-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LMOjpmt+xDf9HKbOT0X0reOL0ZRwY7Q/yTe+sr7ChYAPsVZEhVbvm7LMPpi/f8+L adxUFE1+LsI+vT39a3UOUg== 0000950146-99-000124.txt : 19990205 0000950146-99-000124.hdr.sgml : 19990205 ACCESSION NUMBER: 0000950146-99-000124 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 20 FILED AS OF DATE: 19990204 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: 485APOS SEC ACT: SEC FILE NUMBER: 333-01107 FILM NUMBER: 99520523 FILING VALUES: FORM TYPE: 485APOS SEC ACT: SEC FILE NUMBER: 811-02513 FILM NUMBER: 99520524 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 485APOS 1 AETNA RETIREMENT PLUS As filed with the Securities and Exchange Registration No. 333-01107* Commission on February 4, 1999 Registration No. 811-2513 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-4 - -------------------------------------------------------------------------------- Post-Effective Amendment No. 12 To REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 and Amendment to REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 - -------------------------------------------------------------------------------- Variable Annuity Account C of Aetna Life Insurance and Annuity Company Aetna Life Insurance and Annuity Company 151 Farmington Avenue, RE4A, Hartford, Connecticut 06156 Depositor's Telephone Number, including Area Code: (860) 273-4686 Julie E. Rockmore, Counsel Aetna Life Insurance and Annuity Company 151 Farmington Avenue, RE4A, Hartford, Connecticut 06156 (Name and Address of Agent for Service) - -------------------------------------------------------------------------------- It is proposed that this filing will become effective: [X] 80 days after filing pursuant to paragraph (a)(1) of Rule 485 [ ] on ___________ pursuant to paragraph (a)(1) of Rule 485 *Pursuant to Rule 429(a) under the Securities Act of 1933, Registrant has included a combined prospectus under this Registration Statement which includes all the information which would currently be required in a prospectus relating to the securities covered by the following earlier Registration Statements: 33-88720; 33-75964 (which had included a combined prospectus for earlier Registration Statements: 33-75958, 33-75960, and 33-75994); 33-75986 (which had included a combined prospectus for earlier Registration Statements: 33-75970, 33-75954, and 33-75956); 33-75982 (which had included a combined prospectus for earlier Registration Statements: 33-75968, 33-75966, 33-75990, and the individual deferred compensation contracts covered by Registration Statement No. 33-75992); and 33-91846 (which had included a combined prospectus for earlier Registration Statement: 33-75976). VARIABLE ANNUITY ACCOUNT C CROSS REFERENCE SHEET
FORM N-4 ITEM NO. PART A (PROSPECTUS) LOCATION - PROSPECTUS 1 Cover Page.......................... Cover Page 2 Definitions......................... Not applicable 3 Synopsis............................ Contract Overview; Fee Table 4 Condensed Financial Information..... Condensed Financial Information; Appendix VI - Condensed Financial Information 5 General Description of Registrant, Depositor, and Portfolio Companies.. Other Topics - The Company, Variable Annuity Account C; Appendix V - Fund Descriptions 6 Deductions and Expenses............. Fees 7 General Description of Variable Annuity Contracts................... Contract Overview; Other Topics 8 Annuity Period...................... The Income Phase 9 Death Benefit....................... Death Benefit 10 Purchases and Contract Value........ Purchase and Participation; Your Account Value 11 Redemptions......................... Right to Cancel; Systematic Distribution Options 12 Taxes............................... Taxation 13 Legal Proceedings................... Other Topics - Legal Matters and Proceedings 14 Table of Contents of the Statement of Additional Information.............. Contents of the Statement of Additional Information FORM N-4 PART B (STATEMENT OF LOCATION - STATEMENT OF ITEM NO. ADDITIONAL INFORMATION) ADDITIONAL INFORMATION 15 Cover Page.......................... Cover page 16 Table of Contents................... Table of Contents 17 General Information and History..... General Information and History 18 Services............................ General Information and History; Independent Auditors 19 Purchase of Securities Being Offered Offering and Purchase of Contracts 20 Underwriters........................ Offering and Purchase of Contracts 21 Calculation of Performance Data..... Performance Data; Average Annual Total Return Quotations 22 Annuity Payments.................... Income Phase Payments 23 Financial Statements................ Financial Statements
Part C (Other Information) Information required to be included in Part C is set forth under the appropriate item, so numbered, in Part C to this Registration Statement. VARIABLE ANNUITY ACCOUNT C May 3, 1999 Supplement to May 3, 1999 Prospectus or Contract Prospectus Summary Minnesota State Colleges and Universities Voluntary 403(b) Tax-Deferred Annuity Your plan is administered in part by a third party. Such arrangements are mentioned under the heading "Third Party Compensation Arrangements" in the "Other Topics" section in the prospectus and the Contract Prospectus Summary. In your case, Norwest Bank Minnesota is responsible for handling a portion of administration and service for the contract in which you participate. In exchange for the services provided, we compensate Norwest Bank Minnesota an amount equal to 0.25% of the assets related to the plan on an annual basis (0.0625% is paid quarterly). This is not an additional charge to you, but is part of the charges for the contract. Form No. XCS.01107-99MN May 1999 VARIABLE ANNUITY ACCOUNT C May 3, 1999 Supplement to May 3, 1999 Prospectus or Contract Prospectus Summary Pennsylvania State Association of Boroughs (the "Association") Under a signed agreement, the Association endorses our variable annuity for sale to its employees under the group's Deferred Compensation Plan. We have agreed to compensate the Association $3.50 per year for each participant for which contributions are made under the contract (See "Other Topics--Distribution of the Contracts" in the prospectus or the Contract Prospectus Summary). Form No. XCS.01107-99PA May 1999 VARIABLE ANNUITY ACCOUNT C May 3, 1999 Supplement to May 3, 1999 Prospectus or Contract Prospectus Summary St. John's Regional Health Center The following is a negotiated provision concerning the early withdrawal charge applicable to the Suburban Hospital tax-deferred annuity plan. (See "Fees--Early Withdrawal Charge" in the prospectus or the Contract Prospectus Summary): You may withdraw up to 10% of your current account each year without incurring an early withdrawal charge. This applies only to the first partial withdrawal in each calendar year. The amount eligible will be determined using the account value on the date we receive the withdrawal request. This provision is available to anyone up to age 70-1/2 (instead of between the ages of 59-1/2 and 70-1/2). Outstanding loan amounts on 403(b) accounts are not included in the account value for the purpose of calculating the eligible partial withdrawal. This provision does not apply to full withdrawals or to partial withdrawals due to loan defaults. Form No. XCS.01107-99SJ May 1999 VARIABLE ANNUITY ACCOUNT C VARIABLE ANNUITY ACCOUNT B Aetna Life Insurance and Annuity Company Supplement Dated May 3, 1999 to May 3, 1999 Prospectus or Contract Prospectus Summary GENERAL DESCRIPTION OF GET E Series E of the Aetna GET Fund (GET E) is an investment option that may be available during the accumulation phase of the contract. Aetna Life Insurance and Annuity Company (the Company or we) makes a guarantee, as described below, when you direct money into GET E. Aeltus Investment Management, Inc. is the investment adviser to GET E. We will offer GET E shares only during its offering period, which is scheduled to run from June 15, 1999 through the close of business on September 14, 1999. GET E may not be available under your contract, your plan or in your state. Please read the GET E prospectus for a more complete description of GET E, including its charges and expenses. INVESTMENT OBJECTIVE OF GET E GET E seeks to achieve maximum total return, without compromising a targeted minimum rate of return, by participating in favorable equity market performance during its guarantee period. GET E's guarantee period runs from September 15, 1999 through September 14, 2004. THE GET FUND GUARANTEE The guarantee period for GET E will end on September 14, 2004, which is GET E's maturity date. The Company guarantees that the value of an accumulation unit of the GET E subaccount under the contract on the maturity date (as valued after the close of business on September 14, 2004), will not be less than its value as determined after the close of business on the last day of the offering period. If the value on the maturity date is lower than it was on the last day of the offering period, we will transfer funds from our general account to the GET E subaccount to make up the difference. If you withdraw or transfer funds from GET E before the maturity date, we will process the transactions at the actual unit value next determined after we receive your order. The guarantee will not apply to these amounts or to amounts deducted as a maintenance fee, if applicable. MATURITY DATE Before the maturity date, we will send a notice to each contract holder or participant who has amounts in GET E. This notice will remind you that the maturity date is approaching and that you must choose other investment options for your GET E amounts. If you do not make a choice, on the maturity date we will transfer your GET E amounts to another available series of the GET Fund that is accepting deposits. If no GET Fund Series is available, we will transfer 50% of your GET E account value to Aetna Growth and Income VP and the remaining 50% to Aetna Bond VP. We will make these transfers as of the unit value next determined after the transfer. INCOME PHASE GET E is not available during the Income Phase. You should not select this option if you wish to begin income payments or to make other withdrawals or transfers before the maturity date. You must transfer your GET E account value to another available investment option before you may elect an annuity option. REINVESTMENT Some contracts allow you to reinvest all or a portion of the proceeds after a full withdrawal. If you withdraw amounts from GET E and then elect to reinvest them, we will reinvest them in a GET Fund series that is then accepting deposits, if one is available. If one is not available, we will reallocate your GET E amounts among the other investment options in which you were invested, on a pro rata basis. The following information supplements the fee table contained in the prospectus or contract prospectus summary: FEES DEDUCTED FROM YOUR INVESTMENTS IN THE SEPARATE ACCOUNT In addition to the amounts currently listed under the heading "Fee Table" in the prospectus or contract prospectus summary, we will make a daily deduction of a GET Guarantee Charge, equal on an annual basis to the percentage shown below, from the amounts allocated to the GET E investment option: GET E Guarantee Charge (deducted daily during the Guarantee Period) .... 0.50% Maximum Total Separate Account Expenses .................................. 2.00%(1)
(1) The Total Separate Account Expenses that apply to your contract may be lower. Please refer to the "Fee Table" section of your prospectus or contract prospectus summary. Aetna GET Fund Series E Annual Expenses (As a percentage of the average net assets)
Investment Total Fund Annual Expenses Advisory Fees(2) Other Expenses(3) (after expense reimbursement)(4) ---------------- ----------------- -------------------------------- Aetna GET Fund Series E 0.60% 0.15% 0.75%
For more information regarding expenses paid out of assets of the fund, see the GET E prospectus. Hypothetical Examples of Account Fees (EXAMPLE)--Aetna GET Fund Series E 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. The following Examples illustrate the expenses that would have been paid assuming a $1,000 investment in the GET E investment option under the contract (until GET E's maturity date) and a 5% return on assets.(5) Example A If you withdraw your entire account value at the end of the periods shown, you would pay the following expenses, including any applicable Early Withdrawal Charge assessed:
1 Year 3 Years 5 Years ------ ------- ------- $ $ $
Example B If you leave your entire account value invested or if you select an Income Phase option at the end of the periods shown, you would pay the following expenses (no Early Withdrawal Charge is assessed):
1 Year 3 Years 5 Years ------ ------- ------- $ $ $
- ----------------------- (2) The Investment Advisory Fee will be 0.25% during the Offering Period. An annual management fee of 0.60% will apply during the Guarantee Period. (3) "Other Expenses" include an annual fund administrative fee of 0.075% of the average daily net assets of GET E and any additional direct fund expenses. (4) The Adviser is contractually obligated through December 31, 2000 to waive all or a portion of its investment advisory fee and/or its administrative fee and/or to reimburse a portion of the Fund's other expenses in order to ensure that the Fund's Total Fund Annual Expenses do not exceed 0.75% of the Fund's average daily net assets. (5) The examples shown above reflect an annual mortality and expense risk charge of 1.25%, an annual contract administrative expense charge of 0.25%, an annual GET E guarantee charge of 0.50%, a $20 annual maintenance fee that has been converted to a percentage of assets equal to .xxx%, and all charges and expenses of the GET E Fund. Example A reflects an early withdrawal charge of 5% of the account value at the end of years 1, 3 and 5. (The expenses that you would pay under your contract may be lower. Please refer to the "Fee Table" section of your prospectus or contract prospectus summary.) X.GETESPON-99 June 1999 Prospectus - May 3, 1999 - -------------------------------------------------------------------------------- The Contracts. The contracts described in this prospectus are group or individual deferred variable annuity contracts issued by Aetna Life Insurance and Annuity Company (the Company). They are intended to be used as funding vehicles for certain types of retirement plans and to qualify for beneficial tax treatment and/or to provide current income reduction under certain sections of the Internal Revenue Code of 1986, as amended (Tax Code). - -------------------------------------------------------------------------------- Why reading this Prospectus is Important. Before you participate in the contract through your retirement plan, you should read this prospectus. It provides facts about the contract and its investment options. Plan sponsors (generally your employer or a trust) should read this prospectus to help determine if the contract is appropriate for their plan. Keep this document for future reference. Table of Contents . . . page 3 - -------------------------------------------------------------------------------- Contract Design. The contracts are designed to: o Help you save for retirement while receiving beneficial tax treatment o Offer a variety of investment options to help meet long-term financial goals o Provide a benefit to a beneficiary in the event of death o Provide future income payments over a lifetime or for a specified period Investment Options. The contracts offer variable investment options and fixed interest options. When we establish your account(s), the contract holder, or you if permitted by the plan, instructs us to direct account dollars to any of the available options. Some investment options may be unavailable through certain contracts and plans, or in some states. Variable Investment Options. These options are called subaccounts. The subaccounts are within Variable Annuity Account C (the separate account), a separate account of the Company. Each subaccount invests in one of the mutual funds (funds) listed on this page. Earnings on amounts invested in a subaccount will vary depending on the performance and fees of its underlying fund. You do not invest directly in or hold shares of the funds. The funds in which the subaccounts invest have various risks. For information about risks of investing in the funds see "Investment Options" in this prospectus and each fund prospectus. Retain the fund prospectuses for future reference. Fixed Interest Options. o Guaranteed Accumulation Account o Fixed Plus Account o Fixed Account Except as specifically mentioned, this prospectus describes only the variable investment options. However, we describe the fixed interest options in the appendices to this prospectus. There is also a separate prospectus for the Guaranteed Accumulation Account. - ------------------------- * Transfers or deposits are not allowed into the subaccount investing in this fund, except from accounts established under the contract before May 1, 1998. As soon as all those who have current allocations to the subaccount under the contract have redirected their allocations to other investment options, we will close the subaccount to all investments (except loan repayments that we automatically deposit into the subaccount according to our loan repayment procedures). The Funds Aetna Ascent VP Aetna Balanced VP, Inc. Aetna Income Shares d/b/a Aetna Bond VP Aetna Crossroads VP Aetna Growth VP Aetna Variable Fund d/b/a Aetna Growth and Income VP Aetna High Yield VP Aetna Index Plus Large Cap VP Aetna Index Plus Mid Cap VP Aetna Index Plus Small Cap VP Aetna International VP Aetna Legacy VP Aetna Variable Encore Fund d/b/a Aetna Money Market VP Aetna Real Estate Securities VP Aetna Small Company VP Aetna Value Opportunity VP AIM V. I. Capital Appreciation Fund AIM V. I. Growth Fund AIM V. I. Growth and Income Fund AIM V. I. Value Fund Calvert Social Balanced Portfolio Fidelity VIP Equity-Income Portfolio Fidelity VIP Growth Portfolio Fidelity VIP Overseas Portfolio Fidelity VIP II Contrafund Portfolio Janus Aspen Aggressive Growth Portfolio Janus Aspen Balanced Portfolio Janus Aspen Flexible Income Portfolio Janus Aspen Growth Portfolio Janus Aspen Worldwide Growth Portfolio Lexington Natural Resources Trust* Oppenheimer Global Securities Fund Oppenheimer Strategic Bond Fund Portfolio Partners MFS Emerging Equities Portfolio Portfolio Partners MFS Research Growth Portfolio Portfolio Partners MFS Value Equity Portfolio Portfolio Partners Scudder International Growth Portfolio Portfolio Partners T. Rowe Price Growth Equity Portfolio Prospectus - May 3, 1999 (continued) - -------------------------------------------------------------------------------- Getting Additional Information. You may obtain the May 3, 1999, Statement of Additional Information (SAI) by indicating your request on your enrollment materials or calling the Company at 1-800-525-4225. You may also obtain an SAI for any of the funds by calling that number. This prospectus, the SAI and other information about the separate account are posted on the Securities Exchange Commission (SEC) web site, http://www.sec.gov. The SAI table of contents is listed on page 46 of this prospectus. The SAI is incorporated into this prospectus by reference. Additional Disclosure Information. Neither the SEC, nor any state securities commission, has approved or disapproved the securities offered through this prospectus or passed on the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus is valid only when accompanied by current prospectuses of the funds and the Guaranteed Accumulation Account. We do not intend for this prospectus to be an offer to sell or a solicitation of an offer to buy these securities in any state that does not permit their sale. TABLE OF CONTENTS - ---------------------------------------------------------------- Contract Overview ............................................ 4 Who's Who The Contract and Your Retirement Plan Contract Rights Contract Facts Contract Phases: Accumulation Phase, Income Phase Questions: Contacting the Company Sending Requests in Good Order - ---------------------------------------------------------------- Fee Table ................................................... 6 Condensed Financial Information ............................. 10 Investment Options .......................................... 10 Purchase and Participation .................................. 13 Contract Ownership and Rights ............................... 14 Right to Cancel ............................................. 15 Fees ........................................................ 16 Your Account Value .......................................... 22 Withdrawals ................................................. 24 Loans ....................................................... 26 Systematic Distribution Options ............................. 26 Death Benefit ............................................... 27 The Income Phase ............................................ 29 Taxation .................................................... 33 Other Topics ................................................ 40 The Company - Variable Annuity Account C - Performance Reporting - Voting Rights - Contract Distribution - Contract Modification - Legal Matters and Proceedings - Payment Delay or Suspension - Transfer of Ownership; Assignment - Account Termination - - Year 2000 Readiness Contents of the Statement of Additional Information ......... 46 Appendix I - The Guaranteed Accumulation Account ............ 47 Appendix II - The Fixed Account ............................. 49 Appendix III - The Fixed Plus Account ....................... 51 Appendix IV - Appointment of Employer ....................... 55 Appendix V - The Funds ...................................... 56 Appendix VI - Condensed Financial Information Table of Contents....................................... 59
