36 $ 1.18 $ 0.91 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35,163 18,264 12,519 7,093 2,778 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,721 6,121 -- -- -- -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.25 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,037 4,085 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.08 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,657 11,924 -- -- -- -- --
-------------------------------------------------------------------------------- 64 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.13 $ 0.98 $ 0.81 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.18 $ 1.13 $ 0.98 $ 0.81 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,370 15,748 13,512 7,193 1,106 -- -- PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.21 $ 1.03 $ 0.78 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.29 $ 1.21 $ 1.03 $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,827 1,603 1,268 698 143 -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.96 $ 0.91 $ 0.77 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 0.96 $ 0.91 $ 0.77 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,517 11,248 9,676 6,574 1,743 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.15 $ 1.00 $ 0.78 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.27 $ 1.15 $ 1.00 $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 23,458 24,819 24,880 15,138 2,180 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 42,680 51,579 63,075 73,930 87,722 68,407 7,245 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.07 $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 77,525 74,540 73,310 64,613 53,096 39,810 6,539 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 147,452 148,915 178,580 228,237 265,455 203,922 87,424 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.62% AND 2.65%, RESPECTIVELY RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 15,300 4,962 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.28 $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 257,273 190,125 176,013 159,405 106,760 43,920 11,675 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 278,737 181,318 99,776 67,958 41,299 14,227 3,441 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.53 $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 44,244 16,315 6,501 3,888 1,542 693 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.34 $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 102,876 72,702 54,100 36,626 23,970 14,137 2,368
-------------------------------------------------------------------------------- 65 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 51,906 1,504 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 212,229 135,373 147,485 118,986 130,764 106,410 13,813 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 237,711 236,566 197,358 122,784 88,813 52,655 10,137 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,068 783 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.90 $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 61,793 40,351 21,462 19,189 18,664 15,670 2,173 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 144,230 94,730 45,599 34,956 26,779 22,159 3,227 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,594 2,030 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.03 $ 0.85 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.22 $ 1.11 $ 1.03 $ 0.85 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 31,419 35,498 29,450 12,145 2,238 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,982 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.87 $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 234,424 352,273 387,251 347,841 307,320 219,316 32,483 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.86 $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 122,070 117,372 91,398 65,011 40,575 14,084 --
-------------------------------------------------------------------------------- 66 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,777 2,540 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 121,249 130,386 135,202 116,147 56,966 24,654 12,796 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.58 $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 46,718 51,057 39,709 29,341 24,346 16,349 3,029 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.51 $ 1.27 $ 0.93 $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.59 $ 1.51 $ 1.27 $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 72,463 57,581 44,918 28,099 6,314 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 31,424 41,862 50,934 55,183 65,574 58,414 3,901 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.65 $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 114,381 79,981 56,466 42,309 30,297 21,844 1,343 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.74 $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 169,886 140,320 108,046 72,853 46,456 29,881 2,723 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $ 1.09 $ 1.01 $ 0.84 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.14 $ 1.09 $ 1.01 $ 0.84 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 32,466 31,201 22,278 11,859 3,224 -- -- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.97 $ 0.89 $ 0.69 $ 0.90 $ 1.00 -- -- Accumulation unit value at end of period $ 1.05 $ 0.97 $ 0.89 $ 0.69 $ 0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,690 7,049 5,248 2,781 1,031 -- -- WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $ 1.13 $ 0.97 $ 0.72 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.21 $ 1.13 $ 0.97 $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 25,313 25,983 24,999 17,130 3,747 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.91 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.96 $ 0.91 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,334 16,103 13,800 7,655 2,230 -- --
-------------------------------------------------------------------------------- 67 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.05 $ 1.00 $ 0.78 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.05 $ 1.00 $ 0.78 Number of accumulation units outstanding at end of period (000 omitted) 24,536 5,492 1,386 379 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.07 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.23 $ 1.07 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 2,836 2,429 1,198 552 AIM V.I. DYNAMICS FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.09 $ 0.97 $ 0.71 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.09 $ 0.97 $ 0.71 Number of accumulation units outstanding at end of period (000 omitted) 830 916 758 242 AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.20 $ 1.11 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.20 $ 1.11 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 1,322 1,122 925 526 AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.84 $ 0.81 $ 0.56 $ 1.00 Accumulation unit value at end of period $ 0.85 $ 0.84 $ 0.81 $ 0.56 Number of accumulation units outstanding at end of period (000 omitted) 4,728 1,650 851 192 ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.16 $ 1.06 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.16 $ 1.06 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 20,739 16,610 9,284 3,503 ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.68 $ 1.36 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.94 $ 1.68 $ 1.36 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 25,568 11,679 5,621 1,417 AMERICAN CENTURY VP INTERNATIONAL, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.19 $ 1.05 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.19 $ 1.05 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 7,538 4,969 2,812 944 AMERICAN CENTURY VP VALUE, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.28 $ 1.13 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.28 $ 1.13 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 25,428 16,423 8,977 2,837 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.11 $ 1.04 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.17 $ 1.11 $ 1.04 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 3,186 2,458 1,272 211 EVERGREEN VA FUNDAMENTAL LARGE CAP FUND - CLASS 2 (12/8/2003) Accumulation unit value at beginning of period $ 1.03 $ 0.95 $ 0.93 -- Accumulation unit value at end of period $ 1.11 $ 1.03 $ 0.95 -- Number of accumulation units outstanding at end of period (000 omitted) 2,338 2,067 1,338 -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.09 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.16 $ 1.09 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 28,158 27,602 15,940 3,592 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.52 $ 1.23 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.77 $ 1.52 $ 1.23 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 46,944 30,787 15,111 4,182 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.32 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.55 $ 1.32 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 9,686 7,474 2,900 553
-------------------------------------------------------------------------------- 68 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.77 $ 1.36 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.99 $ 1.77 $ 1.36 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 22,307 17,231 9,166 2,887 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.47 $ 1.20 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.59 $ 1.47 $ 1.20 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 13,298 8,980 5,248 2,075 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.10 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.35 $ 1.23 $ 1.10 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 18,871 13,076 6,742 1,735 GOLDMAN SACHS VIT MID CAP VALUE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.51 $ 1.21 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.69 $ 1.51 $ 1.21 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 30,996 15,049 7,743 2,583 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (2/13/2002) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.17 $ 1.03 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.17 $ 1.03 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 30,636 9,922 2,742 1,048 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.92 $ 0.92 $ 0.64 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.92 $ 0.92 $ 0.64 Number of accumulation units outstanding at end of period (000 omitted) 468 467 428 68 JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.05 $ 0.79 $ 1.00 Accumulation unit value at end of period $ 1.61 $ 1.23 $ 1.05 $ 0.79 Number of accumulation units outstanding at end of period (000 omitted) 1,555 1,500 1,254 681 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.33 $ 1.17 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.46 $ 1.33 $ 1.17 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 7,418 5,816 3,058 499 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.99 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 8,658 5,399 2,971 1,088 MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.96 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.00 $ 0.96 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 6,257 6,311 5,191 2,112 MFS(R) UTILITIES SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.47 $ 1.14 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.70 $ 1.47 $ 1.14 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 6,871 3,380 1,670 276 OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,208 4,318 -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.25 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,924 2,998 -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 34,899 7,003 -- --
-------------------------------------------------------------------------------- 69 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.03 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.18 $ 1.03 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,727 5,442 4,416 1,439 PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.31 $ 1.12 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.40 $ 1.31 $ 1.12 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 243 169 132 50 PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.94 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.00 $ 0.94 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 4,351 2,530 1,776 617 PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.26 $ 1.09 $ 0.86 $ 1.00 Accumulation unit value at end of period $ 1.40 $ 1.26 $ 1.09 $ 0.86 Number of accumulation units outstanding at end of period (000 omitted) 4,252 4,043 4,165 2,086 PUTNAM VT VISTA FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.13 $ 0.96 $ 0.73 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.13 $ 0.96 $ 0.73 Number of accumulation units outstanding at end of period (000 omitted) 736 559 614 267 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.16 $ 1.07 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.16 $ 1.07 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 3,385 2,471 1,608 531 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 0.99 $ 1.00 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.99 $ 1.00 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 22,067 19,507 13,022 12,452 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.60% AND 2.64%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- Accumulation unit value at end of period $ 1.02 $ 1.02 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,994 1,612 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.07 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.11 $ 1.07 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 50,746 22,751 13,984 6,481 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.36 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.53 $ 1.36 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 47,282 24,579 8,342 3,101 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.54 $ 1.25 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 2.04 $ 1.54 $ 1.25 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 8,412 1,983 492 220 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.39 $ 1.28 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.39 $ 1.28 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 18,771 8,568 3,885 1,060
-------------------------------------------------------------------------------- 70 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,279 653 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.77 $ 1.00 Accumulation unit value at end of period $ 1.06 $ 0.99 $ 0.92 $ 0.77 Number of accumulation units outstanding at end of period (000 omitted) 23,296 7,403 5,647 973 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.28 $ 1.16 $ 0.94 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.28 $ 1.16 $ 0.94 Number of accumulation units outstanding at end of period (000 omitted) 28,189 24,305 16,280 3,957 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,061 300 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.26 $ 1.08 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.42 $ 1.26 $ 1.08 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,133 2,551 340 55 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 $ 0.95 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 1.00 $ 0.95 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 27,550 4,862 1,779 291 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 921 450 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.07 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.15 $ 1.07 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 5,505 5,961 4,649 1,153 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 622 -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.01 $ 0.99 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 1.01 $ 0.99 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 16,468 23,120 18,133 6,565 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.01 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.14 $ 1.10 $ 1.01 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 14,184 11,269 6,544 1,889
-------------------------------------------------------------------------------- 71 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,493 840 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.05 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 1.04 $ 1.05 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 18,707 17,403 14,902 6,107 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.46 $ 1.25 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.46 $ 1.25 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,744 5,617 2,920 900 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.43 $ 1.21 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.50 $ 1.43 $ 1.21 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 20,683 11,379 7,181 3,316 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 1.00 $ 0.92 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.08 $ 1.00 $ 0.92 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 471 438 401 114 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 WANGER INTERNATIONAL SMALL CAP (2/13/2002) Accumulation unit value at beginning of period $ 1.66 $ 1.28 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.99 $ 1.66 $ 1.28 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 19,260 9,273 4,376 1,523 WANGER U.S. SMALLER COMPANIES (2/13/2002) Accumulation unit value at beginning of period $ 1.41 $ 1.21 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.56 $ 1.41 $ 1.21 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 41,455 26,304 13,657 3,732 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.16 $ 1.07 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.16 $ 1.07 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 5,289 5,233 3,858 1,279 WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.14 $ 1.05 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.14 $ 1.05 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 1,179 1,653 832 81 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.01 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.18 $ 1.01 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 7,621 6,990 5,557 2,340 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.06 $ 0.94 $ 0.67 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.06 $ 0.94 $ 0.67 Number of accumulation units outstanding at end of period (000 omitted) 2,596 2,735 1,772 662
-------------------------------------------------------------------------------- 72 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.04 $ 0.99 $ 0.78 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.04 $ 0.99 $ 0.78 Number of accumulation units outstanding at end of period (000 omitted) 11,202 2,736 978 447 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.22 $ 1.07 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.22 $ 1.07 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 1,835 1,591 774 463 AIM V.I. DYNAMICS FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.08 $ 0.97 $ 0.71 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.08 $ 0.97 $ 0.71 Number of accumulation units outstanding at end of period (000 omitted) 495 596 554 286 AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.19 $ 1.11 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.19 $ 1.11 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 832 915 731 446 AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.83 $ 0.80 $ 0.56 $ 1.00 Accumulation unit value at end of period $ 0.84 $ 0.83 $ 0.80 $ 0.56 Number of accumulation units outstanding at end of period (000 omitted) 2,168 923 573 157 ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.16 $ 1.05 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.16 $ 1.05 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 14,313 11,547 7,339 4,072 ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.67 $ 1.35 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.92 $ 1.67 $ 1.35 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 16,470 7,898 3,918 1,371 AMERICAN CENTURY VP INTERNATIONAL, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.18 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,768 2,448 1,128 448 AMERICAN CENTURY VP VALUE, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.27 $ 1.13 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.27 $ 1.13 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 16,716 10,779 5,922 2,396 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.11 $ 1.04 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.16 $ 1.11 $ 1.04 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 2,283 1,690 769 208 EVERGREEN VA FUNDAMENTAL LARGE CAP FUND - CLASS 2 (12/8/2003) Accumulation unit value at beginning of period $ 1.02 $ 0.95 $ 0.91 -- Accumulation unit value at end of period $ 1.10 $ 1.02 $ 0.95 -- Number of accumulation units outstanding at end of period (000 omitted) 1,570 1,304 1,011 -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.09 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.15 $ 1.09 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 18,132 18,010 11,020 3,508 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.51 $ 1.23 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.76 $ 1.51 $ 1.23 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 28,423 18,934 9,886 3,541 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.31 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.53 $ 1.31 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 6,520 5,276 2,292 610
-------------------------------------------------------------------------------- 73 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.76 $ 1.35 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.97 $ 1.76 $ 1.35 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 15,139 12,119 6,601 2,989 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.46 $ 1.20 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.57 $ 1.46 $ 1.20 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 8,682 5,338 3,257 1,610 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.22 $ 1.10 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.34 $ 1.22 $ 1.10 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 11,400 7,311 3,856 1,418 GOLDMAN SACHS VIT MID CAP VALUE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.50 $ 1.21 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.68 $ 1.50 $ 1.21 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 20,011 10,047 5,836 2,777 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (2/13/2002) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.17 $ 1.03 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.17 $ 1.03 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 16,269 6,220 2,770 1,483 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.91 $ 0.92 $ 0.63 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.91 $ 0.92 $ 0.63 Number of accumulation units outstanding at end of period (000 omitted) 230 249 279 112 JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.05 $ 0.79 $ 1.00 Accumulation unit value at end of period $ 1.60 $ 1.23 $ 1.05 $ 0.79 Number of accumulation units outstanding at end of period (000 omitted) 854 1,006 956 646 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.33 $ 1.17 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.45 $ 1.33 $ 1.17 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 4,983 4,090 2,091 566 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.99 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 4,710 3,047 2,246 712 MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.95 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.00 $ 0.95 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 4,247 4,567 3,912 1,784 MFS(R) UTILITIES SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.46 $ 1.14 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.68 $ 1.46 $ 1.14 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,189 2,575 1,371 431 OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,927 2,391 -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.24 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,700 1,477 -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.06 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 1.06 -- -- Number of accumulation units outstanding at end of period (000 omitted) 23,303 4,223 -- --
-------------------------------------------------------------------------------- 74 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.03 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.18 $ 1.03 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,006 3,078 2,659 1,189 PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.31 $ 1.12 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.39 $ 1.31 $ 1.12 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 265 205 135 50 PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.94 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.00 $ 0.94 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 2,388 1,649 1,108 583 PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.25 $ 1.09 $ 0.86 $ 1.00 Accumulation unit value at end of period $ 1.39 $ 1.25 $ 1.09 $ 0.86 Number of accumulation units outstanding at end of period (000 omitted) 3,019 2,995 2,797 1,392 PUTNAM VT VISTA FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.12 $ 0.96 $ 0.73 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.12 $ 0.96 $ 0.73 Number of accumulation units outstanding at end of period (000 omitted) 598 413 417 192 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.07 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.15 $ 1.07 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 3,085 2,273 1,117 462 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.99 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 0.99 $ 0.99 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 18,979 15,014 12,047 12,148 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.38% AND 2.41%, RESPECTIVELY RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- Accumulation unit value at end of period $ 1.02 $ 1.02 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,473 1,734 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.07 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.11 $ 1.07 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 37,023 19,654 12,452 5,971 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.35 $ 1.15 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.35 $ 1.15 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 33,232 17,932 5,976 2,058 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.25 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 2.02 $ 1.53 $ 1.25 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 4,677 1,199 318 121 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.38 $ 1.27 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.38 $ 1.27 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 15,541 8,857 4,839 1,529
-------------------------------------------------------------------------------- 75 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- Accumulation unit value at end of period $ 1.04 $ 1.03 -- -- Number of accumulation units outstanding at end of period (000 omitted) 13,014 516 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.98 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 0.98 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 13,519 4,079 2,868 392 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.27 $ 1.15 $ 0.93 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.27 $ 1.15 $ 0.93 Number of accumulation units outstanding at end of period (000 omitted) 27,474 25,456 15,576 4,269 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,187 271 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.25 $ 1.08 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.41 $ 1.25 $ 1.08 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,647 2,172 496 105 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.03 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.08 $ 1.03 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 11,604 2,482 744 96 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 632 499 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.06 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.15 $ 1.06 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 2,961 3,400 2,602 889 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 393 -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.00 $ 0.98 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 1.00 $ 0.98 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 8,727 14,408 12,471 5,049 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.01 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.10 $ 1.01 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 10,825 9,241 5,428 1,648
-------------------------------------------------------------------------------- 76 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.12 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,193 732 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.04 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.04 $ 1.04 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 16,802 16,700 13,079 7,646 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.45 $ 1.24 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.45 $ 1.24 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,917 3,802 2,139 516 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.42 $ 1.20 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.49 $ 1.42 $ 1.20 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 11,559 7,783 5,093 2,665 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.07 $ 0.99 $ 0.92 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 421 383 446 161 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 WANGER INTERNATIONAL SMALL CAP (2/13/2002) Accumulation unit value at beginning of period $ 1.65 $ 1.28 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.98 $ 1.65 $ 1.28 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 11,470 5,817 2,667 1,055 WANGER U.S. SMALLER COMPANIES (2/13/2002) Accumulation unit value at beginning of period $ 1.40 $ 1.20 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.54 $ 1.40 $ 1.20 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 23,080 15,408 8,442 3,131 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.15 $ 1.06 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.15 $ 1.06 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 2,480 2,738 2,182 770 WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.13 $ 1.05 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.13 $ 1.05 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 576 551 374 80 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.01 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.18 $ 1.01 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 3,829 3,698 3,344 1,985 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.05 $ 0.94 $ 0.67 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.05 $ 0.94 $ 0.67 Number of accumulation units outstanding at end of period (000 omitted) 1,557 1,643 1,441 387
-------------------------------------------------------------------------------- 77 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements
-------------------------------------------------------------------------------- 78 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE / RETIREMENT ADVISOR SELECT VARIABLE ANNUITY -- PROSPECTUS [RIVERSOURCE ANNUITIES(SM) LOGO] IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 IDS Life Insurance Company (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Insurance and annuity products are issued by IDS Life Insurance Company, an Ameriprise Financial company. (C) 2006 Ameriprise Financial, Inc. All rights reserved. S-6406 J (5/06) PROSPECTUS MAY 1, 2006 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS(SM) VARIABLE ANNUITY RETIREMENT ADVISOR SELECT PLUS(SM) VARIABLE ANNUITY INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITIES ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 Ameriprise Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 ameriprise.com/variableannuities IDS LIFE VARIABLE ACCOUNT 10/IDS LIFE ACCOUNT MGA This prospectus contains information that you should know before investing in the RiverSource Retirement Advisor Advantage Plus Variable Annuity (RAVA Advantage Plus), or the RiverSource Retirement Advisor Select Plus Variable Annuity (RAVA Select Plus). The information in this prospectus applies to both contracts unless stated otherwise. Prospectuses are also available for: - AIM Variable Insurance Funds - Alliance Bernstein Variable Products Series Fund, Inc. - American Century Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Columbia Funds Variable Insurance Trust (previously Liberty Variable Investment Trust) - Credit Suisse Trust - Eaton Vance Variable Trust - Evergreen Variable Annuity Trust - Fidelity(R) Variable Insurance Products - Service Class 2 - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Lazard Retirement Series, Inc. - Legg Mason Variable Portfolios I, Inc. (previously Salomon Brothers Variable Series Funds, Inc.) - MFS(R) Variable Insurance Trust(SM) - Neuberger Berman Advisers Management Trust - Oppenheimer Variable Account Funds - Service Shares - PIMCO Variable Insurance Trust (VIT) - Putnam Variable Trust - Class IB Shares - RiverSource(SM) Variable Portfolio Funds (previously American Express(R) Variable Portfolio Funds) - The Universal Institutional Funds, Inc. Van Kampen Life Investment Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Please read the prospectuses carefully and keep them for future reference. The contracts provide for purchase payment credits which we may reverse under certain circumstances. Expenses may be higher and surrender charges may be higher and longer for contracts with purchase payment credits than for contracts without such credits. The amount of the credit may be more than offset by additional charges associated with the credit. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are insurance products that are complex investment vehicles. Before you invest, be sure to ask your sales representative about the contract features, benefits, risks and fees, and whether the contract is appropriate for you, based upon your financial situation and objectives. -------------------------------------------------------------------------------- 1 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS The contracts and/or certain optional benefits described in this prospectus may not be available in all jurisdictions. This prospectus constitutes an offering or solicitation only in those jurisdictions where such offering or solicitation may lawfully be made. State variations are covered in a special contract form used in that state. This prospectus provides a general description of the contracts. Your actual contract and any riders or endorsements are the controlling documents. IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may or may not be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits, surrender charge schedules and access to your annuity account values. The fees and charges you will pay when buying, owning and surrendering money from contracts we describe in this prospectus may be more or less than the fees and charges of other variable annuities we and our affiliates issue. You should ask your sales representative about his or her ability to offer you other variable annuities we issue (which might have lower fees and charges than the contracts described in this prospectus). TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 5 EXPENSE SUMMARY 7 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 15 FINANCIAL STATEMENTS 15 THE VARIABLE ACCOUNT AND THE FUNDS 15 GUARANTEE PERIOD ACCOUNTS (GPAs) 28 THE FIXED ACCOUNT 30 THE SPECIAL DCA ACCOUNT 30 BUYING YOUR CONTRACT 31 CHARGES 34 VALUING YOUR INVESTMENT 41 MAKING THE MOST OF YOUR CONTRACT 43 SURRENDERS 53 TSA -- SPECIAL PROVISIONS 54 CHANGING OWNERSHIP 54 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 55 OPTIONAL BENEFITS 56 THE ANNUITY PAYOUT PERIOD 67 TAXES 69 VOTING RIGHTS 72 SUBSTITUTION OF INVESTMENTS 72 ABOUT THE SERVICE PROVIDERS 73 ADDITIONAL INFORMATION 74 APPENDIX A: EXAMPLE -- MARKET VALUE ADJUSTMENT (MVA) 76 APPENDIX B: EXAMPLE -- SURRENDER CHARGES 78 APPENDIX C: EXAMPLE -- OPTIONAL BENEFITS 82 APPENDIX D: CONDENSED FINANCIAL INFORMATION (UNAUDITED) 87 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 113 CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BAND 3 ANNUITIES: RAVA Advantage Plus and RAVA Select Plus contracts that are available for: - current or retired employees of Ameriprise Financial, Inc. or its subsidiaries and their spouses (employees), - current or retired Ameriprise financial advisors and their spouses (advisors), or - individuals investing an initial purchase payment of $1 million or more, with our approval (other individuals). BENEFICIARY: The person you designate to receive benefits in case of your death while the contract is in force. CLOSE OF BUSINESS: The time the New York Stock Exchange (NYSE) closes (4 p.m. Eastern time unless the NYSE closes earlier). CODE: The Internal Revenue Code of 1986, as amended. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB) AND ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP): These are optional benefits you can add to your contract for an additional charge. Each is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. You can elect to purchase either the EEB or the EEP, subject to certain restrictions. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. Unless an asset allocation program is in effect, you may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. GUARANTEE PERIOD: The number of successive 12-month periods that a guaranteed interest rate is credited. GUARANTEE PERIOD ACCOUNTS (GPAs): A nonunitized separate account to which you may allocate purchase payments and purchase payment credits or transfer contract value of at least $1,000. These accounts have guaranteed interest rates for guarantee periods we declare when you allocate purchase payments and purchase payment credits or transfer contract value to a GPA. These guaranteed rates and periods of time may vary by state. Unless an exception applies, transfers or surrenders from a GPA done more than 30 days before the end of the guarantee period will receive a Market Value Adjustment, which may result in a gain or loss of principal. GUARANTEED MINIMUM ACCUMULATION BENEFIT RIDER (ACCUMULATION BENEFIT): This is an optional benefit that you can add to your contract for an additional charge. It is intended to provide you with a guaranteed contract value at the end of a specified waiting period regardless of the volatility inherent in the investments in the subaccounts. This rider requires participation in the Portfolio Navigator Asset Allocation Program. GUARANTEED MINIMUM WITHDRAWAL BENEFIT RIDER (WITHDRAWAL BENEFIT): This is an optional benefit you can add to your contract for an additional charge. It is intended to provide a guaranteed withdrawal benefit that gives you the right to make limited partial withdrawals each contract year. This rider requires participation in one of the asset allocation programs. For purposes of this rider, the term "withdrawal" is equal to the term "surrender" in your contract and any other riders. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MARKET VALUE ADJUSTMENT (MVA): A positive or negative adjustment assessed if any portion of a Guarantee Period Account is surrendered or transferred more than 30 days before the end of its guarantee period. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) AND MAXIMUM FIVE-YEAR ANNIVERSARY VALUE DEATH BENEFIT (5-YEAR MAV): These are optional benefits you can add to your contract for an additional charge. Each is intended to provide additional death benefit protection in the event of fluctuating fund values. You can elect to purchase either the MAV or the 5-Year MAV, subject to certain restrictions. -------------------------------------------------------------------------------- 3 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS OWNER (YOU, YOUR): A natural person (including a revocable trust) who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. If the contract has a nonnatural person as the owner, "you, your" means the annuitant. PORTFOLIO NAVIGATOR (PN) ASSET ALLOCATION PROGRAM: This is an asset allocation program in which you are required to participate if you select the optional Accumulation Benefit rider or the optional Withdrawal Benefit rider. If you do not select the Accumulation Benefit rider or the Withdrawal Benefit rider, you may elect to participate in the PN program by adding the optional PN program rider for an additional charge. PURCHASE PAYMENT CREDITS: An addition we make to your contract value. We base the amount of the credit on the surrender charge schedule you elect and/or total purchase payments. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Code - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension IRA (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and investment only plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax-deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RETURN OF PURCHASE PAYMENTS DEATH BENEFIT (ROPP): This is an optional benefit that you can add to your contract for an additional charge if you are age 76 or older at contract issue that is intended to provide additional death benefit protection in the event of fluctuating fund values. ROPP is included in the standard death benefit for contract owners age 75 and under on the contract effective date at no additional cost. RIDER: You receive a rider to your contract when you purchase the EEB, EEP, MAV, 5-Year MAV, ROPP, Accumulation Benefit, Withdrawal Benefit and/or PN. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SPECIAL DOLLAR-COST AVERAGING (SPECIAL DCA) ACCOUNT: An account to which you may allocate new purchase payments of at least $10,000. Amounts you allocate to this account earn interest at rates that we declare periodically and will transfer into your specified subaccount allocations in six monthly transfers. The Special DCA account may not be available at all times. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. VALUATION DATE: Any normal business day, Monday through Friday, on which the NYSE is open, up to the close of business. At the close of business, the next valuation date begins. We calculate the accumulation unit value of each subaccount on each valuation date. If we receive your purchase payment or any transaction request (such as a transfer or surrender request) at our home office before the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the valuation date we received your payment or transaction request. On the other hand, if we receive your purchase payment or transaction request at our home office at or after the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the next valuation date. If you make a transaction request by telephone (including by fax), you must have completed your transaction by the close of business in order for us to process it using the accumulation unit value we calculate on that valuation date. If you were not able to complete your transaction before the close of business for any reason, including telephone service interruptions or delays due to high call volume, we will process your transaction using the accumulation unit value we calculate on the next valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. -------------------------------------------------------------------------------- 4 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS THE CONTRACT IN BRIEF This prospectus describes two contracts. RAVA Advantage Plus offers a choice of a seven-year or a ten-year surrender charge schedule and relatively lower expenses. RAVA Select Plus offers a three-year surrender charge schedule and relatively higher expenses. The information in this prospectus applies to both contracts unless stated otherwise. Your sales representative can help you determine which contract is best suited to your needs based on factors such as your investment goals and how long you intend to invest. PURPOSE: The purpose of each contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the GPAs, fixed accounts, subaccounts and/or Special DCA account (when available) under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payouts of your contract value (less any applicable premium tax). It may not be advantageous for you to purchase this contract in exchange for, or in addition to, an existing annuity or life insurance policy. Generally, you can exchange one annuity for another in a "tax-free" exchange under Section 1035 of the Code. You also generally can exchange a life insurance policy for an annuity. However, before making an exchange, you should compare both contracts carefully because the features and benefits may be different. Fees and charges may be higher or lower on your old contract than on this contract. You may have to pay a surrender charge when you exchange out of your old contract and a new surrender charge period will begin when you exchange into this contract. If the exchange does not qualify for Section 1035 treatment, you also may have to pay federal income tax on the exchange. You should not exchange your old contract for this contract, or buy this contract in addition to your old contract, unless you determine it is in your best interest. TAX-DEFERRED RETIREMENT PLANS: Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use a qualified annuity to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. A qualified annuity has features other than tax deferral that may help you reach your retirement goals. In addition, the Code subjects retirement plans to required withdrawals triggered at a certain age. These mandatory withdrawals are called required minimum distributions (RMDs). RMDs may reduce the value of certain death benefits and optional riders (see "Taxes - Qualified Annuities - Required Minimum Distributions"). You should consult your tax advisor before you purchase the contract as a qualified annuity for an explanation of the potential tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our home office within the time stated on the first page of your contract. You will receive a full refund of the contract value (reflecting any applicable MVA), less the amount of any purchase payment credits. (See "Valuing Your Investment -- Purchase payment credits.") We will not deduct any other charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Generally, you may allocate your purchase payments among any or all of: - the subaccounts of the variable accounts, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 15) - the GPAs which earn interest at rates declared when you make an allocation to that account. Some states restrict the amount you can allocate to these accounts. The required minimum investment in each GPA is $1,000. These accounts may not be available in all states. (p. 28) - the fixed account, which earns interest at a rate that we adjust periodically. Purchase payment allocations to the fixed account may be subject to special restrictions. (p. 30) - the Special DCA account, when available. (p. 30) BUYING YOUR CONTRACT: There are many factors to consider carefully and fully before you buy a variable annuity and any optional benefit rider. Variable annuities -- with or without optional benefit riders -- are not right for everyone. MAKE SURE YOU HAVE ALL THE FACTS YOU NEED BEFORE YOU PURCHASE A VARIABLE ANNUITY OR CHOOSE AN OPTIONAL BENEFIT RIDER. When considering the purchase of a variable annuity and when choosing an optional benefit rider, you should always work with a sales representative you know and trust. Older persons who are considering buying a variable annuity may find it helpful to consult with or include a family member, friend or other trusted advisor in the decision making process before buying a contract. -------------------------------------------------------------------------------- 5 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS After carefully reviewing this prospectus and any other disclosure materials you are provided, make sure you understand how the variable annuity and any optional benefit riders you choose work. Make sure that the annuity and any optional rider you are considering will meet both your current and anticipated future financial situation and needs. Some of the factors among others you may wish to consider before you buy a variable annuity or choose an optional benefit rider include: - Your age: if you are an older person, you may not necessarily have a need for tax deferral, retirement income or a death benefit. - How long you plan to hold your annuity: variable annuities are not short-term, liquid investments. The contract has surrender charges. (p. 35) Does the contract meet your current and anticipated future needs for liquidity? - How and when you plan to take money from your annuity: under current tax law, surrenders, including withdrawals made under optional benefit riders, are taxed differently than annuity payments. In addition, certain surrenders may be subject to a federal income tax penalty. (p. 65) - Your investment objectives, how much experience you have in managing investments and how much risk you are you willing to accept. - Short-term trading: if you plan to manage your investment in the contract by frequent or short-term trading, this contract is not suitable for you and you should not buy it. (p. 49). - If you can afford the contract: are your annual income and assets adequate to buy the annuity and any optional benefit riders you may choose? - The fees and expenses you will pay when buying, owning and surrendering this contract. (p. 7). Your sales representative will help you complete and submit an application. We are required by law to obtain certain personal information from you which will be used by us to verify your identity. If you do not provide us with the information, we may not be able to issue your contract. If we are unable to verify your identity, we reserve the right to reject your application or take such other steps as we deem reasonable. Applications are subject to acceptance at our home office. You may buy a nonqualified annuity or a qualified annuity. After your initial purchase payment, you have the option of making additional purchase payments in the future, subject to certain limitations. (p. 32) PURCHASE PAYMENTS: MINIMUM ALLOWABLE PURCHASE PAYMENTS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE PLUS RAVA SELECT PLUS If paying by any other method: initial payment for qualified annuities $1,000 $2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
MAXIMUM ALLOWABLE PURCHASE PAYMENTS (without home office approval) based on your age on the effective date of the contract:
RAVA ADVANTAGE PLUS RAVA SELECT PLUS For the first year: through age 85 $999,999* $999,999* for ages 86 to 90 100,000 100,000 For each subsequent year: through age 85 100,000 100,000 for ages 86 to 90 50,000 50,000
* RAVA ADVANTAGE PLUS AND RAVA SELECT PLUS BAND 3 ANNUITIES SOLD TO INDIVIDUALS OTHER THAN ADVISORS AND EMPLOYEES: Require a minimum $1,000,000 initial purchase payment and our approval. Contracts already approved may make payments in subsequent years up to $100,000 if your age on the effective date of the contract is age 85 or younger and $50,000 if your age on the effective date of the contract is age 86 to 90. Purchase payment amounts and purchase payment timing may vary by state and may be limited under the terms of your contract. TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the subaccounts until annuity payouts begin, and once per contract year after annuity payouts begin. Transfers out of the GPAs done more than 30 days before the end of the Guarantee Period will be subject to an MVA, unless an exception applies. You may establish automated transfers among the accounts. You may not transfer existing amounts to the Special DCA account. GPAs and fixed account transfers are subject to special restrictions. (p. 49) -------------------------------------------------------------------------------- 6 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and income taxes (including an IRS penalty if you surrender prior to your reaching age 59 1/2) and may have other tax consequences; also, certain restrictions apply. (p. 53) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 54) BENEFITS IN CASE OF DEATH: If you die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value, except in the case of a purchase payment credit reversal. (p. 55) OPTIONAL BENEFITS: These contracts offer optional features that are available for additional charges if you meet certain criteria. Optional benefits may require the use of an asset allocation model which may limit transfers and allocations; may limit the timing, amount and allocation of purchase payments; and may limit the amount of partial surrenders that can be taken under the optional benefit during a contract year. (p. 56) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet IRS requirements. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 67) TAXES: Generally, income earned your contract value grows tax-deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) The tax treatment of qualified and nonqualified annuities differs. Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. However, Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. (p. 69) LIMITATIONS ON USE OF CONTRACTS: If mandated by applicable law, including but not limited to, federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block an owner's access to contract values or to satisfy other statutory obligations. Under these circumstances we may refuse to implement requests for transfers, surrenders, or death benefits, until instructions are received from the appropriate governmental authority or a court of competent jurisdiction. EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU WILL PAY AT THE TIME THAT YOU BUY THE CONTRACT OR SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE FOR RAVA ADVANTAGE PLUS (Contingent deferred sales load as a percentage of purchase payment surrendered) You select either a seven-year or ten-year surrender charge schedule at the time of application.*
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF COMPLETED NUMBER OF COMPLETED YEARS FROM DATE OF EACH SURRENDER CHARGE YEARS FROM DATE OF EACH SURRENDER CHARGE PURCHASE PAYMENT PERCENTAGE PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7+ 0 7 4 8 3 9 2 10+ 0
* The ten-year surrender charge schedule is not available for contracts issued in Oregon. In Connecticut and Utah, the ten-year surrender charge schedule is 8% for years 0-2, 7% for year 3 and declining by 1% each year thereafter until it is 0% for years 10+. For contracts issued in Alabama, Massachusetts, Oregon and Washington, surrender charges are waived after the tenth contract anniversary. -------------------------------------------------------------------------------- 7 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS SURRENDER CHARGE FOR RAVA SELECT PLUS (EXCEPT TEXAS) (Contingent deferred sales load as a percentage of purchase payment surrendered)
YEARS FROM SURRENDER CHARGE CONTRACT DATE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
SURRENDER CHARGE FOR RAVA SELECT PLUS IN TEXAS (Contingent deferred sales load)
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will be 5.17% if the assumed investment rate is 3.5% and 6.67% if the assumed investment rate is 5%. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.") THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. ANNUAL CONTRACT ADMINISTRATIVE CHARGE Maximum: $50* Current: $30
(We will waive $30 of this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) * In certain states and for certain contracts we have waived our right to increase the contract administrative charge. OPTIONAL RIDER FEES (As a percentage of contract value charged annually at the contract anniversary. The fee applies only if you elect the optional rider.) ROPP RIDER FEE Maximum: 0.30% Current: 0.20% MAV RIDER FEE Maximum: 0.35% Current: 0.25% 5-YEAR MAV RIDER FEE Maximum: 0.20% Current: 0.10% EEB RIDER FEE Maximum: 0.40% Current: 0.30% EEP RIDER FEE Maximum: 0.50% Current: 0.40% PN RIDER FEE Maximum: 0.20% Current: 0.10% ACCUMULATION BENEFIT RIDER FEE Maximum: 2.50% Current: 0.60% WITHDRAWAL BENEFIT RIDER FEE Maximum: 2.50% Current: 0.60%
ANNUAL VARIABLE ACCOUNT EXPENSES (Total annual variable account expenses as a percentage of average daily subaccount value)
MORTALITY AND EXPENSE RISK FEE: RAVA ADVANTAGE PLUS RAVA SELECT PLUS FOR NONQUALIFIED ANNUITIES 0.95% 1.20% FOR QUALIFIED ANNUITIES 0.75% 1.00% FOR BAND 3 ANNUITIES 0.55% 0.75%
-------------------------------------------------------------------------------- 8 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE FIRST TABLE SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS FOR THE LAST FISCAL YEAR. THE SECOND TABLE SHOWS THE FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS(a) (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before fee waivers and/or expense reimbursements 0.53% 5.85%
(a) Each fund deducts management fees and other expenses from fund assets. Fund assets include amounts you allocate to a particular fund. Funds may also charge 12b-1 fees that are used to finance any activity that is primarily intended to result in the sale of fund shares. Because 12b-1 fees are paid out of fund assets on an on-going basis, you may pay more if you select subaccounts investing in funds that have adopted 12b-1 plans than if you select subaccounts investing in funds that have not adopted 12b-1 plans. The fund or the fund's affiliates may pay us and/or our affiliates for promoting and supporting the offer, sale and servicing of fund shares. In addition, the fund's distributor and/or investment adviser, transfer agent or their affiliates may pay us and/or our affiliates for various services we or our affiliates provide. The amount of these payments will vary by fund and may be significant. See "The Variable Account and the Funds" for additional information, including potential conflicts of interest these payments may create. For a more complete description of each fund's fees and expenses and important disclosure regarding payments the fund and/or its affiliates make, please review the fund's prospectus and SAI. TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE PLUS AND RAVA SELECT PLUS (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AIM V.I. Capital Appreciation Fund, Series II Shares 0.61% 0.25% 0.29% 1.15%(1),(2) AIM V.I. Capital Development Fund, Series II Shares 0.75 0.25 0.34 1.34(1),(3) AIM V.I. Financial Services Fund, Series I Shares 0.75 -- 0.37 1.12(1) AIM V.I. Global Health Care Fund, Series II Shares 0.75 0.25 0.33 1.33(1),(3) AIM V.I. International Growth Fund, Series II Shares 0.73 0.25 0.38 1.36(1) AIM V.I. Technology Fund, Series I Shares 0.75 -- 0.37 1.12(1) AllianceBernstein VPS Global Technology Portfolio (Class B) 0.75 0.25 0.17 1.17(4) AllianceBernstein VPS Growth and Income Portfolio (Class B) 0.55 0.25 0.05 0.85(4) AllianceBernstein VPS International Value Portfolio (Class B) 0.75 0.25 0.12 1.12(4) American Century VP International, Class II 1.13 0.25 -- 1.38(4) American Century VP Ultra(R), Class II 0.90 0.25 0.01 1.16(4) American Century VP Value, Class II 0.83 0.25 -- 1.08(4) Calvert Variable Series, Inc. Social Balanced Portfolio 0.70 -- 0.22 0.92(5) Columbia High Yield Fund, Variable Series, Class B 0.55 0.25 0.37 1.17(6) Columbia Marsico Growth Fund, Variable Series 0.74 0.25 0.34 1.33(7) Columbia Marsico International Opportunities Fund, Variable Series 0.80 0.25 0.43 1.48(4) Credit Suisse Trust - Commodity Return Strategy Portfolio 0.50 0.25 0.55 1.30(8) Eaton Vance VT Floating-Rate Income Fund 0.58 -- 0.69 1.27(4) Evergreen VA International Equity Fund - Class 2 0.41 0.25 0.30 0.96(9) Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2 0.57 0.25 0.09 0.91(10) Fidelity(R) VIP Growth & Income Portfolio Service Class 2 0.47 0.25 0.12 0.84(10) Fidelity(R) VIP Mid Cap Portfolio Service Class 2 0.57 0.25 0.12 0.94(10) Fidelity(R) VIP Overseas Portfolio Service Class 2 0.72 0.25 0.17 1.14(10) FTVIPT Franklin Real Estate Fund - Class 2 0.47 0.25 0.02 0.74(11),(12) FTVIPT Franklin Small Cap Value Securities Fund - Class 2 0.52 0.25 0.17 0.94(12),(13) FTVIPT Mutual Shares Securities Fund - Class 2 0.60 0.25 0.18 1.03(12) Goldman Sachs VIT Mid Cap Value Fund 0.80 -- 0.07 0.87(14) Goldman Sachs VIT Structured U.S. Equity Fund 0.65 -- 0.09 0.74(14) (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) Lazard Retirement International Equity Portfolio 0.75 0.25 0.21 1.21(15)
-------------------------------------------------------------------------------- 9 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE PLUS AND RAVA SELECT PLUS (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Legg Mason Partners Variable Small Cap Growth Portfolio, Class II 0.75% 0.25% 0.37% 1.37%(4) (previously Salomon Brothers Small Cap Growth Fund, Class II) MFS(R) Investors Growth Stock Series - Service Class 0.75 0.25 0.15 1.15(16),(17) MFS(R) New Discovery Series - Service Class 0.90 0.25 0.16 1.31(16),(17) MFS(R) Total Return Series - Service Class 0.75 0.25 0.09 1.09(16),(17) MFS(R) Utilities Series - Service Class 0.75 0.25 0.15 1.15(16),(17) Neuberger Berman Advisers Management Trust International Portfolio (Class S) 1.15 0.25 4.45 5.85(18),(19) Oppenheimer Global Securities Fund/VA, Service Shares 0.63 0.25 0.04 0.92(20) Oppenheimer Main Street Small Cap Fund/VA, Service Shares 0.74 0.25 0.05 1.04(20) Oppenheimer Strategic Bond Fund/VA, Service Shares 0.69 0.25 0.02 0.96(20) PIMCO VIT All Asset Portfolio, Advisor Share Class 0.20 0.25 0.88 1.33(21) Putnam VT Health Sciences Fund - Class IB Shares 0.70 0.25 0.11 1.06(4) Putnam VT International Equity Fund - Class IB Shares 0.75 0.25 0.18 1.18(4) Putnam VT Vista Fund - Class IB Shares 0.65 0.25 0.09 0.99(4) RiverSource(SM) Variable Portfolio - Balanced Fund 0.54 0.13 0.14 0.81(22),(23),(24) (previously AXP(R) Variable Portfolio - Managed Fund) RiverSource(SM) Variable Portfolio - Cash Management Fund 0.33 0.13 0.15 0.61(22),(23) (previously AXP(R) Variable Portfolio - Cash Management Fund) RiverSource(SM) Variable Portfolio - Core Bond Fund 0.48 0.13 0.33 0.94(22),(23),(25) (previously AXP(R) Variable Portfolio - Core Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.47 0.13 0.17 0.77(22),(23) (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.68 0.13 0.16 0.97(22),(23),(24) (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.05 0.13 0.34 1.52(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RiverSource(SM) Variable Portfolio - Fundamental Value Fund 0.73 0.13 0.16 1.02(23),(26) RiverSource(SM) Variable Portfolio - Global Bond Fund 0.71 0.13 0.20 1.04(22),(23) (previously AXP(R) Variable Portfolio - Global Bond Fund) RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fun 0.44 0.13 0.33 0.90(22),(23),(25) (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RiverSource(SM) Variable Portfolio - Growth Fund 0.66 0.13 0.17 0.96(22),(23),(24) (previously AXP(R) Variable Portfolio - Growth Fund) RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.59 0.13 0.16 0.88(22),(23) (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.61 0.13 0.34 1.08(22),(23),(25) (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.72 0.13 0.20 1.05(22),(23),(24) (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.56 0.13 0.14 0.83(22),(23),(24) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.60 0.13 1.86 2.59(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.63 0.13 0.17 0.93(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Equity Select Fund) RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.70 0.13 2.18 3.01(22),(23),(25) (previously AXP(R) Variable Portfolio - Mid Cap Value Fund)
-------------------------------------------------------------------------------- 10 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND UNDERLYING RAVA ADVANTAGE PLUS AND RAVA SELECT PLUS (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12B-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.22% 0.13% 0.18% 0.53%(22),(23),(25) (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RiverSource(SM) Variable Portfolio - Select Value Fund 0.77 0.13 0.30 1.20(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Select Value Fund) RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.48 0.13 0.17 0.78(22),(23) (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.80 0.13 0.22 1.15(22),(23),(24) (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.92 0.13 0.24 1.29(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Small Cap Value Fund) Van Kampen Life Investment Trust Comstock Portfolio, Class II Shares 0.56 0.25 0.03 0.84(4) Van Kampen UIF Global Real Estate Portfolio Class II Shares 0.85 0.35 0.62 1.82(27) Van Kampen UIF Mid Cap Growth Portfolio Class II Shares 0.75 0.35 0.34 1.44(27) Wanger International Small Cap 0.95 -- 0.18 1.13(4) Wanger U.S. Smaller Companies 0.90 -- 0.05 0.95(4) Wells Fargo Advantage VT Opportunity Fund 0.72 0.25 0.21 1.18(28) Wells Fargo Advantage VT Small Cap Growth Fund 0.75 0.25 0.24 1.24(28)
(1) Figures shown in the table are for the year ended Dec. 31, 2005 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. The Fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares and Series II shares to the extent necessary to limit total annual expenses of Series I shares to 1.30% and Series II shares to 1.45% of average daily nets assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual expenses to exceed the limit stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganizations as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The expense limitation is in effect through April 30, 2007. (2) As a result of a reorganization of another Fund into the Fund, which will occur on or about May 1, 2006 for AIM V.I. Capital Appreciation Fund, Series II Shares the "Gross total annual expenses" have been restated to reflect such reorganization. (3) Effective Jan. 1, 2005 through June 30, 2006, the advisor has contractually agreed to waive a portion of its advisory fees. (4) Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2005. (5) Expenses are based on expenses for the Portfolio's most recent fiscal year. Management fees include the subadvisory fee paid by the Advisor, to the Subadvisers, and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of the Calvert. (6) On April 28, 2006, Columbia High Yield Fund, Variable Series, Class B merged into Nations High Yield Bond Portfolio. On May 1, 2006, Nations High Yield Bond Portfolio changed its name to Columbia High Yield Fund, Variable Series, Class B. The Fund's advisor has contractually agreed to waive advisory fees and reimburse the Fund for certain expenses so that the total annual fund operating expenses (exclusive of distribution and service fees, brokerage commissions, interest, taxes and extraordinary expenses, if any) will not exceed 0.60% through April 30, 2007. In addition, the Fund's distributor has contractually agreed to waive 0.19% of the 12b-1 fees through April 30, 2007. If these waivers were reflected in the table, total annual fund operating expenses would be 0.66%. (7) The Fund's Distributor has voluntarily agreed to waive 0.25% of its 12b-1 fees. (8) Fee waivers and/or expense reimbursement may reduce expenses for the Portfolio, without which performance would be lower. Waivers and/or expense reimbursements may be discontinued at any time. After fee waivers and expense reimbursements net expenses would be 0.95% for Credit Suisse Trust - Commodity Return Strategy Portfolio. (9) The "Gross total annual expenses" exclude expense reductions and fee waivers. These fees have been restated to reflect current fees. (10) A portion of the brokerage commissions that the Fund pays may be reimbursed and used to reduce the Fund's expenses. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances are used to reduce the Fund's custodian expenses. Including these reductions, the total class operating expenses would have been 0.89% for Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2, 0.79% for Fidelity(R) VIP Growth & Income Portfolio Service Class 2, 0.89% for Fidelity(R) VIP Mid Cap Portfolio Service Class 2 and 1.07% for Fidelity(R) VIP Overseas Portfolio Service Class 2. These offsets may be discontinued at any time. (11) The Fund's administration fee is paid indirectly through the management fee. (12) While the maximum amount payable under the Fund's class rule 12b-1 plan is 0.35% per year of the Fund's class average annual net assets, the Fund's Board of Trustees has set the current rate at 0.25% per year. (13) The Fund's manager has agreed in advance to reduce its fees with respect to assets invested by the Fund in a Franklin Templeton Money Market Fund. This reduction is required by the Fund's Board of Trustees and an exemptive order of the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.05%) and 0.89%, respectively for FTVIPT Franklin Small Cap Value Securities Fund - Class 2. (14) The Fund's annual operating expenses are based on actual expenses for the fiscal year ended Dec. 31, 2005. "Other expenses" include transfer agency fees and expenses equal on an annualized basis to 0.04% of the average daily net assets of the Fund plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to limit "Other expenses" (excluding management fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation and indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, 0.16% of the Fund's average daily net assets for Goldman Sachs VIT Structured U.S. Equity Fund and 0.25% of the Fund's average daily net assets for Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser may cease or modify the expense limitations at its discretion at anytime. If this occurs, other expenses and total annual operating expenses may increase without shareholder approval. -------------------------------------------------------------------------------- 11 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS (15) The Investment Manager has contractually agreed to waive its fees and, if necessary, reimburse the Portfolio through Dec. 31, 2006, to the extent "Gross total annual expenses" exceed 1.25% of average daily net assets for Lazard Retirement International Equity Portfolio. (16) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sale and distribution of service class shares (these fees are referred to as distribution fees). (17) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent, and may have entered into brokerage arrangements, that reduced or recaptured series' expenses. Any such expense reductions are not reflected in the table. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower. (18) Neuberger Berman Management Inc. ("NBMI") has undertaken through Dec. 31, 2009, to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Portfolio. The expense limitation arrangements for the Portfolio is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the Portfolio to exceed its limitation described above. (19) Class S shares of the International Portfolio have a redemption fee of 1.00% for exchanges or redemptions on shares held less than 60 days. The redemption fee is paid to the Portfolio. (20) Expenses may vary in future years. "Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to 0.35% per fiscal year. That undertaking may be amended or withdrawn at any time. For the Fund's fiscal year ended Dec. 31, 2005, the transfer agent fees did not exceed the expense limitation described above. (21) "Other expense" also includes Underlying Fund expenses. Underlying Fund Expenses for the Portfolio are estimated based upon an allocation of the Portfolio's assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. Underlying Fund expenses will vary with changes in the expenses of the Underlying Funds, as well as allocation of the Portfolio's assets, and may be higher or lower than those shown above. For a listing of the expenses associated with each Underlying Fund for the most recent fiscal year, please see "Fund of Funds Fees - Annual Underlying Fund Expenses" in the Portfolio's prospectus. PIMCO has contractually agreed, for the Portfolio's current fiscal year (12/31), to reduce its Advisory Fee to the extent that the Underlying Fund Expenses attributable to Advisory and Administrative Fees exceed 0.60% of the total assets invested in Underlying Funds. PIMCO may recoup these waivers in future periods, not exceeding three years, provided total expenses, including such recoupment, do not exceed the annual expense limit. (22) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2005, adjusted to reflect current fees. (23) The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940. The Fund pays IDS Life Insurance Company an annual fee of up to 0.125% of average daily net assets as payment for distributing its shares and providing shareholder services. Because this fee is paid out of the Fund's assets on an on-going basis, over time this fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (24) Management fees include the impact of a performance incentive adjustment fee that decreased the management fee by 0.05% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.04% for RiverSource(SM) Variable Portfolio - International Opportunity Fund, 0.02% for RiverSource(SM) Variable Portfolio - Large Cap Equity Fund, 0.07% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 0.01% for RiverSource(SM) Variable Portfolio - Select Value Fund and 0.04% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. Management fees include the impact of a performance incentive adjustment fee that increased the management fee by 0.03% for RiverSource(SM) Variable Portfolio - Balanced Fund, 0.08% for RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund, 0.06% for RiverSource(SM) Variable Portfolio - Growth Fund, 0.002% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund and 0.01% for RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund. (25) RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2006, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed: 0.83% for RiverSource(SM) Variable Portfolio - Core Bond Fund, 1.75% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.72% for RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund, 0.99% for RiverSource(SM) Variable Portfolio - Income Opportunities Fund, 1.05% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund, 1.00% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 1.08% for RiverSource(SM) Variable Portfolio - Mid Cap Value Fund, 0.495% for RiverSource(SM) Variable Portfolio - S&P 500 Index Fund, 1.15% for RiverSource(SM) Variable Portfolio - Select Value Fund and 1.25% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. (26) The Fund's expense figures are based on estimated expenses, before fee waivers and expense reimbursements. RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed 1.07% for RiverSource(SM) Variable Portfolio - Fundamental Value Fund. (27) The fees disclosed reflect gross ratios prior to any voluntary waivers/reimbursements of expenses by the adviser. The adviser has voluntarily agreed to waive a portion of or all of its management fee and/or reimburse expenses to the extent necessary so that total annual operating expenses, excluding certain investment related expense such as foreign country tax expense and interest expense on borrowing, do not exceed 1.35%. The adviser may terminate these voluntary waivers at any time at its sole discretion. Additionally, the distributor has agreed to voluntarily waive a portion of the 12b-1 fee for Class II shares. The distributor may terminate these voluntary waivers at any time at its sole discretion. After these fee waivers/reimbursements, net expenses would have been 1.40% for Van Kampen UIF Global Real Estate Portfolio Class II Shares and 1.15% for Van Kampen UIF Mid Cap Growth Portfolio Class II Shares. In addition, Van Kampen UIF Global Real Estate Portfolio Class II Shares was not operational in 2005. Figures in the table are based on estimated assuming the average daily net assets of the Portfolio were not more than $75,000,000. (28) The Funds' investment adviser has implemented a break point schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. Other expenses for Wells Fargo Advantage VT Opportunity Fund are based on estimates for the current fiscal year. The adviser has committed through April 30, 2007 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio. After fee waivers and expense reimbursements net expenses would be 1.07% for Wells Fargo Advantage VT Opportunity Fund and 1.20% for Wells Fargo Advantage VT Small Cap Growth Fund. Please refer to the Fund's prospectus for additional details. -------------------------------------------------------------------------------- 12 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THESE CONTRACTS WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES(1), VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. These examples assume the most expensive combination of contract features and benefits and the maximum fees and expenses of any of the funds for the last fiscal year. They assume that you select the optional MAV, EEP and Withdrawal Benefit or Accumulation Benefit(2). Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS With a ten-year surrender charge schedule(3) $1,832.89 $3,636.48 $5,242.60 $8,173.19 $1,032.89 $2,936.48 $4,642.60 $8,173.19 RAVA ADVANTAGE PLUS With a seven-year surrender charge schedule 1,732.89 3,536.48 5,042.60 8,173.19 1,032.89 2,936.48 4,642.60 8,173.19 RAVA SELECT PLUS 1,760.16 3,705.64 4,739.28 8,291.79 1,060.16 3,005.64 4,739.28 8,291.79 RAVA SELECT PLUS - TEXAS 1,860.16 3,605.64 4,739.28 8,291.79 1,060.16 3,005.64 4,739.28 8,291.79
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS With a ten-year surrender charge schedule(3) $1,812.39 $3,584.21 $5,169.13 $8,081.63 $1,012.39 $2,884.21 $4,569.13 $8,081.63 RAVA ADVANTAGE PLUS With a seven-year surrender charge schedule 1,712.39 3,484.21 4,969.13 8,081.63 1,012.39 2,884.21 4,569.13 8,081.63 RAVA SELECT PLUS 1,739.66 3,653.68 4,666.70 8,202.96 1,039.66 2,953.68 4,666.70 8,202.96 RAVA SELECT PLUS - TEXAS 1,839.66 3,553.68 4,666.70 8,202.96 1,039.66 2,953.68 4,666.70 8,202.96
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: BAND 3 ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS - BAND 3 With a ten-year surrender charge schedule(3) $1,791.89 $3,531.71 $5,094.97 $7,987.96 $ 991.89 $2,831.71 $4,494.97 $7,987.96 RAVA ADVANTAGE PLUS - BAND 3 With a seven-year surrender charge schedule 1,691.89 3,431.71 4,894.97 7,987.96 991.89 2,831.71 4,494.97 7,987.96 RAVA SELECT PLUS - BAND 3 1,714.03 3,588.40 4,575.03 8,089.03 1,014.03 2,888.40 4,575.03 8,089.03 RAVA SELECT PLUS - TEXAS - BAND 3 1,814.03 3,488.40 4,575.03 8,089.03 1,014.03 2,888.40 4,575.03 8,089.03
-------------------------------------------------------------------------------- 13 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS MINIMUM EXPENSES. These examples assume the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds for the last fiscal year. They assume that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: NONQUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS With a ten-year surrender charge schedule(3) $954.47 $1,179.60 $1,427.59 $1,808.38 $154.47 $479.60 $827.59 $1,808.38 RAVA ADVANTAGE PLUS With a seven-year surrender charge schedule 854.47 1,079.60 1,227.59 1,808.38 154.47 479.60 827.59 1,808.38 RAVA SELECT PLUS 881.73 1,262.73 968.37 2,100.97 181.73 562.73 968.37 2,100.97 RAVA SELECT PLUS - TEXAS 981.73 1,162.73 968.37 2,100.97 181.73 562.73 968.37 2,100.97
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: QUALIFIED ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS With a ten-year surrender charge schedule(3) $933.97 $1,116.79 $1,320.70 $1,583.32 $133.97 $416.79 $720.70 $1,583.32 RAVA ADVANTAGE PLUS With a seven-year surrender charge schedule 833.97 1,016.79 1,120.70 1,583.32 133.97 416.79 720.70 1,583.32 RAVA SELECT PLUS 861.23 1,200.27 862.66 1,881.69 161.23 500.27 862.66 1,881.69 RAVA SELECT PLUS - TEXAS 961.23 1,100.27 862.66 1,881.69 161.23 500.27 862.66 1,881.69
IF YOU DO NOT SURRENDER YOUR CONTRACT IF YOU SURRENDER YOUR CONTRACT OR IF YOU SELECT AN ANNUITY PAYOUT PLAN AT THE END OF THE APPLICABLE TIME PERIOD: AT THE END OF THE APPLICABLE TIME PERIOD: BAND 3 ANNUITY 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS RAVA ADVANTAGE PLUS - BAND 3 With a ten-year surrender charge schedule(3) $913.47 $1,053.73 $1,212.92 $1,353.83 $113.47 $353.73 $612.92 $1,353.83 RAVA ADVANTAGE PLUS - BAND 3 With a seven-year surrender charge schedule 813.47 953.73 1,012.92 1,353.83 113.47 353.73 612.92 1,353.83 RAVA SELECT PLUS - BAND 3 835.61 1,121.83 729.29 1,601.49 135.61 421.83 729.29 1,601.49 RAVA SELECT PLUS - TEXAS - BAND 3 935.61 1,021.83 729.29 1,601.49 135.61 421.83 729.29 1,601.49
(1) In these examples, the contract administrative charge is approximated as a .027% charge for RAVA Advantage Plus, a .043% charge for RAVA Select Plus, a .043% for RAVA Select Plus - Texas, a .027% charge for RAVA Advantage Plus - Band 3, a .043% charge for RAVA Select Plus - Band 3 and a .043% charge for RAVA Select Plus - Texas - Band 3. These percentages were determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to each contract by the total average net assets that are attributable to that contract. (2) Because these examples are intended to illustrate the most expensive combination of contract features, the maximum annual fee for each optional rider is reflected rather than the fee that is currently being charged. (3) In Connecticut and Utah, your expenses would be slightly lower due to the modified ten-year surrender charge schedule. -------------------------------------------------------------------------------- 14 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS CONDENSED FINANCIAL INFORMATION (UNAUDITED) You can find unaudited condensed financial information for the subaccounts in Appendix D. We do not include any condensed financial information for subaccounts that are new and did not have any activity as of the financial statement date. FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts with financial history in the SAI. The SAI does not include audited financial statements for subaccounts that are new and have no activity as of the financial statement date. THE VARIABLE ACCOUNT AND THE FUNDS THE VARIABLE ACCOUNT: The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. Although the Internal Revenue Service (IRS) has issued some guidance on investor control, the U.S. Treasury and the IRS may continue to examine this aspect of variable contracts and provide additional guidance on investor control. Their concern involves how many investment choices (subaccounts) may be offered by an insurance company and how many exchanges among those subaccounts may be allowed before the contract owner would be currently taxed on income earned within the contract. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FUNDS: The contracts currently offer subaccounts investing in shares of the funds listed in the table below. - INVESTMENT OBJECTIVES: The investment managers and advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. - PORTFOLIO NAVIGATOR ASSET ALLOCATION PROGRAM: Each underlying fund generally is available (unless we exclude it) to be a component fund of the model portfolios of the PN Program (see "Making the Most of Your Contract -- Portfolio Navigator Asset Allocation Program"). Under the PN program, contract values are rebalanced on a quarterly basis and model portfolios are periodically updated. This quarterly rebalancing and periodic updating of the model portfolios can cause a component fund to incur transactional expenses to raise cash for money flowing out of the fund or to buy securities with money flowing into the fund. Moreover, a large outflow of money from a fund may increase the expenses attributable to the assets remaining in the fund. These expenses can adversely affect the performance of the relevant fund. In addition, when a particular fund needs to buy or sell securities due to quarterly rebalancing or periodic updating of a model portfolio, it may hold a large cash position. A large cash position could detract from the achievement of the fund's investment objective in a period of rising market prices; conversely, a large cash position would reduce the fund's magnitude of loss in the event of falling market prices and provide the fund with liquidity to make additional investments or to meet redemptions. Even if you do not participate in the PN program, a fund in which your subaccount invests may be impacted if it is a component fund of one or more model portfolios. - FUND NAME AND MANAGEMENT: A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. -------------------------------------------------------------------------------- 15 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - ELIGIBLE PURCHASERS: All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. The funds are not available to the public (see "Fund name and management" above). Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future for tax, regulatory or other reasons, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although we and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of each fund will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. Each fund intends to comply with the diversification requirements under Section 817(h) of the Code. - REVENUE WE RECEIVE FROM THE FUNDS MAY CREATE POTENTIAL CONFLICTS OF INTEREST: We seek to provide a broad array of underlying funds taking into account the fees and charges imposed by each fund and the contract charges we impose. We select the underlying funds in which the subaccounts initially invest and upon any substitution (see "Substitution of Investments"). We also make all decisions regarding which funds to retain in a contract, which funds to add to a contract and which funds will no longer be offered in a contract. In making these decisions, we may consider various objective and subjective factors. Objective factors include, but are not limited to, fund performance, fund expenses, classes of fund shares available, size of the fund, and investment objectives and investing style of the fund. Subjective factors include, but are not limited to, investment sub-styles and process, management skill and history at other funds, and portfolio concentration and sector weightings. We also consider the levels and types of revenue a fund, its distributor, investment adviser, subadviser, transfer agent or their affiliates pay us and our affiliates. This revenue includes, but is not limited to, compensation for administrative services provided with respect to the fund and support of marketing and distribution expenses incurred with respect to the fund. We and/or our affiliates receive from each of the funds, or the funds' affiliates, varying levels and types of revenue. The amount of this revenue is most often based on a percentage of average daily net assets invested in the fund. For example, the revenue we receive from affiliates of funds other than the RiverSource Variable Portfolio Funds (unaffiliated funds) currently ranges up to 0.50% of the average daily net assets invested in the fund through this contract and other contracts we or our affiliates issue. In some cases, this revenue may be based, in part, on sales one of our affiliates makes of other securities including, but not limited to, publicly-traded retail mutual funds and/or the average daily net assets resulting from these sales. We or our affiliates may also receive revenue which is not based on a percentage of average daily net assets. The amount of this revenue varies by fund, may be significant and may create potential conflicts of interest. The greatest amount and percentage of revenue we and our affiliates receive comes from assets allocated to subaccounts investing in the RiverSource Variable Portfolio Funds (affiliated funds) that are managed by RiverSource Investments, LLC (RiverSource Investments), one of our affiliates. Employee compensation and operating goals at all levels are tied to the success of Ameriprise Financial, Inc. and its affiliates, including us. Certain employees may receive higher compensation and other benefits based, in part, on contract values that are invested in the RiverSource Variable Portfolio Funds. These revenue payments may also influence recommendations your sales representative makes regarding whether you should invest in the contract, and whether you should allocate purchase payments or contract value to a subaccount that invests in a particular fund (see "About the Service Providers"). The revenue we receive from a fund or its affiliates is in addition to revenue we receive from the charges you pay when buying, owning and surrendering the contract (see "Expense Summary"). However, the revenue we receive from a fund or its affiliates may come, at least in part, from the fund's fees and expenses you pay indirectly when you allocate contract value to the subaccount that invests in that fund. Please see the SAI for a table that ranks the unaffiliated funds according to total dollar amounts they and their affiliates paid to us and/or our affiliates in 2005. -------------------------------------------------------------------------------- 16 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - WHY REVENUES ARE PAID TO US: In accordance with applicable laws, regulations and the terms of the agreements under which such revenue is paid, we or our affiliates may receive this revenue for various purposes including, but not limited to: - Compensating, training and educating sales representatives who sell the contracts. - Granting access to our employees whose job it is to promote sales of the contracts by authorized selling firms and their sales representatives, and granting access to sales representatives of our affiliated selling firms. - Activities or services we or our affiliates provide that assist in the promotion and distribution of the contracts including promoting the funds available under the contracts to prospective and existing contract owners, authorized selling firms and sales representatives. - Providing sub-transfer agency and shareholder servicing to contract owners. - Promoting, including and/or retaining the fund's investment portfolios as underlying investment options in the contracts. - Advertising, printing and mailing sales literature, and printing and distributing prospectuses and reports. - Furnishing personal services to contract owners, including education of contract owners, answering routine inquiries regarding a fund, maintaining accounts or providing such other services eligible for service fees as defined under the rules of the National Association of Securities Dealers, Inc. (NASD). - Subaccounting, transaction processing, recordkeeping and administration. - SOURCES OF REVENUE RECEIVED FROM AFFILIATED FUNDS: The affiliated funds are managed by RiverSource Investments. The sources of revenue we receive from these affiliated funds, or from affiliates of these funds, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser and transfer agent or an affiliate of these. The revenue resulting from these sources may be based either on a percentage of average daily net assets of the fund or on the actual cost of certain services we provide with respect to the fund. We may receive this revenue either in the form of a cash payment or it may be allocated to us. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. - SOURCES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS: The unaffiliated funds are not managed by an affiliate of ours. The sources of revenue we receive from these unaffiliated funds, or the funds' affiliates, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser, subadviser, transfer agent or an affiliate of these and assets of the fund's distributor or an affiliate. The revenue resulting from these sources usually is based on a percentage of average daily net assets of the fund but there may be other types of payment arrangements. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. -------------------------------------------------------------------------------- 17 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS UNLESS AN ASSET ALLOCATION PROGRAM IS IN EFFECT, YOU MAY ALLOCATE PURCHASE PAYMENTS AND TRANSFERS TO ANY OR ALL OF THE SUBACCOUNTS OF THE VARIABLE ACCOUNT THAT INVEST IN SHARES OF THE FOLLOWING FUNDS:
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- AIM V.I. Capital Growth of capital. Invests principally in common stocks of companies A I M Advisors, Inc. Appreciation Fund, likely to benefit from new or innovative products, services or Series II Shares processes as well as those with above-average long-term growth and excellent prospects for future growth. The fund can invest up to 25% of its total assets in foreign securities that involve risks not associated with investing solely in the United States. AIM V.I. Capital Long-term growth of capital. Invests primarily in securities A I M Advisors, Inc. Development Fund, (including common stocks, convertible securities and bonds) of Series II Shares small- and medium-sized companies. The Fund may invest up to 25% of its total assets in foreign securities. AIM V.I. Financial Capital growth. Actively managed. Invests at least 80% of its net A I M Advisors, Inc. Series I Shares assets in Services Fund, the equity securities and equity-related instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks, insurance companies, investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies and suppliers to financial services companies). AIM V.I. Global Capital growth. The fund seeks to meet its objective by investing, A I M Advisors, Inc. Health Care Fund, normally, at least 80% of its assets in securities of health care Series II Shares industry companies. The fund may invest up to 20% of its total companies located in developing countries, i.e., those countries assets in that are in the initial stages of their industrial cycles. The fund may also invest up to 5% of its total assets inlower- quality debt securities, i.e., junk bonds. AIM V.I. International Long-term growth of capital. Invests primarily in a diversified A I M Advisors, Inc. Growth Fund, portfolio of international equity securities, whose issuers are Series II Shares considered to have strong earnings momentum. The fund may invest up to 20% of its total assets in security issuers located in developing countries and in securities exchangeable for or convertible into equity securities of foreign companies. AIM V.I. Technology Capital growth. The Fund is actively managed. Invests at least 80% A I M Advisors, Inc. Fund, Series I Shares of its net assets in equity securities and equity-related instruments of companies engaged in technology-related industries. These include, but are not limited to, various applied technologies, hardware, software, semiconductors, telecommunications equipment and services, and service-related companies in information technology. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. AllianceBernstein VPS Long-term growth of capital. The Fund invests at least 80% of its net AllianceBernstein L.P. Global Technology assets in securities of companies that use technology extensively in Portfolio (Class B) the development of new or improved products or processes. Invests in a global portfolio of securities of U.S. and foreign companies selected for their growth potential.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- AllianceBernstein VPS Long-term growth of capital. Invests primarily in dividend-paying AllianceBernstein L.P. Growth and Income common stocks of large, well-established, "blue chip" companies. Portfolio (Class B) AllianceBernstein VPS Long-term growth of capital. Invests primarily in a diversified AllianceBernstein L.P. International Value portfolio of equity securities of established companies selected Portfolio (Class B) from more than 40 industries and from more than 40 developed and emerging market countries. American Century VP Capital growth. Invests primarily in stocks of growing foreign American Century Global International, Class II companies in developed countries. Investment Management, Inc. American Century VP Long-term capital growth. Invests primarily in U.S. companies, but American Century Investment Ultra(R), Class II there is no limit on the amount of assets the Fund can invest in Management, Inc. foreign companies. American Century VP Long-term capital growth, with income as a secondary objective. American Century Investment Value, Class II Invests primarily in stocks of companies that management believes Management, Inc. to be undervalued at the time of purchase. Calvert Variable Income and capital growth. Invests primarily in stocks, bonds and Calvert Asset Management Series, Inc. Social money market instruments which offer income and capital growth Company, Inc. (CAMCO), Balanced Portfolio opportunity and which satisfy the investment and social criteria. investment adviser. SsgA Funds Management, Inc. and New Amsterdam Partners, LLP are the investment subadvisers. Columbia High Yield High level of current income with capital appreciation as a Columbia Management Fund, Variable Series, secondary objective when consistent with the goal of high current Advisors, Inc. Class B income. The Fund normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in high yielding corporate debt securities, such as bonds, debentures and notes that are rated below investment grade, or unrated securities which the Fund's investment advisor has determined to be of comparable quality. No more than 10% of the Fund's total assets will normally be invested in securities rated CCC or lower by S&P or Caa or lower by Moody's. Columbia Marsico Long-term growth of capital. The Fund invests primarily in equity Columbia Management Growth Fund, securities of large-capitalization companies that are selected for Advisors, LLC (advisor); Variable Series their growth potential. It generally holds a core position of Marsico Capital Management, between 35 and 50 common stocks. It may hold up to 25% of its LLC (sub-advisor) assets in foreign securities. Columbia Marsico Long-term growth of capital. The Fund normally invests at least 65% Columbia Management International of its assets in common stocks of foreign companies. While the Fund Advisors, LLC (advisor); Opportunities Fund, may invest in companies of any size, it focuses on large companies. Marsico Capital Management, Variable Series These companies are selected for their long-term growth potential. LLC (sub-advisor) The Fund normally invests in issuers from at least three different countries not including the United States and generally holds a core position of 35 to 50 common stocks. The Fund may invest in common stocks of companies operating in emerging markets.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- Credit Suisse Trust - Total return. Invests in commodity-linked derivative instruments Credit Suisse Asset Commodity Return backed by a portfolio of fixed-income securities. The portfolio Management, LLC Strategy Portfolio invests in commodity-linked derivative instruments, such as commodity-linked notes, swap agreements, commodity options, futures and options on futures that provide exposure to the investment returns of the commodities markets without investing directly in physical commodities. Eaton Vance VT High level of current income. Non-diversified mutual fund that Eaton Vance Management Floating-Rate normally invests primarily in senior floating rate loans Income Fund ("Senior Loans"). Senior Loans typically are of below investment grade quality and have below investment grade credit ratings, which ratings are associated with having high risk, speculative characteristics. Investments are actively managed, and may be bought or sold on a daily basis (although loans are generally held until repaid). The investment adviser's staff monitors the credit quality of the Fund holdings, as well as other investments that are available. The Fund may invest up to 25% of its total assets in foreign securities and may engage in certain hedging transactions. Evergreen VA Long-term capital growth, with modest income as a secondary Evergreen Investment International Equity objective. The Fund seeks to achieve its goal by investing primarily Management Company, LLC Fund - Class 2 in equity securities issued by established, quality non-U.S. companies located in countries with developed markets and may purchase securities across all market capitalizations. The Fund may also invest in emerging markets. Fidelity(R) VIP Seeks long-term capital appreciation. Normally invests primarily in Fidelity Management & Contrafund(R) Portfolio common stocks. Invests in securities of companies whose value it Research Company (FMR), Service Class 2 believes is not fully recognized by the public. Invests in either investment manager; "growth" stocks or "value" stocks or both. The fund invests in FMR U.K. and FMR Far East, domestic and foreign issuers. sub-investment advisers. Fidelity(R) VIP Seeks high total return through a combination of current income and FMR, investment manager; Growth & Income capital appreciation. Normally invests a majority of assets in common FMR U.K., FMR Far East, Portfolio Service stocks with a focus on those that pay current dividends and show sub-investment advisers. Class 2 potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. Invests in domestic and foreign issuers. The Fund invests in either "growth" stocks or "value" stocks or both. Fidelity(R) VIP Mid Cap Long-term growth of capital. Normally invests primarily in FMR, investment manager; Portfolio Service common stocks. Normally invests at least 80% of assets in securities FMR U.K., FMR Far East, Class 2 of companies of with medium market capitalizations. May invest in sub-investment advisers. companies with smaller or larger market capitalizations. Invests in domestic and foreign issuers. The Fund invests in either "growth" or "value" common stocks or both. Fidelity(R) VIP Overseas Long-term growth of capital. Normally invests primarily in common FMR, investment manager; Portfolio Service stocks of foreign securities. Normally invests at least 80% of FMR U.K., FMR Far East, Class 2 assets in non-U.S. securities. Fidelity International Investment Advisors (FIIA) and FIIA U.K., sub-investment advisers.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- FTVIPT Franklin Real Seeks capital appreciation, with current income as a secondary goal. Franklin Advisers, Inc. Estate Fund - Class 2 The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector. FTVIPT Franklin Small Seeks long-term total return. The Fund normally invests at least Franklin Advisory Services, Cap Value Securities 80% of its net assets in investments of small capitalization LLC Fund - Class 2 companies, and normally invests predominantly in equity securities. For this Fund, small-capitalization companies are those with market capitalization values not exceeding $2.5 billion, at the time of purchase. The Fund invests mainly in equity securities of companies that the manager believes are undervalued. FTVIPT Mutual Shares Seeks capital appreciation, with income as a secondary goal. Franklin Mutual Advisers, LLC Securities Fund - The Fund normally invests mainly in equity securities that the Class 2 manager believes are undervalued. Fund normally invests primarily in undervalued stocks and to a lesser extent in risk arbitrage securities and distressed companies. Goldman Sachs VIT Seeks long-term capital appreciation. The Fund invests, under normal Goldman Sachs Asset Mid Cap Value Fund circumstances, at least 80% of its net assets plus any borrowings for Management, L.P. investment purposes (measured at time of purchase) ("Net Assets") in a diversified portfolio of equity investments in mid-cap issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted basis) within the range of the market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investment. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell Midcap(R) Value Index is currently between $276 million and $14.9 billion. Although the Fund will invest primarily in publicly traded U.S. securities, it may invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and securities quoted in foreign currencies. The Fund may invest in the aggregate up to 20% of its Net Assets in companies with public stock market capitalizations outside the range of companies constituting the Russell Midcap(R) Value Index at the time of investment and in fixed-income securities, such as government, corporate and bank debt obligations. Goldman Sachs VIT The Fund seeks long-term growth of capital and dividend income. Goldman Sachs Asset Structured U.S. Equity The Fund invests, under normal circumstances, at least 90% of its Management, L.P. Fund total assets (not including securities lending collateral and any (previously Goldman investment of that collateral) measured at time of purchase Sachs VIT CORE U.S. ("Total Assets") in a diversified portfolio of equity investments Equity in U.S. issuers, including foreign companies that are traded in CORE is a registered the United States. However, it is currently anticipated that, service mark of under normal circumstances, the Fund will invest at least 95% of Goldman, Sachs & Co. its net assets plus any borrowings for investment purposes (measured at the time of purchase) in such equity investments. The Fund's investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Fund's expected return, while maintaining risk, style, capitalization and industry characteristics similar to the S&P 500 Index. The Fund seeks a broad representation in most major sectors of the U.S. economy and a portfolio consisting of companies with average long-term earnings growth expectations and dividend yields. The Fund is not required to limit its investments to securities in the S&P 500 Index. The Fund's investments in fixed-income securities are limited to securities that are considered cash equivalents.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- Lazard Retirement Long-term capital appreciation. Invests primarily in equity Lazard Asset Management, LLC International Equity securities, principally common stocks, of relatively large non-U.S. Portfolio companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. Legg Mason Partners Long-term growth of capital. The fund invests, under normal Salomon Brothers Asset Variable Small Cap circumstances, at least 80% of its assets in equity securities Management Inc., a subsidiary Growth Portfolio, of companies with small market capitalizations and of Citigroup Inc. Class II related investments. (previously Salomon Brothers Small Cap Growth Fund, Class II) MFS(R) Investors Long-term growth of capital and future income. Invests at least MFS Investment Management(R) Growth Stock Series - 80% of its net assets in stocks and related securities of Service Class companies which MFS(R) believes offer better than average prospects for long-term growth. MFS(R) New Discovery Capital appreciation. Invests at least 65% of its net assets in MFS Investment Management(R) Series - Service Class equity securities of emerging growth companies. MFS(R) Total Return Above-average income consistent with the prudent employment MFS Investment Management(R) Series - Service Class of capital, with growth of capital and income as a secondary objective. Invests primarily in a combination of equity and fixed income securities. MFS(R) Utilities Series Capital growth and current income. Invests primarily in equity MFS Investment Management(R) Service Class and debt securities of domestic and foreign companies in the utilities industry. Neuberger Berman Long-term growth of capital. The Fund invests mainly in foreign Neuberger Berman Advisers Management companies of any size, including companies in developed and Management Inc. Trust International emerging industrialized markets. The Fund defines a foreign company Portfolio (Class S) as one that is organized outside of the United States and conducts the majority of its business abroad. The Fund seeks to reduce risk by diversifying among many industries. Although it has the flexibility to invest a significant portion of its assets in one country or region, it generally intends to remain well-diversified across countries and geographical regions. Oppenheimer Global Long-term capital appreciation. Invests mainly in common stocks of OppenheimerFunds, Inc. Securities Fund/VA, U.S. and foreign issuers that are "growth-type" companies, cyclical Service Shares industries and special situations that are considered to have appreciation possibilities. Oppenheimer Main Seeks capital appreciation. Invests mainly in common stocks of small- OppenheimerFunds, Inc. Street Small Cap capitalization U.S. companies that the fund's investment manager Fund/VA, believes have favorable business trends or prospects. Service Shares
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- Oppenheimer Strategic High level of current income principally derived from interest on OppenheimerFunds, Inc. Bond Fund/VA, debt securities. Invests mainly in three market sectors: debt Service Shares securities of foreign governments and companies, U.S. government securities and lower-rated high yield securities of U.S. and foreign companies. PIMCO VIT All Asset Seeks maximum real return consistent with preservation of real Pacific Investment Management Portfolio, Advisor capital and prudent investment management period. The Portfolio Company LLC Share Class seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). Though it is anticipated that the Portfolio will not currently invest in the European StockPLUS(R) TR Strategy, Far East (ex-Japan) StocksPLUS(R) TR Strategy, Japanese StocksPLUS(R) TR Strategy, StocksPLUS(R) Municipal-Backed and StocksPLUS(R) TR Short Strategy Funds, the Portfolio may invest in these Funds in the future, without shareholder approval, at the discretion of the Portfolio's asset allocation sub-adviser. Putnam VT Health Seeks capital appreciation. The fund pursues its goal by investing Putnam Investment Sciences Fund - Class mainly in common stocks of companies in the health sciences Management, LLC IB Shares industries, with a focus on growth stocks. Under normal circumstances, the fund invests at least 80% of its net assets in securities of (a) companies that derive at least 50% of their assets, revenues or profits from the pharmaceutical, health care services, applied research and development and medical equipment and supplies industries, or (b) companies Putnam Management thinks have the potential for growth as a result of their particular products, technology, patents or other market advantages in the health sciences industries. Putnam VT Seeks capital appreciation. The fund pursues its goal by investing Putnam Investment International Equity mainly in common stocks of companies outside the United States that Management, LLC Fund - Class IB Shares Putnam Management believes have favorable investment potential. Under normal circumstances, the fund invests at least 80% of its net assets in equity investments. Putnam VT Vista Seeks capital appreciation. The fund pursues its goal by investing Putnam Investment Fund - Class IB Shares mainly in common stocks of U.S. companies, with a focus on Management, LLC growth stocks. RiverSource Variable Maximum total investment return through a combination of capital RiverSource Investments Portfolio - Balanced growth and current income. Invests primarily in a combination of Fund common and preferred stocks, bonds and other debt securities. Under normal market conditions, at least 50% of the Fund's total assets are invested in common stocks and no less than 25% of the Fund's total assets are invested in debt securities. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable Maximum current income consistent with liquidity and stability of RiverSource Investments Portfolio - Cash principal. Invests primarily in money market instruments, such as Management Fund marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit, and commercial paper, including asset-backed commercial paper.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- RiverSource Variable High total return through current income and capital appreciation. RiverSource Investments Portfolio - Under normal market conditions, the Fund invests at least 80% of its Core Bond Fund net assets in bonds and other debt securities. Although the Fund is not an index fund, it invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index ("the Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. The Fund will not invest in securities rated below investment grade, although it may hold securities that have been downgraded. RiverSource Variable High level of current income while attempting to conserve the value RiverSource Investments Portfolio - Diversified of the investment and continuing a high level of income for the Bond Fund longest period of time. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. At least 50% of the Fund's net assets will be invested in securities like those included in the Lehman Brothers Aggregate Bond Index (Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes high- and medium-quality debt securities, it will assume some credit risk to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. RiverSource Variable High level of current income and, as a secondary goal, steady growth RiverSource Investments Portfolio - Diversified of capital. Under normal market conditions, the Fund invests at least Equity Income Fund 80% of its net assets in dividend-paying common and preferred stocks. RiverSource Variable Long-term capital growth. The Fund's assets are primarily invested RiverSource Investments, Portfolio - Emerging in equity securities of emerging market companies. Under normal adviser; Threadneedle Markets Fund market conditions, at least 80% of the Fund's net assets will be International Limited, an invested in securities of companies that are located in emerging indirect wholly-owned subsidiary market countries, or that earn 50% or more of their total revenues of Ameriprise Financial, from goods and services produced in emerging market countries or subadviser. from sales made in emerging market countries. RiverSource Variable Long-term capital growth. The Fund's assets are primarily invested in RiverSource Investments Portfolio - Fundamental in equity securities of U.S. companies. Under normal market Value Fund conditions, the Fund's net assets will be invested primarily in companies with market capitalizations of at least $5 billion. RiverSource Variable High total return through income and growth of capital. RiverSource Investments Portfolio - Global Non-diversified mutual fund that invests primarily in debt Bond Fund obligations of U.S. and foreign issuers (which may include issuers located in emerging markets). Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate or government debt obligations including money market instruments of issuers located in at least three different countries.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- RiverSource Variable Total return that exceeds the rate of inflation over the long-term. RiverSource Investments Portfolio - Global Non-diversified mutual fund that, under normal market conditions, Inflation Protected invests at least 80% of its net assets in inflation-protected debt Securities Fund securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource Variable Long-term capital growth. Invests primarily in common stocks and RiverSource Investments Portfolio - Growth securities convertible into common stocks that appear to offer Fund growth opportunities. These growth opportunities could result from new management, market developments, or technological superiority. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable High current income, with capital growth as a secondary objective. RiverSource Investments Portfolio - High Yield Under normal market conditions, the Fund invests at least 80% of its Bond Fund net assets in high-yielding, high-risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource Variable High total return through current income and capital appreciation. RiverSource Investments Portfolio - Income Under normal market conditions, invests primarily in Opportunities Fund income-producing debt securities with an emphasis on the higher rated segment of the high-yield (junk bond) market. The Fund will purchase only securities rated B or above, or unrated securities believed to be of the same quality. If a security falls below a B rating, the Fund may continue to hold the security. RiverSource Variable Capital appreciation. Invests primarily in equity securities of RiverSource Investments, Portfolio - foreign issuers that offer strong growth potential. The Fund may adviser; Threadneedle International invest in developed and in emerging markets. International Limited, an indirect Opportunity Fund wholly-owned subsidiary of Ameriprise Financial, subadviser. RiverSource Variable Capital appreciation. Under normal market conditions, the Fund RiverSource Investments Portfolio - Large Cap invests at least 80% of its net assets in equity securities of Equity Fund companies with market capitalization greater than $5 billion at the time of purchase. RiverSource Variable Long-term growth of capital. Under normal market conditions, the RiverSource Investments Portfolio - Large Cap Fund invests at least 80% of its net assets in equity securities of Value Fund companies with a market capitalization greater than $5 billion. The Fund may also invest in income-producing equity securities and preferred stocks. RiverSource Variable Growth of capital. Under normal market conditions, the Fund invests RiverSource Investments Portfolio - Mid Cap at least 80% of its net assets in equity securities of mid Growth capitalization Fund companies. The investment manager defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the range of the Russell Midcap(R) Growth Index.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ---------------------- -------------------------------------------------------------------- ------------------------------- RiverSource Variable Under normal circumstances, the Fund invests at least 80% of its RiverSource Investments Portfolio - Mid Cap net assets (including the amount of any borrowings for investment Value Fund purposes) in equity securities of medium-sized companies. Medium-sized companies are those whose market capitalizations at the time of purchase fall within the range of the Russell Midcap(R) Value Index. RiverSource Variable Long-term capital appreciation. The Fund seeks to provide investment RiverSource Investments Portfolio - S&P 500 results that correspond to the total return (the combination of Index Fund appreciation and income) of large-capitalization stocks of U.S. companies. The Fund invests in common stocks included in the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P 500 is made up primarily of large-capitalization companies that represent a broad spectrum of the U.S. economy. RiverSource Variable Long-term growth of capital. Invests primarily in common stocks, RiverSource Investments, Portfolio - preferred stocks and securities convertible into common stocks that adviser; GAMCO Investors, Inc., Select Value Fund are listed on a nationally recognized securities exchange or subadviser traded on the NASDAQ National Market System of the National Association of Securities Dealers. The Fund invests in mid-cap companies as well as companies with larger and smaller market capitalizations. RiverSource Variable A high level of current income and safety of principal consistent RiverSource Investments Portfolio - Short with an investment in U.S. government and government agency Duration U.S. securities. Under normal market conditions, at least 80% of the Government Fund Fund's net assets are invested in securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. RiverSource Variable Long-term capital growth. Under normal market conditions, at least RiverSource Investments, Portfolio - Small Cap 80% of the Fund's net assets are invested in equity securities of adviser; Kenwood Capital Advanced Fund companies with market capitalization of up to $2 billion or that Management LLC, subadviser fall within the range of the Russell 2000(R) Index at the time of investment. RiverSource Variable Long-term capital appreciation. Invests primarily in equity RiverSource Investments, Portfolio - Small Cap securities. Under normal market conditions, at least 80% of the adviser; River Road Asset Value Fund Fund's net assets will be invested in small cap companies with Management, LLC, market capitalization, at the time of investment, of up to $2.5 Donald Smith & Co., Inc., billion or that fall within the range of the Russell 2000(R) Value Franklin Portfolio Associates Index. LLC and Barrow, Hanley, Mewhinney & Strauss, Inc., subadvisers. Van Kampen Life Capital growth and income through investments in equity securities, Van Kampen Asset Management Investment Trust including common stocks, preferred stocks and securities convertible Comstock Portfolio, into common and preferred stocks. Class II Shares
-------------------------------------------------------------------------------- 26 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER --------------------- --------------------------------------------------------------------- ----------------------------- Van Kampen UIF Current income and capital appreciation. Invests primarily in equity Morgan Stanley Investment Global Real Estate securities of companies in the real estate industry located Management Inc., doing Portfolio, throughout the world, including real estate operating companies, business as Van Kampen, Class II Shares real estate investment trusts and foreign real estate companies. adviser; Morgan Stanley Investment Management and Morgan Stanley Investment Management Company, sub-adviser Van Kampen UIF Mid Long-term capital growth. Invests primarily in growth-oriented equity Morgan Stanley Investment Cap Growth Portfolio, securities of U.S. mid cap companies and foreign companies, Management Inc., doing Class II Shares including emerging market securities. business as Van Kampen Wanger International Long-term growth of capital. Invests primarily in stocks of companies Columbia Wanger Asset Small Cap based outside the U.S. with market capitalizations of less than Management, L.P. $5 billion at time of initial purchase. Wanger U.S. Smaller Long-term growth of capital. Invests primarily in stocks of small- Columbia Wanger Asset Companies and medium-size U.S. companies with market capitalizations of less Management, L.P. than $5 billion at time of initial purchase. Wells Fargo Advantage Seeks long-term capital appreciation. We invest in equity securities Wells Fargo Funds Management, VT Opportunity Fund of medium-capitalization companies that we believe are under-priced LLC, adviser; Wells Capital yet, have attractive growth prospects. Management Incorporated, subadviser. Wells Fargo Advantage Long-term capital appreciation. Focus is on companies believed to Wells Fargo Funds Management, VT Small Cap have above-average growth potential or that may be involved in new LLC, adviser; Wells Capital Growth Fund or innovative products, services and processes. Invests principally Management Incorporated, in securities of companies with market capitalizations equal to or subadviser. lower than the company with the largest market capitalization in the Russell 2000 Index, which is considered a small capitalization index that is expected to change frequently.
