-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, XtRqIYmylu/1417P3hsoqWtT1Enbu+ksd75UDvO2ze8yN0zX6PgI3/ToMDkzVBKM Hpu4yK0uNZcjy/9PbacqNA== 0000950109-95-002192.txt : 19950607 0000950109-95-002192.hdr.sgml : 19950607 ACCESSION NUMBER: 0000950109-95-002192 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950606 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIABLE ANNUITY ACCT C OF AETNA LIFE INSURANCE & ANNUITY CO CENTRAL INDEX KEY: 0000103007 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-75982 FILM NUMBER: 95545312 BUSINESS ADDRESS: STREET 1: 151 FARMINGTON AVE CITY: HARTFORD STATE: CT ZIP: 06156 BUSINESS PHONE: 2032734808 MAIL ADDRESS: STREET 1: C/O AETNA LIFE & CASUALTY STREET 2: 151 FARMINGTON AVE CITY: HARTFORD STATE: CT ZIP: 06156 FORMER COMPANY: FORMER CONFORMED NAME: VARIABLE ANNUITY ACCOUNT C OF AETNA VARIABLE ANNUITY LIFE IN DATE OF NAME CHANGE: 19791108 497 1 497 STICKERS Variable Annuity Account C AetnaPlus - Group Variable Annuity Contracts For Public Employer Deferred Compensation Plans (Section 457) and for 401(a) Defined Contribution Plans May 1, 1995 Supplement to May 1, 1995 Prospectus Pennsylvania State Association of Boroughs The following information supplements "Distribution" in this Prospectus: Distribution Under a signed agreement, the Pennsylvania State Association of Boroughs ("Association") has endorsed the Company's variable annuity for sale to its employees under the group's Deferred Compensation Plan. The Company has agreed to compensate the Association in the amount of $3.50 per year for each participant on whose behalf contributions are being made to the Contract. - ----------------- Prospectus Dated: May 1, 1995 * * * Variable Annuity Account C . AetnaPlus Contract Series II . Group Variable Annuity Contracts . Fixed Plus Account . Public Employer Deferred Compensation Plans AETNA LIFE INSURANCE AND ANNUITY COMPANY 151 Farmington Avenue, Annuity Operations, Hartford, Connecticut 06156, Telephone: 1-800-525-4225 VARIABLE ANNUITY ACCOUNT C Prospectus Dated: May 1, 1995 AETNAPLUS -- GROUP VARIABLE ANNUITY CONTRACTS FOR PUBLIC EMPLOYER DEFERRED COMPENSATION PLANS (SECTION 457) AND FOR 401(A) DEFINED CONTRIBUTION PLANS This Prospectus describes group deferred variable annuity contracts issued by Aetna Life Insurance and Annuity Company (the "Company"). The Contract allows lump-sum payments and installment payments. See "Contract Purchase." The Contracts are designed for deferred compensation plans ("457 Plans") adopted by state and local governments for their employees or independent contractors, or both under Section 457 ("457") of the Internal Revenue Code of 1986, as amended ("Code") and for qualified defined contribution plans under Section 401(a) of the Code ("401 Plans"). Amounts held under the Contracts may be entitled to tax-deferred treatment under certain sections of the Code. The Contracts allow values to accumulate under credited interest or variable options, or a combination of these options. They also provide for the payment of annuity benefits on a fixed or variable basis or a combination thereof. The funding options currently available through the Separate Account under the Contract described in this Prospectus are as follows: . Aetna Variable Fund . Fidelity Overseas Portfolio . Aetna Income Shares . Franklin Government . Aetna Variable Encore Fund Securities Trust . Aetna Investment Advisers Fund, Inc. . Janus Aspen Aggressive . Aetna Ascent Variable Portfolio Growth Portfolio . Aetna Crossroads Variable Portfolio . Janus Aspen Balanced Portfolio . Aetna Legacy Variable Portfolio . Janus Aspen Flexible Income . Alger American Growth Portfolio Portfolio . Alger American Small Cap Portfolio . Janus Aspen Growth Portfolio . Calvert Responsibly Invested Balanced . Janus Aspen Short-Term Bond Portfolio Portfolio . Fidelity Contrafund Portfolio . Janus Aspen Worldwide Growth . Fidelity Equity-Income Portfolio Portfolio . Fidelity Growth Portfolio . Lexington Natural Resources Trust . Neuberger & Berman Growth Portfolio . Scudder International Portfolio . TCI Growth (a Twentieth Century Fund) The availability of the above Funds is subject to applicable regulatory authorization. Not all Funds are available in all jurisdictions or under all Contracts. Please check with your employer to determine option availability. The credited interest options available for the accumulation of values are the Guaranteed Accumulation Account, and the Fixed Plus Account. The Guaranteed Accumulation Account and the Fixed Plus Account are offered only in those jurisdictions in which they are approved. Except as specifically mentioned, this Prospectus describes only the variable options of the Contracts. Information concerning the Guaranteed Accumulation Account and the Fixed Plus Account is found in Appendix I and Appendix II in this Prospectus. This Prospectus sets forth concisely the information about Variable Annuity Account C (the "Separate Account") that a prospective investor should know before investing. Additional information about the Separate Account is contained in a Statement of Additional Information ("SAI") dated May 1, 1995, which has been filed with the Securities and Exchange Commission and is incorporated herein by reference. The Table of Contents for the SAI is printed in this Prospectus. An SAI may be obtained without charge by indicating your request on the enrollment form or on the prospectus receipt contained in this Prospectus or calling 1-800-525-4225. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF THE FUNDS AND THE GUARANTEED ACCUMULATION ACCOUNT. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. NO PERSON IS AUTHORIZED BY THE COMPANY TO GIVE INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERS CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. TABLE OF CONTENTS
Page DEFINITIONS.......................... 3 PROSPECTUS SUMMARY................... 5 FEE TABLE............................ 6 CONDENSED FINANCIAL INFORMATION...... 9 PERFORMANCE DATA..................... 11 THE COMPANY.......................... 12 VARIABLE ANNUITY ACCOUNT C........... 12 THE FUNDS............................ 12 Fund Investment Advisers............ 15 Mixed and Shared Funding............ 16 Fund Additions, Substitutions and Limitations.................... 16 PURCHASE Contract Purchase................... 17 Net Purchase Payments............... 17 Distribution........................ 18 DETERMINING CONTRACT VALUE Accumulation Units.................. 18 Net Investment Factor............... 18 Transfer Credits.................... 19 CONTRACT RIGHTS Right to Cancel..................... 19 Rights Under the Contract........... 19 Transfers and Allocation Changes............................ 19 Withdrawals......................... 20 CHARGES AND DEDUCTIONS Maintenance Fee .................... 21 Mortality and Expense Risk Charges............................ 22 Administrative Expense Charge....... 22 Fund Expenses....................... 22 Deferred Sales Charge............... 23 Premium Tax......................... 24
Page ADDITIONAL WITHDRAWAL OPTIONS General............................. 24 Estate Conservation Option.......... 25 Systematic Withdrawal Option........ 25 ANNUITY PERIOD Annuity Period Elections............ 26 Annuity Options..................... 27 DEATH BENEFIT Accumulation Period................. 28 Annuity Period...................... 28 TAX STATUS Introduction........................ 29 Taxation of the Company............. 29 Section 457 Plans................... 30 Possible Changes in Taxation........ 30 Other Tax Consequences.............. 30 MISCELLANEOUS Voting Rights....................... 31 Modification of the Contract........ 31 Contract Holder Inquiries........... 32 Telephone Transfers................. 32 Legal Proceedings................... 32 Legal Matters....................... 32 STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS..... 33 APPENDIX I--Guaranteed Accumulation Account............................. 34 APPENDIX II--Fixed Plus Account...... 35 APPENDIX III--401(a) Defined Contribution Plans.................. 37 HYPOTHETICAL TABLES.................. 39
2 DEFINITIONS As used in this Prospectus, the following terms have the meanings shown: ACCOUNT: A record established for each Participant, as directed by the Contract Holder, to identify Contract values during the Accumulation Period. ACCOUNT VALUE: The dollar value of amounts held in an Account as of any Valuation Period, including the value of the Accumulation Units in the Funds, the amounts held in GAA, any amounts invested in the Fixed Plus Account, plus interest earned on those amounts, less any maintenance fees due, but excluding amounts used for Annuity Options. ACCOUNT YEAR: The period of 12 months measured from the Account's Effective Date or from an anniversary of such Effective Date. ACCUMULATION PERIOD: The period during which Purchase Payment(s) credited to an Account are invested to fund future annuity payments. ACCUMULATION UNIT: A measure of the value of the Separate Account assets attributable to each Fund used as a variable funding option. AGGREGATE PURCHASE PAYMENT(S): The sum of all Purchase Payment(s) made under a Contract. ANNUITANT: A natural person on whose life an Annuity payment is based. ANNUITY: A series of payments for life, for a definite period or a combination of the two. ANNUITY PERIOD: The period during which Annuity payments are made. ANNUITY UNIT: A measure of the value attributable to each Fund selected during the Annuity Period. CODE: Internal Revenue Code of 1986, as amended. COMPANY: Aetna Life Insurance and Annuity Company, sometimes referred to as "we" or "us." CONTRACT: The group deferred, variable annuity contracts offered by this Prospectus. CONTRACT HOLDER: The entity to which the Contract is issued. The Contract Holder has all right, title and interest in amounts held under the Contract. The Contract Holder is the Contract beneficiary. CONTRACT YEAR: The period of 12 months measured from the Contract's Effective Date or from any anniversary of such Effective Date. DISTRIBUTOR(S): The registered broker-dealer(s) which have entered into selling agreements with the Company to offer and sell the Contracts. The Company may also serve as a Distributor. EFFECTIVE DATE: The date the Company accepts and approves the Contract application or enrollment form, as applicable. FUNDS: The mutual funds offered as variable funding options for the investment of assets of the Separate Account under the Contracts. GAA: Guaranteed Accumulation Account, the credited interest option available in certain jurisdictions for deposits under the Contract. 3 HOME OFFICE: The Company's principal executive offices located at 151 Farmington Avenue, Hartford, Connecticut 06156. MARKET VALUE ADJUSTMENT: An amount deducted or added to amounts withdrawn early from the Guaranteed Accumulation Account to reflect changes in the market value of the investment since the date of deposit. See Appendix I and the prospectus for the Guaranteed Accumulation Account for a discussion of how the market value adjustment is actually calculated. NET PURCHASE PAYMENT(S): The Purchase Payment(s) less premium taxes, if applicable. PARTICIPANT: An eligible person participating in a 457 Plan or a 401 Plan, referred to as "you." Participants have no rights to the assets accumulated under a 457 Plan. Participants under 401 Plans have such rights as are allowed under the terms of the Plan. 457 PLAN: Deferred compensation plans adopted by state and local governments for their employees or independent contractors, or both, under Section 457 of the Code. 401 PLAN: Defined contribution plans adopted by state and local governments under Section 401 of the Code. PLAN ACCOUNT: The record established for a Contract Holder of the Net Purchase Payment(s) accumulated under a Contract where Accounts are not maintained. PURCHASE PAYMENT(S): The gross payment(s) made to the Company under an Account. PURCHASE PAYMENT PERIOD: For installment Purchase Payment Contracts, the period of time for completion of the agreed upon annual number and amount of Purchase Payments. For example, if it is determined that the Purchase Payment Period will consist of 12 payments per year and only 11 payments are made, the Purchase Payment Period is not completed until the twelfth Purchase Payment is made. When a particular remittance is intended to include more than one regular Purchase Payment, we will credit the number of Purchase Payments represented by such remittance in determining the Purchase Payment Period. However, the number of completed Purchase Payment Periods may never be greater than the number of full calendar years since the date an Account is established under the Contract. SEC: Securities and Exchange Commission SEPARATE ACCOUNT: Variable Annuity Account C, an account that segregates assets from other assets of the Company. The Separate Account holds shares of the Funds acquired for the Contracts. The Company holds title to the assets held in the Separate Account. UNDERWRITER: The registered broker-dealer which contracts with other registered broker-dealers on behalf of the Separate Accounts to offer and sell the Contracts. VALUATION PERIOD: The period of time from when a Fund determines its net asset value until the next time it determines its net asset value, usually from 4:15 p.m. Eastern time, each day the New York Stock Exchange is open, until 4:15 p.m. the next such business day. VALUATION RESERVE: A reserve established pursuant to the insurance laws of Connecticut to measure voting rights during the Annuity Period and the value of a commutation right available under the "Payments for a Specified Period" nonlifetime Annuity option when elected on a variable basis under the Contract. VARIABLE ANNUITY CONTRACT: An Annuity Contract providing for the accumulation of values and/or for Annuity payments which vary in dollar amount with investment results. 4 PROSPECTUS SUMMARY CONTRACTS OFFERED The Contracts described in this prospectus are group, deferred, variable annuity contracts. They allow lump-sum payments and installment payments. See "Purchase -- Contract Purchase," "Contract Rights" and "Miscellaneous." These Contracts are designed to accumulate values and provide you with retirement benefits under deferred compensation Plans adopted by state and local governments for their employees or independent contractors, or both under code Section 457 ("457"). The Contracts may also be used in connection with qualified defined contribution plans of state and local governments under Section 401 of the Code. See Appendix III. PURCHASE The Contracts may be purchased by eligible organizations on behalf of a group made up of their employees and/or independent contractors. An Account is established for eligible employees by completing an enrollment form (and any other required forms) and submitting it to the Company with an initial Purchase Payment. Purchase Payments are made by salary reduction, by employer contribution or by lump sum payments from a 457 plan of an employer. See "Purchase." REDEMPTION The Contract Holder may withdraw all or a portion of the Account value during the Accumulation Period by properly completing the Company's disbursement form and sending it to the Company. Certain charges and deductions may be assessed upon withdrawal. See "Charges and Deductions" and "Contract Rights -- Withdrawals." Limitations apply to withdrawals from the Fixed Plus Account. (See Appendix II.) DEFERRED SALES CHARGES Amounts withdrawn may be subject to a deferred sales charge. The maximum deferred sales charge that could be assessed on a full or partial withdrawal is 5% of the amount withdrawn. See "Charges and Deductions --Deferred Sales Charge." Amounts withdrawn from GAA may be subject to a market value adjustment. (See Appendix I.) TAXES AND WITHHOLDING For 457 Plans, Purchase Payments and investment results of the Separate Account credited to the value of the Account are generally not taxable until distributed or made available under the employer's Plan. Withholding for income tax may be imposed on certain withdrawals. See "Tax Status--Section 457 Plans." For a discussion of taxes and withholding for 401 Plans, see Appendix III. CONTRACT CHARGES Certain charges are associated with these Contracts, for example, mortality and expense risk charges, administrative expense charges and maintenance fees. The Funds are also subject to certain fees and expenses. Purchase Payments may also be subject to premium taxes. See "Charges and Deductions" for a complete explanation of these charges. FREE LOOK PROVISION Contract Holders have the right to cancel their Contract within 10 days after receiving it (or as otherwise allowed by state law) by returning it to us along with a written notice of cancellation. Unless state law requires otherwise, the amount you will receive on cancellation under this provision may reflect the investment performance of the Purchase Payments deposited in the separate account while invested. In certain cases, this may be less than the amount of your Purchase Payments. See "Contract Rights -- Right to Cancel." 5 FEE TABLE (Based on year ended December 31, 1994) THE PURPOSE OF THE FEE TABLE IS TO ASSIST CONTRACT HOLDERS IN UNDERSTANDING THE VARIOUS COSTS AND EXPENSES THAT WILL BE BORNE, DIRECTLY OR INDIRECTLY, UNDER THE CONTRACT. THE INFORMATION LISTED REFLECTS THE CHARGES DUE UNDER THE CONTRACT AS WELL AS THE FEES AND EXPENSES DEDUCTED FROM THE FUNDS. ADDITIONAL INFORMATION REGARDING THE CHARGES AND DEDUCTIONS ASSESSED UNDER THE CONTRACT CAN BE FOUND UNDER "CHARGES AND DEDUCTIONS" IN THIS PROSPECTUS. CHARGES AND EXPENSES SHOWN DO NOT TAKE INTO ACCOUNT PREMIUM TAXES THAT MAY BE APPLICABLE. FOR MORE INFORMATION REGARDING EXPENSES PAID OUT OF THE ASSETS OF A PARTICULAR FUND, SEE THE FUND'S PROSPECTUS. CONTRACT HOLDER TRANSACTION EXPENSES - ------------------------------------ DEFERRED SALES CHARGE (as a percentage of amount withdrawn)/(1)/:
INSTALLMENT PURCHASE PAYMENT CONTRACT (based on Completed Purchase Payment Periods) Deduction ---------------- --------- Less than 5 5% 5 or more but less than 7 4% 7 or more but less than 9 3% 9 or 10 2% more than 10 0%
SINGLE PURCHASE PAYMENT CONTRACT (based on Completed Account Years) Deduction -------------- --------- Less than 5 5% 5 or more but less than 6 4% 6 or more but less than 7 3% 7 or more but less than 8 2% 8 or more but less than 9 1% 9 or more 0%
ANNUAL CONTRACT MAINTENANCE FEE/(2)/ - ------------------------------------ Installment Purchase Payment Contract $20.00 each Single Premium Purchase Payment Contract 0.00
SEPARATE ACCOUNT ANNUAL EXPENSES - -------------------------------- (Daily deductions, equal to the percentage shown on an annual basis, made from amounts allocated to the variable options) Mortality and Expense Risk Fees 1.25% Administrative Expense Charge(/3/) 0% ----- Total Separate Account Annual Expenses 1.25% =====
/(1)/The total amount deducted for the deferred sales charge will not exceed 8.5% of the total Purchase Payments actually made to the Account. The deferred sales charge may be referred to in the Contract as a "surrender fee." See "Charges and Deductions -- Deferred Sales Charge" for instances in which this charge may be waived. /(2)/See "Charges and Deductions -- Maintenance Fee" for instances in which this fee is reduced or waived. A maintenance fee, to the extent permitted by state law, is also deducted upon termination of an Account. This fee is $15.00 for each Account for those Plans where individual solicitation of each Participant is not anticipated, annual aggregate Purchase Payments are expected to be in excess of $100,000 and the sponsoring employer has agreed to accommodate group meetings on its premises for soliciting potential Participants. /(3)/We currently do not impose an administrative expense charge; however, we reserve the right to deduct a daily charge of not more than 0.25% per year from the portion of contract values held in the Separate Account. 6 MUTUAL FUND ANNUAL EXPENSES - --------------------------- (Except as noted, the following figures are a percentage of average net assets and, except where otherwise indicated, are based on figures for the year ended December 31, 1994)
INVESTMENT OTHER TOTAL ADVISORY FEES/(1)/ EXPENSES/(2)/ MUTUAL FUND (AFTER EXPENSE (AFTER EXPENSE ANNUAL REIMBURSEMENT) REIMBURSEMENT) EXPENSES ------------------ -------------- ----------- Aetna Variable Fund 0.25% 0.05% 0.30% Aetna Income Shares 0.25% 0.08% 0.33% Aetna Variable Encore Fund 0.25% 0.07% 0.32% Aetna Investment Advisers Fund, Inc. 0.25% 0.07% 0.32% Aetna Ascent Variable Portfolio/(3)/ 0.50% 0.20% 0.70% Aetna Crossroads Variable Portfolio/(3)/ 0.50% 0.20% 0.70% Aetna Legacy Variable Portfolio/(3)/ 0.50% 0.20% 0.70% Alger American Growth Portfolio 0.75% 0.11% 0.86% Alger American Small Cap Portfolio 0.85% 0.11% 0.96% Calvert Responsibly Invested Balanced Portfolio 0.70% 0.10% 0.80% Fidelity Contrafund Portfolio/(3)/ 0.62% 0.27% 0.89% Fidelity Equity-Income Portfolio 0.52% 0.06% 0.58% Fidelity Growth Portfolio 0.62% 0.07% 0.69% Fidelity Overseas Portfolio 0.77% 0.14% 0.91% Franklin Government Securities Trust/(4)/ 0.47% 0.16% 0.63% Janus Aspen Aggressive Growth Portfolio/(5)/ 0.77% 0.28% 1.05% Janus Aspen Balanced Portfolio/(5)/ 0.83% 0.74% 1.57% Janus Aspen Flexible Income Portfolio/(5)/ 0.30% 0.70% 1.00% Janus Aspen Growth Portfolio/(5)/ 0.66% 0.22% 0.88% Janus Aspen Short-Term Bond Portfolio/(5)/ 0.00% 0.65% 0.65% Janus Aspen Worldwide Growth Portfolio/(5)/ 0.69% 0.49% 1.18% Lexington Natural Resources Trust/(6)/ 1.00% 0.55% 1.55% Neuberger & Berman Growth Portfolio/(7)/ 0.79% 0.12% 0.91% Scudder International Portfolio 0.88% 0.20% 1.08% TCI Growth/(8)/ 1.00% 0.00% 1.00%