3 [begin sidebar text] The Contract and Your Retirement Plan Retirement Plan (plan): A plan sponsor has established a retirement plan for you. This contract is offered as a funding option for that plan. We are not a party to the plan. Plan Type: We refer to the retirement plan by the Tax Code section under which it qualifies. For example: a "457 plan" is a plan that qualifies for tax treatment under code section 457. To learn which code section applies to your plan, contact your plan sponsor, your Aetna representative or the Company. Contract Rights: Rights under the contract and who may exercise those rights, may vary by plan type. Also, while the contract may reserve certain rights for the contract holder, the contract holder may permit you to exercise those rights through the plan. [end sidebar text] Contract Overview - -------------------------------------------------------------------------------- The following is a summary. Please read each section of this prospectus for additional information. Who's Who You (the participant)*: The individual who participates in the contract through a retirement plan. Plan Sponsor: The sponsor of your retirement plan. Generally, your employer or a trust. Contract Holder*: The person to whom we issue the contract. Generally, the plan sponsor. We (the Company): Aetna Life Insurance and Annuity Company. We issue the contract. For greater detail please review "Contract Rights and Ownership" and "Purchase." - ------------------------- * Certain contracts are purchased by and issued directly to persons participating in certain plans. The words "you" and "participant" apply to these individuals, except that these individuals have all rights under the contract. The word "contract holder" also applies to these individuals, except that these individuals have no responsibilities to other participants or beneficiaries. Contract Facts Free look/Right to Cancel: Contract holders may cancel the contract no later than 10 days after they receive the contract. Participants in 403(b) plans or in some plans under 401(a)/401(k) may cancel their participation in the contract no later than 10 days after they receive evidence of participation in the contract. See "Right to Cancel." Death Benefit: A beneficiary may receive a benefit in the event of your death prior to the income phase. Death benefits during the income phase depend on the payment option selected. See "Death Benefit" and "Income Phase." Withdrawals: During the accumulation phase, you may, under some plans, withdraw all or part of your account value. Amounts withdrawn may be subject to an early withdrawal charge, other deductions, tax withholding and taxation. See "Withdrawals" and "Taxation." Systematic Distribution Options: These allow you to receive regular payments from your account, while retaining the account in the accumulation phase. See "Systematic Distribution Options." Fees: Certain fees are deducted from your account value. See "Fee Table" and "Fees." Taxation: The Tax Code has certain rules that apply to amounts accumulated and distributed under the contract. Tax penalties may apply if rules are not followed. See "Taxation." 4 Contract Phases I. The Accumulation Phase (accumulating retirement benefits) STEP 1: You or the contract holder provide Aetna Life Insurance and Annuity Company with your completed enrollment materials. According to the plan, we set up one or more accounts for you. We may set up account(s) for employer contributions and/or for contributions from your salary. STEP 2: The contract holder, or you if permitted by your plan, direct us to invest your account dollars in any of the: (a) Fixed Interest Options (b) Variable Investment Options. (The variable investment options are the subaccounts of Variable Annuity Account C. Each one invests in a specific mutual fund.) STEP 2(b), continued:. The subaccount(s) selected purchases shares of its corresponding fund. II. The Income Phase The contract offers several payment options (see "Income Phase"). In general, you may: o Receive payments over a lifetime or a specified period o Receive payments monthly, quarterly, semi-annually or annually o Select an option that provides a death benefit to beneficiaries o Select fixed payments or payments that vary based on the performance of the variable investment options you select. ------------- Payments to Your Account ------------- Step 1 --------------------------------------------- Aetna Life Insurance and Annuity Company --------------------------------------------- a. Step 2 b. ----------- ---------------------------------------------- Fixed Variable Annuity Interest Account C Options Variable Investment Options The Subaccounts ----------- ---------------------------------------------- A B Etc. ---------------------------------------------- Step 2(b) ---------------------------------------------- Mutual Mutual Etc. Fund A Fund B ---------------------------------------------- [begin sidebar text] Questions? Contact your local representative or write or call the Home Office: Aetna Retirement Services Annuity Services 151 Farmington Avenue Hartford, CT 06156-1277 1-800-525-5225 Sending forms and written requests in good order If you are writing to change your beneficiary, request a withdrawal, or for any other purpose, contact your local representative or the Company to learn what information is required in order for the request to be in "good order." We can only act upon written requests that are received in good order. [end sidebar text] 5 [begin sidebar text] In This Section: o Maximum Transaction Fees o Maximum Fees deducted from investments in the Subaccounts o Fund Fees o Examples of Fee Deductions See "Fees" for: o Early Withdrawal Charge Schedules o How, When and Why Fees are Deducted o Reduction, Waiver and/or Elimination of Certain Fees o Premium and Other Taxes See "Income Phase" for: o Fees during the income phase [end sidebar text] Fee Table - -------------------------------------------------------------------------------- The tables and examples in this section show the fees your account may incur while accumulating dollars under the contract (the Accumulation Phase). See "Income Phase" for fees that may apply after you begin receiving payments under the contract. The fees shown below do not include premium taxes that may be applicable Transaction Fees Maximum Early Withdrawal Charge*....................... 5% of amount withdrawn This is a deferred sales charge. It is a percentage of the amount withdrawn. The percentage will be determined by the applicable early withdrawal charge schedule in the "Fees" section. In certain cases this charge may not apply to a portion or all of your withdrawal. The early withdrawal charge reduces over time. Maximum Annual Maintenance Fee.......................................... $20.00 Fees Deducted From the Subaccounts Maximum Amounts* (Daily deductions equal to the given percentage on an annual basis) Mortality and Expense Risk Charge.......................................1.25% Administrative Expense Charge...........................................0.25% Total Separate Account Expenses.........................................1.50% - ------------------------- *These fees may be waived, reduced or eliminated in certain circumstances. See "Fees." 6 Fees Deducted by the Funds Using this Information. The following table shows the investment advisory fees and other expenses charged annually by each fund. Fund fees are one factor that impacts the value of a fund share. To learn about additional factors, refer to the fund prospectus. How Fees are Deducted. Fund fees are not deducted from account values. Instead, fees are deducted from the value of the fund shares on a daily basis, which in turn will affect the value of each subaccount on a daily basis. Except as noted below, the following figures are a percentage of the average net assets of each fund, and are based on figures for the year ended December 31, 1998.
Investment Advisory Fees(1) Other Expenses (before expense (before expense Total Fund reimbursement) reimbursement) Annual Expenses ------------------ ----------------- ---------------- Aetna Ascent VP Aetna Balanced VP, Inc. Aetna Bond VP Aetna Crossroads VP Aetna Growth VP Aetna Growth and Income VP Aetna High Yield VP Aetna Index Plus Large Cap VP Aetna Index Plus Mid Cap VP Aetna Index Plus Small Cap VP Aetna International VP Aetna Legacy VP Aetna Money Market VP Aetna Real Estate Securities VP Aetna Small Company VP Aetna Value Opportunity VP AIM V. I. Capital Appreciation Fund AIM V. I. Growth Fund AIM V. I. Growth and Income Fund AIM V. I. Value Fund Calvert Social Balanced Portfolio Fidelity VIP Equity-Income Portfolio Fidelity VIP Growth Portfolio Fidelity VIP Overseas Portfolio Fidelity VIP II Contrafund Portfolio Janus Aspen Aggressive Growth Portfolio Janus Aspen Balanced Portfolio Janus Aspen Flexible Income Portfolio Janus Aspen Growth Portfolio Janus Aspen Worldwide Growth Portfolio Lexington Natural Resources Trust Oppenheimer Global Securities Fund Oppenheimer Strategic Bond Fund Portfolio Partners MFS Emerging Equities Portfolio (2) Portfolio Partners MFS Research Growth Portfolio (2) Portfolio Partners MFS Value Equity Portfolio Portfolio Partners Scudder International Growth Portfolio Portfolio Partners T. Rowe Price Growth Equity Portfolio
7 Footnotes to the "Fees Deducted by the Funds" table (1) Certain of the fund advisers reimburse the Company for administrative costs in connection with administering the funds as variable investment options under the contracts. These reimbursements are paid out of the investment advisory fees and are not charged to investors. (2) The advisory fee is 0.70% of the first $500 million of average daily net assets and 0.65% of assets over $500 million. 8 Hypothetical Examples Account Fees Incurred Over Time. The following hypothetical examples show the fees paid over time if $1,000 is invested in a subaccount, assuming a 5% annual return on the investment. For the purpose of these examples, we deducted the maximum allowed under the contract for the following fees: mortality and expense risk charge of 1.25% on an annual basis, administrative expense charge of 0.25% on an annual basis, and a maintenance fee of $20.00 (converted to a percentage of assets equal to x.xxx%). - ---------------------------------------------------- o These examples are purely hypothetical o They should not be considered a representation of past or future fees or expected returns o Actual fees and/or returns may be more or less than those shown in these examples. - ----------------------------------------------------
EXAMPLE A --------- If you withdraw your entire account value at the end of the periods shown, you would pay the following fees, including any applicable Early Withdrawal Charge assessed:* 1 year 3 years 5 years 10 years -------- --------- --------- ---------- Aetna Ascent VP Aetna Balanced VP, Inc. Aetna Bond VP Aetna Crossroads VP Aetna Growth VP Aetna Growth and Income VP Aetna High Yield VP Aetna Index Plus Large Cap VP Aetna Index Plus Mid Cap VP Aetna Index Plus Small Cap VP Aetna International VP Aetna Legacy VP Aetna Money Market VP Aetna Real Estate Securities VP Aetna Small Company VP Aetna Value Opportunity VP AIM V. I. Capital Appreciation Fund AIM V. I. Growth Fund AIM V. I. Growth and Income Fund AIM V. I. Value Fund Calvert Social Balanced Portfolio Fidelity VIP Equity-Income Portfolio Fidelity VIP Growth Portfolio Fidelity VIP Overseas Portfolio Fidelity VIP II Contrafund Portfolio Janus Aspen Aggressive Growth Portfolio Janus Aspen Balanced Portfolio Janus Aspen Flexible Income Portfolio Janus Aspen Growth Portfolio Janus Aspen Worldwide Growth Portfolio Lexington Natural Resources Trust Oppenheimer Global Securities Fund Oppenheimer Strategic Bond Fund Portfolio Partners MFS Emerging Equities Portfolio Portfolio Partners MFS Research Growth Portfolio Portfolio Partners MFS Value Equity Portfolio Portfolio Partners Scudder International Growth Portfolio Portfolio Partners T. Rowe Price Growth Equity Portfolio EXAMPLE B --------- If you leave your entire account value invested or if you select an income phase payment option at the end of the periods shown, you would pay the following fees (no early withdrawal charge is reflected):** 1 year 3 years 5 years 10 years -------- --------- --------- --------- Aetna Ascent VP Aetna Balanced VP, Inc. Aetna Bond VP Aetna Crossroads VP Aetna Growth VP Aetna Growth and Income VP Aetna High Yield VP Aetna Index Plus Large Cap VP Aetna Index Plus Mid Cap VP Aetna Index Plus Small Cap VP Aetna International VP Aetna Legacy VP Aetna Money Market VP Aetna Real Estate Securities VP Aetna Small Company VP Aetna Value Opportunity VP AIM V. I. Capital Appreciation Fund AIM V. I. Growth Fund AIM V. I. Growth and Income Fund AIM V. I. Value Fund Calvert Social Balanced Portfolio Fidelity VIP Equity-Income Portfolio Fidelity VIP Growth Portfolio Fidelity VIP Overseas Portfolio Fidelity VIP II Contrafund Portfolio Janus Aspen Aggressive Growth Portfolio Janus Aspen Balanced Portfolio Janus Aspen Flexible Income Portfolio Janus Aspen Growth Portfolio Janus Aspen Worldwide Growth Portfolio Lexington Natural Resources Trust Oppenheimer Global Securities Fund Oppenheimer Strategic Bond Fund Portfolio Partners MFS Emerging Equities Portfolio Portfolio Partners MFS Research Growth Portfolio Portfolio Partners MFS Value Equity Portfolio Portfolio Partners Scudder International Growth Portfolio Portfolio Partners T. Rowe Price Growth Equity Portfolio
- ----------------- * This example reflects deduction of an early withdrawal charge calculated using Early Withdrawal Charge Schedule I (based on completed payment periods.) Schedule I is listed in "Fees." ** Example B will not apply if during the income phase a nonlifetime payment option is elected with variable payments and a lump sum payment is requested within a certain number of years as specified in the contract. In that case, the lump sum payment is treated as a withdrawal during the accumulation phase and may be subject to an early withdrawal charge. (Refer to Example A.) 9 Condensed Financial Information - -------------------------------------------------------------------------------- Understanding Condensed Financial Information. In Appendix VI, we provide condensed financial information about the Variable Annuity Account C (the separate account) subaccounts available under the contracts. These tables show the values of the subaccounts over the past 10 years. For subaccounts that were not available 10 years ago, we give a history from the date of first availability. Investment Options - -------------------------------------------------------------------------------- The contract offers variable investment options and fixed interest options. When we establish your account(s), the contract holder, or you if permitted by the plan, instructs us to direct account dollars to any of the available options. Variable Investment Options. These options are called subaccounts. The subaccounts are within Variable Annuity Account C (the separate account), a separate account of the Company. Earnings on amounts invested in a subaccount will vary depending on the performance and fees of its underlying mutual fund. You do not invest directly in or hold shares of the funds. o Fund Descriptions. We provide brief descriptions of the funds in Appendix V. Please refer to the fund prospectuses for additional information. Fixed Interest Options. For descriptions of the fixed interest options, see Appendices I, II and III and the Guaranteed Accumulation Account prospectus. - -------------------------------------------------------------------------------- Selecting Investment Options o Choose options appropriate for you. Your Aetna representative can help you evaluate which subaccounts or fixed interest options may be appropriate for your financial goals. o Understand the risks associated with the options you choose. Some subaccounts invest in funds that are considered riskier than others. Funds with additional risks are expected to have a value that rises and falls more rapidly and to a greater degree than other funds. For example, funds investing in foreign or international securities are subject to additional risks not associated with domestic investments, and their performance may vary accordingly. Also, funds using derivatives in their investment strategy may be subject to additional risks. o Be informed. Read this prospectus, the fund prospectuses, fixed interest option appendices and the Guaranteed Accumulation Account prospectus. - -------------------------------------------------------------------------------- Limits on Option Availability. Some funds and fixed interest options may not be available through certain contracts and plans, or in some states. We may add, withdraw or substitute funds, subject to the conditions in the contract and in compliance with regulatory requirements. 