-------------------------------------------------------------------------------- 27 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS GUARANTEE PERIOD ACCOUNTS (GPAs) The GPAs may not be available for contracts in some states. GPAs are not available if either the Withdrawal Benefit, Accumulation Benefit or PN rider is selected. Currently, unless an asset allocation program is in effect, you may allocate purchase payments and purchase payment credits to one or more of the GPAs with guarantee periods declared by us. These periods of time may vary by state. The required minimum investment in each GPA is $1,000. (Exception: if a model portfolio includes one or more GPAs, the required minimum does not apply.) These accounts are not offered after annuity payouts begin. Some states also restrict the amount you can allocate to these accounts. Each GPA pays an interest rate that is declared when you make an allocation to that account. That interest rate is then fixed for the guarantee period that you chose. We will periodically change the declared interest rate for any future allocations to these accounts, but we will not change the rate paid on money currently in a GPA. The GPA interests under the contracts are registered with the SEC. The SEC staff reviews the disclosures in this prospectus on the GPA interests. The interest rates that we will declare as guaranteed rates in the future are determined by us at our discretion (future rates). We will determine future rates based on various factors including, but not limited to, the interest rate environment, returns earned on investments in the nonunitized separate account we have established for the GPAs, the rates currently in effect for new and existing IDS Life annuities, product design, competition and IDS Life's revenues and other expenses. Interest rates offered may vary by state, but will not be lower than state law allows. WE CANNOT PREDICT NOR CAN WE GUARANTEE WHAT FUTURE RATES WILL BE. We hold amounts you allocate to the GPAs in a "nonunitized" separate account we have established under the Minnesota Insurance Code. This separate account provides an additional measure of assurance that we will make full payment of amounts due under the GPAs. State insurance law prohibits us from charging this separate account with liabilities of any other separate account or of our general business. We own the assets of this separate account as well as any favorable investment performance of those assets. You do not participate in the performance of the assets held in this separate account. We guarantee all benefits relating to your value in the GPAs. This guarantee is based on the continued claims-paying ability of the company. We intend to construct and manage the investment portfolio relating to the separate account using a strategy known as "immunization." Immunization seeks to lock in a defined return on the pool of assets versus the pool of liabilities over a specified time horizon. Since the return on the assets versus the liabilities is locked in, it is "immune" to any potential fluctuations in interest rates during the given time. We achieve immunization by constructing a portfolio of assets with a price sensitivity to interest rate changes (i.e., price duration) that is essentially equal to the price duration of the corresponding portfolio of liabilities. Portfolio immunization provides us with flexibility and efficiency in creating and managing the asset portfolio, while still assuring safety and soundness for funding liability obligations. We must invest this portfolio of assets in accordance with requirements established by applicable state laws regarding the nature and quality of investments that life insurance companies may make and the percentage of their assets that they may commit to any particular type of investment. Our investment strategy will incorporate the use of a variety of debt instruments having price durations tending to match the applicable guarantee periods. These instruments include, but are not necessarily limited to, the following: - Securities issued by the U.S. government or its agencies or instrumentalities, which issues may or may not be guaranteed by the U.S. government; - Debt securities that have an investment grade, at the time of purchase, within the four highest grades assigned by any of three nationally recognized rating agencies -- Standard & Poor's, Moody's Investors Service or Fitch -- or are rated in the two highest grades by the National Association of Insurance Commissioners; - Debt instruments that are unrated, but which are deemed by IDS Life to have an investment quality within the four highest grades; - Other debt instruments which are unrated or rated below investment grade, limited to 15% of assets at the time of purchase; and - Real estate mortgages, limited to 30% of portfolio assets at the time of acquisition. In addition, options and futures contracts on fixed income securities will be used from time to time to achieve and maintain appropriate investment and liquidity characteristics on the overall asset portfolio. While this information generally describes our investment strategy, we are not obligated to follow any particular strategy except as may be required by federal law and Minnesota and other state insurance laws. -------------------------------------------------------------------------------- 28 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS MARKET VALUE ADJUSTMENT (MVA) We will not apply an MVA to contract value you transfer or surrender out of the GPAs within 30 days before the end of the guarantee period. During this 30 day window you may choose to start a new guarantee period of the same length, transfer the contract value to a GPA of another length, transfer the contract value to any of the subaccounts or the fixed account, or surrender the contract value (subject to applicable surrender provisions). If we do not receive any instructions at the end of your guarantee period, our current practice is to automatically transfer the contract value to the one year GPA. Any new GPA, whether it is one you choose or an automatic transfer to a one year GPA, will be subject to an MVA as described below. We guarantee the contract value allocated to the GPAs, including interest credited, if you do not make any transfers or surrenders from the GPAs prior to 30 days before the end of the guarantee period (30-day rule). At all other times, and unless one of the exceptions to the 30-day rule described below applies, we will apply an MVA if you surrender or transfer contract value from a GPA including withdrawals under the Withdrawal Benefit rider, or you elect an annuity payout plan while you have contract value invested in a GPA. We will refer to these transactions as "early surrenders." The application of an MVA may result in either a gain or loss of principal. The 30-day rule does not apply and no MVA will apply to: - death benefits; - amounts surrendered for fees and charges; - amounts surrendered under contract provisions that waive surrender charges for Hospital or Nursing Home Confinement and Terminal Illness Disability Diagnosis; - amounts surrendered from the GPA within 30 days prior to the end of the Guarantee Period; - automatic rebalancing under any asset allocation model portfolio which includes one or more GPAs. However, an MVA will apply if you reallocate to a new asset allocation model portfolio; and - amounts applied to an annuity payout plan while an asset allocation model including one or more GPAs in in effect. When you request an early surrender, we adjust the early surrender amount by an MVA formula. The early surrender amount reflects the relationship between the guaranteed interest rate you are earning in your current GPA and the interest rate we are crediting on new GPAs that end at the same time as your current GPA. The MVA is sensitive to changes in current interest rates. The magnitude of any applicable MVA will depend on our current schedule of guaranteed interest rates at the time of the surrender, the time remaining in your guarantee period and your guaranteed interest rate. The MVA is negative, zero or positive depending on how the guaranteed interest rate on your GPA compares to the interest rate of a new GPA for the same number of years as the guarantee period remaining on your GPA. This is summarized in the following table:
IF YOUR GPA RATE IS: THE MVA IS: Less than the new GPA rate + 0.10% Negative Equal to the new GPA rate + 0.10% Zero Greater than the new GPA rate + 0.10% Positive
For an example, see Appendix A. -------------------------------------------------------------------------------- 29 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS THE FIXED ACCOUNT Unless an asset allocation program is in effect, you also may allocate purchase payments and purchase payment credits or transfer contract value to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment or transfer to the fixed account is guaranteed for one year. Thereafter, we will change the rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and IDS Life's revenues and expenses. We reserve the right to limit purchase payment allocations to the fixed account if the interest rate we are then currently crediting to the fixed account is equal to the minimum interest rate stated in the contract. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Transfer policies" for restrictions on transfers involving the fixed account.) THE SPECIAL DCA ACCOUNT You also may allocate purchase payments and purchase payment credits to the Special DCA account, when available. The Special DCA account is available for promotional purposes for new purchase payments only and may not be available at all times.* We back the principal and interest guarantees relating to the Special DCA account. These guarantees are based on the continued claims-paying ability of the company. The value of the Special DCA account increases as we credit interest to the account. Purchase payments to the Special DCA account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate we apply to each purchase payment is guaranteed for the period of time money remains in the Special DCA account. The rates credited to the Special DCA account will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and IDS Life's revenues and expenses. Interests in the Special DCA account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the Special DCA account. Disclosures regarding the Special DCA account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses. (See "Making the Most of Your Contract -- Special Dollar Cost Averaging Program" for more information on the Special DCA account.) * For contracts purchased in Oregon the Special DCA account is available at all times. -------------------------------------------------------------------------------- 30 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS BUYING YOUR CONTRACT You can fill out an application and send it along with your initial purchase payment to our home office. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can buy a contract if you are 90 or younger. When you apply, you may select among the following (if available in your state): - GPAs(1), the fixed account, subaccounts and/or the special DCA account(2) in which you want to invest; - how you want to make purchase payments; - a beneficiary; - under RAVA Advantage Plus, the length of the surrender charge period (seven or ten years)(3); - the optional PN Program; - the following optional death benefits: - ROPP Death Benefit(4); - MAV Death Benefit(4); - 5-Year MAV Death Benefit(4); - EEB Death Benefit(4); - EEP Death Benefit(4); and - one of the following optional living benefits that require the use of an asset allocation program: - Accumulation Benefit rider(5); or - Withdrawal Benefit(5). (1) GPAs are not available if the Withdrawal Benefit or Accumulation Benefit riders are selected. (2) The Special DCA account may not be available for new purchase payments at all times. (3) The ten-year surrender charge schedule under RAVA Advantage Plus is not available for contracts issued in Oregon. In Connecticut and Utah, the ten-year surrender charge schedule is 8% for years 0-2, 7% for year 3 and declining by 1% each year thereafter until it is 0% for years 10+. For contracts issued in Alabama, Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. (4) You may select any one of the ROPP, MAV, 5-Year MAV, EEB or EEP riders or certain combinations thereof. You may select the MAV and either the EEB or the EEP. You may select the 5-Year MAV and either the EEB or the EEP. You cannot select both the EEB and EEP. You cannot select both the MAV and 5-Year MAV. The MAV, EEB, EEP and 5-Year MAV are only available if you are 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. ROPP is only available if you are 76 or older at the rider effective date. ROPP is included in the standard death benefit if you are 75 or younger. (5) You may select either the Accumulation Benefit or the Withdrawal Benefit rider. The Withdrawal Benefit is available if you are 80 or younger at the rider effective date and age 60 to 80 if the contract is a TSA. The Accumulation Benefit is available if you are 80 or younger at the rider effective date. The contract provides for allocation of purchase payments and purchase payment credits to the subaccounts of the variable account, to the GPAs, to the fixed account and/or to the Special DCA account (when available) in even 1% increments subject to the $1,000 required minimum investment for the GPAs. There may be certain restrictions on the amount you may allocate to the fixed account. (See "Purchase Payments.") If your application is complete, we will process it and apply your purchase payment and purchase payment credits to the GPAs, the fixed account, the Special DCA account (when available) and/or subaccounts you selected within two business days after we receive it at our home office. If we accept your application, we will send you a contract. If your application is not complete, you must give us the information to complete it within five business days. If we cannot accept your application within five business days, we will decline it and return your payment unless you specifically ask us to keep the payment and apply it once your application is complete. We will credit additional purchase payments you make to your accounts on the valuation date we receive them. If we receive an additional purchase payment at our home office before the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the valuation date we received the payment. If we receive an additional purchase payment at our home office at or after the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the next valuation date after we received the payment. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we process your application, we will establish the settlement date as the maximum age (or contract anniversary, if applicable) for nonqualified annuities and Roth IRAs and the date specified below for qualified annuities. You can also select a date within the maximum limits. Your selected date can align with your actual retirement from a job, or it can be a different date, depending on your needs and goals and on certain restrictions. You also can change the settlement date, provided you send us written instructions at least 30 days before annuity payouts begin. -------------------------------------------------------------------------------- 31 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than your 85th birthday or the tenth contract anniversary, if purchased after age 75. FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to comply with IRS regulations, the settlement date generally must be: - for IRAs, by April 1 of the year following the calendar year when you reach age 70 1/2; or - for all other qualified annuities, by April 1 of the year following the calendar year when you reach age 70 1/2, or, if later, retire (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you satisfy your RMDs in the form of partial surrenders from this contract, annuity payouts can start as late as your 85th birthday or the tenth contract anniversary, if later, or a date that has been otherwise agreed to by us. Contract owners of IRAs and TSAs may also be able to satisfy required minimum distributions using other IRAs or TSAs, and in that case, may delay the annuity payout start date for these contracts. BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then you or your estate will be the beneficiary. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS* If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month
RAVA ADVANTAGE PLUS RAVA SELECT PLUS If paying by any other method: initial payment for qualified annuities $1,000 $ 2,000 initial payment for nonqualified annuities 2,000 10,000 for any additional payments 50 50
* RAVA ADVANTAGE PLUS AND RAVA SELECT PLUS BAND 3 ANNUITIES SOLD TO INDIVIDUALS OTHER THAN ADVISORS AND EMPLOYEES: Require a minimum $1,000,000 initial purchase payment and home office approval. Contracts already approved may make payments in subsequent years up to $100,000 if your age on the effective date of the contract is age 85 or younger and $50,000 if your age on the effective date of the contract is age 86 to 90. MAXIMUM ALLOWABLE PURCHASE PAYMENTS** (without home office approval) based on your age on the effective date of the contract:
RAVA ADVANTAGE PLUS RAVA SELECT PLUS For the first year: through age 85 $999,999*** $999,999*** for ages 86 to 90 100,000 100,000 For each subsequent year: through age 85 100,000 100,000 for ages 86 to 90 50,000 50,000
** Installments must total at least $600 in the first year. If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. *** These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. We also reserve the right to limit the cumulative amount of purchase payments for contracts with the Withdrawal Benefit rider, subject to state restrictions. Purchase payment amounts and purchase payment timing may vary by state and may be limited under the terms of your contract. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. -------------------------------------------------------------------------------- 32 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. PURCHASE PAYMENT CREDITS FOR RAVA ADVANTAGE PLUS: we add a credit to your contract in the amount of: - 1% of each purchase payment received: -- if you elect the ten-year surrender charge schedule for your contract* and the initial purchase payment is under $100,000; or -- if you elect the seven-year surrender charge schedule for your contract and your initial purchase payment to the contract is at least $100,000 but less than $1,000,000. - 2% of each purchase payment received if you elect the ten-year surrender charge schedule for your contract* and your initial purchase payment to the contract is at least $100,000 but less than $1,000,000. FOR RAVA ADVANTAGE PLUS - BAND 3: we add a credit to your contract in the amount of: - 2% of each purchase payment received: -- if you elect the seven-year surrender charge schedule for your contract. - 3% of each purchase payment received: -- if you elect the ten-year surrender charge schedule for your contract*. Surrender charges under RAVA Advantage Plus and RAVA Advantage Plus - Band 3 may be higher and longer than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated with them. Because of higher charges, there could be circumstances where you may be worse off purchasing one of these contracts with the credits than purchasing other contracts. All things being equal (such as fund performance and availability), this may occur if you select the ten-year surrender charge and you make a full surrender in years five through ten. We pay for the credits under RAVA Advantage Plus and RAVA Advantage Plus - Band 3 primarily through revenue from a higher and longer surrender charge schedule and through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. FOR RAVA SELECT PLUS: we add a credit to your contract in the amount of 1% of each purchase payment received in the first contract year if your initial purchase payment to the contract is at least $250,000 but less than $1,000,000. FOR RAVA SELECT PLUS - BAND 3: we add a credit to your contract in the amount of 2% of each purchase payment received in the first contract year. Expenses under RAVA Select Plus and RAVA Select Plus - Band 3 may be higher than those for contracts that do not have purchase payment credits. The amount of the credits may be more than offset by the additional charges associated with them. Because of higher charges, you may be worse off purchasing one of these contracts with the credits than purchasing other contracts. We pay for the credits under RAVA Select Plus and RAVA Select Plus - Band 3 primarily through lower costs associated with larger sized contracts, including lower compensation paid on the sales of these contracts. We fund all credits from our general account. We do not consider credits to be "investments" for income tax purposes. (See "Taxes.") We allocate each credit to your contract value when the applicable purchase payment is applied to your contract value. We allocate such credits to your contract value according to allocation instructions in effect for your purchase payments. We will reverse credits from the contract value for any purchase payment that is not honored. The amount returned to you under the free look provision also will not include any credits applied to your contract. (See "The Contract in Brief - Free look period.") -------------------------------------------------------------------------------- 33 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS We will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits to the extent a death benefit, surrender payment, or settlement under an annuity payout plan includes purchase payment credits applied within twelve months preceding: (1) the date of death that results in a lump sum death benefit under this contract; (2) a request for surrender charge waiver due to Nursing Home Confinement or Terminal Illness Disability Diagnosis; or (3) your settlement of the contract under an annuity payout plan.* The amount we pay to you under these circumstances will always equal or exceed your surrender value. We reserve the right to increase the amount of the credit for certain groups of contract owners. The increase will not be greater than 8% of total net purchase payments. We would pay for increases in credit amounts primarily through reduced expenses expected from such groups. * The ten-year surrender charge under RAVA Advantage Plus and RAVA Advantage Plus - Band 3 is not available in Oregon. Contracts purchased in Oregon are only eligible for a 1% purchase payment credit if the initial purchase payment is at least $100,000. For contracts purchased in Oregon, we will assess a charge, similar to a surrender charge, equal to the amount of the purchase payment credits to the extent a death benefit includes purchase payment credits applied within twelve months preceding the date of death that results in a lump sum death benefit under this contract only. CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. Currently, we deduct $30 from your contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. The contract administrative charge is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. We reserve the right to increase this charge after the first contract anniversary to a maximum of $50.* We will waive $30 of this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. If you surrender your contract, we will deduct the full charge at the time of surrender regardless of the contract value or purchase payments made. This charge does not apply after annuity payouts begin or when we pay death benefits. * In certain states and for certain contracts we have waived our right to increase the contract administrative charge. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee, which is a percentage of their average daily net assets, on an annual basis as follows:
RAVA ADVANTAGE PLUS RAVA SELECT PLUS For nonqualified annuities 0.95% 1.20% For qualified annuities 0.75% 1.00% For Band 3 annuities 0.55% 0.75%
This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the GPAs, the fixed account or the Special DCA account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific owner lives and no matter how long our entire group of owners live. If, as a group, owners outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, owners do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge more than $20.00 per contract and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. -------------------------------------------------------------------------------- 34 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. We do not expect that the surrender charge, discussed in the following paragraphs, will cover sales and distribution expenses. SURRENDER CHARGE If you surrender all or part of your contract, you may be subject to a surrender charge. For RAVA Advantage Plus, a surrender charge applies if all or part of the surrender amount is from purchase payments we received within seven or ten years before surrender. You select the surrender charge period at the time of your application for the contract. For RAVA Select Plus, a surrender charge applies if you surrender all or part of your purchase payments in the first three contract years. The surrender charge percentages that apply to you are shown in your contract. You may surrender an amount during any contract year without a surrender charge. We call this amount the Total Free Amount (TFA). The TFA varies depending on whether your contract includes the Withdrawal Benefit rider: CONTRACTS WITHOUT WITHDRAWAL BENEFIT RIDER The TFA is the greater of: - 10% of the contract value on the prior contract anniversary*; and - current contract earnings. CONTRACTS WITH WITHDRAWAL BENEFIT RIDER The TFA is the greatest of: - 10% of the contract value on the prior contract anniversary*; - current contract earnings; and - the Remaining Benefit Payment. * We consider your purchase payment and any purchase payment credit applied on the first day payments are received to be the prior contract anniversary's contract value during the first contract year. NOTE: We determine current contract earnings by looking at the entire contract value, not the earnings of any particular subaccount, GPA, the fixed account or the Special DCA account. Amounts surrendered in excess of the TFA may be subject to a surrender charge as described below. SURRENDER CHARGE UNDER RAVA ADVANTAGE PLUS: For purposes of calculating any surrender charge under RAVA Advantage Plus, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next we surrender purchase payments received prior to the surrender charge period you selected and shown in your contract. We do not assess a surrender charge on these purchase payments. 3. Finally, if necessary, we surrender purchase payments received that are still within the surrender charge period you selected and shown in your contract. We surrender these payments on a first-in, first-out (FIFO) basis. We do assess a surrender charge on these payments. We determine your surrender charge by multiplying each of your payments surrendered by the applicable surrender charge percentage, and then adding the total surrender charges. -------------------------------------------------------------------------------- 35 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS The surrender charge percentage depends on the number of years since you made the payments that are surrendered, depending on the schedule you selected*:
SEVEN-YEAR SCHEDULE TEN-YEAR SCHEDULE* NUMBER OF COMPLETED NUMBER OF COMPLETED YEARS FROM DATE OF EACH SURRENDER CHARGE YEARS FROM DATE OF EACH SURRENDER CHARGE PURCHASE PAYMENT PERCENTAGE PURCHASE PAYMENT PERCENTAGE 0 7% 0 8% 1 7 1 8 2 7 2 8 3 6 3 7 4 5 4 7 5 4 5 6 6 2 6 5 7+ 0 7 4 8 3 9 2 10+ 0
* The ten-year surrender charge schedule under RAVA Advantage Plus is not available in Oregon. In Connecticut and Utah, the ten-year surrender charge schedule is 8% for years 0-2, 7% for year 3 and declining by 1% each year thereafter until it is 0% for years 10+. For contracts issued in Alabama, Massachusetts, Oregon and Washington, we waive surrender charges after the tenth contract anniversary. SURRENDER CHARGE UNDER RAVA SELECT PLUS (EXCEPT TEXAS): For purposes of calculating any surrender charge under RAVA Select Plus, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next, if necessary, we surrender purchase payments. We do assess a surrender charge on these payments during the first three contract years as follows:
CONTRACT YEAR SURRENDER CHARGE PERCENTAGE 1 7% 2 7 3 7 Thereafter 0
SURRENDER CHARGE UNDER RAVA SELECT PLUS IN TEXAS: For purposes of calculating any surrender charge under RAVA Select Plus in Texas, we treat amounts surrendered from your contract value in the following order: 1. First, we surrender the TFA. We do not assess a surrender charge on the TFA. 2. Next, if necessary, we surrender purchase payments. We surrender amounts from the oldest purchase payments first. We do assess a surrender charge on these payments during the first three contract years as follows:
SURRENDER CHARGE PERCENTAGE (AS A PERCENTAGE OF PURCHASE PAYMENTS SURRENDERED) IN CONTRACT YEAR PAYMENTS MADE IN CONTRACT YEAR 1 2 3 THEREAFTER 1 8% 7% 6% 0% 2 8 7 0 3 8 0 Thereafter 0
PARTIAL SURRENDERS: For a partial surrender that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge. For an example, see Appendix B. -------------------------------------------------------------------------------- 36 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will be 5.17% if the assumed investment rate is 3.5% and 6.67% if the assumed investment rate is 5%. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. WAIVER OF SURRENDER CHARGES We do not assess surrender charges for: - surrenders of any contract earnings; - surrenders of amounts totaling up to 10% of the contract value on the prior contract anniversary to the extent it exceeds contract earnings; - if you elected the Withdrawal Benefit rider, your contract's Guaranteed Benefit Payment to the extent it exceeds the greater of contract earnings or 10% of the contract value on the prior contract anniversary; - amounts surrendered after the tenth contract anniversary in Alabama, Massachusetts, Washington and Oregon; - required minimum distributions from a qualified annuity provided the amount is no greater than the RMD amount calculated under your specific contract, currently in force; - contracts settled using an annuity payout plan*, unless an Annuity Payout Plan E is later surrendered; - amounts we refund to you during the free look period*; - death benefits*; - surrenders you make under your contract's "Waiver of Surrender Charges for Hospital or Nursing Home Confinement" provision*. To the extent permitted by state law, this provision applies when you are under age 76 on the date that we issue the contract. Under this provision, we will waive surrender charges that we normally assess upon full or partial surrender. You must provide proof satisfactory to us that, as of the date you request the surrender, you or your spouse are confined to a nursing home or hospital and have been for the prior 60 days and the confinement began after the contract date. (See your contract for additional conditions and restrictions on this waiver.); and - surrenders you make under your contract's "Waiver of Surrender Charges for Terminal Illness Disability Diagnosis" provision.* To the extent permitted by state law, this provision applies when you are under age 76 on the date we issue the contract. Under this provision, we will waive surrender charges that we normally assess for surrenders you make if you are diagnosed in the second or later contract years as disabled with a medical condition that with reasonable medical certainty will result in death within 12 months or less from the date of a licensed physician's statement. You must provide us with a licensed physician's statement containing the terminal illness diagnosis and the date the terminal illness was initially diagnosed. (See your contract for additional conditions and restrictions on this waiver.) * However, we will reverse certain purchase payment credits. (See "Buying your contract -- Purchase payment credits.") OTHER INFORMATION ON CHARGES: Ameriprise Financial, Inc. makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. Ameriprise Financial, Inc. will charge a termination fee for owners under age 59 1/2 (fee waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate certain charges such as the contract administrative and surrender charges. However, we expect this to occur infrequently. ACCUMULATION BENEFIT RIDER FEE We charge a fee for this optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.60% of the greater of your contract value or the minimum contract accumulation value on your contract anniversary. We prorate this fee among the subaccounts and the fixed account (if applicable) in the same proportion as your interest in each bears to your total contract value, less any amounts invested in the Special DCA account. Such fee is only deducted from any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. The fee will only be deducted from the subaccounts in Washington. We will modify this prorated approach to comply with state regulations where necessary. Once you elect the Accumulation Benefit rider, you may not cancel it and the fee will continue to be deducted through the end of the waiting period or when annuity payouts begin. If the contract is terminated for any reason or when annuity payouts begin, we will deduct the fee, adjusted for the number of calendar days coverage was in place since we last deducted the fee. Currently, the Accumulation Benefit rider charge does not vary with the model portfolio selected; however, we reserve the right to increase this charge and/or charge a separate rider fee for each model portfolio for new contract holders. The Accumulation Benefit rider fee will not exceed a maximum charge of 2.50%. -------------------------------------------------------------------------------- 37 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS We will not change the Accumulation Benefit rider charge after the rider effective date unless: (a) you choose the annual Elective Step Up after we have exercised our rights to increase the rider charge; (b) you change your model portfolio after we have exercised our rights to increase the rider charge; (c) you change your model portfolio after we have exercised our rights to charge a separate rider charge for each model portfolio. If you elect to change your model portfolio after we have exercised our right to increase the fee we charge for this rider, or after we have exercised our right to establish fees for this rider which vary by model portfolio, the increase in fees we charge for this rider will become effective on the contract anniversary following your change of model portfolio. Any model portfolio changes on the contract anniversary will have the new charge effective on that contract anniversary. Also, in the event you change your model portfolio twice in the same contract year (see "Asset Allocation Program" and "Portfolio Navigator Asset Allocation Program"), the fee we charge for this rider will be the greatest fee applicable to any model portfolio which you have selected during the contract year. If you choose the Elective Step Up or change your model portfolio after we have exercised our rights to increase the rider charge as described above, you will pay the charge that is in effect on the valuation date we receive your written request to step up or change your model portfolio. For Elective Step Ups, this change will be in effect for the entire contract year. (1) Available if you are 80 or younger at the rider effective date. You must select a model portfolio with this rider (see "Portfolio Navigator Asset Allocation Program"). Not available with Withdrawal Benefit. WITHDRAWAL BENEFIT RIDER FEE THIS FEE INFORMATION APPLIES TO BOTH RIDER A AND RIDER B (SEE "OPTIONAL BENEFITS"). We charge a fee for this optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.60% of your contract value on your contract anniversary. We prorate this fee among the subaccounts and the fixed account (if applicable) in the same proportion as your interest in each bears to your total contract value, less any amounts invested in the GPAs and in the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. The fee will only be deducted from the subaccounts in Washington. We will modify this prorated approach to comply with state regulations where necessary. (1) Available if you are 80 or younger at the rider effective date and age 60 to 80 if the contract is a TSA. You must select a model portfolio with this rider (see "Asset Allocation Program" and "Portfolio Navigator Asset Allocation Program"). Once you elect the Withdrawal Benefit, you may not cancel it and the fee will continue to be deducted until the contract is terminated or annuity payouts begin. If the contract is terminated for any reason or when annuity payouts begin, we will deduct the Withdrawal Benefit fee, adjusted for the number of calendar days coverage was in place since we last deducted the fee. If the Remaining Benefit Amount (RBA) goes to zero but the contract value has not been depleted, you will continue to be charged. We reserve the right to change the fee for this rider up to a maximum of 2.50% for new contract owners. However, any change to the rider fee will only apply to existing contract owners if: (a) you choose the annual Elective Step Up after we have exercised our rights to increase the rider charge; (b) you change your model portfolio after we have exercised our rights to increase the rider charge; (c) you change your model portfolio after we have exercised our rights to charge a separate rider charge for each model portfolio. We reserve the right to charge a fee that varies by the model portfolio selected. If you elect to change your model portfolio after we have exercised our right to increase the fee we charge for this rider, or after we have exercised our right to establish fees for this rider which vary by model portfolio, the increase in fees we charge for this rider will become effective on the contract anniversary following your change of model portfolio. Any model portfolio changes on the contract anniversary will have the new charge effective on that contract anniversary. Also, in the event you change your model portfolio twice in the same contract year (see "Asset Allocation Program" and "Portfolio Navigator Asset Allocation Program"), the fee we charge for this rider will be the greatest fee applicable to any model portfolio which you have selected during the contract year. If you choose an Elective Step up, you will pay the fee we then charge. If you choose an Elective Step up on the first contract anniversary, any increase in fees we charge for this rider for the Step up will not become effective until the third contract year. In the event of more than one change in model portfolio and/or an Elective Step up occurring in the same contract year, the fees we charge for this rider will be the highest fee applicable to any of these changes. -------------------------------------------------------------------------------- 38 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ROPP RIDER FEE We charge a fee for this optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.20% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. In this case, we prorate the fee among all accounts in the same proportion your interest in each account bears to your total contract value. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.30%. If the contract is terminated for any reason, we will deduct the charge at that time, adjusted for the number of calendar days coverage was in effect during the year. (1) Available if you are 76 or older at the rider effective date. ROPP is included in the standard death benefit if you are age 75 or younger on the contract effective date at no additional cost. May not be available in all states. MAV RIDER FEE We charge a fee for this optional feature only if you select it.(2) If selected, we deduct an annual fee of 0.25% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. In this case, we prorate the fee among all accounts in the same proportion your interest in each account bears to your total contract value. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.35%. If the contract is terminated for any reason, we will deduct the charge at that time, adjusted for the number of calendar days coverage was in effect during the year. (2) Available if you are 75 or younger at the rider effective date. Not available with 5-Year MAV. May not be available in all states. 5-YEAR MAV RIDER FEE We charge a fee for this optional feature only if you select it.(3) If selected, we deduct an annual fee of 0.10% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. In this case, we prorate the fee among all accounts in the same proportion your interest in each account bears to your total contract value. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.20%. If the contract is terminated for any reason, we will deduct the charge at that time, adjusted for the number of calendar days coverage was in effect during the year. (3) Available if you are 75 or younger at the rider effective date. Not available with MAV. May not be available in all states. EEB RIDER FEE We charge a fee for this optional feature only if you select it.(4) If selected, we deduct an annual fee of 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. In this case, we prorate the fee among all accounts in the same proportion your interest in each account bears to your total contract value. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.40%. If the contract is terminated for any reason, we will deduct the charge at that time, adjusted for the number of calendar days coverage was in effect during the year. (4) Available if you are 75 or younger at the rider effective date. Not available with EEP. May not be available in all states. -------------------------------------------------------------------------------- 39 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS EEP RIDER FEE We charge a fee for this optional feature only if you select it.(5) If selected, we deduct an annual fee of 0.40% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed accounts in the same proportion your interest in each account bears to your total contract value, less amounts invested in the GPAs and the Special DCA account. Such fee is only deducted from GPAs and any Special DCA account if insufficient amounts are available in the fixed account and the subaccounts. In this case, we prorate the fee among all accounts in the same proportion your interest in each account bears to your total contract value. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.50%. If the contract is terminated for any reason, we will deduct the charge at that time, adjusted for the number of calendar days coverage was in effect during the year. (5) Available if you are 75 or younger at the rider effective date. Not available with EEB. May not be available in all states. EEP is only available on contracts purchased through a direct transfer or exchange of another annuity or a life insurance policy. RIDER COMBINATION DISCOUNT A fee discount of 0.05% applies if you purchase 5-Year MAV with either EEB or EEP. A fee discount of 0.10% applies if you purchase MAV with either EEB or EEP. PN RIDER FEE We charge a fee for this optional feature only if you select it.(6) This fee covers our internal administrative costs for providing this service. A portion of this fee is paid to an unaffiliated third party service provider for the design and maintenance of the program (see "Making the Most of Your Contract -- Portfolio Navigator Asset Allocation Program"). If selected, we deduct an annual fee of 0.10% of your contract value excluding amounts allocated to the Special DCA account, on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and the fixed account less any excluded accounts in the same proportion your interest in each account bears to your total contract value, less any excluded accounts (see "Making the Most of Your Contract -- Portfolio Navigator Asset Allocation Program"). The fee will only be deducted from the subaccounts in Washington. We reserve the right to increase the fee for this rider after the tenth rider anniversary to a maximum of 0.20%. If we allow you to add the rider other than on a contract anniversary, we reserve the right to adjust the rider fee for the number of calendar days coverage was in place. If the rider terminates for any reason other than on a contract anniversary, we reserve the right to deduct this fee at that time and adjust it for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary, we will deduct this fee on that anniversary. This fee does not apply after annuity payouts begin. (6) We do not charge this fee and you may not discontinue your participation if you are required to participate in the PN program because you purchased an optional Accumulation Benefit or Withdrawal Benefit rider. FUND FEES AND EXPENSES There are deductions from and expenses paid out of the assets of the funds that are described in the prospectuses for those funds. (see "Annual Operating Expenses of the Funds"). PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon your state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you surrender your contract. -------------------------------------------------------------------------------- 40 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VALUING YOUR INVESTMENT We value your accounts as follows: GPA We value the amounts you allocate to the GPA directly in dollars. The GPA value equals: - the sum of your purchase payments and purchase payment credits allocated to the GPA; - plus any amounts transferred to the GPA from the fixed account or subaccounts; - plus interest credited; - minus any amounts transferred from the GPA to the fixed account or any subaccount; - minus any amounts deducted for charges or surrenders; - plus or minus any applicable MVA; and/or - minus any remaining portion of fees where the values of the fixed account and the subaccounts are insufficient to cover those fees. FIXED ACCOUNT We value the amounts you allocate to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and purchase payment credits and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges) and amounts transferred out; - minus any prorated portion of the contract administrative charge; - minus any prorated portion of the ROPP rider fee (if selected); - minus any prorated portion of the MAV rider fee (if selected); - minus any prorated portion of the 5-Year MAV rider fee (if selected); - minus any prorated portion of the EEB rider fee (if selected); - minus any prorated portion of the EEP rider fee (if selected); - minus any prorated portion of the Accumulation Benefit rider fee (if selected)*; - minus any prorated portion of the Withdrawal Benefit rider fee (if selected)*; and - minus any prorated portion of the PN rider fee (if selected)*. * The fee can only be deducted from the subaccounts in Washington. SPECIAL DCA ACCOUNT We value the amounts you allocate to the Special DCA account directly in dollars. The Special DCA account value equals: - the sum of your purchase payments and purchase payment credits allocated to the Special DCA account; - plus interest credited; - minus the sum of amounts surrendered (including any applicable surrender charges); - minus amounts transferred out; and - minus any remaining portion of fees where the values of the fixed account and the subaccounts are insufficient to cover those fees. SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts or we apply any purchase payment credits to a subaccount, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, we subtract a certain number of accumulation units from your contract each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge, a surrender charge or fee for any optional riders with annual charges (if applicable). The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: -------------------------------------------------------------------------------- 41 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - any purchase payment credits allocated to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; - surrender charges; and a deduction of: - a prorated portion of the contract administrative charge; - a prorated portion of the ROPP rider fee (if selected); - a prorated portion of the MAV rider fee (if selected); - a prorated portion of the 5-Year MAV rider fee (if selected); - a prorated portion of the EEB rider fee (if selected); - a prorated portion of the EEP rider fee (if selected); - a prorated portion of the Accumulation Benefit rider fee (if selected); - a prorated portion of the Withdrawal Benefit rider fee (if selected); and/or - a prorated portion of the PN rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in fund net asset value; - fund dividends distributed to the subaccounts; - fund capital gains or losses; - fund operating expenses; and/or - mortality and expense risk fees. -------------------------------------------------------------------------------- 42 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). Automated transfers from the fixed account to the subaccounts under automated dollar-cost averaging may not exceed an amount that, if continued, would deplete the fixed account within 12 months. For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. You may not set up an automated transfer to or from the GPAs. You may not set up an automated transfer to the fixed account or the Special DCA account. You may not set up an automated transfer if the Withdrawal Benefit, Accumulation Benefit or PN is selected. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER AMOUNT ACCUMULATION OF UNITS MONTH INVESTED UNIT VALUE PURCHASED By investing an equal number Jan $ 100 $ 20 5.00 of dollars each month ... Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ----------> Apr 100 15 6.67 May 100 16 6.25 June 100 18 5.56 July 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high ... ----------> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. -------------------------------------------------------------------------------- 43 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS SPECIAL DOLLAR-COST AVERAGING (SPECIAL DCA) PROGRAM If your purchase payment is at least $10,000, you can choose to participate in the Special DCA program (if available). There is no charge for the Special DCA program. Under the Special DCA program, you can allocate a new purchase payment and any applicable purchase payment credit to a six-month Special DCA account according to the following rules: - You may only allocate a new purchase payment of at least $10,000 to a Special DCA account. - You cannot transfer existing contract values into a Special DCA account. - Each Special DCA arrangement consists of six monthly transfers that begin seven days after we receive your purchase payment. - We make monthly transfers of your Special DCA account value into the subaccounts you select. - You may not use the fixed account or the Special DCA account as a destination for the Special DCA monthly transfer. (Exception: if an asset allocation program is in effect, and the model portfolio you have selected includes the fixed account, amounts will be transferred from the Special DCA account to the fixed account according to the allocation percentage established for the model portfolio you have selected.) - We will change the interest rate on each Special DCA account from time to time at our discretion based on factors that include the competition and the interest rate we are crediting to the fixed account at the time of the change. - We credit each Special DCA account with the current guaranteed annual rate that is in effect on the date we receive your purchase payment. However, we credit this annual rate over the length of the Special DCA arrangement on the balance remaining in your Special DCA account. Therefore, the net effective interest rate you receive is less than the stated annual rate. - We do not credit this interest after we transfer the value out of the Special DCA account into the accounts you selected. - Once you establish a Special DCA account, you cannot allocate additional purchase payments to it. However, you may establish another new Special DCA account (if available on the valuation date we receive your payment) and allocate new purchase payments to it. - Funding from multiple sources are treated as individual purchase payments and a new Special DCA account is opened for each payment (if the Special DCA accounts are available on the valuation date we receive your payment). - You may terminate your participation in the Special DCA program at any time. If you do, we will transfer the remaining balance from your Special DCA account to the fixed account. Interest will be credited according to the rates in effect on the fixed account and not the rate that was in effect on the Special DCA account. (Exception: if an asset allocation program is in effect when you elect to end your participation in the Special DCA program, and the asset allocation program does not end at the same time, we will transfer the remaining balance to the model portfolio which is in effect). - We can modify the terms or discontinue the Special DCA program at any time. Any modifications will not affect any purchase payments that are already in a Special DCA account. For more information on the Special DCA program, contact your sales representative. The Special DCA program does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semi-annually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the GPAs, fixed account or the Special DCA account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing or by any other method acceptable to us, to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. Different rules apply to asset rebalancing under an asset allocation program (see "Asset Allocation Program" and "Portfolio Navigator Asset Allocation Program" below). -------------------------------------------------------------------------------- 44 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ASSET ALLOCATION PROGRAM If you purchased an optional Withdrawal Benefit rider, you are required to participate in our asset allocation program under the terms of the rider. The asset allocation program is only available if you purchased the optional Withdrawal Benefit rider. There is no additional charge for the asset allocation program. This asset allocation program allows you to allocate your contract value to a model portfolio that consists of subaccounts and may include the fixed account and certain GPAs, (if available under the asset allocation program) which represent various asset classes. By spreading your contract value among these various asset classes, you may be able to reduce the volatility in your contract value, but there is no guarantee that this will occur. Asset allocation does not guarantee that your contract will increase in value nor will it protect against a decline in value if market prices fall. You are responsible for determining which model portfolio is best for you. Your sales representative can help you make this determination. In addition, your sales representative may provide you with a questionnaire, a tool that can help you determine which model portfolio is suited to your needs based on factors such as your investment goals, your tolerance for risk, and how long you intend to invest. Currently, there are five model portfolios ranging from conservative to aggressive. You may not use more than one model portfolio at a time. You are allowed to request a change to another model portfolio twice per contract year. Each model portfolio specifies allocation percentages to each of the subaccounts, the fixed account and/or any GPAs that make up that model portfolio. By participating in the program, you authorize us to invest your contract value in the subaccounts, the fixed account and/or any GPAs (if included) according to the allocation percentages stated for the specific model portfolio you have selected. You also authorize us to automatically rebalance your contract value quarterly in order to maintain alignment with the allocation percentages specified in the model portfolio. Special rules will apply to the GPAs if they are included in a model portfolio. Under these rules: - no MVA will apply when rebalancing occurs within a specific model portfolio (but an MVA will apply if you elect to transfer to a new model portfolio); - no MVA will apply if you reallocate your contract value according to an updated model portfolio; and - no MVA will apply when you elect an annuity payout plan while your contract value is invested in a model portfolio (see "Guarantee Period Accounts -- Market Value Adjustment"). If you initially allocate qualifying purchase payments and applicable purchase payment credits to the Special DCA account, when available, (see "The Special DCA Account") and you are participating in the asset allocation program, we will make monthly transfers from the Special DCA account into the model portfolio you have chosen. You may not discontinue your participation in the asset allocation program; however, you have the right at all times to make a full surrender of your contract value (see "Surrenders"). Because the Withdrawal Benefit rider requires that your contract value be invested in one of the model portfolios for the life of the contract, and you cannot terminate the Withdrawal Benefit rider once you have selected it, you must terminate your contract by requesting a full surrender if you no longer wish to participate in any of the model portfolios. Surrender charges and tax penalties may apply. THEREFORE, YOU SHOULD NOT SELECT THE WITHDRAWAL BENEFIT RIDER IF YOU DO NOT INTEND TO CONTINUE PARTICIPATING IN ONE OF THE MODEL PORTFOLIOS FOR THE LIFE OF THE CONTRACT. Under the asset allocation program, the subaccounts, the fixed account and/or any GPAs (if included) that make up the model portfolio you selected and the allocation percentages to those subaccounts, the fixed account and/or any GPAs (if included) will not change unless we adjust the composition of the model portfolio to reflect the liquidation, substitution or merger of an underlying fund, a change of investment objective by an underlying fund or when an underlying fund stops selling its shares to the variable account. We reserve the right to change the terms and conditions of the asset allocation program upon written notice to you. If permitted under applicable securities law, we reserve the right to: - reallocate your current model portfolio to an updated version of your current model portfolio; or - substitute a fund of funds for your current model portfolio. We also reserve the right to discontinue the asset allocation program. We will give you 30 days' written notice of any such change. -------------------------------------------------------------------------------- 45 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS PORTFOLIO NAVIGATOR ASSET ALLOCATION PROGRAM The Portfolio Navigator Asset Allocation Program (PN program) described in this section replaces the previously offered asset allocation program described above for owners of all contracts purchased on or after Nov. 1, 2005 and for contract owners who choose to move from the previously offered asset allocation program to the PN program or who add the PN program on or after Nov. 1, 2005. The PN program is available for nonqualified annuities and for qualified annuities except under 401(k) and 401(a) plans. The PN program allows you to allocate your contract value to a PN program model portfolio that consists of subaccounts, each of which invests in a fund with a particular investment objective (underlying fund), and may include the fixed account and certain GPAs (if available under the PN program) that represent various asset classes (allocation options). The PN program also allows you to periodically update your model portfolio or transfer to a new model portfolio. You are required to participate in the PN program if your contract includes an optional Accumulation Benefit rider or Withdrawal Benefit rider. If your contract does not include one of these riders, you also may participate in the PN program by purchasing a separate optional rider for an additional charge. You should review any PN program information, including the terms of the PN program, carefully. Your sales representative can provide you with additional information and can answer questions you may have on the PN program. SERVICE PROVIDERS TO THE PN PROGRAM. RiverSource Investments, LLC, an affiliate of ours, serves as non-discretionary investment adviser for the PN program solely in connection with the development of the model portfolios and periodic updates of the model portfolios. In this regard, RiverSource Investments enters into an investment advisory agreement with each contract owner participating in the PN program. In its role as investment adviser to the PN program, RiverSource Investments relies upon the recommendations of a third party service provider. In developing and updating the model portfolios, RiverSource Investments reviews the recommendations, and the third party's rationale for the recommendations, with the third party service provider. RiverSource Investments also conducts periodic due diligence and provides ongoing oversight with respect to the process utilized by the third party service provider. For more information on RiverSource Investments' role as investment adviser for the PN program, please see the Portfolio Navigator Asset Allocation Program Investment Adviser Disclosure Document, which is based on Part II of RiverSource Investment's Form ADV, the SEC investment adviser registration form. The Disclosure Document is delivered to contract owners at the time they enroll in the PN program. Currently, the PN program model portfolios are designed and periodically updated for RiverSource Investments by Morningstar Associates, LLC, a registered investment adviser and wholly-owned subsidiary of Morningstar, Inc. RiverSource Investments may replace Morningstar Associates and may hire additional firms to assist with the development and periodic updates of the model portfolios in the future. Also, RiverSource Investments may elect to develop and periodically update the model portfolios without the assistance of a third party service provider. The criteria used in developing and updating the model portfolios do not guarantee or predict future performance. Neither Morningstar Associates nor RiverSource Investments, in connection with their respective roles, provides any individualized investment advice to contract owners regarding the application of a particular model portfolio to his or her circumstances. Contract owners are solely responsible for determining whether any model portfolio is appropriate. We identify to Morningstar Associates the universe of allocation options that can be included in the model portfolios and, in limited circumstances, underlying funds of such allocation options (the universe of allocation options). The universe of allocation options may not include all allocation options available under your contract. We may modify from time to time such universe of allocation options. These modifications may reflect instructions from, or respond to actions taken by, any party making an allocation option available to us. For example, we may modify the universe of allocation options in response to the liquidation, merger or other closure of a fund. Once we identify this universe of allocation options to Morningstar Associates, neither RiverSource Investments, nor any of its affiliates, including us, dictates to Morningstar Associates the number of allocation options that should be included in a model portfolio, the percentage that any allocation option represents in a model portfolio, or whether a particular allocation option may be included in a model portfolio. In identifying the universe of allocation options, we and our affiliates, including RiverSource Investments, are subject to competing interests that may influence the allocation options we propose. These competing interests involve compensation that RiverSource Investments or its affiliates may receive as the investment adviser to the RiverSource Variable Portfolio Funds and certain allocation options as well as compensation we or an affiliate of ours may receive for providing services in connection with the RiverSource Variable Portfolio Funds and such allocation options or their underlying funds. These competing interests also involve compensation we or an affiliate of ours may receive if certain funds that RiverSource Investments does not advise are included in model portfolios. -------------------------------------------------------------------------------- 46 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS As an affiliate of RiverSource Investments, the investment adviser to the RiverSource Variable Portfolio Funds and certain allocation options, we may have an incentive to identify the RiverSource Variable Portfolio Funds and such allocation options for consideration as part of a model portfolio over unaffiliated funds. In addition, RiverSource Investments, in its capacity as investment adviser to the RiverSource Variable Portfolio Funds, monitors the performance of the RiverSource Variable Portfolio Funds. In this role, RiverSource Investments may, from time to time, recommend certain changes to the board of directors of the RiverSource Variable Portfolio Funds. These changes may include, but not be limited to, a change in portfolio management or fund strategy or the closure or merger of a RiverSource Variable Portfolio Fund. RiverSource Investments also may believe that certain RiverSource Variable Portfolio Funds may benefit from additional assets or could be harmed by redemptions. All of these factors may impact RiverSource Investment's view regarding the composition and allocation of a model portfolio. RiverSource Investments' role as investment adviser to the PN program in connection with the development and updating of the model portfolios, and our identification of the universe of allocation options to Morningstar Associates for consideration, may influence the allocation of assets to or away from allocation options that are affiliated with, or managed or advised by RiverSource Investments or its affiliates. RiverSource Investments, we or another affiliate of ours may receive higher compensation from certain unaffiliated funds that RiverSource Investments does not advise or manage. (See "Expense Summary -- Annual Operating Expenses of the Funds.") Therefore, we may have an incentive to identify these unaffiliated funds to Morningstar Associates for inclusion in the model portfolios. In addition, we or an affiliate of ours may receive higher compensation from the fixed account or certain GPAs than from other allocation options. We therefore may have an incentive to identify these allocation options to Morningstar Associates for inclusion in the model portfolios. Some officers and employees of RiverSource Investments are also officers or employees of us or our affiliates which may be involved in, and/or benefit from, your participation in the PN program. These officers and employees may have an incentive to make recommendations, or take actions, that benefit one or more of the entities they represent, rather than participants in the PN program. PARTICIPATING IN THE PN PROGRAM. If you choose to participate in the PN program, you are responsible for determining which model portfolio is best for you. Your sales representative can help you make this determination. In addition, your sales representative may provide you with a questionnaire, a tool to help define your investing style which is based on factors such as your investment goals, your tolerance for risk and how long you intend to invest. Your responses to the questionnaire can help determine which model portfolio most closely matches your investing style. While the scoring of the questionnaire is objective, there is no guarantee that your responses to the questionnaire accurately reflect your tolerance for risk. Similarly, there is no guarantee that the asset mix reflected in the model portfolio you select after completing the questionnaire is appropriate to your ability to withstand investment risk. Neither IDS Life nor RiverSource Investments is responsible for your decision to participate in the PN program, your selection of a specific model portfolio or your decision to change to an updated or different model portfolio. Currently, there are five PN model portfolios ranging from conservative to aggressive. You may not use more than one model portfolio at a time. Each model portfolio specifies allocation percentages to each of the subaccounts, the fixed account and/or any GPAs that make up that model portfolio. By participating in the PN program, you instruct us to invest your contract value in the subaccounts, the fixed account and/or any GPAs (if included) according to the allocation percentages stated for the specific model portfolio you have selected. By participating in the PN program, you also instruct us to automatically rebalance your contract value quarterly in order to maintain alignment with these allocation percentages. Special rules apply to the GPAs if they are included in a model portfolio. Under these rules: - no MVA will apply when rebalancing occurs within a specific model portfolio (but an MVA may apply if you elect to transfer to a new model portfolio); - no MVA will apply if you reallocate your contract value according to an updated model portfolio; and - no MVA will apply when you elect an annuity payout plan while your contract value is invested in a model portfolio. (See "Guarantee Period Accounts -- Market Value Adjustment.") If you initially allocate qualifying purchase payments and applicable purchase payment credits to the Special DCA account, when available (see "The Special DCA Account"), and you are participating in the PN program, we will make monthly transfers in accordance with your instructions from the Special DCA account (and subaccounts we may choose to allow for DCA arrangements which are not part of a model portfolio -- "excluded accounts") into the model portfolio you have chosen. -------------------------------------------------------------------------------- 47 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS Each model portfolio is evaluated periodically by Morningstar Associates, which may then provide updated recommendations to RiverSource Investments. As a result, the model portfolios may be updated from time to time (typically annually) with new allocation options and allocation percentages. When these reassessments are completed and changes to the model portfolios occur, you will receive a reassessment letter. This reassessment letter will notify you that the model portfolio has been reassessed and that, unless you instruct us not to do so, your contract value, less amounts allocated to the Special DCA account, is scheduled to be reallocated according to the updated model portfolio. The reassessment letter will specify the scheduled reallocation date and will be sent to you at least 30 days prior to this date. Based on the written authorization you provided when you enrolled in the PN program, if you do not notify us otherwise, you will be deemed to have instructed us to reallocate your contract value, less amounts allocated to the Special DCA account, according to the updated model portfolio. If you do not want your contract value, less amounts allocated to the Special DCA account, to be reallocated according to the updated model portfolio, you must provide written or other authorized notification as specified in the reassessment letter. In addition to this periodic reassessment and reallocation of the model portfolios, you may also request a change to your model portfolio up to twice per contract year by written request on an authorized form or by another method agreed to by us. Such changes include changing to a different model portfolio at any time or requesting to reallocate according to the updated version of your existing model portfolio other than according to the reassessment process described above. However, if your contract includes an optional Accumulation Benefit or Withdrawal Benefit rider and you make such change (other than a scheduled periodic reallocation), we may charge you a higher fee for your optional Accumulation Benefit or Withdrawal Benefit rider. RISKS. Asset allocation through the PN program does not guarantee that your contract will increase in value nor will it protect against a decline in value if market prices fall. By spreading your contract value among various allocation options under the PN program, you may be able to reduce the volatility in your contract value, but there is no guarantee that this will happen. Although each model portfolio is intended to optimize returns given various levels of risk tolerance, a model portfolio may not perform as intended. A model portfolio, the allocation options and market performance may differ in the future from historical performance and from the assumptions upon which the model portfolio is based, which could cause the model portfolio to be ineffective or less effective in reducing volatility. Investment performance of your contract value could be better or worse by participating in the PN program than if you had not participated. A model portfolio may perform better or worse than any single fund or allocation option or any other combination of funds or allocation options. The performance of a model portfolio depends on the performance of the component funds. In addition, the timing of your investment and automatic rebalancing may affect performance. Quarterly rebalancing and periodic updating of the model portfolios can cause their component funds to incur transactional expenses to raise cash for money flowing out of the funds or to buy securities with money flowing into the funds. Moreover, a large outflow of money from the funds may increase the expenses attributable to the assets remaining in the funds. These expenses can adversely affect the performance of the relevant funds and of the model portfolios. In addition, when a particular fund needs to buy or sell securities due to quarterly rebalancing or periodic updating of a model portfolio, it may hold a large cash position. A large cash position could detract from the achievement of the fund's investment objective in a period of rising market prices; conversely, a large cash position would reduce the fund's magnitude of loss in the event of falling market prices and provide the fund with liquidity to make additional investments or to meet redemptions. (See also the description of competing interests in the section titled "Service Providers to the PN Program" above.) For additional information regarding the risks of investing in a particular fund, see that fund's prospectus. We reserve the right to change the terms and conditions of the PN program upon written notice to you. This includes the right to offer more or fewer model portfolios and to vary the allocation options and/or allocation percentages within those model portfolios. If permitted under applicable securities law, we reserve the right to substitute a fund of funds for your current model portfolio. We also reserve the right to discontinue the PN program. We will give you 30 days' written notice of any such change. In addition, RiverSource Investments has the right to terminate its investment advisory agreement with you upon 30 days' written notice. If RiverSource Investments terminates its investment advisory agreement with you and other participants in the PN program, we would either have to find a replacement investment adviser or terminate the PN program, unless otherwise permitted by applicable law, regulations or positions of the SEC staff. -------------------------------------------------------------------------------- 48 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS PN PROGRAM UNDER THE ACCUMULATION BENEFIT RIDER AND WITHDRAWAL BENEFIT RIDER If you purchase the optional Accumulation Benefit rider or the optional Withdrawal Benefit rider, you are required to participate in the PN program under the terms of each rider. There is no additional charge for the PN program when used with either of these optional riders. - ACCUMULATION BENEFIT RIDER: You cannot terminate the Accumulation Benefit rider. As long as the Accumulation Benefit rider is in effect, your contract value must be invested in one of the model portfolios. The Accumulation Benefit rider automatically ends at the end of the waiting period as does your participation in the PN program. At all other times, if you do not want to participate in any of the model portfolios, you must terminate your contract by requesting a full surrender. Surrender charges and tax penalties may apply. THEREFORE, YOU SHOULD NOT SELECT THE ACCUMULATION BENEFIT RIDER IF YOU DO NOT INTEND TO CONTINUE PARTICIPATING IN THE PN PROGRAM (AS IT NOW EXISTS OR AS WE MAY MODIFY IT IN THE FUTURE) UNTIL END OF WAITING PERIOD. - WITHDRAWAL BENEFIT RIDER: Because the Withdrawal Benefit rider requires that your contract value be invested in one of the model portfolios for the life of the contract, and you cannot terminate the Withdrawal Benefit rider once you have selected it, you must terminate your contract by requesting a full surrender if you do not want to participate in any of the model portfolios. Surrender charges and tax penalties may apply. THEREFORE, YOU SHOULD NOT SELECT THE WITHDRAWAL BENEFIT RIDER IF YOU DO NOT INTEND TO CONTINUE PARTICIPATING IN THE PN PROGRAM (AS IT NOW EXISTS OR AS WE MAY MODIFY IT IN THE FUTURE) FOR THE LIFE OF THE CONTRACT. OPTIONAL PN PROGRAM RIDER If you do not select the optional Accumulation Benefit rider or the optional Withdrawal Benefit rider with your contract, you may elect to participate in the PN program by adding the optional Portfolio Navigator Model Portfolio Rider (PN rider) to your contract for an additional charge (see "Charges"). Unless we agree otherwise, you may only add the PN rider at contract issue. You may cancel your participation in the PN program at any time by giving us written notice. However, you cannot elect to participate in the PN program again until the next contract anniversary unless we agree otherwise. If you terminate the PN rider other than on a contract anniversary, we reserve the right to deduct the PN rider fee at that time and adjust it for the number of calendar days the rider was in effect during the year. Similarly, if we discontinue the PN program, we reserve the right to deduct the PN program rider fee at that time and adjust it for the number of calendar days the rider was in effect during the year. Upon cancellation, automated rebalancing associated with the PN program will end, and there will be no additional charges for the PN rider. You will also cancel the PN rider if you initiate transfers other than transfers to one of the current model portfolios or transfers from a Special DCA account (see "Special Dollar-Cost Averaging (Special DCA) Program") or an excluded account. Partial surrenders do not cancel the PN rider. The PN rider will terminate on the date you make a full surrender from your contract or on your settlement date. TRANSFERRING BETWEEN ACCOUNTS The transfer rights discussed in this section do not apply while a model portfolio is in effect. You may transfer contract value from any one subaccount, GPAs or the fixed account, to another subaccount before annuity payouts begin. Certain restrictions apply to transfers involving the GPAs and the fixed account. When your request to transfer will be processed depends on when we receive it: - If we receive your transfer request at our home office before the close of business, we will process your transfer using the accumulation unit value we calculate on the valuation date we received your transfer request. - If we receive your transfer request at our home office at or after the close of business, we will process your transfer using the accumulation unit value we calculate on the next valuation date after we received your transfer request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. Transfers out of the GPAs will be subject to an MVA if done more than 30 days before the end of the guarantee period. We may suspend or modify transfer privileges at any time. WE SEEK TO PREVENT MARKET TIMING. MARKET TIMING IS FREQUENT OR SHORT-TERM TRADING ACTIVITY. WE DO NOT ACCOMMODATE SHORT-TERM TRADING ACTIVITIES. DO NOT BUY A CONTRACT IF YOU WISH TO USE SHORT-TERM TRADING STRATEGIES TO MANAGE YOUR INVESTMENT. THE MARKET TIMING POLICIES AND PROCEDURES DESCRIBED BELOW APPLY TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN THE CONTRACT. THE UNDERLYING FUNDS IN WHICH THE SUBACCOUNTS INVEST HAVE THEIR OWN MARKET TIMING POLICIES AND PROCEDURES. THE MARKET TIMING POLICIES OF THE UNDERLYING FUNDS MAY BE MORE OR LESS RESTRICTIVE THAN THE MARKET TIMING POLICIES AND PROCEDURES WE APPLY TO TRANSFERS AMONG THE SUBACCOUNTS OF THE CONTRACT, AND MAY INCLUDE REDEMPTION FEES. WE RESERVE THE RIGHT TO MODIFY OUR MARKET TIMING POLICIES AND PROCEDURES AT ANY TIME WITHOUT PRIOR NOTICE TO YOU. -------------------------------------------------------------------------------- 49 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS Market timing may hurt the performance of an underlying fund in which a subaccount invests in several ways, including but not necessarily limited to: - diluting the value of an investment in an underlying fund in which a subaccount invests; - increasing the transaction costs and expenses of an underlying fund in which a subaccount invests; and - preventing the investment adviser(s) of an underlying fund in which a subaccount invests from fully investing the assets of the fund in accordance with the fund's investment objectives. Market timing can reduce the value of your investment in the contract. If market timing causes the returns of an underlying fund to suffer, contract value you have allocated to a subaccount that invests in that underlying fund will be lower, too. Market timing can cause you, any joint owner of the contract and your beneficiary(ies) under the contract a financial loss. IN ORDER TO HELP PROTECT YOU AND THE UNDERLYING FUNDS FROM THE POTENTIALLY HARMFUL EFFECTS OF MARKET TIMING ACTIVITY, WE APPLY THE FOLLOWING MARKET TIMING POLICY TO DISCOURAGE FREQUENT TRANSFERS OF CONTRACT VALUE AMONG THE SUBACCOUNTS OF THE VARIABLE ACCOUNT: We try to distinguish market timing from transfers that we believe are not harmful, such as periodic rebalancing for purposes of asset allocation or dollar-cost averaging. There is no set number of transfers that constitutes market timing. Even one transfer in related accounts may be market timing. We seek to restrict the transfer privileges of a contract owner who makes more than three subaccount transfers in any 90 day period. We also reserve the right to refuse any transfer request, if, in our sole judgment, the dollar amount of transfer request would adversely affect unit values. If we determine, in our sole judgment, that your transfer activity constitutes market timing, we may modify, restrict or suspend your transfer privileges to the extent permitted by applicable law, which may vary based on the state law that applies to your contract and the terms of your contract. These restrictions or modifications may include, but not be limited to: - requiring transfer requests to be submitted only by first-class U.S. mail; - not accepting hand-delivered transfer requests or requests made by overnight mail; - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney; - limiting the dollar amount that you may transfer at any one time; or - suspending the transfer privilege. Subject to applicable state law and the terms of each contract, we will apply the policy described above to all contract owners uniformly in all cases. We will notify you in writing after we impose any modification, restriction or suspension of your transfer rights. We cannot guarantee that we will be able to identify and restrict all market timing activity. Because we exercise discretion in applying the restrictions above, we cannot guarantee that we will be able to restrict all market timing activity. In addition, state law and the terms of some contracts may prevent us from stopping certain market timing activity. Market timing activity that we are unable to identify and/or restrict may impact the performance of the underlying funds and may result in lower contract values. IN ADDITION TO THE MARKET TIMING POLICY DESCRIBED ABOVE, WHICH APPLIES TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT, YOU SHOULD CAREFULLY REVIEW THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS. THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS MAY BE MATERIALLY DIFFERENT THAN THOSE WE IMPOSE ON TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT AND MAY INCLUDE MANDATORY REDEMPTION FEES AS WELL AS OTHER MEASURES TO DISCOURAGE FREQUENT TRANSFERS. AS AN INTERMEDIARY FOR THE UNDERLYING FUNDS, WE ARE REQUIRED TO ASSIST THEM IN APPLYING THEIR MARKET TIMING POLICIES AND PROCEDURES TO TRANSACTIONS INVOLVING THE PURCHASE, EXCHANGE AND REDEMPTION OF FUND SHARES. THIS ASSISTANCE MAY INCLUDE BUT NOT BE LIMITED TO PROVIDING THE UNDERLYING FUND UPON REQUEST WITH YOUR SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER AND THE DETAILS OF YOUR CONTRACT TRANSACTIONS INVOLVING THE UNDERLYING FUND. AN UNDERLYING FUND, IN ITS SOLE DISCRETION, MAY INSTRUCT US AT ANY TIME TO PROHIBIT YOU FROM MAKING FURTHER TRANSFERS OF CONTRACT VALUE TO OR FROM THE UNDERLYING FUND, AND WE MUST FOLLOW THIS INSTRUCTION. WE RESERVE THE RIGHT TO ADMINISTER AND COLLECT ON BEHALF OF AN UNDERLYING FUND ANY REDEMPTION FEE IMPOSED BY AN UNDERLYING FUND. MARKET TIMING POLICIES AND PROCEDURES ADOPTED BY UNDERLYING FUNDS MAY AFFECT YOUR INVESTMENT IN THE CONTRACT IN SEVERAL WAYS, INCLUDING BUT NOT LIMITED TO: - Each fund may restrict or refuse trading activity that the fund determines, in its sole discretion, represents market timing. - Even if we determine that your transfer activity does not constitute market timing under the market timing policies described above which we apply to transfers you make under the contract, it is possible that the underlying fund's market timing policies and procedures, including instructions we receive from a fund, may require us to reject your transfer request. Orders we place to purchase fund shares for the variable account are subject to acceptance by the fund. We reserve the right to reject without prior notice to you any transfer request if the fund does not accept our order. -------------------------------------------------------------------------------- 50 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - Each underlying fund is responsible for its own market timing policies, and we cannot guarantee that we will be able to implement specific market timing policies and procedures that a fund has adopted. As a result, a fund's returns might be adversely affected, and a fund might terminate our right to offer its shares through the variable account. - Funds that are available as investment options under the contract may also be offered to other intermediaries who are eligible to purchase and hold shares of the fund, including without limitation, separate accounts of other insurance companies and certain retirement plans. Even if we are able to implement a fund's market timing policies, we cannot guarantee that other intermediaries purchasing that same fund's shares will do so, and the returns of that fund could be adversely affected as a result. Funds available as investment options under the contract that invest in securities that trade in overseas securities markets may be at greater risk of loss from market timing, as market timers may seek to take advantage of changes in the values of securities between the close of overseas markets and the close of U.S. markets. Further the risks of market timing may be greater for underlying funds that invest in securities, such as small cap stocks, high yield bonds, or municipal securities, that may be traded infrequently. FOR MORE INFORMATION ABOUT THE MARKET TIMING POLICIES AND PROCEDURES OF AN UNDERLYING FUND, THE RISKS THAT MARKET TIMING POSES TO THAT FUND, AND TO DETERMINE WHETHER AN UNDERLYING FUND HAS ADOPTED A REDEMPTION FEE, SEE THAT FUND'S PROSPECTUS. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts, or from the subaccounts to the GPAs and fixed account at any time. The amount transferred to any GPA must be at least $1,000. However, if you made a transfer from the fixed account to the subaccounts or the GPAs, you may not make a transfer from any subaccount or GPA back to the fixed account until the next contract anniversary. We reserve the right to limit transfers to the fixed account if the interest rate we are then currently crediting to the fixed account is equal to the minimum interest rate stated in the contract. - You may transfer contract values from the fixed account to the subaccounts or the GPAs once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). Transfers from the fixed account are not subject to an MVA. Currently, transfers out of the fixed account are limited to the greater of: a) 30% of the fixed account value at the beginning of the contract year, or b) the amount transferred out of the fixed account in the previous contract year, excluding any automated transfer amounts. If an automated dollar-cost averaging arrangement is established at contract issue, the 30% limitation does not apply to transfers made from the fixed account to the subaccounts for the duration of this initial arrangement. - You may transfer contract values from any GPA to the subaccounts, fixed account or other GPA any time after 60 days of transfer or payment allocation into such GPA. Transfers made more than 30 days before the end of the guarantee period will receive an MVA, which may result in a gain or loss of contract value, unless an exception applies (see "The Guarantee Period Accounts (GPAs) -- Market Value Adjustment (MVA)"). - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts or GPAs will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - You may not make a transfer to the Special DCA account. - Once annuity payouts begin, you may not make transfers to or from the GPAs or the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. When annuity payments begin, you must transfer all contract value out of any GPAs. -------------------------------------------------------------------------------- 51 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number* and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance * Failure to provide your Social Security Number or Taxpayer Identification Number may result in mandatory tax withholding on the taxable portion of the distribution. 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers or partial surrenders among your subaccounts or fixed account (if available). You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers to the GPAs, the fixed account or the Special DCA account are not allowed. - Automated transfers from the fixed account to the subaccounts under an automated dollar-cost averaging arrangement may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 7 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders not be authorized from your account by writing to us. -------------------------------------------------------------------------------- 52 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. If we receive your surrender request at our home office before the close of business, we will process your surrender using the accumulation unit value we calculate on the valuation date we received your surrender request. If we receive your surrender request at our home office at or after the close of business, we will process your surrender using the accumulation unit value we calculate on the next valuation date after we received your surrender request. We may ask you to return the contract. You may have to pay contract administrative charges, surrender charges, or any applicable optional rider charges (see "Charges") and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). Any partial surrenders you take under the contract will reduce your contract value. As a result, the value of your death benefit or any optional benefits you have elected also will be reduced. If you have elected the Withdrawal Benefit rider and your partial surrenders in any contract year exceed the permitted surrender amount under the terms of the Withdrawal Benefit rider, your benefits under the rider may be reduced (see "Optional Benefits -- Guaranteed Minimum Withdrawal Benefit"). In addition, surrenders you are required to take to satisfy the RMDs under the Code may reduce the value of certain death benefits and optional benefits (see "Taxes -- Qualified Annuities -- Required Minimum Distributions"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account, in the same proportion as your value in each account correlates to your total contract value, less any GPA or Special DCA account. We will not withdraw money for a partial surrender from any GPAs or Special DCA account you may have, unless insufficient amounts are available from your subaccounts and/or fixed account. However, you may request specifically surrender from a GPA or Special DCA account. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: -- the surrender amount includes a purchase payment check that has not cleared; -- the NYSE is closed, except for normal holiday and weekend closings; -- trading on the NYSE is restricted, according to SEC rules; -- an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or -- the SEC permits us to delay payment for the protection of security holders. -------------------------------------------------------------------------------- 53 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TSA -- SPECIAL PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The contract is not intended for use in connection with an employer sponsored 403(b) plan that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the event that the employer either by affirmative election or inadvertent action causes contributions under a plan that is subject to ERISA to be made to this contract, we will not be responsible for any obligations and requirements under ERISA and the regulations thereunder. You should consult with your employer to determine whether your 403(b) plan is subject to ERISA. The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: -- you are at least age 59 1/2; -- you are disabled as defined in the Code; -- you severed employment with the employer who purchased the contract; or -- the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. Loans will not be available if you have selected the Withdrawal Benefit or Accumulation Benefit rider. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our home office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the ROPP, MAV, 5-Year MAV, EEB, EEP, Accumulation Benefit or Withdrawal Benefit. If you change ownership of your contract, we will terminate the ROPP and EEP. This includes both the EEP Part I benefits and the EEP Part II benefits. (See the description of these terms in "Optional Benefits".) In addition, the terms of the EEB, MAV and the 5-Year MAV will change due to a change of ownership. If the new owner is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over." We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If the new owner is older than age 75, the MAV and 5-Year MAV will terminate. If the MAV or the 5-Year MAV on the date of ownership change is greater than the account value on the date of the ownership change, we will set the MAV or the 5-Year MAV equal to the account value. Otherwise, the MAV or the 5-Year MAV value will not change due to a change in ownership. The Accumulation Benefit rider and the Withdrawal Benefit rider will continue upon change of ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in similar capacity, ownership of the contract may be transferred to the annuitant. -------------------------------------------------------------------------------- 54 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon your death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If you are age 75 or younger on the date we issue the contract, the beneficiary receives the greater of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders. If you are age 76 or older on the date we issue the contract, the beneficiary receives the contract value, less any purchase payment credits subject to reversal, less a pro rata portion of rider fees. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU ARE AGE 75 OR YOUNGER ON THE CONTRACT EFFECTIVE DATE: - You purchase the contract with a payment of $20,000 on Jan. 1, 2006. - On March 1, 2007 the contract value falls to $18,000, at which point you take a $1,500 partial surrender, leaving a contract value of $16,500. We calculate the death benefit on March 1, 2007 as follows: The total purchase payments minus adjustments for partial surrenders: Total purchase payments $20,000 minus adjusted partial surrenders, calculated as: $1,500 x $20,000 = - 1,667 ---------------- -------- $18,000 for a death benefit of: $18,333 IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date that our death claim requirements are fulfilled. We will determine the contract's value using the accumulation unit value we calculate on that valuation date. The death benefit will never be less than the surrender value adjusted by the MVA formula. We pay interest, if any, at a rate no less than required by law. If requested, we will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse elects to keep the contract as owner, the following describes the standard death benefit: - If your spouse was age 75 or younger as of the date we issued the contract, the beneficiary of your spouse's contract receives the greater of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders. If your spouse was age 76 or older as of the date we issued the contract, the beneficiary of your spouse's contract receives the contract value, less any purchase payment credits subject to reversal, less a pro rata portion of rider fees. If you elected any optional contract features or riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders. If your beneficiary is not your spouse, we will pay the beneficiary in a lump sum unless you give us other written instructions. Generally, we must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year after your death, or other date as permitted by the IRS; and - the payout period does not extend beyond the beneficiary's life or life expectancy. -------------------------------------------------------------------------------- 55 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects to treat the contract as his/her own, the following describes the standard death benefit: - If your spouse was 75 or younger as of the date we issued the contract, the beneficiary of your spouse's contract receives the greater of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders. If your spouse was age 76 or older as of the date we issued the contract, the beneficiary of your spouse's contract receives the contract value, less any purchase payment credits subject to reversal, less a pro rata portion of rider fees. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. If you elected any optional contract features or riders, your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of those features or riders just as if they were purchasing a new contract. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your beneficiary does not elect a five year payout, or if your death occurs after attaining age 70 1/2, we will pay the beneficiary in a lump sum unless the beneficiary elects to receive payouts under any payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. DEATH BENEFIT PAYMENT IN A LUMP SUM: We may pay all or part of the death benefit to your beneficiary in a lump sum under either a nonqualified or qualified annuity. We will pay the death benefit by check unless your beneficiary has chosen to have the death benefit directly deposited into a checking account. OPTIONAL BENEFITS OPTIONAL DEATH BENEFITS RETURN OF PURCHASE PAYMENTS DEATH BENEFIT (ROPP) The ROPP is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greater of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS FOR THE ROPP DEATH BENEFIT PS X DB ------- CV PS = the partial surrender including any applicable surrender charge. DB = the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. The death benefit will never be less than the surrender value adjusted by the MVA formula. If this ROPP rider is available in your state and you are age 76 or older at contract issue, you may choose to add the ROPP to your contract. Generally, you must elect the ROPP at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the ROPP may be after we issue the contract according to terms determined by us and at our sole discretion. We reserve the right to discontinue offering the ROPP for new contracts. When annuity payouts begin, or if you terminate the contract for any reason other than death, this rider will terminate. -------------------------------------------------------------------------------- 56 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TERMINATING THE ROPP - You may terminate the ROPP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the ROPP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The ROPP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. If you terminate the ROPP, the standard death benefit applies. For an example, see Appendix C. IF YOUR SPOUSE IS THE SOLE BENEFICIARY AND WAS AGE 76 OR OLDER AS OF THE DATE WE ISSUED THE CONTRACT, he or she may choose to continue the ROPP. In that case, the ROPP rider charges described in "Charges -- ROPP Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary. Your spouse also has the option of discontinuing the ROPP rider within 30 days of the date he or she elects to continue the contract. If your spouse was age 75 or younger as of the date we issued the contract, the ROPP will terminate. NOTE: For special tax considerations associated with the ROPP, see "Taxes." MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you are older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to the GPAs, fixed account or Special DCA account during the time you have amounts allocated to these accounts. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and you are age 75 or younger at contract issue, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract according to terms determined by us and at our sole discretion. We reserve the right to discontinue offering the MAV for new contracts. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value to the higher of these values. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. The death benefit will never be less than the surrender value adjusted by the MVA formula. TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. For an example, see Appendix C. -------------------------------------------------------------------------------- 57 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to continue the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the MAV rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. MAXIMUM FIVE YEAR ANNIVERSARY VALUE DEATH BENEFIT (5-YEAR MAV) The 5-Year MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The 5-Year MAV does not provide any additional benefit before the fifth contract anniversary after the rider effective date. The 5-Year MAV may be of less value if you are older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum five year anniversary value at age 81, the 5-Year MAV rider fee continues to apply until the rider terminates. In addition, the 5-Year MAV does not provide any additional benefit with respect to the GPAs, fixed account or Special DCA account during the time you have amounts allocated to these accounts. Be sure to discuss with your sales representative whether or not the 5-Year MAV is appropriate for your situation. If this 5-Year MAV rider is available in your state and you are age 75 or younger at contract issue, you may choose to add the 5-Year MAV to your contract. Generally, you must elect the 5-Year MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the 5-Year MAV may be after we issue the contract according to terms determined by us and at our sole discretion. We reserve the right to discontinue offering the 5-Year MAV for new contracts. On the fifth contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every fifth contract anniversary after that, through age 80, we compare the previous 5-year anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value to the higher of these values. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value, less any purchase payment credits subject to reversal less a pro rata portion of rider fees; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent fifth contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. The death benefit will never be less than the surrender value adjusted by the MVA formula. TERMINATING THE 5-YEAR MAV - You may terminate the 5-Year MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the 5-Year MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The 5-Year MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The 5-Year MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the 5-Year MAV, the standard death benefit applies. For an example, see Appendix C. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to continue the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the 5-Year MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the 5-Year MAV rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she may choose to continue the 5-Year MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the 5-Year MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the 5-Year MAV rider, the contract value will be increased to the 5-Year MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. -------------------------------------------------------------------------------- 58 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ENHANCED EARNINGS DEATH BENEFIT (EEB) The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides for reduced benefits if you are age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary. The EEB also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and you are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract according to terms determined by us and at our sole discretion. You may not select this rider if you select the EEP. We reserve the right to discontinue offering the EEB for new contracts. The EEB provides that if you die after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Benefit"), the MAV death benefit amount, if applicable, or the 5-Year MAV death benefit amount, if applicable; PLUS - 40% of your earnings at death if you were under age 70 on the rider effective date; or - 15% of your earnings at death if you were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB AND EEP: If the rider effective date for the EEB or EEP is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount, the MAV death benefit amount, or the 5-Year MAV death benefit amount if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. For an example, see Appendix C. -------------------------------------------------------------------------------- 59 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract, he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP) The EEP is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEP provides for reduced benefits if you are age 70 or older at the rider effective date. It does not provide any additional benefit before the first contract anniversary and it does not provide any benefit beyond what is offered under the EEB during the second contract year. The EEP also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because part of the benefit paid by the EEP is determined by the amount of earnings at death. Be sure to discuss with your sales representative and your tax advisor whether or not the EEP is appropriate for your situation. If this EEP rider is available in your state and you are age 75 or younger at contract issue, you may choose to add the EEP to your contract. You must elect the EEP at the time you purchase your contract and your rider effective date will be the contract issue date. THIS RIDER IS ONLY AVAILABLE UNDER ANNUITIES PURCHASED THROUGH AN EXCHANGE OR DIRECT TRANSFER FROM ANOTHER ANNUITY OR A LIFE INSURANCE POLICY. You may not select this rider if you select the EEB. We reserve the right to discontinue offering the EEP for new contracts. The EEP provides that if you die after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - EEP Part I benefits, which equal the benefits payable under the EEB described above; PLUS - EEP Part II benefits, which equal a percentage of exchange purchase payments identified at issue not previously surrendered as follows:
PERCENTAGE IF YOU PERCENTAGE IF YOU ARE UNDER AGE 70 ARE 70 OR OLDER ON ON THE RIDER THE RIDER CONTRACT YEAR EFFECTIVE DATE EFFECTIVE DATE One and Two 0% 0% Three and Four 10% 3.75% Five or more 20% 7.5%
Additional death benefits payable under the EEP are not included in the adjusted partial surrender calculation. If after 6 months, no exchange purchase payments have been received, we will contact you and you will have an additional 30 days to follow-up on exchange purchase payments identified at issue but not received by us. If after these 30 days we have not received any exchange purchase payments, we will convert the EEP rider into an EEB. Another way to describe the benefits payable under the EEP rider is as follows: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit"), the MAV death benefit amount, or 5-Year MAV death benefit amount, if applicable, PLUS
IF YOU ARE UNDER AGE 70 IF YOU ARE AGE 70 ON THE RIDER EFFECTIVE OR OLDER ON THE RIDER CONTRACT YEAR DATE, ADD ... EFFECTIVE DATE, ADD ... 1 Zero Zero 2 40% x earnings at death 15% x earnings at death (see above) 3 & 4 40% x (earnings at death 15% x (earnings at death + 25% of exchange + 25% of exchange purchase payment*) purchase payment*) 5+ 40% x (earnings at death 15% x (earnings at death + 50% of exchange + 50% of exchange purchase payment*) purchase payment*)
* Exchange purchase payments are purchase payments exchanged from another annuity or a life insurance policy that are identified at issue and not previously surrendered. -------------------------------------------------------------------------------- 60 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS We are not responsible for identifying exchange purchase payments if we did not receive proper notification from the company from which the purchase payments are exchanged. TERMINATING THE EEP - You may terminate the EEP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The EEP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEP rider will terminate in the case of an ownership change. - The EEP rider will terminate in the case of the spousal continuation if the new owner is age 76 or older. For an example, see Appendix C. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEP. If your spouse has reached age 76 at the time he or she elects to continue the contract, the EEP rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she cannot continue the EEP. However, he or she may choose to convert the EEP rider into an EEB. In this case, the following conditions will apply: - the EEB rider will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the EEB rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEP rider. If your spouse chooses not to convert the EEP rider into an EEB, the standard death benefit amount (or the MAV or 5-Year MAV death benefit amount, if applicable,) will apply. NOTE: For special tax considerations associated with the EEP, see "Taxes." OPTIONAL LIVING BENEFITS GUARANTEED MINIMUM ACCUMULATION BENEFIT (ACCUMULATION BENEFIT) RIDER The Accumulation Benefit rider is an optional benefit that you may select for an additional charge. It is available for nonqualified and qualified annuities except under 401(a) and 401(k) plans. The Accumulation Benefit rider specifies a waiting period that ends on the benefit date. The Accumulation Benefit rider provides a one-time adjustment to your contract value on the benefit date if your contract value is less than the Minimum Contract Accumulation Value (defined below) on that benefit date. If the contract value falls to zero as the result of adverse market performance or the deduction of fees and/or charges at any time during the waiting period and before the benefit date, the contract and all riders, including the Accumulation Benefit rider will terminate without value and no benefits will be paid. EXCEPTION: if you are still living on the benefit date, we will pay you an amount equal to the Minimum Contract Accumulation Value as determined under the Accumulation Benefit rider on the valuation date your contract value reached zero. If you are 80 or younger at contract issue and this rider is available in your state, you may elect the Accumulation Benefit at the time you purchase your contract and the rider effective date will be the contract issue date. The Accumulation Benefit rider may not be terminated once you have elected it except as described in the "Terminating the Rider" section below. An additional charge for the Accumulation Benefit rider will be assessed annually during the waiting period. The rider ends when the waiting period expires and no further benefit will be payable and no further charges for the rider will be deducted. The Accumulation Benefit rider may not be purchased with the optional Withdrawal Benefit rider. When the rider ends, you may be able to purchase another optional rider we then offer by written request received within 30 days of that contract anniversary date. The Accumulation Benefit rider may not be available in all states. You should consider whether a Accumulation Benefit rider is appropriate for you because: - you must participate in the PN program and you must elect one of the model portfolios. This requirement limits your choice of subaccounts, fixed account and GPAs (if available) to those that are in the model portfolio you select. This means you will not be able to allocate contract value to all of the subaccounts, GPAs or the fixed account that are available under the contract to other contract owners who do not elect this rider. (See "Making the Most of Your Contract -- Portfolio Navigator Asset Allocation Program,"); - you may not make additional purchase payments to your contract during the waiting period after the first 180 days immediately following the effective date of the Accumulation Benefit rider. Some exceptions apply (see "Additional Purchase Payments with Elective Step Up" below); -------------------------------------------------------------------------------- 61 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - if you purchase this contract as a qualified annuity, for example, an IRA, you may need to take partial surrenders from your contract to satisfy the RMDs under the Code. Partial surrenders, including those used to satisfy RMDs, will reduce any potential benefit that the Accumulation Benefit rider provides. You should consult your tax advisor if you have any questions about the use of this rider in your tax situation; - if you think you may surrender all of your contract value before you have held your contract with this benefit rider attached for 10 years, or you are considering selecting an annuity payout option within 10 years of the effective date of your contract, you should consider whether this optional benefit is right for you. You must hold the contract a minimum of 10 years from the effective date of the Accumulation Benefit rider, which is the length of the waiting period under the Accumulation Benefit rider, in order to receive the benefit, if any, provided by the Accumulation Benefit rider. In some cases, as described below, you may need to hold the contract longer than 10 years in order to qualify for any benefit the Accumulation Benefit rider may provide; - the 10 year waiting period under the Accumulation Benefit rider will restart if you exercise the Elective Step-Up Option (described below) or your surviving spouse exercises the spousal continuation Elective Step-Up (described below); and - the 10 year waiting period under the Accumulation Benefit rider may be restarted if you elect to change your model portfolio to one that causes the Accumulation Benefit rider charge to increase (see "Charges"). Be sure to discuss with your sales representative whether a Accumulation Benefit rider is appropriate for your situation. HERE ARE SOME GENERAL TERMS THAT ARE USED TO DESCRIBE THE OPERATION OF THE ACCUMULATION BENEFIT: BENEFIT DATE: This is the first valuation date immediately following the expiration of the waiting period. MINIMUM CONTRACT ACCUMULATION VALUE (MCAV): An amount calculated under the Accumulation Benefit rider. The contract value will be increased to equal the MCAV on the benefit date if the contract value on the benefit date is less than the MCAV on the benefit date. ADJUSTMENTS FOR PARTIAL SURRENDERS: The adjustment made for each partial surrender from the contract is equal to the amount derived from multiplying (a) and (b) where: (a) is 1 minus the ratio of the contract value on the date of (but immediately after) the partial surrender to the contract value on the date of (but immediately prior to) the partial surrender; and (b) is the MCAV on the date of (but immediately prior to) the partial surrender. WAITING PERIOD: The waiting period for the rider is 10 years. We reserve the right to restart the waiting period on the latest contract anniversary if you change your model portfolio after we have exercised our rights to increase the rider fee. Your initial MCAV is equal to your initial purchase payment and any purchase payment credit. It is increased by the amount of any subsequent purchase payments and purchase payment credits received within the first 180 days that the rider is effective. It is reduced by any adjustments for partial surrenders made during the waiting period. AUTOMATIC STEP UP On each contract anniversary after the effective date of the rider, the MCAV will be set to the greater of: 1. 80% of the contract value on the contract anniversary; or 2. the MCAV immediately prior to the automatic step up. The automatic step up does not create contract value, guarantee the performance of any investment option, or provide a benefit that can be surrendered or paid upon death. Rather, the Automatic Step Up is an interim calculation used to arrive at the final MCAV, which is used to determine whether a benefit will be paid under the rider on the benefit date. The automatic step up of the MCAV does not restart the waiting period or increase the charge (although the total fee for the rider may increase). ELECTIVE STEP UP OPTION Within thirty days following each contract anniversary after the rider effective date, but prior to the benefit date, you may notify us in writing that you wish to exercise the annual elective step up option. You may exercise this elective step up option only once per contract year during this 30 day period. If your contract value on the valuation date we receive your written request to step up is greater than the MCAV on that date, your MCAV will increase to 100% of that contract value. -------------------------------------------------------------------------------- 62 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS When you exercise the annual elective step up, we may be charging more for the Accumulation Benefit rider at that time. If your MCAV is increased as a result of the elective step up and we have increased the charge for the Accumulation Benefit rider, you will pay the charge that is in effect on the valuation date we receive your written request to step up for the entire contract year. In addition, the waiting period will restart as of the most recent contract anniversary. Failure to exercise this elective step up in subsequent years will not reinstate any prior waiting period. Rather, the waiting period under the rider will always commence from the most recent anniversary for which the elective step up option was exercised. The elective step up does not create contract value, guarantee the performance of any investment option or provide any benefit that can be surrendered or paid upon death. Rather the elective step up is an interim calculation used to arrive at the final MCAV, which is used to determine whether a benefit will be paid under the rider on the benefit date. The elective step up option is not available to non-spouse beneficiaries that continue the contract during the waiting period. ADDITIONAL PURCHASE PAYMENTS WITH ANNUAL ELECTIVE STEP UPS If your MCAV is increased as a result of Elective Step Up, you have 180 days from the latest contract anniversary to make additional purchase payments, if allowed under the base contract. The MCAV will include the amount of any additional purchase payments and purchase payment credits (if applicable) received during this period. SPOUSAL CONTINUATION If a spouse chooses to continue the contract under the spousal continuation provision, the rider will continue as part of the contract. Once, within the thirty days following the date of spousal continuation, the spouse may choose to exercise an elective step up. The spousal continuation elective step up is in addition to the annual elective step up. If the contract value on the valuation date we receive the written request to exercise this option is greater than the MCAV on that date, we will increase the MCAV to that contract value. If the MCAV is increased as a result of the elective step up and we have increased the charge for the Accumulation Benefit rider, the spouse will pay the charge that is in effect on the valuation date we receive their written request to step up for the entire contract year. In addition, the waiting period will restart as of the most recent contract anniversary. TERMINATING THE RIDER The rider will terminate under the following conditions: The rider will terminate before the benefit date without paying a benefit on the date: - you take a full surrender; or - annuitization begins; or - the contract terminates as a result of the death benefit being paid. The rider will terminate on the benefit date. For an example, see Appendix C. GUARANTEED MINIMUM WITHDRAWAL BENEFIT RIDER (WITHDRAWAL BENEFIT) The Withdrawal Benefit is an optional benefit that you may select for an additional annual charge. It is available for nonqualified and qualified annuities except under 401(a) and 401(k) plans. The Withdrawal Benefit initially provides a guaranteed withdrawal benefit that gives you the right to take limited partial withdrawals in each contract year that over time will total an amount equal to your purchase payments plus any purchase payment credits. Certain withdrawals and step ups, as described below, can cause the initial guaranteed withdrawal benefit to change. The guarantee remains in effect if your partial withdrawals in a contract year do not exceed the Guaranteed Benefit Payment (GBP -- the amount you may withdraw under the terms of the rider in each contract year). As long as your withdrawals in each contract year do not exceed the GBP, you will not be assessed a surrender charge. If you withdraw an amount greater than the GBP in a contract year, we call this an "excess withdrawal" under the rider. If you make an excess withdrawal under the rider: - surrender charges, IF applicable, will apply only to the amount of the withdrawal that exceeds the GBP; and - the Guaranteed Benefit Amount will be adjusted as described below; and - the Remaining Benefit Amount will be adjusted as described below. For a partial withdrawal that is subject to a surrender charge, the amount we actually deduct from your contract value will be the amount you request plus any applicable surrender charge (see "Surrender Charges"). Market value adjustments, if applicable, will also be made (see "Market Value Adjustment"). We pay you the amount you request. Any partial surrender you take under the contract will reduce the value of the death benefits (see "Benefits in Case of Death" and "Optional Benefits"). Upon full surrender of the contract, you will receive the remaining contract value less any applicable charges (see "Surrender Charge"). -------------------------------------------------------------------------------- 63 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS An annual Elective Step Up option is available for 30 days after each contract anniversary. This option allows you to step up the Remaining Benefit Amount and Guaranteed Benefit Amount to: - the contract value on the valuation date we receive your written request to step up (Rider A)(1); or - the contract value on the contract anniversary date (Rider B)(1). The annual Elective Step Up is subject to the following rules: - if you do not take any withdrawals during the first three years, you may step up annually beginning with the first contract anniversary; - if you take any withdrawals during the first three years, the annual step up will not be available until the third contract anniversary; - if you step up on the first or second contract anniversary but then take a withdrawal prior to the third contract anniversary, you will lose any prior step ups and the withdrawal will be considered an excess withdrawal subject to the excess withdrawal procedures discussed under the Guaranteed Benefit Amount and Remaining Benefit Amount headings below; and - you may take withdrawals on or after the third contract anniversary without reversal of previous step ups. If you exercise the annual step up election, the special spousal continuation step up election (described below) or change your asset allocation model, the rider charge may change (see "Charges"). If you are 80 or younger at contract issue, you may choose to add the Withdrawal Benefit to your contract. This benefit may not be available in your state. You must elect the Withdrawal Benefit at the time you purchase your contract and the rider effective date will be the contract issue date. Once elected, the Withdrawal Benefit may not be cancelled and the charge will continue to be deducted until the contract is terminated, the contract value reduces to zero (described below) or annuity payouts begin. You should consider whether the Withdrawal Benefit is appropriate for you because: - you must participate in an asset allocation program and you must elect one of the model portfolios. This requirement limits your choice of subaccounts, fixed account and GPAs (if available) to those that are in the model portfolio you select. This means you will not be able to allocate contract value to all of the subaccounts, GPAs or the fixed account that are available under the contract to other contract owners who do not elect this rider. (See "Making the Most of Your Contract -- Asset Allocation Program and Portfolio Navigator Asset Allocation Program."); - withdrawals before age 59 1/2 may incur an IRS early withdrawal penalty and may be considered taxable income. Qualified annuities have RMD rules that govern the timing and amount of distributions from the contract. If you have a qualified annuity, you may need to take an RMD that is greater than your GBP in any contract year. If you withdraw more than the GBP in any contract year to satisfy an RMD, this will constitute an excess withdrawal, as defined above, and the excess withdrawal procedures described below will apply to the Guaranteed Benefit Amount and the Remaining Benefit Amount. You should consult your tax advisor before you select this optional rider if you have any questions about the use of this rider in your tax situation. - if your contract is a TSA, your right to take withdrawals is restricted (See "TSA-- Special Surrender Provisions"), so the rider may be of limited value to you. You should consult your tax advisor before you select this optional rider if you have questions about the use of this rider in your tax situation. - we reserve the right to limit the cumulative amount of purchase payments, subject to state restrictions. (1) We currently offer two versions of this benefit, Rider A and Rider B. Before April 29, 2005 we only offered Rider B. We began offering Rider A, in states where it is approved, and discontinued offering Rider B in those states, on April 29, 2005. If you purchased a contract with this optional benefit rider before April 29, 2005, the references to Rider B generally apply to your contract (see the rider attached to your contract for the actual terms of the benefit you purchased). If you purchase a contract on or after April 29, 2005 with this benefit, the version we offer you depends on which state you live in. Ask your sales representative which version of the rider, if any, is available in your state. The discussion about this benefit and how it works applies generally to both riders unless otherwise noted. THE TERMS "GUARANTEED BENEFIT AMOUNT" AND "REMAINING BENEFIT AMOUNT" ARE DESCRIBED BELOW. EACH IS USED IN THE OPERATION OF THE GBP, THE RBP, THE ELECTIVE STEP UP, THE SPECIAL SPOUSAL CONTINUATION STEP UP AND THE WITHDRAWAL BENEFIT RBA PAYOUT OPTION. GUARANTEED BENEFIT AMOUNT The Guaranteed Benefit Amount (GBA) is equal to the initial purchase payment, plus any purchase payment credits, adjusted for subsequent purchase payments, purchase payment credits, partial withdrawals in excess of the GBP, and step ups. The maximum GBA is $5,000,000. The GBA is determined at the following times: - at contract issue-- the GBA is equal to the initial purchase payment, plus any purchase payment credit; - when you make additional purchase payments -- each additional purchase payment plus any purchase payment credit has its own GBA equal to the amount of the purchase payment plus any purchase payment credit. The total GBA when an additional purchase payment and purchase payment credit are added is the sum of the individual GBAs immediately prior to the receipt of the additional purchase payment, plus the GBA associated with the additional payment; - when you make a partial withdrawal -- if all of your withdrawals in the current contract year are less than or equal to the GBP, the GBA remains unchanged; -------------------------------------------------------------------------------- 64 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - when you make a partial withdrawal -- if all of your withdrawals in the current contract year, including the current withdrawal, are greater than the GBP prior to the current withdrawal; or you make any withdrawal in a contract year after a step up but before the third contract anniversary, THEN, THE FOLLOWING EXCESS WITHDRAWAL PROCEDURE WILL BE APPLIED TO THE GBA: GBA EXCESS WITHDRAWAL PROCEDURE The GBA will automatically be reset to the lesser of (a) the GBA immediately prior to the withdrawal; or (b) the contract value immediately following the withdrawal. If there have been multiple purchase payments and the excess withdrawal procedure results in a reduction of the total GBA, each payment's GBA will be reset in the following manner: 1. If the contract value before the excess withdrawal is less than the Remaining Benefit Amount before the excess withdrawal, each payment's GBA after the withdrawal will be reset equal to that payment's Remaining Benefit Amount after the withdrawal. 2. If the contract value before the excess withdrawal is greater than the Remaining Benefit Amount before the excess withdrawal, each payment's GBA after the withdrawal will be reset to that payment's Remaining Benefit Amount after the withdrawal plus (a) times (b) divided by (c), where: (a) is the total GBA after the withdrawal less the total Remaining Benefit Amount after the withdrawal; (b) is the ratio of that payment's GBA before the withdrawal to that payment's Remaining Benefit Amount before the withdrawal minus one; and (c) is the sum of the values as determined in (b) for each individual payment before the withdrawal. - at step up -- (see "Elective Step Up" below). REMAINING BENEFIT AMOUNT The Remaining Benefit Amount (RBA) at any point is the total guaranteed amount available for future partial withdrawals. The maximum RBA is $5,000,000. The RBA is determined at the following times: - at contract issue-- the RBA is equal to the initial purchase payment plus any purchase payment credit; - when you make additional purchase payments -- each additional purchase payment plus any purchase payment credit has its own RBA equal to the amount of the purchase payment plus any purchase payment credit. The total RBA when an additional purchase payment and purchase payment credit are added is the sum of the individual RBAs immediately prior to the receipt of the additional purchase payment, plus the RBA associated with the additional payment; - when you make a partial withdrawal -- if all of your withdrawals in the current contract year are less than or equal to the GBP, the RBA becomes the RBA immediately prior to the partial withdrawal, less the partial withdrawal. - when you make a partial withdrawal -- if all of your withdrawals in the current contract year, including the current withdrawal, are greater than the GBP prior to the current withdrawal; or you make any withdrawal in a contract year after a step up but before the third contract anniversary, THEN, THE FOLLOWING EXCESS WITHDRAWAL PROCEDURE WILL BE APPLIED TO THE RBA: RBA EXCESS WITHDRAWAL PROCEDURE The RBA will automatically be reset to the lesser of (a) the contract value immediately following the withdrawal, or (b) the RBA immediately prior to the withdrawal, less the amount of the withdrawal. If there have been multiple purchase payments, any reduction of the RBA will be taken out of each payment's RBA in the following manner: The withdrawal amount up to the Remaining Benefit Payment (defined below) is taken out of each RBA bucket in proportion to its Remaining Benefit Payment at the time of the withdrawal; and the withdrawal amount above the Remaining Benefit Payment and any amount determined by the excess withdrawal procedure are taken out of each RBA bucket in proportion to its RBA at the time of the withdrawal. - at step up-- (see "Elective Step Up" below). GUARANTEED BENEFIT PAYMENT The GBP is the withdrawal amount that you are entitled to take each contract year until the RBA is depleted. The GBP is equal to 7% of the GBA. If you withdraw less than the GBP in a contract year, there is no carry over to the next contract year. The Total Free Amount (TFA) you are allowed to withdraw from the contract in each contract year without incurring a withdrawal charge (see "Surrender Charge") may be greater than the GBP. Any amount you withdraw in a contract year under the contract's TFA provision that exceeds the GBP available for you to withdraw under the terms of the rider is subject to the GBA and RBA excess withdrawal procedures described above. -------------------------------------------------------------------------------- 65 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS REMAINING BENEFIT PAYMENT At the beginning of each contract year, the Remaining Benefit Payment (RBP) is set as the lesser of (a) the GBP, or (b) the RBA. Whenever a partial withdrawal is made, the RBP equals the RBP immediately prior to the partial withdrawal less the amount of the partial withdrawal, but not less than zero. ELECTIVE STEP UP You have the option to increase the RBA, the GBA, the GBP and the RBP beginning with the first contract anniversary. NOTE THAT SPECIAL RULES, DESCRIBED ABOVE, MAY LIMIT ELECTIVE STEP UPS IN THE FIRST THREE CONTRACT YEARS. Depending on whether you have Rider A or Rider B, the increases will be determined as follows: RIDER A You may only step up if your contract value on the valuation date we receive your written request to step up is greater than the RBA. The effective date of the step up is the valuation date we receive your written request to step up. The RBA will be increased to an amount equal to the contract value on the valuation date we receive your written request to step up. The GBA will be set to an amount equal to the greater of the GBA immediately prior to the step up or the contract value on the valuation date we receive your written request to step up. The GBP will be set to an amount equal to the greater of the GBP immediately prior to the step up or 7% of the GBA after the step up. The RBP will be set to the lesser of the RBA after the step up or the GBP after the step up less any withdrawals made during that contract year. RIDER B You may only step up if your contract anniversary value is greater than the RBA. The effective date of the step up is the contract anniversary. The RBA will be increased to an amount equal to the contract anniversary value. The GBA will be set to an amount equal to the greater of the GBA immediately before the step up or the contract anniversary value. The GBP will be set to an amount equal to the greater of the GBP immediately prior to the step up or 7% of the GBA after the step up. The RBP will be set to the lesser of the RBA after the step up or the GBP after the step up. You may elect a step up only once each contract year within 30 days after the contract anniversary. Once a step up has been elected, another step up may not be elected until the next contract anniversary. If you take any partial withdrawals before the third contract anniversary, the annual step up election is not available until the third contract anniversary. If you choose to step up on the first or second contract anniversary but then take a withdrawal before the third contract anniversary, any prior step ups will be removed and the withdrawal will be considered an excess withdrawal subject to the GBA and RBA excess withdrawal procedures described above. The elective step up option is not available to non-spouse beneficiaries that continue the contract. SPOUSAL CONTINUATION AND SPECIAL SPOUSAL CONTINUATION STEP UP If a surviving spouse elects to continue the contract, this rider also continues. The spousal continuation elective step up is in addition to the annual elective step up. A surviving spouse may elect a spousal continuation step up by written request within 30 days following the spouse's election to continue the contract. This step up may be made even if withdrawals have been taken under the contract during the first three years. Under this step up, the RBA will be reset to the greater of the RBA or the contract value on the valuation date we receive the spouse's written request to step up; the GBA will be reset to the greater of the GBA immediately prior to the spousal continuation step up, or the contract value on the same valuation date. If a spousal continuation step up is elected and we have increased the charge for the rider, the spouse will pay the charge that is in effect on the valuation date we receive the written request to step up. RBA PAYOUT OPTION Several annuity payout plans are available under the contract. In addition to these annuity payout plans, a fixed annuity payout option is available under the Withdrawal Benefit. Under this option the amount payable each year will be equal to the future schedule of GBPs, but the total amount paid over the life of the annuity will not exceed the current total RBA at the time you begin this fixed payout option. These annualized amounts will be paid in the frequency that you elect. The frequencies will be among those offered by us at that time but will be no less frequent than annually. If, at the death of the owner, total payments have been made for less than the RBA, the remaining payments will be paid to the beneficiary (see "The Annuity Payout Period" and "Taxes"). -------------------------------------------------------------------------------- 66 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS This payout option may also be elected by the beneficiary of a contract as a settlement option. Whenever multiple beneficiaries are designated under the contract, each such beneficiary's share of the proceeds if they elect this option will be in proportion to their applicable designated beneficiary percentage. Beneficiaries of nonqualified contracts may elect this settlement option subject to the distribution requirements of the contract. We reserve the right to adjust the future schedule of GBPs if necessary to comply with the Code. IF CONTRACT VALUE REDUCES TO MINIMUM REQUIRED VALUE If the contract value is less than $600, the minimum value required by the Withdrawal Benefit, and the RBA remains greater than zero, the following will occur: - you will be paid according to the RBA payout option described above; - we will no longer accept additional purchase payments; - you will no longer be charged for the rider; - any attached death benefit riders will terminate; and - the death benefit becomes the remaining payments under the RBA payout option described above. If the contract value falls to zero and the RBA is depleted, the Withdrawal Benefit and the contract will terminate. For an example, see Appendix C. THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below except under Plan E. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date, plus or minus any applicable MVA on GPAs and less any applicable premium tax. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - your age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. Fixed payouts remain the same from month to month. For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract (Table A and Table B) show the amount of the monthly payout for each $1,000 of contract value according to your age and, when applicable, your sex. (Where required by law, we will use a unisex table of settlement rates.) Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% assumed interest rate results in a higher initial payout, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. -------------------------------------------------------------------------------- 67 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract value is used to purchase the payout plan*: - PLAN A: LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B: LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C: LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D: JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving owner. Payouts end with the death of the second annuitant. - PLAN E: PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that the annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the present value of the remaining annuity payouts which are assumed to remain level at the initial payout. The discount rate we use in the calculation will vary between 5.17% and 6.67%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") - WITHDRAWAL BENEFIT - RBA PAYOUT OPTION: If you have a Withdrawal Benefit rider under your contract, you may elect the Withdrawal Benefit RBA payout option as an alternative to the above annuity payout plans. This option may not be available if the contract is issued to qualify under Sections 403 or 408 of the Code. For such contracts, this option will be available only if the guaranteed payout period is less than the life expectancy of the owner at the time the option becomes effective. Such life expectancy will be computed using life expectancy tables published by IRS. Under this option, the amount payable each year will be equal to the future schedule of GBPs, but the total amount paid over the life of the annuity will not exceed the total RBA at the time you begin this fixed payout option (see "Optional Benefits -- Withdrawal Benefit"). These annualized amounts will be paid in the frequency that you elect. The frequencies will be among those offered by us at the time but will be no less frequent than annually. If, at the death of the owner, total payouts have been made for less than the RBA, the remaining payouts will be paid to the beneficiary. ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If your contract is a qualified annuity, you must select a payout plan as of the settlement date set forth in your contract. You have the responsibility for electing a payout plan under your contract that complies with applicable law. Your contract describes your payout plan options. The options will generally meet certain IRS regulations governing RMDs if the payout plan meets the incidental distribution benefit requirements, if any, and the payouts are made: - in equal or substantially equal payments over a period not longer than your life or over the joint life of you and your designated beneficiary; or - in equal or substantially equal payments over a period not longer than your life expectancy or over the joint life expectancy of you and your designated beneficiary; or - over a period certain not longer than your life expectancy or over the life expectancy of you and your designated beneficiary. * For contracts purchased in Oregon, you cannot apply your contract value to an annuity payout plan during your first contract year. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. -------------------------------------------------------------------------------- 68 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the GPAs, fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any surrenders you request that represent ordinary income normally are taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. We will send you a tax information reporting form for any year in which we made a distribution according to our records. NONQUALIFIED ANNUITIES Tax law requires that all nonqualified deferred annuity contracts issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS: Generally, a portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. SURRENDERS: If you surrender part of your nonqualified annuity before your annuity payouts begin, including withdrawals under a Withdrawal Benefit rider, your surrender payment will be taxed to the extent that the contract value immediately before the surrender exceeds the investment in the contract. If you surrender all of your nonqualified annuity before your annuity payouts begin, including withdrawals under a Withdrawal Benefit rider, your surrender payment will be taxed to the extent that the surrender value immediately before the surrender exceeds the investment in the contract. You also may have to pay a 10% IRS penalty for surrenders of taxable income you make before reaching age 59 1/2 unless certain exceptions apply. WITHHOLDING: If you receive taxable income as a result of an annuity payout or a surrender, including withdrawals under a Withdrawal Benefit rider, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract is not exempt from estate or income taxes. Any amount your beneficiary receives that represents deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities (nonnatural persons) generally will be treated as ordinary income received during that year. However, if the trust was set up for the benefit of a natural person only, the income will generally remain tax-deferred. PENALTIES: If you receive amounts from your nonqualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if it is allocable to an investment before Aug. 14, 1982; or - if annuity payouts begin before the first contract anniversary. -------------------------------------------------------------------------------- 69 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TRANSFER OF OWNERSHIP: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses or former spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a surrender and you may have to pay a 10% IRS penalty. QUALIFIED ANNUITIES Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan's Summary Plan Description, your IRA disclosure statement, or consult a tax advisor for additional information about the distribution rules applicable to your situation. When you use your contract to fund a retirement plan or IRA that is already tax-deferred under the Code, the contract will not provide any necessary or additional tax deferral. If your contract is used to fund an employer sponsored plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. ANNUITY PAYOUTS: Under a qualified annuity except a Roth IRA, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS: Under a qualified annuity except a Roth IRA, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. REQUIRED MINIMUM DISTRIBUTIONS: Retirement plans are subject to required withdrawals called required minimum distributions (RMDs) generally beginning at age 70 1/2. In addition, a new tax regulation, effective for RMDs calculated in 2006 and after, may cause the RMDs for some contracts with certain death benefits and optional riders to increase. RMDs may reduce the value of certain death benefits and optional riders. You should consult your tax advisor prior to making a purchase for an explanation of the potential tax implications to you. WITHHOLDING FOR IRAs, ROTH IRAs, SEPs AND SIMPLE IRAs: If you receive taxable income as a result of an annuity payout or a surrender, including withdrawals under a Withdrawal Benefit rider, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. -------------------------------------------------------------------------------- 70 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS WITHHOLDING FOR ALL OTHER QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity, mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is an RMD as defined under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments made to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. PENALTIES: If you receive amounts from your qualified annuity before reaching age 59 1/2, you may have to pay a 10% penalty on the amount includable in your ordinary income. However, this penalty generally will not apply to any amount received: - because of your death; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if the distribution is made following severance from employment during the calendar year in which you attain age 55 (TSAs and annuities funding 401(a) and 401(k) plans only); or - to pay certain medical or education expenses (IRAs only). DEATH BENEFITS TO BENEFICIARIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If you made non-deductible contributions to a traditional IRA, the portion of any distribution from the contract that represents after-tax contributions is not taxable as ordinary income to your beneficiary. You are responsible for keeping all records tracking your non-deductible contributions to an IRA. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. PURCHASE PAYMENT CREDITS: These are considered earnings and are taxed accordingly when surrendered or paid out. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE OPTIONAL RIDERS (ROPP, MAV, 5-YEAR MAV, EEB, EEP, PN, ACCUMULATION BENEFIT OR WITHDRAWAL BENEFIT): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial surrenders if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on your death as an annuity death benefit distribution, not as proceeds from life insurance. COLLATERAL ASSIGNMENT: You may not collaterally assign or pledge a qualified annuity. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. IDS LIFE'S TAX STATUS: We are taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of our company, although their operations are treated separately in accounting and financial statements. Investment income is reinvested in the fund in which each subaccount invests and becomes part of that subaccount's value. This investment income, including realized capital gains, is not taxed to us, and therefore no charge is made against the subaccounts for federal income taxes. We reserve the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. -------------------------------------------------------------------------------- 71 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute a fund currently listed in this prospectus (existing fund) for another fund (new fund). The new fund may have higher fees and/or operating expenses than the existing fund. Also, the new fund may have investment objectives and policies and/or investment advisers which differ from the existing fund. We may also: - add new subaccounts; - combine any two or more subaccounts; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. We will notify you of any substitution or change. If we notify you that a subaccount will be eliminated or closed, you will have a certain period of time to tell us where to reallocate purchase payments or contract value currently allocated to that subaccount. If we do not receive your reallocation instructions by the due date, we automatically will reallocate to the subaccount investing in the RiverSource Variable Portfolio - Cash Management Fund. You may then transfer this reallocated amount in accordance with the transfer provisions of your contract (see "Transferring Between Accounts" above). In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. -------------------------------------------------------------------------------- 72 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 Ameriprise Financial Center, Minneapolis, MN 55474. IDS Life is a wholly-owned subsidiary of Ameriprise Financial, Inc. IDS Life conducts a conventional life insurance business. It acts as a direct writer of fixed and variable insurance policies and annuities and is licensed in 49 states, the District of Columbia and American Samoa. IDS Life has four wholly-owned subsidiaries, two which serve New York residents and two which serve residents in states other than New York. IDS Life and its subsidiaries offer fixed and variable insurance policies and annuities through individual sales representatives, through insurance agencies and broker-dealers who may also be associated with financial institutions such as banks. IDS Life's primary life insurance products include variable life insurance, universal life insurance, traditional whole life insurance and disability income insurance. IDS Life's primary annuity products include variable and fixed deferred and immediate annuities. We are the sole distributor of the contract which we offer continuously. We pay time-of-sale commissions of up to 5.75% of purchase payments on the contract as well as service/trail commissions of up to 1% based on annual total contract value for as long as the contract remains in effect. We may pay our sales representatives a temporary additional sales commission of up to 1% of purchase payments for a period of time we select. For example, we may offer to pay a temporary additional sales commission to encourage sales representatives to market a new or enhanced contract or to increase sales during the period. The above commissions and service fees compensate our sales representative for selling and servicing the contract. These commissions do not change depending on which subaccounts you choose to allocate your purchase payments. We also may pay additional commissions to help compensate field leadership and to pay for other distribution expenses and benefits noted below. Our sales representatives may be required to return sales commissions under certain circumstances including, but not limited to, if a contact owner returns the contract under the free look period. From time to time and in accordance with applicable laws and regulations, sales representatives and field leaders are eligible for various benefits. These include cash benefits, such as bonuses and sales incentives, and non-cash benefits, such as conferences, seminars and trips (including travel, lodging and meals), entertainment, merchandise and other similar items. Sales of contracts may help sales representatives and/or their field leaders qualify for such benefits. SOURCES OF PAYMENTS TO SALES REPRESENTATIVES - We pay the commissions and other compensation described above from our assets. - Our assets may include: -- revenues we receive from fees and expenses that you will pay when buying, owning and surrendering the contract (see "Expense Summary"); -- compensation we or an affiliate receive from the underlying funds in the form of distribution and services fees (see "The Variable Account and the Funds -- The funds"); -- compensation we or an affiliate receive from a fund's investment adviser, subadviser, distributor or an affiliate of any of these (see "The Variable Account and the Funds -- The funds"); and -- revenues we receive from other contracts and policies we sell that are not securities and other businesses we conduct. - You do not directly pay the commissions and other compensation described above as the result of a specific charge or deduction under the contract. However, you may pay part or all of the commissions and other compensation described above indirectly through: -- fees and expenses we collect from contract owners, including surrender charges; and -- fees and expenses charged by the underlying funds in which the subaccounts you select invest, to the extent we or one of our affiliates receive revenue from the funds or an affiliated person. POTENTIAL CONFLICT OF INTEREST Our compensation arrangements with sales representatives can potentially give sales representatives a heightened financial incentive to sell you the contract offered in this prospectus over other alternative investments which may pay the sales representatives lower compensation. Ask your sales representative for further information about what he or she may receive in connection with your purchase of the contract. -------------------------------------------------------------------------------- 73 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS LEGAL PROCEEDINGS The SEC, the NASD and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information concerning some of these practices and is cooperating fully with these inquiries. IDS Life and its affiliates are involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of their respective business activities. IDS Life believes it has meritorious defenses to each of these actions and intends to defend them vigorously. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. There are no pending legal proceedings affecting the Variable Account. ADDITIONAL INFORMATION INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE To the extent and only to the extent that any statement in a document incorporated by reference into this prospectus is modified or superseded by a statement in this prospectus or in a later-filed document, such statement is hereby deemed so modified or superseded and not part of this prospectus. The Annual Report on Form 10-K for the year ended Dec. 31, 2005 that we previously filed with the SEC under the Securities Exchange Act of 1934 (1934 Act) and the Report of Unscheduled Material Events or Corporate Event on Form 8-K that we filed with the SEC on March 22, 2006 under the 1934 Act are incorporated by reference into this prospectus. To access these documents, see "SEC Filings" under "Investors Relations" on our website at www.ameriprise.com. IDS Life will furnish you without charge a copy of any or all of the documents incorporated by reference into this prospectus, including any exhibits to such documents which have been specifically incorporated by reference. We will do so upon receipt of your written or oral request. You can contact IDS Life at the telephone number and address listed on the first page of this prospectus. AVAILABLE INFORMATION This prospectus is part of a registration statement we file with the SEC. Additional information on IDS Life and on this offering is available in the registration statement and other materials we file. You can obtain copies of these materials at the SEC's Public Reference Room at 100 F Street, N.E., N.W., Washington, D.C. 20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This prospectus, other information about the contract and other information incorporated by reference are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). INDEMNIFICATION Insofar as indemnification for liabilities arising under the Securities Act of 1933 (1933 Act) may be permitted to directors and officers or persons controlling IDS Life pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the 1933 Act and is therefore unenforceable. -------------------------------------------------------------------------------- 74 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS APPENDICES THE PURPOSE OF THESE APPENDICES IS TO ILLUSTRATE THE OPERATION OF VARIOUS CONTRACT FEATURES AND RIDERS AND TO PROVIDE CONDENSED FINANCIAL HISTORY DISCLOSURE REGARDING THE SUBACCOUNTS. IN ORDER TO DEMONSTRATE THESE CONTRACT FEATURES AND RIDERS, AN EXAMPLE MAY SHOW HYPOTHETICAL CONTRACT VALUES. THESE CONTRACT VALUES DO NOT REPRESENT PAST OR FUTURE PERFORMANCE. ACTUAL CONTRACT VALUES MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING BUT NOT LIMITED TO THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, GPAs, SPECIAL DCA ACCOUNT, FIXED ACCOUNT AND THE FEES AND CHARGES THAT APPLY TO YOUR CONTRACT. THE EXAMPLES OF THE OPTIONAL RIDERS AND DEATH BENEFITS IN APPENDIX C INCLUDE PARTIAL SURRENDERS TO ILLUSTRATE THE EFFECT OF PARTIAL SURRENDERS ON THE PARTICULAR BENEFIT. THESE EXAMPLES ARE INTENDED TO SHOW HOW THE OPTIONAL RIDERS AND DEATH BENEFITS OPERATE, AND DO NOT TAKE INTO ACCOUNT WHETHER A PARTICULAR OPTIONAL RIDER OR DEATH BENEFIT IS PART OF A QUALIFIED ANNUITY. QUALIFIED ANNUITIES ARE SUBJECT TO RMDs AT CERTAIN AGES (SEE "TAXES -- QUALIFIED ANNUITIES -- REQUIRED MINIMUM DISTRIBUTIONS") WHICH MAY REQUIRE YOU TO TAKE PARTIAL SURRENDERS FROM THE CONTRACT. IF YOU ARE CONSIDERING THE ADDITION OF CERTAIN DEATH BENEFITS AND/OR OPTIONAL RIDERS TO A QUALIFIED ANNUITY, YOU SHOULD CONSULT YOUR TAX ADVISOR PRIOR TO MAKING A PURCHASE FOR AN EXPLANATION OF THE POTENTIAL TAX IMPLICATION TO YOU. -------------------------------------------------------------------------------- 75 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS APPENDIX A: EXAMPLE -- MARKET VALUE ADJUSTMENT (MVA) As the examples below demonstrate, the application of an MVA may result in either a gain or a loss of principal. We refer to all of the transactions described below as "early surrenders." GENERAL EXAMPLES ASSUMPTIONS: - You purchase a contract and allocate part of your purchase payment to the ten-year GPA; and - we guarantee an interest rate of 3.0% annually for your ten-year Guarantee Period; and - after three years, you decide to make a surrender from your GPA. In other words, there are seven years left in your guarantee period. Remember that the MVA depends partly on the interest rate of a new GPA for the same number of years as the Guarantee Period remaining on your GPA. In this case, that is seven years. EXAMPLE 1: Remember that your GPA is earning 3.0%. Assume at the time of your surrender new GPAs that we offer with a seven-year Guarantee Period are earning 3.5%. We add 0.10% to the 3.5% rate to get 3.6%. Your GPA's 3.0% rate is less than the 3.6% rate so the MVA will be negative. EXAMPLE 2: Remember again that your GPA is earning 3.0%, and assume that new GPAs that we offer with a seven-year Guarantee Period are earning 2.5%. We add 0.10% to the 2.5% rate to get 2.6%. In this example, since your GPA's 3.0% rate is greater than the 2.6% rate, the MVA will be positive. To determine that adjustment precisely, you will have to use the formula described below. SAMPLE MVA CALCULATIONS The precise MVA formula we apply is as follows: EARLY WITHDRAWAL AMOUNT X [( 1 + i ) TO THE POWER OF n/12 - 1] = MVA ------------ 1 + j + .001 Where i = rate earned in the GPA from which amounts are being transferred or surrendered. j = current rate for a new Guaranteed Period equal to the remaining term in the current Guarantee Period (rounded up to the next year). n = number of months remaining in the current Guarantee Period (rounded up to the next month). -------------------------------------------------------------------------------- 76 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS EXAMPLES -- MVA Using assumptions similar to those we used in the examples above: - You purchase a contract and allocate part of your purchase payment to the ten-year GPA; and - we guarantee an interest rate of 3.0% annually for your ten-year Guarantee Period; and - after three years, you decide to make a $1,000 surrender from your GPA. In other words, there are seven years left in your guarantee period. EXAMPLE 1: You request an early surrender of $1,000 from your ten-year GPA earning a guaranteed interest rate of 3.0%. Assume at the time of your surrender new GPAs that we offer with a seven-year Guarantee Period are earning 3.5%. Using the formula above, we determine the MVA as follows: $1,000 X [( 1.030 ) TO THE POWER OF 84/12 - 1] = -$39.84 --------------- 1 + .035 + .001 In this example, the MVA is a negative $39.84. EXAMPLE 2: You request an early surrender of $1,000 from your ten-year GPA earning a guaranteed interest rate of 3.0%. Assume at the time of your surrender new GPAs that we offer with a seven-year Guarantee Period are earning 2.5%. Using the formula above, we determine the MVA as follows: $1,000 X [( 1.030 ) TO THE POWER OF 84/12 - 1] = $27.61 --------------- 1 + .025 + .001 In this example, the MVA is a positive $27.61. We do not apply MVAs to the amounts we deduct for surrender charges, so we would deduct the surrender charge from your early surrender after we applied the MVA. Also note that when you request an early surrender, we surrender an amount from your GPA that will give you the net amount you requested after we apply the MVA and any applicable surrender charge, unless you request otherwise. The current interest rate we offer on the GPA will change periodically at our discretion. It is the rate we are then paying on purchase payments, renewals and transfers paid under this class of contracts for Guarantee Period durations equaling the remaining Guarantee Period of the GPA to which the formula is being applied. -------------------------------------------------------------------------------- 77 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS APPENDIX B: EXAMPLE -- SURRENDER CHARGES FULL SURRENDER CHARGE CALCULATION -- TEN-YEAR SURRENDER CHARGE SCHEDULE: This is an example of how we calculate the surrender charge for a full surrender on a RAVA Advantage Plus contract with a ten-year surrender charge schedule with the following history: - we receive a single $100,000 purchase payment on Jan. 1, 2006; and - you surrender the contract for its total value on July 1, 2009. The surrender charge percentage in the fourth year after a purchase payment is 7.0%; and - you have made no surrenders prior to July 1, 2009. WE WILL LOOK AT TWO SITUATIONS, ONE WHERE THE CONTRACT HAS A GAIN AND ANOTHER WHERE THERE IS A LOSS:
CONTRACT CONTRACT WITH GAIN WITH LOSS Contract Value at time of full surrender: $120,000.00 $80,000.00 Contract Value on prior anniversary: 115,000.00 85,000.00 STEP 1. We determine the Total Free Amount (TFA) available in the contract as the greatest of the earnings or 10% of the prior anniversary value: Earnings in the contract: 20,000.00 0.00 10% of the prior anniversary's contract value: 11,500.00 8,500.00 ------------- ------------- Total Free Amount: 20,000.00 8,500.00 STEP 2. We determine the TFA that is from Purchase Payments: Total Free Amount: 20,000.00 8,500.00 Earnings in the contract: 20,000.00 0.00 Purchase Payments being Surrendered Free (PPF): 0.00 8,500.00 STEP 3. We calculate the Premium Ratio (PR): PR = [WD-TFA] / [CV-TFA] WD = 120,000.00 80,000.00 = the amount of the surrender TFA = 20,000.00 8,500.00 = the total free amount, step 1 CV = 120,000.00 80,000.00 = the contract value at the time of the surrender PR = 100% 100% = the premium ratio STEP 4. We calculate Chargeable Purchase Payments being Surrendered (CPP): CPP = PR x (PP-PPF) PR = 100% 100% = premium ratio, step 3 PP = 100,000.00 100,000.00 = purchase payments not previously surrendered PPF = 0.00 8,500.00 = purchase payments being surrendered free, step 2 CPP = 100,000.00 91,500.00 STEP 5. We calculate the Surrender Charges: Chargeable Purchase Payments: 100,000.00 91,500.00 Surrender Charge Percentage: 7% 7% Surrender Charge: 7,000.00 6,405.00 STEP 6. We calculate the Net Surrender Value: 120,000.00 80,000.00 Contract Value Surrendered: (7,000.00) (6,405.00) Contract Charge (assessed upon full surrender): (30.00) (30.00) Net Full Surrender Proceeds: 112,970.00 73,565.00
-------------------------------------------------------------------------------- 78 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS PARTIAL SURRENDER CHARGE CALCULATION - TEN-YEAR SURRENDER CHARGE SCHEDULE: This is an example of how we calculate the surrender charge for a partial surrender on a RAVA Advantage Plus contract with a ten-year surrender charge schedule with the following history: - we receive a single $100,000 purchase payment on Jan. 1, 2006; and - you request a partial surrender of $50,000 on July 1, 2009. The surrender charge percentage is 7.0%; and - you have made no surrenders prior to July 1, 2009. WE WILL LOOK AT TWO SITUATIONS, ONE WHERE THE CONTRACT HAS A GAIN AND ANOTHER WHERE THERE IS A LOSS:
CONTRACT CONTRACT WITH GAIN WITH LOSS Contract Value at time of partial surrender: $120,000.00 $80,000.00 Contract Value on prior anniversary: 115,000.00 85,000.00 STEP 1. We determine the Total Free Amount (TFA) available in the contract as the greatest of the earnings or 10% of the prior anniversary value: Earnings in the contract: 20,000.00 0.00 10% of the prior anniversary's contract value: 11,500.00 8,500.00 ------------- ------------- Total Free Amount: 20,000.00 8,500.00 STEP 2. We determine the TFA that is from Purchase Payments: Total Free Amount: 20,000.00 8,500.00 Earnings in the contract: 20,000.00 0.00 Purchase Payments being Surrendered Free (PPF): 0.00 8,500.00 STEP 3. We calculate the Premium Ratio (PR): PR = [WD-TFA] / [CV-TFA] WD = 50,000.00 50,000.00 = the amount of the surrender TFA = 20,000.00 8,500.00 = the total free amount, step 1 CV = 120,000.00 80,000.00 = the contract value at the time of surrender PR = 30% 58% = the premium ratio STEP 4. We calculate the Chargeable Purchase Payments being Surrendered (CPP): CPP = PR x (PP - PPF) PR = 30% 58% = premium ratio, step 3 PP = 100,000.00 100,000.00 = purchase payments not previously surrendered PPF = 0.00 8,500.00 = purchase payments being surrendered free, step 2 CPP = 30,000.00 53,108.39 = chargeable purchase payments being surrendered STEP 5. We calculate the Surrender Charges: Chargeable Purchase Payments: 30,000.00 53,108.39 Surrender Charge Percentage: 7% 7% Surrender Charge: 2,100 3,718 STEP 6. We calculate the Net Surrender Value: Contract Value Surrendered: 50,000.00 50,000.00 Surrender Charge: (2,100.00) (3,717.59) Net Full Surrender Proceeds: 47,900.00 46,282.41
-------------------------------------------------------------------------------- 79 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS FULL SURRENDER CHARGE CALCULATION -- THREE-YEAR SURRENDER CHARGE SCHEDULE: This is an example of how we calculate the surrender charge for a full surrender on a RAVA Select Plus contract with a three-year surrender charge schedule with the following history: - we receive a single $100,000 purchase payment on Jan. 1, 2006; and - you surrender the contract for its total value on July 1, 2007. The surrender charge percentage in the year after a purchase payment is 7.0%; and - you have made no surrenders prior to July 1, 2007. WE WILL LOOK AT TWO SITUATIONS, ONE WHERE THE CONTRACT HAS A GAIN AND ANOTHER WHERE THERE IS A LOSS:
CONTRACT CONTRACT WITH GAIN WITH LOSS Contract Value at time of full surrender: $120,000.00 $80,000.00 Contract Value on prior anniversary: 115,000.00 85,000.00 STEP 1. We determine the Total Free Amount (TFA) available in the contract as the greatest of the earnings or 10% of the prior anniversary value: Earnings in the Contract: 20,000.00 0.00 10% of the prior anniversary's contract value: 11,500.00 8,500.00 ------------- ------------- Total Free Amount: 20,000.00 8,500.00 STEP 2. We determine the TFA and Amount Free that is from Purchase Payments: Total Free Amount: 20,000.00 8,500.00 Earnings in the contract: 20,000.00 0.00 Purchase Payments being Surrendered Free (PPF): 0.00 8,500.00 STEP 3. We calculate the Premium Ratio (PR): PR = [WD-TFA] / [CV-TFA] WD = 120,000.00 80,000.00 = the amount of the surrender TFA = 20,000.00 8,500.00 = the total free amount, step 1 CV = 120,000.00 80,000.00 = the contract value at the time of the surrender PR = 100% 100% STEP 4. We calculate Chargeable Purchase Payments being Surrendered (CPP): CPP = PR x (PP-PPF) PR = 100% 100% = premium ratio, step 3 PP = 100,000.00 100,000.00 = purchase payments not previously surrendered PPF = 0.00 8,500.00 = purchase payments being surrendered free, step 2 CPP = 100,000.00 91,500.00 STEP 5. We calculate the Surrender Charges: Chargeable Purchase Payments: 100,000.00 91,500.00 Surrender Charge Percentage: 7% 7% Surrender Charge: 7,000.00 6,405.00 STEP 6. We calculate the Net Surrender Value: 120,000.00 80,000.00 Contract Value Surrendered: (7,000.00) (6,405.00) Contract Charge (assessed upon full surrender): (30.00) (30.00) Net Full Surrender Proceeds: 112,970.00 73,565.00
-------------------------------------------------------------------------------- 80 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS PARTIAL SURRENDER CHARGE CALCULATION -- THREE-YEAR SURRENDER CHARGE SCHEDULE: This is an example of how we calculate the surrender charge for a partial surrender on a RAVA Select Plus contract with a three-year surrender charge schedule with the following history: - we receive a single $100,000 purchase payment on Jan. 1, 2006; and - you request a partial surrender of $50,000 on July 1, 2007. The surrender charge percentage is 7.0%; and - you have made no surrenders prior to July 1, 2007. WE WILL LOOK AT TWO SITUATIONS, ONE WHERE THE CONTRACT HAS A GAIN AND ANOTHER WHERE THERE IS A LOSS:
CONTRACT CONTRACT WITH GAIN WITH LOSS Contract Value at time of partial surrender: $120,000.00 $80,000.00 Contract Value on prior anniversary: 115,000.00 85,000.00 STEP 1. We determine the Total Free Amount (TFA) available in the contract as the greatest of the earnings or 10% of the prior anniversary value: Earnings in the contract: 20,000.00 0.00 10% of the prior anniversary's contract value: 11,500.00 8,500.00 ------------- ------------- Total Free Amount: 20,000.00 8,500.00 STEP 2. We determine the Amount Free that is from Purchase Payments: Total Free Amount: 20,000.00 8,500.00 Earnings in the contract: 20,000.00 0.00 Purchase Payments being Surrendered Free (PPF): 0.00 8,500.00 STEP 3. We calculate the Premium Ratio (PR): PR = [WD-TFA] / [CV-TFA] WD = 50,000.00 50,000.00 = the amount of the surrender TFA = 20,000.00 8,500.00 = the total free amount, step 1 CV = 120,000.00 80,000.00 = the contract value at the time of surrender PR = 30% 58% = the premium ratio STEP 4. We calculate the Chargeable Purchase Payments being Surrendered (CPP): CPP = PR x (PP - PPF) PR = 30% 58% = premium ratio, step 3 PP = 100,000.00 100,000.00 = purchase payments not previously surrendered PPF = 0.00 8,500.00 = purchase payments being surrendered free, step 2 CPP = 30,000.00 53,108.39 = chargeable purchase payments being surrendered STEP 5. We calculate the Surrender Charges: Chargeable Purchase Payments: 30,000.00 53,108.39 Surrender Charge Percentage: 7% 7% Surrender Charge: 2,100 3,718 STEP 6. We calculate the Net Surrender Value: Contract Value Surrendered: 50,000.00 50,000.00 Surrender Charge: (2,100.00) (3,717.00) Net Full Surrender Proceeds: 47,900.00 46,282.41
-------------------------------------------------------------------------------- 81 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS APPENDIX C: EXAMPLE -- OPTIONAL BENEFITS EXAMPLE -- ACCUMULATION BENEFIT The following example shows how the Accumulation Benefit rider works based on hypothetical values. It is not intended to depict investment performance of the contract. The example assumes: - You purchase the contract (with the Accumulation Benefit rider) with a payment of $100,000. No purchase payment credit applies. - You make no additional purchase payments. - You do not exercise the Elective Step-up option. - The Accumulation Benefit rider fee is 0.60%.