- -------- /(1)/Certain of the unaffiliated Fund advisers reimburse the Company for administrative costs incurred in connection with administering the Funds as variable funding options under the Contract. These reimbursements are paid out of the investment advisory fees and are not charged to investors. /(2)/A Fund's "Other Expenses" include operating costs of the Fund. The deduction of the above expenses are reflected in the Fund's net asset value and are not deducted from the Account Value under the Contract. /(3)/These Funds have only limited operating history; therefore the expenses are estimated for the current fiscal year. /(4)/The investment adviser for the Franklin Government Securities Trust has agreed to reduce the investment advisory fee and to reimburse the Fund for certain expenses. Without this agreement, the other expenses would have been 0.63% and total annual expenses for the Franklin Government Securities Trust would have been 0.78%. /(5)/The expense figures shown are net of certain expense waivers from Janus Capital Corporation. Without such waivers, the Investment Advisory Fees, Other Expenses and Total Mutual Fund Annual Expenses for the Portfolios for the fiscal year ended December 31, 1994 would have been: 1.00%, 0.28% and 1.28%, respectively, for Janus Aspen Aggressive Growth Portfolio; 1.00%, 0.74% and 1.74%, respectively, for Janus Aspen Balanced Portfolio; 0.65%, 0.70% and 1.35%, respectively, for Janus Aspen Flexible Income Portfolio; 1.00%, 0.22% and 1.22%, respectively, for Janus Aspen Growth Portfolio; 0.65%, 0.75% and 1.40%, respectively, for Janus Aspen Short-Term Bond Portfolio; and 1.00%, 0.49% and 1.49%, respectively, for Janus Aspen Worldwide Growth Portfolio. /(6)/These fees as a percentage of assets are higher than those for other similar funds, although the amounts of the fees are not due to the limited amount of assets in the Fund. /(7)/Until May 1, 1995, the Portfolio had a Distribution Plan pursuant to Rule 12b-1 which provided for the reimbursement by Neuberger & Berman Management of certain distribution expenses, up to a maximum of 0.25% on an annual basis of the Portfolio's average daily net assets. The "Total Annual Expenses" shown above would have been increased by 0.02% for each portfolio if the 12b-1 fees for the months of January through April, 1995 were taken into account. /(8)/The Portfolio's investment adviser pays all expenses of the Portfolio except brokerage commissions, taxes, interest, fees and expenses of the non-interested directors (including counsel fees) and extraordinary expenses. 7 HYPOTHETICAL ILLUSTRATION (EXAMPLE) - ----------------------------------- THIS EXAMPLE IS PURELY HYPOTHETICAL. IT SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR EXPECTED RETURN. ACTUAL EXPENSES AND/OR RETURN MAY BE MORE OR LESS THAN THOSE SHOWN BELOW. Assuming a 5% annual return on assets, you would have paid the following expenses on a $1,000 investment:/(1)/
If you withdraw your entire If you do not withdraw your Account Value at the end of the entire Account Value or if you applicable time period: annuitize: 1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years ------ ------- ------- -------- ------ ------- ------- -------- Aetna Variable Fund $69 $108 $149 $197 $17 $53 $ 91 $197 Aetna Income Shares $69 $109 $151 $201 $17 $53 $ 92 $201 Aetna Variable Encore Fund $69 $108 $150 $199 $17 $53 $ 92 $199 Aetna Investment Advisers Fund, Inc. $69 $108 $150 $199 $17 $53 $ 92 $199 Aetna Ascent Variable Portfolio $72 $119 $169 $240 $21 $65 $111 $240 Aetna Crossroads Variable Portfolio $72 $119 $169 $240 $21 $65 $111 $240 Aetna Legacy Variable Portfolio $72 $119 $169 $240 $21 $65 $111 $240 Alger American Growth Portfolio $74 $124 $177 $256 $24 $73 $124 $266 Alger American Small Cap Portfolio $75 $127 $181 $266 $24 $73 $124 $266 Calvert Responsibly Invested Balanced Portfolio $73 $122 $174 $250 $22 $68 $116 $250 Fidelity Contrafund Portfolio $74 $125 $178 $259 $23 $71 $121 $259 Fidelity Equity-Income Portfolio $71 $116 $163 $227 $20 $61 $105 $227 Fidelity Growth Portfolio $72 $119 $168 $239 $21 $64 $111 $239 Fidelity Overseas Portfolio $74 $125 $179 $261 $23 $71 $122 $261 Franklin Government Securities Trust $72 $117 $166 $233 $20 $63 $108 $233 Janus Aspen Aggressive Growth Portfolio $76 $129 $186 $275 $24 $75 $129 $275 Janus Aspen Balanced Portfolio $81 $144 $210 $326 $30 $91 $155 $326 Janus Aspen Flexible Income Portfolio $75 $128 $183 $270 $24 $74 $126 $270 Janus Aspen Growth Portfolio $74 $124 $178 $258 $23 $70 $120 $258 Janus Aspen Short-Term Bond Portfolio $72 $118 $167 $234 $20 $63 $109 $234 Janus Aspen Worldwide Growth Portfolio $77 $134 $193 $288 $26 $79 $135 $288 Lexington Natural Resources Trust $81 $143 $209 $324 $29 $90 $154 $324 Neuberger & Berman Growth Portfolio $74 $125 $179 $261 $23 $71 $122 $261 Scudder International Portfolio $76 $130 $187 $278 $25 $76 $130 $278 TCI Growth $75 $128 $183 $270 $24 $74 $126 $270
/(1)/The illustration reflects the $20 annual maintenance fee as an annual charge of 0.117% of assets. 8 CONDENSED FINANCIAL INFORMATION (SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD) THE CONDENSED FINANCIAL INFORMATION PRESENTED BELOW FOR EACH OF THE YEARS IN THE TEN-YEAR PERIOD ENDED DECEMBER 31, 1994 (AS APPLICABLE), ARE DERIVED FROM THE FINANCIAL STATEMENTS OF THE SEPARATE ACCOUNT, WHICH FINANCIAL STATEMENTS HAVE BEEN AUDITED BY KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS. THE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED DECEMBER 31, 1994 AND THE INDEPENDENT AUDITORS' REPORT THEREON, ARE INCLUDED IN THE STATEMENT OF ADDITIONAL INFORMATION.
1994 1993 1992 1991 1990 1989 1988 1987 1986 ----------- ---------- ------------ ---------- ---------- ---------- ---------- ---------- ---------- AETNA VARIABLE FUND Value at beginning of period $11.020 $10.454 $97.185 $77.845 $76.311 $59.871 $52.885 $50.760 $43.205 Value at end of period $10.778 $11.020 $10.454/(2)/ $97.185 $77.845 $76.311 $59.871 $52.885 $50.760 Increase (decrease) in value of accumulation unit/(1)/ (2.20)% 5.41% /(2)/ 24.82% 2.01% 27.46% 13.21% 4.19% 17.49% Number of accumulation units outstanding at end of period 114,733,035 44,166,470 21,250 20,948,226 18,362,908 17,142,820 16,455,396 18,497,406 16,578,251 AETNA INCOME SHARES Value at beginning of period $10.905 $10.068 $38.789 $31.192 $28.943 $25.574 $24.061 $23.308 $20.703 Value at end of period $10.360 $10.905 $10.068/(3)/ $38.789 $31.192 $28.943 $25.574 $24.061 $23.308 Increase (decrease) in value of accumulation unit/(1)/ (5.00)% 8.31% /(3)/ 17.94% 7.77% 13.17% 6.29% 3.23% 12.58% Number of accumulation units outstanding at end of period 11,713,354 4,084,142 3,870 7,844,412 6,984,793 6,202,634 5,955,293 5,372,271 6,188,470 AETNA VARIABLE ENCORE FUND Value at beginning of period $10.241 $10.048 $33.812 $32.138 $30.012 $27.783 $26.171 $24.812 $23.504 Value at end of period $10.528 $10.241 $10.048/(4)/ $33.812 $32.138 $30.012 $27.783 $26.171 $24.812 Increase (decrease) in value of accumulation unit/(1)/ 2.80% 1.92% /(4)/ 5.21% 7.08% 8.02% 6.16% 5.48% 5.57% Number of accumulation units outstanding at end of period 7,673,528 2,766,044 825 8,430,082 10,220,110 8,286,033 8,154,644 7,326,151 6,692,947 AETNA INVESTMENT ADVISERS FUND, INC. Value at beginning of period $11.057 $10.189 $12.736 $10.896 $10.437 $10.000/(5)/ Value at end of period $10.868 $11.057 $10.189/(6)/ $12.736 $10.896 $10.437 Increase (decrease) in value of accumulation unit/(1)/ (1.71)% 8.52% /(6)/ 16.89% 4.40% 4.37% Number of accumulation units outstanding at end of period 23,139,604 11,368,365 11,508 22,898,099 17,078,985 9,535,986 ALGER AMERICAN SMALL CAP PORTFOLIO Value at beginning of period $9.959 $10.000/(7)/ Value at end of period $9.437 $9.959 Increase (decrease) in value of accumulation unit/(1)/ (5.24)% (0.41)% Number of accumulation units outstanding at end of period 6,339,407 781,836 CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO* Value at beginning of period $11.036 $10.278 $10.000/(8)/ Value at end of period $10.554 $11.036 $10.278 Increase (decrease) in value of accumulation unit/(1)/ (4.37)% 7.37% 2.78% Number of accumulation units outstanding at end of period 521,141 144,168 2,556 1985 ---------- AETNA VARIABLE FUND Value at beginning of period $33.323 Value at end of period $43.205 Increase (decrease) in value of accumulation unit/(1)/ 29.66% Number of accumulation units outstanding at end of period 14,186,456 AETNA INCOME SHARES Value at beginning of period $17.145 Value at end of period $20.703 Increase (decrease) in value of accumulation unit/(1)/ 20.75% Number of accumulation units outstanding at end of period 4,673,837 AETNA VARIABLE ENCORE FUND Value at beginning of period $21.942 Value at end of period $23.504 Increase (decrease) in value of accumulation unit/(1)/ 7.12% Number of accumulation units outstanding at end of period 7,220,758 AETNA INVESTMENT ADVISERS FUND, INC. Value at beginning of period Value at end of period Increase (decrease) in value of accumulation unit/(1)/ Number of accumulation units outstanding at end of period ALGER AMERICAN SMALL CAP PORTFOLIO Value at beginning of period Value at end of period Increase (decrease) in value of accumulation unit/(1)/ Number of accumulation units outstanding at end of period CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO* Value at beginning of period Value at end of period Increase (decrease) in value of accumulation unit/(1)/ Number of accumulation units outstanding at end of period
9 CONDENSED FINANCIAL INFORMATION (CONTINUED) (SELECTED DATA FOR ACCUMULATION UNITS OUTSTANDING THROUGHOUT EACH PERIOD)
1994 1993 1992 ---------- --------- ------- FRANKLIN GOVERNMENT SECURITIES TRUST Value at beginning of period $10.642 $10.008 $10.000/(8)/ Value at end of period $10.119 $10.642 $10.008 Increase (decrease) in value of accumulation unit/(1)/ (4.91)% 6.33% 0.08% Number of accumulation units outstanding at end of period 325,365 167,137 5,560 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.000/(9)/ Value at end of period $10.581 Increase (decrease) in value of accumulation unit/(1)/ 5.81% Number of accumulation units outstanding at end of period 753,862 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $10.000/(9)/ Value at end of period $ 9.873 Increase (decrease) in value of accumulation unit/(1)/ (1.27)% Number of accumulation units outstanding at end of period 28,543 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $10.877 $ 9.832 $10.000/(8)/ Value at end of period $10.154 $10.877 $ 9.832 Increase (decrease) in value of accumulation unit/(1)/ (6.65)% 10.63% (1.68)% Number of accumulation units outstanding at end of period 703,676 135,614 561 NEUBERGER & BERMAN GROWTH PORTFOLIO Value at beginning of period $11.747 $10.864 $10.000/(8)/ Value at end of period $11.026 $11.747 $10.864 Increase (decrease) in value of accumulation unit/(1)/ (6.14)% 8.13% 8.64% Number of accumulation units outstanding at end of period 1,865,104 546,559 10,645 SCUDDER INTERNATIONAL PORTFOLIO Value at beginning of period $12.957 $ 9.578 $10.000/(8)/ Value at end of period $12.687 $12.957 $ 9.578 Increase (decrease) in value of accumulation unit/(1)/ (2.08)% 35.28% (4.22)% Number of accumulation units outstanding at end of period 6,558,946 1,020,233 5,232 TCI GROWTH Value at beginning of period $12.069 $10.692 $10.000/(8)/ Value at end of period $11.781 $12.069 $10.692 Increase (decrease) in value of accumulation unit/(1)/ (2.39)% 12.88% 6.92% Number of accumulation units outstanding at end of period 12,853,828 3,667,821 2,254
/(1)/The above figures are calculated by subtracting the beginning Accumulation Unit value from the ending Accumulation Unit value during a calendar year, and dividing the result by the beginning Accumulation Unit value. These figures do not reflect the deferred sales charges or the fixed dollar annual maintenance fee, if any. Inclusion of those charges would reduce the investment results shown. /(2)/The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon the commencement of a new administrative system. Immediately prior to that date, the Accumulation Unit value of the Fund was $97.817. On the date of conversion, additional units were issued so that account values were not changed as a result of the conversion. The percentage change in the Accumulation Unit value from the beginning of the year to the date of conversion was 0.67%; the percentage change in the Accumulation Unit value from the date of conversion to the end of the year was 4.54%. /(3)/The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon the commencement of a new administrative system. Immediately prior to that date, the Accumulation Unit value of the Fund was $38.521. On the date of conversion, additional units were issued so that account values were not changed as a result of the conversion. The percentage change in the Accumulation Unit value from the beginning of the year to the date of conversion was 4.70%; the percentage change in the Accumulation Unit value from the date of conversion to the end of the year was 0.68%. /(4)/The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon the commencement of a new administrative system. Immediately prior to that date, the Accumulation Unit value of the Fund was $34.397. On the date of conversion, additional units were issued so that account values were not changed as a result of the conversion. The percentage change in the Accumulation Unit value from the beginning of the year to the date of conversion was 1.73%; the percentage change in the Accumulation Unit value from the date of conversion to the end of the year was 0.48%. /(5)/The initial Accumulation Unit value was established at $10.000 on June 23, 1989, the date on which the Fund commenced operations. /(6)/The Accumulation Unit value was converted to $10.000 on August 21, 1992 upon the commencement of a new administrative system. Immediately prior to that date, the Accumulation Unit value of the Fund was $13.118. On the date of conversion, additional units were issued so that account values were not changed as a result of the conversion. The percentage change in the Accumulation Unit value from the beginning of the year to the date of conversion was 2.99%; the percentage change in the Accumulation Unit value from the date of conversion to the end of the year was 1.89%. /(7)/The initial Accumulation Unit value was established at $10.000 on September 17, 1993, the date on which the Portfolio became available under the Contract. /(8)/The initial Accumulation Unit value was established at $10.000 on August 21, 1992, the date on which the Fund/Portfolio became available under the Contract. /(9)/The initial Accumulation Unit value was established at $10.000 during October 1994, when funds were first received in this option. * Formerly Calvert Socially Responsible Series. 10 PERFORMANCE DATA From time to time, the Company may advertise different types of historical performance for the variable funding options of the Separate Account available under the Contracts described in this Prospectus. The Company may advertise the "standardized average annual total returns" of the variable funding options, calculated in a manner prescribed by the SEC, as well as the "non-standardized return." Both methods are described below. Further information is contained in the SAI. "Standardized average annual total returns" are computed according to a formula in which a hypothetical investment of $1,000 is applied to the variable funding options under the Contract and then related to the ending redeemable values over the most recent one, five and ten-year periods (or since inception if less than 10 years). Standardized returns will reflect the deduction of all recurring charges during each period (e.g., mortality and expense risk charges, the annual maintenance fee, the administrative expense charge and any applicable deferred sales charge). "Non-standardized return" will be calculated in a similar manner, except that non-standardized figures will not reflect the deduction of any applicable deferred sales charge (which would decrease the level of performance shown if reflected in these calculations). The non-standardized figures may also include a three-year period. For Funds that were in existence prior to the date that the Fund became available under the Contract, the performance data will show the investment performance that such Fund would have achieved (reduced by the applicable charges) had it been available under the Contract for the period quoted. We may distribute sales literature that compares the percentage change in Accumulation Unit values for any of the Funds to established market indexes such as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average or to the percentage change in value of other management investment companies that have investment objectives similar to the Fund being compared. We may publish in advertisements and reports to you and Contract Holders, the ratings and other information assigned to us by one or more independent rating organizations such as A.M. Best Company, Duff & Phelps, Standard & Poor's Corporation and Moody's Investors Service, Inc. The purpose of the ratings is to reflect our financial strength and/or claims-paying ability. We may also quote ranking services, such as Morningstar's Variable Annuity/Life Performance Report and Lipper's Variable Insurance Products Performance Analysis Service (VIPPAS), which rank variable annuity or life subaccounts or their underlying funds by performance and/or investment objective. From time to time, we will quote articles from newspapers and magazines or other publications or reports, including, but not limited to The Wall Street Journal, Money magazine, USA Today and The VARDS Report. 11 THE COMPANY Aetna Life Insurance and Annuity Company, the depositor for Variable Annuity Account C, is a stock life insurance company organized in 1976 under the insurance laws of the State of Connecticut. As of December 31, 1994, the Company managed over $20.4 billion of assets. As of December 31, 1993, the Company ranked among the top 2% of all U.S. life insurance companies by size. It is a wholly owned subsidiary of Aetna Life and Casualty Company which, with its subsidiaries, constitutes one of the nation's largest diversified financial services organizations. The Company's Home Office is located at 151 Farmington Avenue, Hartford, Connecticut 06156. VARIABLE ANNUITY ACCOUNT C Variable Annuity Account C is a separate account established by us in 1976 according to the insurance laws of the State of Connecticut. The Separate Account was formed for the purpose of segregating assets attributable to the variable portions of Contracts from the Company's other assets. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, and meets the definition of "separate account" under the federal securities laws. Although the Company holds title to the assets of the Separate Account, such assets are not chargeable with liabilities arising out of any other business we may conduct. Income, gains or losses of the Separate Account are credited to or charged against the assets of the Separate Account without regard to other income, gains or losses of the Company. All obligations arising under the Contracts are general corporate obligations of the Company. THE FUNDS The Contract Holder will designate some or all of the mutual funds described below as variable funding options under the Contract. The Contract Holder, or you, if allowed by the Contract Holder may select one or more of the Funds for investment of the Purchase Payments made on your behalf. Except where noted, all of the Funds are diversified as defined in the Investment Company Act of 1940. The availability of the Funds is subject to applicable regulatory authorization. Not all Funds are available in all jurisdictions or under all Contracts. . AETNA VARIABLE FUND (sometimes called the "Growth and Income Fund") seeks to maximize total return through investments in a diversified portfolio of common stocks and securities convertible into common stock. . AETNA INCOME SHARES (sometimes called the "Bond Fund") seeks to maximize total return, consistent with reasonable risk, through investments in a diversified portfolio consisting primarily of debt securities. . AETNA VARIABLE ENCORE FUND (sometimes called the "Money Market Fund") seeks to provide high current return, consistent with preservation of capital and liquidity, through investment in high-quality money market instruments. An investment in the Fund is neither insured nor guaranteed by the U.S. Government. . AETNA INVESTMENT ADVISERS FUND, INC. (sometimes called the "Managed Fund") is a managed mutual fund which seeks to maximize investment return consistent with reasonable safety of principal by investing in one or more of the following asset classes: stocks, bonds and cash equivalents based on the Company's judgment of which of those sectors or mix thereof offers the best investment prospects. . AETNA GENERATION PORTFOLIOS INC. -- AETNA ASCENT VARIABLE PORTFOLIO seeks to provide capital appreciation by allocating its investments among equities and fixed income securities. Aetna Ascent Variable Portfolio is managed for investors who generally have an investment horizon 12 exceeding 15 years, and who have a high level of risk tolerance. See the Fund's prospectus for a discussion of the risks involved. . AETNA GENERATION PORTFOLIOS, INC. -- AETNA CROSSROADS VARIABLE PORTFOLIO seeks to provide total return (i.e., income and capital appreciation, both realized and unrealized) by allocating its investments among equities and fixed income securities. Aetna Crossroads Variable Portfolio is managed for investors who generally have an investment horizon exceeding 10 years and who have a moderate level of risk tolerance. . AETNA GENERATION PORTFOLIOS, INC. -- AETNA LEGACY VARIABLE PORTFOLIO seeks to provide total return consistent with preservation of capital by allocating its investments among equities and fixed income securities. Aetna Legacy Variable Portfolio is managed for investors who generally have an investment horizon exceeding five years and who have a low level of risk tolerance. . ALGER AMERICAN FUND -- ALGER AMERICAN GROWTH PORTFOLIO seeks long-term capital appreciation by investing in a diversified, actively managed portfolio of equity securities, primarily of companies with total market capitalization -- present market value per share multiplied by the total number of shares outstanding -- of $1 billion or greater. Income is a consideration in the selection of investments but is not an investment objective. . ALGER AMERICAN FUND -- ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO ("Alger American Small Cap Portfolio") seeks capital return through investment in the common stock of smaller companies offering the potential for significant price gain. It invests at least 85% of its net assets in equity securities and at least 65% of its net assets in equity securities of companies that, at the time of purchase, have "total market capitalization" -- present market value per share multiplied by the total number of shares outstanding -- of less than $1 billion. Investing in smaller companies may present risks not present in investments in larger companies. See the fund's prospectus for a discussion of these risks. . CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO is a nondiversified portfolio that seeks growth of capital through investment in enterprises that make a significant contribution to society through their products and services and through the way they do business. Prior to May 1, 1995, the Fund was known as the Calvert Socially Responsible Series. . FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND II -- CONTRAFUND PORTFOLIO ("Fidelity Contrafund Portfolio") seeks maximum total return over the long term by investing its assets mainly in equity securities of companies that are undervalued or out-of-favor. . FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND--EQUITY-INCOME PORTFOLIO ("Fidelity Equity-Income Portfolio") seeks reasonable income by investing primarily in income-producing equity securities. In choosing these securities, the Fund will also consider the potential for capital appreciation. . FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- GROWTH PORTFOLIO ("Fidelity Growth Portfolio") seeks to achieve capital appreciation by investing primarily in common stock, although the Fund is not limited to any one type of security. . FIDELITY INVESTMENTS' VARIABLE INSURANCE PRODUCTS FUND -- OVERSEAS PORTFOLIO ("Fidelity Overseas Portfolio") seeks long-term growth of capital primarily through investments in foreign securities (at least 65% from at least three countries outside of North America). International investments such as these involve greater risks than U.S. investments. . FRANKLIN GOVERNMENT SECURITIES TRUST seeks income through investments in obligations of the U.S. Government or its agencies or instrumentalities, primarily GNMA obligations. . JANUS ASPEN SERIES -- AGGRESSIVE GROWTH PORTFOLIO ("Janus Aspen Aggressive Growth Portfolio") is a nondiversified portfolio that seeks long-term growth of capital by emphasizing investments in common stocks of companies with market capitalizations between $1 billion and $5 billion. 