10 Limits on Number of Options Selected. Generally, the contract holder, or you if permitted by the plan, may select no more than 18 investment options at one time during the accumulation phase of your account. If you have an outstanding loan (403(b) and some 401 plans only), you may currently make a total of 18 cumulative selections over the life of the account. Each subaccount, the Fixed Account, Fixed Plus Account, and each classification of the Guaranteed Accumulation Account selected counts toward these limits. If you have a loan on the account, each option counts toward the limit, even after the full value is transferred to other options. Limits Imposed by the Underlying Fund. Orders for the purchase of fund shares may be subject to acceptance by the fund. We reserve the right to reject, without prior notice, any allocation of payments to a subaccount if the subaccount's investment in the corresponding fund is not accepted by the fund for any reason. Additional Risks of Investing in the Funds. (Mixed and Shared Funding) "Shared funding" occurs when shares of a fund, which the subaccounts buy for variable annuity contracts, are also bought by other insurance companies for their variable annuity contracts. "Mixed funding" occurs when shares of a fund, which the subaccounts buy for variable annuity contracts, are bought for variable life insurance contracts issued by us or other insurance companies. o Shared--bought by more than one company o Mixed--bought for annuities and life insurance It is possible that a conflict of interest may arise due to mixed and/or shared funding, that could adversely impact the value of a fund. For example, if a conflict of interest occurred and one of the subaccounts withdrew its investment in a fund, the fund may be forced to sell its securities at disadvantageous prices, causing its share value to decrease. Each fund's board of directors or trustees will monitor events in order to identify any conflicts which may arise and to determine what action, if any, should be taken to address such conflicts. 11 Transfers - -------------------------------------------------------------------------------- Transfers Among Investment Options. During the accumulation phase and, under some contracts, the income phase, the contract holder, or you if permitted by the plan, may transfer amounts among investment options. Transfers from fixed interest options are restricted as outlined in Appendices I, II and III. Transfers may be requested in writing, by telephone or, where available, electronically. Transfers must be made in accordance with the terms of the contract. Value of Transferred Dollars. The value of amounts transferred in or out of subaccounts will be based on the subaccount unit values next determined after we receive your request in good order at our Home Office. Telephone Transfers: Security Measures. To prevent fraudulent use of telephone transactions, we have established security procedures. These include recording calls on our toll-free telephone lines and requiring use of a personal identification number (PIN) to execute transactions. You are responsible for keeping your PIN and account information confidential. If we fail to follow reasonable security procedures, we may be liable for losses due to unauthorized or fraudulent telephone transactions. We are not liable for losses resulting from following telephone instructions we believe to be genuine. If a loss occurs when we rely on such instructions, you will bear the loss. Limits on Frequent Transfers. The contracts are not designed to serve as vehicles for frequent trading in response to short-term fluctuations in the market. Such frequent trading can disrupt management of a fund and raise its expenses. This in turn can have an adverse effect on fund performance. Accordingly, organizations or individuals that use market-timing investment strategies and make frequent transfers should not purchase the contracts. We reserve the right to restrict, in our sole discretion and without prior notice, transfers initiated by a market-timing organization or individual or other party authorized to give transfer instructions on behalf of multiple contract holders or participants. Such restrictions could include: (1) Not accepting transfer instructions from an agent acting on behalf of more than one contract holder or participant; and (2) Not accepting preauthorized transfer forms from market timers or other entities acting on behalf of more than one contract holder or participant at a time. We further reserve the right to impose, without prior notice, restrictions on transfers that we determine, in our sole discretion, will disadvantage or potentially hurt the rights or interests of other contract holders or participants. The Dollar Cost Averaging Program. Certain contracts allow you to participate in our Dollar Cost Averaging Program. There is no additional charge for this service. Dollar cost averaging is a system for investing that buys fixed dollar amounts of an investment at regular intervals, regardless of price. Our program transfers, at regular intervals, a fixed dollar amount to one or more subaccounts that you select. Dollar cost averaging is not permitted into the Lexington Natural Resources Trust subaccount. Dollar cost averaging neither ensures a profit nor guarantees against loss in a declining market. You should consider your financial ability to continue purchases through periods of low price levels. For additional information about this program, contact your local representative or call the Company at the number listed in "Contract Overview--Questions." 12 Contract Purchase and Participation - -------------------------------------------------------------------------------- Contracts Available for Purchase. The contracts available for purchase are group or individual deferred annuity contracts that the Company offers in connection with plans established by eligible organizations under Tax Code sections 401(a), 401(k), 403(b), 414(h) and 457. ERISA Notification. Some plans under Sections 401 and 403(b) are subject to Title I of the Employee Retirement Income Security Act of 1974 (ERISA) as amended. The contract holder must notify the Company whether Title I of ERISA applies to the plan. Purchasing the Contract. 1. The contract holder submits the required forms and application to the Company 2. We approve the forms and issue a contract to the contract holder Participating in the Contract. 1. We provide you with enrollment materials for completion and return to us (occasionally enrollment is conducted by someone unaffiliated with us who is assisting the contract holder) 2. If your enrollment materials are complete and in good order, we establish one or more accounts for you. Under certain plans we establish an employee account for contributions from your salary and an employer account for employer contributions. Acceptance or Rejection. We must accept or reject an application or your enrollment materials within two business days of receipt. If the forms are incomplete, we may hold any forms and accompanying payments for five business days, unless you consent to our holding them longer. Under limited circumstances, we may also agree, for a particular plan, to hold payments for longer periods with the permission of the contract holder. If we agree to do this, we will deposit the payments in the Aetna Money Market VP subaccount until the forms are completed (or for a maximum of 105 days). If we reject the application or enrollment, we will return the forms and any payments. 13 Methods of Payment. The contract may allow one or more of the following payment methods: o Lump sum payments--A one-time payment to your account in the form of a transfer from a previous plan o Installment payments--More than one payment made over time to your account The plan and the contract may have certain rules or restrictions that apply to use of these two methods. For example, we may require that installment payments meet certain minimums. Under some contracts, we will place the different types of payments in distinct accounts, where each account will have its own early withdrawal charge schedule. (See "Fees--Early Withdrawal Charge Schedules") Allocation of Payments. The contract holder or you, if the contract holder permits, directs us to allocate initial contributions to the investment options available under the plan. Generally, you will specify this information on your enrollment materials. After your enrollment, changes to allocations for future payments or transfer of existing balances among investment options may be requested in writing and, where available, by telephone or electronically. Allocations must be in whole percentages, and there may be limitations on the number of investment options that can be selected. (See "Investment Options" and "Transfers.") Transfer Credits The Company provides a transfer credit in some cases on transferred assets, as defined by the Company, subject to certain conditions and state approvals. This benefit is provided on a nondiscriminatory basis. If a transfer credit is due under the contract, you will be provided with additional information specific to the contract. Tax Code Restrictions. The Tax Code places some limitations on contributions to your account. (See "Taxation.") Contract Ownership and Rights - -------------------------------------------------------------------------------- Who Owns the Contract? The contract holder. This is the person or entity to whom we issue the contract. Who Owns Money Accumulated Under the Contract? o Under 457 Plans. The Tax Code requires that 457 plan assets of governmental employers be held in trust for the exclusive benefit of you and your beneficiaries. An annuity contract satisfies the trust requirement of the Tax Code. o Under 403(b) Plans. Under the contract we may establish one or more accounts for you. Generally we establish an employee account to receive salary reduction and rollover amounts and an employer account to receive employer contributions. You have the right to the value of your employee account and any employer account to the extent you are vested as interpreted by the contract holder. 14 Under 401(a)/401(k) Plans. Under the contract, we may establish one or more accounts for you. Generally, we establish an employee account to receive salary reduction and rollover amounts and an employer account to receive employer contributions. You have the right to the value of your employee account and any employer account to the extent that you are vested under the plan as interpreted by the contract holder. Who Holds Rights under the Contract? o Under all contracts, except those issued through a voluntary 403(b) plan, the contract holder holds all rights under the contract. The contract holder may permit you to exercise some of those rights. For example, the contract holder may allow you to choose investment options. o If you participate in the contract through a voluntary 403(b) plan, you hold all rights under the contract. Right to Cancel - -------------------------------------------------------------------------------- When and How to Cancel. If the contract holder chooses to cancel a contract, we must receive the contract and a written notice of cancellation within 10 days (or a longer period if required by state law) after the contract holder's receipt of the contract. If you wish to cancel participation in the contract and are allowed to do so under the contract and the plan, you must send the document evidencing your participation and a written notice of cancellation to the Company within 10 days after you receive confirmation of your participation in the contract. Refunds. We will produce a refund not later than seven days after we receive the required documents and written notice in good order at our Home Office. The refund will equal amounts contributed to the contract or account(s), as applicable, plus any earnings or less any losses attributable to the investment options in which amounts were invested. In certain states, we are required to refund contributions. When a refund of contributions is not required, the investor bears any investment risk. 15 [begin sidebar text] Types of Fees There are three types of fees which you may incur under the contract: o Transaction Fees o Early Withdrawal Charge o Annual Maintenance Fee o Fees Deducted from the Subaccounts o Mortality and Expense Risk Charge o Administrative Expense Charge o Fees Deducted by the Funds o Investment Advisory Fees o Other Expenses Terms to Understand in Schedules I and II o Account Year--a 12-month period measured from the date we establish your account, or measured from any anniversary of that date. o Contract Year--a 12-month period measured from the date we establish the contract, or measured from any anniversary of that date. o Payment Period (for installment payments)-- the period of time for completion of the agreed upon number and amount of payments to the account. For example, if a payment period consists of 12 payments per year and only 11 payments are made, the payment period is not completed until the twelfth payment is made. [end sidebar text] Fees - -------------------------------------------------------------------------------- The following repeats and adds to information provided in the "Fee Table" section. Please review both this section and the "Fee Table" section for information on fees. I. Transaction Fees Early Withdrawal Charge Withdrawals of all or a portion of your account value may be subject to a charge. Purpose: This is a deferred sales charge. It reimburses us for some of the sales and administrative expenses associated with the contract. Our remaining sales and administrative expenses are covered by our general assets which are attributable in part to the mortality and expense risk charge described below. Amount: The charge is a percentage of the amount that you withdraw from the subaccounts, the Fixed Account and the Guaranteed Accumulation Account. We do not deduct an early withdrawal charge from amounts that you withdraw from the Fixed Plus Account. The percentage is determined by the early withdrawal charge schedule that applies to your account. Some of these schedules are listed below. The charge will never be more than 8.5% of your total payments to the account. Early Withdrawal Charge Schedules. You may determine which schedule applies to you by consulting your certificate, or the contract (held by the contract holder). Schedule I. This is the maximum early withdrawal charge schedule under the contracts. It grades down to zero over a 10-year period, as shown below. Some contracts have schedules that grade down to zero over fewer than 10 years. Each contract will specify whether a schedule is based on one of the following: 1) The number of years since the account was established; 2) the number of years since the contract was established; 3) the number of completed payment periods. Unless the contract provides otherwise, the same schedule applies to payments (ongoing contributions) and to single payments (rollovers, exchanges other one-time contributions). Schedule I - ---------------------------------------------------------------------- Payment Periods, Contract Years or Account Years Completed (depending on the contract) Early Withdrawal Charge - ------------------------------------------ ------------------------ Fewer than 5 5% 5 or more but fewer than 7 4% 7 or more but fewer than 9 3% 9 or more but fewer than 10 2% more than 10 0% - ----------------------------------------------------------------------
16 Schedule II. For contracts where we establish distinct accounts for installment payment and single payment accounts (defined above), Schedule I applies to installment payment accounts and Schedule II applies to single payment accounts. As shown below, Schedule II grades down to zero over a nine-year period as account years are completed. Schedule II ------------------------------------------------------------------ Account Years Completed Early Withdrawal Charge --------------------------------------- ------------------------ Fewer than 5 5% 5 or more but fewer than 6 4% 6 or more but fewer than 7 3% 7 or more but fewer than 8 2% 8 or more but fewer than 9 1% 9 or more 0% ------------------------------------------------------------------
Early Withdrawal Charge Waivers under all Contracts. These apply to all contracts. Also read the following two subsections regarding additional waivers, reduction or elimination of the charge. This charge is waived for portions of a withdrawal that are: o Used to provide income payments during the income phase; o Paid because of your death before income payments begin; o Paid where your account value is $3,500 or less and no part of the account has been taken as a withdrawal, used to provide income payments or taken as a loan within the prior 12 months; o Taken because of the election of a systematic distribution option (see "Systematic Distribution Options"); o Taken on or after the tenth anniversary of the effective date of the account; or o Taken under accounts with an early withdrawal charge schedule based on completed payment periods, when you are at least age 59-1/2 and have completed at least nine payment periods. Early Withdrawal Charge Waivers under Certain Contracts. To find out which waivers apply to the contract issued in connection with your plan, consult the certificate or the contract (held by the contract holder). This charge is waived for portions of a withdrawal that are: o Taken after you have separated from service with your employer. Under certain contracts, the employer must provide documentation of separation to the Company; o Used to purchase an Aetna single premium immediate annuity or other contracts allowed by the Company, under the condition that you do not cancel the new contract and obtain a refund during the cancellation period. If you cancel the new contract, we will reinstate the account under the old contract. The amount returned to the account from the new contract may then be withdrawn, subject to any early withdrawal charge that would have applied at the time the new contract was established; o Depending on the plan, due to financial hardship or hardship resulting from an unforeseeable emergency as defined by the Tax Code; o From contracts used with plans under section 401(a)/401(k) or section 403(b) of the Tax Code, that is not more than 10% of your account value 17 and is the first partial withdrawal in a calendar year. To qualify for this waiver you must be between the ages of 59-1/2 and 70-1/2 and cannot have elected the systematic withdrawal option. Any outstanding loans are not included in the account value when determining the 10% amount. This waiver does not apply to full withdrawals or to a withdrawal due to a loan default; o Withdrawn due to the transfer of your account value to another of the retirement products the Company offers under the contract holder's plan, subject to various conditions agreed to by the contract holder and the Company; or o When we terminate an account under the circumstances described in "Involuntary Termination." Reduction, Waiver or Elimination. In addition to the specific waivers described above, we may reduce, waive or eliminate the early withdrawal charge for a particular plan. Any such reduction will reflect the differences we expect in distribution costs or services meant to be defrayed by this charge. Factors we consider for a reduction include, but are not limited to, the following: o The number of participants under the plan o The expected level of assets or cash flow under the plan o Our agent's involvement in sales activities o Our sales-related expenses o Distribution provisions under the plan o The plan's purchase of one or more other variable annuity contracts from us and the features of those contracts o The level of employer involvement in determining eligibility for distributions under the contract o Our assessment of financial risk to the Company relating to withdrawals o Whether the contract results from the exchange of another contract issued by the Company to the same plan sponsor We will not reduce the early withdrawal charge in a manner that is unfairly discriminatory against any person. We may also apply different early withdrawal charge provisions in contracts issued to certain employer groups or associations which have negotiated the contract terms on behalf of their employees. We will offer any resulting early withdrawal charge uniformly to all employees in the group. 18 Reduction for Certain New York Contracts. For master 403(b) plan contracts issued after July 29, 1993 in New York, in addition to waivers or reductions that we grant, the state of New York requires a reduced early withdrawal charge schedule for withdrawals from the Guaranteed Accumulation Account. The schedule grades down over a seven-year period as account years are completed, as shown in the table below. ----------------------------------------------------------------- Completed Account Years Early Withdrawal Charge ----------------------------------------------------------------- Fewer than 3 5% 3 or more but fewer than 4 4% 4 or more but fewer than 5 3% 5 or more but fewer than 6 2% 6 or more but fewer than 7 1% 7 or more 0% -----------------------------------------------------------------