ASSUMED NET PARTIAL SURRENDER ADJUSTED ACCUMULATION END OF CONTRACT YEAR RATE OF RETURN (BEGINNING OF YEAR) PARTIAL SURRENDER MCAV BENEFIT AMOUNT CONTRACT VALUE 1 12% 0 0 100,000 0 111,328 2 15% 0 0 102,422 0 127,259 3 3% 0 0 104,861 0 130,290 4 -8% 0 0 104,861 0 119,148 5 -15% 0 0 104,861 0 100,647 6 20% 2,000 2,084 102,778 0 117,666 7 15% 0 0 108,252 0 134,504 8 -10% 0 0 108,252 0 120,327 9 -20% 5,000 4,498 103,754 0 91,639 10 -12% 0 0 103,754 23,734 103,754
EXAMPLE -- WITHDRAWAL BENEFIT The following example shows how the Withdrawal Benefit rider works based on hypothetical values. It is not intended to depict investment performance of the contract. The example assumes: - You purchase the RAVA Select contract (with the Withdrawal Benefit rider) with a payment of $100,000. No purchase payment credit applies. - You make no additional purchase payments. - The contract earns a net return of -5%. - The Withdrawal Benefit rider fee is 0.60%. - You take withdrawals equal to the GBP (which is 7% of the GBA or $7,000) at the beginning of each contract year until the RBA is exhausted.
CONTRACT VALUE WITHDRAWAL CONTRACT VALUE CONTRACT YEAR (BEGINNING OF YEAR) (BEGINNING OF YEAR) (END OF YEAR) GBA RBA 1 $100,000 $7,000 $87,820 $100,000 $93,000 2 87,820 7,000 76,318 100,000 86,000 3 76,318 7,000 65,457 100,000 79,000 4 65,457 7,000 55,201 100,000 72,000 5 55,201 7,000 45,516 100,000 65,000 6 45,516 7,000 36,371 100,000 58,000 7 36,371 7,000 27,735 100,000 51,000 8 27,735 7,000 19,550 100,000 44,000 9 19,550 7,000 11,821 100,000 37,000 10 11,821 7,000 4,523 100,000 30,000 11 4,523 7,000 0 100,000 23,000 12 0 7,000 0 100,000 16,000 13 0 7,000 0 100,000 9,000 14 0 7,000 0 100,000 2,000 15 0 2,000 0 100,000 0
-------------------------------------------------------------------------------- 82 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS EXAMPLE -- ROPP DEATH BENEFIT - You purchase the contract (with the ROPP rider) with a payment of $20,000 on Jan. 1, 2006. - On March 1, 2007 the contract value falls to $18,000, at which point you take a $1,500 partial surrender, leaving a contract value of $16,500. We calculate the death benefit on March 1, 2007 as follows: The total purchase payments minus adjustments for partial surrenders: Total purchase payments $20,000 minus adjusted partial surrenders, calculated as: $1,500 X $20,000 ---------------- = - 1,667 $18,000 ------- for a death benefit of: $18,333
EXAMPLE -- MAV DEATH BENEFIT - You purchase the contract (with the MAV rider) with a payment of $20,000 on Jan. 1, 2006. - On Jan. 1, 2007 (the first contract anniversary) the contract value grows to $24,000. - On March 1, 2007 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2007 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: + 0 minus adjusted partial surrenders, calculated as: $1,500 X $24,000 ---------------- = - 1,636 $22,000 ------- for a death benefit of: $22,364
EXAMPLE -- 5-YEAR MAV DEATH BENEFIT - You purchase the contract (with the 5-Year MAV rider) with a payment of $20,000 on Jan. 1, 2006. - On Jan. 1, 2011 (the fifth contract anniversary) the contract value grows to $30,000. - On March 1, 2011 the contract value falls to $25,000, at which point you take a $1,500 partial surrender, leaving a contract value of $23,500. We calculate the death benefit on March 1, 2011 as follows: The maximum 5-year anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your 5-year contract anniversary contract values: $30,000 plus purchase payments made since that anniversary: + 0 minus adjusted partial surrenders, calculated as: $1,500 X $30,000 ---------------- = - 1,800 $25,000 ------- for a death benefit of: $28,200
-------------------------------------------------------------------------------- 83 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS EXAMPLE -- EEB DEATH BENEFIT - You purchase the contract with a payment of $100,000 on Jan. 1, 2006 and you are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEB. - On July 1, 2006 the contract value grows to $105,000. The death benefit on July 1, 2006 equals the standard death benefit, which is the contract value less purchase payment credits reversed, or $104,000. You have not reached the first contract anniversary so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2007 the contract value grows to $110,000. The death benefit on Jan. 1, 2007 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2008 the contract value falls to $105,000. The death benefit on Jan. 1, 2008 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Feb. 1, 2008 the contract value remains at $105,000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2011 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): ($50,000 X $110,000) $110,000 - ------------------ = $57,619 $105,000 plus the EEB (40% of earnings at death): 0.40 X ($57,619 - $55,000) = +1,048 ------- Total death benefit of: $58,667
- On Jan. 1, 2009 the contract value falls by $40,000. The death benefit on Jan. 1, 2009 equals the death benefit on Feb. 1, 2008. The reduction in contract value has no effect. - On Jan. 1, 2015 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2015 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2015 you make an additional purchase payment of $50,000 and your contract value grows to $250,500. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2015 equals: MAV death benefit amount (contract value less purchase payment credits reversed) $250,000 plus the EEB (40% of earnings at death) 0.40 X 2.50 X ($55,000) = +55,000 -------- Total death benefit of: $305,000
-------------------------------------------------------------------------------- 84 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - On July 1, 2016 the contract value remains $250,500 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2016 equals: MAV death benefit amount (contract value): $250,500 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 X ($250,500 - $105,000) = +58,200 -------- Total death benefit of: $308,700
EXAMPLE -- EEP DEATH BENEFIT - You purchase the contract with an exchange purchase payment of $100,000 on Jan. 1, 2006 and you are under age 70. You select the seven-year surrender charge schedule, the MAV and the EEP. - On July 1, 2006 the contract value grows to $105,000. The death benefit on July 1, 2006 equals the standard death benefit amount, which is the contract value less purchase payment credits reversed, or $104,000. You have not reached the first contract anniversary so neither the EEP Part I nor Part II provides any additional benefit at this time. - On Jan. 1, 2007 the contract value grows to $110,000. You have not reached the second contract anniversary so the EEP Part II does not provide any additional benefit at this time. The death benefit on Jan. 1, 2007 equals: MAV death benefit amount (contract value): $110,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit amount minus purchase payments not previously surrendered): 0.40 X ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2008 the contract value falls to $105,000. The death benefit on Jan. 1, 2008 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEP Part I (40% of earnings at death): 0.40 X ($110,000 - $100,000) = +4,000 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $100,000 = +10,000 -------- Total death benefit of: $124,000
- On Feb. 1, 2008 the contract value remains at $105,000 and you request a partial surrender, including the applicable 7% surrender charge, of $50,000. We will surrender $10,500 from your contract value free of charge (10% of your prior anniversary's contract value). The remainder of the surrender is subject to a 7% surrender charge because your purchase payment is two years old, so we will surrender $39,500 ($36,735 + $2,765 in surrender charges) from your contract value. Altogether, we will surrender $50,000 and pay you $47,235. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2008 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): ($50,000 x $110,000) $110,000 - ------------------- = $57,619 $105,000 plus the EEP Part I (40% of earnings at death): 0.40 x ($57,619 - $55,000) = +1,048 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 X $55,000 = +5,500 ------- Total death benefit of: $64,167
- On Jan. 1, 2009 the contract value falls by $40,000. The death benefit on Jan. 1, 2009 equals the death benefit on Feb. 1, 2008. The reduction in contract value has no effect. -------------------------------------------------------------------------------- 85 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS - On Jan. 1, 2015 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. Because we are beyond the fourth contract anniversary the EEP also reaches its maximum of 20%. The death benefit on Jan. 1, 2015 equals: MAV death benefit amount (contract value): $200,000 plus the EEP Part I (40% of earnings at death) .40 x (2.50 x $55,000) = +55,000 plus the EEP Part II which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $266,000
- On July 1, 2015 you make an additional purchase payment of $50,000 and your contract value grows to $250,500. The new purchase payment is less than one year old and so it has no effect on either the EEP Part I or EEP Part II. The death benefit on July 1, 2015 equals: MAV death benefit amount (contract value less purchase payment credits reversed): $250,000 plus the EEP Part I (40% of earnings at death) .40 x (2.50 x $55,000)= +55,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $316,000
- On July 1, 2016 the contract value remains $250,500 and the "new" purchase payment is one year old. The value of the EEP Part I changes but the value of the EEP Part II remains constant. The death benefit on July 1, 2016 equals: MAV death benefit amount (contract value): $250,500 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit minus payments not previously surrendered): 0.40 x ($250,500 - $105,000) = +58,200 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $319,700
-------------------------------------------------------------------------------- 86 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS APPENDIX D: CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount. The date in which operations commenced in each price level is noted in parentheses. We have not provided this information for subaccounts that were not available under your contract as of Dec. 31, 2005. VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.00 $ 0.94 $0.73 $0.98 $1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 1.00 $0.94 $0.73 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,554 110 85 4 6 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 1.03 $0.77 $0.98 $1.00 -- -- Accumulation unit value at end of period $ 1.28 $ 1.18 $1.03 $0.77 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 141 107 284 180 3 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 1.06 $0.82 $0.97 $1.00 -- -- Accumulation unit value at end of period $ 1.20 $ 1.14 $1.06 $0.82 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 140 132 66 3 -- -- -- AIM V.I. INTERNATIONAL GROWTH FUND, SERIES II SHARES (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.09 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5 -- -- -- -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.72 $ 0.69 $0.48 $0.91 $1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.72 $0.69 $0.48 $0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 532 249 96 3 -- -- -- ALLIANCEBERNSTEIN VPS GLOBAL TECHNOLOGY PORTFOLIO (CLASS B) (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 144 -- -- -- -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.09 $ 0.98 $0.75 $0.97 $1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 $0.98 $0.75 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,186 726 969 310 136 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.64 $ 1.32 $0.92 $0.98 $1.00 -- -- Accumulation unit value at end of period $ 1.90 $ 1.64 $1.32 $0.92 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,607 984 472 606 210 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.04 $ 0.91 $0.74 $0.93 $1.00 -- -- Accumulation unit value at end of period $ 1.17 $ 1.04 $0.91 $0.74 $0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 314 127 5 254 1 -- -- AMERICAN CENTURY VP ULTRA(R), CLASS II (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 618 -- -- -- -- -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.31 $ 1.15 $0.90 $1.04 $1.00 -- -- Accumulation unit value at end of period $ 1.36 $ 1.31 $1.15 $0.90 $1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,104 1,064 673 483 146 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 1.00 $ 0.93 $0.78 $0.89 $0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.05 $ 1.00 $0.93 $0.78 $0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 5 54 8 8 6 5 --
-------------------------------------------------------------------------------- 87 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B* (2/4/2004) Accumulation unit value at beginning of period $ 1.06 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.08 $ 1.06 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 499 89 -- -- -- -- -- *COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B MERGED INTO NATIONS HIGH YIELD BOND PORTFOLIO ON APRIL 28, 2006. ON MAY 1, 2006, NATIONS HIGH YIELD BOND PORTFOLIO CHANGED ITS NAME TO COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B. EVERGREEN VA INTERNATIONAL EQUITY FUND - CLASS 2 (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.32 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 661 76 -- -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.06 $ 1.01 $ 0.83 $1.00 $1.00 -- -- Accumulation unit value at end of period $ 1.14 $ 1.06 $ 1.01 $0.83 $1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,338 994 432 233 132 -- -- FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.59 $ 1.28 $ 0.93 $1.04 $1.00 -- -- Accumulation unit value at end of period $ 1.86 $ 1.59 $ 1.28 $0.93 $1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,702 1,034 510 325 132 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.20 $ 1.06 $ 0.75 $0.95 $1.00 -- -- Accumulation unit value at end of period $ 1.42 $ 1.20 $ 1.06 $0.75 $0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 728 573 205 324 7 -- -- FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.42 $ 1.85 $ 1.37 $1.35 $1.26 $0.96 $1.00 Accumulation unit value at end of period $ 2.73 $ 2.42 $ 1.85 $1.37 $1.35 $1.26 $0.96 Number of accumulation units outstanding at end of period (000 omitted) 667 487 349 205 211 148 4 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.98 $ 1.61 $ 1.22 $1.35 $1.20 $0.96 $1.00 Accumulation unit value at end of period $ 2.14 $ 1.98 $ 1.61 $1.22 $1.35 $1.20 $0.96 Number of accumulation units outstanding at end of period (000 omitted) 593 414 242 282 150 9 2 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 1.05 $ 0.85 $0.97 $1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.18 $ 1.05 $0.85 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 716 533 667 130 -- -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.09 $ 1.67 $ 1.31 $1.38 $1.24 $0.95 $1.00 Accumulation unit value at end of period $ 2.34 $ 2.09 $ 1.67 $1.31 $1.38 $1.24 $0.95 Number of accumulation units outstanding at end of period (000 omitted) 1,930 834 639 450 200 15 8 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.87 $ 0.67 $0.87 $0.99 $1.10 $1.00 Accumulation unit value at end of period $ 1.05 $ 0.99 $ 0.87 $0.67 $0.87 $0.99 $1.10 Number of accumulation units outstanding at end of period (000 omitted) 3,019 1,522 735 694 943 577 170 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.94 $ 0.83 $ 0.65 $0.73 $0.96 $1.07 $1.00 Accumulation unit value at end of period $ 1.04 $ 0.94 $ 0.83 $0.65 $0.73 $0.96 $1.07 Number of accumulation units outstanding at end of period (000 omitted) 1,238 1,236 2,397 636 253 57 8 LEGG MASON PARTNERS VARIABLE SMALL CAP GROWTH PORTFOLIO, CLASS II (11/1/2005) (PREVIOUSLY SALOMON BROTHERS SMALL CAP GROWTH FUND, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) -- -- -- -- -- -- -- MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.64 $ 0.59 $ 0.49 $0.68 $0.91 $1.00 -- Accumulation unit value at end of period $ 0.67 $ 0.64 $ 0.59 $0.49 $0.68 $0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 640 522 874 785 913 533 --
-------------------------------------------------------------------------------- 88 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.86 $ 0.81 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.90 $ 0.86 $ 0.81 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 558 576 622 485 548 352 -- MFS(R) TOTAL RETURN SERIES - SERVICE CLASS (2/4/2004) Accumulation unit value at beginning of period $ 1.10 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 291 92 -- -- -- -- -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.19 $ 0.92 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.38 $ 1.19 $ 0.92 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 588 211 139 139 138 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.31 $ 1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 756 158 -- -- -- -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.26 $ 1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 643 432 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.09 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,173 403 -- -- -- -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.98 $ 0.92 $ 0.78 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.10 $ 0.98 $ 0.92 $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 218 67 170 145 129 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.16 $ 1.01 $ 0.79 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.16 $ 1.01 $ 0.79 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 145 194 207 881 418 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.78 $ 0.59 $ 0.86 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.92 $ 0.78 $ 0.59 $ 0.86 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 374 375 431 525 1,092 1,330 183 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.06 $ 0.97 $ 0.81 $ 0.94 $ 1.06 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.06 $ 0.97 $ 0.81 $ 0.94 $ 1.06 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 623 257 221 120 296 145 10 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.11 $ 1.11 $ 1.10 $ 1.07 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.11 $ 1.11 $ 1.11 $ 1.10 $ 1.07 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 4,504 2,098 447 3,911 5,658 6,615 2,266 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 3.04% AND 3.09%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.04 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 100 73 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.29 $ 1.24 $ 1.20 $ 1.14 $ 1.06 $ 1.02 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.29 $ 1.24 $ 1.20 $ 1.14 $ 1.06 $ 1.02 Number of accumulation units outstanding at end of period (000 omitted) 3,619 2,145 1,691 762 985 410 47
-------------------------------------------------------------------------------- 89 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.36 $ 1.16 $ 0.82 $ 1.02 $ 1.01 $ 1.02 $1.00 Accumulation unit value at end of period $ 1.53 $ 1.36 $ 1.16 $ 0.82 $ 1.02 $ 1.01 $1.02 Number of accumulation units outstanding at end of period (000 omitted) 5,165 3,041 1,239 1,262 281 218 23 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.19 $ 0.96 $ 0.69 $ 0.73 $ 0.75 $ 1.00 -- Accumulation unit value at end of period $ 1.58 $ 1.19 $ 0.96 $ 0.69 $ 0.73 $ 0.75 -- Number of accumulation units outstanding at end of period (000 omitted) 1,491 475 115 277 3 1 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.46 $ 1.33 $ 1.18 $ 1.04 $ 1.03 $ 1.00 $1.00 Accumulation unit value at end of period $ 1.38 $ 1.46 $ 1.33 $ 1.18 $ 1.04 $ 1.03 $1.00 Number of accumulation units outstanding at end of period (000 omitted) 1,377 741 714 251 249 4 3 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,455 5,004 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.62 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.17 $1.00 Accumulation unit value at end of period $ 0.67 $ 0.62 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $1.17 Number of accumulation units outstanding at end of period (000 omitted) 6,193 2,153 1,664 1,064 1,285 1,762 401 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.22 $ 1.10 $ 0.89 $ 0.95 $ 0.91 $ 1.01 $1.00 Accumulation unit value at end of period $ 1.26 $ 1.22 $ 1.10 $ 0.89 $ 0.95 $ 0.91 $1.01 Number of accumulation units outstanding at end of period (000 omitted) 2,397 2,886 4,230 1,480 1,549 1,186 48 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 493 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.82 $ 0.70 $ 0.55 $ 0.67 $ 0.95 $ 1.27 $1.00 Accumulation unit value at end of period $ 0.92 $ 0.82 $ 0.70 $ 0.55 $ 0.67 $ 0.95 $1.27 Number of accumulation units outstanding at end of period (000 omitted) 1,252 848 143 488 65 81 133 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.80 $ 0.76 $ 0.59 $ 0.76 $ 0.94 $ 1.14 $1.00 Accumulation unit value at end of period $ 0.85 $ 0.80 $ 0.76 $ 0.59 $ 0.76 $ 0.94 $1.14 Number of accumulation units outstanding at end of period (000 omitted) 3,121 1,484 172 202 291 266 872 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.14 $ 1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 92 65 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.06 $ 0.87 $ 1.01 $ 1.00 -- -- Accumulation unit value at end of period $ 1.26 $ 1.15 $ 1.06 $ 0.87 $ 1.01 -- -- Number of accumulation units outstanding at end of period (000 omitted) 655 523 578 328 38 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006.
-------------------------------------------------------------------------------- 90 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.20 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 115 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.88 $ 0.86 $ 0.69 $ 0.89 $ 1.08 $ 1.19 $1.00 Accumulation unit value at end of period $ 0.89 $ 0.88 $ 0.86 $ 0.69 $ 0.89 $ 1.08 $1.19 Number of accumulation units outstanding at end of period (000 omitted) 1,645 3,017 3,155 3,029 3,252 3,919 426 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.85 $ 0.77 $ 0.61 $ 0.79 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.88 $ 0.85 $ 0.77 $ 0.61 $ 0.79 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 2,054 1,958 1,381 973 770 285 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.13 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.13 $ 1.13 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 235 182 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.23 $ 1.22 $ 1.21 $ 1.15 $ 1.09 $ 1.01 $1.00 Accumulation unit value at end of period $ 1.24 $ 1.23 $ 1.22 $ 1.21 $ 1.15 $ 1.09 $1.01 Number of accumulation units outstanding at end of period (000 omitted) 688 870 1,097 1,275 592 1 10 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.54 $ 1.31 $ 0.89 $ 1.08 $ 1.16 $ 1.12 $1.00 Accumulation unit value at end of period $ 1.61 $ 1.54 $ 1.31 $ 0.89 $ 1.08 $ 1.16 $1.12 Number of accumulation units outstanding at end of period (000 omitted) 514 779 660 393 378 286 28 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.28 $ 0.93 $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.61 $ 1.53 $ 1.28 $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,068 860 982 627 411 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.77 $ 0.71 $ 0.55 $ 0.81 $ 1.22 $ 1.52 $1.00 Accumulation unit value at end of period $ 0.83 $ 0.77 $ 0.71 $ 0.55 $ 0.81 $ 1.22 $1.52 Number of accumulation units outstanding at end of period (000 omitted) 147 192 221 386 607 798 33 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. VAN KAMPEN LIFE INVESTMENT TRUST COMSTOCK PORTFOLIO CLASS II SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.19 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,642 641 -- -- -- -- -- WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.40 $ 1.08 $ 0.73 $ 0.85 $ 1.09 $ 1.51 $1.00 Accumulation unit value at end of period $ 1.69 $ 1.40 $ 1.08 $ 0.73 $ 0.85 $ 1.09 $1.51 Number of accumulation units outstanding at end of period (000 omitted) 2,814 1,701 1,136 1,484 769 599 112 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.62 $ 1.37 $ 0.96 $ 1.17 $ 1.05 $ 1.15 $1.00 Accumulation unit value at end of period $ 1.79 $ 1.62 $ 1.37 $ 0.96 $ 1.17 $ 1.05 $1.15 Number of accumulation units outstanding at end of period (000 omitted) 2,709 1,415 1,250 847 820 990 125
-------------------------------------------------------------------------------- 91 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $1.15 $0.98 $0.72 $0.99 $1.00 -- -- Accumulation unit value at end of period $1.23 $1.15 $0.98 $0.72 $0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 467 408 445 314 136 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $0.93 $0.82 $0.58 $0.94 $1.00 -- -- Accumulation unit value at end of period $0.98 $0.93 $0.82 $0.58 $0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35 10 10 6 2 -- --
-------------------------------------------------------------------------------- 92 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.99 $ 0.94 $ 0.73 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.07 $ 0.99 $ 0.94 $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 134,591 39,117 20,015 11,313 1,710 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.02 $ 0.76 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.27 $ 1.17 $ 1.02 $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 24,349 20,043 10,924 6,981 1,459 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 1.05 $ 0.82 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.19 $ 1.14 $ 1.05 $ 0.82 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,621 10,625 8,724 5,572 1,081 -- -- AIM V.I. INTERNATIONAL GROWTH FUND, SERIES II SHARES (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.09 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 127 -- -- -- -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.72 $ 0.69 $ 0.48 $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.73 $ 0.72 $ 0.69 $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 31,926 14,454 7,882 3,769 490 -- -- ALLIANCEBERNSTEIN VPS GLOBAL TECHNOLOGY PORTFOLIO (CLASS B) (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,021 -- -- -- -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.08 $ 0.98 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.08 $ 0.98 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 149,316 125,010 82,114 43,189 5,550 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.63 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.88 $ 1.63 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 153,107 70,504 34,604 12,313 805 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.03 $ 0.91 $ 0.73 $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 1.16 $ 1.03 $ 0.91 $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 43,612 34,180 21,555 11,378 1,950 -- -- AMERICAN CENTURY VP ULTRA(R), CLASS II (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,074 -- -- -- -- -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.30 $ 1.15 $ 0.90 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.35 $ 1.30 $ 1.15 $ 0.90 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 142,660 110,681 74,984 42,497 7,356 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.04 $ 0.99 $ 0.92 $ 0.78 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 23,850 20,551 15,315 9,520 4,490 1,283 -- COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B* (2/4/2004) Accumulation unit value at beginning of period $ 1.06 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.06 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 47,440 16,517 -- -- -- -- -- *COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B MERGED INTO NATIONS HIGH YIELD BOND PORTFOLIO ON APRIL 28, 2006. ON MAY 1, 2006, NATIONS HIGH YIELD BOND PORTFOLIO CHANGED ITS NAME TO COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B.
-------------------------------------------------------------------------------- 93 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 EVERGREEN VA INTERNATIONAL EQUITY FUND - CLASS 2 (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.32 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 15,273 4,245 -- -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.06 $ 1.01 $ 0.82 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.06 $ 1.01 $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 189,109 187,351 119,284 48,686 6,363 -- -- FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.58 $ 1.27 $ 0.93 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.85 $ 1.58 $ 1.27 $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 260,492 188,565 109,647 50,458 6,903 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.19 $ 1.06 $ 0.75 $ 0.95 $ 1.00 -- -- Accumulation unit value at end of period $ 1.40 $ 1.19 $ 1.06 $ 0.75 $ 0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 70,878 66,935 31,322 13,157 2,147 -- -- FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.70 $ 2.39 $ 1.83 $ 1.36 $ 1.34 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 139,618 120,456 87,330 59,317 24,477 6,879 885 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.11 $ 1.96 $ 1.59 $ 1.21 $ 1.35 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 78,073 59,293 43,978 29,743 10,800 2,846 586 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.05 $ 0.85 $ 0.97 $ 1.00 -- -- Accumulation unit value at end of period $ 1.29 $ 1.17 $ 1.05 $ 0.85 $ 0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 69,986 45,710 26,370 10,942 942 -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.31 $ 2.07 $ 1.65 $ 1.30 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 174,918 115,616 83,015 56,079 23,748 7,622 1,634 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM( U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 0.98 $ 0.86 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 248,935 128,074 83,166 71,820 60,343 42,626 8,981 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.93 $ 0.82 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 101,054 90,221 62,349 29,532 15,860 7,958 1,981 LEGG MASON PARTNERS VARIABLE SMALL CAP GROWTH PORTFOLIO, CLASS II (11/1/2005) (PREVIOUSLY SALOMON BROTHERS SMALL CAP GROWTH FUND, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 55 -- -- -- -- -- -- MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.66 $ 0.64 $ 0.59 $ 0.48 $ 0.68 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 117,493 108,239 91,666 69,576 50,212 19,521 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.89 $ 0.85 $ 0.81 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 62,995 77,406 74,690 59,272 34,072 12,308 --
-------------------------------------------------------------------------------- 94 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 MFS(R) TOTAL RETURN SERIES - SERVICE CLASS (2/4/2004) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.11 $ 1.09 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 33,809 12,116 -- -- -- -- -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.92 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.37 $ 1.18 $ 0.92 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 55,870 28,362 18,051 10,543 2,997 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.16 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.31 $ 1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 33,811 11,540 -- -- -- -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.26 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,592 7,652 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.09 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 150,945 22,945 -- -- -- -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.97 $ 0.91 $ 0.78 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.09 $ 0.97 $ 0.91 $ 0.78 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,299 21,518 18,023 11,416 2,137 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.15 $ 1.00 $ 0.78 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.29 $ 1.15 $ 1.00 $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 37,980 40,598 38,012 20,773 2,460 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.91 $ 0.78 $ 0.59 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 49,747 57,095 67,224 72,033 74,819 49,764 5,084 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.08 $ 1.05 $ 0.97 $ 0.81 $ 0.94 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 92,705 84,704 79,035 64,273 37,760 28,348 5,220 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.10 $ 1.10 $ 1.10 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 193,996 187,100 203,753 255,251 243,870 171,785 65,522 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.83% AND 2.87%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 17,450 7,405 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.28 $ 1.23 $ 1.19 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 332,677 221,377 188,939 154,530 83,968 30,783 7,186 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.35 $ 1.15 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 408,559 255,776 134,486 86,442 43,328 12,124 3,149
-------------------------------------------------------------------------------- 95 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.54 $ 1.16 $ 0.94 $ 0.68 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 75,520 22,549 8,256 4,750 1,789 906 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.36 $ 1.44 $ 1.32 $ 1.18 $ 1.03 $ 1.03 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 130,135 82,347 51,936 31,133 16,572 8,968 1,552 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,038 2,274 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.62 $ 0.57 $ 0.48 $ 0.65 $ 0.95 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 323,849 191,140 192,314 135,693 129,186 97,754 16,891 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.21 $ 1.09 $ 0.88 $ 0.95 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 262,154 242,254 177,150 93,845 58,348 31,722 7,774 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 29,477 1,052 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.91 $ 0.81 $ 0.69 $ 0.55 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 77,787 51,446 23,614 20,012 15,821 13,967 2,575 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.84 $ 0.79 $ 0.75 $ 0.59 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 263,828 130,790 69,981 52,124 26,327 24,003 5,333 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.14 $ 1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,232 3,498 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.04 $ 0.85 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.23 $ 1.12 $ 1.04 $ 0.85 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 47,283 53,376 42,780 16,388 2,489 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,605 -- -- -- -- -- --
-------------------------------------------------------------------------------- 96 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.75% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.88 $ 0.87 $ 0.85 $ 0.69 $ 0.89 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 325,031 464,000 464,876 373,715 276,054 177,036 31,537 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.87 $ 0.84 $ 0.77 $ 0.61 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 154,949 144,039 103,587 64,771 35,957 9,812 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,247 4,730 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.22 $ 1.21 $ 1.21 $ 1.20 $ 1.14 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 145,087 160,725 155,718 124,866 50,510 16,258 11,135 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.60 $ 1.53 $ 1.30 $ 0.89 $ 1.08 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 59,243 61,563 44,627 29,202 22,792 14,830 2,970 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.52 $ 1.28 $ 0.93 $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.60 $ 1.52 $ 1.28 $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 127,559 90,541 67,609 43,199 6,885 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.76 $ 0.70 $ 0.55 $ 0.81 $ 1.22 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 41,306 52,582 60,915 58,958 58,748 46,978 4,470 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. VAN KAMPEN LIFE INVESTMENT TRUST COMSTOCK PORTFOLIO CLASS II SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.19 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 203,272 36,974 -- -- -- -- -- WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.67 $ 1.38 $ 1.07 $ 0.72 $ 0.85 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 170,230 104,567 66,022 43,554 27,818 18,245 1,234 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.77 $ 1.60 $ 1.36 $ 0.96 $ 1.16 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 241,623 184,961 129,824 78,311 40,791 23,813 2,476 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $ 1.14 $ 0.97 $ 0.72 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.22 $ 1.14 $ 0.97 $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 41,049 43,145 38,865 25,397 3,701 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.97 $ 0.92 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 19,618 22,185 19,289 9,992 2,060 -- --
-------------------------------------------------------------------------------- 97 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.98 $ 0.93 $ 0.73 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 0.98 $ 0.93 $ 0.73 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 64,800 21,785 12,215 7,624 1,711 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.16 $ 1.02 $ 0.76 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.26 $ 1.16 $ 1.02 $ 0.76 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 13,500 12,074 7,348 4,808 1,224 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.13 $ 1.05 $ 0.82 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.18 $ 1.13 $ 1.05 $ 0.82 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,396 6,649 5,460 3,709 901 -- -- AIM V.I. INTERNATIONAL GROWTH FUND, SERIES II SHARES (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.09 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 107 -- -- -- -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.71 $ 0.69 $ 0.48 $ 0.91 $ 1.00 -- -- Accumulation unit value at end of period $ 0.72 $ 0.71 $ 0.69 $ 0.48 $ 0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,960 8,076 5,212 2,845 911 -- -- ALLIANCEBERNSTEIN VPS GLOBAL TECHNOLOGY PORTFOLIO (CLASS B) (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 801 -- -- -- -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.07 $ 0.97 $ 0.74 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.07 $ 0.97 $ 0.74 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 91,924 75,935 54,358 29,770 4,363 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $ 1.61 $ 1.31 $ 0.92 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.86 $ 1.61 $ 1.31 $ 0.92 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,909 44,705 24,114 9,270 790 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.03 $ 0.90 $ 0.73 $ 0.93 $ 1.00 -- -- Accumulation unit value at end of period $ 1.15 $ 1.03 $ 0.90 $ 0.73 $ 0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,136 22,031 15,471 8,200 1,927 -- -- AMERICAN CENTURY VP ULTRA(R), CLASS II (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,856 -- -- -- -- -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $ 1.29 $ 1.14 $ 0.89 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.34 $ 1.29 $ 1.14 $ 0.89 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 95,710 71,318 50,607 30,523 7,298 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 1.02 $ 0.98 $ 0.91 $ 0.77 $ 0.89 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 19,301 17,682 14,100 9,832 6,090 1,693 -- COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B* (2/4/2004) Accumulation unit value at beginning of period $ 1.05 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.07 $ 1.05 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 27,476 9,912 -- -- -- -- -- *COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B MERGED INTO NATIONS HIGH YIELD BOND PORTFOLIO ON APRIL 28, 2006. ON MAY 1, 2006, NATIONS HIGH YIELD BOND PORTFOLIO CHANGED ITS NAME TO COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B.
-------------------------------------------------------------------------------- 98 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 EVERGREEN VA INTERNATIONAL EQUITY FUND - CLASS 2 (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.31 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 9,815 2,086 -- -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.05 $ 1.00 $ 0.82 $ 1.00 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.05 $ 1.00 $ 0.82 $ 1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 121,317 119,521 81,919 36,320 8,177 -- -- FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.57 $ 1.27 $ 0.93 $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.83 $ 1.57 $ 1.27 $ 0.93 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 157,678 117,171 72,124 35,541 6,689 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 1.05 $ 0.74 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 1.39 $ 1.18 $ 1.05 $ 0.74 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 48,642 42,672 21,405 10,123 2,157 -- -- FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.66 $ 2.37 $ 1.81 $ 1.35 $ 1.33 $ 1.25 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 88,911 80,587 63,047 44,591 19,803 6,181 683 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 $ 1.00 Accumulation unit value at end of period $ 2.09 $ 1.94 $ 1.58 $ 1.21 $ 1.34 $ 1.19 $ 0.96 Number of accumulation units outstanding at end of period (000 omitted) 55,521 44,541 34,639 23,553 9,584 2,897 590 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $ 1.17 $ 1.04 $ 0.84 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.28 $ 1.17 $ 1.04 $ 0.84 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 50,166 33,241 21,294 9,151 1,114 -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 2.29 $ 2.05 $ 1.64 $ 1.29 $ 1.37 $ 1.23 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 117,932 84,473 65,106 47,539 24,711 10,265 2,023 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.97 $ 0.85 $ 0.67 $ 0.86 $ 0.99 $ 1.10 Number of accumulation units outstanding at end of period (000 omitted) 168,697 108,140 80,350 75,489 71,185 55,239 9,951 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.92 $ 0.81 $ 0.64 $ 0.72 $ 0.96 $ 1.07 Number of accumulation units outstanding at end of period (000 omitted) 73,982 66,844 53,159 28,853 19,727 10,774 2,504 LEGG MASON PARTNERS VARIABLE SMALL CAP GROWTH PORTFOLIO, CLASS II (11/1/2005) (PREVIOUSLY SALOMON BROTHERS SMALL CAP GROWTH FUND, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.05 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 41 -- -- -- -- -- -- MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 $ 1.00 -- Accumulation unit value at end of period $ 0.65 $ 0.63 $ 0.59 $ 0.48 $ 0.67 $ 0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 84,506 78,223 74,564 62,663 51,051 21,973 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 $ 1.00 -- Accumulation unit value at end of period $ 0.88 $ 0.84 $ 0.80 $ 0.61 $ 0.90 $ 0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 48,503 60,214 61,988 53,383 36,822 15,060 --
-------------------------------------------------------------------------------- 99 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 MFS(R) TOTAL RETURN SERIES - SERVICE CLASS (2/4/2004) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.11 $ 1.09 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,473 6,922 -- -- -- -- -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $ 1.18 $ 0.91 $ 0.68 $ 0.89 $ 1.00 -- -- Accumulation unit value at end of period $ 1.36 $ 1.18 $ 0.91 $ 0.68 $ 0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35,163 18,264 12,519 7,093 2,778 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,721 6,121 -- -- -- -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.25 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 12,037 4,085 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.08 $ 1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 94,657 11,924 -- -- -- -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 0.96 $ 0.91 $ 0.77 $ 0.98 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 0.96 $ 0.91 $ 0.77 $ 0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,517 11,248 9,676 6,574 1,743 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $ 1.15 $ 1.00 $ 0.78 $ 0.96 $ 1.00 -- -- Accumulation unit value at end of period $ 1.27 $ 1.15 $ 1.00 $ 0.78 $ 0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 23,458 24,819 24,880 15,138 2,180 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 0.90 $ 0.77 $ 0.58 $ 0.85 $ 1.29 $ 1.36 Number of accumulation units outstanding at end of period (000 omitted) 42,680 51,579 63,075 73,930 87,722 68,407 7,245 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 $ 1.00 Accumulation unit value at end of period $ 1.07 $ 1.04 $ 0.96 $ 0.80 $ 0.93 $ 1.05 $ 1.09 Number of accumulation units outstanding at end of period (000 omitted) 77,525 74,540 73,310 64,613 53,096 39,810 6,539 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.08 $ 1.09 $ 1.09 $ 1.09 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 147,452 148,915 178,580 228,237 265,455 203,922 87,424 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.62% AND 2.65%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.03 $ 1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 15,300 4,962 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.28 $ 1.26 $ 1.22 $ 1.18 $ 1.13 $ 1.06 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 257,273 190,125 176,013 159,405 106,760 43,920 11,675 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.34 $ 1.14 $ 0.82 $ 1.02 $ 1.01 $ 1.03 Number of accumulation units outstanding at end of period (000 omitted) 278,737 181,318 99,776 67,958 41,299 14,227 3,441
-------------------------------------------------------------------------------- 100 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 $ 1.00 -- Accumulation unit value at end of period $ 1.53 $ 1.15 $ 0.94 $ 0.67 $ 0.72 $ 0.74 -- Number of accumulation units outstanding at end of period (000 omitted) 44,244 16,315 6,501 3,888 1,542 693 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.34 $ 1.43 $ 1.31 $ 1.17 $ 1.03 $ 1.02 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 102,876 72,702 54,100 36,626 23,970 14,137 2,368 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 51,906 1,504 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 $ 1.00 Accumulation unit value at end of period $ 0.66 $ 0.61 $ 0.57 $ 0.47 $ 0.64 $ 0.94 $ 1.18 Number of accumulation units outstanding at end of period (000 omitted) 212,229 135,373 147,485 118,986 130,764 106,410 13,813 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.20 $ 1.08 $ 0.87 $ 0.94 $ 0.91 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 237,711 236,566 197,358 122,784 88,813 52,655 10,137 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 18,068 783 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 $ 1.00 Accumulation unit value at end of period $ 0.90 $ 0.80 $ 0.69 $ 0.54 $ 0.67 $ 0.95 $ 1.27 Number of accumulation units outstanding at end of period (000 omitted) 61,793 40,351 21,462 19,189 18,664 15,670 2,173 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 0.82 $ 0.78 $ 0.75 $ 0.58 $ 0.76 $ 0.93 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 144,230 94,730 45,599 34,956 26,779 22,159 3,227 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- -- -- -- NUMBER OF ACCUMULATION UNITS OUTSTANDING AT END OF PERIOD (000 OMITTED) 3,594 2,030 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.03 $ 0.85 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.22 $ 1.11 $ 1.03 $ 0.85 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 31,419 35,498 29,450 12,145 2,238 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,982 -- -- -- -- -- --
-------------------------------------------------------------------------------- 101 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.95% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 $ 1.00 Accumulation unit value at end of period $ 0.87 $ 0.86 $ 0.84 $ 0.68 $ 0.88 $ 1.07 $ 1.19 Number of accumulation units outstanding at end of period (000 omitted) 234,424 352,273 387,251 347,841 307,320 219,316 32,483 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 $ 1.00 -- Accumulation unit value at end of period $ 0.86 $ 0.84 $ 0.77 $ 0.60 $ 0.79 $ 0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 122,070 117,372 91,398 65,011 40,575 14,084 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,777 2,540 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.20 $ 1.20 $ 1.19 $ 1.13 $ 1.08 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 121,249 130,386 135,202 116,147 56,966 24,654 12,796 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 $ 1.00 Accumulation unit value at end of period $ 1.58 $ 1.52 $ 1.29 $ 0.88 $ 1.07 $ 1.16 $ 1.12 Number of accumulation units outstanding at end of period (000 omitted) 46,718 51,057 39,709 29,341 24,346 16,349 3,029 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.51 $ 1.27 $ 0.93 $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.59 $ 1.51 $ 1.27 $ 0.93 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 72,463 57,581 44,918 28,099 6,314 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 0.81 $ 0.75 $ 0.69 $ 0.54 $ 0.81 $ 1.21 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 31,424 41,862 50,934 55,183 65,574 58,414 3,901 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. VAN KAMPEN LIFE INVESTMENT TRUST COMSTOCK PORTFOLIO CLASS II SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- -- -- -- Accumulation unit value at end of period $ 1.18 $ 1.15 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 96,755 18,714 -- -- -- -- -- WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 $ 1.00 Accumulation unit value at end of period $ 1.65 $ 1.37 $ 1.06 $ 0.72 $ 0.84 $ 1.08 $ 1.51 Number of accumulation units outstanding at end of period (000 omitted) 114,381 79,981 56,466 42,309 30,297 21,844 1,343 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 $ 1.00 Accumulation unit value at end of period $ 1.74 $ 1.58 $ 1.35 $ 0.95 $ 1.15 $ 1.05 $ 1.15 Number of accumulation units outstanding at end of period (000 omitted) 169,886 140,320 108,046 72,853 46,456 29,881 2,723 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $ 1.13 $ 0.97 $ 0.72 $ 0.99 $ 1.00 -- -- Accumulation unit value at end of period $ 1.21 $ 1.13 $ 0.97 $ 0.72 $ 0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 25,313 25,983 24,999 17,130 3,747 -- -- WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $ 0.91 $ 0.81 $ 0.58 $ 0.94 $ 1.00 -- -- Accumulation unit value at end of period $ 0.96 $ 0.91 $ 0.81 $ 0.58 $ 0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 14,334 16,103 13,800 7,655 2,230 -- --
-------------------------------------------------------------------------------- 102 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.05 $ 1.00 $ 0.78 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.05 $ 1.00 $ 0.78 Number of accumulation units outstanding at end of period (000 omitted) 24,536 5,492 1,386 379 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.07 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.23 $ 1.07 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 2,836 2,429 1,198 552 AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.20 $ 1.11 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.20 $ 1.11 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 1,322 1,122 925 526 AIM V.I. INTERNATIONAL GROWTH FUND, SERIES II SHARES (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.09 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2 -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.84 $ 0.81 $ 0.56 $ 1.00 Accumulation unit value at end of period $ 0.85 $ 0.84 $ 0.81 $ 0.56 Number of accumulation units outstanding at end of period (000 omitted) 4,728 1,650 851 192 ALLIANCEBERNSTEIN VPS GLOBAL TECHNOLOGY PORTFOLIO (CLASS B) (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 333 -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.16 $ 1.06 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.21 $ 1.16 $ 1.06 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 20,739 16,610 9,284 3,503 ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.68 $ 1.36 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.94 $ 1.68 $ 1.36 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 25,568 11,679 5,621 1,417 AMERICAN CENTURY VP INTERNATIONAL, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.19 $ 1.05 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.19 $ 1.05 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 7,538 4,969 2,812 944 AMERICAN CENTURY VP ULTRA(R), CLASS II (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,015 -- -- -- AMERICAN CENTURY VP VALUE, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.28 $ 1.13 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.33 $ 1.28 $ 1.13 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 25,428 16,423 8,977 2,837 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.11 $ 1.04 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.17 $ 1.11 $ 1.04 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 3,186 2,458 1,272 211 COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B* (2/4/2004) Accumulation unit value at beginning of period $ 1.05 $ 1.00 -- -- Accumulation unit value at end of period $ 1.07 $ 1.05 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,856 3,881 -- -- *COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B MERGED INTO NATIONS HIGH YIELD BOND PORTFOLIO ON APRIL 28, 2006. ON MAY 1, 2006, NATIONS HIGH YIELD BOND PORTFOLIO CHANGED ITS NAME TO COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B.
-------------------------------------------------------------------------------- 103 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- EVERGREEN VA INTERNATIONAL EQUITY FUND - CLASS 2 (2/4/2004) Accumulation unit value at beginning of period $ 1.14 $ 1.00 -- -- Accumulation unit value at end of period $ 1.31 $ 1.14 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,632 1,316 -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.09 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.16 $ 1.09 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 28,158 27,602 15,940 3,592 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.52 $ 1.23 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.77 $ 1.52 $ 1.23 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 46,944 30,787 15,111 4,182 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.32 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.55 $ 1.32 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 9,686 7,474 2,900 553 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.77 $ 1.36 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.99 $ 1.77 $ 1.36 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 22,307 17,231 9,166 2,887 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.47 $ 1.20 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.59 $ 1.47 $ 1.20 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 13,298 8,980 5,248 2,075 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.23 $ 1.10 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.35 $ 1.23 $ 1.10 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 18,871 13,076 6,742 1,735 GOLDMAN SACHS VIT MID CAP VALUE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.51 $ 1.21 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.69 $ 1.51 $ 1.21 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 30,996 15,049 7,743 2,583 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (2/13/2002) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.17 $ 1.03 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.17 $ 1.03 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 30,636 9,922 2,742 1,048 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.33 $ 1.17 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.46 $ 1.33 $ 1.17 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 7,418 5,816 3,058 499 LEGG MASON PARTNERS VARIABLE SMALL CAP GROWTH PORTFOLIO, CLASS II (11/1/2005) (PREVIOUSLY SALOMON BROTHERS SMALL CAP GROWTH FUND, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.05 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 4 -- -- -- MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.03 $ 0.99 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 8,658 5,399 2,971 1,088 MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.96 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.00 $ 0.96 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 6,257 6,311 5,191 2,112
-------------------------------------------------------------------------------- 104 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- MFS(R) TOTAL RETURN SERIES - SERVICE CLASS (2/4/2004) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 10,940 3,567 -- -- MFS(R) UTILITIES SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.47 $ 1.14 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.70 $ 1.47 $ 1.14 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 6,871 3,380 1,670 276 OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 11,208 4,318 -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.25 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 6,924 2,998 -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.07 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 34,899 7,003 -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.94 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.00 $ 0.94 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 4,351 2,530 1,776 617 PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.26 $ 1.09 $ 0.86 $ 1.00 Accumulation unit value at end of period $ 1.40 $ 1.26 $ 1.09 $ 0.86 Number of accumulation units outstanding at end of period (000 omitted) 4,252 4,043 4,165 2,086 PUTNAM VT VISTA FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.13 $ 0.96 $ 0.73 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.13 $ 0.96 $ 0.73 Number of accumulation units outstanding at end of period (000 omitted) 736 559 614 267 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.16 $ 1.07 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.19 $ 1.16 $ 1.07 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 3,385 2,471 1,608 531 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 0.99 $ 1.00 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 0.99 $ 1.00 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 22,067 19,507 13,022 12,452 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.60% AND 2.63%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- Accumulation unit value at end of period $ 1.02 $ 1.02 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,994 1,612 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.07 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.11 $ 1.07 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 50,746 22,751 13,984 6,481 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.36 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.53 $ 1.36 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 47,282 24,579 8,342 3,101
-------------------------------------------------------------------------------- 105 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 --------------------------------------------------------------------------------------------------------------------------- RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.54 $ 1.25 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 2.04 $ 1.54 $ 1.25 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 8,412 1,983 492 220 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.39 $ 1.28 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.39 $ 1.28 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 18,771 8,568 3,885 1,060 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- Accumulation unit value at end of period $ 1.05 $ 1.03 -- -- Number of accumulation units outstanding at end of period (000 omitted) 20,279 653 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.77 $ 1.00 Accumulation unit value at end of period $ 1.06 $ 0.99 $ 0.92 $ 0.77 Number of accumulation units outstanding at end of period (000 omitted) 23,296 7,403 5,647 973 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.28 $ 1.16 $ 0.94 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.28 $ 1.16 $ 0.94 Number of accumulation units outstanding at end of period (000 omitted) 28,189 24,305 16,280 3,957 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 7,061 300 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.26 $ 1.08 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.42 $ 1.26 $ 1.08 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,133 2,551 340 55 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.00 $ 0.95 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 1.00 $ 0.95 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 27,550 4,862 1,779 291 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 921 450 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.07 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.15 $ 1.07 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 5,505 5,961 4,649 1,153 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 622 -- -- --
-------------------------------------------------------------------------------- 106 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.00% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.01 $ 0.99 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.01 $ 1.01 $ 0.99 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 16,468 23,120 18,133 6,565 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.01 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.14 $ 1.10 $ 1.01 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 14,184 11,269 6,544 1,889 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- Accumulation unit value at end of period $ 1.12 $ 1.12 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,493 840 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.05 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 1.04 $ 1.05 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 18,707 17,403 14,902 6,107 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.46 $ 1.25 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.52 $ 1.46 $ 1.25 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,744 5,617 2,920 900 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.43 $ 1.21 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.50 $ 1.43 $ 1.21 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 20,683 11,379 7,181 3,316 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 1.00 $ 0.92 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.08 $ 1.00 $ 0.92 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 471 438 401 114 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. VAN KAMPEN LIFE INVESTMENT TRUST COMSTOCK PORTFOLIO CLASS II SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.18 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 53,896 12,916 -- -- WANGER INTERNATIONAL SMALL CAP (2/13/2002) Accumulation unit value at beginning of period $ 1.66 $ 1.28 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.99 $ 1.66 $ 1.28 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 19,260 9,273 4,376 1,523 WANGER U.S. SMALLER COMPANIES (2/13/2002) Accumulation unit value at beginning of period $ 1.41 $ 1.21 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.56 $ 1.41 $ 1.21 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 41,455 26,304 13,657 3,732 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.01 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.26 $ 1.18 $ 1.01 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 7,621 6,990 5,557 2,340 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.06 $ 0.94 $ 0.67 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.06 $ 0.94 $ 0.67 Number of accumulation units outstanding at end of period (000 omitted) 2,596 2,735 1,772 662
-------------------------------------------------------------------------------- 107 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.04 $ 0.99 $ 0.78 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.04 $ 0.99 $ 0.78 Number of accumulation units outstanding at end of period (000 omitted) 11,202 2,736 978 447 AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.22 $ 1.07 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.22 $ 1.07 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 1,835 1,591 774 463 AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.19 $ 1.11 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.19 $ 1.11 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 832 915 731 446 AIM V.I. INTERNATIONAL GROWTH FUND, SERIES II SHARES (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.09 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5 -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (2/13/2002) Accumulation unit value at beginning of period $ 0.83 $ 0.80 $ 0.56 $ 1.00 Accumulation unit value at end of period $ 0.84 $ 0.83 $ 0.80 $ 0.56 Number of accumulation units outstanding at end of period (000 omitted) 2,168 923 573 157 ALLIANCEBERNSTEIN VPS GLOBAL TECHNOLOGY PORTFOLIO (CLASS B) (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.06 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 148 -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.16 $ 1.05 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.20 $ 1.16 $ 1.05 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 14,313 11,547 7,339 4,072 ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (2/13/2002) Accumulation unit value at beginning of period $ 1.67 $ 1.35 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.92 $ 1.67 $ 1.35 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 16,470 7,898 3,918 1,371 AMERICAN CENTURY VP INTERNATIONAL, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.18 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,768 2,448 1,128 448 AMERICAN CENTURY VP ULTRA(R), CLASS II (11/1/2005) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.04 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,015 -- -- -- AMERICAN CENTURY VP VALUE, CLASS II (2/13/2002) Accumulation unit value at beginning of period $ 1.27 $ 1.13 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.32 $ 1.27 $ 1.13 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 16,716 10,779 5,922 2,396 CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.11 $ 1.04 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.16 $ 1.11 $ 1.04 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 2,283 1,690 769 208 COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B* (2/4/2004) Accumulation unit value at beginning of period $ 1.05 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 1.05 -- -- Number of accumulation units outstanding at end of period (000 omitted) 8,509 3,599 -- -- *COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B MERGED INTO NATIONS HIGH YIELD BOND PORTFOLIO ON APRIL 28, 2006. ON MAY 1, 2006, NATIONS HIGH YIELD BOND PORTFOLIO CHANGED ITS NAME TO COLUMBIA HIGH YIELD FUND, VARIABLE SERIES, CLASS B.
-------------------------------------------------------------------------------- 108 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- EVERGREEN VA INTERNATIONAL EQUITY FUND - CLASS 2 (2/4/2004) Accumulation unit value at beginning of period $ 1.14 $ 1.00 -- -- Accumulation unit value at end of period $ 1.31 $ 1.14 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,150 728 -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.09 $ 1.04 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.15 $ 1.09 $ 1.04 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 18,132 18,010 11,020 3,508 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.51 $ 1.23 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.76 $ 1.51 $ 1.23 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 28,423 18,934 9,886 3,541 FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.31 $ 1.17 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.53 $ 1.31 $ 1.17 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 6,520 5,276 2,292 610 FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.76 $ 1.35 $ 1.01 $ 1.00 Accumulation unit value at end of period $ 1.97 $ 1.76 $ 1.35 $ 1.01 Number of accumulation units outstanding at end of period (000 omitted) 15,139 12,119 6,601 2,989 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.46 $ 1.20 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.57 $ 1.46 $ 1.20 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 8,682 5,338 3,257 1,610 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (2/13/2002) Accumulation unit value at beginning of period $ 1.22 $ 1.10 $ 0.89 $ 1.00 Accumulation unit value at end of period $ 1.34 $ 1.22 $ 1.10 $ 0.89 Number of accumulation units outstanding at end of period (000 omitted) 11,400 7,311 3,856 1,418 GOLDMAN SACHS VIT MID CAP VALUE FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.50 $ 1.21 $ 0.95 $ 1.00 Accumulation unit value at end of period $ 1.68 $ 1.50 $ 1.21 $ 0.95 Number of accumulation units outstanding at end of period (000 omitted) 20,011 10,047 5,836 2,777 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (2/13/2002) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $ 1.17 $ 1.03 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.23 $ 1.17 $ 1.03 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 16,269 6,220 2,770 1,483 LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (2/13/2002) Accumulation unit value at beginning of period $ 1.33 $ 1.17 $ 0.92 $ 1.00 Accumulation unit value at end of period $ 1.45 $ 1.33 $ 1.17 $ 0.92 Number of accumulation units outstanding at end of period (000 omitted) 4,983 4,090 2,091 566 LEGG MASON PARTNERS VARIABLE SMALL CAP GROWTH PORTFOLIO, CLASS II (11/1/2005) (PREVIOUSLY SALOMON BROTHERS SMALL CAP GROWTH FUND, CLASS II) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.05 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 5 -- -- -- MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.02 $ 0.99 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 4,710 3,047 2,246 712 MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.95 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.00 $ 0.95 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 4,247 4,567 3,912 1,784
-------------------------------------------------------------------------------- 109 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- MFS(R) TOTAL RETURN SERIES - SERVICE CLASS (2/4/2004) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.10 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 8,946 3,545 -- -- MFS(R) UTILITIES SERIES - SERVICE CLASS (2/13/2002) Accumulation unit value at beginning of period $ 1.46 $ 1.14 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.68 $ 1.46 $ 1.14 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 5,189 2,575 1,371 431 OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.30 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 5,927 2,391 -- -- OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.24 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,700 1,477 -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.06 $ 1.00 -- -- Accumulation unit value at end of period $ 1.08 $ 1.06 -- -- Number of accumulation units outstanding at end of period (000 omitted) 23,303 4,223 -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.00 $ 0.94 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.11 $ 1.00 $ 0.94 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 2,388 1,649 1,108 583 PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.25 $ 1.09 $ 0.86 $ 1.00 Accumulation unit value at end of period $ 1.39 $ 1.25 $ 1.09 $ 0.86 Number of accumulation units outstanding at end of period (000 omitted) 3,019 2,995 2,797 1,392 PUTNAM VT VISTA FUND - CLASS IB SHARES (2/13/2002) Accumulation unit value at beginning of period $ 1.12 $ 0.96 $ 0.73 $ 1.00 Accumulation unit value at end of period $ 1.24 $ 1.12 $ 0.96 $ 0.73 Number of accumulation units outstanding at end of period (000 omitted) 598 413 417 192 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.07 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 1.18 $ 1.15 $ 1.07 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 3,085 2,273 1,117 462 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.99 $ 1.00 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 0.99 $ 0.99 $ 1.00 Number of accumulation units outstanding at end of period (000 omitted) 18,979 15,014 12,047 12,148 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 2.38% AND 2.40%, RESPECTIVELY. RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $ 1.02 $ 1.00 -- -- Accumulation unit value at end of period $ 1.02 $ 1.02 -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,473 1,734 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $ 1.11 $ 1.07 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.12 $ 1.11 $ 1.07 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 37,023 19,654 12,452 5,971 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $ 1.35 $ 1.15 $ 0.83 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.35 $ 1.15 $ 0.83 Number of accumulation units outstanding at end of period (000 omitted) 33,232 17,932 5,976 2,058
-------------------------------------------------------------------------------- 110 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $ 1.53 $ 1.25 $ 0.90 $ 1.00 Accumulation unit value at end of period $ 2.02 $ 1.53 $ 1.25 $ 0.90 Number of accumulation units outstanding at end of period (000 omitted) 4,677 1,199 318 121 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $ 1.38 $ 1.27 $ 1.14 $ 1.00 Accumulation unit value at end of period $ 1.30 $ 1.38 $ 1.27 $ 1.14 Number of accumulation units outstanding at end of period (000 omitted) 15,541 8,857 4,839 1,529 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $ 1.03 $ 1.00 -- -- Accumulation unit value at end of period $ 1.04 $ 1.03 -- -- Number of accumulation units outstanding at end of period (000 omitted) 13,014 516 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $ 0.98 $ 0.92 $ 0.76 $ 1.00 Accumulation unit value at end of period $ 1.05 $ 0.98 $ 0.92 $ 0.76 Number of accumulation units outstanding at end of period (000 omitted) 13,519 4,079 2,868 392 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $ 1.27 $ 1.15 $ 0.93 $ 1.00 Accumulation unit value at end of period $ 1.31 $ 1.27 $ 1.15 $ 0.93 Number of accumulation units outstanding at end of period (000 omitted) 27,474 25,456 15,576 4,269 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.00 -- -- Accumulation unit value at end of period $ 1.06 $ 1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 4,187 271 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $ 1.25 $ 1.08 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.41 $ 1.25 $ 1.08 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,647 2,172 496 105 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $ 1.08 $ 1.03 $ 0.81 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.08 $ 1.03 $ 0.81 Number of accumulation units outstanding at end of period (000 omitted) 11,604 2,482 744 96 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.09 $ 1.00 -- -- Accumulation unit value at end of period $ 1.13 $ 1.09 -- -- Number of accumulation units outstanding at end of period (000 omitted) 632 499 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $ 1.15 $ 1.06 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.15 $ 1.06 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 2,961 3,400 2,602 889 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.00 -- -- -- Accumulation unit value at end of period $ 1.19 -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 393 -- -- --
-------------------------------------------------------------------------------- 111 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 1.20% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 ------------------------------------------------------------------------------------------------------------------- RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $ 1.00 $ 0.98 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.00 $ 1.00 $ 0.98 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 8,727 14,408 12,471 5,049 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006 RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $ 1.10 $ 1.01 $ 0.80 $ 1.00 Accumulation unit value at end of period $ 1.13 $ 1.10 $ 1.01 $ 0.80 Number of accumulation units outstanding at end of period (000 omitted) 10,825 9,241 5,428 1,648 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $ 1.12 $ 1.00 -- -- Accumulation unit value at end of period $ 1.11 $ 1.12 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,193 732 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $ 1.04 $ 1.04 $ 1.04 $ 1.00 Accumulation unit value at end of period $ 1.04 $ 1.04 $ 1.04 $ 1.04 Number of accumulation units outstanding at end of period (000 omitted) 16,802 16,700 13,079 7,646 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $ 1.45 $ 1.24 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.51 $ 1.45 $ 1.24 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 3,917 3,802 2,139 516 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $ 1.42 $ 1.20 $ 0.88 $ 1.00 Accumulation unit value at end of period $ 1.49 $ 1.42 $ 1.20 $ 0.88 Number of accumulation units outstanding at end of period (000 omitted) 11,559 7,783 5,093 2,665 RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (2/13/2002) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $ 0.99 $ 0.92 $ 0.72 $ 1.00 Accumulation unit value at end of period $ 1.07 $ 0.99 $ 0.92 $ 0.72 Number of accumulation units outstanding at end of period (000 omitted) 421 383 446 161 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006 VAN KAMPEN LIFE INVESTMENT TRUST COMSTOCK PORTFOLIO CLASS II SHARES (2/4/2004) Accumulation unit value at beginning of period $ 1.15 $ 1.00 -- -- Accumulation unit value at end of period $ 1.18 $ 1.15 -- -- Number of accumulation units outstanding at end of period (000 omitted) 26,831 6,418 -- -- WANGER INTERNATIONAL SMALL CAP (2/13/2002) Accumulation unit value at beginning of period $ 1.65 $ 1.28 $ 0.87 $ 1.00 Accumulation unit value at end of period $ 1.98 $ 1.65 $ 1.28 $ 0.87 Number of accumulation units outstanding at end of period (000 omitted) 11,470 5,817 2,667 1,055 WANGER U.S. SMALLER COMPANIES (2/13/2002) Accumulation unit value at beginning of period $ 1.40 $ 1.20 $ 0.85 $ 1.00 Accumulation unit value at end of period $ 1.54 $ 1.40 $ 1.20 $ 0.85 Number of accumulation units outstanding at end of period (000 omitted) 23,080 15,408 8,442 3,131 WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.18 $ 1.01 $ 0.75 $ 1.00 Accumulation unit value at end of period $ 1.25 $ 1.18 $ 1.01 $ 0.75 Number of accumulation units outstanding at end of period (000 omitted) 3,829 3,698 3,344 1,985 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (2/13/2002) Accumulation unit value at beginning of period $ 1.05 $ 0.94 $ 0.67 $ 1.00 Accumulation unit value at end of period $ 1.10 $ 1.05 $ 0.94 $ 0.67 Number of accumulation units outstanding at end of period (000 omitted) 1,557 1,643 1,441 387
-------------------------------------------------------------------------------- 112 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements
-------------------------------------------------------------------------------- 113 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS / RETIREMENT ADVISOR SELECT PLUS VARIABLE ANNUITY -- PROSPECTUS [RIVERSOURCE ANNUITIES LOGO] IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 IDS Life Insurance Company (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). Insurance and annuity branded products are issued by IDS Life Insurance Company, an Ameriprise Financial company. (C) 2006 Ameriprise Financial, Inc. All rights reserved. S-6273 I (5/06) PROSPECTUS MAY 1, 2006 RIVERSOURCE(SM) RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 INDIVIDUAL FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY - current or retired employees of Ameriprise Financial, Inc. or its subsidiaries and their spouses (employees), - current or retired Ameriprise Financial, Inc. financial advisors and their spouses (advisors), and - individuals investing an initial purchase payment of $1 million (other individuals). NEW RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 CONTRACTS ARE NOT CURRENTLY BEING OFFERED. ISSUED BY: IDS LIFE INSURANCE COMPANY (IDS LIFE) 70100 Ameriprise Financial Center Minneapolis, MN 55474 Telephone: (800) 862-7919 ameriprise.com/variableannuities IDS LIFE VARIABLE ACCOUNT 10 This prospectus contains information that you should know before investing. Prospectuses are also available for: - AIM Variable Insurance Funds - AllianceBernstein Variable Products Series Fund, Inc. - American Century Variable Portfolios, Inc. - Calvert Variable Series, Inc. - Columbia Funds Variable Insurance Trust - Credit Suisse Trust - Eaton Vance Variable Trust - Evergreen Variable Annuity Trust - Fidelity(R) Variable Insurance Products - Service Class 2 - Franklin(R) Templeton(R) Variable Insurance Products Trust (FTVIPT) - Class 2 - Goldman Sachs Variable Insurance Trust (VIT) - Janus Aspen Series: Service Shares - Lazard Retirement Series, Inc. - MFS(R) Variable Insurance Trust(SM) - Neuberger Berman Advisers Management Trust - Oppenheimer Variable Account Funds - Service Shares - PIMCO Variable Insurance Trust (VIT) - Pioneer Variable Contracts Trust (VCT), Class II Shares - Putnam Variable Trust - Class IB Shares - RiverSource(SM) Variable Portfolio Funds - (previously American Express(R) Variable Portfolio Funds) - The Universal Institutional Funds, Inc. Van Kampen Life Investment Trust - Wanger Advisors Trust - Wells Fargo Variable Trust Please read the prospectuses carefully and keep them for future reference. THE SECURITIES AND EXCHANGE COMMISSION (SEC) HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. AN INVESTMENT IN THIS CONTRACT IS NOT A DEPOSIT OF A BANK OR FINANCIAL INSTITUTION AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THIS CONTRACT INVOLVES INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. A Statement of Additional Information (SAI), dated the same date as this prospectus, is incorporated by reference into this prospectus. It is filed with the SEC and is available without charge by contacting IDS Life at the telephone number and address listed above. The table of contents of the SAI is on the last page of this prospectus. The SEC maintains an Internet site. This prospectus, the SAI and other information about the product are available on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov). Variable annuities are insurance products that are complex investment vehicles. Before you invest, be sure to ask your sales representative about the variable annuity's features, benefits, risks and fees, and whether the variable annuity is appropriate for you, based upon your financial situation and objectives. -------------------------------------------------------------------------------- 1 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS This prospectus provides a general description of the contract. Your actual contract and any riders or endorsements are the controlling documents. IDS Life has not authorized any person to give any information or to make any representations regarding the contract other than those contained in this prospectus or the fund prospectuses. Do not rely on any such information or representations. IDS Life and its affiliated insurance companies offer several different annuities which your sales representative may or may not be authorized to offer to you. Each annuity has different features and benefits that may be appropriate for you based on your financial situation and needs, your age and how you intend to use the annuity. The different features and benefits may include the investment and fund manager options, variations in interest rate amount and guarantees, credits and access to annuity account values. The fees and charges may also be different between each annuity. TABLE OF CONTENTS KEY TERMS 3 THE CONTRACT IN BRIEF 4 EXPENSE SUMMARY 6 CONDENSED FINANCIAL INFORMATION (UNAUDITED) 11 FINANCIAL STATEMENTS 11 THE VARIABLE ACCOUNT AND THE FUNDS 12 THE FIXED ACCOUNT 24 BUYING YOUR CONTRACT 24 CHARGES 25 VALUING YOUR INVESTMENT 28 MAKING THE MOST OF YOUR CONTRACT 29 SURRENDERS 33 TSA -- SPECIAL PROVISIONS 34 CHANGING OWNERSHIP 34 BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT 35 OPTIONAL BENEFITS 36 THE ANNUITY PAYOUT PERIOD 40 TAXES 41 VOTING RIGHTS 44 SUBSTITUTION OF INVESTMENTS 44 ABOUT THE SERVICE PROVIDERS 45 APPENDIX A: EXAMPLE - OPTIONAL BENEFITS 48 APPENDIX B: CONDENSED FINANCIAL INFORMATION (UNAUDITED) 52 TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION 58
CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS KEY TERMS THESE TERMS CAN HELP YOU UNDERSTAND DETAILS ABOUT YOUR CONTRACT. ACCUMULATION UNIT: A measure of the value of each subaccount before annuity payouts begin. ANNUITANT: The person on whose life or life expectancy the annuity payouts are based. ANNUITY PAYOUTS: An amount paid at regular intervals under one of several plans. ASSUMED INVESTMENT RATE: The rate of return we assume your investments will earn when we calculate your initial annuity payout amount using the annuity table in your contract. The standard assumed investment rate we use is 5% but you may request we substitute an assumed investment rate of 3.5%. BENEFICIARY: The person you designate to receive benefits in case of the owner's or annuitant's death while the contract is in force. CLOSE OF BUSINESS: The time the New York Stock Exchange (NYSE) closes (4 p.m. Eastern time unless the NYSE closes earlier). CODE: The Internal Revenue Code of 1986, as amended. CONTRACT: A deferred annuity contract that permits you to accumulate money for retirement by making one or more purchase payments. It provides for lifetime or other forms of payouts beginning at a specified time in the future. CONTRACT VALUE: The total value of your contract before we deduct any applicable charges. CONTRACT YEAR: A period of 12 months, starting on the effective date of your contract and on each anniversary of the effective date. ENHANCED EARNINGS DEATH BENEFIT (EEB) AND ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP): These are optional benefits you can add to your contract for an additional charge. Each is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. You can elect to purchase either the EEB or the EEP. FIXED ACCOUNT: An account to which you may allocate purchase payments. Amounts you allocate to this account earn interest at rates that we declare periodically. FUNDS: Investment options under your contract. You may allocate your purchase payments into subaccounts investing in shares of any or all of these funds. IDS LIFE: In this prospectus, "we," "us," "our" and "IDS Life" refer to IDS Life Insurance Company. MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV): This is an optional benefit you can add to your contract for an additional charge that is intended to provide additional death benefit protection in the event of fluctuating fund values. OWNER (YOU, YOUR): The person who controls the contract (decides on investment allocations, transfers, payout options, etc.). Usually, but not always, the owner is also the annuitant. The owner is responsible for taxes, regardless of whether he or she receives the contract's benefits. QUALIFIED ANNUITY: A contract that you purchase to fund one of the following tax-deferred retirement plans that is subject to applicable federal law and any rules of the plan itself: - Individual Retirement Annuities (IRAs) under Section 408(b) of the Code - Roth IRAs under Section 408A of the Code - SIMPLE IRAs under Section 408(p) of the Code - Simplified Employee Pension IRA (SEP) plans under Section 408(k) of the Code - Plans under Section 401(k) of the Code - Custodial and investment only plans under Section 401(a) of the Code - Tax-Sheltered Annuities (TSAs) under Section 403(b) of the Code A qualified annuity will not provide any necessary or additional tax deferral if it is used to fund a retirement plan that is already tax-deferred. All other contracts are considered NONQUALIFIED ANNUITIES. RIDER: You receive a rider when you purchase the EEB, EEP and/or MAV. The rider adds the terms of the optional benefit to your contract. RIDER EFFECTIVE DATE: The date you add a rider to your contract. SETTLEMENT DATE: The date when annuity payouts are scheduled to begin. SURRENDER VALUE: The amount you are entitled to receive if you make a full surrender from your contract. It is the contract value minus any applicable charges. -------------------------------------------------------------------------------- 3 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VALUATION DATE: Any normal business day, Monday through Friday, on which the NYSE is open, up to the close of business. At the close of business, the next valuation date begins. We calculate the accumulation unit value of each subaccount on each valuation date. If we receive your purchase payment or any transaction request (such as a transfer or surrender request) at our home office before the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the valuation date we received your payment or transaction request. On the other hand, if we receive your purchase payment or transaction request at our home office at or after the close of business, we will process your payment or transaction using the accumulation unit value we calculate on the next valuation date. If you make a transaction request by telephone (including by fax), you must have completed your transaction by the close of business in order for us to process it using the accumulation unit value we calculate on that valuation date. If you were not able to complete your transaction before the close of business for any reason, including telephone service interruptions or delays due to high call volume, we will process your transaction using the accumulation unit value we calculate on the next valuation date. VARIABLE ACCOUNT: Consists of separate subaccounts to which you may allocate purchase payments; each invests in shares of one fund. The value of your investment in each subaccount changes with the performance of the particular fund. THE CONTRACT IN BRIEF PURPOSE: The purpose of the contract is to allow you to accumulate money for retirement. You do this by making one or more purchase payments. You may allocate your purchase payments to the fixed account and/or subaccounts under the contract. These accounts, in turn, may earn returns that increase the value of the contract. Beginning at a specified time in the future called the settlement date, the contract provides lifetime or other forms of payout of your contract value (less any applicable premium tax). TAX-DEFERRED RETIREMENT PLANS: Most annuities have a tax-deferred feature. So do many retirement plans under the Code. As a result, when you use a qualified annuity to fund a retirement plan that is tax-deferred, your contract will not provide any necessary or additional tax deferral for that retirement plan. A qualified annuity has features other than tax deferral that may help you reach your retirement goals. In addition, the Code subjects retirement plans to required withdrawals triggered at a certain age. These mandatory withdrawals are called required minimum distributions (RMDs). RMDs may reduce the value of certain death benefits and optional riders (see "Taxes - Qualified Annuities - Required Minimum Distributions"). You should consult your tax advisor before you purchase the contract as a qualified annuity for an explanation of the potential tax implications to you. FREE LOOK PERIOD: You may return your contract to your sales representative or to our home office within the time stated on the first page of your contract. You will receive a full refund of the contract value. We will not deduct any charges. However, you bear the investment risk from the time of purchase until you return the contract; the refund amount may be more or less than the payment you made. (Exception: If the law requires, we will refund all of your purchase payments.) ACCOUNTS: Generally, you may allocate your purchase payments among any or all of: - the subaccounts of the variable account, each of which invests in a fund with a particular investment objective. The value of each subaccount varies with the performance of the particular fund in which it invests. We cannot guarantee that the value at the settlement date will equal or exceed the total purchase payments you allocate to the subaccounts. (p. 12) - the fixed account, which earns interest at a rate that we adjust periodically. Purchase payment allocations to the fixed account may be subject to special restrictions. (p. 24) BUYING YOUR CONTRACT: We no longer offer new contracts. However, you have the option of making additional purchase payments in the future. (p. 24) PURCHASE PAYMENTS: MINIMUM ALLOWABLE PURCHASE PAYMENTS: FOR EMPLOYEES/ADVISORS: If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $1,000 initial payment for qualified annuities $2,000 initial payment for nonqualified annuities $50 for any additional payments FOR OTHER INDIVIDUALS: $1 million* -------------------------------------------------------------------------------- 4 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS MAXIMUM ALLOWABLE PURCHASE PAYMENTS: FOR EMPLOYEES/ADVISORS: $100,000 for issue ages through 85 $50,000 for issue ages 86 to 90 FOR OTHER INDIVIDUALS: $100,000 * For initial purchase payments of more than $999,999, our home office approval is required. TRANSFERS: Subject to certain restrictions, you currently may redistribute your contract value among the accounts until annuity payouts begin, and once per contract year among the subaccounts after annuity payouts begin. You may establish automated transfers among the accounts. Fixed account transfers are subject to special restrictions. (p. 30) SURRENDERS: You may surrender all or part of your contract value at any time before the settlement date. You also may establish automated partial surrenders. Surrenders may be subject to charges and income taxes (including an IRS penalty if you surrender prior to your reaching age 59 1/2 and may have other tax consequences; also, certain restrictions apply. (p. 33) CHANGING OWNERSHIP: You may change ownership of a nonqualified annuity by written instruction, but this may have federal income tax consequences. Restrictions apply to changing ownership of a qualified annuity. (p. 34) BENEFITS IN CASE OF DEATH: If you or the annuitant die before annuity payouts begin, we will pay the beneficiary an amount at least equal to the contract value. (p. 35) OPTIONAL BENEFITS: This contract offers optional features that are available for additional charges if you meet certain criteria. (p. 36) ANNUITY PAYOUTS: You can apply your contract value to an annuity payout plan that begins on the settlement date. You may choose from a variety of plans to make sure that payouts continue as long as you like. If you purchased a qualified annuity, the payout schedule must meet IRS requirements. We can make payouts on a fixed or variable basis, or both. Total monthly payouts may include amounts from each subaccount and the fixed account. During the annuity payout period, you cannot be invested in more than five subaccounts at any one time unless we agree otherwise. (p. 40) TAXES: Generally income earned on, your contract value grows tax deferred until you surrender it or begin to receive payouts. (Under certain circumstances, IRS penalty taxes may apply.) The tax treatment of qualified and nonqualified annuities differs. Even if you direct payouts to someone else, you will be taxed on the income if you are the owner. However, Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. (p. 41) LIMITATIONS ON USE OF CONTRACTS: If mandated by applicable law, including but not limited to, federal anti-money laundering laws, we may be required to reject a purchase payment. We may also be required to block an owner's access to contract values or to satisfy other statutory obligations. Under these circumstances we may refuse to implement requests for transfers, surrenders, or death benefits, until instructions are received from the appropriate governmental authority or a court of competent jurisdiction. -------------------------------------------------------------------------------- 5 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EXPENSE SUMMARY THE FOLLOWING TABLES DESCRIBE THE FEES AND EXPENSES THAT ARE PAID WHEN BUYING, OWNING AND SURRENDERING THE CONTRACT. THE FIRST TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU PAID AT THE TIME THAT YOU BOUGHT THE CONTRACT AND MAY PAY WHEN YOU SURRENDER THE CONTRACT. STATE PREMIUM TAXES ALSO MAY BE DEDUCTED. CONTRACT OWNER TRANSACTION EXPENSES SURRENDER CHARGE 0%
SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this annuity payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.") THE NEXT TABLES DESCRIBE THE FEES AND EXPENSES THAT YOU WILL PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT, NOT INCLUDING FUND FEES AND EXPENSES. ANNUAL CONTRACT ADMINISTRATIVE CHARGE $30
(We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary, except at full surrender.) OPTIONAL RIDER FEES (As a percentage of the contract value charged annually at the contract anniversary. The fee applies only if you elect the optional rider.) MAV RIDER FEE 0.25%* EEB RIDER FEE 0.30% EEP RIDER FEE 0.40%
ANNUAL VARIABLE ACCOUNT EXPENSES (Total annual variable account expenses as a percentage of average daily subaccount value) MORTALITY AND EXPENSE RISK FEE 0.55%
* For contracts purchased before May 1, 2003, the MAV rider fee is 0.15%. -------------------------------------------------------------------------------- 6 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS ANNUAL OPERATING EXPENSES OF THE FUNDS THE NEXT TWO TABLES DESCRIBE THE OPERATING EXPENSES OF THE FUNDS THAT YOU MAY PAY PERIODICALLY DURING THE TIME THAT YOU OWN THE CONTRACT. THE FIRST ITEM SHOWS THE MINIMUM AND MAXIMUM TOTAL OPERATING EXPENSES CHARGED BY THE FUNDS FOR THE LAST FISCAL YEAR. THE SECOND TABLE SHOWS THE TOTAL FEES AND EXPENSES CHARGED BY EACH FUND FOR THE LAST FISCAL YEAR. MORE DETAIL CONCERNING EACH FUND'S FEES AND EXPENSES IS CONTAINED IN THE PROSPECTUS FOR EACH FUND. MINIMUM AND MAXIMUM TOTAL ANNUAL OPERATING EXPENSES FOR THE FUNDS(a) (Including management fee, distribution and/or service (12b-1) fees and other expenses)
MINIMUM MAXIMUM Total expenses before fee waivers and/or expense reimbursements 0.53% 5.85%
(a) Each fund deducts management fees and other expenses from fund assets. Fund assets include amounts you allocate to a particular fund. Funds may also charge 12b-1 fees that are used to finance any activity that is primarily intended to result in the sale of fund shares. Because 12b-1 fees are paid out of fund assets on an on-going basis, you may pay more if you select subaccounts investing in funds that have adopted 12b-1 plans than if you select subaccounts investing in funds that have not adopted 12b-1 plans. The fund or the fund's affiliates may pay us and/or our affiliates for promoting and supporting the offer, sale and servicing of fund shares. In addition, the fund's distributor and/or investment adviser, transfer agent or their affiliates may pay us and/or our affiliates for various services we or our affiliates provide. The amount of these payments will vary by fund and may be significant. See "The Variable Account and the Funds" for additional information, including potential conflicts of interest these payments may create. For a more complete description of each fund's fees and expenses and important disclosure regarding payments the fund and/or its affiliates make, please review the fund's prospectus and SAI. TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES AIM V.I. Capital Appreciation Fund, Series II Shares 0.61% 0.25% 0.29% 1.15%(1),(2) AIM V.I. Capital Development Fund, Series II Shares 0.75 0.25 0.34 1.34(1),(3) AIM V.I. Dynamics Fund, Series I Shares 0.75 -- 0.42 1.17(1),(3) AIM V.I. Financial Services Fund, Series I Shares 0.75 -- 0.37 1.12(1) AIM V.I. Global Health Care Fund, Series II Shares 0.75 0.25 0.33 1.33(1),(3) AIM V.I. Technology Fund, Series I Shares 0.75 -- 0.37 1.12(1) AllianceBernstein VPS Global Technology Portfolio (Class B) 0.75 0.25 0.17 1.17(4) AllianceBernstein VPS Growth and Income Portfolio (Class B) 0.55 0.25 0.05 0.85(4) AllianceBernstein VPS International Value Portfolio (Class B) 0.75 0.25 0.12 1.12(4) American Century VP International, Class II 1.13 0.25 -- 1.38(4) American Century VP Ultra(R), Class II 0.90 0.25 0.01 1.16(4) American Century VP Value, Class II 0.83 0.25 -- 1.08(4) Calvert Variable Series, Inc. Social Balanced Portfolio 0.70 -- 0.22 0.92(5) Columbia Marsico Growth Fund, Variable Series 0.74 0.25 0.34 1.33(6) Columbia Marsico International Opportunities Fund, Variable Series 0.80 0.25 0.43 1.48(4) Credit Suisse Trust - Commodity Return Strategy Portfolio 0.50 0.25 0.55 1.30(7) Eaton Vance VT Floating-Rate Income Fund 0.58 -- 0.69 1.27(4) Evergreen VA Fundamental Large Cap Fund - Class 2 0.58 0.25 0.18 1.01(8) Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2 0.57 0.25 0.09 0.91(9) Fidelity(R) VIP Growth & Income Portfolio Service Class 2 0.47 0.25 0.12 0.84(9) Fidelity(R) VIP Mid Cap Portfolio Service Class 2 0.57 0.25 0.12 0.94(9) Fidelity(R) VIP Overseas Portfolio Service Class 2 0.72 0.25 0.17 1.14(9) FTVIPT Franklin Real Estate Fund - Class 2 0.47 0.25 0.02 0.74(10),(11) FTVIPT Franklin Small Cap Value Securities Fund - Class 2 0.52 0.25 0.17 0.94(11),(12) FTVIPT Mutual Shares Securities Fund - Class 2 0.60 0.25 0.18 1.03(11) Goldman Sachs VIT Mid Cap Value Fund 0.80 -- 0.07 0.87(13) Goldman Sachs VIT Structured U.S. Equity Fund 0.65 -- 0.09 0.74(13) (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) Janus Aspen Series Global Technology Portfolio: Service Shares 0.64 0.25 0.09 0.98(14) Janus Aspen Series International Growth Portfolio: Service Shares 0.64 0.25 0.06 0.95(14)
-------------------------------------------------------------------------------- 7 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES Lazard Retirement International Equity Portfolio 0.75% 0.25% 0.21% 1.21%(15) MFS(R) Investors Growth Stock Series - Service Class 0.75 0.25 0.15 1.15(16),(17) MFS(R) New Discovery Series - Service Class 0.90 0.25 0.16 1.31(16),(17) MFS(R) Utilities Series - Service Class 0.75 0.25 0.15 1.15(16),(17) Neuberger Berman Advisers Management Trust International Portfolio (Class S) 1.15 0.25 4.45 5.85(18),(19) Oppenheimer Global Securities Fund/VA, Service Shares 0.63 0.25 0.04 0.92(20) Oppenheimer Main Street Small Cap Fund/VA, Service Shares 0.74 0.25 0.05 1.04(20) Oppenheimer Strategic Bond Fund/VA, Service Shares 0.69 0.25 0.02 0.96(20) PIMCO VIT All Asset Portfolio, Advisor Share Class 0.20 0.25 0.88 1.33(21) Pioneer Equity Income VCT Portfolio - Class II Shares 0.65 0.25 0.06 0.96(4) Pioneer Europe VCT Portfolio - Class II Shares 0.85 0.25 0.76 1.86(4) Putnam VT Health Sciences Fund - Class IB Shares 0.70 0.25 0.11 1.06(4) Putnam VT International Equity Fund - Class IB Shares 0.75 0.25 0.18 1.18(4) Putnam VT Vista Fund - Class IB Shares 0.65 0.25 0.09 0.99(4) RiverSource(SM) Variable Portfolio - Balanced Fund 0.54 0.13 0.14 0.81(22),(23),(24) (previously AXP(R) Variable Portfolio - Managed Fund) RiverSource(SM) Variable Portfolio - Cash Management Fund 0.33 0.13 0.15 0.61(22),(23) (previously AXP(R) Variable Portfolio - Cash Management Fund) RiverSource(SM) Variable Portfolio - Core Bond Fund 0.48 0.13 0.33 0.94(22),(23),(25) (previously AXP(R) Variable Portfolio - Core Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.47 0.13 0.17 0.77(22),(23) (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.68 0.13 0.16 0.97(22),(23),(24) (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.05 0.13 0.34 1.52(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RiverSource(SM) Variable Portfolio - Fundamental Value Fund 0.73 0.13 0.16 1.02(23),(26) RiverSource(SM) Variable Portfolio - Global Bond Fund 0.71 0.13 0.20 1.04(22),(23) (previously AXP(R) Variable Portfolio - Global Bond Fund) RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.44 0.13 0.33 0.90(22),(23),(25) (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RiverSource(SM) Variable Portfolio - Growth Fund 0.66 0.13 0.17 0.96(22),(23),(24) (previously AXP(R) Variable Portfolio - Growth Fund) RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.59 0.13 0.16 0.88(22),(23) (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.61 0.13 0.34 1.08(22),(23),(25) (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.72 0.13 0.20 1.05(22),(23),(24) (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.56 0.13 0.14 0.83(22),(23),(24) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.60 0.13 1.86 2.59(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.63 0.13 0.17 0.93(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Equity Select Fund) RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.70 0.13 2.18 3.01(22),(23),(25) (previously AXP(R) Variable Portfolio - Mid Cap Value Fund)
-------------------------------------------------------------------------------- 8 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TOTAL ANNUAL OPERATING EXPENSES FOR EACH FUND (CONTINUED) (Before fee waivers and/or expense reimbursements, if applicable, as a percentage of average daily net assets)
GROSS TOTAL MANAGEMENT 12b-1 OTHER ANNUAL FEES FEES EXPENSES EXPENSES RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.22% 0.13% 0.18% 0.53%(22),(23),(25) (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RiverSource(SM) Variable Portfolio - Select Value Fund 0.77 0.13 0.30 1.20(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Select Value Fund) RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.48 0.13 0.17 0.78(22),(23) (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.80 0.13 0.22 1.15(22),(23),(24) (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.92 0.13 0.24 1.29(22),(23),(24),(25) (previously AXP(R) Variable Portfolio - Partners Small Cap Value Fund) Van Kampen Life Investment Trust Comstock Portfolio, Class II Shares 0.56 0.25 0.03 0.84(4) Van Kampen UIF Global Real Estate Portfolio Class II Shares 0.85 0.35 0.62 1.82(27) Van Kampen UIF Mid Cap Growth Portfolio Class II Shares 0.75 0.35 0.34 1.44(27) Wanger International Small Cap 0.95 -- 0.18 1.13(4) Wanger U.S. Smaller Companies 0.90 -- 0.05 0.95(4) Wells Fargo Advantage VT Asset Allocation Fund 0.55 0.25 0.24 1.04(28) Wells Fargo Advantage VT International Core Fund 0.75 0.25 0.41 1.41(28) Wells Fargo Advantage VT Opportunity Fund 0.72 0.25 0.21 1.18(28) Wells Fargo Advantage VT Small Cap Growth Fund 0.75 0.25 0.24 1.24(28)
(1) Figures shown in the table are for the year ended Dec. 31, 2005 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. The Fund's advisor has contractually agreed to waive advisory fees and/or reimburse expenses of Series I shares and Series II shares to the extent necessary to limit total annual expenses of Series I shares to 1.30% and Series II shares to 1.45% of average daily nets assets. In determining the advisor's obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual expenses to exceed the limit stated above: (i) interest; (ii) taxes; (iii) dividend expense on short sales; (iv) extraordinary items; (v) expenses related to a merger or reorganizations as approved by the Fund's Board of Trustees; and (vi) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Currently, the expense offset arrangements from which the Fund may benefit are in the form of credits that the Fund receives from banks where the Fund or its transfer agent has deposit accounts in which it holds uninvested cash. Those credits are used to pay certain expenses incurred by the Fund. The expense limitation is in effect through April 30, 2007. (2) As a result of a reorganization of another Fund into the Fund, which will occur on or about May 1, 2006 for AIM V.I. Capital Appreciation Fund, Series II Shares the "Gross total annual expenses" have been restated to reflect such reorganization. (3) Effective Jan. 1, 2005 through June 30, 2006, the advisor has contractually agreed to waive a portion of its advisory fees. (4) The Fund's expense figures are based on actual expenses for the fiscal year ended Dec. 31, 2005. (5) Expenses are based on expenses for the Portfolio's most recent fiscal year. Management fees include the subadvisory fee paid by the Advisor, to the Subadvisors, and the administrative fee paid by the Portfolio to Calvert Administrative Services Company, an affiliate of Calvert. (6) The Fund's Distributor has voluntarily agreed to waive 0.25% of its 12b-1 fees. (7) Fee waivers and/or expense reimbursement may reduce expenses for the Portfolio, without which performance would be lower. Waivers and/or expense reimbursements may be discontinued at any time. After fee waivers and expense reimbursements net expenses would be 0.95% for Credit Suisse Trust - Commodity Return Strategy Portfolio. (8) The "Gross total annual expenses" exclude expense reductions and fee waivers. These fees have been restated to reflect current fees. (9) A portion of the brokerage commissions that the Fund pays may be reimbursed and used to reduce the Fund's expenses. In addition, through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances are used to reduce the Fund's custodian expenses. Including these reductions, the total class operating expenses would have been 0.89% for Fidelity(R) VIP Contrafund(R) Portfolio Service Class 2, 0.79% for Fidelity(R) VIP Growth & Income Portfolio Service Class 2, 0.89% for Fidelity(R) VIP Mid Cap Portfolio Service Class 2 and 1.07% for Fidelity(R) VIP Overseas Portfolio Service Class 2. These offsets may be discontinued at any time. (10) The Fund's administration fee is paid indirectly through the management fee. (11) While the maximum amount payable under the Fund's class rule 12b-1 plan is 0.35% per year of the Fund's class average annual net assets, the Fund's Board of Trustees has set the current rate at 0.25% per year. (12) The Fund's manager has agreed in advance to reduce its fees with respect to assets invested by the Fund in a Franklin Templeton Money Market Fund. This reduction is required by the Fund's Board of Trustees and an exemptive order by the Securities and Exchange Commission. The management fee reduction and net total annual expense was (0.05%) and 0.89%, respectively for FTVIPT Franklin Small Cap Value Securities Fund - Class 2. (13) The Fund's annual operating expenses are based on actual expenses for the fiscal year ended Dec. 31, 2005. "Other expenses" include transfer agency fees and expenses equal on an annualized basis to 0.04% of the average daily net assets of the Fund plus all other ordinary expenses not detailed above. The Investment Adviser has voluntarily agreed to limit "Other expenses" (excluding management fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation and indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, 0.16% of the Fund's average daily net assets for Goldman Sachs VIT Structured U.S. Equity Fund and 0.25% of the Fund's average daily net assets for Goldman Sachs VIT Mid Cap Value Fund. The Investment Adviser may cease or modify the expense limitations at its discretion at anytime. If this occurs, other expenses and total annual operating expenses may increase without shareholder approval. (14) Janus Capital has contractually agreed to waive certain Portfolio's total annual operating expenses (excluding the distribution and shareholder servicing fee, the administrative services fee applicable to certain Portfolios, brokerage commissions, interest, taxes and extraordinary expenses) to certain limits until May 1, 2007. Because the 12b-1 fee is charged as an ongoing fee, over time the fee will increase the cost of your investment and may cost you more than paying other types of sales charges. -------------------------------------------------------------------------------- 9 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS (15) The Investment Manager has contractually agreed to waive its fees and, if necessary, reimburse the Portfolio through Dec. 31, 2006, to the extent "Gross total annual expenses" exceed 1.25% of average daily net assets for Lazard Retirement International Equity Portfolio. (16) Each series has adopted a distribution plan under Rule 12b-1 that permits it to pay marketing and other fees to support the sale and distribution of service class shares (these fees are referred to as distribution fees). (17) Each series has an expense offset arrangement that reduces the series' custodian fee based upon the amount of cash maintained by the series with its custodian and dividend disbursing agent, and may have entered into brokerage arrangements, that reduced or recaptured series' expenses. Any such expense reductions are not reflected in the table. Had these fee reductions been taken into account, "Gross total annual expenses" would be lower. (18) Neuberger Berman Management Inc. ("NBMI") has undertaken through Dec. 31, 2009 to waive fees and/or reimburse certain operating expenses, including the compensation of NBMI and excluding taxes, interest, extraordinary expenses, brokerage commissions and transaction costs, that exceed, in the aggregate, 2.00% of the average daily net asset value of the Portfolio. The expense limitation arrangements for the Portfolio is contractual and any excess expenses can be repaid to NBMI within three years of the year incurred, provided such recoupment would not cause the Portfolio to exceed its limitation described above. (19) Class S shares of the International Portfolio have a redemption fee of 1.00% for exchanges or redemptions on shares held less than 60 days. The redemption fee is paid to the Portfolio. (20) Expenses may vary in future years. "Other expenses" in the table include transfer agent fees, custodial fees, and accounting and legal expenses the Fund pays. The Fund's transfer agent has voluntarily agreed to limit transfer and shareholder servicing fees to 0.35% per fiscal year. That undertaking may be amended or withdrawn at any time. For the Fund's fiscal year ended Dec. 31, 2005, the transfer agent fees did not exceed the expense limitation described above. (21) "Other expense" also includes Underlying Fund expenses. Underlying Fund Expenses for the Portfolio are estimated based upon an allocation of the Portfolio's assets among the Underlying Funds and upon the total annual operating expenses of the Institutional Class shares of these Underlying Funds. Underlying Fund expenses will vary with changes in the expenses of the Underlying Funds, as well as allocation of the Portfolio's assets, and may be higher or lower than those shown above. For a listing of the expenses associated with each Underlying Fund for the most recent fiscal year, please see "Fund of Funds Fees - Annual Underlying Fund Expenses" in the Portfolio's prospectus. PIMCO has contractually agreed, for the Portfolio's current fiscal year (12/31), to reduce its Advisory Fee to the extent that the Underlying Fund Expenses attributable to Advisory and Administrative Fees exceed 0.60% of the total assets invested in Underlying Funds. PIMCO may recoup these waivers in future periods, not exceeding three years, provided total expenses, including such recoupment, do not exceed the annual expense limit. (22) The Fund's expense figures are based on actual expenses for the fiscal year ended Aug. 31, 2005, adjusted to reflect current fees. (23) The Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940. The Fund pays IDS Life Insurance Company an annual fee of up to 0.125% of average daily net assets as payment for distributing its shares and providing shareholder services. Because this fee is paid out of the Fund's assets on an on-going basis, over time this fee will increase the cost of your investment and may cost you more than paying other types of sales charges. (24) Management fees include the impact of a performance incentive adjustment fee that decreased the management fee by 0.05% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.04% for RiverSource(SM) Variable Portfolio - International Opportunity Fund, 0.02% for RiverSource(SM) Variable Portfolio - Large Cap Equity Fund, 0.07% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 0.01% for RiverSource(SM) Variable Portfolio - Select Value Fund and 0.04% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. Management fees include the impact of a performance incentive adjustment fee that increased the management fee by 0.03% for RiverSource(SM) Variable Portfolio - Balanced Fund, 0.08% for RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund, 0.06% for RiverSource(SM) Variable Portfolio - Growth Fund, 0.002% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund and 0.01% for RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund. (25) RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2006, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed: 0.83% for RiverSource(SM) Variable Portfolio - Core Bond Fund, 1.75% for RiverSource(SM) Variable Portfolio - Emerging Markets Fund, 0.72% for RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund, 0.99% for RiverSource(SM) Variable Portfolio - Income Opportunities Fund, 1.05% for RiverSource(SM) Variable Portfolio - Large Cap Value Fund, 1.00% for RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund, 1.08% for RiverSource(SM) Variable Portfolio - Mid Cap Value Fund, 0.495% for RiverSource(SM) Variable Portfolio - S&P 500 Index Fund, 1.15% for RiverSource(SM) Variable Portfolio - Select Value Fund and 1.25% for RiverSource(SM) Variable Portfolio - Small Cap Value Fund. (26) The Fund's expense figures are based on estimated expenses, before fee waivers and expense reimbursements. RiverSource Investments and its affiliates have contractually agreed to waive certain fees and expenses until Aug. 31, 2007, unless sooner terminated at the discretion of the Fund's Board. Any amount waived will not be reimbursed by the Fund. Under this agreement, net expenses, before giving effect to any performance incentive adjustment, will not exceed 1.07% for RiverSource(SM) Variable Portfolio - Fundamental Value Fund. (27) The fees disclosed reflect gross ratios prior to any voluntary waivers/reimbursements of expenses by the adviser. The adviser has voluntarily agreed to waive a portion of or all of its management fee and/or reimburse expenses to the extent necessary so that total annual operating expenses, excluding certain investment related expense such as foreign country tax expense and interest expense on borrowing, do not exceed 1.35%. The adviser may terminate these voluntary waivers at any time at its sole discretion. Additionally, the distributor has agreed to voluntarily waive a portion of the 12b-1 fee for Class II shares. The distributor may terminate these voluntary waivers at any time at its sole discretion. After these fee waivers/reimbursements, net expenses would have been 1.40% for Van Kampen UIF Global Real Estate Portfolio Class II Shares and 1.15% for Van Kampen UIF Mid Cap Growth Portfolio Class II Shares. In addition, Van Kampen UIF Global Real Estate Portfolio Class II Shares was not operational in 2005. Figures in the table are based on estimated assuming the average daily net assets of the Portfolio were not more than $75,000,000. (28) The Funds' investment adviser has implemented a break point schedule for the Funds' management fees. The management fees charged to the Funds will decline as a Fund's assets grow and will continue to be based on a percentage of the Fund's average daily net assets. Other expenses may include expenses payable to affiliates of Wells Fargo & Company. Other expenses for Wells Fargo Advantage VT Opportunity Fund are based on estimates for the current fiscal year. The adviser has committed through April 30, 2007 to waive fees and/or reimburse the expenses to the extent necessary to maintain the Fund's net operating expense ratio. After fee waivers and expense reimbursements net expenses would be 1.00% for Wells Fargo Advantage VT Asset Allocation Fund, 1.00% for Wells Fargo Advantage VT International Core Fund, 1.07% for Wells Fargo Advantage VT Opportunity Fund and 1.20% for Wells Fargo Advantage VT Small Cap Growth Fund. Please refer to the Fund's prospectus for additional details. -------------------------------------------------------------------------------- 10 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EXAMPLES THESE EXAMPLES ARE INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN THE CONTRACT WITH THE COST OF INVESTING IN OTHER VARIABLE ANNUITY CONTRACTS. THESE COSTS INCLUDE YOUR TRANSACTION EXPENSES, CONTRACT ADMINISTRATIVE CHARGES*, VARIABLE ACCOUNT ANNUAL EXPENSES AND FUND FEES AND EXPENSES. THESE EXAMPLES ASSUME THAT YOU INVEST $10,000 IN THE CONTRACT FOR THE TIME PERIODS INDICATED. THESE EXAMPLES ALSO ASSUME THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR. MAXIMUM EXPENSES. This example assumes the maximum fees and expenses of any of the funds for the last fiscal year. It assumes that you select both the optional MAV and EEP. Although your actual costs may be higher or lower, based on this assumption your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $725.39 $2,127.50 $3,467.11 $6,560.71
MINIMUM EXPENSES. This example assumes the least expensive combination of contract features and benefits and the minimum fees and expenses of any of the funds for the last fiscal year. It assumes that you do not select any optional benefits. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS $113.47 $353.73 $612.92 $1,353.83
* In these examples, the $30 contract administrative charge is approximated as a .027% charge. This percentage was determined by dividing the total amount of the contract administrative charges collected during the year that are attributable to the contract by the total average net assets that are attributable to the contract. CONDENSED FINANCIAL INFORMATION (UNAUDITED) You can find unaudited condensed financial information for the subaccounts in Appendix B. We do not include condensed financial information for subaccounts that are new and did not have any activity as of the financial statement date. FINANCIAL STATEMENTS You can find our audited financial statements and the audited financial statements of the subaccounts in the SAI. The SAI does not include audited financial statements for subaccounts that are new and did not have any activity as of the financial statement date. -------------------------------------------------------------------------------- 11 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE VARIABLE ACCOUNT AND THE FUNDS THE VARIABLE ACCOUNT: The variable account was established under Minnesota law on Aug. 23, 1995, and the subaccounts are registered together as a single unit investment trust under the Investment Company Act of 1940 (the 1940 Act). This registration does not involve any supervision of our management or investment practices and policies by the SEC. All obligations arising under the contracts are general obligations of IDS Life. The variable account meets the definition of a separate account under federal securities laws. We credit or charge income, capital gains and capital losses of each subaccount only to that subaccount. State insurance law prohibits us from charging a subaccount with liabilities of any other subaccount or of our general business. The variable account includes other subaccounts that are available under contracts that are not described in this prospectus. Although the Internal Revenue Service (IRS) has issued some guidance on investor control, the U.S. Treasury and the IRS may continue to examine this aspect of variable contracts and provide additional guidance on investor control. Their concern involves how many investment choices (subaccounts) may be offered by an insurance company and how many exchanges among those subaccounts may be allowed before the contract owner would be currently taxed on income earned within the contract. At this time, we do not know what the additional guidance will be or when action will be taken. We reserve the right to modify the contract, as necessary, so that the owner will not be subject to current taxation as the owner of the subaccount assets. We intend to comply with all federal tax laws so that the contract continues to qualify as an annuity for federal income tax purposes. We reserve the right to modify the contract as necessary to comply with any new tax laws. THE FUNDS: The contract currently offers subaccounts investing in shares of the funds listed in the table below. - INVESTMENT OBJECTIVES: The investment managers and advisers cannot guarantee that the funds will meet their investment objectives. Please read the funds' prospectuses for facts you should know before investing. These prospectuses are available by contacting us at the address or telephone number on the first page of this prospectus. - FUND NAME AND MANAGEMENT: A fund underlying your contract in which a subaccount invests may have a name, portfolio manager, objectives, strategies and characteristics that are the same or substantially similar to those of a publicly-traded retail mutual fund. Despite these similarities, an underlying fund is not the same as any publicly-traded retail mutual fund. Each underlying fund will have its own unique portfolio holdings, fees, operating expenses and operating results. The results of each underlying fund may differ significantly from any publicly-traded retail mutual fund. - ELIGIBLE PURCHASERS: All funds are available to serve as the underlying investments for variable annuities and variable life insurance policies. The funds are not available to the public (see "Fund name and management" above). Some funds also are available to serve as investment options for tax-deferred retirement plans. It is possible that in the future for tax, regulatory or other reasons, it may be disadvantageous for variable annuity accounts and variable life insurance accounts and/or tax-deferred retirement plans to invest in the available funds simultaneously. Although we and the funds do not currently foresee any such disadvantages, the boards of directors or trustees of each fund will monitor events in order to identify any material conflicts between annuity owners, policy owners and tax-deferred retirement plans and to determine what action, if any, should be taken in response to a conflict. If a board were to conclude that it should establish separate funds for the variable annuity, variable life insurance and tax-deferred retirement plan accounts, you would not bear any expenses associated with establishing separate funds. Please refer to the funds' prospectuses for risk disclosure regarding simultaneous investments by variable annuity, variable life insurance and tax-deferred retirement plan accounts. Each fund intends to comply with the diversification requirements under Section 817(h) of the Code. - REVENUE WE RECEIVE FROM THE FUNDS MAY CREATE POTENTIAL CONFLICTS OF INTEREST: We seek to provide a broad array of underlying funds taking into account the fees and charges imposed by each fund and the contract charges we impose. We select the underlying funds in which the subaccounts initially invest and upon any substitution (see "Substitution of Investments"). We also make all decisions regarding which funds to retain in a contract, which funds to add to a contract and which funds will no longer be offered in a contract. In making these decisions, we may consider various objective and subjective factors. Objective factors include, but are not limited to, fund performance, fund expenses, classes of fund shares available, size of the fund, and investment objectives and investing style of the fund. Subjective factors include, but are not limited to, investment sub-styles and process, management skill and history at other funds, and portfolio concentration and sector weightings. We also consider the levels and types of revenue a fund, its distributor, investment adviser, subadviser, transfer agent or their affiliates pay us and our affiliates. This revenue includes, but is not limited to, compensation for administrative services provided with respect to the fund and support of marketing and distribution expenses incurred with respect to the fund. -------------------------------------------------------------------------------- 12 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS We and/or our affiliates receive from each of the funds, or the funds' affiliates, varying levels and types of revenue. The amount of this revenue is most often based on a percentage of average daily net assets invested in the fund. For example, the revenue we receive from affiliates of funds other than the RiverSource Variable Portfolio Funds (unaffiliated funds) currently ranges up to 0.50% of the average daily net assets invested in the fund through this contract and other contracts we or our affiliates issue. In some cases, this revenue may be based, in part, on sales one of our affiliates makes of other securities including, but not limited to, publicly-traded retail mutual funds and/or the average daily net assets resulting from these sales. We or our affiliates may also receive revenue which is not based on a percentage of average daily net assets. The amount of this revenue varies by fund, may be significant and may create potential conflicts of interest. The greatest amount and percentage of revenue we and our affiliates receive comes from assets allocated to subaccounts investing in the RiverSource Variable Portfolio Funds (affiliated funds) that are managed by RiverSource Investments, LLC (RiverSource Investments), one of our affiliates. Employee compensation and operating goals at all levels are tied to the success of Ameriprise Financial, Inc. and its affiliates, including us. Certain employees may receive higher compensation and other benefits based, in part, on contract values that are invested in the RiverSource Variable Portfolio Funds. These revenue payments may also influence recommendations your sales representative makes regarding whether you should invest in the contract, and whether you should allocate purchase payments or contract value to a subaccount that invests in a particular fund (see "About the Service Providers"). The revenue we receive from a fund or its affiliates is in addition to revenue we receive from the charges you pay when buying, owning and surrendering the contract (see "Expense Summary"). However, the revenue we receive from a fund or its affiliates may come, at least in part, from the fund's fees and expenses you pay indirectly when you allocate contract value to the subaccount that invests in that fund. Please see the SAI for a table that ranks the unaffiliated funds according to total dollar amounts they and their affiliates paid to us and/or our affiliates in 2005. - WHY REVENUES ARE PAID TO US: In accordance with applicable laws, regulations and the terms of the agreements under which such revenue is paid, we or our affiliates may receive this revenue for various purposes including, but not limited to: - Compensating, training and educating sales representatives who sell the contracts. - Granting access to our employees whose job it is to promote sales of the contracts by authorized selling firms and their sales representatives, and granting access to sales representatives of our affiliated selling firms. - Activities or services we or our affiliates provide that assist in the promotion and distribution of the contracts including promoting the funds available under the contracts to prospective and existing contract owners, authorized selling firms and sales representatives. - Providing sub-transfer agency and shareholder servicing to contract owners. - Promoting, including and/or retaining the fund's investment portfolios as underlying investment options in the contracts. - Advertising, printing and mailing sales literature, and printing and distributing prospectuses and reports. - Furnishing personal services to contract owners, including education of contract owners, answering routine inquiries regarding a fund, maintaining accounts or providing such other services eligible for service fees as defined under the rules of the National Association of Securities Dealers, Inc. (NASD). - Subaccounting, transaction processing, recordkeeping and administration. - SOURCES OF REVENUE RECEIVED FROM AFFILIATED FUNDS: The affiliated funds are managed by RiverSource Investments. The sources of revenue we receive from these affiliated funds, or from affiliates of these funds, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser and transfer agent or an affiliate of these. The revenue resulting from these sources may be based either on a percentage of average daily net assets of the fund or on the actual cost of certain services we provide with respect to the fund. We may receive this revenue either in the form of a cash payment or it may be allocated to us. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. - SOURCES OF REVENUE RECEIVED FROM UNAFFILIATED FUNDS: The unaffiliated funds are not managed by an affiliate of ours. The sources of revenue we receive from these unaffiliated funds, or the funds' affiliates, may include, but are not necessarily limited to, the following: - Assets of the fund's adviser, subadviser, transfer agent or an affiliate of these and assets of the fund's distributor or an affiliate. The revenue resulting from these sources usually is based on a percentage of average daily net assets of the fund but there may be other types of payment arrangements. - Compensation paid out of 12b-1 fees that are deducted from fund assets and disclosed in the "12b-1 fees" column of the "Annual Operating Expenses of the Funds" table. -------------------------------------------------------------------------------- 13 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS YOU MAY ALLOCATE PURCHASE PAYMENTS AND TRANSFERS TO ANY OR ALL OF THE SUBACCOUNTS OF THE VARIABLE ACCOUNT THAT INVEST IN SHARES OF THE FOLLOWING FUNDS:
INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- AIM V.I. Capital Growth of capital. Invests principally in common A I M Advisors, Inc. Appreciation Fund, Series stocks of companies likely to benefit from new or II Shares innovative products, services or processes as well as those with above-average long-term growth and excellent prospects for future growth. The fund can invest up to 25% of its total assets in foreign securities that involve risks not associated with investing solely in the United States. AIM V.I. Capital Long-term growth of capital. Invests primarily in A I M Advisors, Inc. Development Fund, Series II securities (including common stocks, convertible Shares securities and bonds) of small- and medium-sized companies. The Fund may invest up to 25% of its total assets in foreign securities. AIM V.I. Dynamics Fund, Capital growth. Invests at least 65% of its net A I M Advisors, Inc. Series I Shares assets primarily in common stocks of mid-sized companies, companies included in the Russell Midcap(R) Growth Index at the time of purchase. The Fund also has the flexibility to invest in other types of securities, including preferred stocks, convertible securities and bonds. AIM V.I. Financial Services Capital growth. Actively managed. Invests at least A I M Advisors, Inc. Fund, Series I Shares 80% of its net assets in the equity securities and equity-related instruments of companies involved in the financial services sector. These companies include, but are not limited to, banks, insurance companies, investment and miscellaneous industries (asset managers, brokerage firms, and government-sponsored agencies and suppliers to financial services companies). AIM V.I. Global Health Care Capital growth. The fund seeks to meet its objective A I M Advisors, Inc. Fund, Series II Shares by investing, normally, at least 80% of its assets in securities of health care industry companies. The fund may invest up to 20% of its total assets in companies located in developing countries, i.e., those countries that are in the initial stages of their industrial cycles. The fund may also invest up to 5% of its total assets in lower-quality debt securities, i.e., junk bonds. AIM V.I. Technology Fund, Capital growth. The Fund is actively managed. Invests A I M Advisors, Inc. Series I Shares at least 80% of its net assets in equity securities and equity-related instruments of companies engaged in technology-related industries. These include, but are not limited to, various applied technologies, hardware, software, semiconductors, telecommunications equipment and services, and service-related companies in information technology. Many of these products and services are subject to rapid obsolescence, which may lower the market value of securities of the companies in this sector. AllianceBernstein VPS Long-term growth of capital. The Fund invests at AllianceBernstein L.P. Global Technology Portfolio least 80% of its net assets in securities of (Class B) companies that use technology extensively in the development of new or improved products or processes. Invests in a global portfolio of securities of U.S. and foreign companies selected for their growth potential. AllianceBernstein VPS Long-term growth of capital. Invests primarily in AllianceBernstein L.P. Growth and Income Portfolio dividend-paying common stocks of large, (Class B) well-established, "blue chip" companies.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- AllianceBernstein VPS Long-term growth of capital. Invests primarily in a AllianceBernstein L.P. International Value diversified portfolio of equity securities of Portfolio (Class B) established companies selected from more than 40 industries and from more than 40 developed and emerging market countries. American Century VP Capital growth. Invests primarily in stocks of American Century Global International, Class II growing foreign companies in developed countries. Investment Management, Inc. American Century VP Long-term capital growth. Invests primarily in U.S. American Century Investment Ultra(R), Class II companies, but there is no limit on the amount of Management, Inc. assets the Fund can invest in foreign companies. American Century VP Value, Long-term capital growth, with income as a secondary American Century Investment Class II objective. Invests primarily in stocks of companies Management, Inc. that management believes to be undervalued at the time of purchase. Calvert Variable Series, Income and capital growth. Invests primarily in Calvert Asset Management Company, Inc. Social Balanced stocks, bonds and money market instruments which Inc. (CAMCO), investment adviser. Portfolio offer income and capital growth opportunity and which SsgA Funds Management, Inc. and satisfy the investment and social criteria. New Amsterdam Partners, LLP are the investment subadvisers. Columbia Marsico Growth Long-term growth of capital. The Fund invests Columbia Management Advisors, LLC Fund, Variable Series primarily in equity securities of (advisor); Marsico Capital large-capitalization companies that are selected for Management, LLC (sub-advisor) their growth potential. It generally holds a core position of between 35 and 50 common stocks. It may hold up to 25% of its assets in foreign securities. Columbia Marsico Long-term growth of capital. The Fund normally Columbia Management Advisors, LLC International Opportunities invests at least 65% of its assets in common stocks (advisor); Marsico Capital Fund, Variable Series of foreign companies. While the Fund may invest in Management, LLC (sub-advisor) companies of any size, it focuses on large companies. These companies are selected for their long-term growth potential. The Fund normally invests in issuers from at least three different countries not including the United States and generally holds a core position of 35 to 50 common stocks. The Fund may invest in common stocks of companies operating in emerging markets. Credit Suisse Trust - Total return. Invests in commodity-linked derivative Credit Suisse Asset Management, Commodity Return Strategy instruments backed by a portfolio of fixed-income LLC Portfolio securities. The portfolio invests in commodity-linked derivative instruments, such as commodity-linked notes, swap agreements, commodity options, futures and options on futures that provide exposure to the investment returns of the commodities markets without investing directly in physical commodities.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- Eaton Vance VT High level of current income. Non-diversified mutual Eaton Vance Management Floating-Rate Income Fund fund that normally invests primarily in senior floating rate loans ("Senior Loans"). Senior Loans typically are of below investment grade quality and have below investment grade credit ratings, which ratings are associated with having high risk, speculative characteristics. Investments are actively managed, and may be bought or sold on a daily basis (although loans are generally held until repaid). The investment adviser's staff monitors the credit quality of the Fund holdings, as well as other investments that are available. The Fund may invest up to 25% of its total assets in foreign securities and may engage in certain hedging transactions. Evergreen VA Fundamental Capital growth with the potential for current income. Evergreen Investment Management Large Cap Fund - Class 2 Invests primarily in common stocks of large U.S. Company, LLC companies whose market capitalizations measured at time of purchase fall within the market capitalization range of the companies tracked by the Russell 1000(R) Index. Fidelity(R) VIP Seeks long-term capital appreciation. Normally Fidelity Management & Research Contrafund(R) Portfolio invests primarily in common stocks. Invests in Company (FMR), investment Service Class 2 securities of companies whose value it believes is manager; FMR U.K. and FMR Far not fully recognized by the public. Invests in either East, sub-investment advisers. "growth" stocks or "value" stocks or both. The fund invests in domestic and foreign issuers. Fidelity(R) VIP Growth & Seeks high total return through a combination of FMR, investment manager; FMR Income Portfolio Service current income and capital appreciation. Normally U.K., FMR Far East, Class 2 invests a majority of assets in common stocks with a sub-investment advisers. focus on those that pay current dividends and show potential for capital appreciation. May invest in bonds, including lower-quality debt securities, as well as stocks that are not currently paying dividends, but offer prospects for future income or capital appreciation. Invests in domestic and foreign issuers. The Fund invests in either "growth" stocks or "value" stocks or both. Fidelity(R) VIP Mid Cap Long-term growth of capital. Normally invests FMR, investment manager; FMR Portfolio Service Class 2 primarily in common stocks. Normally invests at least U.K., FMR Far East, 80% of assets in securities of companies with medium sub-investment advisers. market capitalizations. May invest in companies with smaller or larger market capitalizations. Invests in domestic and foreign issuers. The Fund invests in either "growth" or "value" common stocks or both. Fidelity(R) VIP Overseas Long-term growth of capital. Normally invests FMR, investment manager; FMR Portfolio Service Class 2 primarily in common stocks of foreign securities. U.K., FMR Far East, Fidelity Normally invests at least 80% of assets in non-U.S. International Investment Advisors securities. (FIIA) and FIIA U.K., sub-investment advisers. FTVIPT Franklin Real Estate Seeks capital appreciation, with current income as a Franklin Advisers, Inc. Fund - Class 2 secondary goal. The Fund normally invests at least 80% of its net assets in investments of companies operating in the real estate sector.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- FTVIPT Franklin Small Cap Seeks long-term total return. The Fund normally Franklin Advisory Services, LLC Value Securities Fund - invests at least 80% of its net assets in investments Class 2 of small capitalization companies, and normally invests predominantly in equity securities. For this Fund, small-capitalization companies are those with market capitalization values not exceeding $2.5 billion, at the time of purchase. The Fund invests mainly in equity securities of companies that the manager believes are undervalued. FTVIPT Mutual Shares Seeks capital appreciation, with income as a Franklin Mutual Advisers, LLC Securities Fund - Class 2 secondary goal. The Fund normally invests mainly in equity securities that the manager believes are undervalued. The Fund normally invests primarily in undervalued stocks and to a lesser extent in risk arbitrage securities and distressed companies. Goldman Sachs VIT Mid Cap Seeks long-term capital appreciation. The Fund Goldman Sachs Asset Management, Value Fund invests, under normal circumstances, at least 80% of L.P. its net assets plus any borrowings for investment purposes (measured at time of purchase) ("Net Assets") in a diversified portfolio of equity investments in mid-cap issuers with public stock market capitalizations (based upon shares available for trading on an unrestricted basis) within the range of the market capitalization of companies constituting the Russell Midcap(R) Value Index at the time of investment. If the market capitalization of a company held by the Fund moves outside this range, the Fund may, but is not required to, sell the securities. The capitalization range of the Russell Midcap(R) Value Index is currently between $276 million and $14.9 billion. Although the Fund will invest primarily in publicly traded U.S. securities, it may invest up to 25% of its Net Assets in foreign securities, including securities of issuers in emerging countries and securities quoted in foreign currencies. The Fund may invest in the aggregate up to 20% of its Net Assets in companies with public stock market capitalizations outside the range of companies constituting the Russell Midcap(R) Value Index at the time of investment and in fixed-income securities, such as government, corporate and bank debt obligations. Goldman Sachs VIT The Fund seeks long-term growth of capital and Goldman Sachs Asset Management, Structured U.S. Equity Fund dividend income. The Fund invests, under normal L.P. circumstances, at least 90% of its total assets (not (previously Goldman Sachs including securities lending collateral and any VIT CORE U.S. Equity Fund) investment of that collateral) measured at time of purchase ("Total Assets") in a diversified portfolio CORE is a registered of equity investments in U.S. issuers, including service mark of Goldman, foreign companies that are traded in the United Sachs & Co. States. However, it is currently anticipated that, under normal circumstances, the Fund will invest at least 95% of its net assets plus any borrowings for investment purposes (measured at the time of purchase) in such equity investments. The Fund's investments are selected using both a variety of quantitative techniques and fundamental research in seeking to maximize the Fund's expected return, while maintaining risk, style, capitalization and industry characteristics similar to the S&P 500 Index. The Fund seeks a broad representation in most major sectors of the U.S. economy and a portfolio consisting of companies with average long-term earnings growth expectations and dividend yields. The Fund is not required to limit its investments to securities in the S&P 500 Index. The Fund's investments in fixed-income securities are limited to securities that are considered cash equivalents.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- Janus Aspen Series Global Long-term growth of capital. Invests, under normal Janus Capital Technology Portfolio: circumstances, at least 80% of its net assets in Service Shares securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. It implements this policy by investing primarily in equity securities of U.S. and foreign companies selected for their growth potential. Janus Aspen Series Long-term growth of capital. Invests, under normal Janus Capital International Growth circumstances, at least 80% of its net assets in Portfolio: Service Shares securities of issuers from at least five different countries, excluding the United States. Although the Portfolio intends to invest substantially all of its assets in issuers located outside the United States, it may at times invest in U.S. issuers and under unusual circumstances, it may invest all of its assets in fewer than five countries or even a single country. Lazard Retirement Long-term capital appreciation. Invests primarily in Lazard Asset Management, LLC International Equity equity securities, principally common stocks, of Portfolio relatively large non-U.S. companies with market capitalizations in the range of the Morgan Stanley Capital International (MSCI) Europe, Australia and Far East (EAFE(R)) Index that the Investment Manager believes are undervalued based on their earnings, cash flow or asset values. MFS(R) Investors Growth Long-term growth of capital and future income. MFS Investment Management(R) Stock Series - Service Invests at least 80% of its net assets in common Class stocks and related securities of companies which MFS(R) believes offer better than average prospects for long-term growth. MFS(R) New Discovery Series Capital appreciation. Invests at least 65% of its net MFS Investment Management(R) - Service Class assets in equity securities of emerging growth companies. MFS(R) Utilities Series - Capital growth and current income. Invests primarily MFS Investment Management(R) Service Class in equity and debt securities of domestic and foreign companies in the utilities industry. Neuberger Berman Advisers Long-term growth of capital. The Fund invests mainly Neuberger Berman Management Inc. Management Trust in foreign companies of any size, including companies International Portfolio in developed and emerging industrialized markets. The (Class S) Fund defines a foreign company as one that is organized outside of the United States and conducts the majority of its business abroad. The Fund seeks to reduce risk by diversifying among many industries. Although it has the flexibility to invest a significant portion of its assets in one country or region, it generally intends to remain well-diversified across countries and geographical regions. Oppenheimer Global Long-term capital appreciation. Invests mainly in OppenheimerFunds, Inc. Securities Fund/VA, Service common stocks of U.S. and foreign issuers that are Shares "growth-type" companies, cyclical industries and special situations that are considered to have appreciation possibilities. Oppenheimer Main Street Seeks capital appreciation. Invests mainly in common OppenheimerFunds, Inc. Small Cap Fund/VA, Service stocks of small-capitalization U.S. companies that Shares the fund's investment manager believes have favorable business trends or prospects.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- Oppenheimer Strategic Bond High level of current income principally derived from OppenheimerFunds, Inc. Fund/VA, Service Shares interest on debt securities. Invests mainly in three market sectors: debt securities of foreign governments and companies, U.S. government securities and lower-rated high yield securities of U.S. and foreign companies. PIMCO VIT All Asset Seeks maximum real return consistent with Pacific Investment Management Portfolio, Advisor Share preservation of real capital and prudent investment Company LLC Class management period. The Portfolio seeks to achieve its investment objective by investing under normal circumstances substantially all of its assets in Institutional Class shares of the PIMCO Funds, an affiliated open-end investment company, except the All Asset and All Asset All Authority Funds ("Underlying Funds"). Though it is anticipated that the Portfolio will not currently invest in the European StockPLUS(R) TR Strategy, Far East (ex-Japan) StocksPLUS(R) TR Strategy, Japanese StocksPLUS(R) TR Strategy, StocksPLUS(R) Municipal-Backed and StocksPLUS(R) TR Short Strategy Funds, the Portfolio may invest in these Funds in the future, without shareholder approval, at the discretion of the Portfolio's asset allocation sub-adviser. Pioneer Equity Income VCT Current income and long-term growth of capital from a Pioneer Investment Management, Portfolio - Class II Shares portfolio consisting primarily of income producing Inc. equity securities of U.S. corporations. Normally, the portfolio invests at least 80% of its total assets in income producing equity securities of U.S. issuers. The income producing equity securities in which the portfolio may invest include common stocks, preferred stocks and interests in real estate investment trusts (REITs). The remainder of the portfolio may be invested in debt securities, most of which are expected to be convertible into common stocks. The portfolio may invest up to 25% of its total assets in REITs. Pioneer Europe VCT Long-term growth of capital. Normally, the portfolio Pioneer Investment Management, Portfolio - Class II Shares invests at least 80% of its total assets in equity Inc. securities of European issuers. For purposes of the portfolio's investment policies, equity investments include common stocks, convertible debt and securities with common stock characteristics, such as preferred stocks, rights, depositary receipts and warrants. The portfolio may also purchase and sell forward foreign currency exchange contracts in European currencies in connection with its investments. Putnam VT Health Sciences Seeks capital appreciation. The fund pursues its goal Putnam Investment Management, LLC Fund - Class IB Shares by investing mainly in common stocks of companies in the health sciences industries, with a focus on growth stocks. Under normal circumstances, the fund invests at least 80% of its net assets in securities of (a) companies that derive at least 50% of their assets, revenues or profits from the pharmaceutical, health care services, applied research and development and medical equipment and supplies industries, or (b) companies Putnam Management thinks have the potential for growth as a result of their particular products, technology, patents or other market advantages in the health sciences industries. Putnam VT International Seeks capital appreciation. The fund pursues its goal Putnam Investment Management, LLC Equity Fund - Class IB by investing mainly in common stocks of companies Shares outside the United States that Putnam Management believes have favorable investment potential. Under normal circumstances, the fund invests at least 80% of its net assets in equity investments.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- Putnam VT Vista Fund - Seeks capital appreciation. The fund pursues its goal Putnam Investment Management, LLC Class IB Shares by investing mainly in common stocks of U.S. companies, with a focus on growth stocks. RiverSource Variable Maximum total investment return through a combination RiverSource Investments Portfolio - Balanced Fund of capital growth and current income. Invests primarily in a combination of common and preferred stocks, bonds and other debt securities. Under normal market conditions, at least 50% of the Fund's total assets are invested in common stocks and no less than 25% of the Fund's total assets are invested in debt securities. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable Maximum current income consistent with liquidity and RiverSource Investments Portfolio - Cash Management stability of principal. Invests primarily in money Fund market instruments, such as marketable debt obligations issued by corporations or the U.S. government or its agencies, bank certificates of deposit, bankers' acceptances, letters of credit, and commercial paper, including asset-backed commercial paper. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Core Bond Fund appreciation. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. Although the Fund is not an index fund, it invests primarily in securities like those included in the Lehman Brothers Aggregate Bond Index ("the Index"), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. The Fund will not invest in securities rated below investment grade, although it may hold securities that have been downgraded. RiverSource Variable High level of current income while attempting to RiverSource Investments Portfolio - Diversified conserve the value of the investment and continuing a Bond Fund high level of income for the longest period of time. Under normal market conditions, the Fund invests at least 80% of its net assets in bonds and other debt securities. At least 50% of the Fund's net assets will be invested in securities like those included in the Lehman Brothers Aggregate Bond Index (Index), which are investment grade and denominated in U.S. dollars. The Index includes securities issued by the U.S. government, corporate bonds, and mortgage- and asset-backed securities. Although the Fund emphasizes high- and medium-quality debt securities, it will assume some credit risk to achieve higher yield and/or capital appreciation by buying lower-quality (junk) bonds. RiverSource Variable High level of current income and, as a secondary RiverSource Investments Portfolio - Diversified goal, steady growth of capital. Under normal market Equity Income Fund conditions, the Fund invests at least 80% of its net assets in dividend-paying common and preferred stocks. RiverSource Variable Long-term capital growth. The Fund's assets are RiverSource Investments, adviser; Portfolio - Emerging primarily invested in equity securities of emerging Threadneedle International Markets Fund market companies. Under normal market conditions, at Limited, an indirect wholly-owned least 80% of the Fund's net assets will be invested subsidiary of Ameriprise in securities of companies that are located in Financial, subadviser. emerging market countries, or that earn 50% or more of their total revenues from goods and services produced in emerging market countries or from sales made in emerging market countries.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- RiverSource Variable Long-term capital growth. The Fund's assets are RiverSource Investments Portfolio - Fundamental primarily invested in equity securities of U.S. Value Fund companies. Under normal market conditions, the Fund's net assets will be invested primarily in companies with market capitalizations of at least $5 billion. RiverSource Variable High total return through income and growth of RiverSource Investments Portfolio - Global Bond capital. Non-diversified mutual fund that invests Fund primarily in debt obligations of U.S. and foreign issuers (which may include issuers located in emerging markets). Under normal market conditions, the Fund invests at least 80% of its net assets in investment-grade corporate or government debt obligations including money market instruments of issuers located in at least three different countries. RiverSource Variable Total return that exceeds the rate of inflation over RiverSource Investments Portfolio - Global the long-term. Non-diversified mutual fund that, Inflation Protected under normal market conditions, invests at least 80% Securities Fund of its net assets in inflation-protected debt securities. These securities include inflation-indexed bonds of varying maturities issued by U.S. and foreign governments, their agencies or instrumentalities, and corporations. RiverSource Variable Long-term capital growth. Invests primarily in common RiverSource Investments Portfolio - Growth Fund stocks and securities convertible into common stocks that appear to offer growth opportunities. These growth opportunities could result from new management, market developments, or technological superiority. The Fund may invest up to 25% of its total assets in foreign investments. RiverSource Variable High current income, with capital growth as a RiverSource Investments Portfolio - High Yield Bond secondary objective. Under normal market conditions, Fund the Fund invests at least 80% of its net assets in high-yielding, high-risk corporate bonds (junk bonds) issued by U.S. and foreign companies and governments. RiverSource Variable High total return through current income and capital RiverSource Investments Portfolio - Income appreciation. Under normal market conditions, invests Opportunities Fund primarily in income-producing debt securities with an emphasis on the higher rated segment of the high-yield (junk bond) market. The Fund will purchase only securities rated B or above, or unrated securities believed to be of the same quality. If a security falls below a B rating, the Fund may continue to hold the security. RiverSource Variable Capital appreciation. Invests primarily in equity RiverSource Investments, adviser; Portfolio - International securities of foreign issuers that offer strong Threadneedle International Opportunity Fund growth potential. The Fund may invest in developed Limited, an indirect wholly-owned and in emerging markets. subsidiary of Ameriprise Financial, subadviser. RiverSource Variable Capital appreciation. Under normal market conditions, RiverSource Investments Portfolio - Large Cap the Fund invests at least 80% of its net assets in Equity Fund equity securities of companies with market capitalization greater than $5 billion at the time of purchase. RiverSource Variable Long-term growth of capital. Under normal market RiverSource Investments Portfolio - Large Cap Value conditions, the Fund invests at least 80% of its net Fund assets in equity securities of companies with a market capitalization greater than $5 billion. The Fund may also invest in income-producing equity securities and preferred stocks.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- RiverSource Variable Growth of capital. Under normal market conditions, RiverSource Investments Portfolio - Mid Cap Growth the Fund invests at least 80% of its net assets in Fund equity securities of mid capitalization companies. The investment manager defines mid-cap companies as those whose market capitalization (number of shares outstanding multiplied by the share price) falls within the range of the Russell Midcap(R) Growth Index. RiverSource Variable Under normal circumstances, the Fund invests at least RiverSource Investments Portfolio - Mid Cap Value 80% of its net assets (including the amount of any Fund borrowings for investment purposes) in equity securities of medium-sized companies. Medium-sized companies are those whose market capitalizations at the time of purchase fall within the range of the Russell Midcap(R) Value Index. RiverSource Variable Long-term capital appreciation. The Fund seeks to RiverSource Investments Portfolio - S&P 500 Index provide investment results that correspond to the Fund total return (the combination of appreciation and income) of large-capitalization stocks of U.S. companies. The Fund invests in common stocks included in the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P 500 is made up primarily of large-capitalization companies that represent a broad spectrum of the U.S. economy. RiverSource Variable Long-term growth of capital. Invests primarily in RiverSource Investments, adviser; Portfolio - Select Value common stocks, preferred stocks and securities GAMCO Investors, Inc., subadviser Fund convertible into common stocks that are listed on a nationally recognized securities exchange or traded on the NASDAQ National Market System of the National Association of Securities Dealers. The Fund invests in mid-cap companies as well as companies with larger and smaller market capitalizations. RiverSource Variable A high level of current income and safety of RiverSource Investments Portfolio - Short Duration principal consistent with an investment in U.S. U.S. Government Fund government and government agency securities. Under normal market conditions, at least 80% of the Fund's net assets are invested in securities issued or guaranteed as to principal and interest by the U.S. government, its agencies or instrumentalities. RiverSource Variable Long-term capital growth. Under normal market RiverSource Investments, adviser; Portfolio - Small Cap conditions, at least 80% of the Fund's net assets are Kenwood Capital Management LLC, Advantage Fund invested in equity securities of companies with subadviser market capitalization of up to $2 billion or that fall within the range of the Russell 2000(R) Index at the time of investment. RiverSource Variable Long-term capital appreciation. Invests primarily in RiverSource Investments, adviser; Portfolio - Small Cap Value equity securities. Under normal market conditions, at River Road Asset Management, LLC, Fund least 80% of the Fund's net assets will be invested Donald Smith & Co., Inc., in small cap companies with market capitalization, at Franklin Portfolio Associates LLC the time of investment, of up to $2.5 billion or that and Barrow, Hanley, Mewhinney & fall within the range of the Russell 2000(R) Value Strauss, Inc., subadvisers. Index. Van Kampen Life Investment Capital growth and income through investments in Van Kampen Asset Management Trust Comstock Portfolio, equity securities, including common stocks, preferred Class II Shares stocks and securities convertible into common and preferred stocks.
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INVESTING IN INVESTMENT OBJECTIVES AND POLICIES INVESTMENT ADVISER ----------------------------------------------------------------------------------------------------------------------- Van Kampen UIF Global Real Current income and capital appreciation. Invests Morgan Stanley Investment Estate Portfolio, Class II primarily in equity securities of companies in the Management Inc., doing business Shares real estate industry located throughout the world, as Van Kampen, adviser; Morgan including real estate operating companies, real Stanley Investment Management and estate investment trusts and foreign real estate Morgan Stanley Investment companies. Management Company, sub-adviser Van Kampen UIF Mid Cap Long-term capital growth. Invests primarily in Morgan Stanley Investment Growth Portfolio, Class II growth-oriented equity securities of U.S. mid cap Management Inc., doing business Shares companies and foreign companies, including emerging as Van Kampen market securities. Wanger International Small Long-term growth of capital. Invests primarily in Columbia Wanger Asset Management, Cap stocks of companies based outside the U.S. with L.P. market capitalizations of less than $5 billion at time of initial purchase. Wanger U.S. Smaller Long-term growth of capital. Invests primarily in Columbia Wanger Asset Management, Companies stocks of small- and medium-size U.S. companies with L.P. market capitalizations of less than $5 billion at time of initial purchase. Wells Fargo Advantage VT Long-term total return consistent with reasonable Wells Fargo Funds Management, Asset Allocation Fund risk. The Fund invests in equity and fixed income LLC, adviser; Wells Capital securities with an emphasis on equity securities. The Management Incorporated, Fund does not select individual securities for subadviser. investment, rather, it buys substantially all of the securities of various indexes to replicate such indexes. The Fund invests the equity portion of its assets in common stocks to replicate the S&P 500 Index, and invests the fixed income portion of its assets in U.S. Treasury Bonds to replicate the Lehman Brothers 20+ Treasury Index. The Fund seeks to maintain a 95% or better performance correlation with the respective indexes, before fees and expenses, regardless of market conditions. The Fund's "neutral" target allocation is 60% equity securities and 40% fixed income securities. Wells Fargo Advantage VT Long-term capital appreciation. The Fund seeks Wells Fargo Funds Management, International Core Fund long-term capital appreciation by investing LLC, adviser; New Star principally in non-U.S. securities, with focus on Institutional Managers Limited, companies with strong growth potential that offer subadviser. relative values. These companies typically have distinct competitive advantages, high or improving returns on invested capital and a potential for positive earnings surprises. The Fund may invest in emerging markets. Wells Fargo Advantage VT Seeks long-term capital appreciation. We invest in Wells Fargo Funds Management, Opportunity Fund equity securities of medium-capitalization companies LLC, adviser; Wells Capital that we believe are under-priced yet, have attractive Management Incorporated, growth prospects. subadviser. Wells Fargo Advantage VT Long-term capital appreciation. Focus is on companies Wells Fargo Funds Management, Small Cap Growth Fund believed to have above-average growth potential or LLC, adviser; Wells Capital that may be involved in new or innovative products, Management Incorporated, services and processes. Invests principally in subadviser. securities of companies with market capitalizations equal to or lower than the company with the largest market capitalization in the Russell 2000 Index, which is considered a small capitalization index that is expected to change frequently.
-------------------------------------------------------------------------------- 23 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE FIXED ACCOUNT You also may allocate purchase payments and transfer contract value to the fixed account. We back the principal and interest guarantees relating to the fixed account. These guarantees are based on the continued claims-paying ability of the company. The value of the fixed account increases as we credit interest to the account. Purchase payments and transfers to the fixed account become part of our general account. We credit and compound interest daily based on a 365-day year so as to produce the annual effective rate which we declare. We do not credit interest on leap days (Feb. 29). The interest rate for your fixed account is guaranteed for 12 months from the contract issue date. Thereafter, we will change rates from time to time at our discretion. These rates will be based on various factors including, but not limited to, the interest rate environment, returns earned on investments backing these annuities, the rates currently in effect for new and existing IDS Life annuities, product design, competition, and the IDS Life's revenues and expenses. Interests in the fixed account are not required to be registered with the SEC. The SEC staff does not review the disclosures in this prospectus on the fixed account. Disclosures regarding the fixed account, however, may be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in prospectuses.(See "Making the Most of Your Contract - Transfer Policies" for restrictions on transfers involving the fixed account.) BUYING YOUR CONTRACT New contracts are not currently being offered. As the owner, you have all rights and may receive all benefits under the contract. You can own a nonqualified annuity in joint tenancy with rights of survivorship only in spousal situations. You cannot own a qualified annuity in joint tenancy. You can become an annuitant if you are 90 or younger. The contract provides for allocation of purchase payments to the subaccounts of the variable account and/or to the fixed account in even 1% increments. For contracts issued on or after July 1, 2003, the amount of any purchase payment allocated to the fixed account cannot exceed 30% of the purchase payment. More than 30% of a purchase payment may be so allocated if you establish a dollar cost averaging arrangement with respect to the purchase payment according to procedures currently in effect. We applied your initial purchase payment to the fixed account and subaccounts you selected within two business days after we received it at our home office. We will credit additional purchase payments you make to your accounts on the valuation date we receive them. If we receive an additional purchase payment at our home office before the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the valuation date we received the payment. If we receive an additional purchase payment at our home office at or after the close of business, we will credit any portion of that payment allocated to the subaccounts using the accumulation unit value we calculate on the next valuation date after we received the payment. THE SETTLEMENT DATE Annuity payouts are scheduled to begin on the settlement date. When we processed your application, we established the settlement date as the maximum age (or contract anniversary if applicable) for nonqualified annuities and Roth IRAs and the date specified below for qualified annuities. Your selected date can align with your actual retirement from a job, or it can be a different date, depending on your needs and goals and on certain restrictions. You also can change the settlement date, provided you send us written instructions at least 30 days before annuity payouts begin. FOR NONQUALIFIED ANNUITIES AND ROTH IRAs, the settlement date must be: - no earlier than the 60th day after the contract's effective date; and - no later than the annuitant's 85th birthday or the tenth contract anniversary, if purchased after age 75. (In Pennsylvania, the maximum settlement date ranges from age 85 to 96 based on the annuitant's age when we issue the contract. See contract for details.) FOR QUALIFIED ANNUITIES EXCEPT ROTH IRAs, to comply with IRS regulations, the settlement date generally must be: - for IRAs, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2; or - all other qualified annuities, by April 1 of the year following the calendar year when the annuitant reaches age 70 1/2, or, if later, retires (except that 5% business owners may not select a settlement date that is later than April 1 of the year following the calendar year when they reach age 70 1/2). If you satisfy your RMDs in the form of partial surrenders from this contract, annuity payouts can start as late as the annuitant's 85th birthday or the tenth contract anniversary, if later, or a date that has been otherwise agreed to by us. (In Pennsylvania, the annuity payout ranges from age 85 to 96 based on the annuitant's age when the contract is issued. See contract for details.) Contract owners of IRAs and TSAs may also be able to satisfy required minimum distributions using other IRAs and TSAs, and in that case, may delay annuity payout start date for this contract. -------------------------------------------------------------------------------- 24 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS BENEFICIARY If death benefits become payable before the settlement date while the contract is in force and before annuity payouts begin, we will pay your named beneficiary all or part of the contract value. If there is no named beneficiary, then the default provisions of your contract will apply. (See "Benefits in Case of Death" for more about beneficiaries.) PURCHASE PAYMENTS MINIMUM ALLOWABLE PURCHASE PAYMENTS(1) FOR EMPLOYEES/ADVISORS If paying by installments under a scheduled payment plan: $23.08 biweekly, or $50 per month If paying by any other method: $1,000 initial payment for qualified annuities $2,000 initial payment for nonqualified annuities $50 for any additional payments FOR OTHER INDIVIDUALS $1 million(3) MAXIMUM ALLOWABLE PURCHASE PAYMENTS(3) FOR EMPLOYEES/ADVISORS $100,000 for ages through 85 $50,000 for ages 86 to 90 FOR OTHER INDIVIDUALS $100,000 (1) If you do not make any purchase payments for 24 months, and your previous payments total $600 or less, we have the right to give you 30 days' written notice and pay you the total value of your contract in a lump sum. This right does not apply to contracts in New Jersey. (2) For initial purchase payments of more than $999,999, our home office approval is required. (3) These limits apply in total to all IDS Life annuities you own. We reserve the right to increase maximum limits. For qualified annuities the tax-deferred retirement plan's or the Code's limits on annual contributions also apply. We reserve the right to not accept purchase payments allocated to the fixed account for twelve months following either: 1. a partial surrender from the fixed account; or 2. a lump sum transfer from the fixed account to a subaccount. HOW TO MAKE PURCHASE PAYMENTS 1 BY LETTER Send your check along with your name and contract number to: IDS LIFE INSURANCE COMPANY 70200 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 2 BY SCHEDULED PAYMENT PLAN FOR EMPLOYEES/ADVISORS ONLY We can help you set up: - an automatic payroll deduction, salary reduction or other group billing arrangement; or - a bank authorization. CHARGES CONTRACT ADMINISTRATIVE CHARGE We charge this fee for establishing and maintaining your records. We deduct $30 from the contract value on your contract anniversary at the end of each contract year. We prorate this charge among the subaccounts and the fixed account in the same proportion your interest in each account bears to your total contract value. We will waive this charge when your contract value, or total purchase payments less any payments surrendered, is $50,000 or more on the current contract anniversary. -------------------------------------------------------------------------------- 25 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS If you surrender your contract, we will deduct the charge at the time of surrender regardless of the contract value or purchase payments made. We cannot increase the annual contract administrative charge and it does not apply after annuity payouts begin or when we pay death benefits. MORTALITY AND EXPENSE RISK FEE We charge this fee daily to the subaccounts. The unit values of your subaccounts reflect this fee and it totals 0.55% of their average daily net assets on an annual basis. This fee covers the mortality and expense risk that we assume. Approximately two-thirds of this amount is for our assumption of mortality risk, and one-third is for our assumption of expense risk. This fee does not apply to the fixed account. Mortality risk arises because of our guarantee to pay a death benefit and our guarantee to make annuity payouts according to the terms of the contract, no matter how long a specific annuitant lives and no matter how long our entire group of annuitants live. If, as a group, annuitants outlive the life expectancy we assumed in our actuarial tables, we must take money from our general assets to meet our obligations. If, as a group, annuitants do not live as long as expected, we could profit from the mortality risk fee. Expense risk arises because we cannot increase the contract administrative charge and this charge may not cover our expenses. We would have to make up any deficit from our general assets. We could profit from the expense risk fee if future expenses are less than expected. The subaccounts pay us the mortality and expense risk fee they accrued as follows: - first, to the extent possible, the subaccounts pay this fee from any dividends distributed from the funds in which they invest; - then, if necessary, the funds redeem shares to cover any remaining fees payable. We may use any profits we realize from the subaccounts' payment to us of the mortality and expense risk fee for any proper corporate purpose, including, among others, payment of distribution (selling) expenses. MAV RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.25%(2) of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. EEB RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.30% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. -------------------------------------------------------------------------------- 26 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EEP RIDER FEE We charge a fee for the optional feature only if you select it.(1) If selected, we deduct an annual fee of 0.40% of your contract value on your contract anniversary at the end of each contract year. We prorate this fee among the subaccounts and fixed account in the same proportion your interest in each account bears to your total contract value. If the contract terminates for any reason except death or at the settlement date, we will deduct this fee, adjusted for the number of calendar days coverage was in place. If you choose to drop this rider on an anniversary (subject to the restrictions given in "Optional Benefits"), we will deduct this fee on that anniversary. We cannot increase this annual fee after the rider effective date and it does not apply after annuity payouts begin or when we pay death benefits. (1) You may select any one of the MAV, EEB or EEP riders. Or you may select the MAV and either the EEB or the EEP. However, you cannot select both the EEB and EEP. Riders may not be available in all states. The MAV, EEB and EEP riders are only available if you and the annuitant are 75 or younger at the rider effective date. EEP is only available on contracts purchased through a transfer or exchange. (2) For contracts purchased before May 1, 2003, the MAV rider fee is 0.15%. SURRENDER CHARGE There is no charge if you surrender all or part of your contract. SURRENDER CHARGE UNDER ANNUITY PAYOUT PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: Under this payout plan, you can choose to take a surrender. The amount that you can surrender is the present value of any remaining variable payouts. The discount rate we use in the calculation will vary between 3.50% and 5.00% depending on the applicable assumed investment rate. The surrender charge equals the present value of the remaining payouts using the assumed investment rate minus the present value of the remaining payouts using the discount rate. (See "Charges -- Surrender Charge" and "The Annuity Payout Period -- Annuity Payout Plans.") OTHER INFORMATION ON CHARGES: Ameriprise Financial, Inc makes certain custodial services available to some profit sharing, money purchase and target benefit plans funded by our annuities. Fees for these services start at $30 per calendar year per participant. Ameriprise Financial, Inc. will charge a termination fee for owners under age 59 1/2 (waived in case of death or disability). POSSIBLE GROUP REDUCTIONS: In some cases we may incur lower sales and administrative expenses due to the size of the group, the average contribution and the use of group enrollment procedures. In such cases, we may be able to reduce or eliminate the contract administrative and surrender charges. However, we expect this to occur infrequently. FUND FEES AND EXPENSES There are deductions from and expenses paid out of the assets of the funds that are described in the prospectus for those funds. (See "Annual Operating Expenses of the Funds.") PREMIUM TAXES Certain state and local governments impose premium taxes on us (up to 3.5%). These taxes depend upon the state of residence or the state in which the contract was sold. Currently, we deduct any applicable premium tax when annuity payouts begin, but we reserve the right to deduct this tax at other times such as when you make purchase payments or when you surrender your contract. -------------------------------------------------------------------------------- 27 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VALUING YOUR INVESTMENT We value your accounts as follows: FIXED ACCOUNT We value the amounts you allocated to the fixed account directly in dollars. The fixed account value equals: - the sum of your purchase payments and transfer amounts allocated to the fixed account; - plus interest credited; - minus the sum of amounts surrendered and amounts transferred out; - minus any prorated contract administrative charge; - minus any prorated portion of the MAV rider fee (if selected); - minus any prorated portion of the EEB rider fee (if selected); and - minus any prorated portion of the EEP rider fee (if selected). SUBACCOUNTS We convert amounts you allocated to the subaccounts into accumulation units. Each time you make a purchase payment or transfer amounts into one of the subaccounts, we credit a certain number of accumulation units to your contract for that subaccount. Conversely, we subtract a certain number of accumulation units from your contract each time you take a partial surrender, transfer amounts out of a subaccount, or we assess a contract administrative charge or fee for any optional riders with annual charges (if applicable). The accumulation units are the true measure of investment value in each subaccount during the accumulation period. They are related to, but not the same as, the net asset value of the fund in which the subaccount invests. The dollar value of each accumulation unit can rise or fall daily depending on the variable account expenses, performance of the fund and on certain fund expenses. Here is how we calculate accumulation unit values: NUMBER OF UNITS: to calculate the number of accumulation units for a particular subaccount we divide your investment by the current accumulation unit value. ACCUMULATION UNIT VALUE: the current accumulation unit value for each subaccount equals the last value times the subaccount's current net investment factor. WE DETERMINE THE NET INVESTMENT FACTOR BY: - adding the fund's current net asset value per share, plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the accumulation unit value may increase or decrease. You bear all the investment risk in a subaccount. FACTORS THAT AFFECT SUBACCOUNT ACCUMULATION UNITS: accumulation units may change in two ways -- in number and in value. The number of accumulation units you own may fluctuate due to: - additional purchase payments you allocate to the subaccounts; - transfers into or out of the subaccounts; - partial surrenders; and a deduction of: - a prorated portion of the contract administrative charge; - a prorated portion of the MAV rider fee (if selected); - a prorated portion of the EEB rider fee (if selected); and - a prorated portion of the EEP rider fee (if selected). Accumulation unit values will fluctuate due to: - changes in fund net asset value; - fund dividends distributed to the subaccounts; - fund capital gains or losses; - fund operating expenses; and - mortality and expense risk fees. -------------------------------------------------------------------------------- 28 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS MAKING THE MOST OF YOUR CONTRACT AUTOMATED DOLLAR-COST AVERAGING Currently, you can use automated transfers to take advantage of dollar-cost averaging (investing a fixed amount at regular intervals). For example, you might transfer a set amount monthly from a relatively conservative subaccount to a more aggressive one, or to several others, or from the fixed account to one or more subaccounts. There is no charge for dollar-cost averaging. This systematic approach can help you benefit from fluctuations in accumulation unit values caused by fluctuations in the market values of the funds. Since you invest the same amount each period, you automatically acquire more units when the market value falls and fewer units when it rises. The potential effect is to lower your average cost per unit. HOW DOLLAR-COST AVERAGING WORKS
NUMBER By investing an equal number AMOUNT ACCUMULATION OF UNITS of dollars each month ... MONTH INVESTED UNIT VALUE PURCHASED Jan $100 $20 5.00 Feb 100 18 5.56 you automatically buy Mar 100 17 5.88 more units when the per unit market price is low ... ------> Apr 100 15 6.67 May 100 16 6.25 Jun 100 18 5.56 Jul 100 17 5.88 and fewer units Aug 100 19 5.26 when the per unit market price is high. ------> Sept 100 21 4.76 Oct 100 20 5.00
You paid an average price of $17.91 per unit over the 10 months, while the average market price actually was $18.10. Dollar-cost averaging does not guarantee that any subaccount will gain in value nor will it protect against a decline in value if market prices fall. Because dollar-cost averaging involves continuous investing, your success will depend upon your willingness to continue to invest regularly through periods of low price levels. Dollar-cost averaging can be an effective way to help meet your long-term goals. For specific features contact your sales representative. ASSET REBALANCING You can ask us in writing to have the variable subaccount portion of your contract value allocated according to the percentages (in whole percentage amounts ) that you choose. We automatically will rebalance the variable subaccount portion of your contract value either quarterly, semiannually, or annually. The period you select will start to run on the date we record your request. On the first valuation date of each of these periods, we automatically will rebalance your contract value so that the value in each subaccount matches your current subaccount percentage allocations. These percentage allocations must be in whole numbers. Asset rebalancing does not apply to the fixed account. There is no charge for asset rebalancing. The contract value must be at least $2,000. You can change your percentage allocations or your rebalancing period at any time by contacting us in writing. We will restart the rebalancing period you selected as of the date we record your change. You also can ask us in writing or by any other method acceptable to us, to stop rebalancing your contract value. You must allow 30 days for us to change any instructions that currently are in place. For more information on asset rebalancing, contact your sales representative. -------------------------------------------------------------------------------- 29 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TRANSFERRING BETWEEN ACCOUNTS You may transfer contract value from any one subaccount, or the fixed account, to another subaccount before annuity payouts begin. Certain restrictions apply to transfers involving the fixed account. When your request to transfer will be processed depends on when we receive it: - If we receive your transfer request at our home office before the close of business, we will process your transfer using the accumulation unit value we calculate on the valuation date we received your transfer request. - If we receive your transfer request at our home office at or after the close of business, we will process your transfer using the accumulation unit value we calculate on the next valuation date after we received your transfer request. There is no charge for transfers. Before making a transfer, you should consider the risks involved in changing investments. We may suspend or modify transfer privileges at any time. WE SEEK TO PREVENT MARKET TIMING. MARKET TIMING IS FREQUENT OR SHORT-TERM TRADING ACTIVITY. WE DO NOT ACCOMMODATE SHORT-TERM TRADING ACTIVITIES. DO NOT INVEST IN THIS CONTRACT IF YOU WISH TO USE SHORT-TERM TRADING STRATEGIES TO MANAGE YOUR INVESTMENT. THE MARKET TIMING POLICIES AND PROCEDURES DESCRIBED BELOW APPLY TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN THE CONTRACT. THE UNDERLYING FUNDS IN WHICH THE SUBACCOUNTS INVEST HAVE THEIR OWN MARKET TIMING POLICIES AND PROCEDURES. THE MARKET TIMING POLICIES OF THE UNDERLYING FUNDS MAY BE MORE OR LESS RESTRICTIVE THAN THE MARKET TIMING POLICIES AND PROCEDURES WE APPLY TO TRANSFERS AMONG THE SUBACCOUNTS OF THE CONTRACT, AND MAY INCLUDE REDEMPTION FEES. WE RESERVE THE RIGHT TO MODIFY OUR MARKET TIMING POLICIES AND PROCEDURES AT ANY TIME WITHOUT PRIOR NOTICE TO YOU. Market timing may hurt the performance of an underlying fund in which a subaccount invests in several ways, including but not necessarily limited to: - diluting the value of an investment in an underlying fund in which a subaccount invests; - increasing the transaction costs and expenses of an underlying fund in which a subaccount invests; and, - preventing the investment adviser(s) of an underlying fund in which a subaccount invests from fully investing the assets of the fund in accordance with the fund's investment objectives. Market timing can reduce the value of your investment in the contract. If market timing causes the returns of an underlying fund to suffer, contract value you have allocated to a subaccount that invests in that underlying fund will be lower, too. Market timing can cause you, any joint owner of the contract and your beneficiary(ies) under the contract a financial loss. IN ORDER TO HELP PROTECT YOU AND THE UNDERLYING FUNDS FROM THE POTENTIALLY HARMFUL EFFECTS OF MARKETING TIMING ACTIVITY, WE APPLY THE FOLLOWING MARKET TIMING POLICY TO DISCOURAGE FREQUENT TRANSFERS OF CONTRACT VALUE AMONG THE SUBACCOUNTS OF THE VARIABLE ACCOUNT: We try to distinguish market timing from transfers that we believe are not harmful, such as dollar-cost averaging. There is no set number of transfers that constitutes market timing. Even one transfer in related accounts may be market timing. We seek to restrict the transfer privileges of a contract owner who makes more than three subaccount transfers in any 90 day period. We also reserve the right to refuse any transfer requests, if, in our sole judgment, the dollar amount of the transfer request would adversely affect unit values. If we determine, in our sole judgment, that your transfer activity constitutes market timing, we may modify, restrict or suspend your transfer privileges to the extent permitted by applicable law, which may vary based on the state law that applies to your contract and the terms of your contract. These restrictions or modifications may include, but not be limited to: - requiring transfer requests to be submitted only by first-class U.S. mail; - not accepting hand-delivered transfer requests or requests made by overnight mail; - not accepting telephone or electronic transfer requests; - requiring a minimum time period between each transfer; - not accepting transfer requests of an agent acting under power of attorney; - limiting the dollar amount that you may transfer at any one time; or - suspending the transfer privilege. Subject to applicable state law and the terms of each contract, we will apply the policy described above to all contract owners uniformly in all cases. We will notify you in writing after we impose any modification, restriction or suspension of your transfer rights. We cannot guarantee that we will be able to identify and restrict all market timing activity. Because we exercise discretion in applying the restrictions described above, we cannot guarantee that we will be able to restrict all market timing activity. In addition, state law and the terms of some contracts may prevent us from stopping certain market timing activity. Market timing activity that we are unable to identify and/or restrict may impact the performance of the underlying funds and may result in lower contract values. -------------------------------------------------------------------------------- 30 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS IN ADDITION TO THE MARKET TIMING POLICY DESCRIBED ABOVE, WHICH APPLIES TO TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT, YOU SHOULD CAREFULLY REVIEW THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS. THE MARKET TIMING POLICIES AND PROCEDURES OF THE UNDERLYING FUNDS MAY BE MATERIALLY DIFFERENT THAN THOSE WE IMPOSE ON TRANSFERS AMONG THE SUBACCOUNTS WITHIN YOUR CONTRACT AND MAY INCLUDE MANDATORY REDEMPTION FEES AS WELL AS OTHER MEASURES TO DISCOURAGE FREQUENT TRANSFERS. AS AN INTERMEDIARY FOR THE UNDERLYING FUNDS, WE ARE REQUIRED TO ASSIST THEM IN APPLYING THEIR MARKET TIMING POLICIES AND PROCEDURES TO TRANSACTIONS INVOLVING THE PURCHASE, EXCHANGE AND REDEMPTION OF FUND SHARES. THIS ASSISTANCE MAY INCLUDE BUT NOT BE LIMITED TO PROVIDING THE UNDERLYING FUND UPON REQUEST WITH YOUR SOCIAL SECURITY NUMBER OR TAXPAYER IDENTIFICATION NUMBER AND THE DETAILS OF YOUR CONTRACT TRANSACTIONS INVOLVING THE UNDERLYING FUND. AN UNDERLYING FUND, IN ITS SOLE DISCRETION, MAY INSTRUCT US AT ANY TIME TO PROHIBIT YOU FROM MAKING FURTHER TRANSFERS OF CONTRACT VALUE TO OR FROM THE UNDERLYING FUND, AND WE MUST FOLLOW THIS INSTRUCTION. WE RESERVE THE RIGHT TO ADMINISTER AND COLLECT ON BEHALF OF AN UNDERLYING FUND ANY REDEMPTION FEE IMPOSED BY AN UNDERLYING FUND. MARKET TIMING POLICIES AND PROCEDURES ADOPTED BY UNDERLYING FUNDS MAY AFFECT YOUR INVESTMENT IN THE CONTRACT IN SEVERAL WAYS, INCLUDING BUT NOT LIMITED TO: - Each fund may restrict or refuse trading activity that the fund determines, in its sole discretion, represents market timing. - Even if we determine that your transfer activity does not constitute market timing under the market timing policies described above which we apply to transfers you make under the contract, it is possible that the underlying fund's market timing policies and procedures, including instructions we receive from a fund, may require us to reject your transfer request. Orders we place to purchase fund shares for the variable account are subject to acceptance by the fund. We reserve the right to reject without prior notice to you any transfer request if the fund does not accept our order. - Each underlying fund is responsible for its own market timing policies, and we cannot guarantee that we will be able to implement specific market timing policies and procedures that a fund has adopted. As a result, a fund's returns might be adversely affected, and a fund might terminate our right to offer its shares through the variable account. - Funds that are available as investment options under the contract may also be offered to other intermediaries who are eligible to purchase and hold shares of the fund, including without limitation, separate accounts of other insurance companies and certain retirement plans. Even if we are able to implement a fund's market timing policies, we cannot guarantee that other intermediaries purchasing that same fund's shares will do so, and the returns of that fund could be adversely affected as a result. Funds available as investment options under the contract that invest in securities that trade in overseas securities markets may be at greater risk of loss from market timing, as market timers may seek to take advantage of changes in the values of securities between the close of overseas markets and the close of U.S. markets. Further the risks of market timing may be greater for underlying funds that invest in securities, such as small cap stocks, high yield bonds, or municipal securities, that may be traded infrequently. FOR MORE INFORMATION ABOUT THE MARKET TIMING POLICIES AND PROCEDURES OF AN UNDERLYING FUND, THE RISKS THAT MARKET TIMING POSES TO THAT FUND, AND TO DETERMINE WHETHER AN UNDERLYING FUND HAS ADOPTED A REDEMPTION FEE, SEE THAT FUND'S PROSPECTUS. For information on transfers after annuity payouts begin, see "Transfer policies" below. TRANSFER POLICIES - Before annuity payouts begin, you may transfer contract values between the subaccounts. You may also transfer contract values from the subaccounts to the fixed account. However, if you made a transfer from the fixed account to the subaccounts, you may not make a transfer from any subaccount back to the fixed account until the next contract anniversary. For contracts issued on or after July 1, 2003, the amount of contract value transferred to the fixed account cannot result in the value of the fixed account being greater than 30% of the contract value. - You may transfer contract values from the fixed account to the subaccounts once a year during a 31-day transfer period starting on each contract anniversary (except for automated transfers, which can be set up at any time for certain transfer periods subject to certain minimums). For contracts issued on or after July 1, 2003, transfers out of the fixed account are limited to the greater of: a) 30% of the fixed account value at the beginning of the contract year, or b) the amount transferred out of the fixed account in the previous contract year, excluding any automated transfer amounts. - If we receive your request within 30 days before the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the anniversary. - If we receive your request on or within 30 days after the contract anniversary date, the transfer from the fixed account to the subaccounts will be effective on the valuation date we receive it. - We will not accept requests for transfers from the fixed account at any other time. - Once annuity payouts begin, you may not make transfers to or from the fixed account, but you may make transfers once per contract year among the subaccounts. During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. -------------------------------------------------------------------------------- 31 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS HOW TO REQUEST A TRANSFER OR SURRENDER 1 BY LETTER Send your name, contract number, Social Security Number or Taxpayer Identification Number*and signed request for a transfer or surrender to: IDS LIFE INSURANCE COMPANY 70100 AMERIPRISE FINANCIAL CENTER MINNEAPOLIS, MN 55474 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers or surrenders: Contract value or entire account balance * Failure to provide your Social Security Number or Taxpayer Identification Number may result in mandatory tax withholding on the taxable portion of the distribution. 2 BY AUTOMATED TRANSFERS AND AUTOMATED PARTIAL SURRENDERS Your sales representative can help you set up automated transfers among your subaccounts or fixed account or partial surrenders from the accounts. You can start or stop this service by written request or other method acceptable to us. You must allow 30 days for us to change any instructions that are currently in place. - Automated transfers from the fixed account to any one of the subaccounts may not exceed an amount that, if continued, would deplete the fixed account within 12 months. - Automated surrenders may be restricted by applicable law under some contracts. - You may not make additional purchase payments if automated partial surrenders are in effect. - Automated partial surrenders may result in IRS taxes and penalties on all or part of the amount surrendered. - The balance in any account from which you make an automated transfer or automated partial surrender must be sufficient to satisfy your instructions. If not, we will suspend your entire automated arrangement until the balance is adequate. - If we must suspend your automated transfer or automated partial surrender arrangement for six months, we reserve the right to discontinue the arrangement in its entirety. MINIMUM AMOUNT Transfers or surrenders: $50 MAXIMUM AMOUNT Transfers or surrenders: None (except for automated transfers from the fixed account) 3 BY PHONE Call between 7 a.m. and 7 p.m. Central time: (800) 862-7919 TTY service for the hearing impaired: (800) 285-8846 MINIMUM AMOUNT Transfers or surrenders: $250 or entire account balance MAXIMUM AMOUNT Transfers: Contract value or entire account balance Surrenders: $100,000 We answer telephone requests promptly, but you may experience delays when the call volume is unusually high. If you are unable to get through, use the mail procedure as an alternative. We will honor any telephone transfer or surrender requests that we believe are authentic and we will use reasonable procedures to confirm that they are. This includes asking identifying questions and tape recording calls. We will not allow a telephone surrender within 30 days of a phoned-in address change. As long as we follow the procedures, we (and our affiliates) will not be liable for any loss resulting from fraudulent requests. Telephone transfers or surrenders are automatically available. You may request that telephone transfers or surrenders NOT be authorized from your account by writing to us. -------------------------------------------------------------------------------- 32 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS SURRENDERS You may surrender all or part of your contract at any time before annuity payouts begin by sending us a written request or calling us. We will process your surrender request on the valuation date we receive it. If we receive your surrender request at our home office before the close of business, we will process your surrender using the accumulation unit value we calculate on the valuation date we received your surrender request. If we receive your surrender request at our home office at or after the close of business, we will process your surrender using the accumulation unit value we calculate on the next valuation date after we received your surrender request. We may ask you to return the contract. You may have to pay contract administrative charges, or any applicable optional rider charges (see "Charges"), and IRS taxes and penalties (see "Taxes"). You cannot make surrenders after annuity payouts begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout Plans"). Any partial surrenders you take under the contract will reduce your contract value. As a result, the value of your death benefit or any optional benefits you have elected also will be reduced. In addition, surrenders you are required to take to satisfy the RMDs under the Code may reduce the value of certain death benefits and optional benefits (see "Taxes -- Qualified Annuities -- Required Minimum Distributions"). SURRENDER POLICIES If you have a balance in more than one account and you request a partial surrender, we will withdraw money from all your subaccounts and/or the fixed account in the same proportion as your value in each account correlates to your total contract value, unless you request otherwise. The minimum contract value after partial surrender is $600. RECEIVING PAYMENT 1 BY REGULAR OR EXPRESS MAIL - payable to you; - mailed to address of record. NOTE: We will charge you a fee if you request express mail delivery. 2 BY WIRE - request that payment be wired to your bank; - bank account must be in the same ownership as your contract; and - pre-authorization required. NOTE: We will charge you a fee if you request that payment be wired to your bank. For instructions, please contact your sales representative. Normally, we will send the payment within seven days after receiving your request. However, we may postpone the payment if: - the surrender amount includes a purchase payment check that has not cleared; - the NYSE is closed, except for normal holiday and weekend closings; - trading on the NYSE is restricted, according to SEC rules; - an emergency, as defined by SEC rules, makes it impractical to sell securities or value the net assets of the accounts; or - the SEC permits us to delay payment for the protection of security holders. -------------------------------------------------------------------------------- 33 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TSA -- SPECIAL PROVISIONS PARTICIPANTS IN TAX-SHELTERED ANNUITIES The contract is not intended for use in connection with an employer sponsored 403(b) plan that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). In the event that the employer either by affirmative election or inadvertent action causes contributions under a plan that is subject to ERISA to be made to this contract, we will not be responsible for any obligations and requirements under ERISA and the regulations thereunder. You should consult with your employer to determine whether your 403(b) plan is subject to ERISA. The employer must comply with certain nondiscrimination requirements for certain types of contributions under a TSA contract to be excluded from taxable income. You should consult your employer to determine whether the nondiscrimination rules apply to you. The Code imposes certain restrictions on your right to receive early distributions from a TSA: - Distributions attributable to salary reduction contributions (plus earnings) made after Dec. 31, 1988, or to transfers or rollovers from other contracts, may be made from the TSA only if: - you are at least age 59 1/2; - you are disabled as defined in the Code; - you severed employment with the employer who purchased the contract; or - the distribution is because of your death. - If you encounter a financial hardship (as provided by the Code), you may be eligible to receive a distribution of all contract values attributable to salary reduction contributions made after Dec. 31, 1988, but not the earnings on them. - Even though a distribution may be permitted under the above rules, it may be subject to IRS taxes and penalties (see "Taxes"). - The above restrictions on distributions do not affect the availability of the amount credited to the contract as of Dec. 31, 1988. The restrictions also do not apply to transfers or exchanges of contract value within the contract, or to another registered variable annuity contract or investment vehicle available through the employer. - If the contract has a loan provision, the right to receive a loan is described in detail in your contract. CHANGING OWNERSHIP You may change ownership of your nonqualified annuity at any time by completing a change of ownership form we approve and sending it to our home office. The change will become binding on us when we receive and record it. We will honor any change of ownership request that we believe is authentic and we will use reasonable procedures to confirm authenticity. If we follow these procedures, we will not take any responsibility for the validity of the change. Please consider carefully whether or not you wish to change ownership of your nonqualified annuity if you have elected the MAV, EEB or EEP. If you change ownership of your contract, we will terminate the EEP. This includes both the EEP Part I benefits and the EEP Part II benefits. (See the description of these terms in "Optional Benefits.") In addition, the terms of the EEB and the MAV will change due to a change of ownership. If either the new owner or the annuitant is older than age 75, the EEB will terminate. Otherwise, the EEB will effectively "start over". We will treat the EEB as if it is issued on the day the change of ownership is made, using the attained age of the new owner as the "issue age" to determine the benefit levels. The account value on the date of the ownership change will be treated as a "purchase payment" in determining future values of "earnings at death" under the EEB. If either the new owner or the annuitant is older than age 75, the MAV will terminate. If the MAV on the date of ownership change is greater than the account value on the date of the ownership change, the MAV will be set equal to the account value. Otherwise, the MAV value will not change due to a change in ownership. Please see the descriptions of these riders in "Optional Benefits." The rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force) for any rider that continues after a change of ownership. We reserve the right to assess charges for the number of days the rider was in force for any rider that is terminated due to a change of ownership. If you have a nonqualified annuity, you may incur income tax liability by transferring, assigning or pledging any part of it. (See "Taxes.") If you have a qualified annuity, you may not sell, assign, transfer, discount or pledge your contract as collateral for a loan, or as security for the performance of an obligation or for any other purpose except as required or permitted by the Code. However, if the owner is a trust or custodian, or an employer acting in similar capacity, ownership of the contract may be transferred to the annuitant. -------------------------------------------------------------------------------- 34 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS BENEFITS IN CASE OF DEATH -- STANDARD DEATH BENEFIT We will pay the death benefit to your beneficiary upon the earlier of your death or the annuitant's death. If a contract has more than one person as the owner, we will pay benefits upon the first to die of any owner or the annuitant. If you or the annuitant die before annuity payouts begin while this contract is in force, we will pay the beneficiary as follows: If both you and the annuitant are age 80 or younger on the date of death, the beneficiary receives the greatest of: - contract value; - purchase payments minus adjusted partial surrenders; or - the contract value as of the most recent sixth contract anniversary, preceding the date of death, plus any purchase payments since that anniversary, minus adjusted partial surrenders since that anniversary. If either you or the annuitant are age 81 or older on the date of death, the beneficiary receives the greater of: - contract value; or - purchase payments minus adjusted partial surrenders. ADJUSTED PARTIAL SURRENDERS PS X DB ------- CV PS = the partial surrender. DB = is the death benefit on the date of (but prior to) the partial surrender. CV = the contract value on the date of (but prior to) the partial surrender. EXAMPLE OF STANDARD DEATH BENEFIT CALCULATION WHEN YOU AND THE ANNUITANT ARE AGE 80 OR YOUNGER: - You purchase the contract with a payment of $20,000 on Jan. 1, 2004. - On Jan 1, 2010 (the sixth contract anniversary) the contract value grows to $30,000. - March 1, 2010 the contract value falls to $28,000 at which point you take a $1,500 partial surrender, leaving a contract value of $26,500. We calculate the death benefit on March 1, 2010 as follows: The contract value on the most recent sixth contract anniversary: $30,000.00 plus purchase payments made since that anniversary: +0.00 minus adjusted partial surrenders taken since that anniversary calculated as: $1,500 x $30,000 ---------------- $28,000 -1,607.14 ---------- for a death benefit of: $28,392.86
IF YOU DIE BEFORE YOUR SETTLEMENT DATE When paying the beneficiary, we will process the death claim on the valuation date our death claim requirements are fulfilled. We will determine the contract's value using the next accumulation unit value we calculate on that valuation date. We pay interest, if any, at a rate no less than required by law. If requested, we will mail payment to the beneficiary within seven days after our death claim requirements are fulfilled. NONQUALIFIED ANNUITIES If your spouse is sole beneficiary and you die before the settlement date, your spouse may keep the contract as owner. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If you elected any optional contract features and riders your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of these features or riders. If your beneficiary is not your spouse, we will pay the beneficiary in a lump sum unless you give us other written instructions. Generally, we must fully distribute the death benefit within five years of your death. However, the beneficiary may receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year after your death, or other date as permitted by the IRS; and - the payout period does not extend beyond the beneficiary's life or life expectancy. -------------------------------------------------------------------------------- 35 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS QUALIFIED ANNUITIES - SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if your spouse is the sole beneficiary, your spouse may either elect to treat the contract as his/her own or elect an annuity payout plan or another plan agreed to by us. If your spouse elects a payout plan, the payouts must begin no later than the year in which you would have reached age 70 1/2. If you attained age 70 1/2 at the time of death, payouts must begin no later than Dec. 31 of the year following the year of your death. If you elected any optional contract features and riders your spouse and the new annuitant (if applicable) will be subject to all limitations and/or restrictions of these features or riders. - NON-SPOUSE BENEFICIARY: If you have not elected an annuity payout plan, and if death occurs prior to the year you would have attained age 70 1/2, the beneficiary may elect to receive payouts from the contract over a five year period. If your beneficiary does not elect a five year payout, or if your death occurs after attaining age 70 1/2, we will pay the beneficiary in a lump sum unless the beneficiary elects to receive payouts under any annuity payout plan available under this contract if: - the beneficiary asks us in writing within 60 days after our death claim requirements are fulfilled; and - payouts begin no later than one year following the year of your death; and - the payout period does not extend beyond the beneficiary's life or life expectancy. - ANNUITY PAYOUT PLAN: If you elect an annuity payout plan, the payouts to your beneficiary will continue pursuant to the annuity payout plan you elect. DEATH BENEFIT PAYMENT IN A LUMP SUM: We may pay all or part of the death benefit to your beneficiary in a lump sum under either a nonqualified or qualified annuity. We will pay the death benefit by check unless your beneficiary has chosen to have the death benefit directly deposited into a checking account. OPTIONAL BENEFITS MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT (MAV) The MAV is intended to provide additional death benefit protection in the event of fluctuating fund values. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The MAV does not provide any additional benefit before the first contract anniversary after the rider effective date. The MAV may be of less value if you or the annuitant is older since we stop resetting the maximum anniversary value at age 81. Although we stop resetting the maximum anniversary value at age 81, the MAV rider fee continues to apply until the rider terminates. In addition, the MAV does not provide any additional benefit with respect to fixed account values during the time you have amounts allocated to the fixed account. Be sure to discuss with your sales representative whether or not the MAV is appropriate for your situation. If this MAV rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the MAV to your contract. Generally, you must elect the MAV at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the MAV may be after we issue the contract according to terms determined by us and at our sole discretion. On the first contract anniversary after the rider effective date we set the maximum anniversary value equal to the highest of your (a) current contract value, or (b) total purchase payments minus adjusted partial surrenders. Every contract anniversary after that, through age 80, we compare the previous anniversary's maximum anniversary value plus subsequent purchase payments less subsequent adjusted partial surrenders to the current contract value and we reset the maximum anniversary value if the current contract value is higher. We stop resetting the maximum anniversary value at age 81. However, we continue to add subsequent purchase payments and subtract adjusted partial surrenders from the maximum anniversary value. If you die before annuity payouts begin while this contract is in force, we will pay the beneficiary the greatest of: - contract value; or - purchase payments minus adjusted partial surrenders; or - the maximum anniversary value as calculated on the most recent contract anniversary plus subsequent purchase payments made to the contract minus adjustments for partial surrenders since that contract anniversary. -------------------------------------------------------------------------------- 36 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TERMINATING THE MAV - You may terminate the MAV rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the MAV rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The MAV rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The MAV rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. If you terminate the MAV, the standard death benefit applies. For an example, see Appendix A. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY, your spouse may choose to continue the contract as the contract owner. The contract value will be equal to the death benefit that would otherwise have been paid under the MAV. To do this your spouse must, within 60 days after our death claim requirements are fulfilled, give us written instructions to keep the contract in force. If your spouse has reached age 76 at the time he or she elects to continue the contract, the MAV rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she may choose to continue the MAV rider. In this case, the rider charges described in "Charges" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total variable account contract value on the anniversary, including the additional amounts paid into the contract under the MAV rider. If, at the time he or she elects to continue the contract, your spouse has not yet reached age 76 and chooses not to continue the MAV rider, the contract value will be increased to the MAV death benefit amount if it is greater than the contract value on the death benefit valuation date. ENHANCED EARNINGS DEATH BENEFIT (EEB) The EEB is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEB provides reduced benefits if you or the annuitant is age 70 or older at the rider effective date and it does not provide any additional benefit before the first contract anniversary. The EEB also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because the benefit paid by the EEB is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEB is appropriate for your situation. If this EEB rider is available in your state and both you and the annuitant are age 75 or younger at the rider effective date, you may choose to add the EEB to your contract. Generally, you must elect the EEB at the time you purchase your contract and your rider effective date will be the contract issue date. In some instances the rider effective date for the EEB may be after we issue the contract according to terms determined by us and at our sole discretion. You may not select this rider if you select the EEP. The EEB provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit") or the MAV death benefit amount, if applicable, PLUS - 40% of your earnings at death if you and the annuitant were under age 70 on the rider effective date; or - 15% of your earnings at death if you or the annuitant were age 70 or older on the rider effective date. Additional death benefits payable under the EEB are not included in the adjusted partial surrender calculation. EARNINGS AT DEATH FOR THE EEB AND EEP: If the rider effective date for the EEB or EEP is the contract issue date, earnings at death is an amount equal to: - the standard death benefit amount or the MAV death benefit amount, if applicable (the "death benefit amount") - MINUS purchase payments not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% of the purchase payments not previously surrendered that are one or more years old. -------------------------------------------------------------------------------- 37 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS If the rider effective date for the EEB is AFTER the contract issue date, earnings at death is an amount equal to the death benefit amount - MINUS the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered. The earnings at death may not be less than zero and may not be more than 250% multiplied by: - the greater of: - the contract value as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that contract value since that rider effective date; or - an amount equal to the death benefit amount as of the EEB rider effective date (determined before we apply any purchase payment or purchase payment credit), less any surrenders of that death benefit amount since that rider effective date - PLUS any purchase payments made on or after the EEB rider effective date not previously surrendered that are one or more years old. TERMINATING THE EEB - You may terminate the EEB rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEB rider within 30 days of any contract anniversary beginning with the seventh contract anniversary after the rider effective date. - The EEB rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEB rider will terminate in the case of spousal continuation or ownership change if the new owner is age 76 or older. For an example, see Appendix. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEB. If the spouse is age 76 or older at the time he or she elects to continue the contract, then the EEB rider will terminate. If your spouse is less than age 76 at the time he or she elects to continue the contract, then he or she may choose to continue the EEB. In this case, the following conditions will apply: - the EEB rider will continue, but we will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future values of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEB rider. NOTE: For special tax considerations associated with the EEB, see "Taxes." ENHANCED EARNINGS PLUS DEATH BENEFIT (EEP) The EEP is intended to provide an additional benefit to your beneficiary to help offset expenses after your death such as funeral expenses or federal and state taxes. This is an optional benefit that you may select for an additional annual charge (see "Charges"). The EEP provides reduced benefits if you or the annuitant are age 70 or older at the rider effective date. It does not provide any additional benefit before the first contract anniversary and it does not provide any benefit beyond what is offered under the EEB during the second contract year. The EEP also may result in reduced benefits if you take RMDs (see "Taxes -- Qualified Annuities -- Required Minimum Distributions") from your qualified annuity or any partial surrenders during the life of your contract, both of which may reduce contract earnings. This is because part of the benefit paid by the EEP is determined by the amount of earnings at death. Be sure to discuss with your sales representative whether or not the EEP is appropriate for your situation. If this EEP rider is available in your state and both you and the annuitant are age 75 or younger at contract issue, you may choose to add the EEP to your contract. You must elect the EEP at the time you purchase your contract and your rider effective date will be the contract issue date. THIS RIDER IS ONLY AVAILABLE UNDER ANNUITIES PURCHASED THROUGH AN EXCHANGE OR DIRECT TRANSFER FROM ANOTHER ANNUITY OR A LIFE INSURANCE POLICY. You may not select this rider if you select the EEB. -------------------------------------------------------------------------------- 38 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS The EEP provides that if you or the annuitant dies after the first contract anniversary, but before annuity payouts begin, and while this contract is in force, we will pay the beneficiary: - EEP Part I benefits, which equal the benefits payable under the EEB described above; PLUS - EEP Part II benefits, which equal a percentage of exchange purchase payments identified at issue not previously surrendered as follows:
PERCENTAGE IF YOU AND THE ANNUITANT ARE PERCENTAGE IF YOU OR THE ANNUITANT ARE CONTRACT YEAR UNDER AGE 70 ON THE RIDER EFFECTIVE DATE 70 OR OLDER ON THE RIDER EFFECTIVE DATE One and Two 0% 0% Three and Four 10% 3.75% Five or more 20% 7.5%
Additional death benefits payable under the EEP are not included in the adjusted partial surrender calculation. If after 6 months, no exchange purchase payments have been received, we will contact you and you will have an additional 30 days to follow-up on exchange purchase payments identified at issue but not received by us. If after these 30 days we have not received any exchange purchase payments, we will convert the EEP rider into an EEB. Another way to describe the benefits payable under the EEP rider is as follows: - the standard death benefit amount (see "Benefits in Case of Death -- Standard Death Benefit") or the MAV death benefit amount, if applicable PLUS
IF YOU AND THE ANNUITANT ARE UNDER AGE 70 IF YOU OR THE ANNUITANT ARE AGE 70 CONTRACT YEAR ON THE RIDER EFFECTIVE DATE, ADD ... OR OLDER ON THE RIDER EFFECTIVE DATE, ADD ... 1 Zero Zero 2 40% x earnings at death (see above) 15% x earnings at death 3 & 4 40% x (earnings at death + 10% of 15% x (earnings at death + 3.75% of exchange purchase payments*) exchange purchase payments*) 5+ 40% x (earnings at death + 20% of 15% x (earnings at death + 7.5% of exchange purchase payments*) exchange purchase payments)
* Exchange purchase payments are purchase payments exchanged from another contract that are identified at issue and not previously surrendered. We are not responsible for identifying exchange purchase payments if we did not receive proper notification from the company from which the purchase payments are exchanged. TERMINATING THE EEP - You may terminate the EEP rider within 30 days of the first contract anniversary after the rider effective date. - You may terminate the EEP rider within 30 days of any contract anniversary beginning with the seventh contract anniversary. - The EEP rider will terminate when you make a full surrender from the contract or when annuity payouts begin. - The EEP rider will terminate in the case of an ownership change. - The EEP rider will terminate in the case of spousal continuation if the new owner is age 76 or older. For an example, see Appendix A. IN GENERAL, IF YOUR SPOUSE IS THE SOLE BENEFICIARY and your spouse chooses to continue the contract as the contract owner, we will pay an amount into the contract so that the contract value equals the total death benefit payable under the EEP. If your spouse has reached age 76 at the time he or she elects to continue the contract, the EEP rider will terminate. If your spouse has not yet reached age 76 at the time he or she elects to continue the contract, he or she cannot continue the EEP. However, he or she may choose to convert the EEP rider into an EEB. In this case, the following conditions will apply: - the EEB rider will treat the new contract value on the date the ownership of the contract changes to your spouse (after the additional amount is paid into the contract) as if it is a purchase payment in calculating future of "earnings at death." - the percentages of "earnings at death" payable will be based on your spouse's age at the time he or she elects to continue the contract. - the EEB rider charges described in "Charges -- EEB Rider Fee" will be assessed at the next contract anniversary (and all future anniversaries when the EEB rider is in force). These charges will be based on the total contract value on the anniversary, including the additional amounts paid into the contract under the EEP rider. If your spouse chooses not to convert the EEP rider into an EEB, the standard death benefit amount (or the MAV death benefit amount, if applicable) will apply. NOTE: For special tax considerations associated with the EEP, see "Taxes." -------------------------------------------------------------------------------- 39 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS THE ANNUITY PAYOUT PERIOD As owner of the contract, you have the right to decide how and to whom annuity payouts will be made starting at the settlement date. You may select one of the annuity payout plans outlined below, or we may mutually agree on other payout arrangements. We do not deduct any surrender charges under the payout plans listed below except under Plan E. You also decide whether we will make annuity payouts on a fixed or variable basis, or a combination of fixed and variable. The amount available to purchase payouts under the plan you select is the contract value on your settlement date (less any applicable premium tax). During the annuity payout period, you cannot invest in more than five subaccounts at any one time unless we agree otherwise. AMOUNTS OF FIXED AND VARIABLE PAYOUTS DEPEND ON: - the annuity payout plan you select; - the annuitant's age and, in most cases, sex; - the annuity table in the contract; and - the amounts you allocated to the accounts at settlement. In addition, for variable payouts only, amounts depend on the investment performance of the subaccounts you select. These payouts will vary from month to month because the performance of the funds will fluctuate. Fixed payouts remain the same from month to month. For information with respect to transfers between accounts after annuity payouts begin, see "Making the Most of Your Contract -- Transfer policies." ANNUITY TABLES The annuity tables in your contract (Table A and Table B) show the amount of the monthly payout for each $1,000 of contract value according to the age and, when applicable, the sex of the annuitant. (Where required by law, we will use a unisex table of settlement rates.) Table A shows the amount of the first variable payout assuming that the contract value is invested at the beginning of the annuity payout period and earns a 5% rate of return, which is reinvested and helps to support future payouts. If you ask us at least 30 days before the settlement date, we will substitute an annuity table based on an assumed 3.5% investment rate for the 5% Table A in the contract. The assumed investment rate affects both the amount of the first payout and the extent to which subsequent payouts increase or decrease. For example, annuity payouts will increase if the investment return is above the assumed investment rate and payouts will decrease if the return is below the assumed investment rate. Using the 5% assumed interest rate Table A results in a higher initial payment, but later payouts will increase more slowly when annuity unit values rise and decrease more rapidly when they decline. Table B shows the minimum amount of each fixed payout. Amounts in Table B are based on the guaranteed annual effective interest rate shown in your contract. We declare current payout rates that we use in determining the actual amount of your fixed payout. The current payout rates will equal or exceed the guaranteed payout rates shown in Table B. We will furnish these rates to you upon request. ANNUITY PAYOUT PLANS You may choose any one of these annuity payout plans by giving us written instructions at least 30 days before contract value is used to purchase the payout plan: - PLAN A -- LIFE ANNUITY -- NO REFUND: We make monthly payouts until the annuitant's death. Payouts end with the last payout before the annuitant's death. We will not make any further payouts. This means that if the annuitant dies after we made only one monthly payout, we will not make any more payouts. - PLAN B -- LIFE ANNUITY WITH FIVE, TEN OR 15 YEARS CERTAIN: We make monthly payouts for a guaranteed payout period of five, ten or 15 years that you elect. This election will determine the length of the payout period to the beneficiary if the annuitant should die before the elected period expires. We calculate the guaranteed payout period from the settlement date. If the annuitant outlives the elected guaranteed payout period, we will continue to make payouts until the annuitant's death. - PLAN C -- LIFE ANNUITY -- INSTALLMENT REFUND: We make monthly payouts until the annuitant's death, with our guarantee that payouts will continue for some period of time. We will make payouts for at least the number of months determined by dividing the amount applied under this option by the first monthly payout, whether or not the annuitant is living. - PLAN D -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: We make monthly payouts while both the annuitant and a joint annuitant are living. If either annuitant dies, we will continue to make monthly payouts at the full amount until the death of the surviving annuitant. Payouts end with the death of the second annuitant. - PLAN E -- PAYOUTS FOR A SPECIFIED PERIOD: We make monthly payouts for a specific payout period of ten to 30 years that you elect. We will make payouts only for the number of years specified whether the annuitant is living or not. Depending on the selected time period, it is foreseeable that an annuitant can outlive the payout period selected. During the payout period, you can elect to have us determine the present value of any remaining variable payouts and pay it to you in a lump sum. We determine the -------------------------------------------------------------------------------- 40 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS present value of the remaining annuity payouts which are assumed to remain level at the initial payout. For qualified annuities, the discount rate we use in the calculation will vary between 4.72% and 6.22%, depending on the applicable assumed investment rate. For nonqualified annuities, the discount rate we use in the calculation will vary between 4.92% and 6.42%, depending on the applicable assumed investment rate. (See "Charges -- Surrender charge under Annuity Payout Plan E.") You can also take a portion of the discounted value once a year. If you do so, your monthly payouts will be reduced by the proportion of your surrender to the full discounted value. A 10% IRS penalty tax could apply if you take a surrender. (See "Taxes.") ANNUITY PAYOUT PLAN REQUIREMENTS FOR QUALIFIED ANNUITIES: If your contract is a qualified annuity, you must select a payout plan as of the settlement date set forth in your contract. You have the responsibility for electing a payout plan under your contract that complies with applicable law. Your contract describes your payout plan options. The options will generally meet certain IRS regulations governing RMDs if the payout plan meets the incidental distribution benefit requirements, if any, and the payouts are made: - in equal or substantially equal payments over a period not longer than your life or over the life of you and your designated beneficiary; or - in equal or substantially equal payments over a period not longer than your life expectancy over the joint life expectancy of you and your designated beneficiary; or - over a period certain not longer than your life expectancy or over the life expectancy of you and your designated beneficiary. IF WE DO NOT RECEIVE INSTRUCTIONS: You must give us written instructions for the annuity payouts at least 30 days before the annuitant's settlement date. If you do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed. Contract values that you allocated to the fixed account will provide fixed dollar payouts and contract values that you allocated among the subaccounts will provide variable annuity payouts. IF MONTHLY PAYOUTS WOULD BE LESS THAN $20: We will calculate the amount of monthly payouts at the time the contract value is used to purchase a payout plan. If the calculations show that monthly payouts would be less than $20, we have the right to pay the contract value to the owner in a lump sum or to change the frequency of the payouts. DEATH AFTER ANNUITY PAYOUTS BEGIN: If you or the annuitant die after annuity payouts begin, we will pay any amount payable to the beneficiary as provided in the annuity payout plan in effect. TAXES Generally, under current law, your contract has a tax-deferral feature. This means any increase in the value of the fixed account and/or subaccounts in which you invest is taxable to you only when you receive a payout or surrender (see detailed discussion below). Any portion of the annuity payouts and any withdrawals you request that represent ordinary income normally are taxable. We will send you a tax information reporting form for any year in which we made a taxable distribution according to our records. Roth IRAs may grow and be distributed tax free if you meet certain distribution requirements. We will send you a tax information reporting form for any year in which we made a distribution according to our records. NONQUALIFIED ANNUITIES Tax law requires that all nonqualified deferred annuity contracts issued by the same company (and possibly its affiliates) to the same owner during a calendar year be taxed as a single, unified contract when you take distributions from any one of those contracts. ANNUITY PAYOUTS: Generally, a portion of each payout will be ordinary income and subject to tax, and a portion of each payout will be considered a return of part of your investment and will not be taxed. Under Annuity Payout Plan A: Life annuity - no refund, where the annuitant dies before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the owner for the last taxable year. Under all other annuity payout plans, where the annuity payouts end before your investment in the contract is fully recovered, the remaining portion of the unrecovered investment may be available as a federal income tax deduction to the taxpayer for the tax year in which the payouts end. (See "Annuity Payout Plans.") All amounts you receive after your investment in the contract is fully recovered will be subject to tax. SURRENDERS: If you surrender part or all of your nonqualified annuity before your annuity payouts begin, your surrender payment will be taxed to the extent that the contract value immediately before the surrender exceeds the investment in the contract. You also may have to pay a 10% IRS penalty for surrenders of taxable income you make before reaching age 59 1/2 unless certain exceptions apply. WITHHOLDING: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. -------------------------------------------------------------------------------- 41 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS The withholding requirements differ if we deliver the payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. DEATH BENEFITS TO BENEFICIARIES: The death benefit under a contract is not tax exempt. Any amount your beneficiary receives that represents deferred earnings within the contract is taxable as ordinary income to the beneficiary in the year he or she receives the payments. ANNUITIES OWNED BY CORPORATIONS, PARTNERSHIPS OR TRUSTS: For nonqualified annuities, any annual increase in the value of annuities held by such entities (nonnatural persons) generally will be treated as ordinary income received during that year. However, if the trust was set up for the benefit of a natural person only, the income will generally remain tax-deferred. PENALTIES: If you receive amounts from your nonqualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty will not apply to any amount received: - because of your death, or in the event of nonnatural ownership, the death of annuitant; - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments, made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if it is allocable to an investment before Aug. 14, 1982; or - if the annuity payouts begin before the first contract anniversary. TRANSFER OF OWNERSHIP: If you transfer a nonqualified annuity without receiving adequate consideration, the transfer is a gift and also may be treated as a surrender for federal income tax purposes. If the gift is a currently taxable event for income tax purposes, the original owner will be taxed on the amount of deferred earnings at the time of the transfer and also may be subject to the 10% IRS penalty discussed earlier. In this case, the new owner's investment in the contract will be the value of the contract at the time of the transfer. In general, this rule does not apply to transfers between spouses or former spouses. Please consult your tax advisor for further details. COLLATERAL ASSIGNMENT: If you collaterally assign or pledge your contract, earnings on purchase payments you made after Aug. 13, 1982 will be taxed to you like a withdrawal and you may have to pay a 10% IRS penalty. QUALIFIED ANNUITIES Adverse tax consequences may result if you do not ensure that contributions, distributions and other transactions under the contract comply with the law. Qualified annuities have minimum distribution rules that govern the timing and amount of distributions. You should refer to your retirement plan's Summary Plan Description, your IRA disclosure statement, or consult a tax advisor for additional information about the distribution rules applicable to your situation. When you use your contract to fund a retirement plan or IRA that is already tax-deferred under the Code, the contract will not provide any necessary or additional tax deferral. If your contract is used to fund an employer sponsored plan, your rights to benefits may be subject to the terms and conditions of the plan regardless of the terms of the contract. ANNUITY PAYOUTS: Under a qualified annuity except a Roth IRA, the entire payout generally is includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. ANNUITY PAYOUTS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. SURRENDERS: Under a qualified annuity except a Roth IRA, the entire surrender will generally be includable as ordinary income and is subject to tax unless: (1) the contract is an IRA to which you made non-deductible contributions; or (2) you rolled after-tax dollars from a retirement plan into your IRA, or (3) the contract is used to fund a retirement plan and you or your employer have contributed after-tax dollars. SURRENDERS FROM ROTH IRAs: In general, the entire payout from a Roth IRA can be free from income and penalty taxes if you have attained age 59 1/2 and met the five year holding period. REQUIRED MINIMUM DISTRIBUTIONS: Retirement plans are subject to required withdrawals called required minimum distributions (RMDs) generally beginning at age 70 1/2. In addition, a new tax regulation, effective for RMDs calculated in 2006 and after, may cause the RMDs for some contracts with certain death benefits and optional riders to increase. RMDs may reduce the value of certain death benefits and optional riders. You should consult your tax advisor prior to making a purchase for an explanation of the potential tax implications to you. -------------------------------------------------------------------------------- 42 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS WITHHOLDING FOR IRAs, ROTH IRAs, SEPS AND SIMPLE IRAs: If you receive taxable income as a result of an annuity payout or a surrender, we may deduct withholding against the taxable income portion of the payment. Any withholding represents a prepayment of your tax due for the year. You take credit for these amounts on your annual income tax return. As long as you've provided us with a valid Social Security Number or Taxpayer Identification Number, you can elect not to have any withholding occur. If the payment is part of an annuity payout plan, we generally compute the amount of withholding using payroll tables. You may provide us with a statement of how many exemptions to use in calculating the withholding. If the distribution is any other type of payment (such as a partial or full surrender) we compute withholding using 10% of the taxable portion. The withholding requirements differ if we deliver payment outside the United States and/or you are a non-resident alien. Some states also may impose withholding requirements similar to the federal withholding described above. If this should be the case, we may deduct state withholding from the payment. WITHHOLDING FOR ALL OTHER QUALIFIED ANNUITIES: If you receive directly all or part of the contract value from a qualified annuity, mandatory 20% federal income tax withholding (and possibly state income tax withholding) generally will be imposed at the time the payout is made from the plan. This mandatory withholding will not be imposed if: - instead of receiving the distribution check, you elect to have the distribution rolled over directly to an IRA or another eligible plan; - the payout is one in a series of substantially equal periodic payouts, made at least annually, over your life or life expectancy (or the joint lives or life expectancies of you and your designated beneficiary) or over a specified period of 10 years or more; - the payout is an RMD as defined under the Code; - the payout is made on account of an eligible hardship; or - the payout is a corrective distribution. Payments made to a surviving spouse instead of being directly rolled over to an IRA also may be subject to mandatory 20% income tax withholding. State withholding also may be imposed on taxable distributions. PENALTIES: If you receive amounts from your qualified annuity before reaching age 59 1/2, you may have to pay a 10% IRS penalty on the amount includable in your ordinary income. However, this penalty generally will not apply to any amount received: - because of your death, - because you become disabled (as defined in the Code); - if the distribution is part of a series of substantially equal periodic payments made at least annually, over your life or life expectancy (or joint lives or life expectancies of you and your beneficiary); - if the distribution is made following severance from employment during the calendar year in which you attain age 55 (TSAs and annuities funding 401(a) and 401(k) plans only); or - to pay certain medical or education expenses (IRAs only). DEATH BENEFITS TO BENEFICIARIES: The entire death benefit generally is taxable as ordinary income to the beneficiary in the year he or she receives the payments from the qualified annuity. If, under your 401(k) plan you or your employer made after-tax contributions to your contract, or if you made non-deductible contributions to a traditional IRA, the portion of any distribution from the contract that represents after-tax contributions is not taxable as ordinary income to your beneficiary. You are responsible for keeping all records tracking your non-deductible contributions to an IRA. Death benefits under a Roth IRA generally are not taxable as ordinary income to the beneficiary if certain distribution requirements are met. SPECIAL CONSIDERATIONS IF YOU SELECT ONE OF THE DEATH BENEFIT RIDERS (MAV, EEB AND EEP): As of the date of this prospectus, we believe that charges related to these riders are not subject to current taxation. Therefore, we will not report these charges as partial surrenders from your contract. However, the IRS may determine that these charges should be treated as partial surrenders subject to taxation to the extent of any gain as well as the 10% IRS tax penalty for surrenders before the age of 59 1/2, if applicable. We reserve the right to report charges for these riders as partial withdrawals if we, as a withholding and reporting agent, believe that we are required to report them. In addition, we will report the benefits attributable to these riders on your death as an annuity death benefit distribution, not as proceeds from life insurance. COLLATERAL ASSIGNMENT: You may not collaterally assign or pledge a qualified annuity. IMPORTANT: Our discussion of federal tax laws is based upon our understanding of current interpretations of these laws. Federal tax laws or current interpretations of them may change. For this reason and because tax consequences are complex and highly individual and cannot always be anticipated, you should consult a tax advisor if you have any questions about taxation of your contract. -------------------------------------------------------------------------------- 43 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS IDS LIFE'S TAX STATUS: We are taxed as a life insurance company under the Code. For federal income tax purposes, the subaccounts are considered a part of our company, although their operations are treated separately in accounting and financial statements. Investment income is reinvested in the fund in which each subaccount invests and becomes part of that subaccount's value. This investment income, including realized capital gains, is not taxed to us, and therefore no charge is made against the subaccounts for federal income taxes. We reserve the right to make such a charge in the future if there is a change in the tax treatment of variable annuities. TAX QUALIFICATION: We intend that the contract qualify as an annuity for federal income tax purposes. To that end, the provisions of the contract are to be interpreted to ensure or maintain such tax qualification, in spite of any other provisions of the contract. We reserve the right to amend the contract to reflect any clarifications that may be needed or are appropriate to maintain such qualification or to conform the contract to any applicable changes in the tax qualification requirements. We will send you a copy of any amendments. VOTING RIGHTS As a contract owner with investments in the subaccounts, you may vote on important fund policies until annuity payouts begin. Once they begin, the person receiving them has voting rights. We will vote fund shares according to the instructions of the person with voting rights. Before annuity payouts begin, the number of votes you have is determined by applying your percentage interest in each subaccount to the total number of votes allowed to the subaccount. After annuity payouts begin, the number of votes you have is equal to: - the reserve held in each subaccount for your contract; divided by - the net asset value of one share of the applicable fund. As we make annuity payouts, the reserve for the contract decreases; therefore, the number of votes also will decrease. We calculate votes separately for each subaccount. We will send notice of shareholders' meetings, proxy materials and a statement of the number of votes to which the voter is entitled. We will vote shares for which we have not received instructions in the same proportion as the votes for which we received instructions. We also will vote the shares for which we have voting rights in the same proportion as the votes for which we received instructions. SUBSTITUTION OF INVESTMENTS We may substitute the funds in which the subaccounts invest if: - laws or regulations change; - the existing funds become unavailable; or - in our judgment, the funds no longer are suitable for the subaccounts. If any of these situations occur, and if we believe it is in the best interest of persons having voting rights under the contract, we have the right to substitute a fund currently listed in this prospectus (existing fund) for another fund (new fund). The new fund may have higher fees and/or operating expenses than the existing fund. Also, the new fund may have investment objectives and policies and/or investment advisers which differ from the existing fund. We may also: - add new subaccounts; - combine any two or more subaccounts; - transfer assets to and from the subaccounts or the variable account; and - eliminate or close any subaccounts. We will notify you of any substitution or change. If we notify you that a subaccount will be eliminated or closed, you will have a certain period of time to tell us where to reallocate purchase payments or contract value currently allocated to that subaccount. If we do not receive your reallocation instructions by the due date, we automatically will reallocate to the subaccount investing in the RiverSource Variable Portfolio - Cash Management Fund. You may then transfer this reallocated amount in accordance with the transfer provisions of your contract (see "Transferring Between Accounts" above). In the event of substitution or any of these changes, we may amend the contract and take whatever action is necessary and appropriate without your consent or approval. However, we will not make any substitution or change without the necessary approval of the SEC and state insurance departments. -------------------------------------------------------------------------------- 44 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS ABOUT THE SERVICE PROVIDERS ISSUER AND PRINCIPAL UNDERWRITER IDS Life issues and is the principal underwriter for the contracts. IDS Life is a stock life insurance company organized in 1957 under the laws of the State of Minnesota and is located at 70100 Ameriprise Financial Center, Minneapolis, MN 55474. IDS Life is a wholly-owned subsidiary of Ameriprise Financial, Inc. IDS Life conducts a conventional life insurance business. It acts as a direct writer of fixed and variable insurance policies and annuities and is licensed in 49 states, the District of Columbia and American Samoa. IDS Life has four wholly-owned subsidiaries, two which serve New York residents and two which serve residents in states other than New York. IDS Life and its subsidiaries offer fixed and variable insurance policies and annuities through individual sales representatives, through insurance agencies and broker-dealers who may also be associated with financial institutions such as banks. IDS Life's primary life insurance products include variable life insurance, universal life insurance, traditional whole life insurance and disability income insurance. IDS Life's primary annuity products include variable and fixed deferred and immediate annuities. We are the sole distributor of the contract which we offer continuously. We pay time-of-sale commissions of up to 1.15% of purchase payments on the contract as well as service/trail commissions of up to 0.25% based on annual total contract value for as long as the contract remains in effect. We may pay our sales representatives a temporary additional sales commission of up to 1% of purchase payments for a period of time we select. For example, we may offer to pay a temporary additional sales commission to encourage sales representatives to market a new or enhanced contract or to increase sales during the period. The above commissions and service fees compensate our sales representative for selling and servicing the contract. These commissions do not change depending on which subaccounts you choose to allocate your purchase payments. We also may pay additional commissions to help compensate field leadership and to pay for other distribution expenses and benefits noted below. Our sales representatives may be required to return sales commissions under certain circumstances including, but not limited to, if a contact owner returns the contract under the free look period. From time to time and in accordance with applicable laws and regulations, sales representatives and field leaders are eligible for various benefits. These include cash benefits, such as bonuses and sales incentives, and non-cash benefits, such as conferences, seminars and trips (including travel, lodging and meals), entertainment, merchandise and other similar items. Sales of contracts may help sales representatives and/or their field leaders qualify for such benefits. SOURCES OF PAYMENTS TO SALES REPRESENTATIVES - We pay the commissions and other compensation described above from our assets. - Our assets may include: -- revenues we receive from fees and expenses that you will pay when buying, owning and surrendering the contract (see "Expense Summary"); -- compensation we or an affiliate receive from the underlying funds in the form of distribution and services fees (see "The Variable Account and the Funds -- The funds"); -- compensation we or an affiliate receive from a fund's investment adviser, subadviser, distributor or an affiliate of any of these (see "The Variable Account and the Funds -- The funds"); and -- revenues we receive from other contracts and policies we sell that are not securities and other businesses we conduct. - You do not directly pay the commissions and other compensation described above as the result of a specific charge or deduction under the contract. However, you may pay part or all of the commissions and other compensation described above indirectly through: -- fees and expenses we collect from contract owners, including surrender charges; and -- fees and expenses charged by the underlying funds in which the subaccounts you select invest, to the extent we or one of our affiliates receive revenue from the funds or an affiliated person. POTENTIAL CONFLICT OF INTEREST Our compensation arrangements with sales representatives can potentially give sales representatives a heightened financial incentive to sell you the contract offered in this prospectus over other alternative investments which may pay the sales representatives lower compensation. Ask your sales representative for further information about what he or she may receive in connection with your purchase of the contract. -------------------------------------------------------------------------------- 45 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS LEGAL PROCEEDINGS The SEC, the NASD and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information concerning some of these practices and is cooperating fully with these inquiries. IDS Life and its affiliates are involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of their respective business activities. IDS Life believes it has meritorious defenses to each of these actions and intends to defend them vigorously. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. There are no pending legal proceedings affecting the Variable Account. -------------------------------------------------------------------------------- 46 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS APPENDICES THE PURPOSE OF THESE APPENDICES IS TO ILLUSTRATE THE OPERATION OF VARIOUS CONTRACT RIDERS AND TO PROVIDE CONDENSED FINANCIAL HISTORY DISCLOSURE REGARDING THE SUBACCOUNTS. IN ORDER TO DEMONSTRATE THESE CONTRACT RIDERS, AN EXAMPLE MAY SHOW HYPOTHETICAL CONTRACT VALUES. THESE CONTRACT VALUES DO NOT REPRESENT PAST OR FUTURE PERFORMANCE. ACTUAL CONTRACT VALUES MAY BE MORE OR LESS THAN THOSE SHOWN AND WILL DEPEND ON A NUMBER OF FACTORS, INCLUDING BUT NOT LIMITED TO THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, FIXED ACCOUNT AND THE FEES AND CHARGES THAT APPLY TO YOUR CONTRACT. THE EXAMPLES OF THE OPTIONAL DEATH BENEFITS IN APPENDIX A INCLUDE PARTIAL SURRENDERS TO ILLUSTRATE THE EFFECT OF THESE PARTIAL SURRENDERS ON THE PARTICULAR BENEFIT. THESE EXAMPLES ARE INTENDED TO SHOW HOW THE OPTIONAL DEATH BENEFITS OPERATE, AND DO NOT TAKE INTO ACCOUNT WHETHER A PARTICULAR OPTIONAL DEATH BENEFIT IS PART OF A QUALIFIED ANNUITY. QUALIFIED ANNUITIES ARE SUBJECT TO REQUIRED MINIMUM DISTRIBUTIONS AT CERTAIN AGES (SEE "TAXES -- QUALIFIED ANNUITIES -- REQUIRED MINIMUM DISTRIBUTIONS") WHICH MAY REQUIRE YOU TO TAKE PARTIAL SURRENDERS FROM THE CONTRACT. IF YOU ARE CONSIDERING THE ADDITION OF CERTAIN OPTIONAL DEATH BENEFITS TO A QUALIFIED ANNUITY, YOU SHOULD CONSULT YOUR TAX ADVISOR PRIOR TO MAKING A PURCHASE FOR AN EXPLANATION OF THE POTENTIAL TAX IMPLICATION TO YOU. -------------------------------------------------------------------------------- 47 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS APPENDIX A: EXAMPLE - OPTIONAL BENEFITS EXAMPLE -- MAV DEATH BENEFIT - You purchase the contract (with the MAV rider) with a payment of $20,000 on Jan. 1, 2004. - On Jan. 1, 2005 (the first contract anniversary) the contract value grows to $24,000. - On March 1, 2005 the contract value falls to $22,000, at which point you take a $1,500 partial surrender, leaving a contract value of $20,500. We calculate the death benefit on March 1, 2005 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: We calculate the death benefit on March 1, 2005 as follows: The maximum anniversary value immediately preceding the date of death plus any payments made since that anniversary minus adjusted partial surrenders: Greatest of your contract anniversary contract values: $24,000 plus purchase payments made since that anniversary: +0 minus adjusted partial surrenders, calculated as: ($1,500 x $24,000) = -1,636 ------------------ ------- $22,000 for a death benefit of: $22,364
-------------------------------------------------------------------------------- 48 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EXAMPLE -- EEB DEATH BENEFIT - You purchase the contract with a payment of $100,000 on Jan. 1, 2004 and both you and the annuitant are under age 70. You select the MAV and the EEB. - On July 1, 2004 the contract value grows to $105,000. The death benefit on July 1, 2004 equals the standard death benefit, which is the contract value, or $105,000. You have not reached the first contract anniversary so the EEB does not provide any additional benefit at this time. - On Jan. 1, 2005 the contract value grows to $110,000. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (contract value): $110,000 plus the EEB which equals 40% of earnings at death (MAV death benefit amount minus payments not previously surrendered): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2006 the contract value falls to $105,000. The death benefit on Jan. 1, 2006 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEB (40% of earnings at death): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Feb. 1, 2006 the contract value remains at $105,000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2006 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 x $110,000) = $57,619 -------------------- $105,000 plus the EEB (40% of earnings at death): 0.40 x ($57,619 - $55,000) = +1,048 -------- Total death benefit of: $58,667
- On Jan. 1, 2007 the contract value falls by $40,000. The death benefit on Jan. 1, 2007 equals the death benefit on Feb. 1, 2006. The reduction in contract value has no effect. - On Jan. 1, 2013 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. The death benefit on Jan. 1, 2013 equals: MAV death benefit amount (contract value): $200,000 plus the EEB (40% of earnings at death) 0.40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $255,000
- On July 1, 2013 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on the EEB. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEB (40% of earnings at death) 0.40 x 2.50 x ($55,000) = +55,000 -------- Total death benefit of: $305,000
- On July 1, 2014 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEB changes. The death benefit on July 1, 2014 equals: MAV death benefit amount (contract value): $250,000 plus the EEB which equals 40% of earnings at death (the standard death benefit amount minus payments not previously surrendered): 0.40 x ($250,000 - $105,000) = +58,000 -------- Total death benefit of: $308,000
-------------------------------------------------------------------------------- 49 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS EXAMPLE -- EEP DEATH BENEFIT - You purchase the contract with an exchanged purchase payment of $100,000 on Jan. 1, 2004 and both you and the annuitant are under age 70. You select the MAV and the EEP. - On July 1, 2004 the contract value grows to $105,000. The death benefit on July 1, 2004 equals the standard death benefit amount, which is the contract value, or $105,000. You have not reached the first contract anniversary so neither the EEP Part I nor Part II provides any additional benefit at this time. - On Jan. 1, 2005 the contract value grows to $110,000. You have not reached the second contract anniversary so the EEP Part II does not provide any additional benefit at this time. The death benefit on Jan. 1, 2005 equals: MAV death benefit amount (contract value): $110,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit amount minus purchase payments not previously surrendered): 0.40 x ($110,000 - $100,000) = +4,000 -------- Total death benefit of: $114,000
- On Jan. 1, 2006 the contract value falls to $105,000. The death benefit on Jan. 1, 2006 equals: MAV death benefit amount (maximum anniversary value): $110,000 plus the EEP Part I benefit (40% of earnings at death): 0.40 x ($110,000 - $100,000) = +4,000 -------- plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 x $100,000 = +10,000 -------- Total death benefit of: $124,000
- On Feb. 1, 2006 the contract value remains at $105, 000 and you request a partial surrender of $50,000. We calculate purchase payments not previously surrendered as $100,000 - $45,000 = $55,000 (remember that $5,000 of the partial surrender is contract earnings). The death benefit on Feb. 1, 2006 equals: MAV death benefit amount (maximum anniversary value adjusted for partial surrenders): $110,000 - ($50,000 x $110,000) = $57,619 -------------------- $105,000 plus the EEP Part I (40% of earnings at death): 0.40 x ($57,619 - $55,000) = +1,048 plus the EEP Part II which in the third contract year equals 10% of exchange purchase payments identified at issue and not previously surrendered: 0.10 x $55,000 = +5,500 -------- Total death benefit of: $64,167
- On Jan. 1, 2007 the contract value falls by $40,000. The death benefit on Jan. 1, 2007 equals the death benefit on Feb. 1, 2006. The reduction in contract value has no effect. - On Jan. 1, 2013 the contract value grows to a new high of $200,000. Earnings at death reaches its maximum of 250% of purchase payments not previously surrendered that are one or more years old. Because we are beyond the fourth contract anniversary the EEP also reaches its maximum of 20%. The death benefit on Jan. 1, 2013 equals: MAV death benefit amount (contract value): $200,000 plus the EEP Part I (40% of earnings at death) 0.40 x (2.50 x $55,000) = +55,000 plus the EEP Part II which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $266,000
-------------------------------------------------------------------------------- 50 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS - On July 1, 2013 you make an additional purchase payment of $50,000 and your contract value grows to $250,000. The new purchase payment is less than one year old and so it has no effect on either the EEP Part I or EEP Part II. The death benefit on July 1, 2013 equals: MAV death benefit amount (contract value): $250,000 plus the EEP Part I (40% of earnings at death) 0.40 x (2.50 x $55,000) = +55,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $316,000
- On July 1, 2014 the contract value remains $250,000 and the "new" purchase payment is one year old. The value of the EEP Part I changes but the value of the EEP Part II remains constant. The death benefit on July 1, 2014 equals: MAV death benefit amount (contract value): $250,000 plus the EEP Part I which equals 40% of earnings at death (the MAV death benefit minus payments not previously surrendered): 0.40 x ($250,000 - $105,000) = +58,000 plus the EEP Part II, which after the fourth contract year equals 20% of exchange purchase payments identified at issue and not previously surrendered: 0.20 x $55,000 = +11,000 -------- Total death benefit of: $319,000
-------------------------------------------------------------------------------- 51 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS APPENDIX B: CONDENSED FINANCIAL INFORMATION (UNAUDITED) The following tables give per-unit information about the financial history of each subaccount. The date in which operations commenced in each price level is noted in parentheses. We have not provided this information for subaccounts that were not available under your contract as of Dec. 31, 2005. VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT.