13 . JANUS ASPEN SERIES -- BALANCED PORTFOLIO ("Janus Aspen Balanced Portfolio") seeks both long-term growth of capital and current income. The Portfolio is designed for investors who want to participate in the equity markets through a more moderate investment than a pure growth fund. Investments in income-producing securities are intended to result in a portfolio that provides a more consistent total return than may be attainable through investing solely in growth stocks. The Portfolio is not designed for investors who desire a consistent level of income. . JANUS ASPEN SERIES -- FLEXIBLE INCOME PORTFOLIO ("Janus Aspen Flexible Income Portfolio") seeks to maximize total return, consistent with preservation of capital from a combination of current income and capital appreciation. Janus Aspen Flexible Income Portfolio invests in all types of income-producing securities and may have substantial holdings of debt securities rated below investment grade ("high yield, high risk securities") also commonly known as "junk bonds." High yield, high risk securities involve certain risks. See the Fund's prospectus for a discussion of these risks. . JANUS ASPEN SERIES -- GROWTH PORTFOLIO ("Janus Aspen Growth Portfolio") seeks long-term growth of capital by investing primarily in a diversified portfolio of common stocks of a large number of issuers of any size. The Portfolio generally emphasizes issuers with large market capitalizations. . JANUS ASPEN SERIES -- SHORT-TERM BOND PORTFOLIO ("Janus Aspen Short-Term Bond Portfolio") seeks as high a level of current income as is consistent with preservation of capital by investing primarily in short- and intermediate-term fixed income securities. The Portfolio will normally maintain a dollar-weighted average portfolio maturity of less than three years, but not to exceed five years depending upon its portfolio manager's opinion of prevailing market, financial and economic conditions. . JANUS ASPEN SERIES -- WORLDWIDE GROWTH PORTFOLIO ("Janus Aspen Worldwide Growth Portfolio") seeks long-term growth of capital by investing primarily in common stocks of companies of foreign and domestic issuers of any size. The Portfolio normally invests in issuers from at least five different countries including the United States. International investments involve risks not present in U.S. Securities. . LEXINGTON NATURAL RESOURCES TRUST is a nondiversified portfolio that seeks long-term growth of capital through investment primarily in common stocks of companies which own, or develop natural resources and other basic commodities or supply goods and services to such companies. Current income will not be a factor. Total return will consist primarily of capital appreciation. The Fund may invest up to 25% of its total assets in foreign securities. Foreign investing involves risks that differ from those involved in domestic investing. See the Fund's prospectus for a discussion of these risks. . NEUBERGER & BERMAN ADVISERS MANAGEMENT TRUST -- GROWTH PORTFOLIO ("Neuberger & Berman Growth Portfolio") seeks capital growth through investments in common stocks of companies that the investment adviser believes will have above-average earnings or otherwise provide investors with above-average potential for capital appreciation. . SCUDDER VARIABLE LIFE INVESTMENT FUND -- INTERNATIONAL PORTFOLIO ("Scudder International Portfolio") seeks long-term growth of capital primarily through diversified holdings of marketable foreign equity investments. Investing in foreign securities may involve a greater degree of risk than investing in domestic securities. See the Fund's prospectus for a discussion of the risks involved. . TCI PORTFOLIOS, INC. -- TCI GROWTH (a Twentieth Century Fund) seeks capital growth by investing in common stocks (including securities convertible into common stocks) and other securities that meet certain fundamental and technical standards of selection and, in the opinion of TCI Growth's management, have better than average potential for appreciation. TCI Growth tries to stay fully invested in such securities, regardless of the movement of prices generally. The Fund may invest in foreign securities. Foreign investing involves risks that differ from those involved in domestic investing. See the Fund's prospectus for a discussion of these risks. 14 There is no assurance that the Funds will achieve their investment objectives. Contract Holders and Participants bear the full investment risk of investments in the Funds selected. Some of the Funds may use instruments known as derivatives as part of their investment strategies as described in their respective prospectus. The use of certain derivatives such as inverse floaters and principal only debt instruments may involve higher risk of volatility to a Fund. The use of leverage in connection with derivatives can also increase risk of losses. See the prospectus for the Funds for a discussion of the risks associated with an investment in those funds. More comprehensive information, including a discussion of potential risks, is found in the current prospectus for each Fund which is distributed with and must accompany this Prospectus. Contract Holders and Participants should read the accompanying prospectuses carefully before investing. Additional prospectuses and the Statements of Additional Information for this Prospectus and each of the Funds can be obtained from the Company's Home Office at the address and telephone number listed on the cover of this Prospectus. FUND INVESTMENT ADVISERS The following identifies the investment adviser and the subadviser, if any, for each Fund.
FUND INVESTMENT ADVISER SUBADVISER ---- ------------------ ---------- Aetna Variable Fund Aetna Life Insurance and -- Annuity Company (ALIAC) Aetna Income Shares ALIAC -- Aetna Variable Encore Fund ALIAC -- Aetna Investment Advisers ALIAC -- Fund, Inc. Aetna Ascent Variable ALIAC -- Portfolio Aetna Crossroads Variable ALIAC -- Portfolio Aetna Legacy Variable ALIAC -- Portfolio Alger American Growth Fred Alger Management, Inc. -- Portfolio Alger American Small Cap Fred Alger Management, Inc. -- Portfolio Calvert Responsibly Invested Calvert Asset Management NCM Capital Management Balanced Portfolio Company, Inc. Group, Inc. Fidelity Contrafund Fidelity Management & -- Portfolio Research Company Fidelity Equity-Income Fidelity Management & -- Portfolio Research Company Fidelity Growth Portfolio Fidelity Management & -- Research Company Fidelity Overseas Portfolio Fidelity Management & -- Research Company Franklin Government Franklin Advisers, Inc. -- Securities Trust
15 FUND INVESTMENT ADVISERS (CONTINUED)
FUND INVESTMENT ADVISER SUBADVISER ---- ------------------ ---------- Janus Aspen Aggressive Janus Capital Corporation -- Growth Portfolio Janus Aspen Balanced Janus Capital Corporation -- Portfolio Janus Aspen Flexible Income Janus Capital Corporation -- Portfolio Janus Aspen Growth Portfolio Janus Capital Corporation -- Janus Aspen Short-Term Bond Janus Capital Corporation -- Portfolio Janus Aspen Worldwide Growth Janus Capital Corporation -- Portfolio Lexington Natural Resources Lexington Management Market Systems Research Trust Corporation Advisors, Inc. Neuberger & Berman Growth Neuberger & Berman Neuberger & Berman Portfolio Management Incorporated Scudder International Portfolio Scudder, Stevens & Clark, -- Inc. TCI Growth Investors Research -- Corporation
MIXED AND SHARED FUNDING Shares of the Funds are sold to us for funding variable annuities. The Funds may be sold to other companies for the same purpose. This is referred to as "shared funding." Shares of the Funds may also be used for funding variable life insurance policies through variable life separate accounts sponsored by us or by third parties. This is referred to as "mixed funding." It is conceivable that, in the future, it may be disadvantageous for variable annuity separate accounts and variable life separate accounts of the same or of an unaffiliated insurance company to invest in these Funds simultaneously, since the interests of the contract holders or policy owners or insurance companies may differ. Each Fund's Board of Trustees or Directors has agreed to monitor events in order to identify any material irreconcilable conflicts which may possibly arise and to determine what action, if any, should be taken in response thereto. If such a conflict were to occur, one of the separate accounts might withdraw its investment in a Fund. This might force that Fund to sell portfolio securities at disadvantageous prices. FUND ADDITIONS, SUBSTITUTIONS AND LIMITATIONS We may, from time to time, add additional mutual funds as eligible variable funding options under the Contracts. In such event, the Contract Holder or you, if permitted by the Contract Holder, may be permitted to select from these other funds, subject to any conditions that may be imposed in connection with those options. No more than 18 different choices of investment options may be made over the life of the account. See "Transfers and Allocation Changes." The Company's current policy is to allow only Aetna Variable Fund, Aetna Income Shares and Aetna Investment Advisers Fund, Inc to be used as variable investment options during the Annuity Period. See "Annuity Period Elections." The Contract Holder may decide to offer only a select number of Funds as funding options under its Plan, or may decide to substitute shares of one Fund for shares of another Fund currently held by the Separate Account. 16 PURCHASE CONTRACT PURCHASE An organization eligible to establish deferred compensation plans under Section 457 of the Code may acquire a group Contract for its Plan by filling out the appropriate master application form and returning it to the Company or to a Distributor for delivery to the Company. Contracts may also be offered to defined contribution plans under Section 401 of the Code. See Appendix III. Once we approve the application, a group Contract (or Contracts) is issued to the organization as Contract Holder. The Contract Holder exercises all rights under the Contracts. See "Contract Rights." A Single Purchase Payment Contract will be issued for lump-sum transfers of amounts accumulated under a preexisting Plan. There is currently no minimum amount for lump-sum payments; however, we reserve the right to set such a minimum in the future. An installment Purchase Payment Contract will be issued for continuing, periodic payments. Employees of the Contract Holder may fill out an enrollment form or forms and return them to the Company or to a Distributor for delivery to the Company for review, acceptance or rejection. The Company must accept or reject an application or enrollment form within two business days of its receipt. If the application or enrollment form is incomplete, the Company may hold it and any accompanying Purchase Payment for five days. Purchase Payments may be held for longer periods only with the consent of the Contract Holder or Participant, pending acceptance of the application or enrollment form. If the application or enrollment form is accepted, a Contract will be issued to the Contract Holder or the Purchase Payment will be accepted. Any Purchase Payment accompanying the application or enrollment form or received prior to acceptance of the application or enrollment form, will be invested as of the date of acceptance. If the application or enrollment form is rejected, the application or enrollment form and any Purchase Payments will be returned to the Contract Holder. Initial payments held for longer than the five business days will be deposited in the Aetna Variable Encore Fund until the forms are completed. The Contract Holder may cancel the contract within 10 days after receiving it. Refer to "Right to Cancel" for more information. Installment Purchase Payments must be at least $50 per month ($600 annually) per Participant, and may not be less than $25 per payment. For 457 Plans, the Code imposes a maximum limit on annual Purchase Payments that may be excluded from your gross income. The limit is generally the lesser of $7,500 or 33 1/3% of your includible compensation (25% of gross compensation). For 401 Plans, see Appendix III. NET PURCHASE PAYMENTS Each Purchase Payment is forwarded to us through a Distributor. Each Net Purchase Payment, to the extent it is to be accumulated on a variable basis, is placed in the Separate Account and credited to the Contract. The Contract Holder or, you, if the Contract Holder directs us in writing, may elect to have the Net Purchase Payment(s) accumulate (a) on a variable basis under one or more of the available Funds; (b) on a fixed basis under one or more of the available credited interest options; or (c) in a combination of any of the available investment options. The Net Purchase Payment(s) must be allocated to the respective options in increments of whole percentage amounts. Under an installment Purchase Payment Contract, the Contract Holder or you, if permitted by the Contract Holder, may elect to change the allocation of future Net Purchase Payments to any accumulation option described above. 17 DISTRIBUTION The Company will serve as Underwriter for the securities sold by this Prospectus. The Company is registered as a broker-dealer with the Securities and Exchange Commission and is a member of the National Association of Securities Dealers, Inc. (NASD). As Underwriter, the Company will contract with one or more registered broker-dealers ("Distributors"), including at least one affiliate of the Company, to offer and sell the Contracts. All persons offering and selling the Contracts must be registered representatives of the Distributors and must also be licensed as insurance agents to sell Variable Annuity Contracts. These registered representatives may also provide services to Participants in connection with establishing their Accounts under the Contract. Persons offering and selling the Contracts may receive commissions in connection with the sale of the Contracts. The maximum percentage amount that the Company will ever pay as commission with respect to any given Purchase Payment is with respect to those made during the first year of Purchase Payments under an Account. That percentage amount will range from 1% to 6% of those Purchase Payments. The Company may also pay renewal commissions on Purchase Payments made after the first year and asset-based service fees. The average of all payments made by the Company is estimated to equal approximately 3% of the total Purchase Payments made over the life of an average Contract. The Company may also reimburse the Distributor for certain expenses. The name of the Distributor and the registered representative responsible for your Account are set forth on your enrollment form. Commissions and sales related expenses are paid by the Company and are not deducted from Purchase Payments. See "Charges and Deductions--Deferred Sales Charge." Occasionally, we may pay commissions and fees to Distributors which are affiliated or associated with the Contract Holder or the Participants. We may also enter into agreements with some entities associated with the Contract Holder or Participants in which we would agree to pay the association for certain services in connection with administering the Contracts. In both these circumstances there may be an understanding that the Distributor or association would endorse the Company as a provider of the Contract. You will be notified if you are purchasing a Contract that is subject to these arrangements. DETERMINING CONTRACT VALUE ACCUMULATION UNITS A Purchase Payment that is directed to one or more of the Funds is deposited in the Separate Account and credited to the Account in the form of Accumulation Units for each Fund selected. The number of Accumulation Units credited is determined by dividing the applicable portion of the Purchase Payment by that Contract's Accumulation Unit value of the appropriate Fund. The Accumulation Unit value used is that next-computed following the date on which a Purchase Payment is received, unless the application has not been accepted. In that event, Purchase Payments will be credited at the Accumulation Unit Value next determined after acceptance of the application. Shares of the Funds are purchased by the Separate Account at the net asset value next determined by the Fund following receipt of Purchase Payments by the Separate Account. The value of Accumulation Units attributable to the Funds will be affected by the investment performance, expenses and charges of those Funds. Generally, if the net asset value of the fund increases, so does the Accumulation Unit value; however, performance of the Separate Account is reduced by charges and deductions under the contract. Accumulation Units are valued separately for each Fund. Therefore, if you elect to have a Purchase Payment invested in a combination of Funds, you will have Accumulation Units credited from more than one source. The value of your Account as of the most recent Valuation Period, is determined by adding the value of any Accumulation Units attributed to the Fund(s) you have selected to the value of any amounts invested in the Fixed Plus Account and in GAA. NET INVESTMENT FACTOR The value of an Accumulation Unit for any Valuation Period is calculated by multiplying the Accumulation Unit value for the immediately preceding Valuation Period by the net investment factor of the appropriate investment option for the current period. 18 The net investment factor is calculated separately for each Fund in which assets of the Separate Account are invested. It is determined by adding 1.0000000 to the net investment rate. The net investment rate equals (a) the net assets of the Fund held by the Separate Account at the end of a Valuation Period, minus (b) the net assets of the Fund held by the Separate Account at the beginning of a Valuation Period, plus or minus (c) taxes or provision for taxes, if any, attributable to the operation of the Separate Account, divided by (d) the value of the Fund's Accumulation and Annuity Units held by the Separate Account at the beginning of the Valuation Period, minus (e) a daily charge at an annual rate of 1.25% for the Annuity mortality and expense risks, and a daily administrative expense charge which will not exceed 0.25% (zero through April 30, 1996) on an annual basis. The net investment rate may be more or less than zero. TRANSFER CREDITS The Company provides a transfer credit on transferred assets, subject to certain conditions (and state approval). Transferred assets are the value of contributions made on your behalf to this Plan or to a similar Plan, before the amounts were applied to this Contract. This benefit is provided on a nondiscriminatory basis if your Contract is eligible. The transfer credit will equal a percentage of the transferred assets applied to the Contract that remain in the Contract after a specified period of time. Once transfer credit amounts are applied to the Accounts, all provisions of the Contract apply. If a transfer credit is due under the Contract, you will be provided with additional information specific to the Contract. CONTRACT RIGHTS RIGHT TO CANCEL The Contract Holder may cancel the Contract no later than ten days (or as otherwise allowed by state law) after receiving the Contract by returning it, along with a written notice of cancellation, to us. We will produce a refund not later than seven days after we receive the Contract and the written notice at our Home Office. Unless the applicable state law requires a refund of Purchase Payment(s) only, we will refund the Purchase Payment(s) plus any increase or minus any decrease in the value attributable to any Purchase Payment(s) allocated to the variable option(s). RIGHTS UNDER THE CONTRACT All rights under the Contract rest with the Contract Holder, which is usually the employer or other obligor under the Plan. For 457 Plans, the Contract will be part of the employer's general assets, subject to the claims of its general creditors. Benefits available to you are governed exclusively by the provisions of the Plan and are backed only by the general assets of the employer. Some of the options and elections under the Contract may not be available to you under the provisions of the Plan. Contact your employer for information regarding the specifics of your Plan. TRANSFERS AND ALLOCATION CHANGES During each calendar year, the Contract Holder, or you, if permitted by the Contract Holder, may change the allocation of future Net Purchase Payments among the allowable investment options. There is no limit to the number of changes you may make to your allocations. You may also make any number of transfers of not less than $500 among funding options during the calendar year, without charge. You may not make allocations or transfers, however, to new funding options if the total number of funding options you have selected would exceed 18, since the time you acquired an interest in the Contract. 