Maintenance Fee Maximum Amount: $20.00 When/How: For those plans that have a maintenance fee, each year during the accumulation phase we deduct this fee on your account anniversary and, in some cases, at the time of full withdrawal. It is deducted on a pro rata basis from your account value invested in the subaccounts and the fixed interest options. We do not deduct this fee from a single payment account. Under some plans we deduct the maintenance fee from both employer and employee accounts. Under some installment plans, your employer elects whether the fee is deducted from the employee account, employer account, or a portion from each. The Company may send a bill to your employer at or prior to such deduction. Purpose: This fee helps defray the administrative expenses we incur in establishing and maintaining your account. Reduction or elimination: When a plan meets certain criteria, we may reduce, waive or eliminate the maintenance fee. Factors we consider reflect differences in our level of administrative costs and services, such as: o The size, type and nature of the group to which a contract is issued; o the expected level of assets under the plan. Under some contracts, we may aggregate accounts under different contracts issued by the Company to the same contract holder; o The anticipated level of administrative expenses, such as billing for payments, producing periodic reports, providing for the direct payment of account charges rather than having them deducted from account values, and any other factors pertaining to the level and expense of administrative services we will provide; o The number of eligible participants and the program's participation rate. Due to factors on which the maintenance fee is based, it is possible that it may increase or decrease from year to year as the characteristics of the group changes. We will not unfairly discriminate against any group if we reduce or eliminate the maintenance fee. We will make any reduction according to our own rules in effect at the time we approve the application for a contract. We reserve the right to change these rules from time to time. 19 II. Fees Deducted from the Subaccounts Mortality and Expense Risk Charge Maximum Amount: 1.25% annually of your account value invested in the subaccounts. When/How: This fee is deducted daily from the subaccounts. We do not deduct this from any fixed interest option. Purpose: The fee compensates us for the mortality and expense risks we assume under the contracts. o The mortality risks are those risks associated with our promise to make lifetime payments based on annuity rates specified in the contracts and our funding of the death benefits and other payments we make to owners or beneficiaries of the accounts. o The expense risk is the risk that the actual expenses we incur under the contracts will exceed the maximum costs that we can charge. If the amount we deduct for this fee is not enough to cover our mortality costs and expenses under the contracts, we will bear the loss. We may use any excess to recover distribution costs relating to the contract and as a source of profit. We expect to make a profit from this fee. Reduction: We may reduce the mortality and expense risk charge from the maximum when the plan meets certain criteria and we agree to the reduction with the contract holder in writing. Some contracts have a reduced mortality and expense risk charge only during the accumulation phase of the account which then increases during the income phase. Any reduction will reflect differences in expenses for administration based on such factors as: o The expected level of assets under the plan. Under some contracts, we may aggregate accounts under different contracts issued by the Company to the same contract holder. o The size of the prospective group, projected annual number of eligible participants and the program's participation rate. o The plan design. For example, the plan may favor stability of invested assets and limit the conditions for withdrawals, loans and available investment options, which in turn lowers administrative expenses. o The frequency, consistency and method of submitting payments and loan repayments. o The method and extent of onsite services we provide and the contract holder's involvement in services such as enrollment and ongoing participant services. o The contract holder's support and involvement in the communication, enrollment, participant education and other administrative services. o The projected frequency of distributions. o The type and level of other factors that affect the overall administrative expense. We will determine any reduction of mortality and expense risk on a basis that is not unfairly discriminatory according to our rules in effect at the time a contract application is approved. We reserve the right to change these rules from time to time. Under some contracts we will reassess and increase or decrease this fee each year on the anniversary of the date the contract was established. 20 Administrative Expense Charge Maximum Amount: 0.25% annually of your account value invested in the subaccounts. When/How: For all participants who became covered under a contract on or after November 5, 1984, we reserve the right to charge an administrative expense charge of up to 0.25% annually. We are currently deducting this charge under the contracts issued to some plans. If charged, this fee is deducted daily from the subaccounts. We do not deduct this from any fixed interest option. This fee may be assessed during the accumulation phase and/or the income phase. If we are currently imposing this fee under the contract issued in connection with your plan when you enter the income phase, the fee will apply to you during the entire income phase. Purpose: This fee helps defray our administrative expenses that cannot be covered by the mortality and expense charge described above. The fee is not intended to exceed our average expected cost of administering the contracts. We do not expect to make a profit from this fee. Reduction: Under some contracts, if we charge the administrative expense charge, we may reduce it from the maximum when the plan meets certain criteria and we agree to the reduction with the contract holder, in writing. The level of the fee may be reassessed and increased or decreased at each contract anniversary as the characteristics of the group change. III. Fund Expenses Maximum Amount: Each fund determines its own advisory fees and expenses. For a list of fund fees see "Fee Table." The fees are described in more detail in each fund prospectus. When/How: Fund fees are not deducted from your account. Fund advisory fees and expenses are reflected in the daily value of the fund shares, which will in turn affect the daily value of each subaccount. Purpose: These amounts help to pay the fund's investment advisor and operating expenses. IV. Premium and Other Taxes Maximum Amount: Some states and municipalities charge a premium tax on annuities. These taxes currently range from 0% to 4%, depending on the jurisdiction. When/How: We reserve the right to deduct premium taxes from your account value or from payments to the account at any time, but not before there is a tax liability under state law. Our current practice is to deduct premium taxes at the time of a full withdrawal or the commencement of income phase payments. We will not deduct any municipal premium tax of 1% or less, but we reserve the right to reflect such an expense in our annuity purchase rates. In addition, the Company reserves the right to assess a charge for any federal taxes due against the separate account. (See "Taxation.") 21 Your Account Value - -------------------------------------------------------------------------------- During the accumulation phase, your account value at any given time equals: o Account dollars directed to the fixed interest options, including interest earnings to date o Less any deductions from the fixed interest options (e.g. withdrawals, fees) o Plus the current dollar value of amounts invested in the subaccounts. Subaccount Accumulation Units. When a fund is selected as an investment option, your account dollars invest in "accumulation units" of the Variable Annuity Account C subaccount corresponding to that fund. The subaccount invests directly in the fund shares. The value of your interests in a subaccount is expressed as the number of accumulation units you hold multiplied by an "Accumulation Unit Value," as described below, for each unit. Accumulation Unit Value (AUV). The value of each accumulation unit in a subaccount is called the accumulation unit value or AUV. The value of accumulation units vary daily in relation to the underlying fund's investment performance. The value also reflects deductions for fund fees and expenses, the mortality and expense risk charge, and the administrative expense charge (if any). We discuss these deductions in more detail in "Fee Table" and "Fees." Valuation. We determine the AUV every business day after the close of the New York Stock Exchange. At that time, we calculate the current AUV by multiplying the AUV last calculated by the "net investment factor" of the subaccount. The net investment factor measures the investment performance of the subaccount from one valuation to the next. Current AUV = Prior AUV x Net Investment Factor Net Investment Factor. The net investment factor for a subaccount between two consecutive valuations equals the sum of 1.0000 plus the net investment rate. Net Investment Rate. The net investment rate is computed according to a formula that is equivalent to the following: o The net assets of the fund held by the subaccount as of the current valuation, minus; o The net assets of the fund held by the subaccount at the preceding valuation, plus or minus; o Taxes or provisions for taxes, if any, due to subaccount operations (with any federal income tax liability offset by foreign tax credits to the extent allowed); o Divided by the total value of the subaccount's units at the preceding valuation; o Minus a daily deduction for the mortality and expense risk charge and the administrative expense charge (if any). See "Fees." The net investment rate may be either positive or negative. 22 Hypothetical Illustration. As a hypothetical illustration, assume that an investor contributes $5,000 to his account and directs us to invest $3,000 in Fund A and $2,000 in Fund B. After receiving the contribution and following the next close of business of the New York Stock Exchange, the applicable AUV's are $10 for Subaccount A, and $25 for Subaccount B. The investor's account is credited with 300 accumulation units of subaccount A, and 80 accumulation units of subaccount B. Step 1: An Investor contributes $5000 Step 2: A. He directs us to invest $3,000 in Fund A. His dollars purchase 300 accumulation units of Subaccount A ($3,000 divided by the current $10 AUV). B. He directs us to invest $2,000 in Fund B. His dollars purchase 80 accumulation units of Subaccount B ($2,000 divided by the current $25 AUV). Step 3: The separate account then purchases shares of the applicable funds at the current market value (NAV). ----------------------------- $5,000 contribution ----------------------------- Step 1 ------------------------------------------------------ Aetna Life Insurance and Annuity Company ------------------------------------------------------ Step 2 ------------------------------------------------ Variable Annuity Account C ------------------------------------------------ Subaccount A Subaccount B Etc. 300 80 accumulation accumulation units units ------------------------------------------------ Step 3 -------------- -------------- Fund A Fund B -------------- -------------- The fund's subsequent investment performance, expenses and charges, and the daily charges deducted from the subaccount, will cause the AUV to move up or down on a daily basis. 23 [begin sidebar text] Taxes, Fees and Deductions Amounts withdrawn may be subject to one or more of the following: o Early Withdrawal Charge (see "Fees--Early Withdrawal Charge") o Maintenance Fee (see "Fees--Maintenance Fee") o Market Value Adjustment (see Appendix III) o Tax Penalty (see "Taxation") o Tax Withholding (see "Taxation") To determine which may apply, refer to the appropriate sections of this prospectus, contact your Aetna representative or call the Company at the number listed in "Contract Overview-- Questions." [end sidebar text] Payments to Your Account. If all or a portion of initial payments are directed to the subaccounts, they will purchase subaccount accumulation units at the AUV next computed after our acceptance of the applicable application or enrollment forms, as described in "Contract Purchase and Participation." Subsequent payments or transfers directed to the subaccounts that we receive by the close of business of the New York Stock Exchange (Exchange) will purchase subaccount accumulation units at the AUV next computed after the close of the Exchange on that day. The value of subaccounts may vary day to day. Withdrawals - -------------------------------------------------------------------------------- Making a Withdrawal. Subject to limitations on withdrawals from the fixed interest options and other restrictions (see "Withdrawal Restrictions" below), the contract holder, or you if permitted by the plan, may withdraw all or a portion of your account value at any time during the accumulation phase. Steps for Making a Withdrawal. The contract holder, or you if permitted by the plan, must: o Select the withdrawal amount o Full Withdrawal: You will receive, reduced by any required withholding tax, your account value allocated to the subaccounts, the Guaranteed Accumulation Account (plus or minus any applicable market value adjustment) and the Fixed Account, minus any applicable early withdrawal charge, plus the amount available for withdrawal from the Fixed Plus Account. o Partial Withdrawal (Percentage or Specified Dollar Amount): You will receive, reduced by any required withholding tax, the amount you specify, subject to the value available in your account. However, the amount actually withdrawn from your account will be adjusted by any applicable early withdrawal charge for amounts withdrawn from the subaccounts or the Fixed Account, and any positive or negative market value adjustments for amounts withdrawn from the Guaranteed Accumulation Account. The amount available from the Fixed Plus Account may be limited. For a description of limitations on withdrawals from the Fixed Plus Account, see Appendix III. o Select investment options. If this is not specified, we will withdraw dollars proportionally from each investment option in which you have an account value. o Properly complete a disbursement form and submit it to the Home Office. Calculation of Your Withdrawal. We determine your account value every normal business day after the close of the New York Stock Exchange. We pay withdrawal amounts based on your account value either: (1) As of the next valuation after we receive a request for withdrawal in good order at our Home Office, or (2) On such later date as specified on the disbursement form. Delivery of Payment. Payments for withdrawal requests will be made in accordance with SEC requirements. Normally, we will send your payment not later than seven calendar days following our receipt of your disbursement form in good order. 