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 AIM V.I. CAPITAL APPRECIATION FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $1.00 $0.94 $0.73 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.08 $1.00 $0.94 $0.73 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,554 110 85 4 6 -- -- AIM V.I. CAPITAL DEVELOPMENT FUND, SERIES II SHARES (8/13/2001) Accumulation unit value at beginning of period $1.18 $1.03 $0.77 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.28 $1.18 $1.03 $0.77 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 141 107 284 180 3 -- -- AIM V.I. DYNAMICS FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $1.01 $0.89 $0.65 $0.96 $1.00 -- -- Accumulation unit value at end of period $1.11 $1.01 $0.89 $0.65 $0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 19 18 249 149 1 -- -- AIM V.I. FINANCIAL SERVICES FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $1.14 $1.06 $0.82 $0.97 $1.00 -- -- Accumulation unit value at end of period $1.20 $1.14 $1.06 $0.82 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 140 132 66 3 -- -- -- AIM V.I. TECHNOLOGY FUND, SERIES I SHARES (8/13/2001) Accumulation unit value at beginning of period $0.72 $0.69 $0.48 $0.91 $1.00 -- -- Accumulation unit value at end of period $0.73 $0.72 $0.69 $0.48 $0.91 -- -- Number of accumulation units outstanding at end of period (000 omitted) 532 249 96 3 -- -- -- ALLIANCEBERNSTEIN VPS GROWTH AND INCOME PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $1.09 $0.98 $0.75 $0.97 $1.00 -- -- Accumulation unit value at end of period $1.13 $1.09 $0.98 $0.75 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,186 726 969 310 136 -- -- ALLIANCEBERNSTEIN VPS INTERNATIONAL VALUE PORTFOLIO (CLASS B) (8/13/2001) Accumulation unit value at beginning of period $1.64 $1.32 $0.92 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.90 $1.64 $1.32 $0.92 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,607 984 472 606 210 -- -- AMERICAN CENTURY VP INTERNATIONAL, CLASS II (8/13/2001) Accumulation unit value at beginning of period $1.04 $0.91 $0.74 $0.93 $1.00 -- -- Accumulation unit value at end of period $1.17 $1.04 $0.91 $0.74 $0.93 -- -- Number of accumulation units outstanding at end of period (000 omitted) 314 127 5 254 1 -- -- AMERICAN CENTURY VP VALUE, CLASS II (8/13/2001) Accumulation unit value at beginning of period $1.31 $1.15 $0.90 $1.04 $1.00 -- -- Accumulation unit value at end of period $1.36 $1.31 $1.15 $0.90 $1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,104 1,064 673 483 146 -- -- CALVERT VARIABLE SERIES, INC. SOCIAL BALANCED PORTFOLIO (5/1/2000) Accumulation unit value at beginning of period $1.00 $0.93 $0.78 $0.89 $0.96 $1.00 -- Accumulation unit value at end of period $1.05 $1.00 $0.93 $0.78 $0.89 $0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 5 54 8 8 6 5 -- EVERGREEN VA FUNDAMENTAL LARGE CAP FUND - CLASS 2 (12/8/2003) Accumulation unit value at beginning of period $0.94 $0.86 $0.83 -- -- -- -- Accumulation unit value at end of period $1.01 $0.94 $0.86 -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 56 49 90 -- -- -- -- FIDELITY(R) VIP GROWTH & INCOME PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $1.06 $1.01 $0.83 $1.00 $1.00 -- -- Accumulation unit value at end of period $1.14 $1.06 $1.01 $0.83 $1.00 -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,338 994 432 233 132 -- --
-------------------------------------------------------------------------------- 52 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 FIDELITY(R) VIP MID CAP PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $1.59 $1.28 $0.93 $1.04 $1.00 -- -- Accumulation unit value at end of period $1.86 $1.59 $1.28 $0.93 $1.04 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,702 1,034 510 325 132 -- -- FIDELITY(R) VIP OVERSEAS PORTFOLIO SERVICE CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $1.20 $1.06 $0.75 $0.95 $1.00 -- -- Accumulation unit value at end of period $1.42 $1.20 $1.06 $0.75 $0.95 -- -- Number of accumulation units outstanding at end of period (000 omitted) 728 573 205 324 7 -- -- FTVIPT FRANKLIN REAL ESTATE FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $2.42 $1.85 $1.37 $1.35 $1.26 $0.96 $1.00 Accumulation unit value at end of period $2.73 $2.42 $1.85 $1.37 $1.35 $1.26 $0.96 Number of accumulation units outstanding at end of period (000 omitted) 667 487 349 205 211 148 4 FTVIPT FRANKLIN SMALL CAP VALUE SECURITIES FUND - CLASS 2 (9/15/1999) Accumulation unit value at beginning of period $1.98 $1.61 $1.22 $1.35 $1.20 $0.96 $1.00 Accumulation unit value at end of period $2.14 $1.98 $1.61 $1.22 $1.35 $1.20 $0.96 Number of accumulation units outstanding at end of period (000 omitted) 593 414 242 282 150 9 2 FTVIPT MUTUAL SHARES SECURITIES FUND - CLASS 2 (8/13/2001) Accumulation unit value at beginning of period $1.18 $1.05 $0.85 $0.97 $1.00 -- -- Accumulation unit value at end of period $1.30 $1.18 $1.05 $0.85 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 716 533 667 130 -- -- -- GOLDMAN SACHS VIT MID CAP VALUE FUND (9/15/1999) Accumulation unit value at beginning of period $2.09 $1.67 $1.31 $1.38 $1.24 $0.95 $1.00 Accumulation unit value at end of period $2.34 $2.09 $1.67 $1.31 $1.38 $1.24 $0.95 Number of accumulation units outstanding at end of period (000 omitted) 1,930 834 639 450 200 15 8 GOLDMAN SACHS VIT STRUCTURED U.S. EQUITY FUND (9/15/1999) (PREVIOUSLY GOLDMAN SACHS VIT CORE(SM) U.S. EQUITY FUND) Accumulation unit value at beginning of period $0.99 $0.87 $0.67 $0.87 $0.99 $1.10 $1.00 Accumulation unit value at end of period $1.05 $0.99 $0.87 $0.67 $0.87 $0.99 $1.10 Number of accumulation units outstanding at end of period (000 omitted) 3,019 1,522 735 694 943 577 170 JANUS ASPEN SERIES GLOBAL TECHNOLOGY PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $0.37 $0.37 $0.25 $0.43 $0.68 $1.00 -- Accumulation unit value at end of period $0.41 $0.37 $0.37 $0.25 $0.43 $0.68 -- Number of accumulation units outstanding at end of period (000 omitted) 200 333 426 343 202 310 -- JANUS ASPEN SERIES INTERNATIONAL GROWTH PORTFOLIO: SERVICE SHARES (5/1/2000) Accumulation unit value at beginning of period $0.71 $0.60 $0.45 $0.61 $0.80 $1.00 -- Accumulation unit value at end of period $0.93 $0.71 $0.60 $0.45 $0.61 $0.80 -- Number of accumulation units outstanding at end of period (000 omitted) 250 132 295 875 606 556 -- LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO (9/15/1999) Accumulation unit value at beginning of period $0.94 $0.83 $0.65 $0.73 $0.96 $1.07 $1.00 Accumulation unit value at end of period $1.04 $0.94 $0.83 $0.65 $0.73 $0.96 $1.07 Number of accumulation units outstanding at end of period (000 omitted) 1,238 1,236 2,397 636 253 57 8 MFS(R) INVESTORS GROWTH STOCK SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $0.64 $0.59 $0.49 $0.68 $0.91 $1.00 -- Accumulation unit value at end of period $0.67 $0.64 $0.59 $0.49 $0.68 $0.91 -- Number of accumulation units outstanding at end of period (000 omitted) 640 522 874 785 913 533 -- MFS(R) NEW DISCOVERY SERIES - SERVICE CLASS (5/1/2000) Accumulation unit value at beginning of period $0.86 $0.81 $0.61 $0.90 $0.96 $1.00 -- Accumulation unit value at end of period $0.90 $0.86 $0.81 $0.61 $0.90 $0.96 -- Number of accumulation units outstanding at end of period (000 omitted) 558 576 622 485 548 352 -- MFS(R) UTILITIES SERIES - SERVICE CLASS (8/13/2001) Accumulation unit value at beginning of period $1.19 $0.92 $0.68 $0.89 $1.00 -- -- Accumulation unit value at end of period $1.38 $1.19 $0.92 $0.68 $0.89 -- -- Number of accumulation units outstanding at end of period (000 omitted) 588 211 139 139 138 -- -- OPPENHEIMER GLOBAL SECURITIES FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $1.16 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.31 $1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 756 158 -- -- -- -- --
-------------------------------------------------------------------------------- 53 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 OPPENHEIMER MAIN STREET SMALL CAP FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $1.16 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.26 $1.16 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 643 432 -- -- -- -- -- OPPENHEIMER STRATEGIC BOND FUND/VA, SERVICE SHARES (2/4/2004) Accumulation unit value at beginning of period $1.07 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.09 $1.07 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 3,173 403 -- -- -- -- -- PIONEER EQUITY INCOME VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $1.14 $0.99 $0.81 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.20 $1.14 $0.99 $0.81 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 156 182 283 175 -- -- -- PIONEER EUROPE VCT PORTFOLIO - CLASS II SHARES (8/13/2001) Accumulation unit value at beginning of period $1.22 $1.04 $0.79 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.31 $1.22 $1.04 $0.79 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) -- -- -- -- -- -- -- PUTNAM VT HEALTH SCIENCES FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $0.98 $0.92 $0.78 $0.98 $1.00 -- -- Accumulation unit value at end of period $1.10 $0.98 $0.92 $0.78 $0.98 -- -- Number of accumulation units outstanding at end of period (000 omitted) 218 67 170 145 129 -- -- PUTNAM VT INTERNATIONAL EQUITY FUND - CLASS IB SHARES (8/13/2001) Accumulation unit value at beginning of period $1.16 $1.01 $0.79 $0.96 $1.00 -- -- Accumulation unit value at end of period $1.30 $1.16 $1.01 $0.79 $0.96 -- -- Number of accumulation units outstanding at end of period (000 omitted) 145 194 207 881 418 -- -- PUTNAM VT VISTA FUND - CLASS IB SHARES (9/15/1999) Accumulation unit value at beginning of period $0.92 $0.78 $0.59 $0.86 $1.29 $1.36 $1.00 Accumulation unit value at end of period $1.03 $0.92 $0.78 $0.59 $0.86 $1.29 $1.36 Number of accumulation units outstanding at end of period (000 omitted) 374 375 431 525 1,092 1,330 183 RIVERSOURCE(SM) VARIABLE PORTFOLIO - BALANCED FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MANAGED FUND) Accumulation unit value at beginning of period $1.06 $0.97 $0.81 $0.94 $1.06 $1.09 $1.00 Accumulation unit value at end of period $1.10 $1.06 $0.97 $0.81 $0.94 $1.06 $1.09 Number of accumulation units outstanding at end of period (000 omitted) 623 257 221 120 296 145 10 RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND) Accumulation unit value at beginning of period $1.11 $1.11 $1.11 $1.10 $1.07 $1.01 $1.00 Accumulation unit value at end of period $1.13 $1.11 $1.11 $1.11 $1.10 $1.07 $1.01 Number of accumulation units outstanding at end of period (000 omitted) 4,504 2,098 447 3,911 5,658 6,615 2,266 *THE 7-DAY SIMPLE AND COMPOUND YIELDS FOR RIVERSOURCE(SM) VARIABLE PORTFOLIO - CASH MANAGEMENT FUND AT DEC. 31, 2005 WERE 3.04% AND 3.09%, RESPECTIVELY RIVERSOURCE(SM) VARIABLE PORTFOLIO - CORE BOND FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - CORE BOND FUND) Accumulation unit value at beginning of period $1.02 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.04 $1.02 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 100 73 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED BOND FUND) Accumulation unit value at beginning of period $1.29 $1.24 $1.20 $1.14 $1.06 $1.02 $1.00 Accumulation unit value at end of period $1.31 $1.29 $1.24 $1.20 $1.14 $1.06 $1.02 Number of accumulation units outstanding at end of period (000 omitted) 3,619 2,145 1,691 762 985 410 47 RIVERSOURCE(SM) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - DIVERSIFIED EQUITY INCOME FUND) Accumulation unit value at beginning of period $1.36 $1.16 $0.82 $1.02 $1.01 $1.02 $1.00 Accumulation unit value at end of period $1.53 $1.36 $1.16 $0.82 $1.02 $1.01 $1.02 Number of accumulation units outstanding at end of period (000 omitted) 5,165 3,041 1,239 1,262 281 218 23
-------------------------------------------------------------------------------- 54 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - EMERGING MARKETS FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE EMERGING MARKETS FUND) Accumulation unit value at beginning of period $1.19 $0.96 $0.69 $0.73 $0.75 $1.00 -- Accumulation unit value at end of period $1.58 $1.19 $0.96 $0.69 $0.73 $0.75 -- Number of accumulation units outstanding at end of period (000 omitted) 1,491 475 115 277 3 1 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GLOBAL BOND FUND) Accumulation unit value at beginning of period $1.46 $1.33 $1.18 $1.04 $1.03 $1.00 $1.00 Accumulation unit value at end of period $1.38 $1.46 $1.33 $1.18 $1.04 $1.03 $1.00 Number of accumulation units outstanding at end of period (000 omitted) 1,377 741 714 251 249 4 3 RIVERSOURCE(SM) VARIABLE PORTFOLIO - GLOBAL INFLATION PROTECTED SECURITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INFLATION PROTECTED SECURITIES FUND) Accumulation unit value at beginning of period $1.03 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.05 $1.03 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 1,455 5,004 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - GROWTH FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - GROWTH FUND) Accumulation unit value at beginning of period $0.62 $0.57 $0.47 $0.64 $0.94 $1.17 $1.00 Accumulation unit value at end of period $0.67 $0.62 $0.57 $0.47 $0.64 $0.94 $1.17 Number of accumulation units outstanding at end of period (000 omitted) 6,193 2,153 1,664 1,064 1,285 1,762 401 RIVERSOURCE(SM) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - HIGH YIELD BOND FUND) Accumulation unit value at beginning of period $1.22 $1.10 $0.89 $0.95 $0.91 $1.01 $1.00 Accumulation unit value at end of period $1.26 $1.22 $1.10 $0.89 $0.95 $0.91 $1.01 Number of accumulation units outstanding at end of period (000 omitted) 2,397 2,886 4,230 1,480 1,549 1,186 48 RIVERSOURCE(SM) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND (9/13/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - INCOME OPPORTUNITIES FUND) Accumulation unit value at beginning of period $1.04 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.07 $1.04 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 493 -- -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - INTERNATIONAL OPPORTUNITY FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - THREADNEEDLE INTERNATIONAL FUND) Accumulation unit value at beginning of period $0.82 $0.70 $0.55 $0.67 $0.95 $1.27 $1.00 Accumulation unit value at end of period $0.92 $0.82 $0.70 $0.55 $0.67 $0.95 $1.27 Number of accumulation units outstanding at end of period (000 omitted) 1,252 848 143 488 65 81 133 RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND) Accumulation unit value at beginning of period $0.80 $0.76 $0.59 $0.76 $0.94 $1.14 $1.00 Accumulation unit value at end of period $0.85 $0.80 $0.76 $0.59 $0.76 $0.94 $1.14 Number of accumulation units outstanding at end of period (000 omitted) 3,121 1,484 172 202 291 266 872 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - LARGE CAP VALUE FUND) Accumulation unit value at beginning of period $1.10 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.14 $1.10 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 92 65 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND* (5/1/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - EQUITY SELECT FUND) Accumulation unit value at beginning of period $1.15 $1.06 $0.87 $1.01 $1.00 -- -- Accumulation unit value at end of period $1.26 $1.15 $1.06 $0.87 $1.01 -- -- Number of accumulation units outstanding at end of period (000 omitted) 655 523 578 328 38 -- -- *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP VALUE FUND (5/2/2005) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - MID CAP VALUE FUND) Accumulation unit value at beginning of period $1.00 -- -- -- -- -- -- Accumulation unit value at end of period $1.20 -- -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 115 -- -- -- -- -- --
-------------------------------------------------------------------------------- 55 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R)) Accumulation unit value at beginning of period $0.88 $0.86 $0.69 $0.89 $1.08 $1.19 $1.00 Accumulation unit value at end of period $0.89 $0.88 $0.86 $0.69 $0.89 $1.08 $1.19 Number of accumulation units outstanding at end of period (000 omitted) 1,645 3,017 3,155 3,029 3,252 3,919 426 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - NEW DIMENSIONS FUND(R) MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - LARGE CAP EQUITY FUND ON MARCH 17, 2006. RIVERSOURCE(SM) VARIABLE PORTFOLIO - S&P 500 INDEX FUND (5/1/2000) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - S&P 500 INDEX FUND) Accumulation unit value at beginning of period $0.85 $0.77 $0.61 $0.79 $0.90 $1.00 -- Accumulation unit value at end of period $0.88 $0.85 $0.77 $0.61 $0.79 $0.90 -- Number of accumulation units outstanding at end of period (000 omitted) 2,054 1,958 1,381 973 770 285 -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SELECT VALUE FUND (2/4/2004) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SELECT VALUE FUND) Accumulation unit value at beginning of period $1.13 $1.00 -- -- -- -- -- Accumulation unit value at end of period $1.13 $1.13 -- -- -- -- -- Number of accumulation units outstanding at end of period (000 omitted) 235 182 -- -- -- -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SHORT DURATION U.S. GOVERNMENT FUND) Accumulation unit value at beginning of period $1.23 $1.22 $1.21 $1.15 $1.09 $1.01 $1.00 Accumulation unit value at end of period $1.24 $1.23 $1.22 $1.21 $1.15 $1.09 $1.01 Number of accumulation units outstanding at end of period (000 omitted) 688 870 1,097 1,275 592 1 10 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - SMALL CAP ADVANTAGE FUND) Accumulation unit value at beginning of period $1.54 $1.31 $0.89 $1.08 $1.16 $1.12 $1.00 Accumulation unit value at end of period $1.61 $1.54 $1.31 $0.89 $1.08 $1.16 $1.12 Number of accumulation units outstanding at end of period (000 omitted) 514 779 660 393 378 286 28 RIVERSOURCE(SM) VARIABLE PORTFOLIO - SMALL CAP VALUE FUND (8/14/2001) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - PARTNERS SMALL CAP VALUE FUND) Accumulation unit value at beginning of period $1.53 $1.28 $0.93 $1.07 $1.00 -- -- Accumulation unit value at end of period $1.61 $1.53 $1.28 $0.93 $1.07 -- -- Number of accumulation units outstanding at end of period (000 omitted) 2,068 860 982 627 411 -- -- RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND* (9/15/1999) (PREVIOUSLY AXP(R) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND) Accumulation unit value at beginning of period $0.77 $0.71 $0.55 $0.81 $1.22 $1.52 $1.00 Accumulation unit value at end of period $0.83 $0.77 $0.71 $0.55 $0.81 $1.22 $1.52 Number of accumulation units outstanding at end of period (000 omitted) 147 192 221 386 607 798 33 *RIVERSOURCE(SM) VARIABLE PORTFOLIO - STRATEGY AGGRESSIVE FUND MERGED INTO RIVERSOURCE(SM) VARIABLE PORTFOLIO - MID CAP GROWTH FUND ON MARCH 17, 2006. WANGER INTERNATIONAL SMALL CAP (9/15/1999) Accumulation unit value at beginning of period $1.40 $1.08 $0.73 $0.85 $1.09 $1.51 $1.00 Accumulation unit value at end of period $1.69 $1.40 $1.08 $0.73 $0.85 $1.09 $1.51 Number of accumulation units outstanding at end of period (000 omitted) 2,814 1,701 1,136 1,484 769 599 112 WANGER U.S. SMALLER COMPANIES (9/15/1999) Accumulation unit value at beginning of period $1.62 $1.37 $0.96 $1.17 $1.05 $1.15 $1.00 Accumulation unit value at end of period $1.79 $1.62 $1.37 $0.96 $1.17 $1.05 $1.15 Number of accumulation units outstanding at end of period (000 omitted) 2,709 1,415 1,250 847 820 990 125 WELLS FARGO ADVANTAGE VT ASSET ALLOCATION FUND (5/1/2001) Accumulation unit value at beginning of period $1.11 $1.02 $0.84 $0.97 $1.00 -- -- Accumulation unit value at end of period $1.16 $1.11 $1.02 $0.84 $0.97 -- -- Number of accumulation units outstanding at end of period (000 omitted) 355 91 66 29 8 -- -- WELLS FARGO ADVANTAGE VT INTERNATIONAL CORE FUND (5/1/2001) Accumulation unit value at beginning of period $0.99 $0.90 $0.69 $0.90 $1.00 -- -- Accumulation unit value at end of period $1.07 $0.99 $0.90 $0.69 $0.90 -- -- Number of accumulation units outstanding at end of period (000 omitted) 82 84 4 144 1 -- -- WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND (8/13/2001) Accumulation unit value at beginning of period $1.15 $0.98 $0.72 $0.99 $1.00 -- -- Accumulation unit value at end of period $1.23 $1.15 $0.98 $0.72 $0.99 -- -- Number of accumulation units outstanding at end of period (000 omitted) 467 408 445 314 136 -- --
-------------------------------------------------------------------------------- 56 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS VARIABLE ACCOUNT CHARGES OF 0.55% OF THE DAILY NET ASSETS OF THE VARIABLE ACCOUNT. (CONTINUED)
YEAR ENDED DEC. 31, 2005 2004 2003 2002 2001 2000 1999 WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH FUND (5/1/2001) Accumulation unit value at beginning of period $0.93 $0.82 $0.58 $0.94 $1.00 -- -- Accumulation unit value at end of period $0.98 $0.93 $0.82 $0.58 $0.94 -- -- Number of accumulation units outstanding at end of period (000 omitted) 35 10 10 6 2 -- --
-------------------------------------------------------------------------------- 57 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements
-------------------------------------------------------------------------------- 58 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE VARIABLE ANNUITY - BAND 3 -- PROSPECTUS [RIVERSOURCE ANNUITIES(SM) LOGO] IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 IDS Life Insurance Company (Distributor), Member NASD, a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise FInancial). Insurance and annuity products are issued by IDS Life Insurance Company, an Ameriprise Financial company. (C) 2006 Ameriprise Financial, Inc. All rights reserved. S-6407 G (5/06) STATEMENT OF ADDITIONAL INFORMATION FOR RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY(SM) RIVERSOURCE RETIREMENT ADVISOR VARIABLE ANNUITY(SM) - BAND 3 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE(SM) VARIABLE ANNUITY RIVERSOURCE RETIREMENT ADVISOR SELECT(SM) VARIABLE ANNUITY RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE(SM) VARIABLE ANNUITY - BAND 3 RIVERSOURCE RETIREMENT ADVISOR ADVANTAGE PLUS(SM) VARIABLE ANNUITY RIVERSOURCE RETIREMENT ADVISOR SELECT PLUS(SM) VARIABLE ANNUITY IDS LIFE FLEXIBLE PORTFOLIO ANNUITY IDS LIFE VARIABLE ACCOUNT 10 MAY 1, 2006 IDS Life Variable Account 10 is a separate account established and maintained by IDS Life Insurance Company (IDS Life). This Statement of Additional Information (SAI) is not a prospectus. It should be read together with the prospectus dated the same date as this SAI, which may be obtained from your sales representative, or by writing or calling us at the address and telephone number below. This SAI contains financial information for all the subaccounts of the IDS Life Variable Account 10. Not all subaccounts of the IDS Life Variable Account 10 apply to your specific contract. IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 (800) 862-7919 TABLE OF CONTENTS Calculating Annuity Payouts p. 3 Rating Agencies p. 4 Revenues Received During Calendar Year 2005 p. 4 Principal Underwriter p. 5 Independent Registered Public Accounting Firm p. 5 Financial Statements CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. We currently expect this consolidation to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, we plan to change the name of IDS Life to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. -------------------------------------------------------------------------------- 2 - IDS LIFE VARIABLE ACCOUNT 10 CALCULATING ANNUITY PAYOUTS THE VARIABLE ACCOUNT We do the following calculations separately for each of the subaccounts of the variable account. The separate monthly payouts, added together, make up your total variable annuity payout. INITIAL PAYOUT: To compute your first monthly payment, we: - determine the dollar value of your contract on the valuation date and deduct any applicable premium tax; then - apply the result to the annuity table contained in the contract or another table at least as favorable. The annuity table shows the amount of the first monthly payment for each $1,000 of value which depends on factors built into the table, as described below. ANNUITY UNITS: We then convert the value of your subaccount to annuity units. To compute the number of units credited to you, we divide the first monthly payment by the annuity unit value (see below) on the valuation date. The number of units in your subaccount is fixed. The value of the units fluctuates with the performance of the underlying fund. SUBSEQUENT PAYOUTS: To compute later payouts, we multiply: - the annuity unit value on the valuation date; by - the fixed number of annuity units credited to you. ANNUITY UNIT VALUES: We originally set this value at $1 for each subaccount. To calculate later values we multiply the last annuity value by the product of: - the net investment factor; and - the neutralizing factor. The purpose of the neutralizing factor is to offset the effect of the assumed rate built into the annuity table. With an assumed investment rate of 5%, the neutralizing factor is 0.999866 for a one day valuation period. NET INVESTMENT FACTOR: We determine the net investment factor by: - adding the fund's current net asset value per share plus the per share amount of any accrued income or capital gain dividends to obtain a current adjusted net asset value per share; then - dividing that sum by the previous adjusted net asset value per share; and - subtracting the percentage factor representing the mortality and expense risk fee from the result. Because the net asset value of the fund may fluctuate, the net investment factor may be greater or less than one, and the annuity unit value may increase or decrease. You bear this investment risk in a subaccount. THE FIXED ACCOUNT We guarantee your fixed annuity payout amounts. Once calculated, your payout will remain the same and never change. To calculate your annuity payouts we: - take the value of your fixed account at the retirement/settlement date or the date you selected to begin receiving your annuity payouts; then - using an annuity table, we apply the value according to the annuity payout plan you select. The annuity payout table we use will be the one in effect at the time you choose to begin your annuity payouts. The values in the table will be equal to or greater than the table in your contract. -------------------------------------------------------------------------------- 3 - IDS LIFE VARIABLE ACCOUNT 10 RATING AGENCIES We receive ratings from independent rating agencies. These agencies evaluate the financial soundness and claims-paying ability of insurance companies based on a number of different factors. The ratings reflect each agency's estimation of our ability to meet our contractual obligations such as making annuity payouts and paying death benefits and other distributions. As such, the ratings relate to our fixed account and not to the subaccounts. This information generally does not relate to the management or performance of the subaccounts. For detailed information on the agency ratings given to IDS Life, see "Debt & Ratings Information" under "Investors Relations" on our website at ameriprise.com or contact your sales representative. Or view our current ratings by visiting the agency websites directly at: A.M. Best www.ambest.com Fitch www.fitchratings.com Moody's www.moodys.com/insurance Standard & Poor's www.standardandpoors.com A.M. Best -- Rates insurance companies for their financial strength. Fitch -- Rates insurance companies for their claims-paying ability. Moody's -- Rates insurance companies for their financial strength. Standard & Poor's -- Rates insurance companies for their financial strength. REVENUES RECEIVED DURING CALENDAR YEAR 2005: The following table shows the unaffiliated funds ranked according to highest to lowest total dollar amounts the funds and their affiliates paid to us and/or our affiliates in 2005. Some of these funds may not be available under your contract or policy. Please see your contract or policy prospectus regarding the investment options available to you. Fidelity(R) Variable Insurance Products $ 8,854,855.66 Franklin(R) Templeton(R) Variable Insurance Products Trust 6,823,584.36 Liberty Variable Investment Trust / Wanger Advisors Trust 6,167,159.08 American Century(R) Variable Portfolios, Inc. 5,916,210.77 Goldman Sachs Variable Insurance Trust 5,908,269.00 AIM Variable Insurance Funds 4,657,038.45 AllianceBernstein Variable Products Series Fund, Inc. 4,105,185.33 Putnam Variable Trust 2,894,721.89 MFS(R) Variable Insurance Trust(SM) 2,814,229.09 Credit Suisse Trust 1,948,062.06 Wells Fargo Advantage Variable Trust Funds 1,785,045.10 Janus Aspen Series 973,913.25 Evergreen Variable Annuity Trust 950,086.78 Oppenheimer Variable Account Funds 940,501.39 Third Avenue Variable Series Trust 930,151.06 Royce Capital Fund 909,404.51 Lazard Retirement Series, Inc. 866,279.90 Van Kampen Life Investment Trust / The Universal Institutional Funds, Inc. 766,423.33 Pioneer Variable Contracts Trust 367,921.93 Calvert Variable Series, Inc. 166,558.14 Dreyfus Investment Portfolios / Dreyfus Variable Investment Fund 40,580.81 STI Classic Variable Trust 25,316.37 Premier VIT 20,167.99 Baron Capital Funds Trust 7,180.35 J.P. Morgan Series Trust II 4,344.49
If the revenue received from affiliated funds were included in the table above, payment to us or our affiliates by the RiverSource Variable Portfolio Funds or their affiliates would be at the top of the list. -------------------------------------------------------------------------------- 4 - IDS LIFE VARIABLE ACCOUNT 10 PRINCIPAL UNDERWRITER IDS Life serves as principal underwriter for the contract, which it offers on a continuous basis. IDS Life is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. (NASD). Our sales representatives are licensed insurance and annuity agents and are registered with the NASD as our representatives. IDS Life is ultimately controlled by Ameriprise Financial. IDS Life currently pays underwriting commissions for its role as principal underwriter. For the past three years, the aggregate dollar amount of underwriting commissions paid in its role as principal underwriter has been: 2005: $96,912,450; 2004: $57,026,951 and 2003: $39,181,124. IDS Life retains no underwriting commission from the sale of the contract. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP, independent registered public accounting firm, have audited the consolidated financial statements of IDS Life Insurance Company at Dec. 31, 2005 and 2004, and for each of the three years in the period ended Dec. 31, 2005, and the individual financial statements of the segregated asset subaccounts of the IDS Life Variable Account 10 (which includes RiverSource Retirement Advisor Variable Annuity, RiverSource Retirement Advisor Variable Annuity - Band 3, RiverSource Retirement Advisor Advantage Variable Annuity, RiverSource Retirement Advisor Select Variable Annuity, RiverSource Retirement Advisor Advantage Variable Annuity - Band 3, RiverSource Retirement Advisor Advantage Plus Variable Annuity, RiverSource Retirement Advisor Select Plus Variable Annuity and IDS Life Flexible Portfolio Annuity) at Dec. 31, 2005, and for each of the periods indicated therein, as set forth in their reports. We've included our financial statements in the SAI in reliance on Ernst & Young LLP's reports, given on their authority as experts in accounting and auditing. -------------------------------------------------------------------------------- 5 - IDS LIFE VARIABLE ACCOUNT 10 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying individual statements of assets and liabilities of the 88 segregated asset subaccounts of IDS Life Variable Account 10, referred to in Note 1, as of December 31, 2005, and the related statements of operations and changes in net assets for the periods indicated therein. These financial statements are the responsibility of the management of IDS Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of IDS Life Variable Account 10's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of IDS Life Variable Account 10's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005 by correspondence with the affiliated and unaffiliated mutual fund managers. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the individual financial position of the 88 segregated asset subaccounts of IDS Life Variable Account 10, referred to in Note 1, at December 31, 2005, and the individual results of their operations and the changes in their net assets for the periods indicated therein, in conformity with U.S. generally accepted accounting principles. /s/ Ernst & Young LLP Minneapolis, Minnesota March 31, 2006 -------------------------------------------------------------------------------- 6 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE DECEMBER 31, 2005 APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I ASSETS Investments, at value(1),(2) $ 78,569,765 $ 254,206,485 $ 53,703,860 $ 54,381,137 $ 484,950,122 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 4,894 408,237 3,584 53,802 -- Receivable for share redemptions 5,834 3,024 10,101 41,925 429,446 ----------------------------------------------------------------------------- Total assets 78,580,493 254,617,746 53,717,545 54,476,864 485,379,568 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 55,613 180,545 38,380 38,738 511,326 Contract terminations 5,834 3,024 10,101 41,925 429,446 Payable for investments purchased 4,894 408,237 3,584 53,802 -- ----------------------------------------------------------------------------- Total liabilities 66,341 591,806 52,065 134,465 940,772 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 78,341,930 253,983,081 53,618,699 54,316,165 482,243,069 Net assets applicable to contracts in payment period 172,222 42,859 46,781 26,234 2,195,727 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 78,514,152 $ 254,025,940 $ 53,665,480 $ 54,342,399 $ 484,438,796 ============================================================================= (1) Investment shares 3,183,540 10,405,505 3,337,717 3,415,901 20,680,176 (2) Investments, at cost $ 100,035,799 $ 227,020,811 $ 42,461,503 $ 42,602,762 $ 439,855,047 -----------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL DECEMBER 31, 2005 (CONTINUED) DYN, SER I SERV, SER I GRO, SER II TECH, SER I TECH, CL B ASSETS Investments, at value(1),(2) $ 16,422,209 $ 23,124,604 $ 269,605 $ 40,289,073 $ 3,650,122 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 13,724 20,821 20,560 55,022 Receivable for share redemptions 23,278 14,988 -- 1,529 4,478 ----------------------------------------------------------------------------- Total assets 16,445,487 23,153,316 290,426 40,311,162 3,709,622 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 11,750 16,351 129 28,542 1,763 Contract terminations 23,278 14,988 -- 1,529 4,478 Payable for investments purchased -- 13,724 20,821 20,560 55,022 ----------------------------------------------------------------------------- Total liabilities 35,028 45,063 20,950 50,631 61,263 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 16,397,540 23,101,245 269,233 40,260,531 3,648,359 Net assets applicable to contracts in payment period 12,919 7,008 -- -- -- Net assets applicable to seed money -- -- 243 -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 16,410,459 $ 23,108,253 $ 269,476 $ 40,260,531 $ 3,648,359 ============================================================================= (1) Investment shares 1,111,862 1,514,381 11,722 3,174,868 233,533 (2) Investments, at cost $ 11,988,577 $ 19,238,898 $ 261,094 $ 36,792,560 $ 3,683,208 -----------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 7 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, DECEMBER 31, 2005 (CONTINUED) CL B CL B CL I CL II CL II ASSETS Investments, at value(1),(2) $ 313,022,361 $ 551,574,740 $ 61,102,945 $ 97,334,242 $ 19,249,841 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 163,461 753,254 -- 23,268 356,784 Receivable for share redemptions 41,053 5,032 45,372 150,355 -- ----------------------------------------------------------------------------- Total assets 313,226,875 552,333,026 61,148,317 97,507,865 19,606,625 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 222,974 388,487 43,300 69,439 9,513 Contract terminations 41,053 5,032 45,372 150,355 -- Payable for investments purchased 163,461 753,254 -- 23,268 356,784 ----------------------------------------------------------------------------- Total liabilities 427,488 1,146,773 88,672 243,062 366,297 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 312,552,046 550,859,162 60,926,447 97,114,947 19,240,328 Net assets applicable to contracts in payment period 247,341 327,091 133,198 149,856 -- Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 312,799,387 $ 551,186,253 $ 61,059,645 $ 97,264,803 $ 19,240,328 ============================================================================= (1) Investment shares 12,698,676 29,152,999 7,424,416 11,841,149 1,863,489 (2) Investments, at cost $ 263,815,219 $ 436,261,617 $ 64,511,190 $ 75,942,862 $ 19,520,776 -----------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP DECEMBER 31, 2005 (CONTINUED) VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO ASSETS Investments, at value(1),(2) $ 722,847,058 $ 379,098,889 $ 50,889,731 $ 102,719,589 $ 31,903,430 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 11,307 196,636 37,577 147,644 -- Receivable for share redemptions 315,040 6,133 1,288 4,050 8,630 ----------------------------------------------------------------------------- Total assets 723,173,405 379,301,658 50,928,596 102,871,283 31,912,060 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 699,138 272,745 36,487 72,757 22,785 Contract terminations 315,040 6,133 1,288 4,050 8,630 Payable for investments purchased 11,307 196,636 37,577 147,644 -- ----------------------------------------------------------------------------- Total liabilities 1,025,485 475,514 75,352 224,451 31,415 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 719,846,767 378,230,310 50,804,011 102,646,832 31,859,279 Net assets applicable to contracts in payment period 2,301,153 595,834 49,233 -- 21,366 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 722,147,920 $ 378,826,144 $ 50,853,244 $ 102,646,832 $ 31,880,645 ============================================================================= (1) Investment shares 88,152,080 46,288,021 26,191,318 10,492,297 2,418,759 (2) Investments, at cost $ 606,804,491 $ 343,805,058 $ 46,555,739 $ 100,533,649 $ 31,831,987 -----------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 8 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, DECEMBER 31, 2005 (CONTINUED) GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 ASSETS Investments, at value(1),(2) $ 306,282,984 $ 30,666,607 $ 44,111,472 $ 221,653,784 $ 404,900,562 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments -- 12,019 26,287 88 139,574 Receivable for share redemptions 288,142 11,109 3,015 106,004 57,947 ----------------------------------------------------------------------------- Total assets 306,571,126 30,689,735 44,140,774 221,759,876 405,098,083 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 324,211 21,569 31,667 157,938 290,106 Contract terminations 288,142 11,109 3,015 106,004 57,947 Payable for investments purchased -- 12,019 26,287 88 139,574 ----------------------------------------------------------------------------- Total liabilities 612,353 44,697 60,969 264,030 487,627 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 305,181,342 30,596,682 44,062,000 221,044,243 403,883,059 Net assets applicable to contracts in payment period 777,431 48,356 17,805 451,603 727,397 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 305,958,773 $ 30,645,038 $ 44,079,805 $ 221,495,846 $ 404,610,456 ============================================================================= (1) Investment shares 20,569,710 1,719,944 3,093,371 15,119,631 27,866,522 (2) Investments, at cost $ 327,392,152 $ 26,827,229 $ 39,044,647 $ 214,883,164 $ 344,339,698 -----------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, DECEMBER 31, 2005 (CONTINUED) SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 ASSETS Investments, at value(1),(2) $ 405,721,294 $ 909,164,191 $ 94,048,505 $ 193,734,776 $ 690,493,488 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 103,929 422,697 9,813 -- 185,508 Receivable for share redemptions 18,818 1,785 56,698 132,741 -- ----------------------------------------------------------------------------- Total assets 405,844,041 909,588,673 94,115,016 193,867,517 690,678,996 ============================================================================= LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 287,266 645,087 66,387 138,963 489,223 Contract terminations 18,818 1,785 56,698 132,741 -- Payable for investments purchased 103,929 422,697 9,813 -- 185,508 ----------------------------------------------------------------------------- Total liabilities 410,013 1,069,569 132,898 271,704 674,731 ----------------------------------------------------------------------------- Net assets applicable to contracts in accumulation period 404,523,210 907,954,806 93,685,575 193,274,220 689,136,307 Net assets applicable to contracts in payment period 910,818 564,298 296,543 321,593 867,958 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ----------------------------------------------------------------------------- Total net assets $ 405,434,028 $ 908,519,104 $ 93,982,118 $ 193,595,813 $ 690,004,265 ============================================================================= (1) Investment shares 11,608,621 26,223,369 4,583,260 9,478,218 21,524,111 (2) Investments, at cost $ 225,632,489 $ 642,467,642 $ 81,222,636 $ 140,192,862 $ 488,065,865 -----------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 9 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM DECEMBER 31, 2005 (CONTINUED) VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ ASSETS Investments, at value(1),(2) $ 317,118,920 $ 196,249,504 $ 281,922,331 $ 51,531,670 $ 41,120,237 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 157,435 43,227 6,224 -- -- Receivable for share redemptions 4,112 34,859 -- 96,985 1,337 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 317,280,467 196,327,590 281,928,555 51,628,655 41,121,574 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 226,063 142,076 293,334 36,273 29,606 Contract terminations 4,112 34,859 -- 96,985 1,337 Payable for investments purchased 157,435 43,227 6,224 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 387,610 220,162 299,558 133,258 30,943 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 316,681,119 195,691,267 280,939,714 51,383,126 41,065,541 Net assets applicable to contracts in payment period 211,738 416,161 689,283 112,271 25,090 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 316,892,857 $ 196,107,428 $ 281,628,997 $ 51,495,397 $ 41,090,631 ==================================================================================================================================== (1) Investment shares 18,887,369 10,800,743 25,652,623 3,299,083 2,951,919 (2) Investments, at cost $ 233,512,799 $ 162,639,774 $ 196,037,086 $ 40,502,892 $ 33,182,022 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, DECEMBER 31, 2005 (CONTINUED) U.S. EQ VAL SERV SERV SERV ASSETS Investments, at value(1),(2) $ 492,985,307 $ 766,033,632 $ 23,495,362 $ 125,668,157 $ 31,725,381 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 141,854 1,059,348 188 22,496 6,355 Receivable for share redemptions 19 -- 20,742 68,524 26,705 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 493,127,180 767,092,980 23,516,292 125,759,177 31,758,441 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 348,853 539,349 16,691 88,673 22,242 Contract terminations 19 -- 20,742 68,524 15,003 Payable for investments purchased 141,854 1,059,348 188 22,496 6,355 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 490,726 1,598,697 37,621 179,693 43,600 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 492,112,397 764,860,030 23,404,931 125,428,299 31,702,729 Net assets applicable to contracts in payment period 524,057 634,253 73,740 151,185 12,112 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 492,636,454 $ 765,494,283 $ 23,478,671 $ 125,579,484 $ 31,714,841 ==================================================================================================================================== (1) Investment shares 37,546,482 49,326,055 5,933,172 3,573,163 1,116,698 (2) Investments, at cost $ 452,380,090 $ 681,499,216 $ 35,222,318 $ 96,816,148 $ 40,712,168 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 10 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, DECEMBER 31, 2005 (CONTINUED) INTL EQ SERV CL SERV CL SERV CL SERV CL ASSETS Investments, at value(1),(2) $ 198,643,723 $ 147,075,456 $ 110,000,006 $ 82,955,890 $ 145,721,269 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 11,846 53,976 12,293 106,580 225,826 Receivable for share redemptions 27,693 5,491 113,042 -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 198,683,262 147,134,923 110,125,341 83,062,470 145,947,095 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 141,492 104,180 79,685 60,551 101,909 Contract terminations 27,693 5,491 113,042 -- -- Payable for investments purchased 11,846 53,976 12,293 106,580 225,826 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 181,031 163,647 205,020 167,131 327,735 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 198,074,115 146,716,687 109,847,351 82,732,439 145,401,271 Net assets applicable to contracts in payment period 428,116 254,589 72,970 162,900 218,089 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 198,502,231 $ 146,971,276 $ 109,920,321 $ 82,895,339 $ 145,619,360 ==================================================================================================================================== (1) Investment shares 15,482,753 15,131,220 7,119,742 4,046,629 6,185,113 (2) Investments, at cost $ 157,800,616 $ 149,198,856 $ 99,910,992 $ 82,005,578 $ 114,696,109 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, DECEMBER 31, 2005 (CONTINUED) VA, SERV VA, SERV VA, SERV CL II CL II ASSETS Investments, at value(1),(2) $ 94,654,044 $ 52,519,571 $ 333,121,755 $ 64,075,396 $ 7,012,348 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 220,074 76,519 1,742,976 7,097 5,148 Receivable for share redemptions 94 113 -- 49,624 89 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 94,874,212 52,596,203 334,864,731 64,132,117 7,017,585 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 67,103 37,771 225,561 46,485 5,036 Contract terminations 94 113 -- 49,624 89 Payable for investments purchased 220,074 76,519 1,742,976 7,097 5,148 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 287,271 114,403 1,968,537 103,206 10,273 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 94,494,807 52,459,558 332,685,332 63,859,171 7,007,252 Net assets applicable to contracts in payment period 92,134 22,242 210,862 169,740 -- Net assets applicable to seed money -- -- -- -- 60 Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 94,586,941 $ 52,481,800 $ 332,896,194 $ 64,028,911 $ 7,007,312 ==================================================================================================================================== (1) Investment shares 2,854,465 3,078,521 64,185,309 2,998,381 626,102 (2) Investments, at cost $ 81,533,621 $ 46,773,856 $ 329,241,527 $ 52,506,324 $ 5,359,266 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 11 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEW OPP, VISTA, DECEMBER 31, 2005 (CONTINUED) CL IB CL IB CL IB CL IA CL IB ASSETS Investments, at value(1),(2) $ 53,300,648 $ 89,157,908 $ 88,204,080 $ 286,797,011 $ 95,797,184 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 223,710 11,767 -- -- 49,336 Receivable for share redemptions -- 75,340 13,557 22,242 88,110 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 53,524,358 89,245,015 88,217,637 286,819,253 95,934,630 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 36,548 63,601 62,343 301,492 68,162 Contract terminations -- 75,340 13,557 22,242 88,110 Payable for investments purchased 223,710 11,767 -- -- 49,336 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 260,258 150,708 75,900 323,734 205,608 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 53,210,683 89,063,485 88,068,782 285,485,202 95,436,676 Net assets applicable to contracts in payment period 53,417 30,822 72,955 1,010,317 292,346 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 53,264,100 $ 89,094,307 $ 88,141,737 $ 286,495,519 $ 95,729,022 ==================================================================================================================================== (1) Investment shares 4,016,628 5,483,266 6,016,649 15,304,003 6,872,108 (2) Investments, at cost $ 44,587,791 $ 62,469,892 $ 103,120,519 $ 349,682,693 $ 123,318,189 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP DECEMBER 31, 2005 (CONTINUED) BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC ASSETS Investments, at value(1),(2) $ 501,456,522 $ 476,447,834 $ 58,164,084 $ 1,091,016,741 $ 1,175,339,794 Dividends receivable -- 1,389,932 188,647 3,525,906 -- Accounts receivable from IDS Life for contract purchase payments 115,399 320,128 59,048 1,503,748 1,175,608 Receivable for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 501,571,921 478,157,894 58,411,779 1,096,046,395 1,176,515,402 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 453,539 351,869 37,715 842,271 808,553 Contract terminations 82,379 447,618 -- 271,073 -- Payable for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 535,918 799,487 37,715 1,113,344 808,553 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 495,700,619 477,070,101 41,409,952 1,090,553,830 1,173,364,247 Net assets applicable to contracts in payment period 5,335,384 288,306 12,621 4,379,221 2,342,602 Net assets applicable to seed money -- -- 16,951,491 -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 501,036,003 $ 477,358,407 $ 58,374,064 $ 1,094,933,051 $ 1,175,706,849 ==================================================================================================================================== (1) Investment shares 33,841,194 476,618,117 5,902,013 104,146,467 84,384,079 (2) Investments, at cost $ 558,214,900 $ 476,460,793 $ 58,824,275 $ 1,103,916,013 $ 989,826,330 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 12 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD DECEMBER 31, 2005 (CONTINUED) EMER MKTS BOND PROT SEC GRO BOND ASSETS Investments, at value(1),(2) $ 212,830,701 $ 453,357,528 $ 185,367,959 $ 397,707,535 $ 915,970,927 Dividends receivable -- 808,742 183,367 -- 3,766,694 Accounts receivable from IDS Life for contract purchase payments 419,469 603,795 665,089 996,359 243,772 Receivable for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 213,250,170 454,770,065 186,216,415 398,703,894 919,981,393 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 144,006 351,363 126,466 267,408 729,109 Contract terminations 29,780 72,849 -- -- 131,405 Payable for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 173,786 424,212 126,466 267,408 860,514 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 213,060,047 453,866,444 186,085,049 397,597,579 916,484,828 Net assets applicable to contracts in payment period 16,337 479,409 4,900 838,907 2,636,051 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 213,076,384 $ 454,345,853 $ 186,089,949 $ 398,436,486 $ 919,120,879 ==================================================================================================================================== (1) Investment shares 14,484,571 42,953,589 18,726,571 58,394,826 137,540,753 (2) Investments, at cost $ 172,391,596 $ 456,052,928 $ 188,253,717 $ 452,543,921 $ 957,568,031 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP DECEMBER 31, 2005 (CONTINUED) INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO ASSETS Investments, at value(1),(2) $ 62,680,229 $ 370,846,907 $ 570,831,063 $ 16,474,992 $ 107,788,834 Dividends receivable 309,970 -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 209,080 135,684 235,773 820 29,518 Receivable for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 63,199,279 370,982,591 571,066,836 16,475,812 107,818,352 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 42,425 335,254 457,040 10,649 75,400 Contract terminations -- 2,700 69,601 2,895 20,553 Payable for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 42,425 337,954 526,641 13,544 95,953 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 63,103,500 369,342,080 568,210,322 13,019,393 107,593,022 Net assets applicable to contracts in payment period 53,354 1,302,557 2,329,873 16,941 129,377 Net assets applicable to seed money -- -- -- 3,425,934 -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 63,156,854 $ 370,644,637 $ 570,540,195 $ 16,462,268 $ 107,722,399 ==================================================================================================================================== (1) Investment shares 6,151,962 34,261,571 25,966,189 1,508,109 8,806,244 (2) Investments, at cost $ 63,230,155 $ 376,155,754 $ 598,429,660 $ 15,716,676 $ 87,325,295 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 13 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP DECEMBER 31, 2005 (CONTINUED) MID CAP VAL NEW DIM S&P 500 SELECT VAL SHORT DURATION ASSETS Investments, at value(1),(2) $ 17,386,938 $ 1,068,580,984 $ 272,062,557 $ 24,556,406 $ 360,674,668 Dividends receivable -- -- -- -- 973,608 Accounts receivable from IDS Life for contract purchase payments 130,451 2,943 144,984 36,799 77,710 Receivable for share redemptions -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 17,517,389 1,068,583,927 272,207,541 24,593,205 361,725,986 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 10,267 941,422 193,691 16,443 257,029 Contract terminations -- 1,259,912 -- 46 52,034 Payable for investments purchased -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 10,267 2,201,334 193,691 16,489 309,063 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 15,115,912 1,058,747,432 271,147,618 21,186,854 360,467,089 Net assets applicable to contracts in payment period -- 7,635,161 866,232 14,503 949,834 Net assets applicable to seed money -- -- -- 3,375,359 -- Net assets applicable to affiliates 2,391,210 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 17,507,122 $ 1,066,382,593 $ 272,013,850 $ 24,576,716 $ 361,416,923 ==================================================================================================================================== (1) Investment shares 1,460,878 67,706,702 32,084,838 2,222,295 35,590,488 (2) Investments, at cost $ 16,390,515 $ 1,136,316,378 $ 242,145,210 $ 23,674,450 $ 370,316,917 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------------- LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM DECEMBER 31, 2005 (CONTINUED) SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II ASSETS Investments, at value(1),(2) $ 184,032,802 $ 371,057,244 $ 165,899,465 $ 128,796,837 $ 110,413 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 46,201 140,911 33 4 687 Receivable for share redemptions -- -- -- 68,164 -- ------------------------------------------------------------------------------------------------------------------------------------ Total assets 184,079,003 371,198,155 165,899,498 128,865,005 111,100 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 130,099 257,938 150,827 91,537 68 Contract terminations 21,527 13,049 175,739 68,164 -- Payable for investments purchased -- -- -- 4 687 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 151,626 270,987 326,566 159,705 755 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 183,577,022 370,449,483 164,624,726 128,555,305 110,113 Net assets applicable to contracts in payment period 350,355 477,685 948,206 149,995 -- Net assets applicable to seed money -- -- -- -- 232 Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 183,927,377 $ 370,927,168 $ 165,572,932 $ 128,705,300 $ 110,345 ==================================================================================================================================== (1) Investment shares 13,774,661 26,870,338 19,007,329 10,246,367 8,101 (2) Investments, at cost $ 164,212,955 $ 329,357,368 $ 288,285,009 $ 89,291,714 $ 116,203 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 14 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF ASSETS AND LIABILITIES
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------------- VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT DECEMBER 31, 2005 (CONTINUED) VAL CL II SM CAP SM CO ASSET ALLOC ASSETS Investments, at value(1),(2) $ 186,763,861 $ 456,494,367 $ 539,482,926 $ 828,956,151 $ 96,922,491 Dividends receivable -- -- -- -- -- Accounts receivable from IDS Life for contract purchase payments 4,201 664,449 123,516 631,626 70,787 Receivable for share redemptions 15,191 -- 42,125 -- 4,460 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 186,783,253 457,158,816 539,648,567 829,587,777 96,997,738 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 132,497 319,685 376,093 589,198 69,128 Contract terminations 15,191 -- 42,125 -- 4,460 Payable for investments purchased 4,201 664,449 123,516 631,626 70,787 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 151,889 984,134 541,734 1,220,824 144,375 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 186,187,762 456,135,289 538,751,837 827,676,810 96,801,891 Net assets applicable to contracts in payment period 443,602 39,393 354,996 690,143 51,472 Net assets applicable to seed money -- -- -- -- -- Net assets applicable to affiliates -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 186,631,364 $ 456,174,682 $ 539,106,833 $ 828,366,953 $ 96,853,363 ==================================================================================================================================== (1) Investment shares 6,813,713 33,442,811 17,612,893 23,752,325 7,427,011 (2) Investments, at cost $ 113,121,501 $ 436,023,649 $ 414,251,945 $ 601,679,303 $ 88,867,468 ------------------------------------------------------------------------------------------------------------------------------------
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------- WF ADV VT WF ADV VT WF ADV VT DECEMBER 31, 2005 (CONTINUED) INTL CORE OPP SM CAP GRO ASSETS Investments, at value(1),(2) $ 18,927,132 $ 96,031,181 $ 37,497,824 Dividends receivable -- -- -- Accounts receivable from IDS Life for contract purchase payments 604 120,821 9,346 Receivable for share redemptions 90,623 92,151 251 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 19,018,359 96,244,153 37,507,421 ==================================================================================================================================== LIABILITIES Payable to IDS Life for: Mortality and expense risk fee 13,712 69,235 26,891 Contract terminations 90,623 92,151 251 Payable for investments purchased 604 120,821 9,346 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 104,939 282,207 36,488 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to contracts in accumulation period 18,913,420 95,886,321 37,452,097 Net assets applicable to contracts in payment period -- 75,625 18,836 Net assets applicable to seed money -- -- -- Net assets applicable to affiliates -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Total net assets $ 18,913,420 $ 95,961,946 $ 37,470,933 ==================================================================================================================================== (1) Investment shares 2,185,581 3,964,954 4,496,142 (2) Investments, at cost $ 15,536,496 $ 70,626,205 $ 28,854,951 ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 15 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE YEAR ENDED DECEMBER 31, 2005 APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I INVESTMENT INCOME Dividend income $ 48,235 $ -- $ -- $ -- $ 7,307,784 Variable account expenses 639,292 1,309,161 463,090 413,331 6,634,066 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (591,057) (1,309,161) (463,090) (413,331) 673,718 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 9,846,523 2,312,663 9,971,332 4,195,112 122,273,523 Cost of investments sold 13,707,816 2,137,991 8,477,808 3,458,330 113,852,381 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (3,861,293) 174,672 1,493,524 736,782 8,421,142 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 10,236,668 19,806,751 3,388,947 3,919,007 9,964,559 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 6,375,375 19,981,423 4,882,471 4,655,789 18,385,701 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 5,784,318 $ 18,672,262 $ 4,419,381 $ 4,242,458 $ 19,059,419 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) DYN, SER I SERV, SER I GRO, SER II(1) TECH, SER I TECH, CL B(1) INVESTMENT INCOME Dividend income $ -- $ 305,569 $ 929 $ -- $ -- Variable account expenses 140,484 183,938 165 229,549 2,169 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (140,484) 121,631 764 (229,549) (2,169) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 3,672,414 4,280,725 265 1,588,894 4,483 Cost of investments sold 2,889,980 3,760,468 261 1,510,866 4,530 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 782,434 520,257 4 78,028 (47) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 863,131 425,979 8,511 1,711,488 (33,086) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 1,645,565 946,236 8,515 1,789,516 (33,133) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 1,505,081 $ 1,067,867 $ 9,279 $ 1,559,967 $ (35,302) ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) CL B CL B CL I CL II CL II(1) INVESTMENT INCOME Dividend income $ 3,516,566 $ 1,679,771 $ 651,920 $ 720,392 $ -- Variable account expenses 2,412,097 3,121,804 483,426 686,461 11,765 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,104,469 (1,442,033) 168,494 33,931 (11,765) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 5,868,003 333,813 5,815,318 3,161,083 39 Cost of investments sold 5,030,686 278,037 6,759,761 2,643,724 39 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 837,317 55,776 (944,443) 517,359 -- Distributions from capital gains -- 5,469,022 -- -- -- Net change in unrealized appreciation or depreciation of investments 9,122,243 60,595,058 7,546,726 9,845,641 (270,935) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 9,959,560 66,119,856 6,602,283 10,363,000 (270,935) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 11,064,029 $ 64,677,823 $ 6,770,777 $ 10,396,931 $ (282,700) ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 16 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO INVESTMENT INCOME Dividend income $ 6,303,252 $ 2,121,694 $ 897,436 $ -- $ -- Variable account expenses 8,398,314 2,845,260 403,490 605,831 283,969 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (2,095,062) (723,566) 493,946 (605,831) (283,969) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 61,773,591 4,451,225 3,703,330 403,176 7,453,720 Cost of investments sold 53,156,435 4,136,714 3,421,313 399,048 7,843,950 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 8,617,156 314,511 282,017 4,128 (390,230) Distributions from capital gains 72,930,528 29,747,632 -- -- -- Net change in unrealized appreciation or depreciation of investments (52,126,127) (14,710,761) 1,467,785 2,043,401 2,562,333 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 29,421,557 15,351,382 1,749,802 2,047,529 2,172,103 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 27,326,495 $ 14,627,816 $ 2,243,748 $ 1,441,698 $ 1,888,134 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 INVESTMENT INCOME Dividend income $ -- $ 210,548 $ 806,580 $ 3,367,351 $ 4,986,989 Variable account expenses 4,424,489 221,516 218,774 1,913,682 3,305,218 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (4,424,489) (10,968) 587,806 1,453,669 1,681,771 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 97,787,242 2,785,807 436,855 36,967,731 25,282,540 Cost of investments sold 104,925,281 2,468,203 404,911 38,358,175 22,838,335 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (7,138,039) 317,604 31,944 (1,390,444) 2,444,205 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,375,545) 1,650,566 4,104,747 13,701,203 20,910,866 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (11,513,584) 1,968,170 4,136,691 12,310,759 23,355,071 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ (15,938,073) $ 1,957,202 $ 4,724,497 $ 13,764,428 $ 25,036,842 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 INVESTMENT INCOME Dividend income $ 5,978,463 $ 9,919,012 $ 482,554 $ 791,978 $ 8,467,697 Variable account expenses 3,152,244 6,108,569 721,088 1,410,479 5,216,633 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 2,826,219 3,810,443 (238,534) (618,501) 3,251,064 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 19,759,777 1,224,744 9,488,844 9,787,556 11,654,277 Cost of investments sold 12,106,303 939,924 9,567,592 8,061,131 8,509,612 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 7,653,474 284,820 (78,748) 1,726,425 3,144,665 Distributions from capital gains -- -- 434,298 791,978 36,422,334 Net change in unrealized appreciation or depreciation of investments 49,540,142 116,302,504 14,315,905 27,251,027 32,124,507 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 57,193,616 116,587,324 14,671,455 29,769,430 71,691,506 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 60,019,835 $ 120,397,767 $ 14,432,921 $ 29,150,929 $ 74,942,570 ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 17 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ INVESTMENT INCOME Dividend income $ 2,030,822 $ 1,341,758 $ 3,639,750 $ 554,983 $ 98,246 Variable account expenses 2,329,987 1,360,050 3,220,666 398,021 360,778 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (299,165) (18,292) 419,084 156,962 (262,532) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 2,775,439 1,633,270 27,893,338 3,595,254 7,120,753 Cost of investments sold 2,075,953 1,397,267 22,155,493 2,954,836 5,404,299 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 699,486 236,003 5,737,845 640,418 1,716,454 Distributions from capital gains 1,642,725 502,610 -- -- 3,637,554 Net change in unrealized appreciation or depreciation of investments 19,843,755 14,904,933 54,275,339 3,615,228 (3,087,059) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 22,185,966 15,643,546 60,013,184 4,255,646 2,266,949 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 21,886,801 $ 15,625,254 $ 60,432,268 $ 4,412,608 $ 2,004,417 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) U.S. EQ VAL SERV SERV SERV INVESTMENT INCOME Dividend income $ 3,616,319 $ 4,152,396 $ -- $ 1,126,211 $ -- Variable account expenses 3,105,450 5,126,534 187,700 894,705 266,923 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 510,869 (974,138) (187,700) 231,506 (266,923) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 1,498,745 518,291 4,745,868 10,941,816 6,483,988 Cost of investments sold 1,374,802 444,460 8,118,591 10,269,322 9,201,133 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 123,943 73,831 (3,372,723) 672,494 (2,717,145) Distributions from capital gains -- 69,649,171 -- -- -- Net change in unrealized appreciation or depreciation of investments 28,944,309 (156,867) 5,728,444 28,497,150 6,255,115 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 29,068,252 69,566,135 2,355,721 29,169,644 3,537,970 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 29,579,121 $ 68,591,997 $ 2,168,021 $ 29,401,150 $ 3,271,047 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INTL EQ SERV CL SERV CL SERV CL SERV CL INVESTMENT INCOME Dividend income $ 1,743,908 $ 188,357 $ -- $ 823,550 $ 419,716 Variable account expenses 1,519,627 1,147,154 973,185 503,878 860,511 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 224,281 (958,797) (973,185) 319,672 (440,795) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 9,732,094 8,132,616 26,048,022 1,391,895 701,761 Cost of investments sold 8,123,717 8,602,072 25,571,597 1,370,943 549,014 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 1,608,377 (469,456) 476,425 20,952 152,747 Distributions from capital gains 2,655,586 -- -- 1,771,014 -- Net change in unrealized appreciation or depreciation of investments 13,562,204 6,466,116 4,162,578 (797,627) 14,532,603 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 17,826,167 5,996,660 4,639,003 994,339 14,685,350 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 18,050,448 $ 5,037,863 $ 3,665,818 $ 1,314,011 $ 14,244,555 ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 18 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VA, SERV VA, SERV VA, SERV CL II CL II INVESTMENT INCOME Dividend income $ 316,453 $ -- $ 3,119,458 $ 1,303,788 $ 32,881 Variable account expenses 492,275 295,193 1,374,978 533,311 56,757 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (175,822) (295,193) 1,744,480 770,477 (23,876) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 403,168 1,003,335 455,135 5,328,451 1,279,112 Cost of investments sold 364,096 943,490 451,532 4,365,865 998,676 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 39,072 59,845 3,603 962,586 280,436 Distributions from capital gains -- 619,596 -- -- -- Net change in unrealized appreciation or depreciation of investments 9,635,514 3,405,497 1,656,295 1,098,918 200,401 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 9,674,586 4,084,938 1,659,898 2,061,504 480,837 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 9,498,764 $ 3,789,745 $ 3,404,378 $ 2,831,981 $ 456,961 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEW OPP, VISTA, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) CL IB CL IB CL IB CL IA CL IB INVESTMENT INCOME Dividend income $ 21,883 $ 1,217,566 $ 583,106 $ 1,145,975 $ -- Variable account expenses 356,091 718,467 731,380 3,740,723 805,438 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (334,208) 499,099 (148,274) (2,594,748) (805,438) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 2,342,952 9,679,921 15,713,714 78,266,625 16,813,478 Cost of investments sold 2,067,453 7,323,555 20,602,283 104,367,469 23,973,970 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 275,499 2,356,366 (4,888,569) (26,100,844) (7,160,492) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 4,937,199 6,250,490 18,793,414 52,393,351 17,866,972 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 5,212,698 8,606,856 13,904,845 26,292,507 10,706,480 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 4,878,490 $ 9,105,955 $ 13,756,571 $ 23,697,759 $ 9,901,042 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC INVESTMENT INCOME Dividend income $ 13,147,782 $ 12,107,475 $ 1,751,137 $ 35,342,829 $ 14,133,435 Variable account expenses 5,602,576 4,231,519 381,007 9,136,635 7,492,282 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 7,545,206 7,875,956 1,370,130 26,206,194 6,641,153 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 60,860,567 208,771,234 11,865,724 47,374,759 8,838,044 Cost of investments sold 68,618,124 208,777,662 11,934,355 48,693,883 7,386,837 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (7,757,557) (6,428) (68,631) (1,319,124) 1,451,207 Distributions from capital gains 15,130,664 -- 119,042 -- 42,154,895 Net change in unrealized appreciation or depreciation of investments (1,067,962) 7,187 (882,026) (14,215,844) 65,738,972 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 6,305,145 759 (831,615) (15,534,968) 109,345,074 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 13,850,351 $ 7,876,715 $ 538,515 $ 10,671,226 $ 115,986,227 ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 19 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD YEAR ENDED DECEMBER 31, 2005 (CONTINUED) EMER MKTS BOND PROT SEC GRO BOND INVESTMENT INCOME Dividend income $ 229,815 $ 16,141,754 $ 5,751,259 $ 1,038,639 $ 59,497,280 Variable account expenses 972,255 3,952,900 696,889 2,233,701 8,954,395 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (742,440) 12,188,854 5,054,370 (1,195,062) 50,542,885 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 1,752,282 19,840,204 8,104,297 7,989,388 97,464,095 Cost of investments sold 1,486,955 19,116,420 8,036,293 10,715,849 110,821,382 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 265,327 723,784 68,004 (2,726,461) (13,357,287) Distributions from capital gains 8,964,539 1,983,995 281,462 -- -- Net change in unrealized appreciation or depreciation of investments 31,885,885 (39,533,328) (2,998,216) 24,724,212 (10,382,431) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 41,115,751 (36,825,549) (2,648,750) 21,997,751 (23,739,718) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 40,373,311 $ (24,636,695) $ 2,405,620 $ 20,802,689 $ 26,803,167 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO INVESTMENT INCOME Dividend income $ 1,585,800 $ 4,645,366 $ 5,229,152 $ 212,716 $ -- Variable account expenses 230,407 3,604,844 4,586,246 103,721 889,041 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 1,355,393 1,040,522 642,906 108,995 (889,041) =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 742,091 18,910,410 33,987,641 1,451,964 17,634,354 Cost of investments sold 746,451 22,138,269 41,849,141 1,374,167 14,706,161 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments (4,360) (3,227,859) (7,861,500) 77,797 2,928,193 Distributions from capital gains 245,918 -- -- 377,778 5,603,103 Net change in unrealized appreciation or depreciation of investments (553,654) 44,215,130 32,493,419 2,476 1,166,565 ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments (312,096) 40,987,271 24,631,919 458,051 9,697,861 ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 1,043,297 $ 42,027,793 $ 25,274,825 $ 567,046 $ 8,808,820 ===================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) MID CAP VAL(2) NEW DIM S&P 500 SELECT VAL SHORT DURATION INVESTMENT INCOME Dividend income $ 56,678 $ 7,606,388 $ 3,635,117 $ 97,419 $ 10,798,817 Variable account expenses 37,759 13,748,598 2,235,696 158,139 3,219,014 ----------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 18,919 (6,142,210) 1,399,421 (60,720) 7,579,803 =================================================================================================================================== REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 88,439 551,575,379 20,653,303 1,264,745 58,134,114 Cost of investments sold 84,984 601,099,158 18,754,494 1,209,652 59,423,198 ----------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 3,455 (49,523,779) 1,898,809 55,093 (1,289,084) Distributions from capital gains 39,901 -- 670,406 371,892 -- Net change in unrealized appreciation or depreciation of investments 996,423 43,972,499 5,743,632 (358,318) (3,725,259) ----------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 1,039,779 (5,551,280) 8,312,847 68,667 (5,014,343) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 1,058,698 $ (11,693,490) $ 9,712,268 $ 7,947 $ 2,565,460 ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 20 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------------------------- LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II(1) INVESTMENT INCOME Dividend income $ -- $ 632,905 $ 140,954 $ 665,554 $ -- Variable account expenses 1,569,526 2,580,358 1,929,336 1,078,139 86 --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net (1,569,526) (1,947,453) (1,788,382) (412,585) (86) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 20,923,522 4,669,286 53,547,413 22,591,574 6,981 Cost of investments sold 17,074,094 3,962,840 102,323,903 16,996,479 6,834 --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 3,849,428 706,446 (48,776,490) 5,595,095 147 Distributions from capital gains 23,430,623 24,805,317 -- 2,010,887 6,501 Net change in unrealized appreciation or depreciation of investments (18,677,790) (5,638,419) 62,382,895 5,112,180 (5,790) --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 8,602,261 19,873,344 13,606,405 12,718,162 858 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 7,032,735 $ 17,925,891 $ 11,818,023 $ 12,305,577 $ 772 =================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------------------------- VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL CL II SM CAP SM CO ASSET ALLOC INVESTMENT INCOME Dividend income $ 2,265,543 $ 1,260,297 $ 3,370,177 $ -- $ 1,949,646 Variable account expenses 1,473,156 2,206,022 3,367,140 5,881,944 800,022 --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 792,387 (945,725) 3,037 (5,881,944) 1,149,624 ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 12,156,875 849,099 615,737 1,397,879 10,272,441 Cost of investments sold 7,765,094 823,230 466,474 1,064,625 9,463,545 --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 4,391,781 25,869 149,263 333,254 808,896 Distributions from capital gains 3,689,944 4,363,998 -- -- 2,053,725 Net change in unrealized appreciation or depreciation of investments 13,746,849 12,889,870 78,663,844 77,650,370 (172,128) --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 21,828,574 17,279,737 78,813,107 77,983,624 2,690,493 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 22,620,961 $ 16,334,012 $ 78,816,144 $ 72,101,680 $ 3,840,117 =================================================================================================================================
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------- WF ADV VT WF ADV VT WF ADV VT YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INTL CORE OPP SM CAP GRO INVESTMENT INCOME Dividend income $ 358,801 $ -- $ -- Variable account expenses 164,165 792,245 314,807 --------------------------------------------------------------------------------------------------------------------------------- Investment income (loss) -- net 194,636 (792,245) (314,807) ================================================================================================================================= REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET Realized gain (loss) on sales of investments: Proceeds from sales 4,517,688 11,275,182 7,605,146 Cost of investments sold 3,784,994 8,707,288 6,320,946 --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) on sales of investments 732,694 2,567,894 1,284,200 Distributions from capital gains 510,086 -- -- Net change in unrealized appreciation or depreciation of investments 157,961 4,467,316 714,220 --------------------------------------------------------------------------------------------------------------------------------- Net gain (loss) on investments 1,400,741 7,035,210 1,998,420 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations $ 1,595,377 $ 6,242,965 $ 1,683,613 =================================================================================================================================