19 Each variable funding option selected, the Fixed Plus Account and each guaranteed term of GAA, counts as one option, even if you no longer have funds allocated to that option. Any transfer will be based on the Accumulation Unit value next determined after we receive a valid request at our Home Office. See Appendix I and II for information on transfers from GAA and the Fixed Plus Account. During the Annuity Period, transfers of accumulated value are not available. WITHDRAWALS The Contract Holder may withdraw all or a portion of an Account value during the Accumulation Period by properly completing a disbursement form and sending it to our Home Office. Disbursement request forms are available from us and our representatives. Withdrawals under 401(a) Plans are governed by the terms of the Plan as interpreted by the Contract Holder and communicated to the Company. Withdrawals may be requested in one of the following ways: . Full Withdrawal of the Contract: The amount paid will be the full value of the Funds and GAA (plus or minus the Market Value Adjustment) held in all Accounts minus any applicable deferred sales charge and maintenance fee due. Limitations apply to withdrawals from the Fixed Plus Account. See Appendix II. Amounts withdrawn from GAA may be subject to a market value adjustment. See Appendix I. . Full Withdrawal of an Account: The amount paid will be the full value of the Funds and GAA (plus or minus the Market Value Adjustment) held in the Account minus any applicable deferred sales charge and maintenance fee due. Limitations apply to withdrawals from the Fixed Plus Account. See Appendix II. Amounts withdrawn from GAA may be subject to a market value adjustment. See Appendix I. . Partial Withdrawal (Percentage): The amount paid will be the percentage of the Account Value requested minus any applicable deferred sales charge. See Appendix II for a description of the amount eligible for partial withdrawals from the Fixed Plus Account. Amounts withdrawn from GAA may be subject to a market value adjustment. See Appendix I. . Partial Withdrawal (Specific Dollar Amount): The amount paid will be the dollar amount requested. However, the amount withdrawn from the Account will equal the dollar amount requested plus any applicable deferred sales charge. See Appendix II for a description of the amount eligible for partial withdrawals from the Fixed Plus Account. Amounts withdrawn from GAA may be subject to a market value adjustment. See Appendix I. All amounts paid will be based on Account values as of the end of the Valuation Period in which the request is received in our Home Office or such later date as the disbursement form may specify. For any partial withdrawal, unless requested otherwise by the Contract Holder, the value of the Accumulation Units cancelled will be withdrawn proportionately from each investment option used under the Account. Payments for withdrawal requests (subject to the above limitations on withdrawals from the Fixed Plus Account) will be made in accordance with SEC requirements, but normally not later than seven calendar days after a properly completed disbursement form is received at our Home Office or within seven calendar days of the date the disbursement form may specify. Payments may be delayed for: (a) any period in which the New York Stock Exchange ("Exchange") is closed (other than customary weekend and holiday closings) or in which trading on the Exchange is restricted; (b) any period in which an emergency exists where disposal of securities held by the funds is not reasonably practicable or is not reasonably practicable for the value of the assets of the Funds to be fairly determined; or (c) such other 20 periods as the SEC may by order permit for the protection of Contract Holders and Participants. The conditions under which restricted trading or an emergency exists shall be determined by the rules and regulations of the SEC. CHARGES AND DEDUCTIONS This section describes the maximum Contract charges which we may deduct for maintenance fees, administrative expenses and sales-related expenses. A description of mortality and expense risk charges and Fund expenses is also included. Certain Contract Holders may qualify for a reduction of the charges described in this section. We will not reduce or eliminate any charges that would be unfairly discriminatory to any other Contract Holders. MAINTENANCE FEE An annual maintenance fee is deducted from each installment Purchase Payment Contract Account during the Accumulation Period. The maintenance fee is deducted from each Account on its anniversary date (or, if this is not a business day that the New York Stock Exchange is open, on the next such business day). The Company deducts this fee from each investment option used under the Account in the same proportion as the values held under each option have to the total value of the Account. This fee is to reimburse the Company for some of its administrative expenses relating to the establishment and maintenance of the Account(s). The annual maintenance fee on each Account is $15 for those Plans where individual solicitation of each Participant is not anticipated, annual aggregate Purchase Payments are expected to be in excess of $100,000 and the sponsoring employer has agreed to accommodate group meetings on its premises for soliciting potential Participants. For Plans not meeting these criteria, the annual maintenance fee is $20. No maintenance fee is deducted from a separate Account established under an installment Purchase Payment Contract at the request of the Contract Holder for a lump-sum payment of $10,000 or more made to the Contract on behalf of a Participant. No annual maintenance fee is deducted from a Plan Account established by a Contract Holder under an unallocated Contract. Once assets under a Contract reach $30 million, the annual maintenance fee for each Account under a Plan will be reduced according to the schedule below, provided the following conditions are and continue to be met: (a)We continue to be a Contract provider for new Participants; and (b)The Contract Holder provides mechanized remittance to us. If the two above conditions are met, the following annual maintenance fee schedule is effective:
ASSETS UNDER THE CONTRACT MAINTENANCE FEE $30 million or more but less than $60 million $10.00 $60 million or more but less than $90 million $ 5.00 $90 million or more None
On the anniversary of the Contract effective date and every six months thereafter, we will review the Contract to determine eligibility for a maintenance fee reduction. Any change to the maintenance fee will be effective seven calendar days after the review date. 21 The annual maintenance fee will be $15, as described above, if (1) the Contract assets drop below $30 million, or (2) after the effective date of the Contract a limit is imposed on the number of funding options available to Participants, or (3) conditions (a) or (b) above are no longer met. The annual maintenance fee may be reduced or eliminated under various conditions as agreed to by the Company and the Contract Holder in writing. In determining a reduction in the annual maintenance fee, the following factors will be considered: (1) The size, characteristics, and nature of the group to which a Contract is issued, including: the annual Aggregate Purchase Payment(s), the average annual Purchase Payments per Participant, the expected turnover of employees, whether the Contract Holder will remit Purchase Payment allocations electronically, the frequency of Purchase Payment remittance, and any other factors pertaining to the characteristics of the group or the Plan which may enable us to reduce the expense of administration. (2) Our anticipated expenses in administering the Contract, such as: issuing reminders for Purchase Payments, producing periodic reports, providing for the direct payment of Contract charges rather than having them deducted from Contract values, and any other factors pertaining to the level and expense of administrative services which will be provided under the Contract. MORTALITY AND EXPENSE RISK CHARGES We make a daily deduction from the variable portion of Contract values for mortality and expense risks. The deduction, made as part of the calculation of Accumulation and Annuity Unit value(s), is equivalent to 1.25% per year. The mortality risk charge is to compensate us for the risk we assume when we promise to continue making payments for the lives of individual Annuitants according to Annuity rates specified in the Contract at issue. The expense risk charge is to compensate us for the risk that actual expenses for costs incurred under the Contract will exceed the maximum costs that can be charged under the Contract. During 1994, we received $59,320,898 for mortality and expense risks from Contracts funded through the Separate Account. ADMINISTRATIVE EXPENSE CHARGE We reserve the right to deduct a daily charge of not more than 0.25% per year from the variable portion of Contract values to reimburse us for some of the expenses we incur in administering the Contract. This charge will be established by us on an annual basis effective each May 1 and continue until April 30 of the following year. During the Accumulation Period, the charge may fluctuate annually. Once an Annuity option is elected, the charge will be established and will be effective during the entire Annuity Period. Through April 30, 1996, we have established the charge to be zero. Since the administrative expense charge is a percentage of the variable portion of Contract values, there may be no relationship between the amount so deducted and the amount of expenses attributable to the Contract. FUND EXPENSES Each Fund has an investment adviser. An investment advisory fee, based on the Fund's average net assets, is deducted from the assets of each Fund and paid to the investment adviser. Most expenses incurred in the operations of the Funds are borne by that Fund. Fund advisers may reimburse the Funds they advise for some or all of these expenses. For further details on each Fund's expenses, you and the Contract Holder should read the accompanying prospectus for each Fund and refer to the Fee Table in this Prospectus. 22 DEFERRED SALES CHARGE There are no deductions from Purchase Payments for sales commissions or related expenses. Sales commissions and expenses are advanced by the Company and recovered out of any deferred sales charges or, if deferred sales charges are insufficient, out of its profits from investment activities, including the mortality and expense risk charges under the Contract. For sales commissions paid in connection with the sale of the Contracts see "Contract Purchase-- Distribution." Deferred sales charges may be deducted from amounts withdrawn during the first 10 Purchase Payment Periods (for Installment Purchase Payment Contracts) or 9 Account Years (for Single Purchase Payment Contracts), as set forth in the table below. The deferred sales charge will apply to withdrawals during the Accumulation Period. It will apply during the Annuity Period if the nonlifetime Annuity Option is elected on a variable basis and the remaining value is withdrawn before three years of Annuity payments have been completed. See "Annuity Period--Annuity Options." There are additional restrictions and deductions on withdrawals. See "Contract Rights--Withdrawals." The following tables reflect the deferred sales charge deduction as a percentage of the amount withdrawn from the Funds and GAA: INSTALLMENT PURCHASE PAYMENT CONTRACT:
PURCHASE PAYMENT DEFERRED SALES PERIODS COMPLETED CHARGE DEDUCTION Less than 5 5% 5 or more but less than 7 4% 7 or more but less than 9 3% 9 or 10 2% More than 10 0%
SINGLE PURCHASE PAYMENT CONTRACT:
ACCOUNT YEARS DEFERRED SALES COMPLETED CHARGE DEDUCTION Less than 5 5% 5 or more but less than 6 4% 6 or more but less than 7 3% 7 or more but less than 8 2% 8 or more but less than 9 1% 9 or more 0%
The deduction for the deferred sales charge will not exceed 8.5% of the total Purchase Payments actually made to the Account. A deferred sales charge is not deducted from any portion of the Account value which is: (a) applied to provide Annuity benefits, (b) withdrawn on or after the tenth anniversary of the Effective Date of the Account, (c) paid due to the death of the Participant, (d) withdrawn due to the election of the Estate Conservation Option or the Systematic Withdrawal Option, (e) withdrawn due to a hardship resulting from an unforeseen emergency, as specified in the Code, (f) paid where the Account Value is $3,500 or less and no amount has been withdrawn or used to purchase Annuity benefits during the prior 12 months, (g) withdrawn due to the Participant's separation from service with the employer (the Contract Holder must submit documentation satisfactory to the Company confirming the Participant is no longer providing services to the employer), or (h) withdrawn from an installment Purchase Payment Contract providing the Participant is at least age 59 1/2 and nine Purchase Payments Periods have been completed to the Account of the Participant. 23 Based on our actuarial determination, we do not anticipate that the deferred sales charge will cover all sales and administrative expenses which we will incur in connection with the Contract. Also, we do not intend to profit from the administrative expense charge, if imposed. We do hope to profit from the daily deduction for mortality and expense risks. Any such profit, as well as any other profit realized by us and held in the general account (which supports insurance and Annuity obligations), would be available for any proper corporate purpose, including, but not limited to, payment of sales and distribution expenses. Reduction or elimination of the deferred sales charge can be made if we anticipate incurring decreased sales-related expenses due to the nature of the Plan to which the Contract is issued. When considering a change to the deferred sales charge, we will take into account: (a) The size, characteristics and nature of the group to which a Contract is issued; (b) The expected level of initial agent or our involvement during the establishment and maintenance of the Contract including the amount of enrollment activity required, and the amount of service required by the Contract Holder in support of the Plan; (c) Contract Holder involvement in conducting ongoing enrollment of subsequently eligible Participants; and (d) Any other factors which we anticipate will affect the sales-related expenses associated with the sale of the Contract in connection with the Plan. PREMIUM TAX Several states and municipalities impose a premium tax on Annuities. Currently such taxes range up to 4%. Ordinarily, in states that do impose a premium tax, it would be deducted from the amount applied to an Annuity option. However, we reserve the right to deduct a state premium tax at any time from the Purchase Payment(s) or from the Account value based upon our determination of when such tax is due. ADDITIONAL WITHDRAWAL OPTIONS GENERAL The Company offers certain withdrawal options that are not considered Annuity options: the Estate Conservation Option ("ECO") and the Systematic Withdrawal Option ("SWO"). These options are available to you with contract values of at least $10,000 at the time of election and are available at certain ages as described below. Under SWO, you receive a series of partial withdrawals from your account based on a payment method you select. It is designed for those who want a periodic income while retaining investment flexibility for amounts accumulating under the Contract. ECO offers the same investment flexibility as SWO, but is designed for those who want to receive only the minimum distribution that the Code requires each year. Under ECO, the Company calculates the minimum distribution amount required by law and pays you that amount once a year. Amounts withdrawn for ECO and SWO will be deducted from the Contract in the same manner as for any other withdrawals during the Accumulation Period except that no deferred sales charge will be applied. (See "Contract Rights-- Withdrawals" and "Charges and Deductions--Deferred Sales Charge.") Since ECO and SWO are not Annuity options, the Account remains in the Accumulation Period, retains all the rights and flexibility described in this Prospectus, and is subject to all other Contract charges. The value of the Accumulation Units cancelled will be withdrawn proportionately from the investment options used under the Account. We reserve the right to discontinue the availability of these options and to change the terms for future elections. 24 Once elected, the applicable option(s) may be revoked by the Contract Holder by submitting a written request to the Home Office. Any revocation will apply only to the amounts not yet paid. Once ECO or SWO is revoked, with respect to an Account, it may not be elected again. However, if you die after revoking SWO but before a minimum distribution is required, the Contract Holder can elect SWO on behalf of your spouse if your spouse is the Plan beneficiary. You should determine the availability of ECO and SWO under the Plan (by checking with your employer), and the terms and conditions that may apply (any pay-out election you make under a deferred compensation plan must be irrevocable). SWO is different from ECO in the following ways: (1) SWO payments are made for a fixed dollar amount or fixed time period whereas ECO payments vary in dollar amount and are made during your lifetime, and (2) generally, SWO payments will be higher than expected ECO payments. You should carefully assess your future income needs when considering the election of these options. You should consult your tax adviser before requesting the election of these options due to the potential for adverse tax consequences. ESTATE CONSERVATION OPTION At the time of ECO election, the value of your Accounts applied to ECO must be at least $10,000. The first distribution may not be made until the first day of the calendar year in which you attain age 70 1/2 or retire, whichever occurs later. We will calculate and distribute an annual amount using a method contained in the Code's minimum distribution regulations. The annual distribution is determined by dividing the value of the Account by a life expectancy factor. The factor will be based on either your life expectancy or the joint life expectancies of you and your designated Plan beneficiary, as directed by the Contract Holder, and based on tables in IRS regulations. If ECO is elected based only on your life expectancy, the full Account must be distributed in the year following your death as required by current IRS regulations. If ECO is based on joint life expectancy and the survivor dies, the full Account must be distributed in the year following his/her death. Factors will be recalculated for each year's distribution. The value of the Account to be used in this calculation is the value on the December 31st prior to the year for which payment is being made. This calculation will be changed, if necessary, to conform to changes in the Code or applicable regulations. SYSTEMATIC WITHDRAWAL OPTION SWO payments may be made on a monthly, quarterly, semiannual or annual basis. However, distributions may not be elected until you are eligible to begin receiving distributions under the Plan. No election may be made that would result in a payment of less than $250. At the time of SWO election, the value of your Accounts applied to SWO must be at least $10,000. One of two methods of distributions may be elected: (a) Specified Payment -- payments of a designated amount. The annual dollar amount chosen cannot be greater than 20% of the Account value applied to SWO. The Specified Payment amount will remain constant unless a higher amount is required under Code minimum distribution requirements. The minimum required distribution is determined by dividing the value of the Account on the December 31st prior to the year for which payment is being made by the life expectancy factor. If the dollar amount chosen is less than the Code's minimum required distribution, we will pay the minimum distribution amount. 