24 Reinvestment Privilege. (not applicable to contracts under 457 plans). Some contracts allow one-time use of a reinvestment privilege. Within 30 days after a full withdrawal, if allowed by law and the contract, you may elect to reinvest all or a portion of the proceeds. We must receive reinvested amounts within 60 days of the withdrawal. We will credit the account for the amount reinvested based on the subaccount values next computed following our receipt of your request and the amount to be reinvested. We will credit the amount reinvested proportionally for maintenance fees and early withdrawal charges imposed at the time of withdrawal. We will deduct from the amounts reinvested any maintenance fee which fell due after the withdrawal and before the reinvestment. We will reinvest in the same investment options and proportions in place at the time of withdrawal. Special rules apply to reinvestments of amounts withdrawn from the Guaranteed Accumulation Account (see Appendix I). Seek competent advice regarding the tax consequences associated with reinvestment. Withdrawal Restrictions. Some plans may have other limits on withdrawals, other than or in addition to those listed below. o Section 403(b)(11) of the Tax Code generally prohibits withdrawal prior to your death, disability, attainment of age 59-1/2, separation from service or financial hardship, of the following: (1) Salary reduction contributions made after December 31, 1988 and; (2) Earnings on those contributions and earnings on amounts held before 1989 and credited after December 31, 1988. o 401(k) plans generally prohibit withdrawal of salary reduction contributions and associated earnings prior to your death, disability, attainment of age 59-1/2, separation from service, or financial hardship. Income attributable to salary reduction contributions and credited on or after January 1, 1989 may not be distributed in the case of hardship. o The contract may require that the contract holder certify that you are eligible for the distribution. o If you are married and covered by an ERISA plan, the contract holder must provide certification that Retirement Equity Act requirements have been met. o Participants in Ball State University Alternate Pension Plan--The portion of your account value attributable to employer contributions and applicable earnings may not be withdrawn unless: your employment is terminated with Ball State University, or you have died, retired or separated from service. The contract holder may withdraw the employer account value, and you may transfer employer account values pursuant to an IRS Revenue Ruling 90-24 transfer, without regard to this restriction. No early withdrawal charge will apply to the first 20% of the employer account value transferred via a 90-24 transfer in a calendar year. This waiver does not apply to a 90-24 transfer of the full employer account value. o Participants in Texas Optional Retirement Program--You may not receive any distribution before retirement, except upon becoming totally disabled or terminating employment with Texas public institutions of higher learning. Conditions under which you may exercise the right to withdraw and the right to advance the date on which an income phase payment option is to begin are limited. These restrictions are imposed by reason of the Texas Attorney General's interpretation of Texas law. 25 [begin sidebar text] Features of a Systematic Distribution Option (SDO) If available under your plan, an SDO allows you to receive regular payments from your account without moving into the income phase. By remaining in the accumulation phase, you retain certain rights and investment flexibility not available during the income phase. Because the account remains in the accumulation phase, all accumulation phase charges continue to apply. [end sidebar text] Loans - -------------------------------------------------------------------------------- Availability. For certain 403(b) plans and some 401(a) and 401(k) plans, if allowed by the contract and the plan, you may take out a loan from your account value during the accumulation phase. Some contracts restrict loans from your employer account. Loans are only allowed from amounts allocated to certain subaccounts and fixed interest options. Additional restrictions may apply under the Tax Code or due to our administrative practices. Requests. If you are eligible to obtain a loan, you may request one by properly completing the loan request form and submitting it to our Home Office. Read the terms of the loan agreement before submitting any request. Systematic Distribution Options - -------------------------------------------------------------------------------- Availability of Systematic Distribution Options (SDOs) To exercise one of these options the account value must meet any minimum dollar amount and age criteria applicable to that option. To determine what SDOs are available, check with the contract holder or the Company. The Company reserves the right to discontinue the availability of one or all of the SDOs at any time, and/or to change the terms for future elections. SDOs currently available under the contract include the following: o SWO--Systematic Withdrawal Option. SWO is 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 accumulation phase investment flexibility for amounts accumulated under the account. (This option may not be available if you have an outstanding loan.) o ECO--Estate Conservation Option. Also allows you to maintain the account in the accumulation phase and provides periodic payments designed to meet the Tax Code's minimum distribution requirement. Under ECO, the Company calculates the minimum distribution amount required by law at age 59-1/2 (for certain plans, 70-1/2 or retirement, if later) and pays you that amount once a year. For certain contracts issued in the state of New York, no market value adjustment is imposed on ECO withdrawals from the Guaranteed Accumulation Account. o Other SDOs may be available from time to time. Additional information relating to any of the SDOs may be obtained from your local representative or from the Company's Home Office. Electing an SDO. The contract holder, or you if permitted by the plan, makes the election of an SDO. For some contracts, the contract holder must provide the Company with certification that the distribution is in accordance with terms of the plan. Terminating an SDO. Once you elect an SDO, except for accounts that are part of 457 plan contracts, you may revoke it at any time through a written request to our Home Office. Once revoked, an option may not be elected again, nor may any other SDO be elected, unless the Tax Code permits it. 26 Tax Consequences. Withdrawals received through these options may have tax consequences. See "Taxation." Death Benefit - -------------------------------------------------------------------------------- The contract provides a death benefit in the event of your death, which is payable to the beneficiary named under the contract (contract beneficiary). o Under contracts issued in connection with most types of plans except voluntary 403(b) plans, the contract holder must be named as the contract beneficiary, but may direct that we make any payments to the beneficiary you name under the plan (plan beneficiary). o Under contracts issued in connection with voluntary 403(b) plans, you may generally designate your own contract beneficiary, who will normally be your plan beneficiary as well. During the Accumulation Phase Payment Process 1. Following your death, the contract beneficiary (on behalf of the plan beneficiary if applicable), must provide the Company with proof of death acceptable to us and a payment request in good order. 2. The payment request should include selection of a benefit payment option. 3. Within seven days after we receive proof of death acceptable to us and payment request in good order at our Home Office, we will mail payment, unless otherwise requested. Until a payment option is selected, account dollars will remain invested as at the time of your death, and no distributions will be made. Benefit Payment Options. The following payment options are available, if allowed by the Tax Code: o Lump-sum payment o Payment under an available income phase payment option (see "Income Phase--Payment Options") If the contract beneficiary or plan beneficiary is your spouse, payment under an available systematic distribution option (not available under all plans) The following options are also available under some contracts, however, the Tax Code limits how long the death benefit proceeds may be left in these options: o Leaving the account value invested in the contract o Under some contracts, leaving your account value on deposit in the company's general account and receiving monthly, quarterly, semi-annual or annual interest payments at the interest rate currently credited on such deposits. The balance on deposit can be withdrawn at any time or paid in accordance with any of the available income phase payment options (see "Income Phase--Payment Options"). [begin sidebar text] During the Income Phase This section provides information about the accumulation phase. For death benefit information applicable to the income phase (see "Income Phase"). [end sidebar text] 27 Death Benefit Calculation. For most contracts the death benefit will be based on your account value. For amounts held in the Guaranteed Accumulation Account (GAA), any positive market value adjustment (MVA) will be included in your account value. If a negative MVA applies, it would be deducted only if the death benefit is withdrawn more than six months after your death. We describe MVA in Appendix I and the GAA prospectus. The death benefit is calculated as of the next time we value your account following the date on which we receive proof of death and payment request in good order. In addition to this amount, some states require we pay interest calculated from date of death at a rate specified by state law. Some contracts provide a guaranteed death benefit if the contract beneficiary (on behalf of the plan beneficiary, if applicable) elects a lump-sum distribution or an income phase payment option within six months of your death. For those contracts, the guaranteed death benefit is the greater of : (a) Your account value on the day that notice of death and request for payment are received in good order at our Home Office, plus any positive aggregate MVA that applies to amounts allocated to the GAA (b) The sum of payments (minus any applicable premium tax) made to your account, minus withdrawals made from your account and any outstanding loan amount. Tax Code Requirements. The Tax Code requires distribution of death benefit proceeds within a certain period of time. Failure to begin receiving death benefit payments within those time periods can result in tax penalties. Regardless of the method of payment, death benefit proceeds will generally be taxed to the beneficiary in the same manner as if you had received those payments. See "Taxation" for additional information. 28 The Income Phase - -------------------------------------------------------------------------------- During the income phase you receive payments from your accumulated account value. Initiating Payments. At least 30 days prior to the date you want to start receiving payments, the contract holder, or you if permitted by the plan, must notify us in writing of the following: o Start date o Payment option (see the payment options table in this section) o Payment frequency (i.e., monthly, quarterly, semi-annually or annually) o Choice of fixed or variable payments o Selection of an assumed net investment rate (only if variable payments are elected) o Under some plans, certification from your employer and/or submission of the appropriate forms is also required The account will continue in the accumulation phase until the contract holder or you, as applicable, properly initiate payments. Once a payment option is selected, it may not be changed; however, certain options allow you to withdraw a lump sum. What Affects Payment Amounts? Some of the factors that may affect payment amounts include: your age, your account value, the payment option selected, number of guaranteed payments (if any) selected, and whether you select variable or fixed payments. Fixed Payments. Amounts funding fixed payments will be held in the Company's general account. Fixed payments will remain the same over time. Variable Payments. Amounts funding your income phase payments will be held in the subaccount(s) selected, or a combination of subaccounts and fixed interest options. Some contracts restrict the subaccounts available, the number of investment options to be selected and how many transfers, if any, are allowed among options. For variable payments, an assumed net investment rate must be selected. Payments from the Fixed Plus Account. Under some contracts, if a nonlifetime payment option is selected, payments from the Fixed Plus Account may only be made on a fixed basis. Assumed Investment Rate. For variable payments, an assumed investment rate must be selected. If you select a 5% rate, your first payment will be higher, but subsequent payments will increase only if the investment performance of the subaccounts you selected is greater than 5% annually, after deduction of fees. Payment amounts will decline if the investment performance is less than 5%, after deduction of fees. If you select a 3-1/2% rate, your first payment will be lower and subsequent payments will increase more rapidly or decline more slowly depending on the investment performance of the subaccounts you selected. For more information about selecting an assumed net investment rate, request a copy of the Statement of Additional Information by calling the Company. (see "Contract Overview--Questions"). [begin sidebar text] We may have used the following terms in prior prospectuses: Annuity Phase--Income Phase Annuity Option--Payment Option Annuity Payment--Income Phase Payment Annuitization--Initiating Income Phase Payments [end sidebar text] 29 Selecting an Increasing Payment. Under certain payment options, if you select fixed payments, some contracts will allow you to elect an increase of one, two, or three percent, compounded annually. The higher your percentage, the lower your initial payment will be, while future payments will increase each year at a greater rate. Generally, this feature is not available with cash refund payment options and nonlifetime options. Fees Deducted o If variable payments are elected, we make a daily deduction for mortality and expense risks from any amounts held in the subaccounts. The maximum mortality and expense risk charge during the income phase is 1.25% on an annual basis. Under some contracts, we may reduce this fee based on certain factors. (See "Fees--Mortality and Expense Risk Charge.") o We may also deduct a daily administrative charge from amounts held in the subaccounts. We currently charge this under some contracts and reserve the right to charge it under all others. The maximum amount is 0.25% on an annual basis. If we are currently imposing this fee under the contract issued in connection with your plan when you enter the income phase, the fee will apply throughout the entire income phase. Required Minimum Payment Amounts. The initial payment or the annual payment total must meet the minimums stated in the contract. If your account value is too low to meet these minimum payment amounts, you will receive one lump sum payment. Death Benefit During the Income Phase. The death benefits that may be available to a beneficiary are outlined in the payment option table below. If a lump sum payment is due as a death benefit, we will make payment within seven calendar days after we receive proof of death acceptable to us and the payment request at our Home Office. Taxation. To avoid certain tax penalties, you and any beneficiary must meet the distribution rules imposed by the Tax Code. (See "Taxation.") 30 Payment Options The following tables list the payment options and accompanying death benefits which may be available under the contracts. Some contracts restrict the options and the terms available. Refer to your certificate or check with your contract holder for details. We may offer additional payment options under the contract from time to time. Terms used in the Tables: Annuitant: The person(s) on whose life expectancy the income phase payments are calculated. Beneficiary: The person designated to receive the death benefit payable under the contract. - ----------------------------------------------------------------------------------------------------------------------------------- Lifetime Payment Options - ----------------------------------------------------------------------------------------------------------------------------------- Length of Payments: For as long as the annuitant lives. It is possible that only one payment will Life Income be made should the annuitant die prior to the second payment's due date. Death Benefit--None: All payments end upon the annuitant's death. - ----------------------------------------------------------------------------------------------------------------------------------- Length of Payments: For as long as the annuitant lives, with payments guaranteed for your Life Income-- choice of 5-30 years or as otherwise specified in the contract. Guaranteed Pay- Death Benefit--Payment to the Beneficiary: If the annuitant dies before we have made all the ments guaranteed payments, we will pay the beneficiary a lump-sum (unless otherwise requested) equal to the present value of the remaining guaranteed payments. - ----------------------------------------------------------------------------------------------------------------------------------- Length of Payments: For as long as either annuitant lives. It is possible that only one payment will be made should both annuitants die before the second payment's due date. Death Benefit--Continuing Payments: Life Income--Two (a) When you select this option you choose for 100%, 66-2/3% or 50% of the payment to continue Lives after the first death; or (b) 100% of the payment to continue on the second annuitant's death, and 50% of the payment to continue on the annuitant's death. - ----------------------------------------------------------------------------------------------------------------------------------- Length of Payments: For as long as either annuitant lives, with payments guaranteed from 5 to 30 years, or as otherwise specified in the contract. Life Income--Two Death Benefit--Continuing Payments: 100% of the payment to continue after the first death. Lives--Guaranteed Death Benefit--Payment to the Beneficiary: If both annuitants die before the guaranteed pay- Payments ments have all been paid, we will pay the beneficiary a lump-sum (unless otherwise requested) equal to the present value of the remaining guaranteed payments. - ----------------------------------------------------------------------------------------------------------------------------------- Life Income--Cash Length of Payments: For as long as the annuitant lives. Refund Option Death Benefit--Payment to the Beneficiary: Following the annuitant's death, we will pay a lump (limited sum payment equal to the amount originally applied to the payment option (less any premium availability-- tax) and less the total amount of fixed payments paid. fixed payment only) - ----------------------------------------------------------------------------------------------------------------------------------- Life Income--Two Length of Payments: For as long as either annuitant lives. Lives--Cash Death Benefit--Continuing Payment: 100% of the payment to continue after the first death. Refund Option Death Benefit--Payment to the Beneficiary: When both annuitants die, we will pay a lump sum (limited payment equal to the amount applied to the payment option (less any premium tax) and less availability--fixed the total amount of fixed payments paid. payment only) - -----------------------------------------------------------------------------------------------------------------------------------
Table continued [right arrow] 31 Payment options continued - ----------------------------------------------------------------------------------------------------------------------------------- Nonlifetime Payment Options (1) - ----------------------------------------------------------------------------------------------------------------------------------- Length of Payments: Payments will continue for the number of years you choose, based on what is available under the contract. Under some contracts, for amounts held in the Fixed Plus Account during the accumulation phase, the payment must be on a fixed basis and must be for at least 5 Nonlifetime-- years. In certain cases a lump sum payment may be requested at any time (see below). Guaranteed Death Benefit--Payment to the Beneficiary: If the annuitant dies before we make all the Payments guaranteed payments, we wil pay the beneficiary a lump sum (unless otherwise requested) equal to the present value of the remaining guarantee payments, and we will not impose any early withdrawal charge. - ----------------------------------------------------------------------------------------------------------------------------------- Lump-sum Payment: If the Nonlifetime--Guaranteed Payments option is elected with variable payments, you may request at any time that all or a portion of the present value of the remaining payments be paid in one sum. A lump sum elected before three or five years of payments have been completed as specified by the contract will be treated as a withdrawal during the accumulation phase and we will charge any applicable Early Withdrawal Charge. (See "Fees-- Early Withdrawal Charge.") Lump sum payments will be sent within seven calendar days after we receive the request for payment in good order at the Home Office.