(1) For the period Nov. 1, 2005 (commencement of operations) to Dec. 31, 2005. (2) For the period May 2, 2005 (commencement of operations) to Dec. 31, 2005. See accompanying notes to financial statements. -------------------------------------------------------------------------------- 21 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------- AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE YEAR ENDED DECEMBER 31, 2005 APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I OPERATIONS Investment income (loss) -- net $ (591,057) $ (1,309,161) $ (463,090) $ (413,331) $ 673,718 Net realized gain (loss) on sales of investments (3,861,293) 174,672 1,493,524 736,782 8,421,142 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 10,236,668 19,806,751 3,388,947 3,919,007 9,964,559 --------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 5,784,318 18,672,262 4,419,381 4,242,458 19,059,419 =========================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 2,526,731 158,355,211 1,118,544 9,278,215 11,383,447 Net transfers(1) (4,376,410) 11,414,580 (7,239,725) (405,561) (23,381,815) Transfers for policy loans (10,539) (19,508) (36,832) (14,676) 511,126 Adjustments to net assets allocated to contracts in payout period (9,621) (2,786) (3,855) (3,035) (207,089) Contract charges (40,670) (84,237) (23,164) (35,651) (376,012) Contract terminations: Surrender benefits (2,926,956) (2,632,577) (2,134,750) (1,117,186) (99,401,317) Death benefits (680,268) (567,701) (303,500) (218,416) (5,254,324) --------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (5,517,733) 166,462,982 (8,623,282) 7,483,690 (116,725,984) --------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 78,247,567 68,890,696 57,869,381 42,616,251 582,105,361 --------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $78,514,152 $254,025,940 $53,665,480 $54,342,399 $484,438,796 =========================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 86,822,359 69,240,224 38,647,649 36,244,332 351,566,359 Contract purchase payments 2,815,980 159,129,012 739,549 7,876,997 6,906,219 Net transfers(1) (4,888,001) 11,589,486 (4,767,310) (294,754) (14,164,619) Transfers for policy loans (11,772) (20,691) (24,032) (12,062) 315,141 Contract charges (45,207) (82,507) (15,338) (29,976) (228,452) Contract terminations: Surrender benefits (3,238,650) (2,613,704) (1,407,805) (937,558) (60,065,914) Death benefits (751,380) (558,873) (201,585) (185,642) (3,216,627) --------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 80,703,329 236,682,947 32,971,128 42,661,337 281,112,107 ===========================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 22 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) DYN, SER I SERV, SER I GRO, SER II(2) TECH, SER I TECH, CL B(2) OPERATIONS Investment income (loss) -- net $ (140,484) $ 121,631 $ 764 $ (229,549) $ (2,169) Net realized gain (loss) on sales of investments 782,434 520,257 4 78,028 (47) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 863,131 425,979 8,511 1,711,488 (33,086) ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,505,081 1,067,867 9,279 1,559,967 (35,302) ============================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 662,249 3,977,753 165,758 21,812,020 3,458,885 Net transfers(1) (2,749,610) (3,094,763) 94,615 (732,302) 226,876 Transfers for policy loans (7,652) (6,503) -- (6,081) (120) Adjustments to net assets allocated to contracts in payout period (1,837) (1,064) -- -- -- Contract charges (15,007) (19,812) (5) (21,326) (31) Contract terminations: Surrender benefits (641,503) (751,458) (171) (641,629) (1,949) Death benefits (10,973) (211,211) -- (176,576) -- ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (2,764,333) (107,058) 260,197 20,234,106 3,683,661 ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 17,669,711 22,147,444 -- 18,466,458 -- ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $16,410,459 $23,108,253 $269,476 $40,260,531 $3,648,359 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 17,584,294 19,443,630 -- 25,351,782 -- Contract purchase payments 652,292 3,573,837 158,418 31,205,709 3,236,242 Net transfers(1) (2,714,380) (2,815,226) 88,327 (1,046,507) 211,150 Transfers for policy loans (7,448) (6,186) -- (8,540) (111) Contract charges (14,534) (17,815) (5) (30,084) (29) Contract terminations: Surrender benefits (620,339) (677,368) (17) (905,081) (964) Death benefits (10,860) (190,074) -- (252,676) -- ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 14,869,025 19,310,798 246,723 54,314,603 3,446,288 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 23 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------- AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) CL B CL B CL I CL II CL II(2) OPERATIONS Investment income (loss) -- net $ 1,104,469 $ (1,442,033) $ 168,494 $ 33,931 $ (11,765) Net realized gain (loss) on sales of investments 837,317 55,776 (944,443) 517,359 -- Distributions from capital gains -- 5,469,022 -- -- -- Net change in unrealized appreciation or depreciation of investments 9,122,243 60,595,058 7,546,726 9,845,641 (270,935) ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 11,064,029 64,677,823 6,770,777 10,396,931 (282,700) ============================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 49,167,890 169,880,622 1,562,539 15,539,678 18,521,501 Net transfers(1) 12,310,013 105,555,601 (372,136) 7,145,816 1,012,978 Transfers for policy loans (114,675) (97,548) (22,182) (57,298) (6,995) Adjustments to net assets allocated to contracts in payout period (23,174) (17,215) (4,301) (9,302) -- Contract charges (213,670) (227,471) (20,876) (60,797) (144) Contract terminations: Surrender benefits (7,591,363) (8,195,031) (1,715,581) (2,249,751) (4,312) Death benefits (1,552,116) (1,712,395) (330,188) (389,718) -- ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 51,982,905 265,186,563 (902,725) 19,918,628 19,523,028 ---------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 249,752,453 221,321,867 55,191,593 66,949,244 -- ---------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $312,799,387 $551,186,253 $61,059,645 $97,264,803 $19,240,328 ============================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 229,827,573 135,769,714 59,554,487 63,755,535 -- Contract purchase payments 44,931,238 100,417,784 1,663,934 14,513,861 17,626,252 Net transfers(1) 11,372,549 62,461,467 (324,714) 6,676,408 962,687 Transfers for policy loans (105,217) (57,394) (23,097) (51,251) (6,575) Contract charges (195,573) (133,186) (22,266) (56,615) (136) Contract terminations: Surrender benefits (6,929,449) (4,787,393) (1,822,705) (2,106,739) (3,844) Death benefits (1,424,123) (1,010,729) (351,439) (363,726) -- ---------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 277,476,998 292,660,263 58,674,200 82,367,473 18,578,384 ============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 24 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO OPERATIONS Investment income (loss) -- net $ (2,095,062) $ (723,566) $ 493,946 $ (605,831) $ (283,969) Net realized gain (loss) on sales of investments 8,617,156 314,511 282,017 4,128 (390,230) Distributions from capital gains 72,930,528 29,747,632 -- -- -- Net change in unrealized appreciation or depreciation of investments (52,126,127) (14,710,761) 1,467,785 2,043,401 2,562,333 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 27,326,495 14,627,816 2,243,748 1,441,698 1,888,134 ============================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 15,457,786 75,122,989 6,444,396 59,027,096 928,795 Net transfers(1) 90,124,132 28,387,507 1,640,290 8,005,426 (5,689,144) Transfers for policy loans 319,203 (125,067) (13,106) (7,910) (2,227) Adjustments to net assets allocated to contracts in payout period (228,681) (36,352) (4,345) -- (4,490) Contract charges (322,006) (242,823) (36,249) (42,064) (18,618) Contract terminations: Surrender benefits (118,660,231) (9,018,708) (1,294,737) (1,139,804) (1,522,520) Death benefits (5,716,459) (2,202,822) (422,883) (528,180) (356,596) ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (19,026,256) 91,884,724 6,313,366 65,314,564 (6,664,800) ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 713,847,681 272,313,604 42,296,130 35,890,570 36,657,311 ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $722,147,920 $378,826,144 $50,853,244 $102,646,832 $31,880,645 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 348,194,030 210,265,072 42,435,148 33,998,213 30,757,887 Contract purchase payments 7,759,538 58,161,625 6,308,763 55,825,629 769,107 Net transfers(1) 42,557,818 22,109,199 1,632,045 7,577,207 (4,734,517) Transfers for policy loans 125,219 (97,237) (13,545) (7,432) (2,037) Contract charges (154,933) (187,147) (35,749) (39,805) (15,498) Contract terminations: Surrender benefits (53,663,235) (6,934,299) (1,282,967) (1,074,498) (1,261,987) Death benefits (2,862,906) (1,699,162) (418,238) (500,482) (294,506) ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 341,955,531 281,618,051 48,625,457 95,778,832 25,218,449 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 25 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 OPERATIONS Investment income (loss) -- net $ (4,424,489) $ (10,968) $ 587,806 $ 1,453,669 $ 1,681,771 Net realized gain (loss) on sales of investments (7,138,039) 317,604 31,944 (1,390,444) 2,444,205 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments (4,375,545) 1,650,566 4,104,747 13,701,203 20,910,866 ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations (15,938,073) 1,957,202 4,724,497 13,764,428 25,036,842 ============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,166,245 1,559,874 23,215,215 6,122,248 53,098,982 Net transfers(1) (26,312,998) 6,144,752 7,007,148 (27,563,481) (34,598,440) Transfers for policy loans 244,248 (2,231) (10,790) (60,343) (96,453) Adjustments to net assets allocated to contracts in payout period (81,343) (3,240) (1,253) (221,493) (66,278) Contract charges (196,338) (22,789) (14,059) (93,148) (313,688) Contract terminations: Surrender benefits (71,660,860) (904,013) (358,809) (9,953,055) (11,047,457) Death benefits (2,318,382) (229,166) (166,324) (1,507,172) (2,520,118) ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from contract transactions (93,159,428) 6,543,187 29,671,128 (33,276,444) 4,456,548 ------------------------------------------------------------------------------------------------------------------------------ Net assets at beginning of year 415,056,274 22,144,649 9,684,180 241,007,862 375,117,066 ------------------------------------------------------------------------------------------------------------------------------ Net assets at end of year $305,958,773 $30,645,038 $44,079,805 $221,495,846 $404,610,456 ============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 295,070,055 23,447,847 8,450,029 251,134,847 353,479,110 Contract purchase payments 5,305,478 1,608,666 19,631,423 6,393,849 50,362,838 Net transfers(1) (19,680,131) 6,287,164 5,907,482 (28,778,412) (32,618,053) Transfers for policy loans 182,258 (2,355) (9,101) (62,307) (90,589) Contract charges (145,784) (23,421) (11,763) (97,178) (296,175) Contract terminations: Surrender benefits (52,826,352) (924,141) (298,838) (10,426,274) (10,394,557) Death benefits (1,735,107) (238,730) (138,323) (1,581,179) (2,388,847) ------------------------------------------------------------------------------------------------------------------------------ Units outstanding at end of year 226,170,417 30,155,030 33,530,909 216,583,346 358,053,727 ==============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 26 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 OPERATIONS Investment income (loss) -- net $ 2,826,219 $ 3,810,443 $ (238,534) $ (618,501) $ 3,251,064 Net realized gain (loss) on sales of investments 7,653,474 284,820 (78,748) 1,726,425 3,144,665 Distributions from capital gains -- -- 434,298 791,978 36,422,334 Net change in unrealized appreciation or depreciation of investments 49,540,142 116,302,504 14,315,905 27,251,027 32,124,507 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 60,019,835 120,397,767 14,432,921 29,150,929 74,942,570 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 9,084,657 203,430,643 2,381,708 24,797,846 110,766,576 Net transfers(1) 468,530 50,061,964 (3,224,619) (2,624,367) (3,801,846) Transfers for policy loans (185,959) (288,968) (24,663) (37,418) (190,800) Adjustments to net assets allocated to contracts in payout period (255,018) (37,449) (14,792) (15,236) (90,942) Contract charges (149,949) (523,520) (29,309) (123,244) (377,214) Contract terminations: Surrender benefits (13,986,823) (19,178,466) (2,726,263) (4,427,861) (19,424,184) Death benefits (2,470,943) (3,472,411) (507,830) (995,030) (4,823,651) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (7,495,505) 229,991,793 (4,145,768) 16,574,690 82,057,939 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 352,909,698 558,129,544 83,694,965 147,870,194 533,003,756 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $405,434,028 $908,519,104 $93,982,118 $193,595,813 $690,004,265 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 147,112,701 356,492,171 86,131,995 122,929,402 230,880,792 Contract purchase payments 3,616,730 123,309,486 2,413,514 20,203,509 47,356,492 Net transfers(1) 163,631 30,574,098 (3,251,453) (2,161,500) (1,247,979) Transfers for policy loans (75,969) (172,194) (25,349) (30,346) (79,177) Contract charges (59,684) (317,011) (29,642) (100,069) (158,003) Contract terminations: Surrender benefits (5,560,111) (11,548,664) (2,762,260) (3,569,546) (8,075,813) Death benefits (985,246) (2,098,603) (520,293) (818,186) (2,034,247) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 144,212,052 496,239,283 81,956,512 136,453,264 266,642,065 ===============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 27 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ OPERATIONS Investment income (loss) -- net $ (299,165) $ (18,292) $ 419,084 $ 156,962 $ (262,532) Net realized gain (loss) on sales of investments 699,486 236,003 5,737,845 640,418 1,716,454 Distributions from capital gains 1,642,725 502,610 -- -- 3,637,554 Net change in unrealized appreciation or depreciation of investments 19,843,755 14,904,933 54,275,339 3,615,228 (3,087,059) ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 21,886,801 15,625,254 60,432,268 4,412,608 2,004,417 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 55,902,898 44,119,571 4,288,656 1,352,600 785,464 Net transfers(1) 24,785,882 22,850,823 27,575,796 6,542,230 (4,733,062) Transfers for policy loans (112,000) (52,178) 160,948 (22,743) (13,591) Adjustments to net assets allocated to contracts in payout period (21,963) (42,668) 243,840 (14,835) (1,892) Contract charges (161,967) (105,934) (141,487) (14,209) (16,140) Contract terminations: Surrender benefits (8,160,244) (3,728,712) (49,986,868) (1,544,941) (1,407,859) Death benefits (1,478,651) (931,541) (1,724,715) (257,206) (305,535) ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 70,753,955 62,109,361 (19,583,830) 6,040,896 (5,692,615) ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 224,252,101 118,372,813 240,780,559 41,041,893 44,778,829 ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $316,892,857 $196,107,428 $281,628,997 $51,495,397 $41,090,631 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 118,565,790 99,870,679 274,585,826 31,651,467 26,859,407 Contract purchase payments 29,710,659 36,323,585 4,539,404 1,026,556 468,917 Net transfers(1) 12,970,375 18,890,364 29,007,270 5,087,379 (2,850,857) Transfers for policy loans (58,112) (42,536) 170,750 (17,422) (7,799) Contract charges (84,098) (86,921) (149,843) (10,804) (9,670) Contract terminations: Surrender benefits (4,189,672) (3,043,627) (52,053,973) (1,168,491) (847,087) Death benefits (748,428) (771,642) (1,854,947) (195,493) (181,216) ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 156,166,514 151,139,902 254,244,487 36,373,192 23,431,695 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 28 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) U.S. EQ VAL SERV SERV SERV OPERATIONS Investment income (loss) -- net $ 510,869 $ (974,138) $ (187,700) $ 231,506 $ (266,923) Net realized gain (loss) on sales of investments 123,943 73,831 (3,372,723) 672,494 (2,717,145) Distributions from capital gains -- 69,649,171 -- -- -- Net change in unrealized appreciation or depreciation of investments 28,944,309 (156,867) 5,728,444 28,497,150 6,255,115 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 29,579,121 68,591,997 2,168,021 29,401,150 3,271,047 ============================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 167,491,450 184,900,122 1,106,012 3,507,325 1,383,420 Net transfers(1) 55,816,261 82,000,494 (2,833,298) (2,555,596) (5,600,918) Transfers for policy loans (129,287) (175,440) (12,851) (44,935) (21,466) Adjustments to net assets allocated to contracts in payout period (47,148) (84,315) (694) (121,838) (378) Contract charges (185,297) (351,804) (20,489) (63,638) (25,471) Contract terminations: Surrender benefits (9,412,740) (17,640,225) (920,770) (3,520,397) (1,258,299) Death benefits (2,079,667) (3,589,683) (181,166) (654,093) (131,663) ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 211,453,572 245,059,149 (2,863,256) (3,453,172) (5,654,775) ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 251,603,761 451,843,137 24,173,906 99,631,506 34,098,569 ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $492,636,454 $765,494,283 $23,478,671 $125,579,484 $31,714,841 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 253,878,486 226,018,384 65,786,985 139,788,353 71,058,927 Contract purchase payments 168,341,027 90,485,739 3,034,699 4,577,386 2,849,052 Net transfers(1) 57,375,404 39,619,608 (8,024,110) (4,086,040) 11,489,143) Transfers for policy loans (126,153) (86,603) (33,836) (57,292) (41,604) Contract charges (186,236) (168,728) (54,314) (82,006) (51,722) Contract terminations: Surrender benefits (9,619,939) (8,384,464) (2,557,928) (4,485,220) (2,569,842) Death benefits (2,107,379) (1,697,382) (517,568) (839,386) (272,668) ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 467,555,210 345,786,554 57,633,928 134,815,795 59,483,000 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 29 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INTL EQ SERV CL SERV CL SERV CL SERV CL OPERATIONS Investment income (loss) -- net $ 224,281 $ (958,797) $ (973,185) $ 319,672 $ (440,795) Net realized gain (loss) on sales of investments 1,608,377 (469,456) 476,425 20,952 152,747 Distributions from capital gains 2,655,586 -- -- 1,771,014 -- Net change in unrealized appreciation or depreciation of investments 13,562,204 6,466,116 4,162,578 (797,627) 14,532,603 ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 18,050,448 5,037,863 3,665,818 1,314,011 14,244,555 ============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 21,342,468 19,244,718 9,569,175 43,590,151 39,219,491 Net transfers(1) 4,437,347 431,862 (26,427,919) 10,702,264 31,227,139 Transfers for policy loans (50,334) (46,009) (30,724) (29,222) (31,744) Adjustments to net assets allocated to contracts in payout period (38,264) (15,591) (6,217) (10,357) (15,097) Contract charges (105,431) (90,404) (83,504) (36,300) (65,081) Contract terminations: Surrender benefits (5,070,548) (4,121,260) (4,003,332) (1,093,394) (2,438,134) Death benefits (880,520) (870,189) (848,213) (301,535) (719,340) ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from contract transactions 19,634,718 14,533,127 (21,830,734) 52,821,607 67,177,234 ------------------------------------------------------------------------------------------------------------------------------ Net assets at beginning of year 160,817,065 127,400,286 128,085,237 28,759,721 64,197,571 ------------------------------------------------------------------------------------------------------------------------------ Net assets at end of year $198,502,231 $146,971,276 $109,920,321 $82,895,339 $145,619,360 ============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 168,207,767 195,430,028 149,075,141 26,241,735 52,791,656 Contract purchase payments 21,756,164 28,448,188 11,354,932 39,844,898 29,383,744 Net transfers(1) 5,068,392 44,705 (31,945,159) 9,704,197 23,968,663 Transfers for policy loans (53,535) (69,717) (36,617) (26,698) (21,443) Contract charges (108,020) (138,609) (99,674) (33,133) (49,580) Contract terminations: Surrender benefits (5,284,774) (6,358,002) (4,775,554) (995,727) (1,848,546) Death benefits (910,955) (1,349,242) (1,012,950) (276,597) (543,660) ------------------------------------------------------------------------------------------------------------------------------ Units outstanding at end of year 188,675,039 216,007,351 122,560,119 74,458,675 103,680,834 ==============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 30 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------- OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VA, SERV VA, SERV VA, SERV CL II CL II OPERATIONS Investment income (loss) -- net $ (175,822) $ (295,193) $ 1,744,480 $ 770,477 $ (23,876) Net realized gain (loss) on sales of investments 39,072 59,845 3,603 962,586 280,436 Distributions from capital gains -- 619,596 -- -- -- Net change in unrealized appreciation or depreciation of investments 9,635,514 3,405,497 1,656,295 1,098,918 200,401 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 9,498,764 3,789,745 3,404,378 2,831,981 456,961 ========================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 34,584,580 20,350,863 196,037,865 2,798,943 255,229 Net transfers(1) 23,243,274 9,770,101 87,648,989 4,658,261 433,848 Transfers for policy loans (18,273) (15,213) (60,041) (2,699) (8,842) Adjustments to net assets allocated to contracts in payout period (7,636) (1,792) (10,291) (8,770) -- Contract charges (36,548) (21,190) (67,912) (42,553) (5,001) Contract terminations: Surrender benefits (807,674) (483,157) (2,686,792) (1,755,969) (192,353) Death benefits (259,011) (77,565) (1,065,570) (408,412) (42,507) -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 56,698,712 29,522,047 279,796,248 5,238,801 440,374 -------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 28,389,465 19,170,008 49,695,568 55,958,129 6,109,977 -------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $94,586,941 $52,481,800 $332,896,194 $64,028,911 $7,007,312 ========================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 24,526,459 16,643,217 46,499,009 48,892,337 5,011,849 Contract purchase payments 29,489,329 17,483,256 182,735,989 2,423,969 204,923 Net transfers(1) 19,349,693 8,278,155 81,351,289 4,093,136 354,030 Transfers for policy loans (15,091) (12,829) (55,643) (2,227) (7,017) Contract charges (30,819) (18,159) (63,218) (36,645) (4,033) Contract terminations: Surrender benefits (676,521) (408,557) (2,497,993) (1,503,368) (155,020) Death benefits (220,245) (69,866) (992,126) (345,301) (35,293) -------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 72,422,805 41,895,217 306,977,307 53,521,901 5,369,439 ==========================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 31 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEW OPP, VISTA, YEAR ENDED DECEMBER 31, 2005 (CONTINUED) CL IB CL IB CL IB CL IA CL IB OPERATIONS Investment income (loss) -- net $ (334,208) $ 499,099 $ (148,274) $ (2,594,748) $ (805,438) Net realized gain (loss) on sales of investments 275,499 2,356,366 (4,888,569) (26,100,844) (7,160,492) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 4,937,199 6,250,490 18,793,414 52,393,351 17,866,972 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 4,878,490 9,105,955 13,756,571 23,697,759 9,901,042 ============================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 11,538,993 7,011,877 2,928,439 7,758,919 5,583,581 Net transfers(1) 2,387,204 (8,745,216) (13,103,118) (19,280,984) (15,208,838) Transfers for policy loans (5,456) 1,710 (39,356) 380,211 (63,104) Adjustments to net assets allocated to contracts in payout period (3,409) (2,254) (7,343) (269,378) (12,792) Contract charges (37,787) (59,975) (59,443) (276,415) (77,280) Contract terminations: Surrender benefits (1,073,104) (2,034,488) (3,671,642) (61,042,173) (3,940,936) Death benefits (416,355) (621,019) (586,495) (2,347,748) (880,276) ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 12,390,086 (4,449,365) (14,538,958) (75,077,568) (14,599,645) ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 35,995,524 84,437,717 88,924,124 337,875,328 100,427,625 ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $53,264,100 $89,094,307 $ 88,141,737 $286,495,519 $ 95,729,022 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 37,011,026 72,648,580 107,334,366 265,043,639 110,020,303 Contract purchase payments 11,060,105 5,872,834 3,358,181 6,062,354 5,934,007 Net transfers(1) 2,197,127 (7,383,516) (15,087,560) (15,735,370) (16,487,447) Transfers for policy loans (4,392) 1,755 (45,135) 302,410 (65,589) Contract charges (36,952) (50,505) (68,158) (216,217) (83,071) Contract terminations: Surrender benefits (1,041,397) (1,704,860) (4,195,585) (47,397,734) (4,245,667) Death benefits (412,525) (530,667) (663,629) (1,861,874) (938,512) ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 48,772,992 68,853,621 90,632,480 206,197,208 94,134,024 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 32 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC OPERATIONS Investment income (loss) -- net $ 7,545,206 $ 7,875,956 $ 1,370,130 $ 26,206,194 $ 6,641,153 Net realized gain (loss) on sales of investments (7,757,557) (6,428) (68,631) (1,319,124) 1,451,207 Distributions from capital gains 15,130,664 -- 119,042 -- 42,154,895 Net change in unrealized appreciation or depreciation of investments (1,067,962) 7,187 (882,026) (14,215,844) 65,738,972 -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 13,850,351 7,876,715 538,515 10,671,226 115,986,227 ================================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 30,040,892 556,051,004 17,420,875 249,037,899 221,931,868 Net transfers(1) 9,939,385 (498,651,986) 8,986,012 80,765,231 217,209,369 Transfers for policy loans 209,266 415,361 (5,405) 112,570 (387,239) Adjustments to net assets allocated to contracts in payout period (682,900) (413,344) (1,853) (649,315) (4,965) Contract charges (331,006) (287,651) (18,669) (490,788) (565,852) Contract terminations: Surrender benefits (61,182,381) (49,089,168) (9,901,903) (69,255,287) (25,030,754) Death benefits (6,799,707) (7,237,686) (299,927) (10,283,444) (5,955,214) -------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (28,806,451) 786,530 16,179,130 249,236,866 407,197,213 -------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 515,992,103 468,695,162 41,656,419 835,024,959 652,523,409 -------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $501,036,003 $477,358,407 $58,374,064 $1,094,933,051 $1,175,706,849 ================================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 373,844,948 426,211,605 15,786,978 639,930,591 482,647,229 Contract purchase payments 26,162,735 512,980,244 17,053,002 199,112,226 157,632,718 Net transfers(1) 5,527,945 (460,843,027) 8,767,501 62,730,709 155,491,975 Transfers for policy loans 106,968 361,317 (5,247) 73,693 (276,625) Contract charges (242,855) (261,294) (18,259) (381,999) (403,138) Contract terminations: Surrender benefits (39,548,608) (42,891,092) (973,442) (51,113,897) (17,847,823) Death benefits (4,988,392) (6,488,576) (293,630) (7,831,661) (4,270,111) -------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 360,862,741 429,069,177 40,316,903 842,519,662 772,974,225 ================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 33 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD YEAR ENDED DECEMBER 31, 2005 (CONTINUED) EMER MKTS BOND PROT SEC GRO BOND OPERATIONS Investment income (loss) -- net $ (742,440) $ 12,188,854 $ 5,054,370 $ (1,195,062) $ 50,542,885 Net realized gain (loss) on sales of investments 265,327 723,784 68,004 (2,726,461) (13,357,287) Distributions from capital gains 8,964,539 1,983,995 281,462 -- -- Net change in unrealized appreciation or depreciation of investments 31,885,885 (39,533,328) (2,998,216) 24,724,212 (10,382,431) ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 40,373,311 (24,636,695) 2,405,620 20,802,689 26,803,167 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 84,612,660 105,148,080 154,757,685 89,123,405 103,216,534 Net transfers(1) 40,610,042 50,851,232 25,231,053 85,728,430 (47,158,281) Transfers for policy loans (63,069) 17,193 (20,212) (145,817) (54,366) Adjustments to net assets allocated to contracts in payout period (1,250) (50,347) (173) 341,335 (46,589) Contract charges (62,721) (189,160) (23,341) (193,212) (445,857) Contract terminations: Surrender benefits (2,299,209) (29,330,816) (6,287,522) (8,660,973) (68,665,498) Death benefits (542,443) (3,452,011) (195,864) (1,958,397) (9,467,860) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 122,254,010 122,994,171 173,461,626 164,234,771 (22,621,917) ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 50,449,063 355,988,377 10,222,703 213,399,026 914,939,629 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $213,076,384 $454,345,853 $186,089,949 $398,436,486 $919,120,879 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 42,520,875 242,561,640 9,951,031 340,148,136 730,172,431 Contract purchase payments 62,949,904 76,307,545 149,630,901 130,263,482 83,827,962 Net transfers(1) 31,076,926 35,627,908 24,378,576 125,726,923 (37,975,363) Transfers for policy loans (51,012) 9,910 (19,470) (219,189) (48,881) Contract charges (46,183) (135,471) (22,495) (296,814) (357,873) Contract terminations: Surrender benefits (1,700,143) (20,111,839) (6,037,356) (13,491,941) (52,271,318) Death benefits (407,270) (2,436,618) (188,991) (3,044,591) (7,492,537) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 134,343,097 331,823,075 177,692,196 579,086,006 715,854,421 ===============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 34 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO OPERATIONS Investment income (loss) -- net $ 1,355,393 $ 1,040,522 $ 642,906 $ 108,995 $ (889,041) Net realized gain (loss) on sales of investments (4,360) (3,227,859) (7,861,500) 77,797 2,928,193 Distributions from capital gains 245,918 -- -- 377,778 5,603,103 Net change in unrealized appreciation or depreciation of investments (553,654) 44,215,130 32,493,419 2,476 1,166,565 ----------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,043,297 42,027,793 25,274,825 567,046 8,808,820 ============================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 47,351,526 27,708,278 208,244,807 3,448,860 7,522,181 Net transfers(1) 12,727,168 63,156,361 (1,093,795) 2,406,085 (15,381,102) Transfers for policy loans (9,039) 96,886 99,320 (690) (12,932) Adjustments to net assets allocated to contracts in payout period (871) (122,930) (257,434) 4,245 (9,478) Contract charges (8,310) (182,560) (283,629) (9,382) (88,034) Contract terminations: Surrender benefits (376,515) (42,254,354) (40,944,691) (317,375) (3,340,936) Death benefits (75,387) (2,355,941) (4,537,840) (95,305) (665,500) ----------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 59,608,572 46,045,740 161,226,738 5,436,438 (11,975,801) ----------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 2,504,985 282,571,104 384,038,632 10,458,784 110,889,380 ----------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $63,156,854 $370,644,637 $570,540,195 $16,462,268 $107,722,399 ============================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 2,406,070 281,107,065 386,123,263 6,541,500 98,757,571 Contract purchase payments 45,222,755 31,036,608 248,784,080 3,135,978 6,651,877 Net transfers(1) 12,097,459 64,895,807 (8,028,746) 2,177,243 (13,948,752) Transfers for policy loans (8,619) 61,564 34,573 (637) (11,398) Contract charges (7,877) (183,409) (287,511) (8,518) (77,994) Contract terminations: Surrender benefits (353,372) (38,725,945) (34,928,544) (289,249) (2,940,300) Death benefits (71,545) (2,352,575) (4,656,674) (86,074) (607,100) ----------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 59,284,871 335,839,115 587,040,441 11,470,243 87,823,904 =============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 35 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) MID CAP VAL(3) NEW DIM S&P 500 SELECT VAL SHORT DURATION OPERATIONS Investment income (loss) -- net $ 18,919 $ (6,142,210) $ 1,399,421 $ (60,720) $ 7,579,803 Net realized gain (loss) on sales of investments 3,455 (49,523,779) 1,898,809 55,093 (1,289,084) Distributions from capital gains 39,901 -- 670,406 371,892 -- Net change in unrealized appreciation or depreciation of investments 996,423 43,972,499 5,743,632 (358,318) (3,725,259) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 1,058,698 (11,693,490) 9,712,268 7,947 2,565,460 ============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 4,804,511 51,850,055 34,540,678 8,194,986 57,207,520 Net transfers(1) 11,729,799 (411,383,743) (5,739,355) 3,433,607 (63,040,235) Transfers for policy loans (4,372) 590,383 (119,414) (14,220) 44,776 Adjustments to net assets allocated to contracts in payout period -- (1,015,282) (154,241) (1,170) (510,133) Contract charges (1,634) (1,155,514) (178,288) (15,021) (235,135) Contract terminations: Surrender benefits (65,876) (162,242,297) (8,884,766) (375,798) (17,565,749) Death benefits (14,004) (12,630,543) (1,734,255) (157,107) (4,902,788) ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from contract transactions 16,448,424 (535,986,941) 17,730,359 11,065,277 (29,001,744) ------------------------------------------------------------------------------------------------------------------------------ Net assets at beginning of year -- 1,614,063,024 244,571,223 13,503,492 387,853,207 ------------------------------------------------------------------------------------------------------------------------------ Net assets at end of year $17,507,122 $1,066,382,593 $272,013,850 $24,576,716 $361,416,923 ============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 1,388,978,838 283,879,436 9,023,995 326,083,939 Contract purchase payments 2,394,503 51,484,277 39,566,176 7,362,154 48,641,824 Net transfers(1) 10,397,207 (386,482,046) (6,620,623) 3,063,842 (53,107,463) Transfers for policy loans (3,751) 252,461 (140,951) (12,591) 37,126 Contract charges (1,423) (1,031,865) (206,350) (13,479) (198,723) Contract terminations: Surrender benefits (57,450) (117,987,719) (10,358,998) (337,208) (14,769,462) Death benefits (12,513) (11,109,471) (2,037,161) (140,976) (4,153,732) ------------------------------------------------------------------------------------------------------------------------------ Units outstanding at end of year 12,716,573 924,104,475 304,081,529 18,945,737 302,533,509 ===============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 36 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------------- LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM PERIOD ENDED DECEMBER 31, 2005 (CONTINUED) SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II(2) OPERATIONS Investment income (loss) -- net $ (1,569,526) $ (1,947,453) $ (1,788,382) $ (412,585) $ (86) Net realized gain (loss) on sales of investments 3,849,428 706,446 (48,776,490) 5,595,095 147 Distributions from capital gains 23,430,623 24,805,317 -- 2,010,887 6,501 Net change in unrealized appreciation or depreciation of investments (18,677,790) (5,638,419) 62,382,895 5,112,180 (5,790) ----------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 7,032,735 17,925,891 11,818,023 12,305,577 772 =================================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 16,093,478 118,568,963 6,765,293 3,141,221 54,212 Net transfers(1) (18,127,446) (8,851,554) (28,478,724) (17,731,827) 55,517 Transfers for policy loans (52,489) (130,269) 121,614 (66,632) -- Adjustments to net assets allocated to contracts in payout period (23,791) (21,746) (252,826) (124,032) -- Contract charges (125,568) (232,194) (150,384) (42,894) (1) Contract terminations: Surrender benefits (6,646,523) (8,931,998) (25,681,865) (5,301,784) (155) Death benefits (1,403,874) (1,607,266) (1,906,259) (803,347) -- ----------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (10,286,213) 98,793,936 (49,583,151) (20,929,295) 109,573 ----------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 187,180,855 254,207,341 203,338,060 137,329,018 -- ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $183,927,377 $370,927,168 $165,572,932 $128,705,300 $110,345 =================================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 122,817,518 168,145,266 222,702,207 54,526,234 -- Contract purchase payments 10,763,167 79,036,855 7,986,746 1,248,653 50,730 Net transfers(1) (11,981,198) (5,602,079) (34,177,278) (7,100,797) 53,637 Transfers for policy loans (34,860) (86,704) 114,286 (26,804) -- Contract charges (83,256) (154,312) (167,334) (17,121) (1) Contract terminations: Surrender benefits (4,424,654) (5,923,401) (26,005,670) (2,101,239) -- Death benefits (920,991) (1,082,966) (2,172,372) (323,712) -- ----------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 116,135,726 234,332,659 168,280,585 46,205,214 104,366 ===================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 37 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT YEAR ENDED DECEMBER 31, 2005 (CONTINUED) VAL CL II SM CAP SM CO ASSET ALLOC OPERATIONS Investment income (loss) -- net $ 792,387 $ (945,725) $ 3,037 $ (5,881,944) $ 1,149,624 Net realized gain (loss) on sales of investments 4,391,781 25,869 149,263 333,254 808,896 Distributions from capital gains 3,689,944 4,363,998 -- -- 2,053,725 Net change in unrealized appreciation or depreciation of investments 13,746,849 12,889,870 78,663,844 77,650,370 (172,128) ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 22,620,961 16,334,012 78,816,144 72,101,680 3,840,117 ============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,994,824 318,117,418 132,653,626 163,267,333 3,672,044 Net transfers(1) (1,046,659) 38,832,269 58,793,805 37,803,467 5,319,107 Transfers for policy loans (88,844) (100,849) (187,755) (225,632) 11,513 Adjustments to net assets allocated to contracts in payout period (37,247) (3,229) (129,105) (79,666) 12,778 Contract charges (55,985) (134,733) (240,917) (437,598) (67,415) Contract terminations: Surrender benefits (6,218,459) (2,872,625) (10,836,707) (19,394,263) (4,321,503) Death benefits (1,094,962) (1,002,175) (1,795,901) (4,000,534) (1,019,531) ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from contract transactions (4,547,332) 352,836,076 178,257,046 176,933,107 3,606,993 ------------------------------------------------------------------------------------------------------------------------------ Net assets at beginning of year 168,557,735 87,004,594 282,033,643 579,332,166 89,406,253 ------------------------------------------------------------------------------------------------------------------------------ Net assets at end of year $186,631,364 $456,174,682 $539,106,833 $828,366,953 $96,853,363 ============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 66,586,567 75,663,646 201,339,634 368,407,413 80,917,530 Contract purchase payments 1,532,395 278,152,667 86,330,476 101,844,726 3,301,562 Net transfers(1) (396,567) 34,151,254 39,127,587 23,314,554 4,840,662 Transfers for policy loans (33,005) (87,950) (123,239) (139,131) 10,083 Contract charges (21,562) (116,666) (157,953) (271,679) (60,462) Contract terminations: Surrender benefits (2,383,826) (2,496,182) (7,165,985) (11,936,882) (3,869,174) Death benefits (417,902) (870,678) (1,196,045) (2,466,879) (921,700) ------------------------------------------------------------------------------------------------------------------------------ Units outstanding at end of year 64,866,100 384,396,091 318,154,475 478,752,122 84,218,501 ==============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 38 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------- WF ADV VT WF ADV VT WF ADV VT YEAR ENDED DECEMBER 31, 2005 (CONTINUED) INTL CORE OPP SM CAP GRO OPERATIONS Investment income (loss) -- net $ 194,636 $ (792,245) $ (314,807) Net realized gain (loss) on sales of investments 732,694 2,567,894 1,284,200 Distributions from capital gains 510,086 -- -- Net change in unrealized appreciation or depreciation of investments 157,961 4,467,316 714,220 -------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,595,377 6,242,965 1,683,613 ============================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 609,061 11,162,668 1,908,393 Net transfers(1) (2,193,503) (9,957,654) (4,502,232) Transfers for policy loans (3,729) (34,417) (14,933) Adjustments to net assets allocated to contracts in payout period -- (7,403) 1,388 Contract charges (13,843) (74,090) (29,856) Contract terminations: Surrender benefits (585,748) (2,934,625) (1,169,826) Death benefits (90,343) (407,110) (154,039) -------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (2,278,105) (2,252,631) (3,961,105) -------------------------------------------------------------------------------------------- Net assets at beginning of year 19,596,148 91,971,612 39,748,425 -------------------------------------------------------------------------------------------- Net assets at end of year $18,913,420 $95,961,946 $37,470,933 ============================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 19,728,058 80,224,787 42,675,340 Contract purchase payments 602,948 9,683,469 2,046,827 Net transfers(1) (2,099,725) (8,656,676) (5,071,379) Transfers for policy loans (3,636) (29,803) (15,089) Contract charges (13,614) (64,052) (32,649) Contract terminations: Surrender benefits (577,196) (2,523,374) (1,293,726) Death benefits (88,315) (354,403) (169,979) -------------------------------------------------------------------------------------------- Units outstanding at end of year 17,548,520 78,279,948 38,139,345 ============================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. (2) For the period Nov. 1, 2005 (commencement of operations) to Dec. 31, 2005. (3) For the period May 2, 2005 (commencement of operations) to Dec. 31, 2005. See accompanying notes to financial statements. -------------------------------------------------------------------------------- 39 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE YEAR ENDED DECEMBER 31, 2004 APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I OPERATIONS Investment income (loss) -- net $ (640,514) $ (399,010) $ (465,418) $ (266,313) $ (1,737,496) Net realized gain (loss) on sales of investments (3,697,581) 48,925 228,391 210,531 526,759 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 8,601,381 4,053,514 7,620,656 4,848,211 43,215,452 --------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 4,263,286 3,703,429 7,383,629 4,792,429 42,004,715 =========================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 3,053,791 22,001,001 1,511,697 11,006,777 14,330,856 Net transfers(1) (2,075,689) 11,910,446 (2,457,919) 6,388,958 (15,715,664) Transfers for policy loans (87,887) (32,392) (30,735) (14,801) 524,392 Adjustments to net assets allocated to contracts in payout period (8,629) (1,529) (3,563) (3,376) (404,000) Contract charges (47,667) (32,583) (26,467) (19,721) (415,754) Contract terminations: Surrender benefits (2,507,221) (1,010,658) (1,770,607) (373,219) (46,263,413) Death benefits (701,992) (253,983) (442,292) (276,574) (5,246,578) --------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (2,375,294) 32,580,302 (3,219,886) 16,708,044 (53,190,161) --------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 76,359,575 32,606,965 53,705,638 21,115,778 593,290,807 --------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $78,247,567 $68,890,696 $57,869,381 $42,616,251 $582,105,361 =========================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 89,596,127 34,678,535 41,077,334 20,527,278 385,661,996 Contract purchase payments 3,596,889 23,279,167 1,118,295 10,369,334 9,199,731 Net transfers(1) (2,412,320) 12,701,588 (1,864,248) 5,991,955 (10,332,539) Transfers for policy loans (104,594) (35,190) (22,048) (14,476) 338,950 Contract charges (56,237) (34,874) (19,619) (18,595) (267,975) Contract terminations: Surrender benefits (2,965,645) (1,080,785) (1,312,319) (349,790) (29,659,806) --------------------------------------------------------------------------------------------------------------------------- Death benefits (831,861) (268,217) (329,746) (261,374) (3,373,998) --------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 86,822,359 69,240,224 38,647,649 36,244,332 351,566,359 ===========================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 40 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------- AB VPS AB VPS AIM VI AIM VI FIN AIM VI GRO & INC, INTL VAL, YEAR ENDED DECEMBER 31, 2004 (CONTINUED) DYN, SER I SERV, SER I TECH, SER I CL B CL B OPERATIONS Investment income (loss) -- net $ (148,082) $ (11,654) $ (124,562) $ (295,672) $ (652,673) Net realized gain (loss) on sales of investments 474,871 255,857 22,845 254,384 93,031 Distributions from capital gains -- -- -- -- 284,870 Net change in unrealized appreciation or depreciation of investments 1,630,175 1,239,726 956,043 21,507,374 35,982,856 ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,956,964 1,483,929 854,326 21,466,086 35,708,084 ============================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 1,803,020 4,117,218 3,829,305 54,403,186 55,761,059 Net transfers(1) (2,285,222) 275,231 4,029,349 27,796,257 42,457,545 Transfers for policy loans (14,646) (250) (18,101) (84,824) (53,202) Adjustments to net assets allocated to contracts in payout period (2,157) (1,069) -- (16,857) (8,104) Contract charges (16,618) (18,541) (14,790) (142,824) (88,034) Contract terminations: Surrender benefits (471,714) (444,632) (399,752) (4,241,633) (2,373,299) Death benefits (388,459) (81,958) (65,473) (1,089,484) (504,102) ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (1,375,796) 3,845,999 7,360,538 76,623,821 95,191,863 ---------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 17,088,543 16,817,516 10,251,594 151,662,546 90,421,920 ---------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $17,669,711 $22,147,444 $18,466,458 $249,752,453 $221,321,867 ============================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 19,140,470 15,906,860 14,614,535 154,063,892 68,729,783 Contract purchase payments 1,965,313 3,811,073 5,540,010 53,813,111 39,523,043 Net transfers(1) (2,540,465) 238,020 5,944,540 27,447,751 29,645,524 Transfers for policy loans (16,601) (279) (27,741) (84,530) (38,349) Contract charges (18,224) (17,174) (22,109) (141,750) (62,587) Contract terminations: Surrender benefits (520,738) (417,221) (600,285) (4,196,609) (1,673,175) Death benefits (425,461) (77,649) (97,168) (1,074,292) (354,525) ---------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 17,584,294 19,443,630 25,351,782 229,827,573 135,769,714 ============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 41 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------- AC VP AC VP INTL, INTL, AC VP AC VP CALVERT VS YEAR ENDED DECEMBER 31, 2004 (CONTINUED) CL I CL II VAL, CL I VAL, CL II SOCIAL BAL OPERATIONS Investment income (loss) -- net $ (155,723) $ (263,992) $ (1,291,295) $ (279,106) $ 384,842 Net realized gain (loss) on sales of investments (1,519,611) 113,313 2,476,814 201,419 90,022 Distributions from capital gains -- -- 4,804,401 1,416,342 -- Net change in unrealized appreciation or depreciation of investments 8,417,745 7,720,183 74,288,626 26,940,452 2,248,730 ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 6,742,411 7,569,504 80,278,546 28,279,107 2,723,594 ============================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 1,734,986 15,328,621 15,454,777 60,736,216 7,640,686 Net transfers(1) 1,151,296 7,470,990 81,862,344 28,044,896 4,029,404 Transfers for policy loans (11,362) (26,425) 228,083 (81,235) (27,907) Adjustments to net assets allocated to contracts in payout period (3,981) (5,913) (31,502) (29,858) (2,765) Contract charges (21,254) (34,287) (285,019) (154,932) (27,489) Contract terminations: Surrender benefits (1,183,258) (858,494) (45,954,032) (4,568,303) (979,595) Death benefits (327,490) (174,286) (5,683,884) (1,494,856) (166,727) ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 1,338,937 21,700,206 45,590,767 82,451,928 10,465,607 ---------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 47,110,245 37,679,534 587,978,368 161,582,569 29,106,929 ---------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $55,191,593 $66,949,244 $713,847,681 $272,313,604 $42,296,130 ============================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 57,922,907 40,970,806 324,528,281 141,162,933 31,464,149 Contract purchase payments 2,076,991 16,130,771 8,456,988 51,020,734 7,969,294 Net transfers(1) 1,407,584 7,815,095 41,283,491 23,345,252 4,274,149 Transfers for policy loans (13,596) (27,898) 89,275 (67,870) (29,351) Contract charges (25,531) (36,276) (150,001) (129,892) (29,039) Contract terminations: Surrender benefits (1,419,225) (913,962) (22,948,560) (3,808,956) (1,034,180) Death benefits (394,643) (183,001) (3,065,444) (1,257,129) (179,874) ---------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 59,554,487 63,755,535 348,194,030 210,265,072 42,435,148 ============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 42 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------ EG VA EG VA COL HI YIELD, CS MID-CAP CS SM CAP FUNDAMENTAL INTL EQ, PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) VS CL B(2) GRO GRO LG CAP, CL 2 CL 2(2) OPERATIONS Investment income (loss) -- net $ 1,051,796 $ (312,351) $ (5,142,429) $ 36,284 $ 54,869 Net realized gain (loss) on sales of investments 4,039 (1,066,403) (4,722,722) 69,532 7,824 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 142,539 5,445,925 45,523,163 1,498,341 962,078 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,198,374 4,067,171 35,658,012 1,604,157 1,024,771 ========================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 26,564,606 1,151,677 9,078,883 2,982,641 7,052,816 Net transfers(1) 8,448,358 (4,172,796) 3,621,513 1,823,844 1,648,622 Transfers for policy loans (6,539) (26,166) 261,134 (5,261) (9,493) Adjustments to net assets allocated to contracts in payout period -- (5,296) (75,459) (3,309) -- Contract charges -- (22,462) (221,875) (16,613) -- Contract terminations: Surrender benefits (140,474) (1,175,989) (32,681,462) (439,776) (32,536) Death benefits (173,755) (284,950) (3,049,537) (144,061) -- -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 34,692,196 (4,535,982) (23,066,803) 4,197,465 8,659,409 -------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 37,126,122 402,465,065 16,343,027 -- -------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $35,890,570 $36,657,311 $415,056,274 $22,144,649 $9,684,180 ========================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 34,940,271 313,369,549 18,707,429 -- Contract purchase payments 26,108,452 1,047,146 6,919,328 3,394,667 6,884,568 Net transfers(1) 8,194,801 (3,836,710) 2,189,545 2,047,987 1,606,204 Transfers for policy loans (6,410) (23,113) 201,743 (5,238) (9,012) Contract charges -- (20,436) (170,618) (19,019) -- Contract terminations: Surrender benefits (130,419) (1,080,555) (25,115,344) (508,008) (31,731) Death benefits (168,211) (268,716) (2,324,148) (169,971) -- -------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 33,998,213 30,757,887 295,070,055 23,447,847 8,450,029 ==========================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 43 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------- FID VIP FID VIP FID VIP FID VIP FID VIP GRO & INC, GRO & INC, MID CAP, MID CAP, OVERSEAS, YEAR ENDED DECEMBER 31, 2004 (CONTINUED) SERV CL SERV CL 2 SERV CL SERV CL 2 SERV CL OPERATIONS Investment income (loss) -- net $ (158,702) $ (684,487) $ (2,568,022) $ (3,409,546) $ 70,494 Net realized gain (loss) on sales of investments (983,109) 170,486 2,259,485 142,015 (266,357) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 12,313,008 17,261,870 67,189,559 98,925,700 9,142,630 ------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets resulting from operations 11,171,197 16,747,869 66,881,022 95,658,169 8,946,767 ============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 7,895,216 94,622,179 9,580,767 140,097,486 2,838,869 Net transfers(1) 6,733,524 40,325,016 19,092,453 70,349,085 17,191,895 Transfers for policy loans (87,429) (83,709) (161,278) (243,439) (13,795) Adjustments to net assets allocated to contracts in payout period (42,111) (45,780) (61,663) (23,533) (12,630) Contract charges (107,334) (220,167) (145,288) (269,835) (28,709) Contract terminations: Surrender benefits (7,768,721) (6,107,831) (9,005,546) (8,265,017) (2,100,395) Death benefits (1,873,579) (1,806,180) (2,040,258) (1,921,070) (375,945) ------------------------------------------------------------------------------------------------------------------------------ Increase (decrease) from contract transactions 4,749,566 126,683,528 17,259,187 199,723,677 17,499,290 ------------------------------------------------------------------------------------------------------------------------------ Net assets at beginning of year 225,087,099 231,685,669 268,769,489 262,747,698 57,248,908 ------------------------------------------------------------------------------------------------------------------------------ Net assets at end of year $241,007,862 $375,117,066 $352,909,698 $558,129,544 $83,694,965 ============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 245,972,419 228,595,699 138,655,203 207,277,037 66,233,708 Contract purchase payments 8,642,842 93,590,550 4,665,927 104,784,289 3,271,492 Net transfers(1) 7,302,151 39,430,591 9,280,439 52,323,437 19,510,936 Transfers for policy loans (95,982) (83,181) (78,963) (182,634) (15,639) Contract charges (117,332) (218,009) (70,710) (199,149) (32,615) Contract terminations: Surrender benefits (8,509,870) (6,041,701) (4,352,320) (6,101,393) (2,405,993) Death benefits (2,059,381) (1,794,839) (986,875) (1,409,416) (429,894) ------------------------------------------------------------------------------------------------------------------------------ Units outstanding at end of year 251,134,847 353,479,110 147,112,701 356,492,171 86,131,995 ==============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 44 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------------------- FID VIP FTVIPT FRANK FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP OVERSEAS, REAL EST, SM CAP SHARES DEV MKTS YEAR ENDED DECEMBER 31, 2004 (CONTINUED) SERV CL 2 CL 2 VAL, CL 2 SEC, CL 2 SEC, CL 1 OPERATIONS Investment income (loss) -- net $ (138,859) $ 3,857,542 $ (1,174,550) $ (115,561) $ 1,356,930 Net realized gain (loss) on sales of investments 70,493 417,885 291,691 110,880 (223,694) Distributions from capital gains -- 548,146 -- -- -- Net change in unrealized appreciation or depreciation of investments 15,273,162 109,406,731 38,543,791 11,030,710 44,077,374 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 15,204,796 114,230,304 37,660,932 11,026,029 45,210,610 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 43,117,010 92,441,491 36,363,690 31,913,758 4,583,722 Net transfers(1) 29,950,049 43,795,134 20,015,156 15,441,017 16,379,824 Transfers for policy loans (40,169) (152,091) (59,532) (28,742) 159,371 Adjustments to net assets allocated to contracts in payout period (10,126) (64,315) (9,620) (35,664) (35,910) Contract charges (58,921) (223,866) (100,804) (57,440) (127,303) Contract terminations: Surrender benefits (1,921,754) (10,730,393) (3,910,286) (1,916,890) (17,764,751) Death benefits (597,510) (3,046,932) (1,133,510) (570,233) (1,434,279) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 70,438,579 122,019,028 51,165,094 44,745,806 1,760,674 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 62,226,819 296,754,424 135,426,075 62,600,978 193,809,275 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $147,870,194 $533,003,756 $224,252,101 $118,372,813 $240,780,559 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 58,123,519 166,493,008 87,363,303 58,929,248 272,504,410 Contract purchase payments 39,755,536 49,110,153 22,455,545 29,205,759 6,142,294 Net transfers(1) 27,477,856 22,459,645 11,855,770 14,089,446 21,323,559 Transfers for policy loans (37,154) (79,988) (37,026) (26,693) 214,585 Contract charges (54,105) (115,228) (61,091) (52,632) (171,494) Contract terminations: Surrender benefits (1,778,685) (5,423,212) (2,322,582) (1,751,119) (23,498,505) Death benefits (557,565) (1,563,586) (688,129) (523,330) (1,929,023) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 122,929,402 230,880,792 118,565,790 99,870,679 274,585,826 ===============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 45 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------- FTVIPT TEMP GS VIT GS VIT GS VIT JANUS ASPEN FOR SEC, STRUCTD SM STRUCTD MID CAP GLOBAL TECH, YEAR ENDED DECEMBER 31, 2004 (CONTINUED) CL 2 CAP EQ U.S. EQ VAL SERV OPERATIONS Investment income (loss) -- net $ 58,756 $ (291,246) $ 957,540 $ (546,429) $ (206,860) Net realized gain (loss) on sales of investments 150,564 1,303,981 17,313 249,226 (3,203,997) Distributions from capital gains -- 2,037,159 -- 37,963,658 -- Net change in unrealized appreciation or depreciation of investments 5,433,284 3,053,882 25,856,016 42,312,887 3,197,033 ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 5,642,604 6,103,776 26,830,869 79,979,342 (213,824) ============================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 1,137,692 991,371 41,186,099 68,429,617 1,914,090 Net transfers(1) 8,832,282 (3,758,123) 43,093,338 52,432,656 (2,939,827) Transfers for policy loans (5,069) (15,334) (55,532) (184,629) (14,833) Adjustments to net assets allocated to contracts in payout period (10,679) (1,628) (32,227) (44,902) (1,474) Contract charges (11,460) (18,342) (98,188) (205,308) (24,107) Contract terminations: Surrender benefits (747,972) (1,460,255) (4,378,303) (8,159,755) (806,922) Death benefits (210,136) (302,856) (1,707,279) (2,392,310) (153,840) ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 8,984,658 (4,565,167) 78,007,908 109,875,369 (2,026,913) ---------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 26,414,631 43,240,220 146,764,984 261,988,426 26,414,643 ---------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $41,041,893 $44,778,829 $251,603,761 $451,843,137 $ 24,173,906 ============================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 24,004,481 29,915,980 169,761,645 162,339,005 71,812,097 Contract purchase payments 989,760 659,185 44,317,144 40,196,741 5,250,941 Net transfers(1) 7,499,429 (2,515,003) 46,738,683 29,693,145 (8,456,187) Transfers for policy loans (4,403) (10,522) (62,479) (103,252) (39,263) Contract charges (9,927) (12,179) (108,169) (117,848) (69,153) Contract terminations: Surrender benefits (649,428) (975,204) (4,864,938) (4,615,844) (2,328,360) Death benefits (178,445) (202,850) (1,903,400) (1,373,563) (383,090) ---------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 31,651,467 26,859,407 253,878,486 226,018,384 65,786,985 ============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 46 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ---------------------------------------------------------------------------- JANUS ASPEN JANUS ASPEN LAZARD MFS INV MFS INTL GRO, MID CAP GRO RETIRE GRO STOCK, NEW DIS, YEAR ENDED DECEMBER 31, 2004 (CONTINUED) SERV SERV INTL EQ SERV CL SERV CL OPERATIONS Investment income (loss) -- net $ (14,493) $ (277,576) $ (406,162) $ (974,680) $ (1,053,729) Net realized gain (loss) on sales of investments (1,502,505) (4,805,699) 418,154 (966,901) (309,601) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 16,805,361 10,920,933 18,904,327 11,317,936 7,566,711 ------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 15,288,363 5,837,658 18,916,319 9,376,355 6,203,381 =============================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,475,868 1,726,576 29,521,230 21,913,445 18,808,276 Net transfers(1) (10,117,127) (6,514,777) 14,291,040 (3,262,306) (12,056,663) Transfers for policy loans (40,171) (32,945) (43,557) (35,887) (59,999) Adjustments to net assets allocated to contracts in payout period (9,154) (1,346) (26,925) (13,306) (16,451) Contract charges (61,525) (30,610) (68,474) (71,857) (83,908) Contract terminations: Surrender benefits (2,634,023) (1,138,282) (3,105,206) (2,842,480) (3,048,623) Death benefits (458,256) (181,226) (1,202,515) (897,270) (867,921) ------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (7,844,388) (6,172,610) 39,365,593 14,790,339 2,674,711 ------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 92,187,531 34,433,521 102,535,153 103,233,592 119,207,145 ------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 99,631,506 $ 34,098,569 $160,817,065 $127,400,286 $128,085,237 =============================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 152,636,050 85,735,607 123,055,609 172,321,885 146,403,867 Contract purchase payments 8,569,964 4,161,033 34,050,282 35,325,971 23,066,981 Net transfers(1) (16,310,217) (15,553,204) 16,246,138 (5,881,804) (15,275,661) Transfers for policy loans (65,467) (78,879) (51,208) (60,063) (73,895) Contract charges (98,182) (72,930) (79,638) (118,899) (104,873) Contract terminations: Surrender benefits (4,215,074) (2,700,552) (3,617,534) (4,729,069) (3,831,976) Death benefits (728,721) (432,148) (1,395,882) (1,427,993) (1,109,302) ------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 139,788,353 71,058,927 168,207,767 195,430,028 149,075,141 ===============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 47 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS -------------------------------------------------------------------------- MFS MFS OPPEN OPPEN MAIN OPPEN TOTAL RETURN, UTILITIES, GLOBAL SEC ST SM CAP STRATEGIC BOND PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) SERV CL(2) SERV CL VA, SERV(2) VA, SERV(2) VA, SERV(2) OPERATIONS Investment income (loss) -- net $ (29,969) $ 152,074 $ (78,756) $ (64,985) $ (52,862) Net realized gain (loss) on sales of investments 2,666 217,593 2,822 (1,282) 19,201 Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 1,747,939 12,349,971 3,484,909 2,340,218 2,223,933 ---------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,720,636 12,719,638 3,408,975 2,273,951 2,190,272 ============================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 21,308,342 13,859,353 20,113,707 13,389,062 40,240,819 Net transfers(1) 5,844,279 7,528,345 4,963,093 3,623,127 7,459,708 Transfers for policy loans (2,294) (35,259) (11,696) (7,062) (3,001) Adjustments to net assets allocated to contracts in payout period (3,474) (12,016) (2,897) (39) (2,238) Contract charges -- (30,781) -- -- -- Contract terminations: Surrender benefits (107,768) (1,251,705) (64,060) (60,364) (153,842) Death benefits -- (272,981) (17,657) (48,667) (36,150) ---------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 27,039,085 19,784,956 24,980,490 16,896,057 47,505,296 ---------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 31,692,977 -- -- -- ---------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $28,759,721 $64,197,571 $28,389,465 $19,170,008 $ 49,695,568 ============================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 33,750,603 -- -- -- Contract purchase payments 20,796,985 13,329,124 19,922,002 13,234,450 39,490,524 Net transfers(1) 5,549,636 7,255,084 4,695,700 3,523,948 7,191,284 Transfers for policy loans (2,239) (35,787) (11,953) (7,223) (3,027) Contract charges -- (29,863) -- -- -- Contract terminations: Surrender benefits (102,647) (1,203,961) (61,716) (57,739) (144,752) Death benefits -- (273,544) (17,574) (50,219) (35,020) ---------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 26,241,735 52,791,656 24,526,459 16,643,217 46,499,009 ============================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 48 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------------------------------- PIONEER EQ PIONEER PUT VT HEALTH PUT VT PUT VT INTL INC VCT, EUROPE VCT, SCIENCES, INTL EQ, NEW OPP, YEAR ENDED DECEMBER 31, 2004 (CONTINUED) CL II CL II CL IB CL IB CL IB OPERATIONS Investment income (loss) -- net $ 600,248 $ (9,929) $ (217,416) $ 435,001 $ 145,038 Net realized gain (loss) on sales of investments 384,138 95,785 139,936 1,171,208 (9,105,804) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 6,073,072 761,903 2,139,930 9,558,457 18,991,209 -------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 7,057,458 847,759 2,062,450 11,164,666 10,030,443 ========================================================================================================================== CONTRACT TRANSACTIONS Contract purchase payments 5,108,212 728,644 6,724,326 10,511,984 3,989,567 Net transfers(1) 2,868,290 567,029 272,151 (5,683,731) (15,607,770) Transfers for policy loans 1,100 (2,139) (15,856) (3,458) (76,097) Adjustments to net assets allocated to contracts in payout period (8,068) -- (2,317) (1,543) 25,876 Contract charges (33,652) (3,508) (31,146) (55,174) (68,596) Contract terminations: Surrender benefits (922,044) (89,306) (929,155) (1,568,107) (3,169,519) Death benefits (390,248) (30,776) (213,007) (595,423) (770,232) -------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,623,590 1,169,944 5,804,996 2,604,548 (15,676,771) -------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 42,277,081 4,092,274 28,128,078 70,668,503 94,570,452 -------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $55,958,129 $6,109,977 $35,995,524 $84,437,717 $ 88,924,124 ========================================================================================================================== ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 42,477,097 3,936,545 30,752,878 70,061,727 128,359,678 Contract purchase payments 4,975,152 674,738 7,308,123 10,122,904 5,319,344 Net transfers(1) 2,728,009 517,971 241,004 (5,383,084) (20,881,836) Transfers for policy loans 852 (2,011) (17,299) (3,568) (103,323) Contract charges (32,496) (3,265) (34,050) (53,507) (91,669) Contract terminations: Surrender benefits (881,970) (83,320) (1,004,207) (1,516,289) (4,238,246) Death benefits (374,307) (28,809) (235,423) (579,603) (1,029,582) -------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 48,892,337 5,011,849 37,011,026 72,648,580 107,334,366 ==========================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 49 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- PUT VT PUT VT NEW OPP, VISTA, RVS VP RVS VP RVS VP PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) CL IA CL IB BAL CASH MGMT CORE BOND(2) OPERATIONS Investment income (loss) -- net $ (4,417,611) $ (842,677) $ 5,723,045 $ (961,972) $ 616,957 Net realized gain (loss) on sales of investments (34,346,947) (12,490,909) (8,969,169) (32,155) (160) Distributions from capital gains -- -- -- -- -- Net change in unrealized appreciation or depreciation of investments 67,672,045 29,121,717 43,509,846 32,144 221,835 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 28,907,487 15,788,131 40,263,722 (961,983) 838,632 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 10,958,989 6,275,108 29,027,456 571,349,765 41,201,686 Net transfers(1) (45,280,125) (19,946,617) (13,730,662) (589,122,063) (274,110) Transfers for policy loans 432,820 (35,822) 224,794 257,566 (2,629) Adjustments to net assets allocated to contracts in payout period (101,760) (12,785) (700,002) (56,826) (944) Contract charges (323,028) (87,393) (329,924) (253,744) -- Contract terminations: Surrender benefits (33,231,204) (3,085,672) (28,585,577) (44,857,573) (51,429) Death benefits (2,299,235) (666,852) (7,107,073) (7,401,996) (54,787) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (69,843,543) (17,560,033) (21,200,988) (70,084,871) 40,817,787 --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 378,811,384 102,199,527 496,929,369 539,742,016 -- --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 337,875,328 $ 100,427,625 $ 515,992,103 $ 468,695,162 $ 41,656,419 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 324,630,611 131,761,615 384,616,841 486,938,899 -- Contract purchase payments 9,337,785 7,724,009 26,606,952 529,297,244 16,205,872 Net transfers(1) (38,717,314) (24,684,913) (11,747,440) (543,701,968) (310,537) Transfers for policy loans 376,691 (43,880) 128,179 221,876 (2,600) Contract charges (277,280) (108,176) (253,717) (230,584) -- Contract terminations: Surrender benefits (28,343,885) (3,817,648) (20,093,642) (39,627,857) (50,987) Death benefits (1,962,969) (810,704) (5,412,225) (6,686,005) (54,770) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 265,043,639 110,020,303 373,844,948 426,211,605 15,786,978 =================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 50 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ------------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) DIV BOND DIV EQ INC EMER MKTS BOND PROT SEC(3) OPERATIONS Investment income (loss) -- net $ 22,540,091 $ 3,510,789 $ 730,882 $ 9,145,140 $ 57,384 Net realized gain (loss) on sales of investments (2,248,525) 479,949 1,491,567 661,679 508 Distributions from capital gains -- -- 718,692 -- -- Net change in unrealized appreciation or depreciation of investments 6,355,688 81,169,091 4,725,833 18,192,158 112,458 -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 26,647,254 85,159,829 7,666,974 27,998,977 170,350 ================================================================================================================================ CONTRACT TRANSACTIONS Contract purchase payments 111,233,597 149,201,380 13,005,939 50,908,313 8,894,544 Net transfers(1) (34,352,716) 144,675,035 15,962,954 41,811,527 1,177,249 Transfers for policy loans 61,452 (283,610) (6,978) (25,037) (5,025) Adjustments to net assets allocated to contracts in payout period (537,546) (101,016) (286) (42,777) -- Contract charges (381,075) (248,559) (15,377) (117,621) -- Contract terminations: Surrender benefits (45,029,026) (10,931,723) (5,826,973) (14,604,050) (2,661) Death benefits (10,680,417) (3,060,023) (160,179) (3,373,661) (11,754) -------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 20,314,269 279,251,484 22,959,100 74,556,694 10,052,353 -------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 788,063,436 288,112,096 19,822,989 253,432,706 -- -------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 835,024,959 $ 652,523,409 $ 50,449,063 $ 355,988,377 $ 10,222,703 ================================================================================================================================ ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 618,469,469 249,817,645 15,682,750 186,449,862 -- Contract purchase payments 90,641,436 125,078,569 12,333,827 38,217,916 8,811,443 Net transfers(1) (26,369,256) 119,859,590 15,358,122 30,866,074 1,158,574 Transfers for policy loans 35,943 (240,771) (7,738) (20,755) (4,937) Contract charges (301,273) (206,624) (14,868) (86,895) -- Contract terminations: Surrender benefits (34,278,035) (9,109,862) (672,990) (10,388,545) (2,607) Death benefits (8,267,693) (2,551,318) (158,228) (2,476,017) (11,442) -------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 639,930,591 482,647,229 42,520,875 242,561,640 9,951,031 ================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 51 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP HI YIELD RVS VP RVS VP RVS VP PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) GRO BOND INC OPP(3) INTL OPP LG CAP EQ OPERATIONS Investment income (loss) -- net $ (1,080,759) $ 48,745,495 $ 11,039 $ (74,442) $ (537,555) Net realized gain (loss) on sales of investments (10,540,094) (6,831,692) 190 (2,283,736) (6,863,159) Distributions from capital gains -- -- 2,485 -- -- Net change in unrealized appreciation or depreciation of investments 26,360,175 39,540,615 3,728 39,063,408 25,579,282 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 14,739,322 81,454,418 17,442 36,705,230 18,178,568 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 24,038,567 120,131,878 1,828,425 22,113,469 29,489,887 Net transfers(1) (20,913,562) 48,163,071 662,783 48,201,164 75,831,522 Transfers for policy loans (149,147) (19,262) (2,635) 130,020 165,169 Adjustments to net assets allocated to contracts in payout period (36,703) (436,848) -- (92,847) 40,211 Contract charges (169,985) (337,723) -- (127,538) (235,383) Contract terminations: Surrender benefits (5,913,979) (37,329,127) (1,030) (15,533,625) (22,636,696) Death benefits (1,195,674) (9,078,934) -- (1,765,606) (3,121,456) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (4,340,483) 121,093,055 2,487,543 52,925,037 79,533,254 --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 203,000,187 712,392,156 -- 192,940,837 286,326,810 --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 213,399,026 $ 914,939,629 $ 2,504,985 $ 282,571,104 $ 384,038,632 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 349,978,006 622,127,642 -- 215,587,211 277,049,586 Contract purchase payments 39,863,641 105,400,548 1,765,327 27,906,943 33,421,855 Net transfers(1) (36,903,423) 41,331,680 644,295 55,873,725 97,858,617 Transfers for policy loans (261,103) (26,373) (2,557) 122,688 115,983 Contract charges (290,376) (289,706) -- (140,782) (240,163) Contract terminations: Surrender benefits (10,174,573) (30,660,754) (995) (16,276,899) (18,840,120) Death benefits (2,064,036) (7,710,606) -- (1,965,821) (3,242,495) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 340,148,136 730,172,431 2,406,070 281,107,065 386,123,263 =================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 52 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP RVS VP PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) LG CAP VAL(2) MID CAP GRO NEW DIM S&P 500 SELECT VAL(2) OPERATIONS Investment income (loss) -- net $ 70,915 $ (825,943) $ (921,708) $ 1,286,379 $ 27,207 Net realized gain (loss) on sales of investments 1,849 561,759 (21,183,695) 333,050 (264) Distributions from capital gains 23,454 -- -- -- 18,031 Net change in unrealized appreciation or depreciation of investments 755,840 8,507,279 52,203,925 17,978,306 1,240,274 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 852,058 8,243,095 30,098,522 19,597,735 1,285,248 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 8,440,916 19,073,999 110,067,365 46,092,851 10,760,069 Net transfers(1) 1,218,991 3,674,214 (161,723,803) 23,276,810 1,509,905 Transfers for policy loans (5,275) (38,076) 453,345 (90,156) (5,758) Adjustments to net assets allocated to contracts in payout period -- (6,184) (1,184,558) (51,184) -- Contract charges -- (73,191) (1,373,436) (133,728) -- Contract terminations: Surrender benefits (32,222) (2,209,511) (99,983,143) (5,744,980) (39,690) Death benefits (15,684) (857,789) (14,362,261) (1,748,599) (6,282) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 9,606,726 19,563,462 (168,106,491) 61,601,014 12,218,244 --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year -- 83,082,823 1,752,070,993 163,372,474 -- --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 10,458,784 $ 110,889,380 $1,614,063,024 $ 244,571,223 $ 13,503,492 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year -- 80,059,776 1,511,971,325 208,338,047 -- Contract purchase payments 5,392,947 18,352,678 116,290,429 56,904,166 7,609,483 Net transfers(1) 1,201,385 3,403,128 (147,728,508) 28,298,237 1,464,383 Transfers for policy loans (5,419) (36,267) 44,183 (114,239) (5,393) Contract charges -- (70,651) (1,232,532) (166,870) -- Contract terminations: Surrender benefits (31,685) (2,123,483) (77,626,451) (7,195,601) (38,218) Death benefits (15,728) (827,610) (12,739,608) (2,184,304) (6,260) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 6,541,500 98,757,571 1,388,978,838 283,879,436 9,023,995 =================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 53 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- RVS VP RVS VP RVS VP RVS VP ROYCE YEAR ENDED DECEMBER 31, 2004 (CONTINUED) SHORT DURATION SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP OPERATIONS Investment income (loss) -- net $ 6,058,073 $ (1,292,995) $ (1,647,830) $ (2,304,547) $ (1,094,163) Net realized gain (loss) on sales of investments (374,181) 584,873 675,026 (44,509,453) 2,519,476 Distributions from capital gains 114,024 7,693,261 19,296,675 -- 9,893,706 Net change in unrealized appreciation or depreciation of investments (5,758,481) 19,267,317 19,037,968 61,737,163 4,300,071 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 39,435 26,252,456 37,361,839 14,923,163 15,619,090 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 101,366,355 31,136,256 44,470,781 9,832,770 3,355,371 Net transfers(1) (74,447,340) 18,157,950 18,461,938 (28,615,013) 1,355,831 Transfers for policy loans (144,123) (121,817) (110,645) 108,467 (89,132) Adjustments to net assets allocated to contracts in payout period (94,917) (22,342) (22,816) (93,024) 101,749 Contract charges (209,183) (88,904) (155,295) (175,995) (49,041) Contract terminations: Surrender benefits (16,449,492) (3,972,206) (4,910,416) (15,184,084) (4,238,566) Death benefits (3,525,486) (1,056,567) (876,748) (1,761,275) (1,154,394) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 6,495,814 44,032,370 56,856,799 (35,888,154) (718,182) --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 381,317,958 116,896,029 159,988,703 224,303,051 122,428,110 --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 387,853,207 $ 187,180,855 $ 254,207,341 $ 203,338,060 $ 137,329,018 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 319,997,737 90,053,655 125,782,929 265,714,865 54,944,664 Contract purchase payments 85,680,022 23,226,302 33,158,842 12,718,147 1,444,016 Net transfers(1) (62,556,337) 13,384,925 13,672,159 (36,214,349) 512,806 Transfers for policy loans (120,624) (90,390) (83,330) 100,121 (38,213) Contract charges (176,832) (65,672) (115,680) (214,104) (21,159) Contract terminations: Surrender benefits (13,760,912) (2,915,207) (3,621,537) (17,262,723) (1,821,349) Death benefits (2,979,115) (776,095) (648,117) (2,139,750) (494,531) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 326,083,939 122,817,518 168,145,266 222,702,207 54,526,234 =================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 54 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS --------------------------------------------------------------------------------- VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT PERIOD ENDED DECEMBER 31, 2004 (CONTINUED) VAL CL II(2) SM CAP SM CO ASSET ALLOC OPERATIONS Investment income (loss) -- net $ (487,645) $ (232,977) $ (546,378) $ (3,904,799) $ 974,113 Net realized gain (loss) on sales of investments 2,864,955 1,929 103,769 303,044 298,605 Distributions from capital gains 1,555,176 -- -- -- 2,431,399 Net change in unrealized appreciation or depreciation of investments 22,867,215 7,580,848 55,901,372 83,030,166 2,809,536 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 26,799,701 7,349,800 55,458,763 79,428,411 6,513,653 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 4,587,854 63,603,038 48,017,387 104,960,608 10,859,440 Net transfers(1) 408,384 16,382,117 43,002,202 57,714,071 14,230,154 Transfers for policy loans (107,751) (26,997) (100,924) (192,776) (13,676) Adjustments to net assets allocated to contracts in payout period (32,679) (833) (12,109) (45,521) (6,766) Contract charges (57,896) -- (120,876) (278,542) (57,395) Contract terminations: Surrender benefits (4,759,685) (262,753) (4,275,996) (10,630,849) (2,137,697) Death benefits (1,183,749) (39,778) (1,107,187) (2,940,351) (476,191) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions (1,145,522) 79,654,794 85,402,497 148,586,640 22,397,869 --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 142,903,556 -- 141,172,383 351,317,115 60,494,731 --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 168,557,735 $ 87,004,594 $ 282,033,643 $ 579,332,166 $ 89,406,253 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 67,134,941 -- 130,667,629 261,219,059 59,332,447 Contract purchase payments 2,057,089 60,674,429 39,584,100 75,981,538 10,500,399 Net transfers(1) 99,626 15,295,774 35,791,147 41,200,729 13,673,779 Transfers for policy loans (48,621) (25,800) (86,191) (137,569) (13,429) Contract charges (25,840) -- (100,951) (199,661) (55,304) Contract terminations: Surrender benefits (2,112,542) (242,093) (3,590,391) (7,571,578) (2,053,459) Death benefits (518,086) (38,664) (925,709) (2,085,105) (466,903) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 66,586,567 75,663,646 201,339,634 368,407,413 80,917,530 =================================================================================================================================
See accompanying notes to financial statements. -------------------------------------------------------------------------------- 55 - IDS LIFE VARIABLE ACCOUNT 10 STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS ----------------------------------------------- WF ADV VT WF ADV VT WF ADV VT YEAR ENDED DECEMBER 31, 2004 (CONTINUED) INTL CORE OPP SM CAP GRO OPERATIONS Investment income (loss) -- net $ (108,135) $ (695,611) $ (302,130) Net realized gain (loss) on sales of investments 175,763 1,001,614 403,635 Distributions from capital gains -- -- -- Net change in unrealized appreciation or depreciation of investments 1,494,917 12,710,146 4,151,455 --------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in net assets resulting from operations 1,562,545 13,016,149 4,252,960 ================================================================================================================================= CONTRACT TRANSACTIONS Contract purchase payments 2,010,444 13,003,612 4,218,795 Net transfers(1) 3,144,006 (3,079,073) 2,334,292 Transfers for policy loans (10,764) (47,988) (16,097) Adjustments to net assets allocated to contracts in payout period -- (7,239) (975) Contract charges (13,345) (67,821) (29,143) Contract terminations: Surrender benefits (390,737) (1,930,438) (791,834) Death benefits (59,402) (578,477) (140,775) --------------------------------------------------------------------------------------------------------------------------------- Increase (decrease) from contract transactions 4,680,202 7,292,576 5,574,263 --------------------------------------------------------------------------------------------------------------------------------- Net assets at beginning of year 13,353,401 71,662,887 29,921,202 --------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $ 19,596,148 $ 91,971,612 $ 39,748,425 ================================================================================================================================= ACCUMULATION UNIT ACTIVITY Units outstanding at beginning of year 14,684,279 73,209,261 36,311,628 Contract purchase payments 2,185,016 12,445,579 4,913,587 Net transfers(1) 3,377,422 (2,924,571) 2,600,450 Transfers for policy loans (11,826) (46,691) (18,595) Contract charges (14,632) (65,229) (34,483) Contract terminations: Surrender benefits (430,442) (1,841,200) (932,737) Death benefits (61,759) (552,362) (164,510) --------------------------------------------------------------------------------------------------------------------------------- Units outstanding at end of year 19,728,058 80,224,787 42,675,340 =================================================================================================================================
(1) Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's fixed account. (2) For the period Feb. 4, 2004 (commencement of operations) to Dec. 31, 2004. (3) For the period Sept. 13, 2004 (commencement of operations) to Dec. 31, 2004. See accompanying notes to financial statements. -------------------------------------------------------------------------------- 56 - IDS LIFE VARIABLE ACCOUNT 10 NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION IDS Life Variable Account 10 (the Account) was established under Minnesota law as a segregated asset account of IDS Life. The Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended (the 1940 Act) and exists in accordance with the rules and regulations of the Insurance Division, Department of Commerce of the State of Minnesota. The Account is used as a funding vehicle for individual variable annuity contracts issued by IDS Life. The following is a list of each variable annuity product funded through the Account. RiverSource Retirement Advisor Variable Annuity(SM) (RAVA) RiverSource Retirement Advisor Variable Annuity(SM) - Band 3 (RAVA Band 3) RiverSource Retirement Advisor Advantage(SM) Variable Annuity (RAVA Advantage) RiverSource Retirement Advisor Advantage(SM) Variable Annuity - Band 3 (RAVA Advantage Band 3) RiverSource Retirement Advisor Select(SM) Variable Annuity (RAVA Select) RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity (RAVA Advantage Plus) RiverSource Retirement Advisor Select Plus(SM) Variable Annuity (RAVA Select Plus) IDS Life Flexible Portfolio Annuity (FPA) The Account is comprised of various subaccounts. Each subaccount invests exclusively in shares of the following funds or portfolios (collectively, the Funds), which are registered under the 1940 Act as open-end management investment companies. The name of each Fund and the corresponding subaccount name are provided below.
SUBACCOUNT FUND ---------------------------------------------------------------------------------------------------------- AIM VI Cap Appr, Ser I AIM V.I. Capital Appreciation Fund, Series I Shares AIM VI Cap Appr, Ser II AIM V.I. Capital Appreciation Fund, Series II Shares AIM VI Cap Dev, Ser I AIM V.I. Capital Development Fund, Series I Shares AIM VI Cap Dev, Ser II AIM V.I. Capital Development Fund, Series II Shares AIM VI Core Eq, Ser I AIM V.I. Core Equity Fund, Series I Shares AIM VI Dyn, Ser I AIM V.I. Dynamics Fund, Series I Shares AIM VI Fin Serv, Ser I AIM V.I. Financial Services Fund, Series I Shares AIM VI Intl Gro, Ser II AIM V.I. International Growth Fund, Series II Shares AIM VI Tech, Ser I AIM V.I. Technology Fund, Series I Shares(1) AB VPS Global Tech, Cl B AllianceBernstein VPS Global Technology Portfolio (Class B) AB VPS Gro & Inc, Cl B AllianceBernstein VPS Growth and Income Portfolio (Class B) AB VPS Intl Val, Cl B AllianceBernstein VPS International Value Portfolio (Class B) AC VP Intl, Cl I American Century VP International, Class I AC VP Intl, Cl II American Century VP International, Class II AC VP Ultra, Cl II American Century VP Ultra(R), Class II AC VP Val, Cl I American Century VP Value, Class I AC VP Val, Cl II American Century VP Value, Class II Calvert VS Social Bal Calvert Variable Series, Inc. Social Balanced Portfolio Col Hi Yield, VS Cl B Columbia High Yield Fund, Variable Series, Class B(2) CS Mid-Cap Gro Credit Suisse Trust - Mid-Cap Growth Portfolio CS Sm Cap Gro Credit Suisse Trust - Small Cap Growth Portfolio EG VA Fundamental Lg Cap, Cl 2 Evergreen VA Fundamental Large Cap Fund - Class 2(3) EG VA Intl Eq, Cl 2 Evergreen VA International Equity Fund - Class 2 Fid VIP Gro & Inc, Serv Cl Fidelity(R) VIP Growth & Income Portfolio Service Class Fid VIP Gro & Inc, Serv Cl 2 Fidelity(R) VIP Growth & Income Portfolio Service Class 2 Fid VIP Mid Cap, Serv Cl Fidelity(R) VIP Mid Cap Portfolio Service Class Fid VIP Mid Cap, Serv Cl 2 Fidelity(R) VIP Mid Cap Portfolio Service Class 2 Fid VIP Overseas, Serv Cl Fidelity(R) VIP Overseas Portfolio Service Class Fid VIP Overseas, Serv Cl 2 Fidelity(R) VIP Overseas Portfolio Service Class 2 FTVIPT Frank Real Est, Cl 2 FTVIPT Franklin Real Estate Fund - Class 2 FTVIPT Frank Sm Cap Val, Cl 2 FTVIPT Franklin Small Cap Value Securities Fund - Class 2 FTVIPT Mutual Shares Sec, Cl 2 FTVIPT Mutual Shares Securities Fund - Class 2 TVIPT Temp Dev Mkts Sec, Cl 1 FTVIPT Templeton Developing Markets Securities Fund - Class 1 FTVIPT Temp For Sec, Cl 2 FTVIPT Templeton Foreign Securities Fund - Class 2 GS VIT Structd Sm Cap Eq Goldman Sachs VIT Structured Small Cap Equity Fund (previously Goldman Sachs VIT CORE(SM) Small Cap Equity Fund) GS VIT Structd U.S. Eq Goldman Sachs VIT Structured U.S. Equity Fund (previously Goldman Sachs VIT CORE(SM) U.S. Equity Fund) GS VIT Mid Cap Val Goldman Sachs VIT Mid Cap Value Fund Janus Aspen Global Tech, Serv Janus Aspen Series Global Technology Portfolio: Service Shares Janus Aspen Intl Gro, Serv Janus Aspen Series International Growth Portfolio: Service Shares Janus Aspen Mid Cap Gro, Serv Janus Aspen Series Mid Cap Growth Portfolio: Service Shares
-------------------------------------------------------------------------------- 57 - IDS LIFE VARIABLE ACCOUNT 10
SUBACCOUNT FUND ---------------------------------------------------------------------------------------------------------- Lazard Retire Intl Eq Lazard Retirement International Equity Portfolio MFS Inv Gro Stock, Serv Cl MFS(R) Investors Growth Stock Series - Service Class MFS New Dis, Serv Cl MFS(R) New Discovery Series - Service Class MFS Total Return, Serv Cl MFS(R) Total Return Series - Service Class MFS Utilities, Serv Cl MFS(R) Utilities Series - Service Class Oppen Global Sec VA, Serv Oppenheimer Global Securities Fund/VA, Service Shares Oppen Main St Sm Cap VA, Serv Oppenheimer Main Street Small Cap Fund/VA, Service Shares Oppen Strategic Bond VA, Serv Oppenheimer Strategic Bond Fund/VA, Service Shares Pioneer Eq Inc VCT, Cl II Pioneer Equity Income VCT Portfolio - Class II Shares Pioneer Europe VCT, Cl II Pioneer Europe VCT Portfolio - Class II Shares Put VT Health Sciences, Cl IB Putnam VT Health Sciences Fund - Class IB Shares Put VT Intl Eq, Cl IB Putnam VT International Equity Fund - Class IB Shares Put VT Intl New Opp, Cl IB Putnam VT International New Opportunities Fund - Class IB Shares Put VT New Opp, Cl IA Putnam VT New Opportunities Fund - Class IA Shares Put VT Vista, Cl IB Putnam VT Vista Fund - Class IB Shares RVS VP Bal RiverSource(SM) Variable Portfolio - Balanced Fund (previously AXP(R) Variable Portfolio - Managed Fund) RVS VP Cash Mgmt RiverSource(SM) Variable Portfolio - Cash Management Fund (previously AXP(R) Variable Portfolio - Cash Management Fund) RVS VP Core Bond RiverSource(SM) Variable Portfolio - Core Bond Fund (previously AXP(R) Variable Portfolio - Core Bond Fund) RVS VP Div Bond RiverSource(SM) Variable Portfolio - Diversified Bond Fund (previously AXP(R) Variable Portfolio - Diversified Bond Fund) RVS VP Div Eq Inc RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund (previously AXP(R) Variable Portfolio - Diversified Equity Income Fund) RVS VP Emer Mkts RiverSource(SM) Variable Portfolio - Emerging Markets Fund (previously AXP(R) Variable Portfolio - Threadneedle Emerging Markets Fund) RVS VP Global Bond RiverSource(SM) Variable Portfolio - Global Bond Fund (previously AXP(R) Variable Portfolio - Global Bond Fund) RVS VP Global Inflation Prot Sec RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund (previously AXP(R) Variable Portfolio - Inflation Protected Securities Fund) RVS VP Gro RiverSource(SM) Variable Portfolio - Growth Fund (previously AXP(R) Variable Portfolio - Growth Fund) RVS VP Hi Yield Bond RiverSource(SM) Variable Portfolio - High Yield Bond Fund (previously AXP(R) Variable Portfolio - High Yield Bond Fund) RVS VP Inc Opp RiverSource(SM) Variable Portfolio - Income Opportunities Fund (previously AXP(R) Variable Portfolio - Income Opportunities Fund) RVS VP Intl Opp RiverSource(SM) Variable Portfolio - International Opportunity Fund (previously AXP(R) Variable Portfolio - Threadneedle International Fund) RVS VP Lg Cap Eq RiverSource(SM) Variable Portfolio - Large Cap Equity Fund(4),(5) (previously AXP(R) Variable Portfolio - Large Cap Equity Fund) RVS VP Lg Cap Val RiverSource(SM) Variable Portfolio - Large Cap Value Fund (previously AXP(R) Variable Portfolio - Large Cap Value Fund) RVS VP Mid Cap Gro RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund(6) (previously AXP(R) Variable Portfolio - Equity Select Fund) RVS VP Mid Cap Val RiverSource(SM) Variable Portfolio - Mid Cap Value Fund (previously AXP(R) Variable Portfolio - Mid Cap Value Fund) RVS VP New Dim RiverSource(SM) Variable Portfolio - New Dimensions Fund(R)(5) (previously AXP(R) Variable Portfolio - New Dimensions Fund(R)) RVS VP S&P 500 RiverSource(SM) Variable Portfolio - S&P 500 Index Fund (previously AXP(R) Variable Portfolio - S&P 500 Index Fund) RVS VP Select Val RiverSource(SM) Variable Portfolio - Select Value Fund (previously AXP(R) Variable Portfolio - Partners Select Value Fund) RVS VP Short Duration RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund (previously AXP(R) Variable Portfolio - Short Duration U.S. Government Fund) RVS VP Sm Cap Adv RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund (previously AXP(R) Variable Portfolio - Small Cap Advantage Fund) RVS VP Sm Cap Val RiverSource(SM) Variable Portfolio - Small Cap Value Fund (previously AXP(R) Variable Portfolio - Partners Small Cap Value Fund) RVS VP Strategy Aggr RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund(6) (previously AXP(R) Variable Portfolio - Strategy Aggressive Fund) Royce Micro-Cap Royce Micro-Cap Portfolio LM Ptnrs Var Sm Cap Gro, Cl II Legg Mason Partners Variable Small Cap Growth Portfolio, Class II (previously Salomon Brothers Small Cap Growth Fund, Class II) Third Ave Val Third Avenue Value Portfolio
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SUBACCOUNT FUND ---------------------------------------------------------------------------------------------------------------------- VanK LIT Comstock, Cl II Van Kampen Life Investment Trust Comstock Portfolio Class II Shares Wanger Intl Sm Cap Wanger International Small Cap Wanger U.S. Sm Co Wanger U.S. Smaller Companies WF Adv VT Asset Alloc Wells Fargo Advantage VT Asset Allocation Fund WF Adv VT Intl Core Wells Fargo Advantage VT International Core Fund WF Adv VT Opp Wells Fargo Advantage VT Opportunity Fund(7) WF Adv VT Sm Cap Gro Wells Fargo Advantage VT Small Cap Growth Fund
(1) INVESCO VIF - Telecommunications Fund merged into AIM V.I. Technology Fund, Series I Shares on April 30, 2004. (2) Columbia High Yield Fund, Variable Series, Class B merged into Nations High Yield Bond Portfolio on April 28, 2006. On May 1, 2006, Nations High Yield Bond Portfolio changed its name to Columbia High Yield Fund, Variable Series, Class B. (3) Evergreen VA Fund - Class 2 merged into Evergreen VA Fundamental Large Cap Fund - Class 2 on April 15, 2005. (4) AXP(R) Variable Portfolio - Blue Chip Advantage Fund and AXP(R) Variable Portfolio - Stock Fund merged into AXP(R) Variable Portfolio - Large Cap Equity Fund on July 9, 2004. (5) RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) merged into RiverSource(SM) Variable Portfolio - Large Cap Equity Fund on March 17, 2006. (6) RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund merged into RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund on March 17, 2006. (7) The Investor Class and Advisor Class shares of the Strong Opportunity Fund II reorganized into the Wells Fargo Advantage Opportunity Fund on or about April 11, 2005. The assets of each subaccount of the Account are not chargeable with liabilities arising out of the business conducted by any other segregated asset account or by IDS Life. IDS Life serves as issuer of the contract. Ameriprise Financial, Inc. (Ameriprise Financial) (formerly American Express Financial Corporation) was formerly a wholly-owned subsidiary of American Express Company. On Sept. 30, 2005, American Express Company distributed its Ameriprise Financial common shares to American Express Company shareholders. Ameriprise Financial is the parent company of IDS Life. Ameriprise Financial owns all the outstanding stock of IDS Life and replaced American Express Company as the ultimate control person of IDS Life. CORPORATE CONSOLIDATION Later this year, two of IDS Life's subsidiaries, American Enterprise Life Insurance Company and American Partners Life Insurance Company, plan to merge into IDS Life. This merger will help simplify overall corporate structure because these three life insurance companies will be consolidated into one. This consolidation is expected to occur at the end of 2006, subject to certain regulatory and other approvals. At the time of the consolidation, IDS Life will be renamed to RiverSource Life Insurance Company. This consolidation and renaming will not have any adverse effect on the benefits under your contract. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INVESTMENTS IN THE FUNDS Investments in shares of the Funds are stated at market value which is the net asset value per share as determined by the respective Funds. Investment transactions are accounted for on the date the shares are purchased and sold. Realized gains and losses on the sales of investments are computed using the average cost method. Income from dividends and gains from realized capital gain distributions are reinvested in additional shares of the Funds and are recorded as income by the subaccounts on the ex-dividend date. Unrealized appreciation or depreciation of investments in the accompanying financial statements represents the subaccounts' share of the Funds' undistributed net investment income, undistributed realized gain or loss and the unrealized appreciation or depreciation on their investment securities. VARIABLE PAYOUT Net assets allocated to contracts in the payout period are periodically compared to a computation which uses the Annuity 2000 Basic Mortality Table and which assumes future mortality improvement. The assumed investment return is 5% unless the annuitant elects otherwise, in which case the rate would be 3.5%, as regulated by the laws of the respective states. The mortality risk is fully borne by IDS Life and may result in additional amounts being transferred into the variable annuity account by IDS Life to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the insurance company. -------------------------------------------------------------------------------- 59 - IDS LIFE VARIABLE ACCOUNT 10 FEDERAL INCOME TAXES IDS Life is taxed as a life insurance company. The Account is treated as part of IDS Life for federal income tax purposes. Under existing federal income tax law, no income taxes are payable with respect to any investment income of the Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Account for federal income taxes. IDS Life will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. USE OF ESTIMATES The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the period. Actual results could differ from those estimates. 3. VARIABLE ACCOUNT EXPENSES IDS Life makes contractual assurances to the Account that possible future adverse changes in administrative expenses and mortality experience of the contract owners and annuitants will not affect the Account. IDS Life deducts a daily mortality and expense risk fee equal, on an annual basis, to the following percent of the average daily net assets of each subaccount.