25 (b) Specified Period -- payments for a designated time period. The specified period must be at least 5 years but not greater than the Participant's life expectancy factor. Each annual distribution is determined by dividing the Account value on the December 31st prior to the year for which the payment is being made by the number of years remaining in the elected period. For payments made more often than annually, the annual payment result (calculated above) is divided by the number of payments due each year. A life expectancy factor from tables designated by the IRS will be used to determine the minimum distribution amounts required. The factor will be based on either your life expectancy or the joint life expectancies of you and your designated Plan beneficiary, as directed by the Contract Holder. Factors will be reduced by one for each distribution year. ANNUITY PERIOD ANNUITY PERIOD ELECTIONS The Contract Holder must notify us in writing of the Annuity start date and Annuity option elected. Until a date and option are elected, the Account will continue in the Accumulation Period (for details, see the Statement of Additional Information). The Contract Holder must give written notice to us at least 30 days before Annuity payments begin, electing or changing (a) the date on which Annuity payments are to begin, (b) the Annuity option, (c) whether the payments are to be made monthly, quarterly, semiannually or annually, and (d) the investment option(s) used to provide Annuity payments (i.e., a fixed annuity using the general account, Aetna Variable Fund, Aetna Income Shares, Aetna Investment Advisers Fund, Inc., or any combination thereof). No other Variable Funds may currently be used as investment options during the Annuity Period. Once Annuity Payments begin, the Annuity Option may not be changed, nor may transfers be made among funding options. If Annuity payments are to be made on a variable basis, the first and subsequent payments will vary depending on the assumed net investment rate (3 1/2% per annum, unless a 5% annual rate is elected). Selection of a 5% rate causes a higher first payment, but Annuity payments will increase thereafter only to the extent that the net investment rate exceeds 5% on an annualized basis. Annuity payments would decline if the rate were below 5%. Use of the 3 1/2% assumed rate causes a lower first payment, but subsequent payments would increase more rapidly or decline more slowly as changes occur in the net investment rate. No election may be made that would result in a first Annuity payment of less than $20 or total yearly Annuity payments of less than $100. If the value of the Account is insufficient to elect an option for the minimum amount specified, a lump-sum payment must be elected. When payments start, the age of the Annuitant plus the number of years for which payments are guaranteed must not exceed 95. Section 401(a)(9) of the Code has required minimum distribution rules for 457 Plans. Under such rules, the retirement date and the Annuity options available to you are normally established by the terms of the Plan, subject to applicable provisions of the Code. Generally, distributions from the Plan must begin by April 1 of the calendar year following the calendar year in which you attain age 70 1/2 or retire, whichever occurs later. In addition, distributions must be in a form and amount sufficient to satisfy the Code requirements. In determining the amount of benefit payments, the minimum distribution incidental death benefit rule described in IRS regulations* must be satisfied. 26 Annuity payments may not extend beyond (a) your life, (b) the joint lives of you and your Plan beneficiary, (c) a period certain greater than your life expectancy, or (d) a period certain greater than the joint life expectancies of you and your Plan beneficiary. You will be subject to a 50% federal penalty tax on the amount of distribution required each year which is not distributed under the Code's minimum distribution rules. * This rule assures that any death benefits payable under the Plan are incidental to the primary purpose of the Plan which is to provide retirement benefits to you. The amount to be distributed under this rule is determined from tables contained in the IRS regulations and is based on your age or the ages of you and your Plan beneficiary. ANNUITY OPTIONS LIFETIME: (a) Life Annuity -- an Annuity with payments guaranteed to the date of the Annuitant's death. This option may be elected with payments guaranteed for 5, 10, 15 or 20 years. Because it provides a specified minimum number of Annuity payments, the election of a guaranteed payment period results in somewhat lower payments. (b) Life Income Based Upon the Lives of Two Payees -- An Annuity will be paid during the lives of the Annuitant and a second Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice must be made of: (i) 100% of the payment to continue after the first death; (ii) 66 2/3% of the payment to continue after the first death; (iii) 50% of the payment to continue after the first death; (iv) Payments for a minimum of 120 months, with 100% of the payment to continue after the first death; or (v) 100% of the payment to continue at the death of the second Annuitant and 50% of the payment to continue at the death of the Annuitant; Because (iv) provides a specified minimum number of Annuity payments, the election of the guaranteed payment period results in somewhat lower payments. Payments under any lifetime Annuity option will be determined without regard to the sex of the Annuitant(s). Such Annuity payments will be based solely on the age of the Annuitant(s). If a lifetime option is elected without a guaranteed minimum payment period, it is possible that only one Annuity payment will be made if the Annuitant under (a), or the surviving Annuitant under (b) should die prior to the due date of the second Annuity payment. Once lifetime Annuity payments begin, the Annuitant cannot elect to receive a lump-sum settlement. NONLIFETIME: Under the nonlifetime option, the number of years that may be selected are determined by the investment options used prior to annuitization. Payments for a Specified Period -- For amounts held in the Fixed Plus Account, an Annuity with payments to be made for at least five but not more than thirty years on a fixed or variable basis. For amounts held in the Funds or GAA, an Annuity with payments to be made for three to thirty years, as selected, on a fixed or variable basis. If this option is elected on a variable basis, the Contract Holder may request at any time during the payment period that the present 27 value of all or any portion of the remaining variable payments be paid in one sum. However, any lump-sum elected before three years of payments have been completed will be treated as a withdrawal during the Accumulation Period and any applicable deferred sales charge will be assessed. See "Charges and Deductions--Deferred Sales Charge." This option is not available on a variable basis under a Contract which provides for immediate Annuity benefits. We make a daily deduction for mortality and expense risks from any Contract values held on a variable basis. See "Mortality and Expense Risk Charges." Therefore, electing the nonlifetime option on a variable basis will result in a deduction being made even though we assume no mortality risk. In addition to the Annuity options described above, we may make optional methods of payment available to you and other payees. DEATH BENEFIT ACCUMULATION PERIOD A portion or all of any death proceeds may be (a) paid to the beneficiary in a lump sum; (b) applied under any of the Annuity options; (c) subject to applicable provisions of the Code, left in the variable investment options; or (d) if the Plan beneficiary is your spouse, paid under ECO or SWO. Any lump-sum payment paid during the Accumulation Period will normally be made within seven calendar days after proof of death acceptable to us and a request for payment are received at our Home Office. Until the election of a method of payment, amounts will remain invested as they were before death, and the beneficiary will assume rights under the Contracts. The Code requires that distributions begin within a certain time period. If your designated beneficiary under the Plan is your surviving spouse, he or she has until you would have attained age 70 1/2 to begin Annuity payments, to receive a lump-sum distribution, or to begin receiving distribution under ECO or SWO. If your beneficiary under the Plan is not your spouse, Annuity payments must begin by December 31 of the year following the year of your death, or the entire value must be distributed by December 31 of the fifth year following the year of your death. In no event may payments to any beneficiary extend beyond the life of the beneficiary or any period certain greater than the beneficiary's life expectancy. If no elections are made concerning distribution, no distributions will be made. Failure to commence distribution within the above time periods can result in tax penalties. If a lump-sum distribution is elected, the Plan beneficiary will receive the value of the Account determined as of the Valuation Period in which proof of death acceptable to us and a request for payment are received at the Home Office. If an Annuity Option is elected, the value applied to the Annuity Option is determined in the same manner as a lump-sum distribution; the amount of payout will depend on the annuity option elected and the investment option(s) used to provide such payments. See "Annuity Period." If amounts are left in the variable investment options, the account value will continue to be affected by the investment performance of the investment option(s) selected. In general, regardless of the method of payment, payments received by your beneficiaries after your death are taxed in the same manner as if you had received those payments. (See "Tax Status.") ANNUITY PERIOD If an Annuitant dies after Annuity payments have begun, any death benefit payable will depend upon the terms of the Contract and the Annuity option selected. If lifetime option (a) or (b) was elected without a guaranteed minimum payment period under the Contract, Annuity payments will cease upon the death of the Annuitant under a Life Annuity or the death of the surviving Annuitant under options (b)(i), (ii), (iii) or (v). 28 Under the Contract, if lifetime option (a) or (b) was elected with a guaranteed minimum payment period and the death of the second Annuitant under option (a) or the surviving Annuitant under option (b)(iv) occurs prior to the end of that period, we will pay to the designated beneficiary in a lump sum, unless otherwise requested, the present value of the guaranteed Annuity payments remaining. Such value will be determined as of the Valuation Period in which proof of death acceptable to us and a request for payment are received at our Home Office. The value will be reduced by any payments made after the date of death. If the nonlifetime option was elected under the Contract and the Annuitant dies before all payments are made, the value of any remaining payments may be paid in a lump sum to the Plan beneficiary and no deferred sales charge will be imposed. Such value will be determined as of the Valuation Period in which proof of death acceptable to us and a request for payment are received at our Home Office. Any lump sum payment paid under the applicable lifetime or nonlifetime Annuity options will normally be made within seven calendar days after proof of death, acceptable to us, and a request for payment are received at our Home Office. If the Annuitant dies after Annuity payments have begun and if there is a death benefit payable under the Annuity option elected, Annuity payments must be distributed to your Plan beneficiary at least as rapidly as under the original method of distribution and in substantially nonincreasing amounts. TAX STATUS INTRODUCTION The following discussion is a general discussion of federal income tax considerations relating to the Contract and is not intended as tax advice. This discussion is not intended to address the tax consequences resulting from all of the situations in which a person may be entitled to or may receive a distribution under the Contract. Any person concerned about these tax implications should consult a competent tax adviser before initiating any transaction. This discussion is based upon the Company's understanding of the present federal income tax laws as they are currently interpreted by the Internal Revenue Service ("IRS"). No representation is made as to the likelihood of the continuation of the present federal income tax laws or of the current interpretation by the IRS. Moreover, no attempt has been made to consider any applicable state or other tax laws. The Contract may be purchased and used in connection with certain retirement arrangements entitled to special income tax treatment under Section 457 of the Code. The Contract may also be used in connection with defined contribution plans under Section 401 of the Code. See Appendix III. The ultimate effect of federal income taxes on the amounts held under a Contract, or Annuity Payments, and on the economic benefit to the Contract Owner, the Annuitant, or the Beneficiary may depend on the tax status of the individual concerned. TAXATION OF THE COMPANY The Company is taxed as a life insurance company under Part I of Subchapter L of the Code. Since the Separate Account is not an entity separate from the Company, and its operation forms a part of the Company, it will not be taxed separately as a "regulated investment company" under Subchapter M of the Code. Investment income and realized capital gains are automatically applied to increase reserves under the Contracts. Under existing federal income tax law, the Company believes that the Separate Account investment income and realized net capital gains will not be taxed to the extent that such income and gains are applied to increase the reserves under the Contracts. 29 Accordingly, the Company does not anticipate that it will incur any federal income tax liability attributable to the Separate Account and, therefore, the Company does not intend to make provisions for any such taxes. However, if changes in the federal tax laws or interpretations thereof result in the Company being taxed on income or gains attributable to the Separate Account, then the Company may impose a charge against the Separate Account (with respect to some or all Contracts) in order to set aside provisions to pay such taxes. SECTION 457 PLANS (FOR A DISCUSSION OF 401 PLANS, SEE APPENDIX III.) The Contract is designed for use with section 457 plans. The tax rules applicable to participants and beneficiaries in retirement plans vary according to the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions. Adverse tax consequences may result from contributions in excess of specified limits; distributions prior to separation from service (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; and in other specified circumstances. The Company makes no attempt to provide more than general information about use of the Contracts with section 457 plans. Owners and participants under section 457 plans as well as annuitants and beneficiaries are cautioned that the rights of any person to any benefits under the Contracts may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract issued in connection with such a plan. Section 457 plans are subject to distribution and other requirements that are not incorporated in the provisions of the Contracts. Owners are responsible for determining that contributions, distributions and other transactions with respect to the Contracts satisfy applicable law. Purchasers of Contracts for use with any section 457 plan should consult their legal counsel and tax adviser regarding the suitability of the Contract. Code section 457 provides for certain deferred compensation plans. These plans may be offered with respect to service for state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and tax exempt organizations. These plans are subject to various restrictions on contributions and distributions. The plans may permit participants to specify the form of investment for their deferred compensation account. In general, all investments are owned by the sponsoring employer and are subject to the claims of the general creditors of the employer. Depending on the terms of the particular plan, the employer may be entitled to draw on deferred amounts for purposes unrelated to its section 457 plan obligations. In general, all amounts received under a section 457 plan are taxable and are subject to federal income tax withholding as wages. This includes payments for death benefits, periodic and nonperiodic distribution. If we make payments directly to a participant or beneficiary on behalf of the employer as Owner, we will withhold federal taxes (and state taxes, if applicable) and will report to the IRS the taxable income. POSSIBLE CHANGES IN TAXATION In past years, legislation has been proposed that would have adversely modified the federal taxation of certain annuities. Although as of the date of this prospectus Congress is not actively considering any legislation regarding the taxation of annuities, there is always the possibility that the tax treatment of annuities could change by legislation or other means (such as IRS regulations, revenue rulings, judicial decisions, etc.). Moreover, it is also possible that any change could be retroactive (that is, effective prior to the date of the change). OTHER TAX CONSEQUENCES As noted above, the foregoing discussion of the federal income tax consequences is not exhaustive and special rules are provided with respect to other tax situations not discussed in this Prospectus. Further, the federal income tax consequences discussed herein reflect the Company's understanding 30 of the current law and the law may change. Federal estate and gift tax consequences of ownership or receipt of distributions under the Contract depend on the individual circumstances of each Owner or recipient of a distribution. A competent tax adviser should be consulted for further information. MISCELLANEOUS VOTING RIGHTS Each Contract Holder may direct us in the voting of shares at meetings of shareholders of the appropriate Fund(s). The number of votes to which each Contract Holder may give direction will be determined as of the record date. The number of votes each Contract Holder is entitled to direct with respect to a particular Fund during the Accumulation Period is equal to the portion of the current value of the Contract attributable to that Fund, divided by the net asset value of one share of that Fund. During the Annuity Period, the number of votes is equal to the Valuation Reserve applicable to the portion of the Contract attributable to that Fund, divided by the net asset value of one share of that Fund. In determining the number of votes, fractional votes will be recognized. Where the value of the Contract or Valuation Reserve relates to more than one Fund, the calculation of votes will be performed separately for each Fund. Each Contract Holder will receive a notice of each meeting of shareholders of that Fund, together with any proxy solicitation materials, and a statement of the number of votes attributable to the Contract. Votes attributable to Contract Holders who do not direct us will be cast by us in the same proportion as the votes for which we have received directions. MODIFICATION OF THE CONTRACT The Company may modify the Contract when it deems an amendment appropriate, subject to the limitations described below, by notifying the Contract Holder in writing 30 days before the effective date of the change, with the Contract Holder's consent. Changes to the following Contract provisions may be considered material by the Company and cannot be changed without the approval of appropriate state or federal regulatory authorities: (a) transfers among investment options; (b) notification to the Contract Holder; (c) conditions governing payments of surrender values; (d) terms of Annuity Options; (e) death benefit payments; and (f) maintenance fee provisions. In addition, changes to the items listed below will apply only to future Accounts: (a) the Annuity options (such changes may only be made twelve months after the Effective Date of the Contract and twelve months after the Effective Date of any such prior changes), (b) the contractual promise that no deduction will be made from Purchase Payment(s) for sales or administrative expenses, (c) increasing the deferred sales charge, if applicable, (d) increasing the mortality and expense risk charges, (e) increasing the administrative expense charge provision, and (f) increasing the annual maintenance fee. 31 If a Contract Holder has not accepted a proposed change at the time of its effective date, we will discontinue establishing new Accounts and we reserve the right to discontinue accepting Purchase Payments to existing Accounts. Modification of items (b) through (f) above specifically require authorization by the SEC to the extent that the proposed charges are not currently authorized by existing orders issued to us by the SEC. We may also change any provision that must be altered to comply with state or federal law. Once an Annuity has begun, we will not change the terms or the amount of the Annuity payments, unless a change is deemed necessary to comply with Code requirements or other laws and regulations affecting the Plan or Contract. CONTRACT HOLDER INQUIRIES A Contract Holder or Participant may direct inquiries to a local representative of the Distributor or may write directly to us at the address shown on the cover page of this prospectus. TELEPHONE TRANSFERS Subject to the Contract Holder's approval, you automatically have the right to make transfers among Funds by telephone. The Company has enacted procedures to prevent abuses of Account transactions by telephone. The procedures include requiring the use of a personal identification number (PIN) to execute transactions. You are responsible for safeguarding your PIN, and for keeping Account information confidential. If the Company fails to follow its procedures it would be liable for any losses to the Account resulting from the failure. To ensure authenticity, we record all calls on the 800 line. Note: all Account information and transactions permitted are subject to the terms of the Plan(s). LEGAL PROCEEDINGS We know of no material legal proceedings pending to which the Separate Account is a party or which would materially affect the Separate Account. LEGAL MATTERS The validity of the securities offered by this Prospectus has been passed upon by Susan E. Bryant, Esq., Counsel to the Company. 32 STATEMENT OF ADDITIONAL INFORMATION -- TABLE OF CONTENTS The following items are the contents of the Statement of Additional Information: General Information and History............................................. 2 Variable Annuity Account C.................................................. 2 Offering and Purchase of Contracts.......................................... 3 Performance Data............................................................ 3 General.................................................................... 3 Average Annual Total Return Quotations..................................... 4 Annuity Payments............................................................ 6 Dollar-Cost Averaging....................................................... 7 Sales Material.............................................................. 7 Independent Auditors........................................................ 8 Financial Statements of the Separate Account................................ S-1 Financial Statements of Aetna Life Insurance and Annuity Company............ F-1