- -------------------------------------------------------------------------------- (1) For contracts issued to the State of Montana and Board of Trustees, University of Illinois the Nonlifetime option is available only with fixed payments. 32 TAXATION - -------------------------------------------------------------------------------- I. Introduction This section discusses our understanding of current federal income tax laws affecting the contract. You should keep the following in mind when reading it: o Your tax position (or the tax position of the beneficiary, as applicable) determines federal taxation of amounts held or paid out under the contract. o Tax laws change. It is possible that a change in the future could affect contracts issued in the past. o This section addresses federal income tax rules and does not discuss federal estate and gift tax implications, state and local taxes or any other tax provisions. o We do not make any guarantee about the tax treatment of the contract or transactions involving the contract. - -------------------------------------------------------------------------------- We do not intend this information to be tax advice. For advice about the effect of federal income taxes or any other taxes on amounts held or paid out under the contract, consult a tax adviser. For more comprehensive information contact the Internal Revenue Service. - -------------------------------------------------------------------------------- II. Your Retirement Plan The tax rules applicable to retirement plans vary according to plan type, and terms and conditions of the plan. To understand what tax rules apply, you need to know the code section under which your plan qualifies. Contact your plan sponsor, local representative or the Company to learn which code section applies to your plan. Plan Types. The contract is designed for use with retirement plans that qualify under code sections 401(a), 401(k), 403(b) or 457. A code section 457 plan may be either a 457(b) (eligible) plan or a 457 (f) (ineligible) plan. The contract may also be used with code section 415(m) arrangements. The Contract and Retirement Plans. Contract holders and contract participants are responsible for determining that contributions, distributions and other transactions satisfy applicable laws. Legal counsel and a tax adviser should be consulted regarding the suitability of the contract. Because the plan is not part of the contract, we are not bound by any plan's terms or conditions. III. Withdrawals and Other Distributions Certain tax rules apply to distributions from the contract. A distribution is any amount taken from the contract including withdrawals, income payments, rollovers and any death benefit. We report the taxable portion of all distributions to the IRS. Taxation of Distributions. 457(b) Plans. All amounts received under a 457(b) plan are includible in gross income when paid or otherwise made available to you or your beneficiary. [begin sidebar text] In This Section I. Introduction II. Your Retirement Plan III. Withdrawals and other Distributions o Taxation of Distributions o 10% Penalty Tax o Withholding IV. Minimum Distribution Requirements o 50% Excise Tax V. Rules Specific to Certain Plans o Code Section 457 Plans o Code Section 403(b) Plans o Code Section 401(a) and 401(k) Plans o 415(m) Arrangements o Bona Fide Severance Pay Plans VI. Taxation of the Company [end sidebar text] 33 457(f) Plans. Compensation deferred under a 457(f) plan is includible in gross income in the first year when it is no longer subject to a "substantial risk of forfeiture" as defined by the Tax Code. 401(a), 401(k) or 403(b) Plans. All distributions from these plans are taxed as received unless: o The distribution is rolled over to another plan of the same type or to a traditional individual retirement annuity/account (IRA) in accordance with the Tax Code, or o You made after-tax contributions to the plan. In this case, depending on the type of distribution, a portion may be excluded from gross income according to rules detailed in the Tax Code. Taxation of Death Benefits In general, payments received by your beneficiaries after your death are taxed in the same manner as if you had received those payments. 10% Penalty Tax The Tax Code imposes a 10% penalty tax on the taxable portion of any distribution from a 401(a), 401(k) or 403(b) plan, unless one or more of the following have occurred: (a) You have attained age 59-1/2; (b) You have become permanently disabled; (c) You have died; (d) You have separated from service with the plan sponsor at or after age 55; (e) The distribution amount is rolled over into another plan of the same type or to an IRA in accordance with the terms of the Tax Code; or (f) The distribution amount is made in substantially equal periodic payments (at least annually) over your life or life expectancy or the joint lives or joint life expectancies of you and your beneficiary. Also, you must have separated from service with the plan sponsor. In addition, the penalty tax does not apply for the amount of a distribution equal to unreimbursed medical expenses incurred by you that qualify for deduction as specified in the Tax Code. The Tax Code may impose other penalty taxes in other circumstances. Withholding for Federal Income Tax Liability Any distributions under the contracts are generally subject to withholding. Federal income tax liability rates vary according to the type of distribution and the recipient's tax status. 401(a), 401(k) or 403(b) Plans. Generally, under these plans you or a beneficiary may elect not to have tax withheld from distributions. However, certain distributions from these plans are subject to a mandatory 20% federal income tax withholding. 457 Plans. All distributions from a 457 plan, except death benefits, are subject to mandatory federal income tax withholding as wages. No withholding is required on payments to beneficiaries. Non-resident Aliens. If you or a beneficiary is a non-resident alien, then any withholding is governed by code section 1441 based on the individual's citizenship, the country of domicile and treaty status. 34 IV. Minimum Distribution Requirements To avoid certain tax penalties, you and any beneficiary must meet the minimum distribution requirements imposed by the Tax Code. These requirements do not apply to 457(f) plans. These rules may dictate one or more of the following: o Start date for distributions o The time period in which all amounts in your account(s) must be distributed o Distribution amounts Start Date. Generally, you must begin receiving distributions by April 1 of the calendar year following the calendar year in which you attain age 70-1/2 or retire, whichever occurs later, unless: o You are a 5% owner, in which case such distributions must begin by April 1st of the calendar year following the calendar year in which you attain age 70-1/2, or o Under 403(b) plans, if you had amounts under the contract as of December 31, 1986. In this case, distribution of these amounts generally must begin by the end of the calendar year in which you attain age 75 or retire, if later. However, if you take any distributions in excess of the minimum required amount, then special rules require that some or all of the December 31, 1986 balance be distributed earlier. Time Period. We must pay out distributions from the contract over one of the following time periods: o Over your life or the joint lives of you and your beneficiary, or o Over a period not greater than your life expectancy or the joint life expectancies of you and your beneficiary Amount (457(b) Plan Only). Any distribution from a 457(b) plan, payable over a period of more than one year, must be made in substantially non-increasing amounts. 50% Excise Tax. If you fail to receive the minimum required distribution for any tax year, a 50% excise tax is imposed on the required amount that was not distributed. Minimum Distribution of Death Benefits. The following applies to all plans except 457(f) plans. Different distribution requirements apply if your death occurs: o After you begin receiving minimum distributions under the contract, or o Before you begin receiving such distributions If your death occurs after you begin receiving minimum distributions under the contract, distributions must be made at least as rapidly as under the method in effect at the time of your death. Code section 401(a)(9) provides specific rules for calculating the minimum required distributions at your death. The rules differ, dependent upon: o Whether your minimum required distribution was calculated each year based on your single life expectancy or the joint life expectancies of you and your beneficiary, and o Whether life expectancy was recalculated The rules are complex and any beneficiary should consult with a tax adviser before electing the method of calculation to satisfy the minimum distribution requirements. 35 Should you die before you begin receiving minimum distributions under the contract, your entire balance must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of your death. For example, if you die on September 1, 1999, your entire balance must be distributed to the beneficiary by December 31, 2004. However, if the distribution begins by December 31 of the calendar year following the calendar year of your death, then payments may be made in one of the following time-frames: o Over the life of the beneficiary o Over a period not extending beyond the life expectancy of the beneficiary For 457(b) plans, if the beneficiary is not your spouse, the time-frame may not exceed fifteen years. Start Dates for Spousal Beneficiaries. If the beneficiary is your spouse, the distribution must begin on or before the later of the following: o December 31 of the calendar year following the calendar year of your death o December 31 of the calendar year in which you would have attained age 70-1/2. V. Rules Specific to Certain Plans 457 Plans Code section 457 provides for certain deferred compensation plans. These plans may be offered by state governments, local governments, political subdivisions, agencies, instrumentalities and certain affiliates of such entities, and non-governmental tax exempt organizations. The plan may either be a 457(b)(eligible) plan or a 457(f)(ineligible) plan. Either type of plan may permit participants to specify the form of investment for their deferred compensation account. 457(b) Plan. A 457(b) plan is subject to restrictions on contributions and distributions. 457(f) Plan. A 457(f) plan is not subject to restrictions on contributions or distributions, but must contain a "substantial risk of forfeiture" as defined by the Tax Code. Generally, substantial risk of forfeiture means that your right to receive deferred compensation is dependent upon your performance of future services to an employer or other entity. The Contract. We make this contract available to plans subject to code section 457 only if a governmental employer sponsors the plan. Trust Requirement. 457(b) plans maintained by state or local governments, their political subdivisions, agencies, instrumentalities and certain affiliates are required to hold all assets and income of the plan in trust for the exclusive benefit of plan participants and their beneficiaries. For purposes of meeting this requirement, custodial accounts and annuity contracts are treated as trusts. Contributions Excluded from Gross Income. If your employer's plan is a 457(b) plan, the Tax Code imposes a maximum limit on annual contributions to your account(s) that may be excluded from your gross income. For Section 457(b) plan participants, such limit is generally the lesser of $8,000, as adjusted to reflect changes in the cost of living, or 33% of your includible compensation (25% of gross compensation). 36 Restrictions on Distributions. Under a 457(b) plan, amounts may not be made available to you earlier than (1) the calendar year you attain age 70-1/2, (2) when you separate from service with the employer or (3) when you are faced with an unforeseeable emergency. A 457(b) plan may permit a one-time in-service distribution if the total amount payable to the participant does not exceed $5,000 and no amounts have been deferred by the participant during the 2-year period ending on the date of distribution. 403(b) Plans Under code section 403(b), contributions made by public school systems or nonprofit healthcare organizations and other Section 501(c)(3) tax exempt organizations to purchase annuity contracts for their employees are generally excludable from the gross income of the employee. Adverse tax consequences to the plan and/or to you may result if your beneficial interest in the contract is assigned or transferred to any person except to an alternate payee under a qualified domestic relations order in accordance with code section 414(p) or to the Company as collateral for a loan. Exclusions from Gross Income. In order to be excludable from gross income, total annual contributions made by you and your employer cannot exceed the lesser of the following limits set by the Tax Code. o The first limit, under code section 415, is generally the lesser of 25% of your compensation or $30,000. Compensation means your compensation from the employer sponsoring the plan and, for years beginning after December 31, 1997, includes any elective deferrals under code section 402(g) and any amounts not includible in gross income under code section 125 or 457. o The second limit, which is the exclusion allowance under code section 403(b), is usually calculated according to a formula that takes into account your length of employment, any pretax contributions you and your employer have already made under the plan, and any pretax contributions to certain other retirement plans. These two limits apply to your contributions as well as to any contributions made by your employer on your behalf. o An additional limit specifically limits your salary reduction contributions to generally no more than $10,000 annually (subject to indexing). Your own limit may be higher or lower, depending on certain conditions. Payments to your account(s) will be excluded from your gross income only if the plan meets certain nondiscrimination requirements. Restrictions on Distributions. Code section 403(b)(11) restricts the distribution under Section 403(b) contracts of: o salary reduction contributions made after December 31, 1988; o earnings on those contributions; and o earnings during such period on amounts held as of December 31, 1988. Distribution of those amounts may only occur upon your death, attainment of age 59-1/2, separation from service, disability, or financial hardship. Income attributable to salary reduction contributions and credited on or after January 1, 1989 may not be distributed in the case of hardship. Transfers from 403(b)(7) Custodial Accounts. If, pursuant to Revenue Ruling 90-24, the Company agrees to accept, under any of the contracts, amounts 37 transferred from a code section 403(b)(7) custodial account, such amounts will be subject to the withdrawal restrictions set forth in code section 403(b)(7)(A)(ii). Taxation of Gains Prior to Distribution. Generally no amounts accumulated under the contract will be taxable prior to the time of actual distribution. However, the IRS has stated in published rulings that a variable contract owner, including participants under code section 403(b) plans, will be considered the owner of separate account assets if the contract owner possesses incidents of investment control over the assets. In these circumstances, income and gains from the separate account assets would be currently includible in the variable contract owner's gross income. The Treasury announced that it will issue guidance regarding the extent to which owners could direct their investments among subaccounts without being treated as owners of the underlying assets of the separate account. It is possible that the Treasury's position, when announced, may adversely affect the tax treatment of existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent the owner from being considered the federal tax owner of a pro rata share of the assets of the separate account. 401(a) and 401(k) Plans Code sections 401(a) and 401(k) permit certain employers to establish various types of retirement plans for employees, and permit self-employed individuals to establish various types of retirement plans for themselves and for their employees. These retirement plans may permit the purchase of the contracts to accumulate retirement savings under the plans. Assignment or Transfer of Contracts. Adverse tax consequences to the plan and/or to you may result if your beneficial interest in the contract is assigned or transferred to persons other than: a plan participant as a means to provide benefit payments; an alternate payee under a qualified domestic relations order in accordance with code section 414(p); or to the Company as collateral for a loan. Exclusion From Gross Income. The Tax Code imposes a maximum limit on annual payments to your account(s) that may be excluded from gross income. The employer must calculate this limit under the plan in accordance with code section 415. This limit is generally the lesser of 25% of your compensation or $30,000. Compensation means your compensation from the employer sponsoring the plan and, for years beginning after December 31, 1997, includes any elective deferrals under code section 402(g) and any amounts not includible in gross income under code sections 125 or 457. The limit applies to your contributions as well as any contributions made by your employer on your behalf. There is an additional limit that specifically limits your salary reduction contributions under a 401(k) plan to generally no more than $10,000 annually (subject to indexing). Your own limits may be higher or lower, depending on certain conditions. In addition, payments to your account(s) will be excluded from your gross income only if the plan meets certain nondiscrimination requirements. Restrictions on Distributions. Code section 401(k) restricts distribution from your 401(k) employee account, and possibly all or a portion of your 401(k) employer account if such amounts are included in determining compliance with certain nondiscrimination requirements under the Tax Code. 38 Subject to the terms of the 401(k) plan, distribution of these restricted amounts may only occur upon: retirement, death, attainment of age 59-1/2, disability, separation from service, financial hardship, termination of the plan in certain circumstances, or, generally, if your employer is a corporation and disposes of substantially all of its assets or disposes of a subsidiary. In addition, income attributable to salary reduction contributions and credited on or after January 1, 1989, may not be distributed in the case of hardship. Code Section 415(m) Arrangements If you participate in the contract through a qualified governmental excess benefit arrangement, defined in code section 415(m), the amounts provided under the contract may be subject to the same requirements as those applied to code section 457(b) plans described above, except that the limits described in "Contributions Excluded from Taxable Income" do not apply. If the code section 415(m) arrangement is not designed to meet the requirements of code section 457(b), then the amounts provided under the contract are taxed in accordance with code section 451 and are generally taxable when paid or made available to you. Bona Fide Severance Pay Plans If you participate in the contract through certain bona fide severance pay plans, described in code section 457(e)(11), amounts provided under the contract are generally not taxable until paid or made available to you. However, because these plans are not clearly defined in the Code, it may be determined that your plan does not qualify as a bona fide severance pay plan. If the plan does not qualify, then amounts provided under the contract are taxable in the year in which they are deferred. Because of this lack of clarity, it is imperative that you consult your tax adviser for guidance regarding taxation. VI. Taxation of the Company We are taxed as a life insurance company under the Tax Code. Variable Annuity Separate Account C is not a separate entity from us. Therefore, it is not taxed separately as a "regulated investment company," but is taxed as part of the Company. We automatically apply investment income and capital gains attributable to the separate account to increase reserves under the contracts. Because of this, under existing federal tax law we believe that any such income and gains will not be taxed to the extent that such income and gains are applied to increase reserves under the contracts. In addition, any foreign tax credits attributable to the separate account will be first used to reduce any income taxes imposed on the separate account before being used by the Company. In summary, we do not expect that we will incur any federal income tax liability attributable to the separate account and we do not intend to make any provision for such taxes. However, changes in federal tax laws and/or their interpretation may result in our being taxed on income or gains attributable to the separate account. In this case, we may impose a charge against the separate account (with respect to some or all of the contracts) to set aside provisions to pay such taxes. We may deduct this amount from the separate account, including from your account value invested in the subaccounts. 