PRODUCT MORTALITY AND EXPENSE RISK FEE ----------------------------------------------------------------------------- RAVA 0.75% to 0.95% (DEPENDING ON THE CONTRACT SELECTED) RAVA Band 3 0.55% RAVA Advantage 0.75% to 0.95% (DEPENDING ON THE CONTRACT SELECTED) RAVA Advantage Band 3 0.55% RAVA Select 1.00% to 1.20% (DEPENDING ON THE CONTRACT SELECTED) RAVA Advantage Plus 0.55% to 0.95% (DEPENDING ON THE CONTRACT SELECTED) RAVA Select Plus 0.75% to 1.20% (DEPENDING ON THE CONTRACT SELECTED) FPA 1.25%
4. CONTRACT CHARGES IDS Life deducts a contract administrative charge of $30 per year. This charge reimburses IDS Life for expenses incurred in establishing and maintaining the annuity records. Certain products may waive this charge based upon the underlying contract value. Optional riders are available on certain products and if selected, the related fees are deducted annually from the contract value on the contract anniversary. Additional information can be found in the applicable product's prospectus. 5. SURRENDER CHARGES IDS Life may use a surrender charge to help it recover certain expenses related to the sale of the annuity. When applicable, a surrender charge will apply for a maximum number of years, as depicted in the surrender charge schedule included in the applicable product's prospectus. Charges by IDS Life for surrenders are not identified on an individual segregated asset account basis. Charges for all segregated asset accounts amounted to $23,369,239 in 2005 and $20,712,481 in 2004. Such charges are not treated as a separate expense of the subaccounts. They are ultimately deducted from contract surrender benefits paid by IDS Life. -------------------------------------------------------------------------------- 60 - IDS LIFE VARIABLE ACCOUNT 10 6. RELATED PARTY TRANSACTIONS For the period from Oct. 1, 2005 through Dec. 31, 2005, management fees were paid indirectly to RiverSource Investments, LLC, an affiliate of IDS Life, in its capacity as investment manager for the following RiverSource(SM) Variable Portfolio Funds (formerly American Express(R) Variable Portfolio Funds) shown in the table below. For the period from Jan. 1, 2005 through Sept. 30, 2005, investment management services were paid indirectly to Ameriprise Financial. The Fund's Investment Management Services Agreement provides for a fee at a percentage of each Fund's average daily net assets that declines annually as each Fund's assets increase. The percentage range for each Fund is as follows:
FUND PERCENTAGE RANGE -------------------------------------------------------------------------------------------------- RiverSource(SM) Variable Portfolio - Balanced Fund 0.630% to 0.550% RiverSource(SM) Variable Portfolio - Cash Management Fund 0.510% to 0.440% RiverSource(SM) Variable Portfolio - Core Bond Fund 0.630% to 0.555% RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.610% to 0.535% RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.560% to 0.470% RiverSource(SM) Variable Portfolio - Emerging Markets Fund 1.170% to 1.095% RiverSource(SM) Variable Portfolio - Global Bond Fund 0.840% to 0.780% RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.490% to 0.415% RiverSource(SM) Variable Portfolio - Growth Fund 0.630% to 0.570% RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.620% to 0.545% RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.640% to 0.565% RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.870% to 0.795% RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.630% to 0.570% RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.630% to 0.570% RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.650% to 0.560% RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.730% to 0.610% RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) 0.630% to 0.570% RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.290% to 0.260% RiverSource(SM) Variable Portfolio - Select Value Fund 0.810% to 0.720% RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.610% to 0.535% RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.790% to 0.650% RiverSource(SM) Variable Portfolio - Small Cap Value Fund 1.020% to 0.920% RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund 0.650% to 0.575%
For the following Funds the fee may be adjusted upward or downward by a maximum performance incentive adjustment of 0.08% for RiverSource(SM) Variable Portfolio - Balanced Fund and 0.12% for each remaining Fund. The adjustment is based on a comparison of the performance of each Fund to an index of similar funds up to a maximum percentage of each Fund's average daily net assets. RiverSource(SM) Variable Portfolio - Balanced Fund RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund RiverSource(SM) Variable Portfolio - Emerging Markets Fund RiverSource(SM) Variable Portfolio - Growth Fund RiverSource(SM) Variable Portfolio - International Opportunity Fund RiverSource(SM) Variable Portfolio - Large Cap Equity Fund RiverSource(SM) Variable Portfolio - Large Cap Value Fund RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund RiverSource(SM) Variable Portfolio - Mid Cap Value Fund RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) RiverSource(SM) Variable Portfolio - Select Value Fund RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund RiverSource(SM) Variable Portfolio - Small Cap Value Fund RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund The RiverSource(SM) Variable Portfolio Funds, as shown in the table above, also have an agreement with IDS Life for distribution services. Under a Plan and Agreement of Distribution pursuant to Rule 12b-1, each Fund pays a distribution fee at an annual rate up to 0.125% of each Fund's average daily net assets. -------------------------------------------------------------------------------- 61 - IDS LIFE VARIABLE ACCOUNT 10 The following RiverSource(SM) Variable Portfolio Funds, as shown in the table below, have an Administrative Services Agreement with Ameriprise Financial. Under this agreement, each Fund pays Ameriprise Financial a fee for administration and accounting services at a percentage of each Fund's average daily net assets that declines annually as each Fund's assets increase. The percentage range for each Fund is as follows:
FUND PERCENTAGE RANGE --------------------------------------------------------------------------------------------------- RiverSource(SM) Variable Portfolio - Balanced Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Cash Management Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Core Bond Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Emerging Markets Fund 0.080% to 0.050% RiverSource(SM) Variable Portfolio - Global Bond Fund 0.080% to 0.050% RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - Growth Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.080% to 0.050% RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) 0.060% to 0.030% RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Select Value Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.070% to 0.040% RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.080% to 0.050% RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.080% to 0.050% RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.030%
Prior to Oct. 1, 2005, the fee percentage of each Fund's average daily net assets declined annually as each Fund's assets increased as follows:
FUND PERCENTAGE RANGE -------------------------------------------------------------------------------------------------- RiverSource(SM) Variable Portfolio - Balanced Fund 0.040% to 0.020% RiverSource(SM) Variable Portfolio - Cash Management Fund 0.030% to 0.020% RiverSource(SM) Variable Portfolio - Core Bond Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - Diversified Bond Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 0.040% to 0.020% RiverSource(SM) Variable Portfolio - Emerging Markets Fund 0.100% to 0.050% RiverSource(SM) Variable Portfolio - Global Bond Fund 0.060% to 0.040% RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - Growth Fund 0.050% to 0.030% RiverSource(SM) Variable Portfolio - High Yield Bond Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - Income Opportunities Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - International Opportunity Fund 0.060% to 0.035% RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 0.050% to 0.030% RiverSource(SM) Variable Portfolio - Large Cap Value Fund 0.050% to 0.030% RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 0.060% to 0.030% RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 0.050% to 0.020% RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) 0.050% to 0.030% RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 0.080% to 0.065% RiverSource(SM) Variable Portfolio - Select Value Fund 0.060% to 0.035% RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 0.050% to 0.025% RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 0.060% to 0.035% RiverSource(SM) Variable Portfolio - Small Cap Value Fund 0.080% to 0.055% RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund 0.060% to 0.035%
The RiverSource(SM) Variable Portfolio Funds, as shown in the table above, pay custodian fees to Ameriprise Trust Company (formerly American Express Trust Company), an affiliate of IDS Life. -------------------------------------------------------------------------------- 62 - IDS LIFE VARIABLE ACCOUNT 10 SUBSEQUENT EVENT Shareholders approved moving transfer agent services from the Investment Management Services Agreement to a new transfer agent agreement at a shareholder meeting on Feb. 15, 2006 for the RiverSource(SM) Variable Portfolio Funds shown in the table on the previous page. The Funds will then enter into a separate transfer agent agreement with RiverSource Service Corporation. The fee under that agreement will be uniform for the RiverSource(SM) Variable Portfolio Funds shown in the table on the previous page at an annual rate of 0.06% of average daily net assets. The impact of moving transfer agent fees from the Investment Management Services Agreement fee schedules varies by each fund and decreases the rate between 0.03% and 0.15% of average daily net assets. 7. INVESTMENT TRANSACTIONS The subaccounts' purchases of Funds' shares, including reinvestment of dividend distributions, for the period ended Dec. 31, 2005 were as follows:
SUBACCOUNT FUND PURCHASES ------------------------------------------------------------------------------------------------------------------------------ AIM VI Cap Appr, Ser I AIM V.I. Capital Appreciation Fund, Series I Shares $ 3,793,346 AIM VI Cap Appr, Ser II AIM V.I. Capital Appreciation Fund, Series II Shares 167,647,029 AIM VI Cap Dev, Ser I AIM V.I. Capital Development Fund, Series I Shares 923,340 AIM VI Cap Dev, Ser II AIM V.I. Capital Development Fund, Series II Shares 11,304,209 AIM VI Core Eq, Ser I AIM V.I. Core Equity Fund, Series I Shares 6,732,583 AIM VI Dyn, Ser I AIM V.I. Dynamics Fund, Series I Shares 779,347 AIM VI Fin Serv, Ser I AIM V.I. Financial Services Fund, Series I Shares 4,311,649 AIM VI Intl Gro, Ser II AIM V.I. International Growth Fund, Series II Shares 261,355 AIM VI Tech, Ser I AIM V.I. Technology Fund, Series I Shares 21,621,993 AB VPS Global Tech, Cl B AllianceBernstein VPS Global Technology Portfolio (Class B) 3,687,738 AB VPS Gro & Inc, Cl B AllianceBernstein VPS Growth and Income Portfolio (Class B) 59,178,351 AB VPS Intl Val, Cl B AllianceBernstein VPS International Value Portfolio (Class B) 269,935,852 AC VP Intl, Cl I American Century VP International, Class I 5,124,387 AC VP Intl, Cl II American Century VP International, Class II 23,183,081 AC VP Ultra, Cl II American Century VP Ultra(R), Class II 19,520,815 AC VP Val, Cl I American Century VP Value, Class I 114,281,939 AC VP Val, Cl II American Century VP Value, Class II 125,632,760 Calvert VS Social Bal Calvert Variable Series, Inc. Social Balanced Portfolio 10,547,129 Col Hi Yield, VS Cl B Columbia High Yield Fund, Variable Series, Class B 65,184,666 CS Mid-Cap Gro Credit Suisse Trust - Mid-Cap Growth Portfolio 527,736 CS Sm Cap Gro Credit Suisse Trust - Small Cap Growth Portfolio 527,536 EG VA Fundamental Lg Cap, Cl 2 Evergreen VA Fundamental Large Cap Fund - Class 2 9,339,595 EG VA Intl Eq, Cl 2 Evergreen VA International Equity Fund - Class 2 30,727,456 Fid VIP Gro & Inc, Serv Cl Fidelity(R) VIP Growth & Income Portfolio Service Class 5,302,894 Fid VIP Gro & Inc, Serv Cl 2 Fidelity(R) VIP Growth & Income Portfolio Service Class 2 31,710,965 Fid VIP Mid Cap, Serv Cl Fidelity(R) VIP Mid Cap Portfolio Service Class 15,377,757 Fid VIP Mid Cap, Serv Cl 2 Fidelity(R) VIP Mid Cap Portfolio Service Class 2 235,672,067 Fid VIP Overseas, Serv Cl Fidelity(R) VIP Overseas Portfolio Service Class 5,605,227 Fid VIP Overseas, Serv Cl 2 Fidelity(R) VIP Overseas Portfolio Service Class 2 26,674,686 FTVIPT Frank Real Est, Cl 2 FTVIPT Franklin Real Estate Fund - Class 2 133,874,837 FTVIPT Frank Sm Cap Val, Cl 2 FTVIPT Franklin Small Cap Value Securities Fund - Class 2 75,099,017 FTVIPT Mutual Shares Sec, Cl 2 FTVIPT Mutual Shares Securities Fund - Class 2 64,369,025 FTVIPT Temp Dev Mkts Sec, Cl 1 FTVIPT Templeton Developing Markets Securities Fund - Class 1 9,021,926 FTVIPT Temp For Sec, Cl 2 FTVIPT Templeton Foreign Securities Fund - Class 2 9,829,385 GS VIT Structd Sm Cap Eq Goldman Sachs VIT Structured Small Cap Equity Fund 4,832,766 GS VIT Structd U.S. Eq Goldman Sachs VIT Structured U.S. Equity Fund 213,812,039 GS VIT Mid Cap Val Goldman Sachs VIT Mid Cap Value Fund 314,791,822 Janus Aspen Global Tech, Serv Janus Aspen Series Global Technology Portfolio: Service Shares 1,711,603 Janus Aspen Intl Gro, Serv Janus Aspen Series International Growth Portfolio: Service Shares 7,808,823 Janus Aspen Mid Cap Gro, Serv Janus Aspen Series Mid Cap Growth Portfolio: Service Shares 572,830 Lazard Retire Intl Eq Lazard Retirement International Equity Portfolio 32,388,171 MFS Inv Gro Stock, Serv Cl MFS(R) Investors Growth Stock Series - Service Class 21,811,126 MFS New Dis, Serv Cl MFS(R) New Discovery Series - Service Class 3,323,788 MFS Total Return, Serv Cl MFS(R) Total Return Series - Service Class 56,364,739 MFS Utilities, Serv Cl MFS(R) Utilities Series - Service Class 67,540,109
-------------------------------------------------------------------------------- 63 - IDS LIFE VARIABLE ACCOUNT 10
SUBACCOUNT FUND PURCHASES -------------------------------------------------------------------------------------------------------------------------------- Oppen Global Sec VA, Serv Oppenheimer Global Securities Fund/VA, Service Shares $ 56,993,161 Oppen Main St Sm Cap VA, Serv Oppenheimer Main Street Small Cap Fund/VA, Service Shares 30,887,556 Oppen Strategic Bond VA, Serv Oppenheimer Strategic Bond Fund/VA, Service Shares 282,221,424 Pioneer Eq Inc VCT, Cl II Pioneer Equity Income VCT Portfolio - Class II Shares 11,384,214 Pioneer Europe VCT, Cl II Pioneer Europe VCT Portfolio - Class II Shares 1,700,646 Put VT Health Sciences, Cl IB Putnam VT Health Sciences Fund - Class IB Shares 14,435,378 Put VT Intl Eq, Cl IB Putnam VT International Equity Fund - Class IB Shares 5,793,256 Put VT Intl New Opp, Cl IB Putnam VT International New Opportunities Fund - Class IB Shares 1,088,825 Put VT New Opp, Cl IA Putnam VT New Opportunities Fund - Class IA Shares 895,801 Put VT Vista, Cl IB Putnam VT Vista Fund - Class IB Shares 1,476,557 RVS VP Bal RiverSource(SM) Variable Portfolio - Balanced Fund 54,653,886 RVS VP Cash Mgmt RiverSource(SM) Variable Portfolio - Cash Management Fund 215,674,943 RVS VP Core Bond RiverSource(SM) Variable Portfolio - Core Bond Fund 29,396,133 RVS VP Div Bond RiverSource(SM) Variable Portfolio - Diversified Bond Fund 321,785,554 RVS VP Div Eq Inc RiverSource(SM) Variable Portfolio - Diversified Equity Income Fund 465,148,829 RVS VP Emer Mkts RiverSource(SM) Variable Portfolio - Emerging Markets Fund 132,048,167 RVS VP Global Bond RiverSource(SM) Variable Portfolio - Global Bond Fund 156,964,961 RVS VP Global Inflation Prot Sec RiverSource(SM) Variable Portfolio - Global Inflation Protected Securities 186,506,841 Fund RVS VP Gro RiverSource(SM) Variable Portfolio - Growth Fund 170,267,108 RVS VP Hi Yield Bond RiverSource(SM) Variable Portfolio - High Yield Bond Fund 126,881,601 RVS VP Inc Opp RiverSource(SM) Variable Portfolio - Income Opportunities Fund 61,546,986 RVS VP Intl Opp RiverSource(SM) Variable Portfolio - International Opportunity Fund 66,149,052 RVS VP Lg Cap Eq RiverSource(SM) Variable Portfolio - Large Cap Equity Fund 195,905,729 RVS VP Lg Cap Val RiverSource(SM) Variable Portfolio - Large Cap Value Fund 7,417,178 RVS VP Mid Cap Gro RiverSource(SM) Variable Portfolio - Mid Cap Growth Fund 10,443,324 RVS VP Mid Cap Val RiverSource(SM) Variable Portfolio - Mid Cap Value Fund 16,475,499 RVS VP New Dim RiverSource(SM) Variable Portfolio - New Dimensions Fund(R) 9,699,622 RVS VP S&P 500 RiverSource(SM) Variable Portfolio - S&P 500 Index Fund 40,514,168 RVS VP Select Val RiverSource(SM) Variable Portfolio - Select Value Fund 12,664,215 RVS VP Short Duration RiverSource(SM) Variable Portfolio - Short Duration U.S. Government Fund 36,629,473 RVS VP Sm Cap Adv RiverSource(SM) Variable Portfolio - Small Cap Advantage Fund 32,591,717 RVS VP Sm Cap Val RiverSource(SM) Variable Portfolio - Small Cap Value Fund 126,520,206 RVS VP Strategy Aggr RiverSource(SM) Variable Portfolio - Strategy Aggressive Fund 2,204,987 Royce Micro-Cap Royce Micro-Cap Portfolio 3,352,118 LM Ptnrs Var Sm Cap Gro, Cl II Legg Mason Partners Variable Small Cap Growth Portfolio, Class II 123,037 Third Ave Val Third Avenue Value Portfolio 12,224,371 VanK LIT Comstock, Cl II Van Kampen Life Investment Trust Comstock Portfolio Class II Shares 357,423,133 Wanger Intl Sm Cap Wanger International Small Cap 179,251,913 Wanger U.S. Sm Co Wanger U.S. Smaller Companies 173,038,240 WF Adv VT Asset Alloc Wells Fargo Advantage VT Asset Allocation Fund 17,151,911 WF Adv VT Intl Core Wells Fargo Advantage VT International Core Fund 2,958,017 WF Adv VT Opp Wells Fargo Advantage VT Opportunity Fund 8,299,541 WF Adv VT Sm Cap Gro Wells Fargo Advantage VT Small Cap Growth Fund 3,356,125
-------------------------------------------------------------------------------- 64 - IDS LIFE VARIABLE ACCOUNT 10 8. ACCUMULATION UNIT VALUES, UNITS OUTSTANDING AND NET ASSETS The following is a summary of accumulation unit values at Dec. 31, 2005:
AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE PRICE LEVEL APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I --------------------------------------------------------------------------------------------- 0.55% $ 0.99 $ 1.08 $ 1.66 $ 1.28 $ -- 0.75% 0.98 1.07 1.64 1.27 -- 0.95% 0.96 1.06 1.62 1.26 -- 1.00% -- 1.13 -- 1.33 -- 1.20% -- 1.12 -- 1.32 -- 1.25% -- -- -- -- 1.72
AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL PRICE LEVEL DYN, SER I SERV, SER I GRO, SER II TECH, SER I TECH, CL B --------------------------------------------------------------------------------------------- 0.55% $ 1.11 $ 1.20 $ 1.09 $ 0.73 $ 1.06 0.75% 1.10 1.19 1.09 0.73 1.06 0.95% 1.09 1.18 1.09 0.72 1.06 1.00% 1.19 1.26 1.09 0.85 1.06 1.20% 1.19 1.25 1.09 0.84 1.06 1.25% -- -- -- -- --
AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, PRICE LEVEL CL B CL B CL I CL II CL II --------------------------------------------------------------------------------------------- 0.55% $ 1.13 $ 1.90 $ 1.06 $ 1.17 $ 1.04 0.75% 1.12 1.88 1.04 1.16 1.04 0.95% 1.11 1.86 1.03 1.15 1.04 1.00% 1.21 1.94 -- 1.33 1.04 1.20% 1.20 1.92 -- 1.32 1.04 1.25% -- -- -- -- --
AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP PRICE LEVEL VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO --------------------------------------------------------------------------------------------- 0.55% $ 1.61 $` 1.36 $ 1.05 $ 1.08 $ 1.29 0.75% 1.59 1.35 1.04 1.07 1.27 0.95% 1.57 1.34 1.02 1.07 1.26 1.00% -- 1.33 1.17 1.07 -- 1.20% -- 1.32 1.16 1.06 -- 1.25% 2.35 -- -- -- --
EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, PRICE LEVEL GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 --------------------------------------------------------------------------------------------- 0.55% $ -- $ 1.01 $ 1.32 $ 1.04 $ 1.14 0.75% -- 1.00 1.32 1.03 1.13 0.95% -- 1.00 1.31 1.01 1.12 1.00% -- 1.11 1.31 -- 1.16 1.20% -- 1.10 1.31 -- 1.15 1.25% 1.35 -- -- -- --
-------------------------------------------------------------------------------- 65 - IDS LIFE VARIABLE ACCOUNT 10
FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, PRICE LEVEL SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 --------------------------------------------------------------------------------------------- 0.55% $ 2.86 $ 1.86 $ 1.16 $ 1.42 $ 2.73 0.75% 2.82 1.85 1.15 1.40 2.70 0.95% 2.79 1.83 1.14 1.39 2.66 1.00% -- 1.77 -- 1.55 1.99 1.20% -- 1.76 -- 1.53 1.97 1.25% -- -- -- -- --
FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM PRICE LEVEL VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ --------------------------------------------------------------------------------------------- 0.55% $ 2.14 $ 1.30 $ -- $ 1.43 $ 1.79 0.75% 2.11 1.29 -- 1.42 1.76 0.95% 2.09 1.28 -- 1.41 1.74 1.00% 1.59 1.35 -- -- -- 1.20% 1.57 1.34 -- -- -- 1.25% -- -- 1.10 -- --
GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, PRICE LEVEL U.S. EQ VAL SERV SERV SERV --------------------------------------------------------------------------------------------- 0.55% $ 1.05 $ 2.34 $ 0.41 $ 0.93 $ 0.54 0.75% 1.04 2.31 0.40 0.92 0.54 0.95% 1.02 2.29 0.40 0.91 0.53 1.00% 1.24 1.69 1.01 1.61 -- 1.20% 1.23 1.68 1.01 1.60 -- 1.25% -- -- -- -- --
LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, PRICE LEVEL INTL EQ SERV CL SERV CL SERV CL SERV CL --------------------------------------------------------------------------------------------- 0.55% $ 1.04 $ 0.67 $ 0.90 $ 1.12 $ 1.38 0.75% 1.03 0.66 0.89 1.11 1.37 0.95% 1.01 0.65 0.88 1.11 1.36 1.00% 1.46 1.03 1.04 1.11 1.70 1.20% 1.45 1.02 1.04 1.10 1.68 1.25% -- -- -- -- --
OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, PRICE LEVEL VA, SERV VA, SERV VA, SERV CL II CL II --------------------------------------------------------------------------------------------- 0.55% $ 1.31 $ 1.26 $ 1.09 $ 1.20 $ 1.31 0.75% 1.31 1.26 1.09 1.19 1.30 0.95% 1.30 1.25 1.08 1.18 1.29 1.00% 1.30 1.25 1.08 1.24 1.40 1.20% 1.30 1.24 1.08 1.23 1.39 1.25% -- -- -- -- --
-------------------------------------------------------------------------------- 66 - IDS LIFE VARIABLE ACCOUNT 10
PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEWOPP, VISTA, PRICE LEVEL CL IB CL IB CL IB CL IA CL IB ----------------------------------------------------------------------------------------- 0.55% $ 1.10 $ 1.30 $ 0.99 $ -- $ 1.03 0.75% 1.09 1.29 0.98 -- 1.02 0.95% 1.08 1.27 0.97 -- 1.00 1.00% 1.12 1.40 -- -- 1.25 1.20% 1.11 1.39 -- -- 1.24 1.25% -- -- -- 1.38 --
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC ----------------------------------------------------------------------------------------- 0.55% $ 1.10 $ 1.13 $ 1.04 $ 1.31 $ 1.53 0.75% 1.08 1.12 1.03 1.30 1.52 0.95% 1.07 1.10 1.03 1.28 1.51 1.00% 1.19 1.01 1.02 1.12 1.53 1.20% 1.18 1.00 1.02 1.12 1.51 1.25% 1.66 1.23 -- 1.41 --
RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD PRICE LEVEL EMER MKTS BOND PROT SEC GRO BOND ----------------------------------------------------------------------------------------- 0.55% $ 1.58 $ 1.38 $ 1.05 $ 0.67 $ 1.26 0.75% 1.54 1.36 1.05 0.66 1.25 0.95% 1.53 1.34 1.05 0.66 1.23 1.00% 2.04 1.31 1.05 1.06 1.32 1.20% 2.02 1.30 1.04 1.05 1.31 1.25% -- 1.46 -- -- 1.39
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO ----------------------------------------------------------------------------------------- 0.55% $ 1.07 $ 0.92 $ 0.85 $ 1.14 $ 1.26 0.75% 1.07 0.91 0.84 1.14 1.23 0.95% 1.06 0.90 0.82 1.13 1.22 1.00% 1.06 1.42 1.05 1.13 1.26 1.20% 1.06 1.41 1.13 1.13 1.25 1.25% -- 1.23 1.35 -- --
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL MID CAP VAL NEW DIM S&P 500 SELECT VAL SHORT DURATION ----------------------------------------------------------------------------------------- 0.55% $ 1.20 $ 0.89 $ 0.88 $ 1.13 $ 1.24 0.75% 1.19 0.88 0.87 1.12 1.22 0.95% 1.19 0.87 0.86 1.12 1.20 1.00% 1.19 1.01 1.14 1.12 1.05 1.20% 1.19 1.00 1.13 1.11 1.04 1.25% -- 1.61 -- -- --
LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM PRICE LEVEL SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II ----------------------------------------------------------------------------------------- 0.55% $ 1.61 $ 1.61 $ 0.83 $ 2.83 $ 1.06 0.75% 1.60 1.60 0.82 2.80 1.06 0.95% 1.58 1.59 0.81 2.76 1.05 1.00% 1.52 1.50 1.08 -- 1.05 1.20% 1.51 1.49 1.07 -- 1.05 1.25% -- -- 1.10 -- --
-------------------------------------------------------------------------------- 67 - IDS LIFE VARIABLE ACCOUNT 10
VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT PRICE LEVEL VAL CL II SM CAP SM CO ASSET ALLOC -------------------------------------------------------------------------------------------- 0.55% $ 2.92 $ 1.19 $ 1.69 $ 1.79 $ 1.16 0.75% 2.89 1.19 1.67 1.77 1.15 0.95% 2.85 1.18 1.65 1.74 1.14 1.00% -- 1.18 1.99 1.56 1.20 1.20% -- 1.18 1.98 1.54 1.19 1.25% -- -- -- -- --
WF ADV VT WF ADV VT WF ADV VT PRICE LEVEL INTL CORE OPP SM CAP GRO ------------------------------------------------------ 0.55% $ 1.07 $ 1.23 $ 0.98 0.75% 1.06 1.22 0.97 0.95% 1.05 1.21 0.96 1.00% 1.24 1.26 1.11 1.20% 1.23 1.25 1.10 1.25% -- -- --
The following is a summary of units outstanding at Dec. 31, 2005:
AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE PRICE LEVEL APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I -------------------------------------------------------------------------------------------- 0.55% 910,160 1,554,316 283,175 141,500 -- 0.75% 42,184,768 134,591,312 16,328,916 24,348,605 -- 0.95% 37,608,401 64,799,812 16,359,037 13,500,441 -- 1.00% -- 24,535,561 -- 2,835,717 -- 1.20% -- 11,201,946 -- 1,835,074 -- 1.25% -- -- -- -- 281,112,107 ------------------------------------------------------------------------------------------------------------------------------ Total 80,703,329 236,682,947 32,971,128 42,661,337 281,112,107 ------------------------------------------------------------------------------------------------------------------------------
AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL PRICE LEVEL DYN, SER I SERV, SER I GRO, SER II TECH, SER I TECH, CL B -------------------------------------------------------------------------------------------- 0.55% 19,068 140,165 4,642 531,893 143,575 0.75% 8,601,505 10,621,224 127,285 31,926,374 2,021,339 0.95% 4,923,517 6,395,777 107,351 14,959,837 800,530 1.00% 829,652 1,321,640 2,193 4,728,356 332,725 1.20% 495,283 831,992 5,252 2,168,143 148,119 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 14,869,025 19,310,798 246,723 54,314,603 3,446,288 ------------------------------------------------------------------------------------------------------------------------------
AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, PRICE LEVEL CL B CL B CL I CL II CL II -------------------------------------------------------------------------------------------- 0.55% 1,186,388 2,607,393 594,423 313,905 618,218 0.75% 149,315,635 153,106,631 28,072,686 43,611,845 10,074,441 0.95% 91,923,780 94,908,813 30,007,091 27,135,918 4,856,043 1.00% 20,738,602 25,567,771 -- 7,538,265 2,014,910 1.20% 14,312,593 16,469,655 -- 3,767,540 1,014,772 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 277,476,998 292,660,263 58,674,200 82,367,473 18,578,384 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 68 - IDS LIFE VARIABLE ACCOUNT 10
AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP PRICE LEVEL VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO -------------------------------------------------------------------------------------------- 0.55% 1,036,783 1,103,924 5,382 498,653 281,038 0.75% 53,724,188 142,660,099 23,849,609 47,439,556 12,277,146 0.95% 53,402,691 95,710,369 19,300,879 27,476,087 12,660,265 1.00% -- 25,428,024 3,186,340 11,855,828 -- 1.20% -- 16,715,635 2,283,247 8,508,708 -- 1.25% 233,791,869 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 341,955,531 281,618,051 48,625,457 95,778,832 25,218,449 ------------------------------------------------------------------------------------------------------------------------------
EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, PRICE LEVEL GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 -------------------------------------------------------------------------------------------- 0.55% -- 55,701 660,555 1,102,551 1,338,181 0.75% -- 16,190,554 15,273,071 107,380,015 189,109,387 0.95% -- 10,000,685 9,815,434 108,100,780 121,316,657 1.00% -- 2,338,153 4,631,663 -- 28,157,835 1.20% -- 1,569,937 3,150,186 -- 18,131,667 1.25% 226,170,417 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 226,170,417 30,155,030 33,530,909 216,583,346 358,053,727 ------------------------------------------------------------------------------------------------------------------------------
FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, PRICE LEVEL SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 -------------------------------------------------------------------------------------------- 0.55% 915,213 2,702,152 604,666 727,507 667,444 0.75% 72,759,444 260,492,338 40,988,433 70,878,237 139,617,618 0.95% 70,537,395 157,678,342 40,363,413 48,641,899 88,910,830 1.00% -- 46,943,789 -- 9,685,588 22,307,389 1.20% -- 28,422,662 -- 6,520,033 15,138,784 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 144,212,052 496,239,283 81,956,512 136,453,264 266,642,065 ------------------------------------------------------------------------------------------------------------------------------
FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM PRICE LEVEL VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ -------------------------------------------------------------------------------------------- 0.55% 592,863 716,188 -- 356,719 119,234 0.75% 78,072,518 69,985,567 -- 17,595,454 10,822,924 0.95% 55,521,459 50,166,375 -- 18,421,019 12,489,537 1.00% 13,297,708 18,871,414 -- -- -- 1.20% 8,681,966 11,400,358 -- -- -- 1.25% -- -- 254,244,487 -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 156,166,514 151,139,902 254,244,487 36,373,192 23,431,695 ------------------------------------------------------------------------------------------------------------------------------
GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, PRICE LEVEL U.S. EQ VAL SERV SERV SERV -------------------------------------------------------------------------------------------- 0.55% 3,018,594 1,929,799 199,690 249,985 125,006 0.75% 248,934,590 174,917,887 32,605,663 72,831,886 34,554,752 0.95% 168,697,313 117,932,094 24,130,682 59,325,219 24,803,242 1.00% 30,635,637 30,996,256 468,309 1,554,638 -- 1.20% 16,269,076 20,010,518 229,584 854,067 -- 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 467,555,210 345,786,554 57,633,928 134,815,795 59,483,000 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 69 - IDS LIFE VARIABLE ACCOUNT 10
LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, PRICE LEVEL INTL EQ SERV CL SERV CL SERV CL SERV CL -------------------------------------------------------------------------------------------- 0.55% 1,238,267 639,873 558,246 290,615 588,100 0.75% 101,053,986 117,492,892 62,994,509 33,809,100 55,870,148 0.95% 73,981,542 84,506,338 48,503,117 20,473,072 35,162,683 1.00% 7,418,450 8,658,429 6,257,390 10,939,641 6,871,056 1.20% 4,982,794 4,709,819 4,246,857 8,946,247 5,188,847 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 188,675,039 216,007,351 122,560,119 74,458,675 103,680,834 ------------------------------------------------------------------------------------------------------------------------------
OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, PRICE LEVEL VA, SERV VA, SERV VA, SERV CL II CL II -------------------------------------------------------------------------------------------- 0.55% 756,367 643,099 3,173,482 155,803 -- 0.75% 33,810,932 18,591,965 150,945,119 27,263,315 3,034,396 0.95% 20,720,531 12,036,627 94,656,600 17,370,195 1,827,389 1.00% 11,207,899 6,923,613 34,899,357 5,726,852 242,757 1.20% 5,927,076 3,699,913 23,302,749 3,005,736 264,897 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 72,422,805 41,895,217 306,977,307 53,521,901 5,369,439 ------------------------------------------------------------------------------------------------------------------------------
PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEW OPP, VISTA, PRICE LEVEL CL IB CL IB CL IB CL IA CL IB -------------------------------------------------------------------------------------------- 0.55% 217,974 144,787 507,123 -- 373,892 0.75% 27,298,795 37,979,560 47,078,250 -- 49,747,095 0.95% 14,516,974 23,457,719 43,047,107 -- 42,679,592 1.00% 4,351,100 4,252,198 -- -- 735,837 1.20% 2,388,149 3,019,357 -- -- 597,608 1.25% -- -- -- 206,197,208 -- ------------------------------------------------------------------------------------------------------------------------------ Total 48,772,992 68,853,621 90,632,480 206,197,208 94,134,024 ------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC -------------------------------------------------------------------------------------------- 0.55% 622,636 4,504,356 100,474 3,619,181 5,164,611 0.75% 92,705,106 193,995,765 17,449,804 332,676,678 408,559,076 0.95% 77,524,744 147,452,270 15,300,044 257,272,965 278,737,113 1.00% 3,384,921 22,066,760 3,993,710 50,745,782 47,281,876 1.20% 3,085,432 18,978,896 3,472,871 37,022,661 33,231,549 1.25% 183,539,902 42,071,130 -- 161,182,395 -- ------------------------------------------------------------------------------------------------------------------------------ Total 360,862,741 429,069,177 40,316,903 842,519,662 772,974,225 ------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD PRICE LEVEL EMER MKTS BOND PROT SEC GRO BOND -------------------------------------------------------------------------------------------- 0.55% 1,490,711 1,377,438 1,454,813 6,192,825 2,397,042 0.75% 75,519,655 130,135,374 91,038,069 323,849,052 262,154,239 0.95% 44,243,629 102,875,706 51,906,128 212,229,239 237,711,013 1.00% 8,411,805 18,770,965 20,278,941 23,295,613 28,188,709 1.20% 4,677,297 15,541,309 13,014,245 13,519,277 27,474,017 1.25% -- 63,122,283 -- -- 157,929,401 ------------------------------------------------------------------------------------------------------------------------------ Total 134,343,097 331,823,075 177,692,196 579,086,006 715,854,421 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 70 - IDS LIFE VARIABLE ACCOUNT 10
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO -------------------------------------------------------------------------------------------- 0.55% 492,596 1,251,854 3,121,419 91,823 654,709 0.75% 29,476,686 77,786,921 263,828,221 6,231,693 47,283,202 0.95% 18,067,872 61,792,724 144,230,281 3,593,761 31,419,449 1.00% 7,060,871 5,132,705 27,550,266 921,237 5,505,240 1.20% 4,186,846 3,646,914 11,604,020 631,729 2,961,304 1.25% -- 186,227,997 136,706,234 -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 59,284,871 335,839,115 587,040,441 11,470,243 87,823,904 ------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL MID CAP VAL NEW DIM S&P 500 SELECT VAL SHORT DURATION -------------------------------------------------------------------------------------------- 0.55% 115,184 1,644,516 2,054,232 235,426 688,145 0.75% 6,605,260 325,031,491 154,949,018 10,246,796 145,086,997 0.95% 4,981,588 234,423,970 122,069,627 5,776,825 121,249,374 1.00% 621,680 16,468,226 14,183,619 1,493,346 18,706,616 1.20% 392,861 8,726,567 10,825,033 1,193,344 16,802,377 1.25% -- 337,809,705 -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 12,716,573 924,104,475 304,081,529 18,945,737 302,533,509 ------------------------------------------------------------------------------------------------------------------------------
LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM PRICE LEVEL SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II -------------------------------------------------------------------------------------------- 0.55% 514,324 2,067,597 147,007 539,435 -- 0.75% 59,242,678 127,559,493 41,305,691 22,799,189 55,090 0.95% 46,718,173 72,463,151 31,424,493 22,866,590 40,796 1.00% 5,743,505 20,683,462 471,291 -- 3,572 1.20% 3,917,046 11,558,956 421,033 -- 4,908 1.25% -- -- 94,511,070 -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 116,135,726 234,332,659 168,280,585 46,205,214 104,366 ------------------------------------------------------------------------------------------------------------------------------
VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT PRICE LEVEL VAL CL II SM CAP SM CO ASSET ALLOC -------------------------------------------------------------------------------------------- 0.55% 370,811 3,642,315 2,813,624 2,708,955 354,874 0.75% 31,915,751 203,272,353 170,229,894 241,622,599 43,629,251 0.95% 32,579,538 96,755,129 114,380,940 169,885,655 32,465,960 1.00% -- 53,895,678 19,260,119 41,455,234 5,288,744 1.20% -- 26,830,616 11,469,898 23,079,679 2,479,672 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 64,866,100 384,396,091 318,154,475 478,752,122 84,218,501 ------------------------------------------------------------------------------------------------------------------------------
WF ADV VT WF ADV VT WF ADV VT PRICE LEVEL INTL CORE OPP SM CAP GRO ------------------------------------------------------ 0.55% 82,395 467,445 35,263 0.75% 9,021,190 41,048,996 19,617,959 0.95% 6,690,267 25,313,100 14,333,820 1.00% 1,179,160 7,621,150 2,595,791 1.20% 575,508 3,829,257 1,556,512 1.25% -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total 17,548,520 78,279,948 38,139,345 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 71 - IDS LIFE VARIABLE ACCOUNT 10 The following is a summary of net assets at Dec. 31, 2005:
AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CAP AIM VI CORE PRICE LEVEL APPR, SER I APPR, SER II DEV, SER I DEV, SER II EQ, SER I -------------------------------------------------------------------------------------------- 0.55% $ 899,748 $ 1,673,314 $ 469,208 $ 181,472 $ -- 0.75% 41,273,298 143,586,002 26,747,624 30,946,259 -- 0.95% 36,341,106 68,552,825 26,448,648 17,035,503 -- 1.00% -- 27,668,841 -- 3,763,279 -- 1.20% -- 12,544,958 -- 2,415,886 -- 1.25% -- -- -- -- 484,438,796 ------------------------------------------------------------------------------------------------------------------------------ Total $ 78,514,152 $ 254,025,940 $ 53,665,480 $ 54,342,399 $ 484,438,796 ------------------------------------------------------------------------------------------------------------------------------
AIM VI AIM VI FIN AIM VI INTL AIM VI AB VPS GLOBAL PRICE LEVEL DYN, SER I SERV, SER I GRO, SER II TECH, SER I TECH, CL B -------------------------------------------------------------------------------------------- 0.55% $ 21,114 $ 168,777 $ 5,150 $ 390,341 $ 152,107 0.75% 9,453,754 12,671,434 138,934 23,250,796 2,140,067 0.95% 5,357,749 7,571,007 117,109 10,799,097 847,341 1.00% 990,888 1,660,200 2,474 4,000,416 352,121 1.20% 586,954 1,036,835 5,809 1,819,881 156,723 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 16,410,459 $ 23,108,253 $ 269,476 $ 40,260,531 $ 3,648,359 ------------------------------------------------------------------------------------------------------------------------------
AB VPS AB VPS AC VP AC VP AC VP GRO & INC, INTL VAL, INTL, INTL, ULTRA, PRICE LEVEL CL B CL B CL I CL II CL II -------------------------------------------------------------------------------------------- 0.55% $ 1,339,312 $ 4,945,966 $ 629,281 $ 367,392 $ 640,438 0.75% 167,194,786 288,004,650 29,464,183 50,620,909 10,435,780 0.95% 102,116,333 177,066,093 30,966,181 31,278,941 5,027,968 1.00% 25,017,328 49,513,825 -- 10,026,010 2,085,975 1.20% 17,131,628 31,655,719 -- 4,971,551 1,050,167 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 312,799,387 $ 551,186,253 $ 61,059,645 $ 97,264,803 $ 19,240,328 ------------------------------------------------------------------------------------------------------------------------------
AC VP AC VP CALVERT VS COL HI YIELD, CS MID-CAP PRICE LEVEL VAL, CL I VAL, CL II SOCIAL BAL VS CL B GRO -------------------------------------------------------------------------------------------- 0.55% $ 1,664,823 $ 1,504,861 $ 5,620 $ 537,796 $ 361,747 0.75% 85,372,688 192,853,677 24,735,657 50,968,237 15,614,103 0.95% 83,884,617 128,594,575 19,755,826 29,404,264 15,904,795 1.00% -- 33,815,724 3,714,781 12,674,962 -- 1.20% -- 22,057,307 2,641,360 9,061,573 -- 1.25% 551,225,792 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 722,147,920 $ 378,826,144 $ 50,853,244 $ 102,646,832 $ 31,880,645 ------------------------------------------------------------------------------------------------------------------------------
EG VA EG VA FID VIP FID VIP CS SM CAP FUNDAMENTAL INTL EQ, GRO & INC, GRO & INC, PRICE LEVEL GRO LG CAP, CL 2 CL 2 SERV CL SERV CL 2 -------------------------------------------------------------------------------------------- 0.55% $ -- $ 56,492 $ 873,815 $ 1,148,034 $ 1,521,859 0.75% -- 16,267,968 20,123,449 110,373,275 213,539,101 0.95% -- 10,009,348 12,897,482 109,974,537 135,978,955 1.00% -- 2,587,082 6,071,654 -- 32,686,924 1.20% -- 1,724,148 4,113,405 -- 20,883,617 1.25% 305,958,773 -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 305,958,773 $ 30,645,038 $ 44,079,805 $ 221,495,846 $ 404,610,456 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 72 - IDS LIFE VARIABLE ACCOUNT 10
FID VIP FID VIP FID VIP FID VIP FTVIPT FRANK MID CAP, MID CAP, OVERSEAS, OVERSEAS, REAL EST, PRICE LEVEL SERV CL SERV CL 2 SERV CL SERV CL 2 CL 2 -------------------------------------------------------------------------------------------- 0.55% $ 2,615,347 $ 5,033,482 $ 704,064 $ 1,030,962 $ 1,826,260 0.75% 205,711,475 481,328,753 47,354,010 99,585,073 376,841,882 0.95% 197,107,206 288,853,421 45,924,044 67,991,952 237,073,592 1.00% -- 83,274,684 -- 14,981,229 44,371,968 1.20% -- 50,028,764 -- 10,006,597 29,890,563 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 405,434,028 $ 908,519,104 $ 93,982,118 $ 193,595,813 $ 690,004,265 ------------------------------------------------------------------------------------------------------------------------------
FTVIPT FRANK FTVIPT MUTUAL FTVIPT TEMP FTVIPT TEMP GS VIT SM CAP SHARES DEV MKTS FOR SEC, STRUCTD SM PRICE LEVEL VAL, CL 2 SEC, CL 2 SEC, CL 1 CL 2 CAP EQ -------------------------------------------------------------------------------------------- 0.55% $ 1,267,708 $ 930,230 $ -- $ 509,443 $ 212,864 0.75% 164,984,744 90,467,241 -- 24,992,878 19,098,222 0.95% 115,893,539 64,057,336 -- 25,993,076 21,779,545 1.00% 21,087,104 25,400,817 -- -- -- 1.20% 13,659,762 15,251,804 -- -- -- 1.25% -- -- 281,628,997 -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 316,892,857 $ 196,107,428 $ 281,628,997 $ 51,495,397 $ 41,090,631 ------------------------------------------------------------------------------------------------------------------------------
GS VIT GS VIT JANUS ASPEN JANUS ASPEN JANUS ASPEN STRUCTD MID CAP GLOBAL TECH, INTL GRO, MID CAP GRO, PRICE LEVEL U.S. EQ VAL SERV SERV SERV -------------------------------------------------------------------------------------------- 0.55% $ 3,171,842 $ 4,523,651 $ 80,916 $ 233,312 $ 67,708 0.75% 258,530,595 405,155,615 13,065,494 67,231,764 18,505,623 0.95% 173,108,738 269,952,898 9,627,079 54,243,521 13,141,510 1.00% 37,870,787 52,330,941 474,478 2,505,759 -- 1.20% 19,954,492 33,531,178 230,704 1,365,128 -- 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 492,636,454 $ 765,494,283 $ 23,478,671 $ 125,579,484 $ 31,714,841 ------------------------------------------------------------------------------------------------------------------------------
LAZARD MFS INV MFS MFS MFS RETIRE GRO STOCK, NEW DIS, TOTAL RETURN, UTILITIES, PRICE LEVEL INTL EQ SERV CL SERV CL SERV CL SERV CL -------------------------------------------------------------------------------------------- 0.55% $ 1,287,115 $ 426,766 $ 500,713 $ 325,111 $ 812,211 0.75% 103,878,226 77,662,143 55,912,860 37,785,584 76,660,341 0.95% 75,234,356 55,208,773 42,570,064 22,774,284 47,764,810 1.00% 10,836,002 8,880,182 6,535,516 12,130,071 11,651,453 1.20% 7,266,532 4,793,412 4,401,168 9,880,289 8,730,545 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 198,502,231 $ 146,971,276 $ 109,920,321 $ 82,895,339 $ 145,619,360 ------------------------------------------------------------------------------------------------------------------------------
OPPEN OPPEN MAIN OPPEN PIONEER EQ PIONEER GLOBAL SEC ST SM CAP STRATEGIC BOND INC VCT, EUROPE VCT, PRICE LEVEL VA, SERV VA, SERV VA, SERV CL II CL II -------------------------------------------------------------------------------------------- 0.55% $ 993,363 $ 810,583 $ 3,461,141 $ 186,899 $ 60 0.75% 44,321,473 23,348,447 164,110,581 32,581,794 3,944,096 0.95% 26,998,248 15,068,934 102,506,741 20,498,112 2,354,583 1.00% 14,589,250 8,649,923 37,728,127 7,077,036 340,240 1.20% 7,684,607 4,603,913 25,089,604 3,685,070 368,333 1.25% -- -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------ Total $ 94,586,941 $ 52,481,800 $ 332,896,194 $ 64,028,911 $ 7,007,312 ------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 73 - IDS LIFE VARIABLE ACCOUNT 10
PUT VT HEALTH PUT VT PUT VT INTL PUT VT PUT VT SCIENCES, INTL EQ, NEW OPP, NEW OPP, VISTA, PRICE LEVEL CL IB CL IB CL IB CL IA CL IB -------------------------------------------------------------------------------------------- 0.55% $ 239,675 $ 188,052 $ 501,972 $ -- $ 384,785 0.75% 29,783,204 48,855,566 46,065,163 -- 50,671,241 0.95% 15,700,176 29,915,957 41,574,602 -- 43,006,309 1.00% 4,882,095 5,945,447 -- -- 922,858 1.20% 2,658,950 4,189,285 -- -- 743,829 1.25% -- -- -- 286,495,519 -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 53,264,100 $ 89,094,307 $ 88,141,737 $ 286,495,519 $ 95,729,022 --------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL BAL CASH MGMT CORE BOND DIV BOND DIV EQ INC -------------------------------------------------------------------------------------------- 0.55% $ 682,989 $ 5,090,279 $ 17,055,402 $ 4,747,444 $ 7,925,850 0.75% 100,994,333 216,539,557 17,972,030 432,290,712 624,138,581 0.95% 83,806,346 162,633,012 15,708,467 330,067,294 420,944,286 1.00% 4,040,244 22,260,019 4,093,049 57,020,872 72,445,668 1.20% 3,654,274 18,996,049 3,545,116 41,339,664 50,252,464 1.25% 307,857,817 51,839,491 -- 229,467,065 -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 501,036,003 $ 477,358,407 $ 58,374,064 $ 1,094,933,051 $ 1,175,706,849 --------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP GLOBAL GLOBAL INFLATION RVS VP HI YIELD PRICE LEVEL EMER MKTS BOND PROT SEC GRO BOND -------------------------------------------------------------------------------------------- 0.55% $ 2,361,018 $ 1,895,992 $ 1,526,436 $ 4,119,080 $ 3,030,058 0.75% 116,579,543 177,056,012 95,490,262 215,833,094 328,006,930 0.95% 67,513,960 138,231,577 54,301,650 139,453,410 293,783,005 1.00% 17,156,159 24,569,957 21,200,770 24,760,503 37,116,417 1.20% 9,465,704 20,206,972 13,570,831 14,270,399 35,958,968 1.25% -- 92,385,343 -- -- 221,225,501 -------------------------------------------------------------------------------------------------------------------------------- Total $ 213,076,384 $ 454,345,853 $ 186,089,949 $ 398,436,486 $ 919,120,879 --------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL INC OPP INTL OPP LG CAP EQ LG CAP VAL MID CAP GRO -------------------------------------------------------------------------------------------- 0.55% $ 526,391 $ 1,156,563 $ 2,639,801 $ 3,530,793 $ 823,419 0.75% 31,480,220 71,089,698 220,701,486 7,088,260 58,054,173 0.95% 19,210,669 55,833,011 119,392,943 4,088,389 38,209,791 1.00% 7,502,399 7,272,730 28,974,754 1,042,669 6,913,821 1.20% 4,437,175 5,127,594 13,132,518 712,157 3,721,195 1.25% -- 230,165,041 185,698,693 -- -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 63,156,854 $ 370,644,637 $ 570,540,195 $ 16,462,268 $ 107,722,399 --------------------------------------------------------------------------------------------------------------------------------
RVS VP RVS VP RVS VP RVS VP RVS VP PRICE LEVEL MID CAP VAL NEW DIM S&P 500 SELECT VAL SHORT DURATION -------------------------------------------------------------------------------------------- 0.55% $ 2,528,730 $ 1,459,967 $ 1,806,221 $ 3,640,162 $ 852,046 0.75% 7,856,761 286,161,124 135,909,217 11,482,677 177,221,543 0.95% 5,917,466 204,357,824 105,909,264 6,463,191 146,157,348 1.00% 738,246 16,664,741 16,155,229 1,665,233 19,654,271 1.20% 465,919 8,798,956 12,233,919 1,325,453 17,531,715 1.25% -- 548,939,981 -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 17,507,122 $ 1,066,382,593 $ 272,013,850 $ 24,576,716 $ 361,416,923 --------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 74 - IDS LIFE VARIABLE ACCOUNT 10
-------------------------------------------------------------------------------------------------------------------------------- LM PTNRS RVS VP RVS VP RVS VP ROYCE VAR SM PRICE LEVEL SM CAP ADV SM CAP VAL STRATEGY AGGR MICRO-CAP CAP GRO, CL II -------------------------------------------------------------------------------------------- 0.55% $ 826,936 $ 3,325,745 $ 122,487 $ 1,529,250 $ 78 0.75% 94,810,656 204,245,222 34,152,131 63,856,609 58,131 0.95% 73,654,836 115,125,083 25,667,037 63,319,441 43,039 1.00% 8,720,351 31,014,307 507,434 -- 3,845 1.20% 5,914,598 17,216,811 449,838 -- 5,252 1.25% -- -- 104,674,005 -- -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 183,927,377 $ 370,927,168 $ 165,572,932 $ 128,705,300 $ 110,345 --------------------------------------------------------------------------------------------------------------------------------
VANK LIT THIRD AVE COMSTOCK, WANGER INTL WANGER U.S. WF ADV VT PRICE LEVEL VAL CL II SM CAP SM CO ASSET ALLOC -------------------------------------------------------------------------------------------- 0.55% $ 1,086,676 $ 4,349,034 $ 4,758,404 $ 4,847,305 $ 411,530 0.75% 92,483,065 241,767,886 284,500,362 426,787,952 50,127,094 0.95% 93,061,623 114,647,391 188,790,534 296,636,388 37,005,978 1.00% -- 63,782,996 38,378,723 64,463,778 6,352,917 1.20% -- 31,627,375 22,678,810 35,631,530 2,955,844 1.25% -- -- -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 186,631,364 $ 456,174,682 $ 539,106,833 $ 828,366,953 $ 96,853,363 --------------------------------------------------------------------------------------------------------------------------------
WF ADV VT WF ADV VT WF ADV VT PRICE LEVEL INTL CORE OPP SM CAP GRO ------------------------------------------------------ 0.55% $ 88,547 $ 576,451 $ 34,534 0.75% 9,602,938 50,239,127 19,035,807 0.95% 7,055,151 30,705,580 13,794,602 1.00% 1,459,945 9,637,077 2,887,907 1.20% 706,839 4,803,711 1,718,083 1.25% -- -- -- -------------------------------------------------------------------------------------------------------------------------------- Total $ 18,913,420 $ 95,961,946 $ 37,470,933 --------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------- 75 - IDS LIFE VARIABLE ACCOUNT 10 9. FINANCIAL HIGHLIGHTS The following is a summary for each period in the five year period ended Dec. 31, 2005 of units, net assets and investment income ratios in addition to the accumulation unit values, total returns and expense ratios for variable annuity contracts with the highest and lowest expense. Some of these subaccounts only offer one price level.
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------- ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- AIM VI CAP APPR, SER I 2005 80,703 $0.99 to $0.96 $ 78,514 0.06% 0.55% to 0.95% 8.24% to 7.81% 2004 86,822 $0.91 to $0.89 $ 78,248 -- 0.55% to 0.95% 6.04% to 5.62% 2003 89,596 $0.86 to $0.85 $ 76,360 -- 0.55% to 0.95% 28.36% to 28.79% 2002 96,660 $0.67 to $0.66 $ 64,136 -- 0.55% to 0.95% (24.72%) to (25.00%) 2001 105,976 $0.89 to $0.88 $ 93,755 -- 0.55% to 0.95% (23.93%) to (24.14%) AIM VI CAP APPR, SER II 2005 236,683 $1.08 to $1.12 $254,026 -- 0.55% to 1.20% 7.98% to 7.29% 2004 69,240 $1.00 to $1.04 $ 68,891 -- 0.55% to 1.20% 5.75% to 5.07% 2003 34,679 $0.94 to $0.99 $ 32,607 -- 0.55% to 1.20% 28.77% to 26.92% 2002 19,767 $0.73 to $0.78 $ 14,483 -- 0.55% to 1.20% (25.51%) to (22.00%)(7) 2001 3,427 $0.98 to $0.98 $ 3,346 -- 0.55% to 0.95% (2.00%)(5) to (2.00%)(5) AIM VI CAP DEV, SER I 2005 32,971 $1.66 to $1.62 $ 53,665 -- 0.55% to 0.95% 9.01% to 8.57% 2004 38,648 $1.52 to $1.49 $ 57,869 -- 0.55% to 0.95% 14.87% to 14.41% 2003 41,077 $1.32 to $1.30 $ 53,706 -- 0.55% to 0.95% 34.69% to 34.02% 2002 45,062 $0.98 to $0.97 $ 43,896 -- 0.55% to 0.95% (22.22%) to (22.40%) 2001 49,249 $1.26 to $1.25 $ 61,506 -- 0.55% to 0.95% (8.70%) to (8.76%) AIM VI CAP DEV, SER II 2005 42,661 $1.28 to $1.32 $ 54,342 -- 0.55% to 1.20% 8.67% to 7.97% 2004 36,244 $1.18 to $1.22 $ 42,616 -- 0.55% to 1.20% 14.64% to 13.89% 2003 20,527 $1.03 to $1.07 $ 21,116 -- 0.55% to 1.20% 33.77% to 33.75% 2002 12,985 $0.77 to $0.80 $ 9,976 -- 0.55% to 1.20% (21.43%) to (20.00%)(7) 2001 2,686 $0.98 to $0.98 $ 2,638 -- 0.55% to 0.95% (2.00%)(5) to (2.00%)(5) AIM VI CORE EQ, SER I 2005 281,112 $1.72 to $1.72 $484,439 1.38% 1.25% to 1.25% 4.01% to 4.01% 2004 351,566 $1.65 to $1.65 $582,105 0.96% 1.25% to 1.25% 7.62% to 7.62% 2003 385,662 $1.53 to $1.53 $593,291 1.01% 1.25% to 1.25% 22.40% to 22.40% 2002 422,060 $1.25 to $1.25 $528,240 0.31% 1.25% to 1.25% (16.67%) to (16.67%) 2001 491,682 $1.50 to $1.50 $737,552 0.04% 1.25% to 1.25% (23.47%) to (23.47%) AIM VI DYN, SER I 2005 14,869 $1.11 to $1.19 $ 16,410 -- 0.55% to 1.20% 10.12% to 9.40% 2004 17,584 $1.01 to $1.08 $ 17,670 -- 0.55% to 1.20% 12.72% to 11.99% 2003 19,140 $0.89 to $0.97 $ 17,089 -- 0.55% to 1.20% 36.92% to 36.62% 2002 12,409 $0.65 to $0.71 $ 8,087 -- 0.55% to 1.20% (32.29%) to (29.00%)(7) 2001 2,977 $0.96 to $0.96 $ 2,873 -- 0.55% to 0.95% (4.00%)(5) to (4.00%)(5) AIM VI FIN SERV, SER I 2005 19,311 $1.20 to $1.25 $ 23,108 1.42% 0.55% to 1.20% 5.33% to 4.65% 2004 19,444 $1.14 to $1.19 $ 22,147 0.80% 0.55% to 1.20% 8.08% to 7.38% 2003 15,907 $1.06 to $1.11 $ 16,818 0.64% 0.55% to 1.20% 29.27% to 27.59% 2002 10,257 $0.82 to $0.87 $ 8,431 1.01% 0.55% to 1.20% (15.46%) to (13.00%)(7) 2001 1,982 $0.97 to $0.96 $ 1,913 -- 0.55% to 0.95% (3.00%)(5) to (4.00%)(5)
-------------------------------------------------------------------------------- 76 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------ AIM VI INTL GRO, SER II 2005 247 $1.09 to $1.09 $ 269 4.53% 0.55% to 1.20% 8.28%(12) to 8.17%(12) 2004 -- -- -- -- -- -- -- -- -- 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- AIM VI TECH, SER I 2005 54,315 $0.73 to $0.84 $ 40,261 -- 0.55% to 1.20% 1.61% to 0.96% 2004 25,352 $0.72 to $0.83 $ 18,466 -- 0.55% to 1.20% 4.06% to 3.38% 2003 14,615 $0.69 to $0.80 $ 10,252 -- 0.55% to 1.20% 43.75% to 42.86% 2002 6,964 $0.48 to $0.56 $ 3,364 -- 0.55% to 1.20% (47.25%) to (44.00%)(7) 2001 1,401 $0.91 to $0.91 $ 1,273 -- 0.55% to 0.95% (9.00%)(5) to (9.00%)(5) AB VPS GLOBAL TECH, CL B 2005 3,446 $1.06 to $1.06 $ 3,648 -- 0.55% to 1.20% 5.87%(12) to 5.76%(12) 2004 -- -- -- -- -- -- -- -- -- 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- AB VPS GRO & INC, CL B 2005 277,477 $1.13 to $1.20 $312,799 1.25% 0.55% to 1.20% 4.02% to 3.35% 2004 229,828 $1.09 to $1.16 $249,752 0.71% 0.55% to 1.20% 10.61% to 9.90% 2003 154,064 $0.98 to $1.05 $151,663 0.79% 0.55% to 1.20% 30.67% to 29.63% 2002 80,843 $0.75 to $0.81 $ 60,725 0.50% 0.55% to 1.20% (22.68%) to (19.00%)(7) 2001 10,049 $0.97 to $0.96 $ 9,722 -- 0.55% to 0.95% (3.00%)(5) to (4.00%)(5) AB VPS INTL VAL, CL B 2005 292,660 $1.90 to $1.92 $551,186 0.47% 0.55% to 1.20% 15.88% to 15.13% 2004 135,770 $1.64 to $1.67 $221,322 0.41% 0.55% to 1.20% 24.21% to 23.40% 2003 68,730 $1.32 to $1.35 $ 90,422 0.27% 0.55% to 1.20% 43.48% to 42.11% 2002 24,977 $0.92 to $0.95 $ 23,004 0.10% 0.55% to 1.20% (6.12%) to (5.00%)(7) 2001 1,805 $0.98 to $0.98 $1,763 -- 0.55% to 0.95% (2.00%)(5) to (2.00%)(5) AC VP INTL, CL I 2005 58,674 $1.06 to $1.03 $ 61,060 1.15% 0.55% to 0.95% 12.63% to 12.19% 2004 59,554 $0.94 to $0.92 $ 55,192 0.54% 0.55% to 0.95% 14.29% to 13.84% 2003 57,923 $0.82 to $0.81 $ 47,110 0.73% 0.55% to 0.95% 24.24% to 22.73% 2002 59,024 $0.66 to $0.66 $ 38,901 0.78% 0.55% to 0.95% (21.43%) to (20.48%) 2001 58,367 $0.84 to $0.83 $ 48,729 0.08% 0.55% to 0.95% (29.41%) to (29.66%) AC VP INTL, CL II 2005 82,367 $1.17 to $1.32 $ 97,265 0.91% 0.55% to 1.20% 12.49% to 11.76% 2004 63,756 $1.04 to $1.18 $ 66,949 0.34% 0.55% to 1.20% 14.14% to 13.41% 2003 40,971 $0.91 to $1.04 $ 37,680 0.48% 0.55% to 1.20% 22.97% to 22.35% 2002 21,225 $0.74 to $0.85 $ 15,745 0.41% 0.55% to 1.20% (20.43%) to (15.00%)(7) 2001 3,878 $0.93 to $0.93 $ 3,615 -- 0.55% to 0.95% (7.00%)(5) to (7.00%)(5) AC VP ULTRA, CL II 2005 18,578 $1.04 to $1.04 $ 19,240 -- 0.55% to 1.20% 3.73%(12) to 3.62%(12) 2004 -- -- -- -- -- -- -- -- -- 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------- 77 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------- ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- AC VP VAL, CL I 2005 341,956 $1.61 to $2.35 $722,148 0.87% 0.55% to 1.25% 4.46% to 3.73% 2004 348,194 $1.54 to $2.27 $713,848 0.97% 0.55% to 1.25% 13.71% to 12.92% 2003 324,528 $1.35 to $2.01 $587,978 1.05% 0.55% to 1.25% 27.36% to 27.22% 2002 313,518 $1.06 to $1.58 $445,941 0.83% 0.55% to 1.25% (12.40%) to (13.66%) 2001 265,030 $1.21 to $1.83 $437,267 0.98% 0.55% to 1.25% 12.04% to 11.59% AC VP VAL, CL II 2005 281,618 $1.36 to $1.32 $378,826 0.64% 0.55% to 1.20% 4.28% to 3.61% 2004 210,265 $1.31 to $1.27 $272,314 0.73% 0.55% to 1.20% 13.55% to 12.81% 2003 141,163 $1.15 to $1.13 $161,583 0.78% 0.55% to 1.20% 27.78% to 26.97% 2002 78,736 $0.90 to $0.89 $ 70,747 0.43% 0.55% to 1.20% (13.46%) to (11.00%)(7) 2001 14,800 $1.04 to $1.04 $ 15,523 -- 0.55% to 0.95% 4.00%(5) to 4.00%(5) CALVERT VS SOCIAL BAL 2005 48,625 $1.05 to $1.16 $ 50,853 1.93% 0.55% to 1.20% 5.07% to 4.39% 2004 42,435 $1.00 to $1.11 $ 42,296 1.96% 0.55% to 1.20% 7.66% to 6.97% 2003 31,464 $0.93 to $1.04 $ 29,107 2.40% 0.55% to 1.20% 19.23% to 18.18% 2002 19,780 $0.78 to $0.88 $ 15,389 3.65% 0.55% to 1.20% (12.36%) to (12.00%)(7) 2001 10,586 $0.89 to $0.89 $ 9,407 5.83% 0.55% to 0.95% (7.29%) to (7.29%) COL HI YIELD, VS CL B 2005 95,779 $1.08 to $1.06 $102,647 -- 0.55% to 1.20% 1.85% to 1.19% 2004 33,998 $1.06 to $1.05 $ 35,891 7.83% 0.55% to 1.20% 5.83%(10) to 5.23%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- CS MID-CAP GRO 2005 25,218 $1.29 to $1.26 $ 31,881 -- 0.55% to 0.95% 6.39% to 5.97% 2004 30,758 $1.21 to $1.18 $ 36,657 -- 0.55% to 0.95% 12.50% to 12.05% 2003 34,940 $1.08 to $1.06 $ 37,126 -- 0.55% to 0.95% 44.00% to 43.24% 2002 38,546 $0.75 to $0.74 $ 28,797 -- 0.55% to 0.95% (29.91%) to (30.19%) 2001 45,322 $1.07 to $1.06 $ 48,286 -- 0.55% to 0.95% (17.05%) to (17.19%) CS SM CAP GRO 2005 226,170 $1.35 to $1.35 $305,959 -- 1.25% to 1.25% (3.88%) to (3.88%) 2004 295,070 $1.40 to $1.40 $415,056 -- 1.25% to 1.25% 9.49% to 9.49% 2003 313,370 $1.28 to $1.28 $402,465 -- 1.25% to 1.25% 47.13% to 47.13% 2002 314,849 $0.87 to $0.87 $275,569 -- 1.25% to 1.25% (34.59%) to (34.59%) 2001 325,878 $1.33 to $1.33 $435,458 -- 1.25% to 1.25% (17.39%) to (17.39%) EG VA FUNDAMENTAL LG CAP, CL 2 2005 30,155 $1.01 to $1.10 $ 30,645 0.82% 0.55% to 1.20% 8.15% to 7.45% 2004 23,448 $0.94 to $1.02 $ 22,145 1.06% 0.55% to 1.20% 8.33% to 7.63% 2003 18,707 $0.86 to $0.95 $ 16,343 6.60% 0.55% to 1.20% 3.61%(9) to 4.40%(9) 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- EG VA INTL EQ, CL 2 2005 33,531 $1.32 to $1.31 $ 44,080 3.25% 0.55% to 1.20% 15.04% to 14.30% 2004 8,450 $1.15 to $1.14 $9,684 2.51% 0.55% to 1.20% 16.83%(10) to 16.14%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------- 78 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------- ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- FID VIP GRO & INC, SERV CL 2005 216,583 $1.04 to $1.01 $221,496 1.50% 0.55% to 0.95% 6.94% to 6.51% 2004 251,135 $0.97 to $0.95 $241,008 0.79% 0.55% to 0.95% 5.18% to 4.76% 2003 245,972 $0.92 to $0.91 $225,087 1.06% 0.55% to 0.95% 22.67% to 22.97% 2002 226,422 $0.75 to $0.74 $168,931 1.28% 0.55% to 0.95% (17.58%) to (17.78%) 2001 224,545 $0.91 to $0.90 $202,788 1.03% 0.55% to 0.95% (9.00%) to (10.00%) FID VIP GRO & INC, SERV CL 2 2005 358,054 $1.14 to $1.15 $404,610 1.30% 0.55% to 1.20% 6.81% to 6.12% 2004 353,479 $1.06 to $1.09 $375,117 0.64% 0.55% to 1.20% 4.95% to 4.27% 2003 228,596 $1.01 to $1.04 $231,686 0.66% 0.55% to 1.20% 21.69% to 22.35% 2002 92,339 $0.83 to $0.85 $ 76,486 0.57% 0.55% to 1.20% (17.00%) to (15.00%)(7) 2001 14,672 $1.00 to $1.00 $ 14,809 -- 0.55% to 0.95% 0.00%(5) to 0.00%(5) FID VIP MID CAP, SERV CL 2005 144,212 $2.86 to $2.79 $405,434 1.62% 0.55% to 0.95% 17.56% to 17.09% 2004 147,113 $2.43 to $2.38 $352,910 -- 0.55% to 0.95% 24.09% to 23.59% 2003 138,655 $1.96 to $1.93 $268,769 0.31% 0.55% to 0.95% 38.03% to 37.86% 2002 132,332 $1.42 to $1.40 $186,627 0.85% 0.55% to 0.95% (10.69%) to (10.83%) 2001 127,306 $1.59 to $1.57 $201,042 -- 0.55% to 0.95% (3.64%) to (4.27%) FID VIP MID CAP, SERV CL 2 2005 496,239 $1.86 to $1.76 $908,519 1.41% 0.55% to 1.20% 17.37% to 16.61% 2004 356,492 $1.59 to $1.51 $558,130 -- 0.55% to 1.20% 23.97% to 23.17% 2003 207,277 $1.28 to $1.23 $262,748 0.18% 0.55% to 1.20% 37.63% to 36.67% 2002 94,048 $0.93 to $0.90 $ 87,109 0.33% 0.55% to 1.20% (10.58%) to (10.00%)(7) 2001 13,724 $1.04 to $1.04 $ 14,333 -- 0.55% to 0.95% 4.00%(5) to 4.00%(5) FID VIP OVERSEAS, SERV CL 2005 81,957 $1.16 to $1.14 $ 93,982 0.57% 0.55% to 0.95% 18.32% to 17.85% 2004 86,132 $0.98 to $0.96 $ 83,695 0.96% 0.55% to 0.95% 12.86% to 12.41% 2003 66,234 $0.87 to $0.86 $ 57,249 0.74% 0.55% to 0.95% 42.62% to 43.33% 2002 62,136 $0.61 to $0.60 $ 37,840 0.70% 0.55% to 0.95% (20.78%) to (22.08%) 2001 60,772 $0.77 to $0.77 $ 46,833 4.50% 0.55% to 0.95% (22.22%) to (21.43%) FID VIP OVERSEAS, SERV CL 2 2005 136,453 $1.42 to $1.53 $193,596 0.49% 0.55% to 1.20% 18.13% to 17.37% 2004 122,929 $1.20 to $1.31 $147,870 0.73% 0.55% to 1.20% 12.68% to 11.95% 2003 58,124 $1.06 to $1.17 $ 62,227 0.34% 0.55% to 1.20% 41.33% to 40.96% 2002 24,767 $0.75 to $0.83 $ 18,666 0.35% 0.55% to 1.20% (21.05%) to (17.00%)(7) 2001 4,311 $0.95 to $0.94 $ 4,072 -- 0.55% to 0.95% (5.00%)(5) to (6.00%)(5) FTVIPT FRANK REAL EST, CL 2 2005 266,642 $2.73 to $1.97 $690,004 1.39% 0.55% to 1.20% 12.85% to 12.12% 2004 230,881 $2.42 to $1.76 $533,004 1.86% 0.55% to 1.20% 31.08% to 30.23% 2003 166,493 $1.85 to $1.35 $296,754 2.44% 0.55% to 1.20% 35.04% to 33.66% 2002 109,989 $1.37 to $1.01 $147,218 2.57% 0.55% to 1.20% 1.48% to 1.00%(7) 2001 44,491 $1.35 to $1.33 $ 59,740 3.64% 0.55% to 0.95% 7.14% to 6.40% FTVIPT FRANK SM CAP VAL, CL 2 2005 156,167 $2.14 to $1.57 $316,893 0.75% 0.55% to 1.20% 8.17% to 7.47% 2004 118,566 $1.98 to $1.46 $224,252 0.18% 0.55% to 1.20% 23.07% to 22.27% 2003 87,363 $1.61 to $1.20 $135,426 0.21% 0.55% to 1.20% 31.97% to 30.43% 2002 57,262 $1.22 to $0.92 $ 68,337 0.37% 0.55% to 1.20% (9.63%) to (8.00%)(7) 2001 20,534 $1.35 to $1.34 $ 27,681 0.37% 0.55% to 0.95% 12.50% to 12.61%
-------------------------------------------------------------------------------- 79 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------- ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- FTVIPT MUTUAL SHARES SEC, CL 2 2005 151,140 $1.30 to $1.34 $196,107 0.87% 0.55% to 1.20% 9.95% to 9.24% 2004 99,871 $1.18 to $1.22 $118,373 0.76% 0.55% to 1.20% 12.02% to 11.29% 2003 58,929 $1.05 to $1.10 $ 62,601 0.96% 0.55% to 1.20% 23.53% to 23.60% 2002 23,376 $0.85 to $0.89 $ 19,872 0.75% 0.55% to 1.20% (12.37%) to (11.00%)(7) 2001 2,056 $0.97 to $0.96 $ 1,985 -- 0.55% to 0.95% (3.00%)(5) to (4.00%)(5) FTVIPT TEMP DEV MKTS SEC, CL 1 2005 254,244 $1.10 to $1.10 $281,629 1.43% 1.25% to 1.25% 26.18% to 26.18% 2004 274,586 $0.88 to $0.88 $240,781 1.92% 1.25% to 1.25% 23.28% to 23.28% 2003 272,504 $0.71 to $0.71 $193,809 1.36% 1.25% to 1.25% 51.06% to 51.06% 2002 273,087 $0.47 to $0.47 $127,911 1.62% 1.25% to 1.25% 0.00% to 0.00% 2001 292,955 $0.47 to $0.47 $138,800 1.02% 1.25% to 1.25% (9.62%) to (9.62%) FTVIPT TEMP FOR SEC, CL 2 2005 36,373 $1.43 to $1.41 $ 51,495 1.18% 0.55% to 0.95% 9.57% to 9.13% 2004 31,651 $1.30 to $1.29 $ 41,042 1.04% 0.55% to 0.95% 17.88% to 17.41% 2003 24,004 $1.11 to $1.10 $ 26,415 1.67% 0.55% to 0.95% 32.14% to 30.95% 2002 18,138 $0.84 to $0.84 $ 15,223 2.32% 0.55% to 0.95% (16.00%)(8) to (16.00%)(8) 2001 -- -- -- -- -- -- -- -- -- GS VIT STRUCTD SM CAP EQ 2005 23,432 $1.79 to $1.74 $ 41,091 0.23% 0.55% to 0.95% 5.49% to 5.07% 2004 26,859 $1.69 to $1.66 $ 44,779 0.19% 0.55% to 0.95% 15.69% to 15.23% 2003 29,916 $1.46 to $1.44 $ 43,240 0.24% 0.55% to 0.95% 44.55% to 44.00% 2002 32,164 $1.01 to $1.00 $ 32,114 0.26% 0.55% to 0.95% (15.13%) to (15.25%) 2001 33,224 $1.19 to $1.18 $ 39,336 0.33% 0.55% to 0.95% 3.48% to 3.51% GS VIT STRUCTD U.S. EQ 2005 467,555 $1.05 to $1.23 $492,636 1.00% 0.55% to 1.20% 5.93% to 5.24% 2004 253,878 $0.99 to $1.17 $251,604 1.38% 0.55% to 1.20% 14.31% to 13.57% 2003 169,762 $0.87 to $1.03 $146,765 0.79% 0.55% to 1.20% 29.85% to 28.75% 2002 150,534 $0.67 to $0.80 $101,100 0.61% 0.55% to 1.20% (22.99%) to (20.00%)(7) 2001 132,471 $0.87 to $0.86 $114,454 0.49% 0.55% to 0.95% (12.12%) to (13.13%) GS VIT MID CAP VAL 2005 345,787 $2.34 to $1.68 $765,494 0.70% 0.55% to 1.20% 12.21% to 11.48% 2004 226,018 $2.09 to $1.50 $451,843 0.70% 0.55% to 1.20% 25.19% to 24.38% 2003 162,339 $1.67 to $1.21 $261,988 1.08% 0.55% to 1.20% 27.48% to 27.37% 2002 109,427 $1.31 to $0.95 $140,030 1.38% 0.55% to 1.20% (5.07%) to (5.00%)(7) 2001 48,659 $1.38 to $1.37 $ 66,749 1.44% 0.55% to 0.95% 11.29% to 11.38% JANUS ASPEN GLOBAL TECH, SERV 2005 57,634 $0.41 to $1.01 $ 23,479 -- 0.55% to 1.20% 10.94% to 10.22% 2004 65,787 $0.37 to $0.91 $ 24,174 -- 0.55% to 1.20% 0.02% to (0.63%) 2003 71,812 $0.37 to $0.92 $ 26,415 -- 0.55% to 1.20% 48.00% to 46.03% 2002 69,076 $0.25 to $0.63 $ 17,299 -- 0.55% to 1.20% (41.86%) to (37.00%)(7) 2001 69,019 $0.43 to $0.42 $ 29,306 0.67% 0.55% to 0.95% (36.76%) to (38.24%) JANUS ASPEN INTL GRO, SERV 2005 134,816 $0.93 to $1.60 $125,579 1.08% 0.55% to 1.20% 31.22% to 30.37% 2004 139,788 $0.71 to $1.23 $ 99,632 0.84% 0.55% to 1.20% 18.04% to 17.27% 2003 152,636 $0.60 to $1.05 $ 92,188 0.98% 0.55% to 1.20% 33.33% to 32.91% 2002 157,502 $0.45 to $0.79 $ 70,985 0.68% 0.55% to 1.20% (26.23%) to (21.00%)(7) 2001 125,280 $0.61 to $0.61 $ 76,239 0.75% 0.55% to 0.95% (23.75%) to (23.75%)
-------------------------------------------------------------------------------- 80 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- JANUS ASPEN MID CAP GRO, SERV 2005 59,483 $0.54 to $0.53 $ 31,715 -- 0.55% to 0.95% 11.41% to 10.97% 2004 71,059 $0.49 to $0.48 $ 34,099 -- 0.55% to 0.95% 19.82% to 19.34% 2003 85,736 $0.41 to $0.40 $ 34,434 -- 0.55% to 0.95% 36.67% to 33.33% 2002 95,558 $0.30 to $0.30 $ 28,712 -- 0.55% to 0.95% (28.57%) to (28.57%) 2001 106,585 $0.42 to $0.42 $ 44,895 -- 0.55% to 0.95% (40.00%) to (40.00%) LAZARD RETIRE INTL EQ 2005 188,675 $1.04 to $1.45 $198,502 0.98% 0.55% to 1.20% 10.04% to 9.33% 2004 168,208 $0.94 to $1.33 $160,817 0.54% 0.55% to 1.20% 14.35% to 13.61% 2003 123,056 $0.83 to $1.17 $102,535 0.35% 0.55% to 1.20% 27.69% to 27.17% 2002 60,087 $0.65 to $0.92 $ 38,997 0.09% 0.55% to 1.20% (10.96%) to (8.00%)(7) 2001 35,840 $0.73 to $0.72 $ 26,081 0.01% 0.55% to 0.95% (23.96%) to (25.00%) MFS INV GRO STOCK, SERV CL 2005 216,007 $0.67 to $1.02 $146,971 0.14% 0.55% to 1.20% 3.66% to 2.99% 2004 195,430 $0.64 to $0.99 $127,400 -- 0.55% to 1.20% 8.39% to 7.69% 2003 172,322 $0.59 to $0.92 $103,234 -- 0.55% to 1.20% 20.41% to 21.05% 2002 134,823 $0.49 to $0.76 $ 65,815 -- 0.55% to 1.20% (27.94%) to (24.00%)(7) 2001 102,176 $0.68 to $0.67 $ 69,005 0.06% 0.55% to 0.95% (25.27%) to (25.56%) MFS NEW DIS, SERV CL 2005 122,560 $0.90 to $1.04 $109,920 -- 0.55% to 1.20% 4.46% to 3.78% 2004 149,075 $0.86 to $1.00 $128,085 -- 0.55% to 1.20% 5.63% to 4.94% 2003 146,404 $0.81 to $0.95 $119,207 -- 0.55% to 1.20% 32.79% to 31.94% 2002 117,036 $0.61 to $0.72 $ 71,654 -- 0.55% to 1.20% (32.22%) to (28.00%)(7) 2001 71,442 $0.90 to $0.90 $ 64,221 -- 0.55% to 0.95% (6.25%) to (6.25%) MFS TOTAL RETURN, SERV CL 2005 74,459 $1.12 to $1.10 $ 82,895 1.46% 0.55% to 1.20% 2.04% to 1.38% 2004 26,242 $1.10 to $1.09 $ 28,760 0.61% 0.55% to 1.20% 9.02%(10) to 8.38%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- MFS UTILITIES, SERV CL 2005 103,681 $1.38 to $1.68 $145,619 0.42% 0.55% to 1.20% 15.93% to 15.18% 2004 52,792 $1.19 to $1.46 $ 64,198 1.21% 0.55% to 1.20% 29.13% to 28.30% 2003 33,751 $0.92 to $1.14 $ 31,693 1.87% 0.55% to 1.20% 35.29% to 34.12% 2002 18,482 $0.68 to $0.85 $ 12,743 2.05% 0.55% to 1.20% (23.60%) to (15.00%)(7) 2001 5,913 $0.89 to $0.89 $ 5,308 -- 0.55% to 0.95% (11.00%)(5) to (11.00%)(5) OPPEN GLOBAL SEC VA, SERV 2005 72,423 $1.31 to $1.30 $ 94,587 0.57% 0.55% to 1.20% 13.44% to 12.70% 2004 24,526 $1.16 to $1.15 $ 28,389 0.15% 0.55% to 1.20% 15.92%(10) to 15.24%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- OPPEN MAIN ST SM CAP VA, SERV 2005 41,895 $1.26 to $1.24 $ 52,482 -- 0.55% to 1.20% 9.11% to 8.41% 2004 16,643 $1.16 to $1.15 $ 19,170 -- 0.55% to 1.20% 17.36%(10) to 16.67%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------- 81 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- OPPEN STRATEGIC BOND VA, SERV 2005 306,977 $1.09 to $1.08 $332,896 1.97% 0.55% to 1.20% 1.92% to 1.26% 2004 46,499 $1.07 to $1.06 $ 49,696 0.56% 0.55% to 1.20% 7.06%(10) to 6.43%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- PIONEER EQ INC VCT, CL II 2005 53,522 $1.20 to $1.23 $ 64,029 2.13% 0.55% to 1.20% 4.94% to 4.26% 2004 48,892 $1.14 to $1.18 $ 55,958 2.13% 0.55% to 1.20% 15.40% to 14.66% 2003 42,477 $0.99 to $1.03 $ 42,277 2.14% 0.55% to 1.20% 22.22% to 21.18% 2002 21,648 $0.81 to $0.85 $ 17,802 2.77% 0.55% to 1.20% (17.35%) to (15.00%)(7) 2001 2,422 $0.98 to $0.97 $ 2,362 2.26% 0.55% to 0.95% (2.00%)(5) to (3.00%)(5) PIONEER EUROPE VCT, CL II 2005 5,369 $1.31 to $1.39 $ 7,007 0.49% 0.55% to 1.20% 7.22% to 6.53% 2004 5,012 $1.22 to $1.31 $ 6,110 0.65% 0.55% to 1.20% 17.55% to 16.79% 2003 3,937 $1.04 to $1.12 $ 4,092 0.33% 0.55% to 1.20% 31.65% to 31.76% 2002 2,111 $0.79 to $0.85 $ 1,662 -- 0.55% to 1.20% (19.39%) to (15.00%)(7) 2001 264 $0.98 to $0.98 $ 258 -- 0.55% to 0.95% (2.00%)(5) to (2.00%)(5) PUT VT HEALTH SwCIENCES, CL IB 2005 48,773 $1.10 to $1.11 $ 53,264 0.05% 0.55% to 1.20% 12.58% to 11.85% 2004 37,011 $0.98 to $1.00 $ 35,996 0.17% 0.55% to 1.20% 6.54% to 5.85% 2003 30,753 $0.92 to $0.94 $ 28,128 0.46% 0.55% to 1.20% 17.95% to 17.50% 2002 19,335 $0.78 to $0.80 $ 15,031 -- 0.55% to 1.20% (20.41%) to (20.00%)(7) 2001 4,009 $0.98 to $0.98 $ 3,934 -- 0.55% to 0.95% (2.00%)(5) to (2.00%)(5) PUT VT INTL EQ, CL IB 2005 68,854 $1.30 to $1.39 $ 89,094 1.45% 0.55% to 1.20% 11.58% to 10.86% 2004 72,649 $1.16 to $1.25 $ 84,438 1.45% 0.55% to 1.20% 15.56% to 14.81% 2003 70,062 $1.01 to $1.09 $ 70,669 0.71% 0.55% to 1.20% 27.85% to 26.74% 2002 40,270 $0.79 to $0.86 $ 31,835 0.43% 0.55% to 1.20% (17.71%) to (14.00%)(7) 2001 5,058 $0.96 to $0.96 $ 4,857 -- 0.55% to 0.95% (4.00%)(5) to (4.00%)(5) PUT VT INTL NEW OPP, CL IB 2005 90,632 $0.99 to $0.97 $ 88,142 0.68% 0.55% to 0.95% 17.72% to 17.25% 2004 107,334 $0.84 to $0.82 $ 88,924 1.02% 0.55% to 0.95% 12.73% to 12.28% 2003 128,360 $0.75 to $0.73 $ 94,570 0.31% 0.55% to 0.95% 33.93% to 30.36% 2002 148,078 $0.56 to $0.56 $ 82,588 0.68% 0.55% to 0.95% (15.15%) to (13.85%) 2001 170,444 $0.66 to $0.65 $110,996 -- 0.55% to 0.95% (28.26%) to (29.35%) PUT VT NEW OPP, CL IA 2005 206,197 $1.38 to $1.38 $286,496 0.38% 1.25% to 1.25% 8.96% to 8.96% 2004 265,044 $1.27 to $1.27 $337,875 -- 1.25% to 1.25% 9.20% to 9.20% 2003 324,631 $1.16 to $1.16 $378,811 -- 1.25% to 1.25% 30.34% to 30.34% 2002 378,658 $0.89 to $0.89 $337,002 -- 1.25% to 1.25% (31.01%) to (31.01%) 2001 457,099 $1.29 to $1.29 $590,926 -- 1.25% to 1.25% (31.02%) to (31.02%) PUT VT VISTA, CL IB 2005 94,134 $1.03 to $1.24 $ 95,729 -- 0.55% to 1.20% 11.53% to 10.81% 2004 110,020 $0.92 to $1.12 $100,428 -- 0.55% to 1.20% 17.96% to 17.19% 2003 131,762 $0.78 to $0.96 $102,200 -- 0.55% to 1.20% 32.20% to 31.51% 2002 146,947 $0.59 to $0.73 $ 86,196 -- 0.55% to 1.20% (31.40%) to (27.00%)(7) 2001 163,633 $0.86 to $0.85 $139,270 -- 0.55% to 0.95% (33.33%) to (34.11%)
-------------------------------------------------------------------------------- 82 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------- ---------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- RVS VP BAL 2005 360,863 $1.10 to $1.66 $ 501,036 2.59% 0.55% to 1.25% 3.35% to 2.63% 2004 373,845 $1.06 to $1.61 $ 515,992 2.28% 0.55% to 1.25% 9.00% to 8.23% 2003 384,617 $0.97 to $1.49 $ 496,929 2.26% 0.55% to 1.25% 19.75% to 18.25% 2002 376,502 $0.81 to $1.26 $ 418,919 2.60% 0.55% to 1.25% (13.83%) to (13.70%) 2001 375,270 $0.94 to $1.46 $ 505,158 2.50% 0.55% to 1.25% (11.32%) to (11.52%) RVS VP CASH MGMT 2005 429,069 $1.13 to $1.23 $ 477,358 2.58% 0.55% to 1.25% 2.05% to 1.34% 2004 426,212 $1.11 to $1.21 $ 468,695 0.73% 0.55% to 1.25% 0.19% to (0.51%) 2003 486,939 $1.11 to $1.22 $ 539,742 0.51% 0.55% to 1.25% 0.00% to (0.81%) 2002 636,469 $1.11 to $1.23 $ 711,964 1.16% 0.55% to 1.25% 0.91% to 0.00% 2001 659,980 $1.10 to $1.23 $ 741,608 3.57% 0.55% to 1.25% 2.80% to 2.50% RVS VP CORE BOND 2005 40,317 $1.04 to $1.02 $ 58,374 3.36% 0.55% to 1.20% 1.22% to 0.57% 2004 15,787 $1.02 to $1.02 $ 41,656 2.55% 0.55% to 1.20% 2.45%(10) to 1.85%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- RVS VP DIV BOND 2005 842,520 $1.31 to $1.41 $1,094,933 3.71% 0.55% to 1.25% 1.56% to 0.85% 2004 639,931 $1.29 to $1.40 $ 835,025 3.83% 0.55% to 1.25% 3.92% to 3.19% 2003 618,469 $1.24 to $1.36 $ 788,063 3.58% 0.55% to 1.25% 3.33% to 3.82% 2002 589,321 $1.20 to $1.31 $ 734,053 5.08% 0.55% to 1.25% 5.26% to 3.97% 2001 430,733 $1.14 to $1.26 $ 521,087 6.41% 0.55% to 1.25% 7.55% to 5.88% RVS VP DIV EQ INC 2005 772,974 $1.53 to $1.51 $1,175,707 1.61% 0.55% to 1.20% 12.88% to 12.15% 2004 482,647 $1.36 to $1.35 $ 652,523 1.65% 0.55% to 1.20% 17.56% to 16.80% 2003 249,818 $1.16 to $1.15 $ 288,112 1.60% 0.55% to 1.20% 41.46% to 38.55% 2002 160,822 $0.82 to $0.83 $ 132,660 1.61% 0.55% to 1.20% (19.61%) to (17.00%)(7) 2001 84,908 $1.02 to $1.02 $ 87,283 1.26% 0.55% to 0.95% 0.99% to 0.99% RVS VP EMER MKTS 2005 134,343 $1.58 to $2.02 $ 213,076 0.20% 0.55% to 1.20% 33.07% to 32.21% 2004 42,521 $1.19 to $1.53 $ 50,449 3.09% 0.55% to 1.20% 23.47% to 22.67% 2003 15,683 $0.96 to $1.25 $ 19,823 1.73% 0.55% to 1.20% 39.13% to 38.89% 2002 9,255 $0.69 to $0.90 $ 9,786 -- 0.55% to 1.20% (5.48%) to (10.00%)(7) 2001 3,334 $0.73 to $0.72 $ 6,073 0.02% 0.55% to 0.95% (2.67%) to (2.70%) RVS VP GLOBAL BOND 2005 331,823 $1.38 to $1.46 $ 454,346 3.91% 0.55% to 1.25% (5.52%) to (6.17%) 2004 242,562 $1.46 to $1.55 $ 355,988 4.10% 0.55% to 1.25% 9.42% to 8.66% 2003 186,450 $1.33 to $1.43 $ 253,433 7.33% 0.55% to 1.25% 12.71% to 11.72% 2002 141,210 $1.18 to $1.28 $ 173,577 4.74% 0.55% to 1.25% 13.46% to 13.27% 2001 108,861 $1.04 to $1.13 $ 119,039 3.38% 0.55% to 1.25% 0.97% to 0.00% RVS VP GLOBAL INFLATION PROT SEC 2005 177,692 $1.05 to $1.04 $ 186,090 7.05% 0.55% to 1.20% 2.24% to 1.59% 2004 9,951 $1.03 to $1.03 $ 10,223 3.47% 0.55% to 1.20% 2.67%(11) to 2.47%(11) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------- 83 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- RVS VP GRO 2005 579,086 $0.67 to $1.05 $398,436 0.39% 0.55% to 1.20% 8.02% to 7.32% 2004 340,148 $0.62 to $0.98 $213,399 0.32% 0.55% to 1.20% 7.84% to 7.14% 2003 349,978 $0.57 to $0.92 $203,000 0.21% 0.55% to 1.20% 21.28% to 21.05% 2002 257,108 $0.47 to $0.76 $122,448 0.07% 0.55% to 1.20% (26.56%) to (24.00%)(7) 2001 261,235 $0.64 to $0.64 $169,182 -- 0.55% to 0.95% (31.91%) to (31.91%) RVS VP HI YIELD BOND 2005 715,854 $1.26 to $1.39 $919,121 6.46% 0.55% to 1.25% 3.45% to 2.73% 2004 730,172 $1.22 to $1.36 $914,940 6.99% 0.55% to 1.25% 10.78% to 10.01% 2003 622,128 $1.10 to $1.23 $712,392 7.63% 0.55% to 1.25% 23.60% to 23.00% 2002 426,030 $0.89 to $1.00 $399,795 7.77% 0.55% to 1.25% (6.32%) to (7.41%) 2001 364,550 $0.95 to $1.08 $375,155 10.97% 0.55% to 1.25% 4.40% to 3.85% RVS VP INC OPP 2005 59,285 $1.07 to $1.06 $ 63,157 5.94% 0.55% to 1.20% 2.76% to 2.10% 2004 2,406 $1.04 to $1.04 $ 2,505 5.77% 0.55% to 1.20% 3.92%(11) to 3.72%(11) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- RVS VP INTL OPP 2005 335,839 $0.92 to $1.23 $370,645 1.43% 0.55% to 1.25% 13.24% to 12.45% 2004 281,107 $0.82 to $1.09 $282,571 1.13% 0.55% to 1.25% 16.76% to 15.95% 2003 215,587 $0.70 to $0.94 $192,941 0.92% 0.55% to 1.25% 27.27% to 25.33% 2002 223,251 $0.55 to $0.75 $159,249 0.97% 0.55% to 1.25% (17.91%) to (18.48%) 2001 244,022 $0.67 to $0.92 $217,485 1.21% 0.55% to 1.25% (29.47%) to (29.77%) RVS VP LG CAP EQ 2005 587,040 $0.85 to $1.35 $570,540 1.15% 0.55% to 1.25% 5.59% to 4.86% 2004 386,123 $0.80 to $1.28 $384,039 0.92% 0.55% to 1.25% 5.30% to 4.57% 2003 277,050 $0.76 to $1.23 $286,327 0.62% 0.55% to 1.25% 28.81% to 28.13% 2002 249,561 $0.59 to $0.96 $208,847 0.53% 0.55% to 1.25% (22.37%) to (23.20%) 2001 243,097 $0.76 to $1.25 $279,797 0.30% 0.55% to 1.25% (19.15%) to (19.35%) RVS VP LG CAP VAL 2005 11,470 $1.14 to $1.13 $ 16,462 1.60% 0.55% to 1.20% 3.96% to 3.29% 2004 6,542 $1.10 to $1.09 $ 10,459 1.89% 0.55% to 1.20% 10.01%(10) to 9.37%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- RVS VP MID CAP GRO 2005 87,824 $1.26 to $1.25 $107,722 -- 0.55% to 1.20% 9.52% to 8.81% 2004 98,758 $1.15 to $1.15 $110,889 -- 0.55% to 1.20% 8.50% to 7.80% 2003 80,060 $1.06 to $1.06 $ 83,083 -- 0.55% to 1.20% 21.84% to 20.45% 2002 30,902 $0.87 to $0.88 $ 28,082 -- 0.55% to 1.20% (13.86%) to (12.00%)(7) 2001 4,765 $1.01 to $0.99 $ 6,764 -- 0.55% to 0.95% 1.00%(4) to (1.00%)(4) RVS VP MID CAP VAL 2005 12,717 $1.20 to $1.19 $ 17,507 1.13% 0.55% to 1.20% 17.78%(13) to 17.28%(13) 2004 -- -- -- -- -- -- -- -- -- 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- --
-------------------------------------------------------------------------------- 84 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 -------------------------------------------- ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) --------------------------------------------------------------------------------------------------------- RVS VP NEW DIM 2005 924,104 $0.89 to $1.61 $1,066,383 0.58% 0.55% to 1.25% 0.75% to 0.05% 2004 1,388,979 $0.88 to $1.61 $1,614,063 1.02% 0.55% to 1.25% 2.71% to 1.99% 2003 1,511,971 $0.86 to $1.58 $1,752,071 0.67% 0.55% to 1.25% 24.64% to 23.44% 2002 1,385,194 $0.69 to $1.28 $1,346,629 0.51% 0.55% to 1.25% (22.47%) to (22.89%) 2001 1,296,185 $0.89 to $1.66 $1,709,109 0.22% 0.55% to 1.25% (17.59%) to (17.82%) RVS VP S&P 500 2005 304,082 $0.88 to $1.13 $ 272,014 1.40% 0.55% to 1.20% 3.83% to 3.16% 2004 283,879 $0.85 to $1.10 $ 244,571 1.50% 0.55% to 1.20% 9.66% to 8.95% 2003 208,338 $0.77 to $1.01 $ 163,372 1.21% 0.55% to 1.20% 26.23% to 26.25% 2002 134,292 $0.61 to $0.80 $ 82,220 1.00% 0.55% to 1.20% (22.78%) to (20.00%)(7) 2001 77,302 $0.79 to $0.79 $ 60,947 0.89% 0.55% to 0.95% (12.22%) to (13.19%) RVS VP SELECT VAL 2005 18,946 $1.13 to $1.11 $ 24,577 0.49% 0.55% to 1.20% (0.05%) to (0.69%) 2004 9,024 $1.13 to $1.12 $ 13,503 1.11% 0.55% to 1.20% 12.84%(10) to 12.18%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- RVS VP SHORT DURATION 2005 302,534 $1.24 to $1.04 $ 361,417 2.89% 0.55% to 1.20% 1.02% to 0.37% 2004 326,084 $1.23 to $1.04 $ 387,853 2.44% 0.55% to 1.20% 0.30% to (0.35%) 2003 319,998 $1.22 to $1.04 $ 381,318 2.30% 0.55% to 1.20% 0.83% to 0.00% 2002 256,041 $1.21 to $1.04 $ 304,224 2.87% 0.55% to 1.20% 5.22% to 4.00%(7) 2001 108,068 $1.15 to $1.13 $ 123,458 4.54% 0.55% to 0.95% 5.50% to 4.63% RVS VP SM CAP ADV 2005 116,136 $1.61 to $1.51 $ 183,927 -- 0.55% to 1.20% 4.25% to 3.58% 2004 122,818 $1.54 to $1.45 $ 187,181 -- 0.55% to 1.20% 17.89% to 17.13% 2003 90,054 $1.31 to $1.24 $ 116,896 -- 0.55% to 1.20% 47.19% to 45.88% 2002 60,353 $0.89 to $0.85 $ 53,405 -- 0.55% to 1.20% (17.59%) to (15.00%)(7) 2001 47,516 $1.08 to $1.07 $ 51,159 -- 0.55% to 0.95% (6.90%) to (7.76%) RVS VP SM CAP VAL 2005 234,333 $1.61 to $1.49 $ 370,927 0.21% 0.55% to 1.20% 5.19% to 4.51% 2004 168,145 $1.53 to $1.42 $ 254,207 0.03% 0.55% to 1.20% 19.36% to 18.58% 2003 125,783 $1.28 to $1.20 $ 159,989 0.04% 0.55% to 1.20% 37.63% to 36.36% 2002 77,906 $0.93 to $0.88 $ 76,358 0.17% 0.55% to 1.20% (13.08%) to (12.00%)(7) 2001 13,610 $1.07 to $1.07 $ 18,860 -- 0.55% to 0.95% 7.00%(6) to 7.00%(6) RVS VP STRATEGY AGGR 2005 168,281 $0.83 to $1.10 $ 165,573 0.08% 0.55% to 1.25% 8.58% to 7.82% 2004 222,702 $0.77 to $1.02 $ 203,338 -- 0.55% to 1.25% 8.80% to 8.04% 2003 265,715 $0.71 to $0.94 $ 224,303 -- 0.55% to 1.25% 29.09% to 27.03% 2002 276,115 $0.55 to $0.74 $ 183,289 -- 0.55% to 1.25% (32.10%) to (32.73%) 2001 316,849 $0.81 to $1.10 $ 314,291 0.21% 0.55% to 1.25% (33.61%) to (34.13%) ROYCE MICRO-CAP 2005 46,205 $2.83 to $2.76 $ 128,705 0.53% 0.55% to 0.95% 11.00% to 10.56% 2004 54,526 $2.55 to $2.50 $ 137,329 -- 0.55% to 0.95% 13.22% to 12.77% 2003 54,945 $2.26 to $2.22 $ 122,428 -- 0.55% to 0.95% 48.68% to 48.00% 2002 53,109 $1.52 to $1.50 $ 79,999 -- 0.55% to 0.95% (13.14%) to (13.79%) 2001 43,983 $1.75 to $1.74 $ 76,654 -- 0.55% to 0.95% 28.68% to 28.89%
-------------------------------------------------------------------------------- 85 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- LM PTNRS VAR SM CAP GRO, CL II 2005 104 $1.06 to $1.05 $ 110 -- 0.55% to 1.20% 5.56%(12) to 5.45%(12) 2004 -- -- -- -- -- -- -- -- -- 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- THIRD AVE VAL 2005 64,866 $2.92 to $2.85 $186,631 1.31% 0.55% to 0.95% 14.00% to 13.55% 2004 66,587 $2.57 to $2.51 $168,558 0.54% 0.55% to 0.95% 19.24% to 18.76% 2003 67,135 $2.15 to $2.12 $142,904 0.19% 0.55% to 0.95% 41.45% to 41.33% 2002 66,723 $1.52 to $1.50 $100,487 0.19% 0.55% to 0.95% (11.11%) to (11.24%) 2001 59,202 $1.71 to $1.69 $100,737 0.15% 0.55% to 0.95% 13.25% to 12.67% VANK LIT COMSTOCK, CL II 2005 384,396 $1.19 to $1.18 $456,175 0.49% 0.55% to 1.20% 3.54% to 2.87% 2004 75,664 $1.15 to $1.15 $ 87,005 0.11% 0.55% to 1.20% 14.41%(10) to 13.74%(10) 2003 -- -- -- -- -- -- -- -- -- 2002 -- -- -- -- -- -- -- -- -- 2001 -- -- -- -- -- -- -- -- -- WANGER INTL SM CAP 2005 318,154 $1.69 to $1.98 $539,107 0.86% 0.55% to 1.20% 20.86% to 20.08% 2004 201,340 $1.40 to $1.65 $282,034 0.59% 0.55% to 1.20% 29.56% to 28.72% 2003 130,668 $1.08 to $1.28 $141,172 0.27% 0.55% to 1.20% 47.95% to 47.13% 2002 89,925 $0.73 to $0.87 $ 65,493 -- 0.55% to 1.20% (14.12%) to (13.00%)(7) 2001 58,884 $0.85 to $0.84 $ 49,945 0.00% 0.55% to 0.95% (22.02%) to (22.22%) WANGER U.S. SM CO 2005 478,752 $1.79 to $1.54 $828,367 -- 0.55% to 1.20% 10.64% to 9.93% 2004 368,407 $1.62 to $1.40 $579,332 -- 0.55% to 1.20% 17.68% to 16.92% 2003 261,219 $1.37 to $1.20 $351,317 -- 0.55% to 1.20% 42.71% to 41.18% 2002 158,874 $0.96 to $0.85 $151,154 -- 0.55% to 1.20% (17.95%) to (15.00%)(7) 2001 88,067 $1.17 to $1.15 $102,085 0.06% 0.55% to 0.95% 11.43% to 9.52% WF ADV VT ASSET ALLOC 2005 84,219 $1.16 to $1.19 $ 96,853 2.09% 0.55% to 1.20% 4.41% to 3.74% 2004 80,918 $1.11 to $1.15 $ 89,406 2.16% 0.55% to 1.20% 8.74% to 8.04% 2003 59,332 $1.02 to $1.06 $ 60,495 1.74% 0.55% to 1.20% 21.43% to 20.45% 2002 28,802 $0.84 to $0.88 $ 24,203 2.33% 0.55% to 1.20% (13.40%) to (12.00%)(7) 2001 7,031 $0.97 to $0.97 $ 6,810 2.07% 0.55% to 0.95% (3.00%)(4) to 3.00%(4) WF ADV VT INTL CORE 2005 17,549 $1.07 to $1.23 $ 18,913 1.88% 0.55% to 1.20% 9.07% to 8.37% 2004 19,728 $0.99 to $1.13 $ 19,596 0.23% 0.55% to 1.20% 9.03% to 8.32% 2003 14,684 $0.90 to $1.05 $ 13,353 0.33% 0.55% to 1.20% 30.43% to 29.63% 2002 7,789 $0.69 to $0.81 $ 5,378 0.20% 0.55% to 1.20% (23.33%) to (19.00%)(7) 2001 2,232 $0.90 to $0.90 $ 2,008 0.03% 0.55% to 0.95% (10.00%)(4) to (10.00%)(4) WF ADV VT OPP 2005 78,280 $1.23 to $1.25 $ 95,962 -- 0.55% to 1.20% 7.22% to 6.52% 2004 80,225 $1.15 to $1.18 $ 91,972 -- 0.55% to 1.20% 17.43% to 16.67% 2003 73,209 $0.98 to $1.01 $ 71,663 0.01% 0.55% to 1.20% 36.11% to 34.67% 2002 47,166 $0.72 to $0.75 $ 34,051 0.73% 0.55% to 1.20% (27.27%) to (25.00%)(7) 2001 7,584 $0.99 to $0.99 $ 7,518 2.32% 0.55% to 0.95% (1.00%)(5) to (1.00%)(5)
-------------------------------------------------------------------------------- 86 - IDS LIFE VARIABLE ACCOUNT 10
AT DEC. 31 FOR THE YEAR ENDED DEC. 31 ------------------------------------------ ----------------------------------------------------------- UNITS ACCUMULATION UNIT VALUE NET ASSETS INVESTMENT EXPENSE RATIO TOTAL RETURN (000S) LOWEST TO HIGHEST (000S) INCOME RATIO(1) LOWEST TO HIGHEST(2) LOWEST TO HIGHEST(3) ------------------------------------------------------------------------------------------------------- WF ADV VT SM CAP GRO 2005 38,139 $0.98 to $1.10 $ 37,471 -- 0.55% to 1.20% 5.66% to 4.98% 2004 42,675 $0.93 to $1.05 $ 39,748 -- 0.55% to 1.20% 13.15% to 12.41% 2003 36,312 $0.82 to $0.94 $ 29,921 -- 0.55% to 1.20% 41.38% to 40.30% 2002 18,702 $0.58 to $0.67 $ 10,870 -- 0.55% to 1.20% (38.30%) to (33.00%)(7) 2001 4,292 $0.94 to $0.94 $ 4,036 -- 0.55% to 0.95% (6.00%)(4) to (6.00%)(4)
(1) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude variable account expenses that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. These ratios are annualized for periods less than one year. (2) These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. (3) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period. Although the total return is presented as a range of maximum to minimum values, based on the price level representing the minimum and maximum expense ratio amounts, some individual price level total returns are not within the ranges presented due to the introduction of new price levels during the year and other market factors. (4) Operations commenced on May 1, 2001. (5) Operations commenced on Aug. 13, 2001. (6) Operations commenced on Aug. 14, 2001. (7) Operations commenced on Feb. 13, 2002. (8) Operations commenced on March 1, 2002. (9) Operations commenced on Dec. 8, 2003. (10) Operations commenced on Feb. 4, 2004. (11) Operations commenced on Sept. 13, 2004. (12) Operations commenced on Nov. 1, 2005. (13) Operations commenced on May 2, 2005. -------------------------------------------------------------------------------- 87 - IDS LIFE VARIABLE ACCOUNT 10 IDS Life Insurance Company ------------------------------------------------------------------------------ REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS IDS LIFE INSURANCE COMPANY We have audited the accompanying Consolidated Balance Sheets of IDS Life Insurance Company (a wholly-owned subsidiary of Ameriprise Financial, Inc.) as of December 31, 2005 and 2004, and the related Consolidated Statements of Income, Stockholder's Equity, and Cash Flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of IDS Life Insurance Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of IDS Life Insurance Company at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. As discussed in Note 1 to the Consolidated Financial Statements, in 2004 IDS Life Insurance Company adopted the provisions of the American Institute of Certified Public Accountants' Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts" and in 2003 adopted the provisions of Financial Accounting Standards Board Interpretation No. 46 (revised December 2003), "Consolidation of Variable Interest Entities." /s/ Ernst & Young LLP --------------------------------- Ernst & Young LLP Minneapolis, Minnesota February 27, 2006 IDS Life Insurance Company ------------------------------------------------------------------------------ CONSOLIDATED BALANCE SHEETS
DECEMBER 31, (THOUSANDS, EXCEPT SHARE DATA) 2005 2004 ASSETS Investments: Available-for-Sale: Fixed maturities, at fair value (amortized cost: 2005, $27,817,021; 2004, $27,400,640) $27,753,174 $28,131,195 Preferred and common stocks, at fair value (cost: 2005, $13; 2004, $30,019) 21 31,256 Mortgage loans on real estate, at cost (less allowance for loan losses: 2005, $41,347; 2004, $45,347) 2,842,362 2,923,542 Policy loans 605,212 588,574 Trading securities and other investments 547,668 802,096 --------------------------------------------------------------------------------------------------------------------------- Total investments 31,748,437 32,476,663 Cash and cash equivalents 233,589 131,427 Restricted cash -- 535,821 Reinsurance recoverables 982,521 876,408 Amounts due from brokers 4,166 7,109 Other accounts receivable 62,930 52,527 Accrued investment income 328,567 351,522 Deferred policy acquisition costs 4,035,879 3,637,956 Deferred sales inducement costs 370,166 302,997 Other assets 220,371 186,003 Separate account assets 37,929,960 32,454,032 --------------------------------------------------------------------------------------------------------------------------- Total assets $75,916,586 $71,012,465 =========================================================================================================================== LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities: Future policy benefits: Fixed annuities $26,126,068 $26,978,596 Variable annuity guarantees 29,550 32,955 Universal life insurance 3,711,628 3,689,639 Traditional life insurance 298,479 271,516 Disability income and long-term care insurance 2,145,969 1,942,656 Policy claims and other policyholders' funds 90,233 69,884 Amounts due to brokers 31,772 162,609 Deferred income taxes, net 9,099 141,202 Other liabilities 381,938 363,821 Separate account liabilities 37,929,960 32,454,032 --------------------------------------------------------------------------------------------------------------------------- Total liabilities 70,754,696 66,106,910 --------------------------------------------------------------------------------------------------------------------------- Stockholder's equity: Capital stock, $30 par value; 100,000 shares authorized, issued and outstanding 3,000 3,000 Additional paid-in capital 2,020,388 1,370,388 Retained earnings 3,269,206 3,190,474 Accumulated other comprehensive (loss) income, net of tax: Net unrealized securities (losses) gains (90,632) 370,615 Net unrealized derivative losses (40,072) (28,922) --------------------------------------------------------------------------------------------------------------------------- Total accumulated other comprehensive (loss) income (130,704) 341,693 --------------------------------------------------------------------------------------------------------------------------- Total stockholder's equity 5,161,890 4,905,555 --------------------------------------------------------------------------------------------------------------------------- Total liabilities and stockholder's equity $75,916,586 $71,012,465 =========================================================================================================================== See Notes to Consolidated Financial Statements.
IDS Life Insurance Company ------------------------------------------------------------------------------ CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, (THOUSANDS) 2005 2004 2003 REVENUES Premiums: Traditional life insurance $ 74,751 $ 68,335 $ 64,890 Disability income and long-term care insurance 295,084 283,608 284,111 ---------------------------------------------------------------------------------------------------------------------- Total premiums 369,835 351,943 349,001 Net investment income 1,791,324 1,777,446 1,705,185 Contractholder and policyholder charges 577,159 554,344 530,190 Mortality and expense risk and other fees 488,633 430,320 390,516 Net realized gain on investments 48,296 27,292 4,445 ---------------------------------------------------------------------------------------------------------------------- Total revenues 3,275,247 3,141,345 2,979,337 ---------------------------------------------------------------------------------------------------------------------- BENEFITS AND EXPENSES Death and other benefits: Traditional life insurance 41,550 36,843 38,870 Investment contracts and universal life-type insurance 232,816 227,664 209,065 Disability income and long-term care insurance 75,864 67,261 57,339 Increase (decrease) in liabilities for future policy benefits: Traditional life insurance 4,638 1,381 (2,401) Disability income and long-term care insurance 141,286 123,289 142,532 Interest credited to account values 1,110,425 1,127,875 1,242,020 Amortization of deferred policy acquisition costs 315,882 260,778 264,308 Separation costs 121,264 -- -- Other insurance and operating expenses 591,133 503,872 453,065 ---------------------------------------------------------------------------------------------------------------------- Total benefits and expenses 2,634,858 2,348,963 2,404,798 ---------------------------------------------------------------------------------------------------------------------- Income before income tax provision and accounting change 640,389 792,382 574,539 Income tax provision 181,657 226,177 66,945 ---------------------------------------------------------------------------------------------------------------------- Income before accounting change 458,732 566,205 507,594 Cumulative effect of accounting change, net of tax -- (70,568) 44,463 ---------------------------------------------------------------------------------------------------------------------- Net income $ 458,732 $ 495,637 $ 552,057 ====================================================================================================================== See Notes to Consolidated Financial Statements.
IDS Life Insurance Company ------------------------------------------------------------------------------ CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, (THOUSANDS) 2005 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 458,732 $ 495,637 $ 552,057 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Cumulative effect of accounting change, net of tax -- 70,568 (44,463) Amortization of deferred policy acquisition costs 315,882 260,778 264,308 Amortization of deferred sales inducement costs 40,332 33,825 23,968 Capitalization of deferred policy acquisition costs (632,743) (533,842) (516,928) Capitalization of deferred sales inducement costs (94,319) (70,860) (71,839) Amortization of premium, net 83,152 92,617 160,862 Deferred income taxes 122,264 70,574 (30,714) Policyholder and contractholder charges, non-cash (231,503) (231,611) (234,098) Net realized gain on investments (48,296) (27,292) (4,445) Net realized gain on trading securities and equity method investments in hedge funds (24,037) (37,460) (30,400) Change in operating assets and liabilities: Trading securities and equity method investments in hedge funds, net 246,828 6,788 (358,200) Future policy benefits for traditional life, disability income and long-term care insurance 230,276 235,327 265,233 Policy claims and other policyholders' funds 20,349 1,973 (17,489) Policy loans, excluding universal life-type insurance: Repayment 35,996 37,592 43,596 Issuance (38,688) (39,230) (34,490) Reinsurance recoverables (106,113) (121,894) (121,004) Other accounts receivable (10,403) 15,895 (12,177) Accrued investment income 22,955 3,852 (64,359) Other assets and liabilities, net 38,782 (12,765) (130,066) ---------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) operating activities 429,446 250,472 (360,648) ---------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Available-for-Sale securities: Sales 3,124,154 1,603,285 12,232,235 Maturities, sinking fund payments and calls 2,241,829 1,931,070 4,152,088 Purchases (5,780,183) (4,392,522) (20,527,995) Other investments, excluding policy loans: Sales, maturities, sinking fund payments and calls 652,831 690,333 621,163 Purchases (542,610) (402,235) (438,336) Change in amounts due to and from brokers, net (127,894) (71,415) (3,261,601) Change in restricted cash 535,821 298,627 -- ---------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) investing activities 103,948 (342,857) (7,222,446) ---------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Activity related to investment contracts and universal life-type insurance: Considerations received 1,532,282 2,350,426 4,267,115 Interest credited to account values 1,110,425 1,127,875 1,242,020 Surrenders and other benefits (3,329,993) (2,715,847) (2,235,889) Universal life-type insurance policy loans: Repayment 89,322 84,281 85,760 Issuance (103,268) (93,217) (81,740) Capital contribution from Ameriprise Financial, Inc. 650,000 -- 282,061 Cash dividend to Ameriprise Financial, Inc. (380,000) (930,000) -- ---------------------------------------------------------------------------------------------------------------------- Net cash (used in) provided by financing activities (431,232) (176,482) 3,559,327 ---------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 102,162 (268,867) (4,023,767) Cash and cash equivalents at beginning of year 131,427 400,294 4,424,061 ---------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 233,589 $ 131,427 $ 400,294 ====================================================================================================================== Supplemental disclosures: Income taxes paid $ 95,794 $ 196,397 $ 103,034 Interest paid on borrowings $ 364 $ 411 $ 2,926 Non-cash ownership transfer of net assets of American Express Corporation to Ameriprise Financial, Inc. in 2003 $ -- $ -- $ 282,061 See Notes to Consolidated Financial Statements.
IDS Life Insurance Company ------------------------------------------------------------------------------ CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
ADDITIONAL ACCUMULATED OTHER CAPITAL PAID-IN RETAINED COMPREHENSIVE FOR THE THREE YEARS ENDED DECEMBER 31, 2005 (THOUSANDS) TOTAL STOCK CAPITAL EARNINGS INCOME (LOSS) ----------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 2002 $4,944,251 $3,000 $1,088,327 $3,354,841 $ 498,083 Comprehensive income: Net income 552,057 -- -- 552,057 -- Change in unrealized holding losses on securities, net (90,695) -- -- -- (90,695) Change in unrealized derivative losses, net (7,777) -- -- -- (7,777) --------------- Total comprehensive income 453,585 -- -- -- -- Capital contribution 282,061 -- 282,061 -- -- Non-cash dividend of American Express Corporation to Ameriprise Financial, Inc. (282,061) -- -- (282,061) -- ----------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 2003 5,397,836 3,000 1,370,388 3,624,837 399,611 Comprehensive income: Net income 495,637 -- -- 495,637 -- Change in unrealized holding losses on securities, net (34,841) -- -- -- (34,841) Change in unrealized derivative losses, net (23,077) -- -- -- (23,077) --------------- Total comprehensive income 437,719 -- -- -- -- Cash dividends to Ameriprise Financial, Inc. (930,000) -- -- (930,000) -- ----------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 2004 4,905,555 3,000 1,370,388 3,190,474 341,693 Comprehensive loss: Net income 458,732 -- -- 458,732 -- Change in unrealized holding losses on securities, net (461,247) -- -- -- (461,247) Change in unrealized derivative losses, net (11,150) -- -- -- (11,150) --------------- Total comprehensive loss (13,665) -- -- -- -- Capital contribution from Ameriprise Financial, Inc. 650,000 -- 650,000 -- -- Cash dividend to Ameriprise Financial, Inc. (380,000) -- -- (380,000) -- ----------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 2005 $5,161,890 $3,000 $2,020,388 $3,269,206 $(130,704) =================================================================================================================================== See Notes to Consolidated Financial Statements.