33 APPENDIX I GUARANTEED ACCUMULATION ACCOUNT THE GUARANTEED ACCUMULATION ACCOUNT ("GAA") IS A CREDITED INTEREST OPTION AVAILABLE DURING THE ACCUMULATION PERIOD UNDER THE CONTRACTS. YOU AND THE CONTRACT HOLDER SHOULD READ THE ACCOMPANYING GAA PROSPECTUS CAREFULLY BEFORE INVESTING. THIS APPENDIX IS A SUMMARY OF GAA AND IS NOT INTENDED TO REPLACE THE GAA PROSPECTUS. AMOUNTS ALLOCATED TO GAA ARE HELD IN A NONINSULATED, NONUNITIZED SEPARATE ACCOUNT. GAA is a credited interest option in which we guarantee stipulated rates of interest for stated periods of time on amounts directed to GAA. The interest rate stipulated is an annual effective yield; that is, it reflects a full year's interest. Interest is credited daily at a rate that will provide the guaranteed annual effective yield over the period of one year. This option guarantees the minimum interest rate specified in the Contract. During a specified period of time, amounts may be applied to any or all of available Guaranteed Terms within the Short-Term and Long-Term Classifications. The Short-Term Classification consists of all Guaranteed Terms of 3 years or less and the Long-Term Classification consists of all Guaranteed Terms of 10 years or less, but greater than 3 years. Withdrawals or transfers from a Guaranteed Term before the end of that Guaranteed Term may be subject to a Market Value Adjustment ("MVA"). An MVA reflects the change in the value of the investment due to changes in interest rates since the date of deposit. When interest rates increase after the date of deposit, the value of the investment decreases, and the MVA is negative. Conversely, when interest rates decrease after the date of deposit, the value of the investment increases, and the MVA is positive. It is possible that a negative MVA could result in your receiving an amount which is less than the amount paid into GAA. As a Guaranteed Term matures, assets accumulating under GAA may be (a) transferred to a new Guaranteed Term, (b) transferred to the other available investment options, or (c) withdrawn. Amounts withdrawn may be subject to a deferred sales charge and/or tax liabilities. By notifying us at our Home Office at least 30 days before Annuity payments begin, you may elect to have amounts that have been accumulating under GAA transferred to one or more of the Funds available during the Annuity Period to provide variable Annuity payments. GAA cannot be used as an investment option during the Annuity Period. MORTALITY AND EXPENSE RISK CHARGES We make no deductions from the credited interest rate for mortality and expense risks; these risks are considered in determining the credited rate. TRANSFERS Amounts applied to a Guaranteed Term during a deposit period may not be transferred to any other funding option or to another Guaranteed Term during that deposit period or for 90 days after the close of that deposit period. Transfers are permitted from Guaranteed Terms of one Classification to available Guaranteed Terms of another Classification. We will apply an MVA to GAA transfers made before the end of a Guaranteed Term. Transfers of GAA values due to a maturity are not subject to an MVA. 34 APPENDIX II FIXED PLUS ACCOUNT THE FIXED PLUS ACCOUNT IS AN INVESTMENT OPTION AVAILABLE DURING THE ACCUMULATION PERIOD UNDER THE CONTRACTS. THE FOLLOWING SUMMARIZES MATERIAL INFORMATION CONCERNING THE FIXED ACCOUNT THAT IS OFFERED AS AN OPTION UNDER THE CONTRACT. ADDITIONAL INFORMATION MAY BE FOUND IN THE CONTRACT. AMOUNTS ALLOCATED TO THE FIXED PLUS ACCOUNT ARE HELD IN THE COMPANY'S GENERAL ACCOUNT THAT SUPPORTS INSURANCE AND ANNUITY OBLIGATIONS. INTERESTS IN THE FIXED PLUS ACCOUNT HAVE NOT BEEN REGISTERED WITH THE SEC IN RELIANCE ON EXEMPTIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED. DISCLOSURE IN THIS PROSPECTUS REGARDING THE FIXED PLUS ACCOUNT, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY AND COMPLETENESS OF THE STATEMENTS. DISCLOSURE IN THIS APPENDIX REGARDING THE FIXED PLUS ACCOUNT HAS NOT BEEN REVIEWED BY THE SEC. FIXED PLUS ACCOUNT This option guarantees that amounts allocated to this option will earn the minimum Fixed Plus interest rate specified in the Contract. We may credit a higher interest rate from time to time. The Company's determination of interest rates reflects the investment income earned on invested assets and the amortization of any capital gains and/or losses realized on the sale of invested assets. Under this option, we assume the risk of investment gain or loss by guaranteeing Net Purchase Payment values and promising a minimum interest rate and Annuity payment. The Fixed Plus Account will reflect a compound interest rate credited by us. The interest rate quoted is an annual effective yield. Amounts applied to the Fixed Plus Account will earn the Fixed Plus interest rate in effect when actually applied to the Fixed Plus Account. We make no deductions from the credited interest rate for mortality and expense risks; these risks are considered in determining the credited rate. Beginning on the tenth Account Year, we will credit amounts held in the Fixed Plus Account with an interest rate that is at least 0.25% higher than the then- declared interest rate for the Fixed Plus Accounts for Accounts that have not reached their tenth anniversary. The Company reserves the right to limit Net Purchase Payments(s) and/or transfers to the Fixed Plus Account. FIXED PLUS ACCOUNT WITHDRAWALS The amount eligible for partial withdrawal is 20% of the amount held in the Fixed Plus Account on the day our Home Office receives a written request, reduced by any Fixed Plus Account withdrawals, transfers or annuitizations made in the prior 12 months. In calculating the 20% limit, we reserve the right to include payments made due to the election of SWO or ECO. The 20% limit is waived if the partial withdrawal is due to annuitization, death, hardship, (when the conditions specified under (e) below are met), or separation from service (when the conditions specified under (d) below are met). For this waiver to apply, any such withdrawal must also be made pro rata from all options used under the Account. If a full withdrawal is requested, we will pay any amounts held in the Fixed Plus Account, with interest, in five annual payments of: . One-fifth of the Fixed Plus Account value on the day the request is received, reduced by any Fixed Plus Account withdrawals, transfers or annuitizations made in the prior 12 months; . One-fourth of the remaining Fixed Plus Account value 12 months later; 35 . One-third of the remaining Fixed Plus Account value 12 months later; . One-half of the remaining Fixed Plus Account value 12 months later; and . The balance of the Fixed Plus Account value 12 months later. Once we receive a request for a full withdrawal from an Account, no further withdrawals or transfers will be permitted from the Fixed Plus Account. A full withdrawal from the Fixed Plus Account may be cancelled at any time before the end of the five-payment period. We will waive the Fixed Plus Account full surrender provision if a full withdrawal is made due to: (a) the Participant's death, before Annuity payments begin; (b) the election of an Annuity option; (c) if the Fixed Plus Account value is $3,500 or less (and no withdrawals, transfers or annuitizations have been made from the Account within the prior 12 months); (d) the Participant's separation from service with the employer, if the following conditions are met: (1) the separation from service is certified by the Contract Holder; (2) the amount is paid directly to the Participant; and (3) the amount paid for all withdrawals due to separation from service for all Participants under the Contract during the previous 12- month period does not exceed 20% of the average value of all Accounts during that same period. (e) hardship due to an unforeseeable emergency, as defined by the Code, if the following conditions are met: (1) the hardship is certified by the employer; (2) the amount is paid directly to the Participant; and (3) the amount paid for all withdrawals due to hardship for all Participants under the Contract during the previous 12-month period does not exceed 10% of the average value of all Accounts during that same period. TRANSFERS AMONG INVESTMENT OPTIONS The amount eligible for transfer from the Fixed Plus Account is 20% of the amount held in the Fixed Plus Account on the day our Home Office receives a written request, reduced by any Fixed Plus Account withdrawals, transfers or annuitizations made in the prior 12 months. In calculating the 20% limit, we reserve the right to include payments made due to the election of SWO or ECO. We will waive the 20% transfer limit when the value in the Fixed Plus Account is $1,000 or less. SWO The Systematic Withdrawal Option may not be elected if you have requested a Fixed Plus Account transfer or withdrawal within the prior 12 month period. ANNUITIZATIONS By notifying us at our Home Office at least 30 days before Annuity payments begin, you may elect to have amounts which have been accumulating under the Fixed Plus Account transferred to one or more of the funds available during the Annuity Period to provide lifetime variable Annuity payments. 36 APPENDIX III 401(A) DEFINED CONTRIBUTION PLANS THE COMPANY HAS MADE THE FOLLOWING CHANGES DESCRIBED IN THIS PROSPECTUS SO THAT THE PROSPECTUS MAY BE USED IN CONNECTION WITH A QUALIFIED DEFINED CONTRIBUTION PLAN UNDER SECTION 401(A) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED ("CODE"). EXCEPT AS NOTED ELSEWHERE IN THE PROSPECTUS AND AS NOTED BELOW, THE 401(A) CONTRACT SHALL HAVE THE SAME PROVISIONS AS THOSE DESCRIBED IN THIS PROSPECTUS. GENERAL Except where noted, the term "Plan" refers to a 457 Plan or a 401 Plan. PURCHASE The following paragraph replaces the last paragraph under the section entitled "Purchase." The Code imposes a maximum limit on annual Purchase Payments that may be excluded from a Participant's gross income. Such limits must be calculated under the 401 Plan by the Contract Holder in accordance with Section 415 of the Code. Purchase Payments will be excluded from the Participant's gross income only if the 401(a) Plan meets certain nondiscrimination requirements. RIGHTS UNDER THE CONTRACT The following sentence replaces the paragraph entitled "Rights Under the Contract." Participants under 401 Plans have such rights as are authorized by the Contract Holder and by the terms of the Plan. TAX STATUS The following section replaces the section entitled "Section 457 Plans." CONTRACTS USED WITH CERTAIN RETIREMENT PLANS IN GENERAL. The Contract is designed for use with certain types of retirement plans that qualify under Section 401(a) of the Code. The tax rules applicable to participants and beneficiaries in retirement plans vary according to the type of plan and the terms and conditions of the plan. Special favorable tax treatment may be available for certain types of contributions and distributions. Adverse tax consequences may result from contributions in excess of specified limits; distributions prior to age 59 1/2 (subject to certain exceptions); distributions that do not conform to specified commencement and minimum distribution rules; aggregate distributions in excess of a specified annual amount; and in other specified circumstances. The Company makes no attempt to provide more than general information about use of the Contracts with the various types of retirement plans. Owners and participants under retirement plans as well as annuitants and beneficiaries are cautioned that the rights of any person to any benefits under the Contracts may be subject to the terms and conditions of the plans themselves, regardless of the terms and conditions of the Contract issued in connection with such a plan. Some retirement plans are subject to distribution and other requirements that are not incorporated in the administration of the Contracts. Owners are responsible for determining that contributions, distributions and other transactions with respect to the Contracts satisfy applicable law. Purchasers of Contracts for use with any retirement plan should consult their legal counsel and tax adviser regarding the suitability of the Contract. 37 CORPORATE PENSION AND PROFIT-SHARING PLANS AND H.R. 10 PLANS. Code section 401(a) permits employers to establish various types of retirement plans for employees, and permit self-employed individuals to establish retirement plans for themselves and their employees. These retirement plans may permit the purchase of the Contracts to accumulate retirement savings under the plans. Adverse tax consequences to the plan, to the participant or to both may result if this Contract is assigned or transferred to any individual as a means to provide benefit payments. In the case of a withdrawal under a Contract paid to a plan participant or beneficiary, including withdrawals under the Systematic Withdrawal Option or the Estate Conservation Option, a ratable portion of the amount received is taxable, generally based on the ratio of the "investment in the contract" to the individual's total accrued benefit under the retirement plan. The "investment in the contract" generally equals the amount of any non-deductible contributions paid by or on behalf of any individual's total accrued benefit under the retirement plan. The "investment in the contract" generally equals the amount of any non-deductible contributions paid by or on behalf of any individual. For a Contract issued in connection with qualified plans, the "investment in the contract" can be zero. Special tax rules may be available for certain distributions from a qualified plan. Although the tax consequences may vary depending on the Annuity payment elected under the Contract, in general, only the portion of the Annuity payment that represents the amount by which the Account Value exceeds the "investment in the contract" will be taxed; after the "investment in the contract" is recovered, the full amount of any additional Annuity payments is taxable. For Variable Annuity payments, the taxable portion is generally determined by an equation that establishes a specific dollar amount of each payment that is not taxed. The dollar amount is determined by dividing the "investment in the contract" by the total number of expected periodic payments. However, the entire distribution will be taxable once the recipient has recovered the dollar amount of his or her "investment in the contract". For Fixed Annuity payments, in general there is no tax on the portion of each payment which represents the same ratio that the "investment in the contract" bears to the total expected value of the Annuity payments for the term of the payments; however, the remainder of each Annuity payment is taxable. Once the "investment in the contract" has been fully recovered, the full amount of any additional Annuity payments is taxable. If Annuity payments cease as a result of an Annuitant's death before full recovery of the "investment in the contract," consult a competent tax advisor regarding deductibility of the unrecovered amount. Pension distributions generally are subject to withholding for the recipient's federal income tax liability at rates that vary according to the type of distribution and the recipient's tax status. Certain distributions are subject to mandatory federal income tax withholding. Recipients generally are provided the opportunity to elect not to have tax withheld from distributions. 38 HYPOTHETICAL TABLES The following tables represent hypothetical values for the periods indicated that would have resulted under a Contract described in this Prospectus had you made contributions to the Contract during the periods indicated. Each set of hypothetical results is based exclusively on the investment performance of a particular Fund during the periods shown. The Fund performance is based on the actual net asset values of the various Funds which would be net of advisory fees and expenses actually charged for those periods. Some of the Funds' advisers have reimbursed the Funds for a portion of those fees. Reimbursements may not continue in the future. The hypothetical returns also assume deduction of all charges and expenses under the Contracts which include 1.25% mortality and expense risk charges and a $20.00 maintenance fee which is assumed to be deducted on the last day of each Contract Year. The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. Since the Contracts are designed to fund variable retirement benefits through long-term investments, "active" Contracts will, on the average, involve a long- term relationship between the Company and the Contract Holder during both the Accumulation and Annuity Periods. Accordingly, the Tables are intended to illustrate the hypothetical values of each Fund since that Fund became available under the Contract. For those Funds not available under the Contract as of December 31, 1994, no histories are shown. Generally, Table 1 for each Fund shows the accumulation value at annual intervals following contract issuance on the date indicated, and Table 2 shows the accumulation value at quarterly intervals following contract issuance. Table 1 assumes that monthly purchase payments of $100 were made during each Contract Year following contract issuance, and illustrates the accumulation value of such payment over a period of time, as well as the actual withdrawal value of your account following the deduction of any applicable deferred sales charge that would have been assessed had a withdrawal been made during that period. Table 2 assumes that a single net purchase payment of $100 was made at contract issuance, and illustrates the accumulation value of that payment at quarterly intervals thereafter. For those Funds available during annuity payout (e.g., Aetna Variable Fund, Aetna Income Shares and Aetna Investment Advisers Fund, Inc.), Table 3 illustrates the value of hypothetical monthly variable annuity payments at quarterly intervals following the commencement of annuity payments on the date indicated. Table 3 assumes an initial annuity payment of $100. For those funds not available as funding options during the Annuity Period, no annuity payout information is provided. PLEASE ALSO NOTE THAT WHILE THESE HYPOTHETICAL CHARTS REFLECT ACTUAL HISTORICAL PERFORMANCE, THEY ARE NOT INDICATIVE OF FUTURE RESULTS. A PROGRAM OF THE TYPE ILLUSTRATED IN THE TABLES DOES NOT ASSURE A PROFIT OR PROTECT AGAINST DEPRECIATION IN DECLINING MARKETS. 39 AETNA VARIABLE FUND HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1985 $ 1,200.00 $ 20.00 $ 1,367.23 $ 68.36 $ 1,298.87 - ------------------------------------------------------------------------ December 1986 2,400.00 40.00 2,846.99 142.35 2,704.64 - ------------------------------------------------------------------------ December 1987 3,600.00 60.00 4,039.49 201.97 3,837.52 - ------------------------------------------------------------------------ December 1988 4,800.00 80.00 5,811.72 290.59 5,521.13 - ------------------------------------------------------------------------ December 1989 6,000.00 100.00 8,731.84 349.27 8,382.57 - ------------------------------------------------------------------------ December 1990 7,200.00 120.00 10,130.50 405.22 9,725.28 - ------------------------------------------------------------------------ December 1991 8,400.00 140.00 13,972.92 419.19 13,553.73 - ------------------------------------------------------------------------ December 1992 9,600.00 160.00 15,964.73 478.94 15,485.79 - ------------------------------------------------------------------------ December 1993 10,800.00 180.00 18,055.81 361.12 17,694.69 - ------------------------------------------------------------------------ December 1994 12,000.00 200.00 18,828.60 0.00 18,828.60
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1985 $107.70 September 1988 $176.76 March 1992 $284.68 - ------------------------------------------------------------------------------------- June 1985 116.79 December 1988 179.67 June 1992 286.43 - ------------------------------------------------------------------------------------- September 1985 112.94 March 1989 191.77 September 1992 296.11 - ------------------------------------------------------------------------------------- December 1985 129.66 June 1989 204.95 December 1992 307.24 - ------------------------------------------------------------------------------------- March 1986 145.11 September 1989 222.25 March 1993 312.71 - ------------------------------------------------------------------------------------- June 1986 153.04 December 1989 229.00 June 1993 309.99 - ------------------------------------------------------------------------------------- September 1986 144.06 March 1990 223.82 September 1993 316.15 - ------------------------------------------------------------------------------------- December 1986 152.32 June 1990 240.28 December 1993 323.87 - ------------------------------------------------------------------------------------- March 1987 179.56 September 1990 215.93 March 1994 313.24 - ------------------------------------------------------------------------------------- June 1987 184.52 December 1990 233.61 June 1994 311.15 - ------------------------------------------------------------------------------------- September 1987 193.77 March 1991 261.74 September 1994 317.75 - ------------------------------------------------------------------------------------- December 1987 158.70 June 1991 258.45 December 1994 316.77 - ------------------------------------------------------------------------------------- March 1988 168.39 September 1991 268.21 - ------------------------------------------------------------------------------------- June 1988 176.03 December 1991 291.58
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 40 TABLE 3 - ANNUITY PERIOD VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY VARIABLE ANNUITY PAYMENTS (Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