39 Other Topics - -------------------------------------------------------------------------------- The Company Aetna Life Insurance and Annuity Company (the Company, we) issues the contracts described in this prospectus and is responsible for providing each contract's insurance and annuity benefits. We are a stock life insurance company organized under the insurance laws of the State of Connecticut in 1976 and an indirect wholly owned subsidiary of Aetna Inc. Through a merger, our operations include the business of Aetna Variable Annuity Insurance Company (formerly known as Participating Annuity Life Insurance Company, an Arkansas life insurance company organized in 1954). We are engaged in the business of issuing life insurance and annuities. Our principal executive offices are located at: 151 Farmington Avenue Hartford Connecticut 06156 Variable Annuity Account C We established Variable Annuity Account C (the "separate account") in 1976 as a segregated asset account to fund our variable annuity contracts. The separate account is registered as a unit investment trust under the Investment Company Act of 1940 (the "40 Act"). It also meets the definition of "separate account" under the federal securities laws. The separate account is divided into "subaccounts." These subaccounts invest directly in shares of a corresponding fund. Although we hold title to the assets of the separate account, such assets are not chargeable with the liabilities of any other business that we 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 obligations of the Company. Performance Reporting We may advertise different types of historical performance for the subaccounts including o standardized average annual total returns o non-standardized average annual total returns We may also advertise certain ratings, rankings or other information related to the Company, the subaccounts or the funds. For further details regarding performance reporting and advertising, request a Statement of Additional Information at the number listed in "Contract Overview--Questions." Standardized Average Annual Total Returns. We calculate standardized average annual total returns according to a formula prescribed by the SEC. This shows the percentage return applicable to $1,000 invested in the subaccount over the most recent one, five and 10-year periods. If the investment option was not available for the full period, we give a history from the date money was first received in that option under the separate account. 40 We include all recurring charges during each period (e.g., mortality and expense risk charges, annual maintenance fees, administrative expense charges (if any) and any applicable early withdrawal charges). Non-Standardized Average Annual Total Returns. We calculate non-standardized average annual total returns in a similar manner as that stated above, except we do not include the deduction of any applicable early withdrawal charge. Some non-standardized returns may also exclude the effect of a maintenance fee. If we reflected these charges in the calculation, they would decrease the level of performance reflected by the calculation. Non-standardized returns may also include performance from the fund's inception date, if that date is earlier than the one we use for standardized returns. Voting Rights Each of the subaccounts holds shares in a fund and each is entitled to vote at regular and special meetings of that fund. Under our current view of applicable law, we will vote the shares for each subaccount as instructed by persons having a voting interest in the separate account. Generally, under contracts issued in connection with section 403(b) or 401 plans, you have a fully vested interest in the value of your employee account, and in your employer account to the extent of your vested percentage in the plan. Therefore, under such plans you generally have the right to instruct the contract holder how to direct us to vote shares attributable to your account. Under contracts issued in connection with section 457 plans, the contract holder retains all voting rights. We will vote shares for which instructions have not been received in the same proportion as those for which we received instructions. Each person who has a voting interest in the separate account will receive periodic reports relating to the funds in which he or she has an interest, as well as any proxy materials and a form on which to give voting instructions. Voting instructions will be solicited by a written communication at least 14 days before the meeting. The number of votes, whole and fractional, any person is entitled to direct will be determined as of the record date set by any fund in which that person invests through the subaccounts. o During the accumulation phase the number of votes is equal to the portion of your account value invested in the fund, divided by the net asset value of one share of that fund. o During the income phase the number of votes is equal to the portion of reserves set aside for the contract's share of the fund, divided by the net asset value of one share of that fund. Contract Distribution The Company will serve as the principal underwriter for the securities sold under this prospectus. The Company is registered as a broker-dealer with the SEC and is a member of the National Association of Securities Dealers, Inc. As principal underwriter, the Company will enter into arrangements with one or more registered broker-dealers, including at least one affiliate of the Company, to offer and sell the contracts described in this prospectus. We call these entities "distributors." 41 We and one or more of our affiliates may also sell the contracts directly. All individuals offering and selling the contracts must be registered representatives of a broker-dealer and must be licensed as insurance agents to sell variable annuity contracts Commission Payments. We may pay commissions to persons who offer and sell the contracts. The maximum percentage amount we ever pay with respect to a given purchase payment is the first-year percentage which ranges from 1% to a maximum of 7% of the first year of payments to an account. We may also pay renewal commissions on payments made after the first year and, under group contracts, asset-based service fees. The average of all commissions and asset-based service fees paid is estimated to equal approximately 3% of the total payments made over the life of an average contract. Some sales personnel may receive various types of non-cash compensation as special sales incentives, including trips and educational and/or business seminars. However, any such compensation will be paid in accordance with NASD rules. We may reimburse the distributor for certain expenses. The names of the distributor and the registered representative responsible for your account are stated in your enrollment materials. Commissions and sales related expenses are paid by us and are not deducted from payments to your account. Third Party Compensation Arrangements. Occasionally, we may: o Pay commissions and fees to distributors affiliated or associated with the contract holder, you and/or other contract participants. o Enter into agreements with entities associated with the contract holder, you and/or other participants. Through such agreements, we may pay the entities for certain services in connection with administering the contract. In both these circumstances there may be an understanding that the distributor or entities would endorse us as a provider of the contract. You will be notified if you are purchasing a contract that is subject to these arrangements. Contract Modification We may change the contract as required by federal or state law. In addition, we may, upon 30 days' written notice to the contract holder, make other changes to group contracts that would apply only to individuals who become participants under that contract after the effective date of such changes. If the group contract holder does not agree to a change, we reserve the right to refuse to establish new accounts under the contract, and under some contracts, to discontinue accepting payments to existing accounts. Certain changes will require the approval of appropriate state or federal regulatory authorities. In addition, under some contracts we reserve the right, without contract holder consent, to change the tables for determining the amount of income payments or the income payment options available. Such a change would only apply to income payments attributable to contributions accepted after the date of change. 42 Legal Matters and Proceedings We are aware of no material legal proceedings pending which involve the separate account or the Company as a party or which would materially affect the separate account. The validity of the securities offered by this prospectus has been passed upon by Counsel to the Company. Payment Delay or Suspension We reserve the right to suspend or postpone the date of any payment of benefits or values under the following circumstances: (a) on any valuation date when the New York Stock Exchange is closed (except customary weekend and holiday closings), or when trading on the Exchange is restricted; (b) when an emergency exists as determined by the SEC so that disposal of securities held in the subaccounts is not reasonably practicable or it is not reasonably practicable for us fairly to determine the value of the subaccount's assets; (c) during any other periods the SEC may by order permit for the protection of investors. The conditions under which restricted trading or an emergency exists shall be determined by the rules and regulations of the SEC. Transfer of Ownership; Assignment An assignment of a contract will only be binding on us if it is made in writing and sent to us at our Home Office. We will use reasonable procedures to confirm that the assignment is authentic, including verification of signature. If we fail to follow our own procedures, we will be liable for any losses to you directly resulting from the failure. Otherwise, we are not responsible for the validity of any assignment. The rights of the contract holder and the interest of the annuitant and any beneficiary will be subject to the rights of any assignee we have on our records. Account Termination Under some contracts, where allowed by state law, we reserve the right to terminate an individual account if the account value is less than $3,500 and this value is not due to negative investment performance. We will notify you or the contract holder 90 days prior to terminating the account. If we exercise this right we will not deduct an early withdrawal charge. Year 2000 Readiness As a healthcare and financial services enterprise, Aetna Inc. (referred to collectively with its affiliates and subsidiaries as "Aetna"), is dependent on computer systems and applications to conduct its business. Aetna has developed and is currently executing a comprehensive risk-based plan designed to make its mission-critical information technology ("IT") systems and embedded systems Year 2000 ready. The plan for IT systems covers five stages including (i) assessment, (ii) remediation, (iii) testing, (iv) implementation and (v) Year 2000 approval. At year end 1997, Aetna, including the Company, had substantially completed the assessment stage. The remediation of mission- critical IT systems was completed year end 1998. Testing of all mission-critical IT systems is underway with Year 2000 approval targeted for completion by mid-1999. The costs of these efforts will not affect the separate account. 43 The Company, its affiliates and the mutual funds that serve as investment options for the separate account also have relationships with investment advisers, broker dealers, transfer agents, custodians or other securities industry participants or other service providers that are not affiliated with Aetna. Aetna, including the Company, has initiated communication with its critical external relationships to determine the extent to which Aetna may be vulnerable to such parties' failure to resolve their own Year 2000 issues. Aetna and the Company have assessed and are prioritizing responses in an attempt to mitigate risks with respect to the failure of these parties to be Year 2000 ready. There can be no assurance that failure of third parties to complete adequate preparations in a timely manner, and any resulting systems interruptions or other consequences, would not have an adverse effect, directly or indirectly, on the separate account, including, without limitation, its operation or the valuation of its assets and units. 44 OREGON EDUCATION ASSOCIATION CHOICE PERSONAL BENEFIT TRUST ("OEA TRUST") AND THE COMPANY'S AGREEMENT Under past and current agreements, the OEA Trust exclusively endorses our tax deferred variable annuity for sale to its members. Under the current agreement the OEA Trust agrees to: o facilitate Oregon Education Association ("OEA") members' access to the variable annuity; o assist us by providing services such as office space and secretarial/clerical support. The OEA Trust will provide an employee who: o is a registered representative of one of our affiliates; o advertises the Company in OEA's newsletter; o facilitates and coordinates meetings and workshops where registered representatives of the Company's affiliate present the annuity to OEA members; and o acts as a liaison between the Company and OEA members. In return the Company agrees to: o compensate OEA Trust to help it defray the costs incurred in providing the administrative and other support; o reimburse OEA Trust for out-of-pocket travel and meeting expenses of an OEA Trust employee who is also a registered representative of the Company's affiliate. During 1998, the Company compensated OEA Trust $ _____ as reimbursement for the costs and services described above. During 1999, the Company expects to compensate OEA Trust approximately $ _____ as reimbursement for the costs and services described above. The OEA Trust receives no commissions or other transaction-based compensation from the sale. 45 Contents of the Statement of Additional Information - -------------------------------------------------------------------------------- The Statement of Additional Information contains more specific information on the Separate Account and the contract, as well as the financial statements of the Separate Account and the Company. A list of the contents of the SAI is set forth below: General Information and History Variable Annuity Account C Offering and Purchase of Contracts Performance Data General Average Annual Total Return Quotations Income Phase Payments Sales Material and Advertising Independent Auditors Financial Statements of the Separate Account Financial Statements of the Company 46 Appendix I Guaranteed Accumulation Account - -------------------------------------------------------------------------------- The Guaranteed Accumulation Account (GAA) is a fixed interest option that may be available during the accumulation phase. This appendix is only a summary of certain facts about the GAA. Please read the GAA prospectus before investing in this option. In General. Amounts that you invest in GAA will earn a guaranteed interest rate if amounts are left in GAA for the specified period of time. If you withdraw or transfer those amounts before the specified period of time has elapsed, we may apply a "market value adjustment," which may be positive or negative. When you decide to invest money in GAA, you will want to contact your representative or the Company to learn: o The interest rate we will apply to the amounts that you invest in GAA. We change this rate periodically, so be certain that you know what rate we guarantee on the day your account dollars are invested into GAA. o The period of time your account dollars need to remain in GAA in order to earn that rate. You are required to leave your account dollars in GAA for a specified period of time (guaranteed term), in order to earn the guaranteed interest rate. Deposit Periods. A deposit period is the time during which we offer a specific interest rate if you deposit dollars for a certain guaranteed term. For a particular interest rate and guaranteed term to apply to your account dollars, you must invest them during the deposit period during which that rate and term are offered. Interest Rates. We guarantee different interest rates, depending on when account dollars are invested in GAA. The interest rate we guarantee is an annual effective yield; that means that the rate reflects a full year's interest. We credit interest daily at a rate that will provide the guaranteed annual effective yield over one year. The guaranteed interest rate will never be less than the rate stated in the contract. Fees and Other Deductions. o If all or a portion of your account value in GAA is withdrawn, you may incur the following: Market Value Adjustment (MVA)--as described in this appendix and in the GAA prospectus Tax Penalties and/or Tax withholding--see "Taxation" Early Withdrawal Charge--see "Fees" Maintenance Fee--"see Fees" o We do not make deductions from amounts in the GAA to cover mortality and expense risks. Rather, we consider these risks when determining the credited rate. Market Value Adjustment (MVA). If you withdraw or transfer your account value from GAA before the guaranteed term is completed, an MVA may apply. The MVA reflects the change in the value of the investment due to changes in interest rates since the date of deposit. The MVA may be positive or negative. o If interest rates at the time of withdrawal have increased since the date of deposit, the value of the investment decreases and the MVA will be negative. This could result in your receiving less than the amount you paid into GAA. o If interest rates at the time of withdrawal have decreased since the date of deposit, the value of the investment increases and the MVA will be positive. Under some contracts issued in New York, if you have elected ECO or SWO as described in "Systematic Distribution Options," no MVA applies to amounts withdrawn from GAA. Guaranteed Terms. The guaranteed term is the period of time account dollars must be left in the GAA in order to earn the interest rate specified for that guaranteed term. We offer different guaranteed terms at different times. Check with your representative or the Company to learn the details about the guaranteed term(s) currently being offered. 