IDS Life Insurance Company ------------------------------------------------------------------------------ NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF BUSINESS IDS Life Insurance Company is a stock life insurance company with four wholly-owned operating subsidiaries: IDS Life Insurance Company of New York, American Partners Life Insurance Company, American Enterprise Life Insurance Company and American Centurion Life Assurance Company. IDS Life Insurance Company is a wholly-owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial). * IDS Life Insurance Company is domiciled in Minnesota and holds Certificates of Authority in American Samoa, the District of Columbia and all states except New York. IDS Life Insurance Company issues insurance and annuity products. * American Enterprise Life Insurance Company (American Enterprise Life) is a stock life insurance company domiciled in Indiana, which holds Certificates of Authority in the District of Columbia and all states except New York. American Enterprise Life issues fixed and variable annuity contracts primarily through regional and national financial institutions and regional and/or independent broker-dealers. (In past years, American Enterprise Life issued a nominal number of variable universal life contracts.) * American Partners Life Insurance Company (American Partners Life) is a stock life insurance company domiciled in Arizona, which holds Certificates of Authority in the District of Columbia and all states except New York and New Hampshire. American Partners Life markets annuity products directly to customers, generally persons holding an American Express(R) Card. * IDS Life Insurance Company of New York (IDS Life of New York) is a stock life insurance company domiciled in New York, which holds Certificates of Authority in New York and North Dakota. IDS Life of New York issues insurance and annuity products. * American Centurion Life Assurance Company (American Centurion Life) is a stock life insurance company domiciled in New York, which holds Certificates of Authority in New York, Alabama and Delaware. American Centurion Life issues fixed and variable annuity contracts primarily through financial institutions and independent broker-dealers. American Centurion Life also markets annuity products directly, generally to persons holding an American Express(R) Card. IDS Life Insurance Company also owns IDS REO 1, LLC, IDS REO 2, LLC and American Enterprise REO 1, LLC which hold real estate investments. IDS Life Insurance Company and its seven subsidiaries are referred to collectively as "IDS Life". Prior to August 1, 2005, Ameriprise Financial was referred to as American Express Financial Corporation. On February 1, 2005 American Express Company (American Express) announced its intention to pursue the disposition of 100% of its shareholding in what is now Ameriprise Financial (the Separation) through a tax-free distribution to American Express shareholders. Effective as of the close of business on September 30, 2005, American Express completed the Separation and distribution of common shares to American Express shareholders (the Distribution). In connection with the Distribution, Ameriprise Financial entered into certain agreements with American Express to effect the separation of its business and to define the responsibility for obligations arising before and after the date of the Distribution, including, among others, obligations relating to transition services, taxes, and employees. IDS Life was allocated certain separation and Distribution-related expenses incurred as a result of Ameriprise Financial becoming an independent company. Cumulatively, the expenses incurred and allocated to IDS Life are significant to IDS Life. IDS Life received a capital contribution of $650 million from Ameriprise Financial during the third quarter of 2005 to support its current financial strength ratings and to cover the allocated separation costs. IDS Life's principal products are deferred annuities and universal life insurance which are issued primarily to individuals. It offers single premium and flexible premium deferred annuities on both a fixed and variable dollar basis. Immediate annuities are offered as well. IDS Life's fixed deferred annuities guarantee a relatively low annual interest rate during the accumulation period (the time before annuity payments begin). However, IDS Life has the option of paying a higher rate set at its discretion. In addition, persons owning one type of annuity may have their interest calculated based on an increase in a broad-based stock market index. IDS Life also offers variable annuities, including the RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity and the RiverSource Retirement Advisor Select Plus(SM) Variable Annuity. Life insurance products currently offered by IDS Life include universal life (fixed and variable, single life and joint life), single premium life, whole life and term products. Waiver of premium and accidental death benefit riders are generally available with these life insurance products. IDS Life also markets disability income (DI) insurance. Although IDS Life discontinued issuance of long- term care (LTC) insurance at the end of 2002, IDS Life retains risk on a large block of existing contracts, 50% of which are reinsured. In May 2003, IDS Life began outsourcing claims administration. IDS Life Insurance Company ------------------------------------------------------------------------------ Under IDS Life's variable life insurance and variable annuity products described above, the purchaser may choose among investment options that include IDS Life's "general account" as well as from a variety of portfolios including common stocks, bonds, managed assets and/or short- term securities. BASIS OF PRESENTATION The accompanying Consolidated Financial Statements include the accounts of IDS Life Insurance Company, its wholly-owned subsidiaries and certain variable interest entities (VIEs). All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying Consolidated Financial Statements have been prepared in conformity with United States generally accepted accounting principles (GAAP) which vary in certain respects from reporting practices prescribed or permitted by state insurance regulatory authorities as described in Note 7. Certain prior year amounts have been reclassified to conform to the current year's presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. PRINCIPLES OF CONSOLIDATION IDS Life consolidates all non-variable interest entities in which it holds a greater than 50% voting interest, except for immaterial seed money investments in separate accounts, which are accounted for as trading securities. Entities in which IDS Life holds a greater than 20% but less than 50% voting interest are accounted for under the equity method. Additionally, other investments in hedge funds in which IDS Life holds an interest that is less than 50% are accounted for under the equity method. All other investments are accounted for under the cost method where IDS Life owns less than a 20% voting interest and does not exercise significant influence, or as Available-for-Sale securities, as applicable. IDS Life also consolidates all VIEs for which it is considered to be the primary beneficiary pursuant to Financial Accounting Standards Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest Entities," as revised (FIN 46). The determination as to whether an entity is a VIE is based on the amount and characteristics of the entity's equity. In general, FIN 46 requires a VIE to be consolidated when an enterprise has a variable interest for which it is deemed to be the primary beneficiary, which means that it will absorb a majority of the VIEs expected losses, receive a majority of the VIEs expected residual return, or both. IDS Life liquidated its interest in all consolidated VIEs during 2004 and 2005 resulting in no consolidated VIEs as of December 31, 2005. Qualifying Special Purpose Entities (QSPEs) under Statement of Financial Accounting Standard (SFAS) No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," are not consolidated. Such QSPEs include a securitization trust containing a majority of its rated collateralized debt obligations (CDOs), as described in Note 2. IDS Life sold all of its retained interest in this securitization trust in 2005. BALANCE SHEET INVESTMENTS Investments consist of the following: Available-for-Sale Securities Available-for-Sale securities are carried at fair value on the Consolidated Balance Sheets with unrealized gains (losses) recorded in accumulated other comprehensive income (loss) within equity, net of income tax provision (benefit) and net of adjustments in asset and liability balances, such as deferred policy acquisition costs (DAC), to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective balance sheet date. Gains and losses are recognized in results of operations upon disposition of the securities. In addition, losses are also recognized when management determines that a decline in value is other-than- temporary, which requires judgment regarding the amount and timing of recovery. Indicators of other-than-temporary impairment for debt securities include issuer downgrade, default or bankruptcy. IDS Life also considers the extent to which amortized cost exceeds fair value, the duration of that difference, and management's judgment about the issuer's current and prospective financial condition, as well as its ability and intent to hold until recovery. Other-than-temporary impairment charges are recorded in net realized gains (losses) on investments within the Consolidated Statements of Income. Fair value is generally based on quoted market prices. IDS Life Insurance Company ------------------------------------------------------------------------------ Mortgage Loans on Real Estate, Net Mortgage loans on real estate reflect principal amounts outstanding less allowance for mortgage loan losses. The allowance for mortgage loan losses is measured as the excess of the loan's recorded investment over the present value of its expected principal and interest payments discounted at the loan's effective interest rate, or the fair value of collateral. Additionally, the level of the allowance for mortgage loan losses considers other factors, including historical experience and current economic and political conditions. Management regularly evaluates the adequacy of the allowance for mortgage loan losses and believes it is adequate to absorb estimated losses in the portfolio. IDS Life generally stops accruing interest on mortgage loans for which interest payments are delinquent more than three months. Based on management's judgment as to the ultimate collectibility of principal, interest payments received are either recognized as income or applied to the recorded investment in the loan. Policy Loans Policy loans are carried at the aggregate of the unpaid loan balances, which do not exceed the cash surrender values of the related policies. Trading Securities and Other Investments Included in trading securities and other investments are hedge fund investments, separate account seed money, syndicated loans and real estate. Separate account seed money is carried at fair market value with changes in value recognized in the Consolidated Statements of Income within net investment income. The carrying value of equity method investments in hedge funds reflects IDS Life's original investment and its share of earnings or losses of the hedge funds subsequent to the date of investment, and approximate fair value. Syndicated loans reflect amortized cost less allowance for losses. Real estate investments reflect properties acquired in satisfaction of debt and are carried at the lower of cost or the property's net realizable value. CASH AND CASH EQUIVALENTS IDS Life has defined cash equivalents to include highly liquid investments with original maturities of 90 days or less. RESTRICTED CASH As a result of the adoption of FIN 46 in 2003, IDS Life consolidated restricted cash held by secured loan trusts (SLTs) where such cash cannot be utilized for operations. The SLTs were liquidated in 2004 and 2005. REINSURANCE IDS Life reinsures a portion of the insurance risks associated with its life and LTC insurance products through reinsurance agreements with unaffiliated insurance companies. Reinsurance is used in order to limit losses, minimize exposure to large risks, provide additional capacity for future growth and to effect business-sharing arrangements. IDS Life evaluates the financial condition of reinsurers to manage its exposure to significant losses from reinsurer insolvencies. IDS Life remains primarily liable as the direct insurer on all risks reinsured. Generally, IDS Life reinsures 90% of the death benefit liability related to fixed and variable universal life and term life insurance products. IDS Life began reinsuring risks at this level beginning in 2001 for term life insurance and 2002 for variable and universal life insurance. Policies issued prior to these dates are not subject to these same reinsurance levels. The maximum amount of life insurance risk retained by IDS Life is $750,000 on any policy insuring a single life and $1.5 million on any flexible premium survivorship variable life policy. For existing LTC policies, IDS Life retained 50% of the risk and the remaining 50% of the risk was ceded to General Electric Capital Assurance Company. Risk on variable life and universal life policies is reinsured on a yearly renewable term basis. Risk on recent term life and LTC policies is reinsured on a coinsurance basis. IDS Life retains all risk for new claims on DI contracts. Risk is currently managed by limiting the amount of disability insurance written on any one individual. IDS Life also retains all accidental death benefit and waiver of premium risk. DEFERRED POLICY ACQUISITION COSTS DAC represents the costs of acquiring new business, principally direct sales commissions and other distribution and underwriting costs that have been deferred on the sale of annuity and life, DI and LTC insurance products. These costs are deferred to the extent they are recoverable from future profits. For annuity and insurance products, DAC is amortized over periods approximating the lives of the business, generally as a percentage of premiums or estimated gross profits or as a portion of product interest margins depending on the product's characteristics. For IDS Life's annuity and insurance products, the projections underlying the amortization of DAC require the use of certain assumptions, including interest margins, mortality and morbidity rates, persistency, maintenance expense levels and customer asset value growth rates for variable products. Management routinely monitors a wide variety of trends in the business, including comparisons of actual and assumed experience. The customer asset value growth rate is the rate at which contract values are assumed to appreciate in the future. The rate is net of asset fees and anticipates a blend of equity and fixed income investments. Management reviews and, where appropriate, adjusts its assumptions with respect to client asset value growth rates on a quarterly basis. IDS Life Insurance Company ------------------------------------------------------------------------------ Management monitors other principal DAC assumptions, such as interest margin, mortality and morbidity rates, persistency and maintenance expense level assumptions, each quarter. Unless management identifies a material deviation over the course of the quarterly monitoring, management reviews and updates these DAC assumptions annually in the third quarter of each year. When assumptions are changed, the percentage of estimated gross profits or portion of interest margins used to amortize DAC may also change. A change in the required amortization percentage is applied retrospectively; an increase in amortization percentage will result in an increase in DAC amortization expense while a decrease in amortization percentage will result in a decrease in DAC amortization expense. The impact on results of operations of changing assumptions with respect to the amortization of DAC can be either positive or negative in any particular period and is reflected in the period in which such changes are made. DEFERRED SALES INDUCEMENT COSTS Deferred sales inducement costs (DSIC) consist of bonus interest credits and deposit credits added to certain annuity contract values. These benefits are capitalized to the extent they are incremental to amounts that would be credited on similar contracts without the applicable feature. These costs were previously included in DAC and were reclassified as part of the adoption of the American Institute of Certified Public Accountants (AICPA) Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts" (SOP 03-1). The amounts capitalized are amortized using the same methodology and assumptions used to amortize DAC. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Derivative instruments are classified on the Consolidated Balance Sheets at fair value within other assets or liabilities. The fair value of IDS Life's derivative financial instruments is determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market data inputs. In certain instances, the fair value includes structuring costs incurred at the inception of the transaction. The accounting for the change in the fair value of a derivative instrument depends on its intended use and the resulting hedge designation, if any. For derivative financial instruments that qualify as cash flow hedges, the effective portions of the gain or loss on the derivative instruments are recorded in accumulated other comprehensive income (loss) and reclassified into earnings when the hedged item or transactions impact earnings. The amount that is reclassified into earnings is presented in the Consolidated Statements of Income with the hedged instrument or transaction impact. Any ineffective portion of the gain or loss is reported currently in earnings as a component of net investment income. If a hedge is no longer designated or is terminated prior to maturity, the amount previously recorded in accumulated other comprehensive income (loss) is recognized into earnings over the period that the hedged item impacts earnings. For any hedge relationships that are discontinued because the forecasted transaction is not expected to occur according to the original strategy, any related amounts previously recorded in accumulated other comprehensive income (loss) are recognized into earnings immediately. Derivative financial instruments that are entered into for hedging purposes are designated as such at the time that IDS Life enters into the contract. For all derivative financial instruments that are designated for hedging activities, IDS Life formally documents all of the hedging relationships between the hedge instruments and the hedged items at the inception of the relationships. Management also formally documents its risk management objectives and strategies for entering into the hedge transactions. IDS Life formally assesses, at inception and on a quarterly basis, whether derivatives designated as hedges are highly effective in offsetting the cash flows of hedged items. If it is determined that a derivative is not highly effective as a hedge, IDS Life will discontinue the application of hedge accounting. See Note 10 for information regarding the cash flow hedges used by IDS Life. IDS Life currently has economic hedges that either do not qualify or are not designated for hedge accounting treatment under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133). For derivative financial instruments that do not qualify for hedge accounting, or are not designated under SFAS 133 as hedges, changes in fair value are reported in current period earnings generally as a component of net investment income. See the "Derivatives Not Designated as Hedges" section of Note 10 which describes the types of economic hedges used by IDS Life. SEPARATE ACCOUNT ASSETS AND LIABILITIES Separate account assets and liabilities are funds held for exclusive benefit of variable annuity contractholders and variable life insurance policyholders. IDS Life receives mortality and expense risk and other fees, including payments from its affiliate, RiverSource Investments, LLC for providing certain sponsor and related servicing activity, which are based on asset levels, guaranteed minimum death benefit (GMDB) fees and cost of insurance charges from the related accounts. In addition, IDS Life also receives marketing and administrative support payments from the affiliates of other companies' funds included as investment options in its variable annuity and variable life insurance products, which vary based on the level of variable assets. Prior to the fourth quarter of 2003, these fees included investment advisory fees as IDS Life served as the investment manager for affiliate variable portfolio mutual funds. In the fourth quarter of 2003, Ameriprise Financial replaced IDS Life as the investment manager and assumed these duties for the mutual funds and retained IDS Life to provide underlying sponsor and related services. At that time, IDS Life began receiving internal allocation fees from Ameriprise Financial as compensation for providing these IDS Life Insurance Company ------------------------------------------------------------------------------ non-investment advisory services. In the fourth quarter of 2005, RiverSource Investments, LLC replaced Ameriprise Financial as the investment manager. As a result, IDS Life now receives internal allocation payments as compensation from RiverSource Investments, LLC for providing these non-investment advisory services. IDS Life provides contractual mortality assurances to variable annuity contractholders that the net assets of the separate accounts will not be affected by future variations in the actual life expectancy experience of the annuitants and beneficiaries from the mortality assumptions implicit in the annuity contracts. IDS Life makes periodic fund transfers to, or withdrawals from, the separate account assets for such actuarial adjustments for variable annuities that are in the benefit payment period. IDS Life also guarantees that the rates at which administrative charges are deducted from contract funds will not exceed contractual maximums. For variable life insurance, IDS Life guarantees that the rates at which insurance charges and administrative charges are deducted from contract funds will not exceed contractual maximums. LIABILITIES FOR FUTURE POLICY BENEFITS AND CLAIMS Fixed Annuities and Variable Annuity Guarantees Liabilities for fixed and variable deferred annuities are equal to accumulation values which are the cumulative gross deposits, credited interest and fund performance less withdrawals and mortality and expense risk charges. The majority of the variable annuity contracts offered by IDS Life contain GMDB provisions. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the contract accumulation value. IDS Life also offers variable annuities with death benefit provisions that gross up the amount payable by a certain percentage of contract earnings. These are referred to as gain gross-up (GGU) benefits. In addition, IDS Life offers contracts containing guaranteed minimum withdrawal benefit (GMWB), guaranteed minimum income benefit (GMIB) and guaranteed minimum accumulation benefit (GMAB) provisions. Effective January 1, 2004, liabilities for GMDB, GGU and GMIB benefits have been established under SOP 03-1. Actuarial models to simulate various equity market scenarios are used to project these benefits and contract assessments and include making significant assumptions related to customer asset value growth rates, mortality, persistency and investment margins. These assumptions, as well as their periodic review by management, are consistent with those used for DAC purposes. Prior to the adoption of SOP 03-1, amounts paid in excess of contract value were expensed when payable. See the "Recently Issued Accounting Standards" section below and Note 5 for more information about these guaranteed benefits. GMWB and GMAB provisions are considered embedded derivatives under SFAS 133 and, accordingly, are carried at fair value within future policy benefits for variable annuity guarantees on the Consolidated Balance Sheets. The fair value of these embedded derivatives is based on the present value of future benefits less applicable fees charged for the provision. Changes in fair value are reflected in death and other benefits for investment contracts and universal life-type insurance within the Consolidated Statements of Income. Liabilities for equity indexed deferred annuities issued in 1999 or later are equal to the accumulation of host contract values covering guaranteed benefits and the market value of embedded equity options. Liabilities for equity indexed deferred annuities issued before 1999 are equal to the present value of guaranteed benefits and the intrinsic value of index-based benefits. Accounting for equity indexed deferred annuities issued before 1999 differs from those issued in 1999 and later due to the treatment of embedded equity options within the contracts. Embedded equity options are considered embedded derivatives under SFAS 133. However, SFAS 133 allowed companies to elect whether to separately account for embedded derivatives which are part of contracts issued prior to January 1, 1999. IDS Life elected not to separately account for embedded derivatives related to contracts issued prior to January 1, 1999. Liabilities for fixed annuities in a benefit or payout status are based on future estimated payments using established industry mortality tables and interest rates, ranging from 4.6% to 9.5% at December 31, 2005, depending on year of issue, with an average rate of approximately 6.0%. Life, Disability Income and Long-Term Care Policies Liabilities for insurance claims that have been reported but have not yet been paid (unpaid claim liabilities) are equal to the death benefits payable under the policies. For DI and LTC claims, unpaid claim liabilities are equal to benefit amounts due and accrued including the expense of reviewing claims and making benefit payment determinations. Liabilities for claims that have been incurred but not reported are estimated based on periodic analysis of the actual lag between when a claim occurs and when it is reported. Where applicable, amounts recoverable from other insurers who share in the risk of the products offered (reinsurers) are separately recorded as receivables. IDS Life Insurance Company ------------------------------------------------------------------------------ Liabilities for fixed and variable universal life insurance are equal to accumulation values which are the cumulative gross deposits, credited interest, and fund performance less withdrawals and mortality and expense risk charges. Liabilities for future benefits on term and whole life insurance are based on the net level premium method, using anticipated premium payments, mortality rates, policy persistency and interest rates earned on the assets supporting the liability. Anticipated mortality rates are based on established industry mortality tables, with modifications based on IDS Life's experience. Anticipated policy premium payments and persistency rates vary by policy form, issue age and policy duration. Anticipated interest rates range from 4% to 10% at December 31, 2005, depending on policy form, issue year and policy duration. IDS Life issues only non-participating life insurance policies, which do not pay dividends to policyholders from the insurers' earnings. Liabilities for future policy benefits include both policy reserves and claim reserves on DI and LTC products. Policy reserves are the amounts needed to meet obligations for future claims and are based on the net level premium method, using anticipated premium payments and morbidity, mortality, policy persistency and discount rates. Anticipated morbidity and mortality rates are based on established industry morbidity and mortality tables. Anticipated policy persistency rates vary by policy form, issue age, policy duration and, for DI policies, occupation class. Anticipated discount rates for DI policy reserves are 7.5% at policy issue and grade to 5% over 5 years. Anticipated discount rates for LTC policy reserves are currently 5.3% at December 31, 2005 grading up to 9.4% over 40 years. Claim reserves on DI and LTC products are the amounts needed to meet obligations for continuing claim payments on already incurred claims. Claim reserves are calculated based on claim continuance tables which estimate the likelihood that an individual will continue to be eligible for benefits and anticipated interest rates earned on assets supporting the reserves. Anticipated claim continuance rates are based on established industry tables. Anticipated interest rates for claim reserves for both DI and LTC range from 3.0% to 8.0% at December 31, 2005, with an average rate of approximately 4.9%. REVENUES AND EXPENSES IDS Life's principal sources of revenue include premium revenues, net investment income, contractholder and policyholder charges and mortality and expense risk and other fees. Premium Revenues Premium revenues include premiums on traditional life, DI and LTC insurance products. Such premiums are recognized as revenue when due. Net Investment Income Net investment income predominantly consists of interest income earned on fixed maturity securities classified as Available-for-Sale, mortgage loans on real estate and policy loans, mark-to-market of trading securities and hedges on equity indexed annuities and GMWB, and allocated income from equity method investments in hedge funds. Interest income is accrued as earned using the effective interest method, which makes an adjustment of the yield for security premiums and discounts on all performing fixed maturity securities classified as Available-for-Sale, excluding structured securities, and mortgage loans on real estate so that the related security or loan recognizes a constant rate of return on the outstanding balance throughout its term. Contractholder and Policyholder Charges Contractholder and policyholder charges include certain charges assessed on annuities and fixed and variable universal life insurance, such as cost of insurance and administrative and surrender charges. Cost of insurance charges on fixed and variable universal life insurance are recognized as revenue when earned, whereas contract charges and surrender charges on annuities and universal and variable universal life insurance are recognized as revenue when collected. Mortality and Expense Risk and Other Fees Mortality and expense risk and other fees include risk, management and administration fees, which are generated directly and indirectly from IDS Life's separate account assets. IDS Life's management and other fees are generally computed as a contractual rate based on the underlying asset values and are generally received monthly. Net Realized Gain (Loss) on Investments Realized gains and losses are recognized using the specific identification method, on a trade date basis, and charges are recorded when securities are determined to be other-than-temporarily impaired. Separation Costs During 2005, Ameriprise Financial developed an allocation policy for separation costs resulting in the allocation of certain costs to IDS Life that it considered to be a reasonable reflection of separation costs benefiting IDS Life. Separation costs generally consist of allocated financial advisor and employee retention program costs, re- branding and marketing costs and costs to separate and reestablish technology platforms related to the separation and Distribution of Ameriprise Financial. IDS Life Insurance Company ------------------------------------------------------------------------------ Income Taxes IDS Life's taxable income is included in the consolidated federal income tax return of American Express through September 30, 2005. IDS Life will file a separate consolidated life insurance company federal income tax return for five tax years following the Distribution including the period October 1, 2005 through December 31, 2005. IDS Life provides for income taxes based on the net amount of income taxes that it expects to pay or receive from various taxing jurisdictions in connection with its operations. RECENTLY ISSUED ACCOUNTING STANDARDS On November 3, 2005, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." FSP FAS 115-1 and FAS 124-1 address the determination as to when an investment is considered impaired, whether that impairment is other-than-temporary and the measurement of loss. It also includes accounting considerations subsequent to the recognition of an other- than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. FSP FAS 115-1 and FAS 124-1 are effective for reporting periods beginning after December 15, 2005. IDS Life anticipates the impact of FSP FAS 115-1 and FAS 124-1 on IDS Life's consolidated results of operations and financial condition will not be material. In September 2005, the AICPA issued Statement of Position 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts" (SOP 05-1). SOP 05-1 provides guidance on accounting by insurance enterprises for DAC on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments." SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006, with earlier adoption encouraged. IDS Life is currently evaluating the impact of SOP 05-1 on IDS Life's consolidated results of operations and financial condition. In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections" (SFAS 154). This statement replaces APB Opinion No. 20, "Accounting Changes," and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements" and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. IDS Life does not anticipate SFAS 154 will materially impact its Consolidated Financial Statements upon its adoption on January 1, 2006. In June 2004, the FASB issued FSP No. 97-1, "Situations in Which Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments (SFAS No. 97), Permit or Require Accrual of an Unearned Revenue Liability" (FSP 97-1). The implementation of SOP 03-1 raised a question regarding the interpretation of the requirements of SFAS No. 97 concerning when it is appropriate to record an unearned revenue liability. FSP 97-1 clarifies that SFAS No. 97 is clear in its intent and language, and requires the recognition of an unearned revenue liability for amounts that have been assessed to compensate insurers for services to be performed over future periods. SOP 03-1 describes one situation, when assessments result in profits followed by losses, where an unearned revenue liability is required. SOP 03-1 does not amend SFAS No. 97 or limit the recognition of an unearned revenue liability to the situation described in SOP 03-1. The guidance in FSP 97-1 is effective for financial statements for fiscal periods beginning after June 18, 2004. The adoption of FSP 97-1 did not have a material impact on IDS Life's consolidated results of operations or financial condition. In July 2003, the AICPA issued SOP 03-1 effective for fiscal years beginning after December 15, 2003. SOP 03-1 provides guidance on separate account presentation and accounting for interests in separate accounts. Additionally, SOP 03-1 provides clarifying guidance as to the recognition of bonus interest and other sales inducement benefits and the presentation of any deferred amounts in the financial statements. Lastly, SOP 03-1 requires insurance enterprises to establish additional liabilities for benefits that may become payable under variable annuity death benefit guarantees or other insurance or annuity contract provisions. Where an additional liability is established, the recognition of this liability will then be considered in amortizing DAC and any DSIC associated with those insurance or annuity contracts. The adoption of SOP 03-1 as of January 1, 2004, resulted in a cumulative effect of accounting change that reduced 2004 results by $70.6 million ($108.6 million pretax). The cumulative effect of accounting change consisted of: (i) $42.9 million pretax from establishing additional liabilities for certain variable annuity guaranteed benefits ($32.8 million) and from considering these liabilities in valuing DAC and DSIC associated with those contracts ($10.1 million) and (ii) $65.7 million pretax from establishing IDS Life Insurance Company ------------------------------------------------------------------------------ additional liabilities for certain variable universal life and single pay universal life insurance contracts under which contractual cost of insurance charges are expected to be less than future death benefits ($92 million) and from considering these liabilities in valuing DAC associated with those contracts ($26.3 million offset). Prior to the adoption of SOP 03-1, amounts paid in excess of contract value were expensed when payable. IDS Life's accounting for separate accounts was already consistent with the provisions of SOP 03-1 and, therefore, there was no impact related to this requirement. The AICPA released a series of technical practice aids (TPAs) in September 2004, which provide additional guidance related to, among other things, the definition of an insurance benefit feature and the definition of policy assessments in determining benefit liabilities, as described within SOP 03-1. The TPAs did not have a material effect on IDS Life's calculation of liabilities that were recorded in the first quarter of 2004 upon adoption of SOP 03-1. In January 2003, the FASB issued FIN 46, which addresses consolidation by business enterprises of VIEs and was subsequently revised in December 2003. The VIEs primarily impacted by FIN 46, which IDS Life consolidated as of December 31, 2003, relate to three SLTs, which were managed by an affiliate and partially owned by IDS Life. The consolidation of the three SLTs partially owned by IDS Life and managed by an affiliate, resulted in a cumulative effect of accounting change that increased 2003 net income through a non-cash gain of $44.5 million ($68.4 million pretax). The Company liquidated its interest in all consolidated VIEs during 2004 and 2005. See Note 3 for further discussion of consolidated VIEs. 2. INVESTMENTS AVAILABLE-FOR-SALE SECURITIES Available-for-Sale securities at December 31, 2005 are distributed by type as presented below:
---------------------------------------------------------------------------------------------------------------------- GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (THOUSANDS) COST GAINS LOSSES VALUE ---------------------------------------------------------------------------------------------------------------------- Fixed maturities: Corporate debt securities $13,318,636 $208,577 $(198,774) $13,328,439 Mortgage and other asset-backed securities 10,804,984 45,531 (158,784) 10,691,731 Foreign corporate bonds and obligations 3,148,534 67,097 (54,721) 3,160,910 U.S. Government and agencies obligations 300,337 16,207 (5,282) 311,262 State and municipal obligations 114,165 2,756 (3,262) 113,659 Foreign government bonds and obligations 127,912 16,922 (114) 144,720 Structured investments(a) 2,453 -- -- 2,453 ---------------------------------------------------------------------------------------------------------------------- Total fixed maturities 27,817,021 357,090 (420,937) 27,753,174 Preferred and common stocks 13 8 -- 21 ---------------------------------------------------------------------------------------------------------------------- Total $27,817,034 $357,098 $(420,937) $27,753,195 ----------------------------------------------------------------------------------------------------------------------
(a) Includes unconsolidated CDOs. Available-for-Sale securities at December 31, 2004 are distributed by type as presented below:
---------------------------------------------------------------------------------------------------------------------- GROSS GROSS AMORTIZED UNREALIZED UNREALIZED FAIR (THOUSANDS) COST GAINS LOSSES VALUE ---------------------------------------------------------------------------------------------------------------------- Fixed maturities: Corporate debt securities $13,718,138 $531,970 $ (36,990) $14,213,118 Mortgage and other asset-backed securities 9,383,868 143,102 (30,487) 9,496,483 Foreign corporate bonds and obligations 3,185,592 139,821 (14,178) 3,311,235 U.S. Government and agencies obligations 330,540 15,181 (513) 345,208 State and municipal obligations 114,161 3,493 (2,569) 115,085 Foreign government bonds and obligations 104,442 15,507 (552) 119,397 Structured investments(a) 563,899 -- (33,230) 530,669 ---------------------------------------------------------------------------------------------------------------------- Total fixed maturities 27,400,640 849,074 (118,519) 28,131,195 Preferred and common stocks 30,019 1,237 -- 31,256 ---------------------------------------------------------------------------------------------------------------------- Total $27,430,659 $850,311 $(118,519) $28,162,451 ----------------------------------------------------------------------------------------------------------------------
(a) Includes unconsolidated CDOs. IDS Life Insurance Company ------------------------------------------------------------------------------ At December 31, 2005 and 2004, fixed maturity securities, excluding net unrealized appreciation and depreciation, comprised approximately 87% of IDS Life's total investments. These securities are rated by Moody's Investors Service, Inc. (Moody's) and Standard & Poor's (S&P), except for approximately $1.0 billion of securities at both December 31, 2005 and 2004 which are rated by RiverSource Investments, LLC's internal analysts using criteria similar to Moody's and S&P. Ratings on investment grade securities are presented using S&P's convention and, if the two agencies' ratings differ, the lower rating is used. A summary by rating (excluding net unrealized appreciation and depreciation) on December 31 is as follows:
RATING 2005 2004 ------------------------------------------------------------------------------------------ AAA 40% 37% AA 6 3 A 20 22 BBB 26 30 Below investment grade 8 8 ------------------------------------------------------------------------------------------ Total 100% 100% ------------------------------------------------------------------------------------------
At December 31, 2005 and 2004, approximately 47% and 61%, respectively, of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other issuer were greater than 10% of stockholder's equity. The following table provides information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2005:
(THOUSANDS) LESS THAN 12 MONTHS 12 MONTHS OR MORE TOTAL -------------------------------------------------------------------------------------------------------------------------------- FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION OF SECURITIES: VALUE LOSSES VALUE LOSSES VALUE LOSSES -------------------------------------------------------------------------------------------------------------------------------- Corporate debt securities $ 6,184,289 $(132,802) $1,618,552 $ (65,972) $ 7,802,841 $(198,774) Mortgage and other asset-backed securities 6,001,482 (87,558) 2,059,075 (71,226) 8,060,557 (158,784) Foreign corporate bonds and obligations 1,203,652 (31,308) 535,393 (23,413) 1,739,045 (54,721) U.S. Government and agencies obligations 148,584 (3,062) 72,844 (2,220) 221,428 (5,282) State and municipal obligations 67,353 (2,589) 14,348 (673) 81,701 (3,262) Foreign government bonds and obligations 13,344 (114) -- -- 13,344 (114) Structured investments 2,189 -- -- -- 2,189 -- -------------------------------------------------------------------------------------------------------------------------------- Total $13,620,893 $(257,433) $4,300,212 $(163,504) $17,921,105 $(420,937) --------------------------------------------------------------------------------------------------------------------------------
The following table provides information about Available-for-Sale securities with gross unrealized losses and the length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2004:
(THOUSANDS) LESS THAN 12 MONTHS 12 MONTHS OR MORE TOTAL -------------------------------------------------------------------------------------------------------------------------------- FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED DESCRIPTION OF SECURITIES: VALUE LOSSES VALUE LOSSES VALUE LOSSES -------------------------------------------------------------------------------------------------------------------------------- Corporate debt securities $2,410,156 $(20,461) $ 645,898 $(16,529) $3,056,054 $ (36,990) Mortgage and other asset-backed securities 2,560,175 (17,686) 550,728 (12,801) 3,110,903 (30,487) Foreign corporate bonds 641,928 (6,571) 373,312 (7,607) 1,015,240 (14,178) U.S. Government and agencies obligations 159,904 (498) 533 (15) 160,437 (513) State and municipal obligations -- -- 62,454 (2,569) 62,454 (2,569) Foreign government bonds and obligations 1,002 (33) 9,008 (519) 10,010 (552) Structured investments -- -- 526,190 (33,230) 526,190 (33,230) -------------------------------------------------------------------------------------------------------------------------------- Total $5,773,165 $(45,249) $2,168,123 $(73,270) $7,941,288 $(118,519) --------------------------------------------------------------------------------------------------------------------------------
In evaluating potential other-than-temporary impairments, IDS Life considers the extent to which amortized costs exceeds fair value and the duration of that difference. A key metric in performing this evaluation is the ratio of fair value to amortized cost. The following table summarizes the unrealized losses by ratio of fair value to amortized cost as of December 31, 2005:
(MILLIONS, EXCEPT NUMBER OF SECURITIES) LESS THAN 12 MONTHS 12 MONTHS OR MORE TOTAL ----------------------------------------------------------------------------------------------------------------------------------- GROSS GROSS GROSS RATIO OF FAIR VALUE NUMBER OF UNREALIZED NUMBER OF UNREALIZED NUMBER OF UNREALIZED TO AMORTIZED COST SECURITIES FAIR VALUE LOSSES SECURITIES FAIR VALUE LOSSES SECURITIES FAIR VALUE LOSSES ----------------------------------------------------------------------------------------------------------------------------------- 95% - 100% 645 $13,200 $(223) 213 $3,971 $(141) 858 $17,171 $(364) 90% - 95% 36 340 (22) 24 321 (22) 60 661 (44) 80% - 90% 9 81 (12) 3 8 (1) 12 89 (13) ----------------------------------------------------------------------------------------------------------------------------------- Total 690 $13,621 $(257) 240 $4,300 $(164) 930 $17,921 $(421) -----------------------------------------------------------------------------------------------------------------------------------
IDS Life Insurance Company ------------------------------------------------------------------------------ A majority of the gross unrealized losses related to corporate debt securities and substantially all of the gross unrealized losses related to mortgage and other asset-backed securities are attributable to changes in interest rates. A portion of the gross unrealized losses particularly related to corporate debt securities is also attributed to credit spreads and specific issuer credit events. As noted in the table above, a significant portion of the unrealized loss relates to securities that have a fair value to amortized cost ratio of 95% or above resulting in an overall 98% ratio of fair value to amortized cost for all securities with an unrealized loss. From an overall perspective, the gross unrealized losses are not concentrated in any individual industries or with any individual securities. However, the securities with a fair value to amortized cost ratio of 80%-90% primarily relate to the auto and paper industries. The largest unrealized loss associated with an individual issuer, excluding GNMA, FNMA and FHLMC mortgage- backed securities, is $6 million. The securities related to this issuer have a fair value to amortized cost ratio of 80%-90% and have been in an unrealized loss position for less than 12 months. IDS Life monitors the investments and metrics discussed previously on a quarterly basis to identify and evaluate investments that have indications of possible other-than-temporary impairment. See the Investments section of Note 1 for information regarding IDS Life's policy for determining when an investment's decline in value is other- than-temporary. As stated earlier, IDS Life's ongoing monitoring process has revealed that a significant portion of the gross unrealized losses on its Available-for-Sale securities are attributable to changes in interest rates. Additionally, IDS Life has the ability and intent to hold these securities for a time sufficient to recover its amortized cost and has, therefore, concluded that none are other-than-temporarily impaired at December 31, 2005. The change in net unrealized securities gains (losses) recognized in accumulated other comprehensive income includes three components, net of tax: (i) unrealized gains (losses) that arose from changes in market value of securities that were held during the period (holding gains (losses)), (ii) gains (losses) that were previously unrealized, but have been recognized in current period net income due to sales and other- than-temporary impairments of Available-for-Sale securities (reclassification of realized (gains) losses) and (iii) other items primarily consisting of adjustments in asset and liability balances, such as DAC, DSIC and annuity liabilities to reflect the expected impact on their carrying values had the unrealized gains (losses) been realized as of the respective consolidated balance sheet dates. The following table presents these components of other comprehensive income (loss), net of tax:
(THOUSANDS) 2005 2004 2003 ----------------------------------------------------------------------------------------------------------------------------------- Holding (losses) gains, net of tax of $260,090, $22,633, and $44,705, respectively $(483,023) $ 42,034 $(83,106) Reclassification of realized gains, net of tax of $18,381, $10,765, and $6,044, respectively (34,137) (19,993) (11,225) DAC, net of tax of $28,372, $3,179 and $1,958, respectively 52,690 5,905 3,636 DSIC, net of tax of $4,614, $3,538, and $0, respectively 8,568 (6,571) -- Fixed annuity liabilities, net of tax of $2,878, $30,270, and $0, respectively (5,345) (56,216) -- ----------------------------------------------------------------------------------------------------------------------------------- Net unrealized securities losses $(461,247) $(34,841) $(90,695) -----------------------------------------------------------------------------------------------------------------------------------
The following is a distribution of Available-for-Sale securities by maturity as of December 31, 2005:
AMORTIZED FAIR (THOUSANDS) COST VALUE --------------------------------------------------------------------------------------------------------------------- Due within 1 year $ 525,818 $ 529,579 Due after 1 through 5 years 4,288,859 4,301,151 Due after 5 through 10 years 11,063,792 11,020,647 Due after 10 years 1,131,115 1,207,613 --------------------------------------------------------------------------------------------------------------------- 17,009,584 17,058,990 Mortgage and other asset-backed securities 10,804,984 10,691,731 Structured investments 2,453 2,453 Preferred and common stocks 13 21 --------------------------------------------------------------------------------------------------------------------- Total $27,817,034 $27,753,195 ---------------------------------------------------------------------------------------------------------------------
The expected payments on mortgage and other asset-backed securities and structured investments may not coincide with their contractual maturities. As such, these securities, as well as preferred and common stocks, were not included in the maturities distribution. The table below includes sales, maturities, and purchases of investments classified as Available-for-Sale for the years ended December 31:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Sales $3,124,154 $1,603,285 $12,232,235 Maturities, sinking fund payments and calls $2,241,829 $1,931,070 $ 4,152,088 Purchases $5,780,183 $4,392,522 $20,527,995 ---------------------------------------------------------------------------------------------------------------------------------
IDS Life Insurance Company ------------------------------------------------------------------------------ Included in net realized gains and losses were gross realized gains and losses on sales of securities, as well as other-than-temporary losses on investments, classified as Available-for-Sale, using the specific identification method, as noted in the following table for the years ended December 31:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Gross realized gains from sales $107,800 $ 48,412 $ 255,348 Gross realized losses from sales $(38,602) $(17,524) $(135,465) Other-than-temporary impairments $(19,380) $ (131) $(102,614) ---------------------------------------------------------------------------------------------------------------------------------
The $19.4 million of other-than-temporary impairments in 2005 primarily related to corporate debt securities within the auto industry which were downgraded in 2005 and subsequently deteriorated throughout the year in terms of their fair value to amortized cost ratio. The $102.6 million of other-than-temporary impairments in 2003 consisted of $54.4 million related to corporate debt securities, $40.9 million related to IDS Life's interests in a CDO securitization trust which was sold in 2005 as discussed below, and $7.3 million related to other securities. The other-than-temporary impairments related to corporate debt securities primarily resulted from continued operating difficulties and bankruptcies of certain large airline carriers and the related overall impact on the airline industry. The other-than-temporary impairments related to IDS Life's interests in the CDO securitization trust primarily resulted from defaults associated with a specific CDO within the securitization trust. During the second quarter of 2005, IDS Life sold all of its retained interest in the CDO-related securitization trust and realized a net pretax gain of $24.9 million. The carrying value of this retained interest was $526.2 million at December 31, 2004, of which $389.9 million was considered investment grade. At December 31, 2005 and 2004, bonds carried at $15.8 million were on deposit with various states as required by law. MORTGAGE LOANS ON REAL ESTATE AND SYNDICATED LOANS, NET The following is a summary of mortgage loans on real estate and syndicated loans at December 31:
(THOUSANDS) 2005 2004 --------------------------------------------------------------------------------------------------------------------- Mortgage loans on real estate $2,883,709 $2,968,889 Less: allowance for loan losses (41,347) (45,347) --------------------------------------------------------------------------------------------------------------------- Net mortgage loans $2,842,362 $2,923,542 --------------------------------------------------------------------------------------------------------------------- Syndicated loans $ 130,869 $ 139,295 Less: allowance for loan losses (3,500) (3,500) --------------------------------------------------------------------------------------------------------------------- Net syndicated loans $ 127,369 $ 135,795 ---------------------------------------------------------------------------------------------------------------------
Mortgage loans are first mortgages on real estate. IDS Life holds the mortgage documents, which gives it the right to take possession of the property if the borrower fails to perform according to the terms of the agreements. Mortgage loan fundings are restricted by state insurance regulatory authorities to 80% or less of the market value of the real estate at the time of origination of the loan. Commitments to fund mortgages are made in the ordinary course of business. The estimated fair value of the mortgage commitments as of December 31, 2005 and 2004 was not material. Syndicated loans, which are included as a component of other investments, represent loans in which a group of lenders provide funds to borrowers. There is usually one originating lender which retains a small percentage and syndicates the remainder. At December 31, 2005 and 2004, IDS Life's recorded investment in impaired mortgage loans on real estate was $14.0 million and $11.3 million, respectively, with related allowances for mortgage loan losses of $4.0 million for both periods. During 2005 and 2004, the average recorded investment in impaired mortgage loans on real estate was $6.3 million and $8.3 million, respectively. IDS Life recognized nil, $0.6 million and $0.8 million of interest income related to impaired mortgage loans on real estate for the years ended December 31, 2005, 2004 and 2003, respectively. The balances of and changes in the total allowance for mortgage loan losses as of and for the years ended December 31, are as follows:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of year $45,347 $ 47,197 $44,312 Provision for mortgage loan losses -- 9,500 11,687 Foreclosures, write-offs and loan sales (4,000) (11,350) (8,802) --------------------------------------------------------------------------------------------------------------------------------- Balance, end of year $41,347 $ 45,347 $47,197 ---------------------------------------------------------------------------------------------------------------------------------
IDS Life Insurance Company ------------------------------------------------------------------------------ Concentration of credit risk of mortgage loans on real estate by region at December 31 were:
(THOUSANDS) 2005 2004 --------------------------------------------------------------------------------------------------------------------------------- ON BALANCE FUNDING ON BALANCE FUNDING REGION SHEET COMMITMENTS SHEET COMMITMENTS --------------------------------------------------------------------------------------------------------------------------------- South Atlantic $ 594,022 $ 10,900 $ 588,764 $24,115 West North Central 436,367 6,200 433,298 14,550 East North Central 406,714 -- 509,752 1,400 Pacific 364,448 26,750 332,764 13,700 Mountain 352,178 8,725 371,801 20,025 Middle Atlantic 257,625 11,500 270,509 2,600 West South Central 215,467 17,350 191,410 -- New England 164,047 20,550 198,297 6,515 East South Central 92,841 4,850 72,294 9,625 --------------------------------------------------------------------------------------------------------------------------------- 2,883,709 106,825 2,968,889 92,530 Less: allowance for loan losses (41,347) -- (45,347) -- --------------------------------------------------------------------------------------------------------------------------------- Total $2,842,362 $106,825 $2,923,542 $92,530 ---------------------------------------------------------------------------------------------------------------------------------
Concentration of credit risk of mortgage loans on real estate by property type at December 31 were:
(THOUSANDS) 2005 2004 --------------------------------------------------------------------------------------------------------------------------------- ON BALANCE FUNDING ON BALANCE FUNDING PROPERTY TYPE SHEET COMMITMENTS SHEET COMMITMENTS --------------------------------------------------------------------------------------------------------------------------------- Office buildings $1,048,566 $ 36,000 $1,087,700 $ 5,840 Department/retail stores 703,811 37,800 734,590 40,075 Apartments 454,024 10,500 505,632 24,875 Industrial buildings 453,503 12,000 373,767 15,615 Hotels/motels 92,335 5,900 109,408 -- Medical buildings 46,851 2,700 46,960 -- Mixed use 39,318 -- 62,424 4,200 Nursing/retirement homes 4,898 -- 9,875 -- Other 40,403 1,925 38,533 1,925 --------------------------------------------------------------------------------------------------------------------------------- 2,883,709 106,825 2,968,889 92,530 Less: allowance for loan losses (41,347) -- (45,347) -- --------------------------------------------------------------------------------------------------------------------------------- Total $2,842,362 $106,825 $2,923,542 $92,530 ---------------------------------------------------------------------------------------------------------------------------------
SOURCES OF INVESTMENT INCOME AND REALIZED GAINS (LOSSES) ON INVESTMENTS Net investment income for the years ended December 31 is summarized as follows:
(THOUSANDS) 2005 2004 2003 ------------------------------------------------------------------------------------------------------------------- Income on fixed maturities $1,448,882 $1,450,919 $1,423,560 Income on mortgage loans on real estate 196,840 221,022 247,001 Trading securities and other investments 163,814 138,468 63,983 ------------------------------------------------------------------------------------------------------------------- 1,809,536 1,810,409 1,734,544 Less: investment expenses 18,212 32,963 29,359 ------------------------------------------------------------------------------------------------------------------- Total $1,791,324 $1,777,446 $1,705,185 -------------------------------------------------------------------------------------------------------------------
Net realized gains (losses) on investments for the years ended December 31 is summarized as follows:
(THOUSANDS) 2005 2004 2003 ------------------------------------------------------------------------------------------------------------------- Fixed maturities $49,818 $30,757 $ 17,269 Mortgage loans on real estate (1,627) (3,048) (10,865) Trading securities and other investments 105 (417) (1,959) ------------------------------------------------------------------------------------------------------------------- Total $48,296 $27,292 $ 4,445 -------------------------------------------------------------------------------------------------------------------
IDS Life Insurance Company ------------------------------------------------------------------------------ 3. VARIABLE INTEREST ENTITIES The VIEs for which IDS Life was considered the primary beneficiary and which were consolidated beginning December 31, 2003, relate to SLTs which were partially owned by IDS Life and managed by an affiliate. The consolidated SLTs provided returns to investors primarily based on the performance of an underlying portfolio of high-yield loans which were managed by an affiliate. IDS Life liquidated its interest in all three SLTs. One SLT was liquidated in 2004, and the other two SLTs were liquidated in 2005, resulting in a non-cash $27.9 million cumulative net pretax charge and a $13.9 million pretax gain during the years ended December 31, 2004 and 2005, respectively. There is no remaining exposure related to these SLTs as of December 31, 2005.The following table presents the consolidated assets, essentially all of which were restricted, and other balances related to these entities at December 31:
(MILLIONS) 2004 --------------------------------------------------------------------------------------- Restricted cash $536 Derivative financial instruments(a) 43 --------------------------------------------------------------------------------------- Total assets $579 Total liabilities 117 --------------------------------------------------------------------------------------- Net assets $462 ---------------------------------------------------------------------------------------
(a) Represents the estimated fair market value of the total return swap derivatives related to the consolidated SLTs which had a notional amount of $1.8 billion as of December 31, 2004. IDS Life has other significant variable interests for which it is not considered the primary beneficiary and, therefore, does not consolidate. These interests are represented by carrying values of $2.5 million of CDO residual tranches managed by an affiliate where IDS Life is not the primary beneficiary. IDS Life's maximum exposure to loss as a result of its investment in CDO residual tranches is represented by the carrying value. 4. DEFERRED POLICY ACQUISITION COSTS AND DEFERRED SALES INDUCEMENT COSTS The balances of and changes in DAC as of and for the years ended December 31, were:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of year $3,637,956 $3,336,208 $3,077,994 Impact of SOP 03-1 -- 19,600 -- Capitalization of acquisition costs 632,743 533,842 516,928 Amortization, excluding impact of changes in assumptions (382,882) (340,578) (266,108) Amortization, impact of annual third quarter changes in DAC-related assumptions 67,000 23,700 1,800 Amortization, impact of other quarter changes in DAC-related assumptions(a) -- 56,100 -- Impact of changes in net unrealized securities losses 81,062 9,084 5,594 --------------------------------------------------------------------------------------------------------------------------------- Balance, end of year $4,035,879 $3,637,956 $3,336,208 ---------------------------------------------------------------------------------------------------------------------------------
(a) Primarily relates to a $65.7 million reduction in DAC amortization expense to reflect the lengthening of the amortization periods for certain annuity and life insurance products impacted by IDS Life's adoption of SOP 03-1 on January 1, 2004, partially offset by a $9.6 million increase in amortization expense due to a LTC DAC valuation system conversion. The balances of and changes in DSIC as of and for the years ended December 31, were:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Balance, beginning of year $302,997 $278,971 $231,100 Impact of SOP 03-1 -- (2,900) -- Capitalization of sales inducements 94,319 70,860 71,839 Amortization (40,332) (33,825) (23,968) Impact of changes in net unrealized securities losses (gains) 13,182 (10,109) -- --------------------------------------------------------------------------------------------------------------------------------- Balance, end of year $370,166 $302,997 $278,971 ---------------------------------------------------------------------------------------------------------------------------------
5. VARIABLE ANNUITY GUARANTEES This note discusses variable annuity guarantees for which liabilities are established under SOP 03-1, specifically GMDB, GGU and GMIB. See Note 10 for more information about guarantees for which liabilities are established under SFAS 133, specifically GMWB and GMAB. The majority of the variable annuity contracts offered by IDS Life contain GMDB provisions. When market values of the customer's accounts decline, the death benefit payable on a contract with a GMDB may exceed the contract accumulation value. IDS Life also offers GGU provisions on variable annuities with death benefit provisions and contracts containing GMIB provisions. If elected by the contract owner and after a stipulated waiting period from contract issuance, a GMIB guarantees a minimum lifetime annuity based on a specified rate of contract accumulation value growth and predetermined annuity purchase rates. IDS Life has established additional liabilities for these variable annuity death benefits and GMIB provisions. IDS Life Insurance Company ------------------------------------------------------------------------------ The variable annuity death benefit liability is determined each period by estimating the expected value of death benefits in excess of the projected contract accumulation value and recognizing the excess over the estimated meaningful life based on expected assessments (e.g., mortality and expense fees, contractual administrative charges and similar fees). Similarly, the GMIB liability is determined each period by estimating the expected value of annuitization benefits in excess of the projected contract accumulation value at the date of annuitization and recognizing the excess over the estimated meaningful life based on expected assessments. The majority of the GMDB contracts provide for six year reset contract values. In determining the additional liabilities for variable annuity death benefits and GMIB, IDS Life projects these benefits and contract assessments using actuarial models to simulate various equity market scenarios. Significant assumptions made in projecting future benefits and assessments relate to customer asset value growth rates, mortality, persistency and investment margins and are consistent with those used for DAC asset valuation for the same contracts. As with DAC, management will review, and where appropriate, adjust its assumptions each quarter. Unless management identifies a material deviation over the course of quarterly monitoring, management will review and update these assumptions annually in the third quarter of each year. The following provides summary information related to variable annuity contracts for which IDS Life has established additional liabilities for death benefits and GMIB as of December 31: ---------------------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY GMDB, GMIB AND GGU BY BENEFIT TYPE (DOLLARS IN THOUSANDS) 2005 2004 --------------------------------------------------------------------------------------------------------------------------------- Contracts with GMDB Providing for Return of Premium Total Contract Value $ 9,106,907 $ 3,241,618 Contract Value in Separate Accounts $ 7,409,865 $ 1,727,415 Net Amount at Risk* $ 16,727 $ 110,922 Weighted Average Attained Age 60 62 --------------------------------------------------------------------------------------------------------------------------------- Contracts with GMDB Providing for Six Year Reset Total Contract Value $24,608,183 $27,453,193 Contract Value in Separate Accounts $20,362,261 $22,787,083 Net Amount at Risk* $ 762,724 $ 1,267,225 Weighted Average Attained Age 61 60 --------------------------------------------------------------------------------------------------------------------------------- Contracts with GMDB Providing for One Year Ratchet Total Contract Value $ 5,129,201 $ 4,039,358 Contract Value in Separate Accounts $ 4,210,758 $ 3,078,491 Net Amount at Risk* $ 45,363 $ 55,622 Weighted Average Attained Age 61 61 --------------------------------------------------------------------------------------------------------------------------------- Contracts with Other GMDB Total Contract Value $ 993,152 $ 494,668 Contract Value in Separate Accounts $ 891,930 $ 397,696 Net Amount at Risk* $ 16,415 $ 11,689 Weighted Average Attained Age 59 66 --------------------------------------------------------------------------------------------------------------------------------- Contracts with GGU Death Benefit Total Contract Value $ 619,846 $ 450,067 Contract Value in Separate Accounts $ 535,821 $ 363,753 Net Amount at Risk* $ 34,844 $ 18,192 Weighted Average Attained Age 61 64 --------------------------------------------------------------------------------------------------------------------------------- Contracts with GMIB Total Contract Value $ 792,578 $ 603,251 Contract Value in Separate Accounts $ 711,759 $ 517,596 Net Amount at Risk* $ 15,970 $ 11,886 Weighted Average Attained Age 60 59 --------------------------------------------------------------------------------------------------------------------------------- * Represents current death benefit less total contract value for GMDB, amount of gross up for GGU and accumulated guaranteed minimum benefit base less total contract value for GMIB and assumes the actuarially remote scenario that all claims become payable on the same day. --------------------------------------------------------------------------------------------------------------------------------- ADDITIONAL LIABILITIES AND INCURRED BENEFITS GMDB & GGU GMIB --------------------------------------------------------------------------------------------------------------------------------- For the year ended December 31, 2005 Liability balance at January 1 $29,966 $2,989 Reported claims $12,203 $ -- Liability balance at December 31 $16,451 $3,528 Incurred claims (reported + change in liability) $(1,312) $ 539 ---------------------------------------------------------------------------------------------------------------------------------
The additional liabilities for guaranteed benefits established under SOP 03-1 are supported by general account assets. Changes in these liabilities are included in death and other benefits in the Consolidated Statements of Income. Contract values in separate accounts were invested in various equity, bond and other funds as directed by the contractholder. No gains or losses were recognized on assets transferred to separate accounts for the periods presented. IDS Life Insurance Company ------------------------------------------------------------------------------ 6. INCOME TAXES IDS Life qualifies as a life insurance company for federal income tax purposes. As such, IDS Life is subject to the Internal Revenue Code provisions applicable to life insurance companies. Provisions (benefits) for income taxes were:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Federal income tax: Current $ 55,766 $159,783 $ 91,862 Deferred 122,264 70,574 (30,714) --------------------------------------------------------------------------------------------------------------------------------- Total federal income taxes 178,030 230,357 61,148 State income taxes-current 3,627 (4,180) 5,797 --------------------------------------------------------------------------------------------------------------------------------- Income tax provision before accounting change $181,657 $226,177 $ 66,945 ---------------------------------------------------------------------------------------------------------------------------------
The principal reasons that the aggregate income tax provision is different from that computed by using the U.S. statutory rate of 35% are as follows:
2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Tax at U.S. statutory rate 35.0% 35.0% 35.0% Changes in taxes resulting from: Tax-exempt interest and dividend income (9.7) (3.1) (10.6) State income taxes, net of federal benefit 0.4 (0.4) 0.7 Affordable housing credits -- -- (12.8) Taxes applicable to prior years 3.2 (2.6) -- Other, net (0.5) (0.4) (0.6) --------------------------------------------------------------------------------------------------------------------------------- Income tax provision before accounting change 28.4% 28.5% 11.7% =================================================================================================================================
Deferred income tax assets and liabilities result from temporary differences between the assets and liabilities measured for U.S. GAAP reporting versus income tax return purposes. The significant components of IDS Life's deferred income tax assets and liabilities as of December 31, 2005 and 2004 are reflected in the following table:
(THOUSANDS) 2005 2004 ------------------------------------------------------------------------------------------------------------------ Deferred income tax assets: Policy reserves $1,101,836 $1,035,300 Other investments 69,864 139,066 Deferred taxes related to net securities and derivative unrealized losses 70,379 -- Other 61,896 55,556 ------------------------------------------------------------------------------------------------------------------ Total deferred income tax assets 1,303,975 1,229,922 ------------------------------------------------------------------------------------------------------------------ Deferred income tax liabilities: Deferred policy acquisition costs 1,154,402 1,116,235 Deferred taxes related to net securities and derivative unrealized gains -- 183,988 Other 158,672 70,901 ------------------------------------------------------------------------------------------------------------------ Total deferred income tax liabilities 1,313,074 1,371,124 ------------------------------------------------------------------------------------------------------------------ Deferred income tax liabilities, net $ 9,099 $ 141,202 ------------------------------------------------------------------------------------------------------------------
A portion of IDS Life's income earned prior to 1984 was not subject to current taxation but was accumulated, for tax purposes, in a "policyholders' surplus account." At December 31, 2005, IDS Life had a policyholders' surplus account balance of $1.1 million. The American Jobs Creation Act of 2004 which was enacted on October 22, 2004 provides a two-year suspension of the tax on policyholders' surplus account distributions. IDS Life has made distributions of $19 million, which will not be subject to tax under the two-year suspension. Previously the policyholders' surplus account was only taxable if dividends to shareholders exceeded the shareholders' surplus account and/or IDS Life is liquidated. Deferred income taxes of $0.4 million have not been established as distributions of the remaining policyholders' surplus account are contemplated in 2006. IDS Life is required to establish a valuation allowance for any portion of the deferred income tax assets that management believes will not be realized. Included in IDS Life's deferred tax assets is a significant deferred tax asset relating to capital losses realized for tax return purposes and capital losses that have been recognized for financial statement purposes but not yet for tax return purposes. Under current U.S. federal income tax law, capital losses generally must be used against capital gain income within five years of the year in which the capital losses are recognized for tax purposes. IDS Life has $231 million in capital loss carryforwards that expire December 31, 2009. The deferred tax benefit of these capital loss carryforwards is reflected in the other investments deferred tax assets, net of other related items. Based on analysis of IDS Life's tax position, management believes it is more likely than not that the results of future operations and implementation of tax planning strategies will generate sufficient IDS Life Insurance Company ------------------------------------------------------------------------------ taxable income to enable IDS Life to utilize all of its deferred tax assets. Accordingly, no valuation allowance for deferred tax assets has been established as of December 31, 2005 and 2004. As a result of the separation of Ameriprise Financial from American Express, IDS Life will be required to file a short period income tax return through September 30, 2005 which will be included as part of the American Express consolidated income tax return for the year ended December 31, 2005. Additionally, IDS Life and subsidiaries will not be able to file a consolidated U.S. federal income tax return with other members of the Ameriprise Financial affiliated group for five tax years following the Distribution. Therefore IDS Life will also be required to file a separate short period consolidated life insurance company income tax return for the period October 1, 2005 through December 31, 2005. The items comprising other comprehensive income in the Consolidated Statements of Stockholder's Equity are presented net of the following income tax benefit amounts:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Net unrealized securities losses $248,363 $18,761 $48,791 Net unrealized derivative losses 6,004 12,426 4,188 --------------------------------------------------------------------------------------------------------------------------------- Net income tax benefit $254,367 $31,187 $52,979 ---------------------------------------------------------------------------------------------------------------------------------
7. STATUTORY CAPITAL AND SURPLUS Statutory capital and surplus available for distribution or dividends to Ameriprise Financial are limited to IDS Life Insurance Company's surplus as determined in accordance with accounting practices prescribed by state insurance regulatory authorities. IDS Life Insurance Company's statutory unassigned surplus aggregated $925.1 million and $909.7 million as of December 31, 2005 and 2004, respectively. In addition, any dividend or distribution paid prior to December 24, 2006 (one year after IDS Life Insurance Company's most recent dividend payment) would require pre-notification to the Commissioner of Commerce of the State of Minnesota, who has the authority to disapprove and prevent payment thereof. From December 24, 2006 to December 31, 2006, dividends or distributions in excess of $327.5 million would be subject to this same pre-notification and potential disapproval. Statutory net income for the years ended December 31 and capital and surplus as of December 31 are summarized as follows:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Statutory net income $ 341,235 $ 379,950 $ 432,063 Statutory capital and surplus 2,942,153 2,276,724 2,804,593
IDS Life Insurance Company and its wholly-owned life insurance subsidiaries are subject to regulatory capital requirements. Actual capital, determined on a statutory basis, and regulatory capital requirements for each of the life insurance entities as of December 31, 2005 are as follows:
REGULATORY CAPITAL (THOUSANDS) ACTUAL CAPITAL(a) REQUIREMENT ------------------------------------------------------------------------------------------------------------------- IDS Life Insurance Company $3,270,285 $750,975 American Enterprise Life Insurance Company 583,303 125,285 IDS Life Insurance Company of New York 246,001 39,880 American Partners Life Insurance Company 67,382 10,906 American Centurion Life Assurance Company 61,748 12,654 -------------------------------------------------------------------------------------------------------------------
(a) Actual capital, as defined by the NAIC for purposes of meeting regulatory capital requirements, includes statutory capital and surplus, plus certain statutory valuation reserves. 8. RELATED PARTY TRANSACTIONS IDS Life loans funds to Ameriprise Financial under a collateral loan agreement. There was no balance on the loan at December 31, 2005 and 2004. This loan can be increased to a maximum of $75 million and pays interest at a rate equal to the preceding month's effective new money rate for IDS Life's permanent investments. In connection with Ameriprise Financial being named the investment manager for the proprietary mutual funds used as investment options by IDS Life's variable annuity and variable life insurance contract owners in the fourth quarter of 2003, Ameriprise Financial received management fees from these funds. IDS Life continues to provide all fund management services, other than investment management, and entered into an administrative services agreement with Ameriprise Financial to be compensated for the services IDS Life provides. For the years ended December 31, 2005, 2004 and 2003, IDS Life received $55.7 million, $81.5 million, and $14.1 million, respectively, under the agreement with Ameriprise Financial. In the fourth quarter of 2005, RiverSource Investments, LLC replaced Ameriprise Financial as the investment manager. As a result, IDS Life's administrative service fees were payable from RiverSource Investments, LLC rather than Ameriprise Financial during the fourth quarter of 2005. For the year ended December 31, 2005, IDS Life received $19.5 million under the agreement with RiverSource Investments, LLC. IDS Life Insurance Company ------------------------------------------------------------------------------ IDS Life participates in the Ameriprise Financial Retirement Plan which covers all permanent employees age 21 and over who have met certain employment requirements. Company contributions to the plan are based on participants' age, years of service and total compensation for the year. Funding of retirement costs for this plan complies with the applicable minimum funding requirements specified by ERISA. IDS Life's share of the total net periodic pension cost was $0.9 million in 2005, $0.5 million in 2004, and $0.3 million in 2003. IDS Life also participates in the defined contribution pension plans of Ameriprise Financial which cover all employees who have met certain employment requirements. Company contributions to the plans are a percent of either each employee's eligible compensation or basic contributions. Costs of these plans charged to operations in 2005, 2004 and 2003 were $3.2 million, $2.4 million, and $2.2 million, respectively. IDS Life participates in the defined benefit health care plans of Ameriprise Financial that provide health care and life insurance benefits to retired employees and retired financial advisors. The plans include participant contributions and service related eligibility requirements. Upon retirement, such employees are considered to have been employees of Ameriprise Financial. Ameriprise Financial expenses these benefits and allocates the expenses to its subsidiaries. The cost of these plans charged to operations in 2005, 2004 and 2003 was $1.1 million, $0.5 million, and $2.1 million, respectively. Charges by Ameriprise Financial for use of joint facilities, technology support, marketing services and other services aggregated $725.2 million, $600.6 million, and $549.2 million for 2005, 2004 and 2003, respectively. Certain of these costs are included in DAC. Expenses allocated to IDS Life may not be reflective of expenses that would have been incurred by IDS Life on a stand-alone basis. In connection with the separation, IDS Life received a capital contribution of $650 million from Ameriprise Financial during the third quarter of 2005 to support its current financial strength ratings and to cover the allocated separation costs. During the fourth quarter of 2005, IDS Life approved and paid dividends to Ameriprise Financial of $380 million. During the second and fourth quarter of 2004, IDS Life approved and paid dividends to Ameriprise Financial of $430 million and $500 million, respectively. IDS Life expects to continue to maintain adequate capital to meet internal and external Risk-Based Capital requirements. Included in other liabilities at December 31, 2005 and 2004 are $7.6 million and $30.1 million, respectively, payable to Ameriprise Financial for federal income taxes. 9. REINSURANCE At December 31, 2005, 2004 and 2003, traditional life and universal life insurance in force aggregated $160.1 billion, $147.5 billion and $131.1 billion, respectively, of which $86.3 billion, $70.9 billion and $53.8 billion, was reinsured at the respective year ends. IDS Life also reinsures a portion of the risks assumed under LTC policies. Under all reinsurance agreements, premiums ceded to reinsurers amounted to $174.9 million, $159.6 million and $144.7 million and reinsurance recovered from reinsurers amounted to $105.6 million, $73.3 million and $60.3 million, for the years ended December 31, 2005, 2004 and 2003, respectively. Reinsurance contracts do not relieve IDS Life from its primary obligation to policyholders. Life insurance in force is reported on a statutory basis. 10. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES Derivative financial instruments enable the end users to manage exposure to credit and various market risks. The value of such instruments is derived from an underlying variable or multiple variables, including equity, and interest rate indices or prices. IDS Life enters into various derivative financial instruments as part of its ongoing risk management activities. IDS Life does not engage in any derivative instrument trading activities. Credit risk associated with IDS Life's derivatives is limited to the risk that a derivative counterparty will not perform in accordance with the terms of the contract. To mitigate such risk, counterparties are all required to be preapproved. Additionally, IDS Life may, from time to time, enter into master netting agreements wherever practical. The following summarizes IDS Life's use of derivative financial instruments. IDS Life Insurance Company ------------------------------------------------------------------------------ Cash Flow Hedges IDS Life uses interest rate products, primarily interest rate swaptions, to hedge the risk of increasing interest rates on forecasted fixed annuity sales. During 2005, 2004 and 2003, no amounts were reclassified into earnings from accumulated other comprehensive income. Additionally, IDS Life does not expect to reclassify any material amounts from accumulated other comprehensive income to earnings during the next twelve months. Currently, the longest period of time over which IDS Life is hedging exposure to the variability in future cash flows is 13 years and relates to forecasted fixed annuity sales. There were losses of $1.8 million for the year ended December 31, 2005 and no gains or losses for the years ended December 31, 2004 and 2003 on derivative transactions or portions thereof that were ineffective as hedges or excluded from the assessment of hedge effectiveness. During 2005, 2004 and 2003, IDS Life recognized the following impacts in other comprehensive income related to its cash flow hedging activity, net of tax:
(THOUSANDS) 2005 2004 2003 --------------------------------------------------------------------------------------------------------------------------------- Holding losses, net of tax of $6,628, $11,901, and $3,663, respectively $(12,309) $(22,102) $(6,802) Reclassification for realized losses (gains), net of tax of $624, $525, and $525, respectively 1,159 (975) (975) --------------------------------------------------------------------------------------------------------------------------------- Net unrealized derivative losses $(11,150) $(23,077) $(7,777) ---------------------------------------------------------------------------------------------------------------------------------
Derivatives Not Designated as Hedges IDS Life has economic hedges that either do not qualify or are not designated for hedge accounting treatment. Certain annuity products have returns tied to the performance of equity markets. As a result of fluctuations in equity markets, the amount of expenses incurred by IDS Life related to equity-indexed annuities will positively or negatively impact earnings. As a means of economically hedging its obligations under the provisions of these products, IDS Life writes and purchases index options and occasionally enters into futures contracts. Purchased options used in conjunction with these products are reported in other assets and written options are included in other liabilities. Additionally, certain annuity products contain GMWB provisions, which guarantee the right to make limited partial withdrawals each contract year regardless of the volatility inherent in the underlying investments. The GMWB provision is considered an embedded derivative and is valued each period by estimating the present value of future benefits less applicable fees charged for the rider using actuarial models, which simulate various economic scenarios. IDS Life economically hedges the exposure related to the GMWB provision using various equity futures and structured derivatives. As of December 31, 2005 and 2004, the fair value of the purchased derivatives used in conjunction with these products was $124.6 million and $27.8 million, respectively. As of December 31, 2005 and 2004, the fair value of the written options was $(0.8) million and $(0.9) million, respectively. Futures contracts are settled daily by exchanging cash with the counterparty and gains and losses are reported in earnings. Embedded Derivatives As noted above, certain annuity products have returns tied to the performance of equity markets. The equity component of the annuity product obligations are considered embedded derivatives. Additionally, certain annuities contain GMWB and GMAB provisions, which are also considered embedded derivatives. The changes in fair value of the equity indexed annuities are recognized in interest credited to account values and the changes in fair value of the GMWB and GMAB features are recognized in death and other benefits for investment contracts and universal life-type insurance. The fair value of the embedded derivatives for equity indexed annuities is recognized in future policy benefits for fixed annuities and the fair value of the embedded options for GMWB and GMAB is recognized in future policy benefits for variable annuity guarantees in the Consolidated Balance Sheets. The total fair value of these instruments, excluding the host contract, was $47.9 million and $34.6 million at December 31, 2005 and 2004, respectively. IDS Life Insurance Company ------------------------------------------------------------------------------ 11. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table discloses fair value information for financial instruments. Certain items, such as life insurance obligations, employee benefit obligations, investments accounted for under the equity method, DAC and DSIC are not reflected in the table as they are not required to be disclosed in such table by SFAS No. 107, "Disclosure about Fair Value of Financial Instruments." The fair values of financial instruments are estimates based upon market conditions and perceived risks at December 31, 2005 and 2004 and require management judgment to estimate such values. These figures may not be indicative of future fair values. Additionally, management believes the value of excluded assets and liabilities is significant. The fair value of IDS Life, therefore, cannot be estimated by aggregating the amounts presented herein. The following table discloses carrying value and fair value information for financial instruments at December 31:
2005 2004 --------------------------------------------------------------------------------------------------------------------------------- CARRYING FAIR CARRYING FAIR (THOUSANDS) VALUE VALUE VALUE VALUE --------------------------------------------------------------------------------------------------------------------------------- FINANCIAL ASSETS Assets for which carrying values approximate fair values $ 233,589 $ 233,589 $ 667,248 $ 667,248 Available-for-Sale securities 27,753,195 27,753,195 28,162,451 28,162,451 Mortgage loans on real estate, net 2,842,362 2,976,688 2,923,542 3,149,986 Policy loans 605,212 605,212 588,574 588,574 Trading securities 23,956 23,956 168,055 168,055 Other investments 127,369 131,475 135,795 140,428 Separate account assets 37,929,960 37,929,960 32,454,032 32,454,032 Derivative financial instruments 133,263 133,263 97,784 97,784 FINANCIAL LIABILITIES Liabilities for which carrying values approximate fair values $ 25,000 $ 25,000 $ 47,000 $ 47,000 Fixed annuity reserves 24,637,806 23,840,988 25,522,643 24,733,010 Separate account liabilities 33,154,528 31,742,503 28,284,118 27,164,063 Derivative financial instruments 6,941 6,941 4,290 4,290 ---------------------------------------------------------------------------------------------------------------------------------
As of December 31, 2005 and 2004, the carrying and fair values of off- balance sheet financial instruments are not material. See Note 2 for carrying and fair value information regarding Available-for-Sale securities and mortgage loans on real estate (net of allowance for loan losses). The following methods were used to estimate the fair values of financial assets and financial liabilities: FINANCIAL ASSETS Assets for which carrying values approximate fair values include cash and cash equivalents, restricted cash and certain other assets. The carrying value approximates fair value due to the short-term nature of these instruments. Available-for-Sale securities are carried at fair value in the Consolidated Balance Sheets. Gains and losses are recognized in the results of operations upon disposition. In addition, impairment losses are recognized when management determines that a decline in value is other-than-temporary. The fair value of mortgage loans on real estate, except those with significant credit deterioration, are estimated using discounted cash flow analysis, based on current interest rates for loans with similar terms to borrowers of similar credit quality. For loans with significant credit deterioration, fair values are based on estimates of future cash flows discounted at rates commensurate with the risk inherent in the revised cash flow projections, or for collateral dependent loans, on collateral values. The fair value of policy loans approximates carrying value. Trading securities are carried at fair value in the Consolidated Balance Sheets with changes in fair value recognized in current period earnings. Other investments include IDS Life's interest in syndicated loans, which are carried at amortized cost less allowance for losses in the Consolidated Balance Sheets. Fair values are based on quoted market prices. Separate account assets are carried at fair value in the Consolidated Balance Sheets. Derivative financial instruments are carried at fair value within other assets or other liabilities. The fair value of the derivative financial instruments are determined using either market quotes or valuation models that are based upon the net present value of estimated future cash flows and incorporate current market data inputs. IDS Life Insurance Company ------------------------------------------------------------------------------ FINANCIAL LIABILITIES Liabilities for which carrying values approximate fair values include certain other liabilities. The carrying value approximates fair value due to the short-term nature of these instruments. Fair values of fixed annuities in deferral status are estimated as the accumulated value less applicable surrender charges. For annuities in payout status, fair value is estimated using discounted cash flows based on current interest rates. The fair value of these reserves excludes life insurance related elements of $1.5 billion as of both December 31, 2005 and 2004. If the fair value of the fixed annuities were realized, the surrender charges received would be offset by the write off of the DAC and DSIC associated with the fixed annuities of $496.4 million and $534.4 million as of December 31, 2005 and 2004, respectively. Fair values of separate account liabilities, excluding life insurance- related elements of $4.8 billion and $4.2 billion at December 31, 2005 and 2004, respectively, are estimated as the accumulated value less applicable surrender charges. If the fair value of the separate account liabilities were realized, the surrender charges received would be offset by the write off of the DAC and DSIC associated with separate account liabilities of $2.0 billion and $1.7 billion as of December 31, 2005 and 2004, respectively. 12. COMMITMENTS AND CONTINGENCIES At December 31, 2005 and 2004, IDS Life had no commitments to purchase investments other than mortgage loan fundings (see Note 2). The Securities and Exchange Commission, the National Association of Securities Dealers and several state authorities have brought proceedings challenging several mutual fund and variable product financial practices, generally including suitability, late trading, market timing, compensation and disclosure of revenue sharing arrangements. IDS Life has received requests for information and has been contacted by regulatory authorities concerning its practices and is cooperating fully with these inquiries. IDS Life is involved in a number of other legal and arbitration proceedings concerning matters arising in connection with the conduct of its business activities. IDS Life believes that it is not a party to, nor are any of its properties the subject of, any pending legal, arbitration or regulatory proceedings that would have a material adverse effect on its consolidated financial condition, results of operations or liquidity. However, it is possible that the outcome of any such proceedings could have a material impact on results of operations in any particular reporting period as the proceedings are resolved. The IRS routinely examines IDS Life's federal income tax returns and recently completed its audit of IDS Life for the 1993 through 1996 tax years. The IRS is currently conducting an audit of IDS Life for the 1997 through 2002 tax years. Management does not believe there will be a material adverse effect on IDS Life's consolidated financial condition or results of operations as a result of these audits. S-6325 D (5/06) PART C. Item 24. Financial Statements and Exhibits (a) Financial statements included in Part B of this Registration Statement: The audited financial statements of the IDS Life Variable Account 10 RiverSource Retirement Advisor Variable Annuity(SM) RiverSource Retirement Advisor Variable Annuity(SM) - Band 3 RiverSource Retirement Advisor Advantage(SM) Variable Annuity RiverSource Retirement Advisor Select(SM) Variable Annuity RiverSource Retirement Advisor Advantage(SM) Variable Annuity - Band 3 RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity RiverSource Retirement Advisor Select Plus(SM) Variable Annuity including: Report of Independent Registered Public Accounting Firm dated March 31, 2006. Statements of Assets and Liabilities for the year ended Dec. 31, 2005. Statements of Operations for the year ended Dec. 31, 2005. Statements of Changes in Net Assets for the years ended Dec. 31, 2005 and 2004. Notes to Financial Statements. The audited financial statements of the IDS Life Insurance Company including: Report of Independent Registered Public Accounting Firm dated Feb. 27, 2006. Consolidated Balance Sheets as of Dec. 31, 2005 and 2004. Consolidated Statements of Income for the years ended Dec. 31, 2005, 2004 and 2003. Consolidated Statements of Cash Flows for the years ended Dec. 31, 2005, 2004 and 2003. Consolidated Statements of Stockholder's Equity for the three years ended Dec. 31, 2005, 2004 and 2003. Notes to Consolidated Financial Statements. (b) Exhibits: 1.1 Resolution of the Board of Directors of IDS Life Insurance Company establishing the IDS Life Variable Account 10 dated August 23, 1995, filed electronically as Exhibit 1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 1.2 Resolution of the Board of Directors of IDS Life Insurance Company establishing 105 additional subaccounts within the separate account, filed electronically as Exhibit 1.2 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999, is incorporated herein by reference. 1.3 Resolution of the Board of Directors of IDS life Insurance Company establishing 25 additional subaccounts within the separate account, filed electronically as Exhibit 1.3 to Registrant's Post-Effective Amendment No. 2 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.4 Resolution of the Board of Directors of IDS Life Insurance Company establishing 12 additional subaccounts within the separate account, filed electronically as Exhibit 1.3 to Registrant's Post-Effective Amendment No. 3 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.5 Resolution of the Board of Directors of IDS Life Insurance Company establishing 69 additional subaccounts within the separate account, filed electronically as Exhibit 1.5 to Registrant's Post-Effective Amendment No. 6 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.6 Resolution of the Board of Directors of IDS Life Insurance Company establishing 112 additional subaccounts within the separate account, dated Feb. 11, 2002, filed electronically as Exhibit 1.6 to Registrant's Post-Effective Amendment No. 8 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.7 Resolution of the Board of Directors of IDS Life Insurance Company establishing 3 additional subaccounts within the separate account, dated Feb. 28, 2002, filed electronically as Exhibit 1.7 to Registrant's Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 1.8 Resolution of the Board of Directors of IDS Life Insurance Company establishing 8 additional subaccounts within the separate account, dated January 6, 2004, filed electronically as Exhibit 1.8 to Registrant's Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 1.9 Resolution of the Board of Directors of IDS Life Insurance Company establishing 6 additional subaccounts within the separate account, dated August 12, 2004 filed electronically as Exhibit 1.9 to Post-Effective Amendment No. 32 to Registration Statement No. 333-79311 is incorporated by reference. 1.10 Resolution of the Board of Directors of IDS Life Insurance Company establishing an additional subaccount within the separate account, dated April 27, 2005 filed electronically as Exhibit 1.10 to Post-Effective Amendment No. 32 to Registration Statement No. 333-79311 is incorporated by reference. 1.11 Resolution of the Board of Directors establishing 18 additional subaccounts within the separate accounts dated April 12, 2006 is filed electronically herewith. 2. Not applicable. 3. Not applicable. 4.1 Form of Deferred Annuity Contract for non-qualified contracts (form 31043) filed electronically as Exhibit 4.1 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.2 Form of Deferred Annuity Contract for tax qualified contracts (form 31044) filed electronically as Exhibit 4.2 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.3 Form of Deferred Annuity Contract for IRA contracts (form 31045-IRA) filed electronically as Exhibit 4.3 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.4 Form of Deferred Annuity Contract for non-qualified contracts (form 31046) filed electronically as Exhibit 4.4 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.5 Form of Deferred Annuity Contract for tax qualified contracts (form 31047) filed electronically as Exhibit 4.5 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.6 Form of Deferred Annuity Contract for IRA contracts (form 31048-IRA) filed electronically as Exhibit 4.6 to Registrant's Initial Registration Statement No. 333-79311, filed on or about May 26, 1999, is incorporated herein by reference. 4.7 Form of TSA Endorsement (form 31049), filed electronically as Exhibit 4.7 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999 is incorporated herein by reference. 4.8 Form of Maximum Anniversary Value Death Benefit Rider, filed electronically as Exhibit 4.8 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.9 Form of Enhanced Earnings Death Benefit Rider, filed electronically as Exhibit 4.9 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.10 Form of Enhanced Earnings Plus Death Benefit Rider, filed electronically as Exhibit 4.10 to Post-Effective Amendment No. 4 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.11 Form of Traditional IRA or SEP-IRA Annuity Endorsement (form 131061) filed electronically as Exhibit 4.11 to Post-Effective Amendment No. 14 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.12 Form of Roth IRA Annuity Endorsement (form 131062) filed electronically as Exhibit 4.12 to Post-Effective Amendment No. 14 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.13 Form of SIMPLE IRA Annuity Endorsement (form 131063) filed electronically as Exhibit 4.13 to Post-Effective Amendment No. 14 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.14 Form of Deferred Annuity Contract for non-qualified contracts (form 131041) filed electronically as Exhibit 4.14 to Post-Effective Amendment No. 14 to Registration Statement No. 333-79311, is incorporated herein by reference. 4.15 Form of Deferred Annuity Contract for Retirement Advisor Advantage Plus (form 1043 A) filed electronically as Exhibit 4.15 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.16 Form of Deferred Annuity Contract for Retirement Advisor Select Plus (form 131041 A) filed electronically as Exhibit 4.16 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.17 Form of Deferred Annuity Contract for RiverSource Retirement Advisor 4 Advantage Variable Annuity (form 131101), to be filed by Amendment. 4.18 Form of Deferred Annuity Contract for RiverSource Retirement Advisor 4 Select Variable Annuity (form 131102), to be filed by Amendment. 4.19 Form of Deferred Annuity Contract for RiverSource Retirement Advisor Access Variable Annuity (form 131103), to be filed by Amendment. 4.20 Form of TSA Endorsement (form 131068), filed electronically as Exhibit 4.17 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.21 Form of Return of Purchase Payments Rider (form 131072), filed electronically as Exhibit 4.18 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.22 Form of Maximum Anniversary Value Death Benefit Rider (form 131031), filed electronically as Exhibit 4.19 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.23 Form of 5-Year Maximum Anniversary Value Death Benefit Rider (form 131071), filed electronically as Exhibit 4.20 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.24 Form of Enhanced Earnings Death Benefit Rider (form 131032 A), filed electronically as Exhibit 4.21 to Post-Effective Amendment No.21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.25 Form of Enhanced Earnings Plus Death Benefit Rider (form 131033 A), filed electronically as Exhibit 4.22 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.26 Form of 401 (a) Annuity Endorsement (form 131069), filed electronically as Exhibit 4.23 to Post-Effective Amendment No. 21 to Registration Statement No. 333-79311, filed on or about Jan. 23, 2004, is incorporated by reference. 4.27 Form of Guarantee Period Accounts Rider filed electronically as Exhibit 4.24 to Post-Effective Amendment No. 25 to Registration Statement No. 333-79311, filed on or about June 2, 2004, is incorporated by reference. 4.28 Form of Guaranteed Minimum Withdrawal Benefit Rider (form 131034) filed electronically as Exhibit 4.25 to Post-Effective Amendment No. 29 to Registration Statement No. 333-79311, filed on or about Oct. 21, 2004, is incorporated by reference. 4.29 Form of Guaranteed Minimum Accumulation Benefit Rider (GMAB) (form 131035) is filed electronically herewith. 4.30 Form of Portfolio Navigator Model Portfolio Rider (form 131070C) is filed electronically herewith. 4.31 Form of Guaranteed Minimum Lifetime Withdrawal Benefit Rider (Withdrawal Benefit for Life), will be filed by Amendment. 5. Form of Variable Annuity Application (form 31063), filed electronically as Exhibit 5 to Pre-Effective Amendment No. 1 to Registration Statement No. 333-79311 filed on or about Aug. 10, 1999 is incorporated herein by reference. 6.1 Certificate of Incorporation of IDS Life dated July 24, 1957, filed electronically as Exhibit 6.1 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 6.2 Amended By-Laws of IDS Life filed electronically as Exhibit 6.2 to Registrant's Initial Registration Statement No. 33-62407 is incorporated herein by reference. 6.3 Copy of Amended and Restated By-Laws of IDS Life Insurance Company, filed electronically as Exhibit 6.2 to Post-Effective Amendment No. 13 to Registration Statement No. 33-47302, is incorporated herein by reference. 7. Not applicable. 8.1(a) Copy of Participation Agreement between IDS Life Insurance Company and AIM Variable Insurance Funds, Inc. and AIM Distributors, Inc., dated March 4,1996, filed electronically as Exhibit 8.4 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.1(b) Copy of Participation Agreement By and Among AIM Variable Insurance Funds, Inc., A I M Distributors, Inc., and IDS Life Insurance Company, on Behalf of Itself and Its Separate Accounts, dated Oct. 7, 1996, filed electronically as Exhibit 8.1(b) to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.2 Copy of Participation Agreement by and among IDS Life Insurance Company, American Express Financial Advisors Inc., Alliance Capital Management L.P. and Alliance Fund Distributors dated March 1, 2000 filed electronically as Exhibit 8.2 to Post-Effective Amendment No. 14 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.3 Copy of Participation Agreement By and Among Calvert Variable Series, Inc. and Calvert Asset Management Co. and Calvert Distributors Inc. and IDS Life Insurance Company, dated April 14, 2000, filed as Exhibit 8.7 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.4 Copy of Participation Agreement between IDS Life Insurance Company and Warburg Pincus Trust and Warburg Pincus Counselors, Inc. and Counselors Securities Inc., dated March 1, 1996, filed electronically as Exhibit 8.3 to Post-Effective Amendment No. 2 to Registration statement No. 33-62407 is incorporated herein by reference. 8.5 Copy of Participation Agreement by and between Evergreen Variable Annuity Trust and IDS Life Insurance Company, dated August 13, 2001 filed electronically as Exhibit 8.5(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.6 Copy of Participation Agreement among Variable Insurance Products Fund, Fidelity Distributors Corporation and IDS Life Insurance Company, dated Sept. 1, 1999, filed electronically as Exhibit 8.8(a) to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.7 Copy of Amended and Restated Participation Agreement by and between Franklin Templeton Variable Insurance Products Trust, Franklin/Templeton Distributors, Inc., American Centurion Life Assurance Company, American Enterprise Life Insurance Company, IDS Life Insurance Company, IDS Life Insurance Company of New York, Ameriprise Financial Services, Inc. (formerly American Express Financial Advisors Inc.), dated August 1, 2005 is filed electronically herewith. 8.8 Copy of Participation Agreement By and Between Goldman Sachs Variable Insurance Trust, Goldman, Sachs & Co. and IDS Life Insurance Company, dated September 1, 1999, filed electronically as Exhibit 8.3 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.9 Copy of Participation Agreement between IDS Life Insurance Company and INVESCO Variable Investment Funds, Inc, and INVESCO Distributors, Inc., dated August 13, 2001 filed electronically as Exhibit 8.9 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.10 Copy of Participation Agreement Between Janus Aspen Series and IDS Life Insurance Company, dated April 21, 2000, filed electronically as Exhibit 8.10 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.11 Copy of Participation Agreement by and among IDS Life Insurance Company, Lazard Asset Management and Lazard Retirement Series, Inc., dated September 1, 1999, filed as Exhibit 8.11 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.12 Copy of Participation Agreement Among MFS Variable Insurance Trust, IDS Life Insurance Company and Massachusetts Financial Services Company, dated March 1, 2000, filed as Exhibit 8.12 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.13 Copy of Participation Agreement among Pioneer Variable Contracts Trust, IDS Life Insurance Company, Pioneer Investment Management, Inc. and Pioneer Funds Distributor, Inc. dated August 13, 2001 filed electronically as Exhibit 8.13(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.14 Copy of Participation Agreement by and among IDS Life Insurance Company and Putnam Capital Manager Trust and Putnam Mutual Funds Corp., dated March 1, 1996, filed electronically as Exhibit 8.1 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.15 Copy of Participation Agreement by and among Royce Capital Fund and Royce & Associates, Inc. and IDS Life Insurance Company, dated September 1, 1999, filed as Exhibit 8.5 to Post-Effective Amendment No. 3 to Registration Statement No. 333-79311 is incorporated herein by reference. 8.16 Copy of Participation Agreement by and among IDS Life Insurance Company and Strong Opportunity Fund II, Inc. and Strong Investor Services, Inc. and Strong Investments, Inc. dated August 13, 2001 filed electronically as Exhibit 8.16 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.17 Copy of Participation Agreement between IDS Life Insurance Company and TCI Portfolios, Inc., dated April 24, 1996, filed electronically as Exhibit 8.5 to Post-Effective Amendment No. 2 to Registration Statement No. 33-62407 is incorporated herein by reference. 8.18 Copy of Participation Agreement by and among Wanger Advisors Trust and Liberty Wanger Asset Management, L.P. and IDS Life Insurance Company dated August 30, 1999 filed electronically as Exhibit 8.17 to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.19 Copy of Participation Agreement by and among Wells Fargo Variable Trust and IDS Life Insurance Company and Stephens Inc. dated May 1, 2000 filed electronically as Exhibit 8.18(a) to Post-Effective Amendment No. 10 to Registration Statement No. 333-79311, is incorporated herein by reference. 8.20 Copy of Participation Agreement by and among Liberty Variable Investment Trust, Columbia Funds Distributor, Inc. and IDS Life Insurance Company, dated Feb. 2, 2004 filed electronically as Exhibit 8.20 to Post-Effective Amendment No. 24 to Registration Statement No. 333-79311, is incorporated by reference. 8.21 Copy of Participation Agreement by and among Oppenheimer Variable Account Funds, Oppenheimer Funds, Inc. and IDS Life Insurance Company, dated Jan. 12, 2004 filed electronically as Exhibit 8.21 to Post-Effective Amendment No. 24 to Registration Statement No. 333-79311, is incorporated by reference. 8.22 Copy of Fund Participation Agreement by and between Neuberger Berman Advisers Management Trust, Neuberger Berman Management Inc. and IDS Life Insurance Company, dated March 2, 2006 is filed electronically herewith. 8.23 Form of Participation Agreement among IDS Life Insurance Company, PIMCO Variable Insurance Trust, and Allianz Global Investors Distributors LLC, dated March 1, 2006 is filed electronically herewith. 9. Opinion of counsel and consent to its use as the legality of the securities being registered is filed electronically herewith. 10.1 Consent of Independent Registered Public Accounting Firm for RiverSource Retirement Advisory Variable Annuity(SM) is filed electronically herewith. 10.2 Consent of Independent Registered Public Accounting Firm for RiverSource Retirement Advisory Variable Annuity(SM) - Band 3 is filed electronically herewith. 10.3 Consent of Independent Registered Public Accounting Firm for RiverSource Retirement Advisor Advantage(SM) Variable Annuity/RiverSource Retirement Advisor Select(SM) Variable Annuity is filed electronically herewith. 10.4 Consent of Independent Registered Public Accounting Firm for RiverSource Express Retirement Advisory Advantage(SM) Variable Annuity - Band 3 is filed electronically herewith. 10.5 Consent of Independent Registered Public Accounting Firm for RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity/RiverSource Retirement Advisor Select Plus(SM) Variable Annuity is filed electronically herewith. 11. None 12. Not applicable. 13.1 Power of Attorney to sign Amendment to this Registration Statement, dated April 13, 2005 filed electronically as Exhibit 13.1 to Post-Effective Amendment No. 32 to Registration Statement No. 333-79311 is incorporated by reference. 13.2 Power of Attorney to sign Amendment to this Registration Statement, dated July 7, 2004 filed electronically as Exhibit 15.2 to Post-Effective Amendment No. 27 to Registration Statement No. 333-79311, is incorporated by reference. 13.3 Power of Attorney to sign Amendment to this Registration Statement, dated Dec. 5, 2005 is filed electronically herewith. 14. Not applicable.
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company) -------------------------------------------------------------------- Name Principal Business Address* Position and Offices with Depositor ------------------------------------------------------ ---------------------------------------- Neysa M. Alecu Anti-Money Laundering Officer Gumer C. Alvero Director and Executive Vice President - Annuities Timothy V. Bechtold Director and President Arthur H. Berman Director Walter S. Berman Vice President and Treasurer Richard N. Bush Senior Vice President - Corporate Tax Michelle M. Keeley Vice President - Investments Eric L. Marhoun General Counsel Brian J. McGrane Director, Executive Vice President and Chief Financial Officer Thomas W. Murphy Vice President - Investments Benji Orr Deputy Anti-Money Laundering Officer Kevin E. Palmer Director, Vice President and Chief Actuary Scott R. Plummer 38a-1 Chief Compliance Officer Julie A. Ruether Chief Compliance Officer and Assistant Secretary Mark E. Schwarzmann Director, Chairman of the Board and Chief Executive Officer Heather M. Somers Assistant General Counsel and Assistant Secretary Bridget M. Sperl Executive Vice President - Client Service David K. Stewart Vice President and Controller * Unless otherwise noted, the business address is 70100 Amerprise Financial Center, Minneapolis, MN 55474.
Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant (Continued) The following list includes the names of major subsidiaries of Ameriprise Financial, Inc. Jurisdiction of Name of Subsidiary Incorporation Ameriprise Financial Services Inc. Delaware American Express Financial Advisors Japan Inc. Delaware American Express Management Company S.A. Luxembourg Ameriprise Trust Company Minnesota IDS Life Insurance Company Minnesota IDS REO 1, LLC Minnesota IDS REO 2, LLC Minnesota American Partners Life Insurance Company Arizona IDS Life Insurance Company of New York New York American Enterprise Life Insurance Company Indiana American Enterprise REO 1, LLC Minnesota American Centurion Life Assurance Company New York RiverSource Tax Advantaged Investments, Inc. Delaware AEXP Affordable Housing Portfolio LLC Delaware Ameriprise Certificate Company Delaware Investors Syndicate Development Corp. Nevada American Express International Deposit Company Cayman Islands American Express Insurance Agency of Alabama Inc. Alabama American Express Insurance Agency of Arizona Inc. Arizona American Express Insurance Agency of Idaho Inc. Idaho American Express Insurance Agency of Indiana Inc. Indiana American Express Insurance Agency of Massachusetts Inc. Massachusetts American Express Insurance Agency of New Mexico Inc. New Mexico American Express Insurance Agency of Texas Inc. Texas IDS Insurance Agency of Utah Inc. Utah American Express Insurance Agency of Wyoming Inc. Wyoming American Express Insurance Agency of Maryland Inc. Maryland American Express Insurance Agency of Oklahoma Inc. Oklahoma American Express Insurance Agency of Nevada Inc. Nevada RiverSource Investments LLC Minnesota Advisory Capital Strategies Group Inc. Minnesota American Express Asset Management International (Japan) Inc. Japan Advisory Capital Partners LLC Delaware Advisory Select LLC Delaware Boston Equity General Partner LLC Delaware Advisory Quantitative Equity (General Partner) LLC Delaware Advisory Credit Opportunities GP LLC Delaware Advisory European (General Partner) Inc. Cayman Islands Advisory Convertible Arbitrage LLC Delaware Kenwood Capital Management LLC (51.1% owned) Delaware IDS Capital Holdings Inc. Minnesota American Express Asset Management International Inc. Delaware American Express Asset Management Ltd. England IDS Management Corporation Minnesota IDS Partnership Services Corporation Minnesota IDS Cable Corporation Minnesota IDS Futures Corporation Minnesota IDS Realty Corporation Minnesota IDS Cable II Corporation Minnesota IDS Property Casualty Insurance Company Wisconsin Amex Assurance Company Illinois Ameriprise Auto & Home Insurance Agency, Inc. Wisconsin American Enterprise Investment Services Inc. Minnesota American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky RiverSource Service Corporation Minnesota American Express Property Casualty Insurance Agency of Maryland Inc. Maryland American Express Property Casualty Insurance Agency of Mississippi Inc. Mississippi American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania AEFA (Jersey) Limited Jersey, Channel Islands Channel Islands Securities America Financial Corporation Nebraska Realty Assets, Inc. Nebraska Securities America Advisors, Inc. Nebraska Securities America, Inc. Nebraska American Express Asset Management (Australia) Limited Australia Threadneedle Asset Management Holdings Ltd. England Threadneedle Investments (Channel Islands) Ltd. Jersey, Channel Islands Channel Islands Threadneedle Asset Management Ltd. England Threadneedle Portfolio Services Ltd. England Threadneedle Postfolio Managers Ltd. England Threadneedle Investment Services Ltd. England Threadneedle Asset Management (Nominees) Ltd. England Threadneedle Investment Services GMbH Germany Threadneedle Investment Advisors Ltd. England Threadneedle International Fund Management Ltd. England MM Asset Management Ltd. England Eagle Star ISA Manager Ltd. England Eagle Star Unit Managers Ltd. England ADT Nominees Ltd. England Threadneedle International Ltd. England Threadneedle Management Services Ltd. England Threadneedle Rural Property Services Ltd. England Threadneedle Property Services Ltd. England Threadneedle Pensions Ltd. England Threadneedle Property GP Holdings Ltd. England Threadneedle Property Investments Ltd. England Sackville TCI Property (GP) Ltd. England Sackville TCI Property Nominee (1) Ltd. England Sackville TCI Property Nominee (2) Ltd. England Sackville Property (GP) Ltd. England Sackville Tandem Property (GP) Ltd. England Sackville Tandem Property Nominee Ltd. England Sackville TPEN Property (GP) Ltd. England Sackville TPEN Property Nominee Ltd. England Sackville TPEN Property Nominee (2) Ltd. England Sackville TSP Property (GP) Ltd. England Sackville TSP Property Nominee Ltd. England JDM3 California Cornbrash Park Management Company Ltd. England Highcross (Slough) Management Ltd. England Threadneedle Financial Services Ltd. England Threadneedle Pension Trustees Ltd. England Sloan Financial Group North Carolina Ameriprise Insurance Company Wisconsin RiverSource Distributors, Inc. Delaware Ameriprise India Private Limited India
Item 27. Number of Contract owners As of March 31, 2006, there were 184,776 non-qualified contract owners and 299,248 qualified contract owners in the IDS Life Variable Account 10. Item 28. Indemnification The amended and restated By-Laws of the depositor provide that the depositor will indemnify, to the fullest extent now or hereafter provided for or permitted by law, each person involved in, or made or threatened to be made a party to, any action, suit, claim or proceeding, whether civil or criminal, including any investigative, administrative, legislative, or other proceeding, and including any action by or in the right of the depositor or any other corporation, or any partnership, joint venture, trust, employee benefit plan, or other enterprise (any such entity, other than the depositor, being hereinafter referred to as an "Enterprise"), and including appeals therein (any such action or process being hereinafter referred to as a "Proceeding"), by reason of the fact that such person, such person's testator or intestate (i) is or was a director or officer of the depositor, or (ii) is or was serving, at the request of the depositor, as a director, officer, or in any other capacity, or any other Enterprise, against any and all judgments, amounts paid in settlement, and expenses, including attorney's fees, actually and reasonably incurred as a result of or in connection with any Proceeding, except as provided below. No indemnification will be made to or on behalf of any such person if a judgment or other final adjudication adverse to such person establishes that such person's acts were committed in bad faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that such person personally gained in fact a financial profit or other advantage to which such person was not legally entitled. In addition, no indemnification will be made with respect to any Proceeding initiated by any such person against the depositor, or a director or officer of the depositor, other than to enforce the terms of this indemnification provision, unless such Proceeding was authorized by the Board of Directors of the depositor. Further, no indemnification will be made with respect to any settlement or compromise of any Proceeding unless and until the depositor has consented to such settlement or compromise. The depositor may, from time to time, with the approval of the Board of Directors, and to the extent authorized, grant rights to indemnification, and to the advancement of expenses, to any employee or agent of the depositor or to any person serving at the request of the depositor as a director or officer, or in any other capacity, of any other Enterprise, to the fullest extent of the provisions with respect to the indemnification and advancement of expenses of directors and officers of the depositor. Insofar as indemnification for liability arising under the Securities Act of 1933 (the "Act") may be permitted to directors, officers and controlling persons of the depositor or the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29 Principal Underwriter (IDS Life Insurance Company) (a) IDS Life is the principal underwriter, depositor or sponsor for IDS Life Variable Annuity Fund A, IDS Life Variable Annuity Fund B, IDS Life Account MGA, IDS Life Account SBS, IDS Life Accounts F, G, H, IZ, JZ, KZ, LZ, MZ, N, PZ, QZ, RZ, SZ and TZ, IDS Life Variable Account 10, IDS Life Variable Life Separate Account and IDS Life Variable Account for Smith Barney. (b) As to each director, officer, or partner of the principal underwriter: Name and Principal Business Address* Position and Offices with Underwriter ------------------------------------ ------------------------------------- Neysa M. Alecu Anti-Money Laundering Officer Gumer C. Alvero Director and Executive Vice President - Annuities Timothy V. Bechtold Director and President Arthur H. Berman Director Walter S. Berman Vice President and Treasurer Richard N. Bush Senior Vice President - Corporate Tax Michelle M. Keeley Vice President - Investments Eric L. Marhoun General Counsel Brian J. McGrane Director, Executive Vice President and Chief Financial Officer Thomas W. Murphy Vice President - Investments Benji Orr Deputy Anti-Money Laundering Officer Kevin E. Palmer Director, Vice President and Chief Actuary Scott R. Plummer 38a-1 Chief Compliance Officer Julie A. Ruether Chief Compliance Officer and Assistant Secretary Mark E. Schwarzmann Director, Chairman of the Board and Chief Executive Officer Heather M. Somers Assistant General Counsel and Assistant Secretary Bridget M. Sperl Executive Vice President - Client Service David K. Stewart Vice President and Controller * Unless otherwise noted, the business address is 70100 Ameriprise Financial Center, Minneapolis, MN 55474. (c)
NAME OF NET UNDERWRITING PRINCIPAL DISCOUNTS AND COMPENSATION ON BROKERAGE UNDERWRITER COMMISSIONS REDEMPTION COMMISSIONS COMPENSATION ----------- ----------- ---------- ----------- ------------ IDS Life Insurance $96,912,450 None None None Company
Item 30. Location of Accounts and Records IDS Life Insurance Company 70100 Ameriprise Financial Center Minneapolis, MN 55474 Item 31. Management Services Not applicable. Item 32. Undertakings (a) Registrant undertakes to file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. (b) Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information. (c) Registrant undertakes to deliver any Statement of Additional Information and any financial statements required to be made available under this Form promptly upon written or oral request. (d) Registrant represents that it is relying upon the no-action assurance given to the American Council of Life Insurance (pub. avail. Nov. 28, 1988). Further, Registrant represents that it has complied with the provisions of paragraphs (1)-(4) of that no-action letter. (e) The sponsoring insurance company represents that the fees and charges deducted under the contract, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, IDS Life Insurance Company, on behalf of the Registrant, certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Amendment to its Registration Statement and has caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Minneapolis, and State of Minnesota, on the 26th day of April, 2006. IDS LIFE VARIABLE ANNUITY ACCOUNT 10 ------------------------------------ (Registrant) By IDS Life Insurance Company ------------------------------------ (Sponsor) By /s/ Timothy V. Bechtold* ---------------------------------- Timothy V. Bechtold President As required by the Securities Act of 1933, Amendment to this Registration Statement has been signed by the following persons in the capacities indicated on the 26th day of April, 2006. /s/ Gumer C. Alvero* Director and Executive Vice ------------------------------------ President - Annuities Gumer C. Alvero /s/ Timothy V. Bechtold* Director and President ------------------------------------ Timothy V. Bechtold /s/ Arthur H. Berman* Director and Executive Vice ------------------------------------ President - Finance Arthur H. Berman (Principal Financial Officer) /s/ Brian J. McGrane*** Director, Executive ------------------------------------ Vice President and Brian J. McGrane Chief Financial Officer /s/ Kevin E. Palmer*** Director, Vice President and ----------------------------------- Chief Actuary Kevin E. Palmer /s/ Mark E. Schwarzmann* Chairman of the Board and ------------------------------------ Chief Executive Officer Mark E. Schwarzmann (Chief Executive Officer) /s/ Bridget M. Sperl* Executive Vice President - ------------------------------------ Client Services Bridget M. Sperl /s/ David K. Stewart** Vice President and Controller ------------------------------------ (Principal Accounting Officer) David K. Stewart * Signed pursuant to Power of Attorney dated April 13, 2005 filed electronically as Exhibit 13.1, to Registrant's Post-Effective Amendment No. 32 to Registration Statement No. 333-79311, is incorporated by reference, by: ** Signed pursuant to Power of Attorney, dated July 7, 2004 filed electronically as Exhibit 15.2 to Registrant's Post-Effective Amendment No. 27 to Registration Statement No. 333-79311, is incorporated by reference, by: *** Signed pursuant to Power of Attorney dated Dec. 5, 2005 filed electronically herewith as Exhibit 13.3 /s/ Mary Ellyn Minenko ---------------------- Mary Ellyn Minenko Assistant General Counsel CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 39 TO REGISTRATION STATEMENT This Post-Effective Amendment is comprised of the following papers and documents: The Cover Page. Part A. The Prospectuses for: RiverSource Retirement Advisor Variable Annuity(SM) RiverSource Retirement Advisor Variable Annuity(SM) - Band 3 RiverSource Retirement Advisor Advantage(SM) Variable Annuity RiverSource Retirement Advisor Select(SM) Variable Annuity RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity RiverSource Retirement Advisor Select Plus(SM) Variable Annuity RiverSource Retirement Advisor Advantage(SM) Variable Annuity - Band 3 Part B. Statement of Additional Information Financial Statements Part C. Other Information. The signatures.