PAYMENT PAYMENT PAYMENT MONTH FOR MONTH/(1)/ MONTH FOR MONTH/(1)/ MONTH FOR MONTH/(1)/ - --------------------------------------------------------------------------------------- March 1985 $106.78 September 1988 $155.37 March 1992 $221.84 - --------------------------------------------------------------------------------------- June 1985 114.80 December 1988 156.57 June 1992 221.29 - --------------------------------------------------------------------------------------- September 1985 110.07 March 1989 165.69 September 1992 226.82 - --------------------------------------------------------------------------------------- December 1985 125.27 June 1989 175.55 December 1992 233.32 - --------------------------------------------------------------------------------------- March 1986 139.00 September 1989 188.74 March 1993 235.44 - --------------------------------------------------------------------------------------- June 1986 145.34 December 1989 192.81 June 1993 231.40 - --------------------------------------------------------------------------------------- September 1986 135.64 March 1990 186.84 September 1993 233.97 - --------------------------------------------------------------------------------------- December 1986 142.20 June 1990 198.86 December 1993 237.64 - --------------------------------------------------------------------------------------- March 1987 166.19 September 1990 177.18 March 1994 227.87 - --------------------------------------------------------------------------------------- June 1987 169.31 December 1990 190.04 June 1994 224.41 - --------------------------------------------------------------------------------------- September 1987 176.28 March 1991 211.10 September 1994 227.21 - --------------------------------------------------------------------------------------- December 1987 143.14 June 1991 206.66 December 1994 224.56 - --------------------------------------------------------------------------------------- March 1988 150.58 September 1991 212.63 - --------------------------------------------------------------------------------------- June 1988 156.06 December 1991 229.18
AETNA INCOME SHARES HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(2)/ CHARGE VALUE/(3)/ - ------------------------------------------------------------------------ December 1985 $1,200.00 $ 20.00 $ 1,326.68 $ 66.33 $ 1,260.35 - ------------------------------------------------------------------------ December 1986 2,400.00 40.00 2,743.51 137.18 2,606.33 - ------------------------------------------------------------------------ December 1987 3,600.00 60.00 4,048.59 202.43 3,846.16 - ------------------------------------------------------------------------ December 1988 4,800.00 80.00 5,503.95 275.20 5,228.75 - ------------------------------------------------------------------------ December 1989 6,000.00 100.00 7,488.22 299.53 7,188.69 - ------------------------------------------------------------------------ December 1990 7,200.00 120.00 9,323.14 372.93 8,950.21 - ------------------------------------------------------------------------ December 1991 8,400.00 140.00 12,312.73 369.38 11,943.35 - ------------------------------------------------------------------------ December 1992 9,600.00 160.00 14,294.58 428.84 13,865.74 - ------------------------------------------------------------------------ December 1993 10,800.00 180.00 16,705.89 334.12 16,371.77 - ------------------------------------------------------------------------ December 1994 12,000.00 200.00 17,034.89 0.00 17,034.89
/(1)/The amounts above assume deductions of all fees and expenses of the Funds and under the Contracts during the Annuity Period. The Payments are based on the standard assumed net investment rate of 3 1/2% per annum. See the narrative preceding these Tables. /(2)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(3)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 41 TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1985 $101.98 September 1988 $150.13 March 1992 $212.59 - ------------------------------------------------------------------------------------- June 1985 110.57 December 1988 149.16 June 1992 219.50 - ------------------------------------------------------------------------------------- September 1985 112.83 March 1989 151.53 September 1992 226.46 - ------------------------------------------------------------------------------------- December 1985 120.75 June 1989 161.56 December 1992 227.69 - ------------------------------------------------------------------------------------- March 1986 128.07 September 1989 164.21 March 1993 234.12 - ------------------------------------------------------------------------------------- June 1986 129.28 December 1989 168.81 June 1993 239.72 - ------------------------------------------------------------------------------------- September 1986 131.86 March 1990 167.74 September 1993 245.09 - ------------------------------------------------------------------------------------- December 1986 135.95 June 1990 173.10 December 1993 246.62 - ------------------------------------------------------------------------------------- March 1987 138.44 September 1990 174.39 March 1994 237.69 - ------------------------------------------------------------------------------------- June 1987 135.48 December 1990 181.93 June 1994 232.55 - ------------------------------------------------------------------------------------- September 1987 133.97 March 1991 187.56 September 1994 234.67 - ------------------------------------------------------------------------------------- December 1987 140.34 June 1991 191.12 December 1994 234.31 - ------------------------------------------------------------------------------------- March 1988 145.12 September 1991 202.49 - ------------------------------------------------------------------------------------- June 1988 147.55 December 1991 214.57
TABLE 3 - ANNUITY PERIOD VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY VARIABLE ANNUITY PAYMENTS (Assumes Initial Annuity Payment of $100 beginning on December 31, 1984)
PAYMENT PAYMENT PAYMENT MONTH FOR MONTH/(2)/ MONTH FOR MONTH/(2)/ MONTH FOR MONTH/(2)/ - --------------------------------------------------------------------------------------- March 1985 $101.10 September 1988 $131.96 March 1992 $165.66 - --------------------------------------------------------------------------------------- June 1985 108.68 December 1988 129.99 June 1992 169.58 - --------------------------------------------------------------------------------------- September 1985 109.95 March 1989 130.92 September 1992 173.46 - --------------------------------------------------------------------------------------- December 1985 116.67 June 1989 138.39 December 1992 172.91 - --------------------------------------------------------------------------------------- March 1986 122.68 September 1989 139.45 March 1993 176.28 - --------------------------------------------------------------------------------------- June 1986 122.77 December 1989 142.14 June 1993 178.94 - --------------------------------------------------------------------------------------- September 1986 124.16 March 1990 140.02 September 1993 181.39 - --------------------------------------------------------------------------------------- December 1986 126.91 June 1990 143.26 December 1993 180.95 - --------------------------------------------------------------------------------------- March 1987 128.13 September 1990 143.09 March 1994 172.91 - --------------------------------------------------------------------------------------- June 1987 124.32 December 1990 148.00 June 1994 167.72 - --------------------------------------------------------------------------------------- September 1987 121.87 March 1991 151.28 September 1994 167.80 - --------------------------------------------------------------------------------------- December 1987 126.58 June 1991 152.82 December 1994 166.11 - --------------------------------------------------------------------------------------- March 1988 129.77 September 1991 160.53 - --------------------------------------------------------------------------------------- June 1988 130.81 December 1991 168.65
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The amounts above assume deductions of all fees and expenses of the Funds and under the Contracts during the Annuity Period. The Payments are based on the standard assumed net investment rate of 3 1/2% per annum. See the narrative preceding these Tables. 42 AETNA VARIABLE ENCORE FUND HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1985 $ 1,200.00 $ 20.00 $ 1,225.45 $ 61.27 $ 1,164.18 - ------------------------------------------------------------------------ December 1986 2,400.00 40.00 2,507.18 125.36 2,381.82 - ------------------------------------------------------------------------ December 1987 3,600.00 60.00 3,861.61 193.08 3,668.53 - ------------------------------------------------------------------------ December 1988 4,800.00 80.00 5,320.58 266.03 5,054.55 - ------------------------------------------------------------------------ December 1989 6,000.00 100.00 6,977.91 279.12 6,698.79 - ------------------------------------------------------------------------ December 1990 7,200.00 120.00 8,697.51 347.90 8,349.61 - ------------------------------------------------------------------------ December 1991 8,400.00 140.00 10,362.80 310.88 10,051.92 - ------------------------------------------------------------------------ December 1992 9,600.00 160.00 11,804.21 354.13 11,450.08 - ------------------------------------------------------------------------ December 1993 10,800.00 180.00 13,222.53 264.45 12,958.08 - ------------------------------------------------------------------------ December 1994 12,000.00 200.00 14,793.90 0.00 14,793.90
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1984 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1985 $101.71 September 1988 $124.54 March 1992 $155.16 - ------------------------------------------------------------------------------------- June 1985 103.59 December 1988 126.62 June 1992 156.20 - ------------------------------------------------------------------------------------- September 1985 105.29 March 1989 129.10 September 1992 157.11 - ------------------------------------------------------------------------------------- December 1985 107.12 June 1989 131.82 December 1992 157.77 - ------------------------------------------------------------------------------------- March 1986 108.88 September 1989 134.34 March 1993 158.56 - ------------------------------------------------------------------------------------- June 1986 110.34 December 1989 136.78 June 1993 159.30 - ------------------------------------------------------------------------------------- September 1986 111.79 March 1990 139.10 September 1993 160.10 - ------------------------------------------------------------------------------------- December 1986 113.08 June 1990 141.55 December 1993 160.79 - ------------------------------------------------------------------------------------- March 1987 114.44 September 1990 143.96 March 1994 161.48 - ------------------------------------------------------------------------------------- June 1987 115.90 December 1990 146.46 June 1994 162.48 - ------------------------------------------------------------------------------------- September 1987 117.45 March 1991 148.53 September 1994 163.73 - ------------------------------------------------------------------------------------- December 1987 119.27 June 1991 150.40 December 1994 165.30 - ------------------------------------------------------------------------------------- March 1988 121.00 September 1991 152.32 - ------------------------------------------------------------------------------------- June 1988 122.63 December 1991 154.09
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 43 AETNA INVESTMENT ADVISERS FUND, INC. HYPOTHETICAL PERIODIC ACCUMULATION VALUES AND ANNUITY PAYMENTS TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1990 $1,200.00 $ 20.00 $1,222.33 $ 61.12 $1,161.21 - ------------------------------------------------------------------------ December 1991 2,400.00 40.00 2,722.45 136.12 2,586.33 - ------------------------------------------------------------------------ December 1992 3,600.00 60.00 4,080.52 204.03 3,876.49 - ------------------------------------------------------------------------ December 1993 4,800.00 80.00 5,669.78 283.49 5,386.29 - ------------------------------------------------------------------------ December 1994 6,000.00 100.00 6,755.19 270.21 6,484.98
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1990 $100.50 December 1991 $122.03 September 1993 $135.87 - ------------------------------------------------------------------------------------- June 1990 104.24 March 1992 121.57 December 1993 139.11 - ------------------------------------------------------------------------------------- September 1990 98.48 June 1992 124.32 March 1994 135.05 - ------------------------------------------------------------------------------------- December 1990 104.40 September 1992 126.08 June 1994 133.48 - ------------------------------------------------------------------------------------- March 1991 110.45 December 1992 128.19 September 1994 137.27 - ------------------------------------------------------------------------------------- June 1991 110.48 March 1993 131.17 December 1994 136.90 - ------------------------------------------------------------------------------------- September 1991 115.28 June 1993 132.20
TABLE 3 - ANNUITY PERIOD VALUE AT QUARTERLY INTERVALS OF HYPOTHETICAL MONTHLY VARIABLE ANNUITY PAYMENTS (Assumes Initial Annuity Payment of $100 beginning on December 31, 1990)
PAYMENT PAYMENT PAYMENT MONTH FOR MONTH/(3)/ MONTH FOR MONTH/(3)/ MONTH FOR MONTH/(3)/ - --------------------------------------------------------------------------------------- March 1991 $104.89 September 1992 $113.71 March 1994 $115.67 - --------------------------------------------------------------------------------------- June 1991 104.02 December 1992 114.62 June 1994 113.35 - --------------------------------------------------------------------------------------- September 1991 107.61 March 1993 116.28 September 1994 115.57 - --------------------------------------------------------------------------------------- December 1991 112.93 June 1993 116.19 December 1994 114.27 - --------------------------------------------------------------------------------------- March 1992 111.54 September 1993 118.39 - --------------------------------------------------------------------------------------- June 1992 113.10 December 1993 120.18
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. /(3)/The amounts above assume deductions of all fees and expenses of the Funds and under the Contracts during the Annuity Period. The Payments are based on the standard assumed net investment rate of 3 1/2% per annum. See the narrative preceding these Tables. 44 ALGER AMERICAN GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1990 $1,200.00 $ 20.00 $1,247.30 $ 62.37 $1,184.93 - ------------------------------------------------------------------------ December 1991 2,400.00 40.00 3,125.11 156.26 2,968.85 - ------------------------------------------------------------------------ December 1992 3,600.00 60.00 4,804.70 240.24 4,564.46 - ------------------------------------------------------------------------ December 1993 4,800.00 80.00 7,166.41 358.32 6,808.09 - ------------------------------------------------------------------------ December 1994 6,000.00 100.00 8,388.83 335.55 8,053.28
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1990 $ 94.31 December 1991 $142.59 September 1993 $181.33 - ------------------------------------------------------------------------------------- June 1990 109.69 March 1992 138.75 December 1993 191.39 - ------------------------------------------------------------------------------------- September 1990 91.62 June 1992 130.58 March 1994 182.84 - ------------------------------------------------------------------------------------- December 1990 102.84 September 1992 138.99 June 1994 172.52 - ------------------------------------------------------------------------------------- March 1991 122.22 December 1992 158.25 September 1994 186.62 - ------------------------------------------------------------------------------------- June 1991 116.94 March 1993 161.04 December 1994 191.75 - ------------------------------------------------------------------------------------- September 1991 131.83 June 1993 165.51
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 45 ALGER AMERICAN SMALL CAPITALIZATION PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1989 $1,200.00 $ 20.00 $ 1,436.08 $ 71.80 $1,364.28 - ------------------------------------------------------------------------ December 1990 2,400.00 40.00 2,808.86 140.44 2,668.42 - ------------------------------------------------------------------------ December 1991 3,600.00 60.00 5,885.79 294.29 5,591.50 - ------------------------------------------------------------------------ December 1992 4,800.00 80.00 7,372.18 368.61 7,003.57 - ------------------------------------------------------------------------ December 1993 6,000.00 100.00 9,488.61 379.54 9,109.07 - ------------------------------------------------------------------------ December 1994 7,200.00 120.00 10,200.73 408.03 9,792.70
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1988 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1989 $121.70 March 1991 $218.56 March 1993 $253.23 - ------------------------------------------------------------------------------------- June 1989 135.80 June 1991 205.53 June 1993 270.26 - ------------------------------------------------------------------------------------- September 1989 167.68 September 1991 230.08 September 1993 304.19 - ------------------------------------------------------------------------------------- December 1989 162.44 December 1991 271.28 December 1993 306.96 - ------------------------------------------------------------------------------------- March 1990 164.48 March 1992 244.58 March 1994 279.42 - ------------------------------------------------------------------------------------- June 1990 188.05 June 1992 217.20 June 1994 260.35 - ------------------------------------------------------------------------------------- September 1990 148.59 September 1992 233.48 September 1994 283.36 - ------------------------------------------------------------------------------------- December 1990 174.35 December 1992 277.41 December 1994 290.89
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 46 CALVERT RESPONSIBLY INVESTED BALANCED PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1987 $1,200.00 $ 20.00 $ 1,112.65 $ 55.63 $ 1,057.02 - ------------------------------------------------------------------------ December 1988 2,400.00 40.00 2,444.81 122.24 2,322.57 - ------------------------------------------------------------------------ December 1989 3,600.00 60.00 4,072.09 203.60 3,868.49 - ------------------------------------------------------------------------ December 1990 4,800.00 80.00 5,565.03 278.25 5,286.78 - ------------------------------------------------------------------------ December 1991 6,000.00 100.00 7,684.96 307.40 7,377.56 - ------------------------------------------------------------------------ December 1992 7,200.00 120.00 9,379.10 375.16 9,003.94 - ------------------------------------------------------------------------ December 1993 8,400.00 140.00 11,293.88 338.82 10,955.06 - ------------------------------------------------------------------------ December 1994 9,600.00 160.00 11,960.53 358.82 11,601.71
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1987 $112.57 December 1989 $132.97 September 1992 $167.05 - ------------------------------------------------------------------------------------- June 1987 115.51 March 1990 134.18 December 1992 171.86 - ------------------------------------------------------------------------------------- September 1987 120.87 June 1990 139.46 March 1993 176.90 - ------------------------------------------------------------------------------------- December 1987 104.36 September 1990 133.13 June 1993 177.95 - ------------------------------------------------------------------------------------- March 1988 111.30 December 1990 141.34 September 1993 183.93 - ------------------------------------------------------------------------------------- June 1988 114.04 March 1991 148.25 December 1993 184.54 - ------------------------------------------------------------------------------------- September 1988 114.50 June 1991 148.45 March 1994 178.00 - ------------------------------------------------------------------------------------- December 1988 115.06 September 1991 153.35 June 1994 174.81 - ------------------------------------------------------------------------------------- March 1989 118.57 December 1991 162.47 September 1994 178.19 - ------------------------------------------------------------------------------------- June 1989 127.85 March 1992 158.05 December 1994 176.48 - ------------------------------------------------------------------------------------- September 1989 134.65 June 1992 159.75
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 47 FIDELITY EQUITY-INCOME PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1987 $1,200.00 $ 20.00 $ 1,035.65 $ 51.78 $ 983.87 - ------------------------------------------------------------------------ December 1988 2,400.00 40.00 2,510.38 125.52 2,384.86 - ------------------------------------------------------------------------ December 1989 3,600.00 60.00 4,124.96 206.25 3,918.71 - ------------------------------------------------------------------------ December 1990 4,800.00 80.00 4,556.68 227.83 4,328.85 - ------------------------------------------------------------------------ December 1991 6,000.00 100.00 7,233.86 289.35 6,944.51 - ------------------------------------------------------------------------ December 1992 7,200.00 120.00 9,638.85 385.55 9,253.30 - ------------------------------------------------------------------------ December 1993 8,400.00 140.00 12,520.67 375.62 12,145.05 - ------------------------------------------------------------------------ December 1994 9,600.00 160.00 14,448.23 433.45 14,014.78
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1987 $116.62 December 1989 $137.18 September 1992 $160.07 - ------------------------------------------------------------------------------------- June 1987 116.44 March 1990 128.48 December 1992 171.94 - ------------------------------------------------------------------------------------- September 1987 121.21 June 1990 130.51 March 1993 185.89 - ------------------------------------------------------------------------------------- December 1987 97.65 September 1990 107.71 June 1993 190.09 - ------------------------------------------------------------------------------------- March 1988 107.54 December 1990 114.75 September 1993 198.67 - ------------------------------------------------------------------------------------- June 1988 116.73 March 1991 131.50 December 1993 200.88 - ------------------------------------------------------------------------------------- September 1988 117.55 June 1991 133.25 March 1994 195.17 - ------------------------------------------------------------------------------------- December 1988 118.35 September 1991 142.34 June 1994 201.93 - ------------------------------------------------------------------------------------- March 1989 127.35 December 1991 148.95 September 1994 215.14 - ------------------------------------------------------------------------------------- June 1989 135.87 March 1992 153.48 December 1994 212.40 - ------------------------------------------------------------------------------------- September 1989 144.01 June 1992 157.65
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 48 FIDELITY GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1987 $1,200.00 $ 20.00 $ 1,060.37 $ 53.02 $ 1,007.35 - ------------------------------------------------------------------------ December 1988 2,400.00 40.00 2,435.72 121.79 2,313.93 - ------------------------------------------------------------------------ December 1989 3,600.00 60.00 4,488.71 224.44 4,264.27 - ------------------------------------------------------------------------ December 1990 4,800.00 80.00 5,022.28 251.11 4,771.17 - ------------------------------------------------------------------------ December 1991 6,000.00 100.00 8,645.08 345.80 8,299.28 - ------------------------------------------------------------------------ December 1992 7,200.00 120.00 10,621.44 424.86 10,196.58 - ------------------------------------------------------------------------ December 1993 8,400.00 140.00 13,805.85 414.18 13,391.67 - ------------------------------------------------------------------------ December 1994 9,600.00 160.00 14,835.69 445.07 14,390.62
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1986 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1987 $117.68 December 1989 $151.80 September 1992 $180.29 - ------------------------------------------------------------------------------------- June 1987 121.59 March 1990 145.68 December 1992 205.27 - ------------------------------------------------------------------------------------- September 1987 128.33 June 1990 156.68 March 1993 212.52 - ------------------------------------------------------------------------------------- December 1987 102.38 September 1990 123.70 June 1993 227.57 - ------------------------------------------------------------------------------------- March 1988 111.73 December 1990 132.33 September 1993 242.00 - ------------------------------------------------------------------------------------- June 1988 117.41 March 1991 155.77 December 1993 241.96 - ------------------------------------------------------------------------------------- September 1988 116.84 June 1991 150.85 March 1994 233.61 - ------------------------------------------------------------------------------------- December 1988 116.87 September 1991 173.36 June 1994 217.27 - ------------------------------------------------------------------------------------- March 1989 125.98 December 1991 190.18 September 1994 233.94 - ------------------------------------------------------------------------------------- June 1989 135.15 March 1992 192.77 December 1994 238.96 - ------------------------------------------------------------------------------------- September 1989 150.59 June 1992 175.96
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 49 FIDELITY OVERSEAS PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1988 $1,200.00 $ 20.00 $ 1,245.57 $ 62.28 $ 1,183.29 - ------------------------------------------------------------------------ December 1989 2,400.00 40.00 2,923.51 146.18 2,777.33 - ------------------------------------------------------------------------ December 1990 3,600.00 60.00 3,970.38 198.52 3,771.86 - ------------------------------------------------------------------------ December 1991 4,800.00 80.00 5,463.60 273.18 5,190.42 - ------------------------------------------------------------------------ December 1992 6,000.00 100.00 5,884.11 235.36 5,648.75 - ------------------------------------------------------------------------ December 1993 7,200.00 120.00 9,349.71 373.99 8,975.72 - ------------------------------------------------------------------------ December 1994 8,400.00 140.00 10,536.93 316.11 10,220.82
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1988 $103.32 September 1990 $123.39 March 1993 $136.03 - ------------------------------------------------------------------------------------- June 1988 100.97 December 1990 129.35 June 1993 144.09 - ------------------------------------------------------------------------------------- September 1988 100.55 March 1991 130.66 September 1993 156.48 - ------------------------------------------------------------------------------------- December 1988 106.79 June 1991 126.13 December 1993 165.04 - ------------------------------------------------------------------------------------- March 1989 111.42 September 1991 137.78 March 1994 167.91 - ------------------------------------------------------------------------------------- June 1989 109.71 December 1991 137.99 June 1994 168.99 - ------------------------------------------------------------------------------------- September 1989 126.12 March 1992 133.57 September 1994 170.38 - ------------------------------------------------------------------------------------- December 1989 133.19 June 1992 144.83 December 1994 165.82 - ------------------------------------------------------------------------------------- March 1990 132.79 September 1992 128.61 - ------------------------------------------------------------------------------------- June 1990 144.96 December 1992 121.66
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 50 FRANKLIN GOVERNMENT SECURITIES TRUST HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1990 $1,200.00 $ 20.00 $1,259.04 $ 62.95 $1,196.09 - ------------------------------------------------------------------------ December 1991 2,400.00 40.00 2,728.65 136.43 2,592.22 - ------------------------------------------------------------------------ December 1992 3,600.00 60.00 4,122.37 206.12 3,916.25 - ------------------------------------------------------------------------ December 1993 4,800.00 80.00 5,588.18 279.41 5,308.77 - ------------------------------------------------------------------------ December 1994 6,000.00 100.00 6,477.09 259.08 6,218.01
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1990 $ 99.93 December 1991 $124.93 September 1993 $140.60 - ------------------------------------------------------------------------------------- June 1990 103.18 March 1992 123.11 December 1993 140.85 - ------------------------------------------------------------------------------------- September 1990 104.50 June 1992 128.13 March 1994 135.19 - ------------------------------------------------------------------------------------- December 1990 109.10 September 1992 132.33 June 1994 133.20 - ------------------------------------------------------------------------------------- March 1991 111.86 December 1992 132.46 September 1994 133.45 - ------------------------------------------------------------------------------------- June 1991 113.83 March 1993 136.50 December 1994 133.92 - ------------------------------------------------------------------------------------- September 1991 119.43 June 1993 139.47
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 51 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,346.33 $67.32 $1,279.01 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $95.38 September 1994 $109.21 - --------------------------------------------------------------------------------------- June 1994 93.78 December 1994 114.91 - ---------------------------------------------------------------------------------------
JANUS ASPEN BALANCED PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,155.86 $57.79 $1,098.07 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $101.75 September 1994 $100.92 - --------------------------------------------------------------------------------------- June 1994 100.50 December 1994 99.58 - ---------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 52 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,161.25 $58.06 $1,103.19 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $99.40 September 1994 $98.99 - --------------------------------------------------------------------------------------- June 1994 98.60 December 1994 97.88 - ---------------------------------------------------------------------------------------
JANUS ASPEN GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,176.15 $58.81 $1,117.34 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $100.85 September 1994 $101.74 - --------------------------------------------------------------------------------------- June 1994 99.05 December 1994 101.62 - ---------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 53 JANUS ASPEN SHORT-TERM BOND PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,183.58 $59.18 $1,124.40 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $99.19 September 1994 $99.39 - --------------------------------------------------------------------------------------- June 1994 98.49 December 1994 99.67 - ---------------------------------------------------------------------------------------
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1994 $1,200.00 $20.00 $1,166.66 $58.33 $1,108.33 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1993 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- --------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - --------------------------------------------------------------------------------------- March 1994 $99.69 September 1994 $101.58 - --------------------------------------------------------------------------------------- June 1994 97.48 December 1994 100.26 - ---------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 54 LEXINGTON NATURAL RESOURCES TRUST HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1990 $1,200.00 $ 20.00 $1,079.80 $ 53.99 $1,025.81 - ------------------------------------------------------------------------ December 1991 2,400.00 40.00 2,202.09 110.10 2,091.99 - ------------------------------------------------------------------------ December 1992 3,600.00 60.00 5,408.91 270.45 5,138.46 - ------------------------------------------------------------------------ December 1993 4,800.00 80.00 7,166.49 358.32 6,808.17 - ------------------------------------------------------------------------ December 1994 6,000.00 100.00 7,806.83 312.27 7,494.56 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1989 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- ------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1990 $94.55 December 1991 $ 78.82 September 1993 $150.57 - ------------------------------------------------------------------------------------- June 1990 85.87 March 1992 78.05 December 1993 144.38 - ------------------------------------------------------------------------------------- September 1990 94.91 June 1992 77.73 March 1994 140.65 - ------------------------------------------------------------------------------------- December 1990 83.98 September 1992 129.97 June 1994 137.08 - ------------------------------------------------------------------------------------- March 1991 77.84 December 1992 130.51 September 1994 145.53 - ------------------------------------------------------------------------------------- June 1991 81.45 March 1993 144.40 December 1994 134.79 - ------------------------------------------------------------------------------------- September 1991 76.72 June 1993 148.57 - -------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 55 NEUBERGER & BERMAN GROWTH PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1986 $ 1,200.00 $ 20.00 $ 1,182.44 $ 59.12 $ 1,123.32 - ------------------------------------------------------------------------ December 1987 2,400.00 40.00 2,089.17 104.46 1,984.71 - ------------------------------------------------------------------------ December 1988 3,600.00 60.00 3,887.42 194.37 3,693.05 - ------------------------------------------------------------------------ December 1989 4,800.00 80.00 6,333.08 316.65 6,016.43 - ------------------------------------------------------------------------ December 1990 6,000.00 100.00 6,895.07 275.80 6,619.27 - ------------------------------------------------------------------------ December 1991 7,200.00 120.00 10,155.85 406.23 9,749.62 - ------------------------------------------------------------------------ December 1992 8,400.00 140.00 12,260.19 367.81 11,892.38 - ------------------------------------------------------------------------ December 1993 9,600.00 160.00 14,501.96 435.06 14,066.90 - ------------------------------------------------------------------------ December 1994 10,800.00 180.00 14,760.91 295.22 14,465.69 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1985 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- ------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1986 $117.52 March 1989 $144.66 March 1992 $196.43 - ------------------------------------------------------------------------------------- June 1986 120.84 June 1989 159.49 June 1992 192.09 - ------------------------------------------------------------------------------------- September 1986 109.37 September 1989 178.13 September 1992 198.75 - ------------------------------------------------------------------------------------- December 1986 113.51 December 1989 171.94 December 1992 215.87 - ------------------------------------------------------------------------------------- March 1987 135.03 March 1990 163.27 March 1993 216.00 - ------------------------------------------------------------------------------------- June 1987 138.75 June 1990 173.51 June 1993 221.41 - ------------------------------------------------------------------------------------- September 1987 143.88 September 1990 145.25 September 1993 236.27 - ------------------------------------------------------------------------------------- December 1987 106.60 December 1990 155.92 December 1993 233.43 - ------------------------------------------------------------------------------------- March 1988 120.81 March 1991 178.87 March 1994 223.60 - ------------------------------------------------------------------------------------- June 1988 126.61 June 1991 176.05 June 1994 208.97 - ------------------------------------------------------------------------------------- September 1988 127.35 September 1991 185.94 September 1994 223.14 - ------------------------------------------------------------------------------------- December 1988 132.61 December 1991 199.68 December 1994 219.10 - -------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 56 SCUDDER INTERNATIONAL PORTFOLIO HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1988 $1,200.00 $ 20.00 $ 1,272.70 $ 63.64 $ 1,209.06 - ------------------------------------------------------------------------ December 1989 2,400.00 40.00 3,132.67 156.63 2,976.04 - ------------------------------------------------------------------------ December 1990 3,600.00 60.00 3,942.42 197.12 3,745.30 - ------------------------------------------------------------------------ December 1991 4,800.00 80.00 5,559.92 278.00 5,281.92 - ------------------------------------------------------------------------ December 1992 6,000.00 100.00 6,475.22 259.01 6,216.21 - ------------------------------------------------------------------------ December 1993 7,200.00 120.00 10,167.85 406.71 9,761.14 - ------------------------------------------------------------------------ December 1994 8,400.00 140.00 11,092.72 332.78 10,759.94 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- ------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1988 $108.22 September 1990 $137.61 March 1993 $164.56 - ------------------------------------------------------------------------------------- June 1988 110.15 December 1990 143.07 June 1993 171.18 - ------------------------------------------------------------------------------------- September 1988 104.91 March 1991 154.45 September 1993 189.68 - ------------------------------------------------------------------------------------- December 1988 115.28 June 1991 148.17 December 1993 204.23 - ------------------------------------------------------------------------------------- March 1989 125.78 September 1991 156.84 March 1994 202.46 - ------------------------------------------------------------------------------------- June 1989 130.06 December 1991 157.46 June 1994 204.44 - ------------------------------------------------------------------------------------- September 1989 147.69 March 1992 150.63 September 1994 208.68 - ------------------------------------------------------------------------------------- December 1989 156.87 June 1992 159.33 December 1994 199.98 - ------------------------------------------------------------------------------------- March 1990 158.34 September 1992 156.39 - ------------------------------------------------------------------------------------- June 1990 166.92 December 1992 150.97 - -------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 57 TCI GROWTH HYPOTHETICAL PERIODIC ACCUMULATION VALUES TABLE 1 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT ANNUAL INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assuming $100 Monthly Purchase Payments made during each Contract Year)
- ------------------------------------------------------------------------ CUMULATIVE CUMULATIVE DEFERRED VALUE AT END PURCHASE MAINTENANCE ACCUMULATION SALES WITHDRAWAL OF MONTH PAYMENTS FEES VALUE/(1)/ CHARGE VALUE/(2)/ - ------------------------------------------------------------------------ December 1988 $1,200.00 $ 20.00 $ 1,201.10 $ 60.06 $ 1,141.04 - ------------------------------------------------------------------------ December 1989 2,400.00 40.00 2,814.55 140.73 2,673.82 - ------------------------------------------------------------------------ December 1990 3,600.00 60.00 3,913.50 195.68 3,717.82 - ------------------------------------------------------------------------ December 1991 4,800.00 80.00 6,876.43 343.82 6,532.61 - ------------------------------------------------------------------------ December 1992 6,000.00 100.00 7,942.07 317.68 7,624.39 - ------------------------------------------------------------------------ December 1993 7,200.00 120.00 10,226.22 409.05 9,817.17 - ------------------------------------------------------------------------ December 1994 8,400.00 140.00 11,154.78 334.64 10,820.14 - ------------------------------------------------------------------------
TABLE 2 - ACCUMULATION PERIOD HYPOTHETICAL ACCUMULATION VALUES AT QUARTERLY INTERVALS FOLLOWING CONTRACT ISSUANCE ON DECEMBER 31, 1987 (Assumes Single $100 Net Purchase Payment made at Contract Issuance)
- ------------------------------------------------------------------------------------- VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION VALUE AT END ACCUMULATION OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ OF MONTH VALUE/(1)/ - ------------------------------------------------------------------------------------- March 1988 $ 91.40 September 1990 $113.00 March 1993 $166.85 - ------------------------------------------------------------------------------------- June 1988 100.13 December 1990 119.63 June 1993 175.10 - ------------------------------------------------------------------------------------- September 1988 94.39 March 1991 145.88 September 1993 184.11 - ------------------------------------------------------------------------------------- December 1988 96.51 June 1991 136.27 December 1993 184.72 - ------------------------------------------------------------------------------------- March 1989 104.63 September 1991 151.98 March 1994 180.04 - ------------------------------------------------------------------------------------- June 1989 110.48 December 1991 167.60 June 1994 170.61 - ------------------------------------------------------------------------------------- September 1989 124.71 March 1992 159.19 September 1994 178.52 - ------------------------------------------------------------------------------------- December 1989 122.65 June 1992 148.65 December 1994 180.31 - ------------------------------------------------------------------------------------- March 1990 123.51 September 1992 152.80 - ------------------------------------------------------------------------------------- June 1990 134.26 December 1992 163.65 - -------------------------------------------------------------------------------------
/(1)/The Accumulation Value is net of all applicable fees and expenses of the Fund and under the Contract, except the deferred sales charges. See the narrative preceding these Tables. /(2)/The Withdrawal Value is net of all applicable fees and expenses of the Fund and under the Contract, including deferred sales charges. See the narrative preceding these Tables. 58 For Master Applications Only I hereby acknowledge receipt of: (1) an Account C 457 Public Employer group prospectus dated May 1, 1995 for deferred compensation contracts issued by Aetna Life Insurance and Annuity Company and (2) all current prospectuses pertaining to all of the investment options under the contracts. [_] Please send an Account C Statement of Additional Information. ---------------------------------- SIGNATURE ---------------------------------- DATE 75982SP-1 (5/95) Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, Connecticut 06156 Telephone: 1-800-525-4225 [LOGO OF AETNA APPEARS HERE] [LOGO OF RECYCLED PAPER APPEARS] printed on recycled paper -----END PRIVACY-ENHANCED MESSAGE-----