47 In general we offer the following guaranteed terms: o short-term--three years or less o long-term--ten years or less, but greater than three years At the end of a guaranteed term, your contract holder or you if permitted may: o transfer dollars to a new guaranteed term o transfer dollars to other available investment options o withdraw dollars Deductions may apply to withdrawals. See "Fees and Other Deductions" in this section. Transfer of Account Dollars. Generally, account dollars invested in GAA may be transferred among guaranteed terms offered through the GAA, and/or to other investment options offered through the contract. However, transfers may not be made during the deposit period in which your account dollars are invested in GAA or for 90 days after the close of that deposit period. We will apply an MVA to transfers made before the end of a guaranteed term. Income Phase. GAA can not be used as an investment option during the income phase. The contract holder or you, if permitted, may notify us at least 30 days in advance to elect a variable payment option and to transfer your GAA account dollars to any of the subaccounts available during the income phase. Loans. You cannot take a loan from your account value in GAA. However, we include your account value in GAA when determining the amount of your account value we may distribute as a loan. Reinvesting amounts withdrawn from GAA. If amounts are withdrawn from GAA and then reinvested in GAA, we will apply the reinvested amount to the current deposit period. The guaranteed annual interest rate, and guaranteed terms available on the date of reinvestment will apply. Amounts will be reinvested proportionately in the same way as they were allocated before withdrawal. Your account value will not be credited for any negative MVA that was deducted at the time of withdrawal. 48 Appendix II Fixed Account - -------------------------------------------------------------------------------- The Fixed Account is an investment option available during the accumulation phase under some contracts. Under some contracts, this option is available to installment purchase plans only. This option is not available in the state of New York under some contracts. - -------------------------------------------------------------------------------- Additional information about this option may be found in the contract. - -------------------------------------------------------------------------------- Amounts allocated to the Fixed Account are held in the Company's general account which supports insurance and annuity obligations. General Disclosure. Interests in the Fixed 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 Account 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 Account has not been reviewed by the SEC. Interest Rates. The Fixed Account guarantees that amounts allocated to this option will earn the minimum interest rate specified in the contract. We may credit a higher interest rate from time to time, but the rate we credit will never fall below the guaranteed minimum specified in the contract. Amounts applied to the Fixed Account will earn the interest rate in effect at the time money is applied. Amounts in the Fixed Account will reflect a compound interest rate as credited by us. The rate we quote is an annual effective yield. Our 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 the amounts you allocate to this option and promising a minimum interest rate and income phase payment. Withdrawals. Under certain emergency conditions, some contracts allow us to defer payment of any withdrawal for a period of up to 6 months or as provided by federal law. Additionally, if allowed by state law, some contracts provide that we may pay withdrawals in equal payments with interest, over a period not to exceed 60 months when: (a) The Fixed Account withdrawal value exceeds $250,000 on the day before withdrawal; and (b) The sum of the current Fixed Account withdrawal and total of all Fixed Account withdrawals within the past 12 calendar months exceeds 20% of the amount in the Fixed Account on the day before the current withdrawal. The contract describes how we will determine the interest rate credited to amounts held in the Fixed Account during the payment period, including the minimum interest rate. Charges. We do not make deductions from amounts in the Fixed Account to cover mortality and expense risks. We consider these risks when determining the credited rate. If you make a withdrawal from amounts in the Fixed Account, an early withdrawal charge may apply. See "Fees--Early Withdrawal Charge." Transfers. During the accumulation phase, you may transfer account dollars from the Fixed Account to any other available investment option. We may vary the dollar amount that you are allowed to transfer, but it will never be less than 10% of your account value held in the Fixed Account each calendar year or each 12-month period, depending on the contract. We determine the amount available for transfer based on your Fixed Account value either (1) on the January 1st preceding the transfer request or (2) as of the date we receive the transfer request in good order at our Home Office. The 10% limit does not apply to amounts being transferred into the Fixed Plus Account (if available under the contract). 49 By notifying the Home Office at least 30 days before income payments begin you, or the contract holder on your behalf, may elect to have amounts transferred to one or more of the funds available during the income phase to provide variable payments. Contract Loans. If available under your plan, contract loans may be made from account values held in Fixed Account. 50 Appendix III Fixed Plus Account - -------------------------------------------------------------------------------- The Fixed Plus Account is an investment option available during the accumulation phase under some contracts. Amounts allocated to the Fixed Plus Account are held in the Company's general account which supports insurance and annuity obligations. - -------------------------------------------------------------------------------- Additional information about this option may be found in the contract. - -------------------------------------------------------------------------------- General Disclosure. 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 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. Certain Restrictions. This option is not available in the state of New York under some contracts. We reserve the right to limit investment in or transfers to the Fixed Plus Account. Under most contracts, you may not elect certain withdrawal options including, under most contracts, the systematic distribution option, if you have requested a Fixed Plus Account transfer or withdrawal in the prior 12-month period. For some contracts, under certain emergency conditions, we may defer payment of a withdrawal from the Fixed Plus Account for a period of up to six months or as provided by federal law. Interest Rates. The Fixed Plus Account guarantees that amounts allocated to this option will earn the minimum interest rate specified in the contract. We may credit a higher interest rate from time to time, but the rate we credit will never fall below the guaranteed minimum specified in the contract. Under some contracts, we credit amounts held in the Fixed Plus Account with a rate 0.25% higher than the then-declared rate beginning in the tenth year after your account was established. Amounts applied to the Fixed Plus Account will earn the interest rate in effect at the time money is applied. Amounts in the Fixed Plus Account will reflect a compound interest rate as credited by us. The rate we quote is an annual effective yield. Our 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 the amounts you allocate to this option and promising a minimum interest rate and income phase payment. Requests for Partial Withdrawals. The contract holder or you, if permitted by the plan, may take up to 20% of the Fixed Plus Account value as a partial withdrawal in each twelve (12) month period, or under some contracts, in each calendar year. We determine the amount eligible for partial withdrawal as of the date we receive a request for partial withdrawal in good order at our Home Office or as of the January 1st preceding the partial withdrawal request, depending on the terms of the contract. The amount allowed for partial withdrawal is reduced by any Fixed Plus Account withdrawals, transfers, loan or amounts applied to income phase payment options made in the prior 12 months (or, under some contracts, the prior calendar year). Under most contracts, in calculating the 20% limit, we reserve the right to include payments made due to the election of a systematic distribution option. Waiver of Partial Withdrawal Limits. We generally waive the 20% limit if the partial withdrawal is due to the election of an income phase payment option (under some contracts, the waiver does not apply to the election of a nonlifetime payment option with variable payments). We also waive the 20% limit for withdrawals due to your death. Under most contracts, the waiver upon death may only be exercised once, must occur within six months after your date of death and must be made proportionally from all subaccounts and fixed interest options in which the account was invested. 51 Also, under some contracts the 20% limit is waived if the withdrawal is due to hardship from an unforeseeable emergency, or an unforeseeable emergency as defined by the Tax Code, and the following requirements are satisfied: o The hardship is certified (required under most contracts); o The partial withdrawal is taken proportionally from each investment option in which the your account invests; o The amount is paid directly to you; and o The amount paid for all withdrawals due to hardship during the previous 12-month period does not exceed 10% of the average value of your account(s) and all other accounts under the relevant contracts during that same period. Under some contracts, the percentage limit is also waived if the partial withdrawal is due to separation from service and the following conditions are met: o The employer certifies you have separated from service; o The amount withdrawn is paid directly to you; and o The amount paid for all partial and full withdrawals due to separation from service during the previous 12-month period does not exceed 20% of the average value of your account(s) and all other accounts under the relevant contracts providing this waiver during that same period. Additionally, we may allow other waivers of the percentage limit on partial withdrawals to participants in certain plans. You can determine what additional waivers, if any, apply to you by referring to the contract or certificate. Requests for Full Withdrawals. If the contract holder or you, if allowed by the plan, request a full withdrawal of your Fixed Plus Account value, we will pay any amounts held in the Fixed Plus Account, with interest, in five annual payments that will be equal to: o One-fifth of the Fixed Plus Account value on the day the request is received, reduced by any Fixed Plus Account withdrawals, transfers, amounts used to fund income phase payments, or loans made during the prior 12 months (or, under some contracts, during the prior calendar year); o One-fourth of the remaining Fixed Plus Account value 12 months later; o One-third of the remaining Fixed Plus Account value 12 months later; o One-half of the remaining Fixed Plus Account value 12 months later; and o The balance of the Fixed Plus Account value 12 months later. Under some contracts, there is a different method of calculating the amount available each year. The full withdrawal will be paid in installments of 20% of your account value held in the Fixed Plus Account, reduced by any Fixed Plus Account withdrawals, transfers, amounts used to fund income phase payments, or loans made during the prior 12 months in each of four consecutive 12-month periods. Under this provision, the remaining Fixed Plus Account balance in the account may be withdrawn any time after the end of the fourth 12-month period. Once we receive a request for a full withdrawal, no further withdrawals, loans or transfers will be permitted from the Fixed Plus Account. A full withdrawal from the Fixed Plus Account may be canceled at any time before the end of the five-payment period. Waiver of Full Withdrawal Provisions. We will waive the Fixed Plus Account five-installment payout for full withdrawals made due to one or more of the following: (a) Due to the election of an income phase payment option (under some contracts this waiver does not apply to the election of a nonlifetime payment option with variable payments) (b) Due to your death during the accumulation phase. Some contracts require that we be notified of your death, or that the withdrawal be taken, within six months of the death (c) When the Fixed Plus Account value is $3,500 or less ($2,000 or less under some contracts). Most contracts also require that no withdrawals, transfers, loans or elections of income phase payment options have been made from the your account within the prior 12 months (or, under some contracts, within the prior calendar year). 52 Additionally, under certain contracts, we will waive the five-payment full withdrawal provision due to one or more of the following: 1. Due to hardship from an unforeseeable emergency, as defined by the Tax Code, if all of the following conditions are met: o The hardship is certified by the employer, and, under some contracts; o The amount is paid directly to you; and o The amount paid for all withdrawals due to hardship during the previous 12-month period does not exceed 10% of the average value of your account(s) and all other accounts under the relevant contract during that same period. 2. Due to your separation from service with the employer, provided that all the following apply*: o The employer certifies that you have separated from service; o The amount withdrawn is paid directly to you (under some contracts it must be paid directly to you only if you withdraw the amounts more than one year after separation); and o Under most contracts, if the amount paid for all partial and full withdrawals due to separation from service during the previous 12-month period does not exceed 20% of the average value of all your account(s) and all other accounts under the relevant contract during that same period. 3. If you are at least age 59-1/2 and have completed nine payment periods 4. If we terminate your account based on our right to do so for accounts below a certain value (usually $3,500). 5. Additionally, we may allow other waivers of the five installment payout for full withdrawals to participants in certain plans. You can determine what additional waivers, if any, apply to you by referring to the contract or certificate. Charges. We do not make deductions from amounts in the Fixed Plus Account to cover mortality and expense risks. We consider these risks when determining the credited rate. Transfers. The contract holder or you, if allowed by the plan, may transfer 20% of your account value held in the Fixed Plus Account in each 12-month period or during each calendar year, depending on the terms of the contract. We determine the amount eligible for transfer on the day we receive a transfer request in good order at our Home Office, or under some contracts, as of the January 1st preceding the transfer request. We will reduce amounts allowed for transfer by any Fixed Plus Account withdrawals, transfers, loans or amounts applied to income phase payment options during the prior 12 months (or, under some contracts, during the prior calendar year). Under most contracts, in calculating the percentage limit on transfers, we reserve the right to include payments made due to the election of any of the systematic distribution options. We will waive the percentage limit on transfers when the value in the Fixed Plus Account is $1,000 or less ($2,000 or less under some contracts). Under some contracts, if you transfer 20% of your account value held in the Fixed Plus Account in each of four consecutive 12-month periods, you may transfer the remaining balance in the succeeding 12-month period provided you do not allocate any amount to or transfer any other amount from the Fixed Plus Account during the five-year period. The 20% amount available to transfer under this provision will be reduced by any amount transferred, taken as a loan or applied to income phase payment options within the 12-month period preceding the first 20% transfer. Also, we may reduce it for payments we made from your Fixed Plus Account value under any systematic distribution option. - ----------------- * Instead of the provisions under number 2 above, some contracts waive the five-payment full withdrawal provision for separation from service if all of the following apply: o The hardship is certified by the employer; o We receive the withdrawal request within 60 days of the date of separation; and o You pay a 3% charge based on the entire Fixed Plus Account value. If you instead choose to have your payout in five annual installments as described above, then we will not assess the charge. 53 Income Phase. Amounts accumulating under the Fixed Plus Account can be transferred to subaccounts to fund variable payments during the income phase. Availability of subaccounts may vary during the income phase. Some contracts do not permit Fixed Plus Account values to fund nonlifetime income options with variable payments. Contract Loans. If permitted under the plan, loans may be made from account values held in the Fixed Plus Account. See the loan agreement for a description of the amount available and possible consequences upon loan default if Fixed Plus Account values are used for a loan. Transfer Credits. The Company provides a transfer credit in certain circumstances. See "Purchase--Transfer Credits." The transfer credit is a specified percentage of the assets transferred to the Company under a contract that remain in the accounts for the period of time specified by the Company, plus the interest that would have been credited had that amount been deposited in the Fixed Plus Account on the first business day of the calendar month following its calculation. We apply the transfer credit to the current value held in the Fixed Plus Account. 54 Appendix IV Employee Appointment of Employer as Agent Under an Annuity Contract - -------------------------------------------------------------------------------- For Plans under Section 403(b) or 401 of the Code (except voluntary Section 403(b) Plans) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- My employer has adopted a plan under Internal Revenue Code Sections 403(b) or 401(a)/401(k) ("Plan") and has purchased an Aetna Life Insurance and Annuity Company ("Company") group variable annuity contract ("Contract") as the funding vehicle. Contributions under this Plan will be made by me through salary reduction to an Employee Account, and by my employer to an Employer Account. By electing to participate in my employer's Plan, I voluntarily appoint my employer, who is the Contract Holder, as my agent for the purposes of all transactions under the Contract in accordance with the terms of the Plan. The Company is not a party to the Plan and does not interpret the Plan provisions. As a Participant in the Plan, I understand and agree to the following terms and conditions: o I own the value of my Employee Account subject to the restrictions of Sections 403(b) or 401(k) and the terms of the Plan. Subject to the terms of the vesting schedule in the Plan and the restrictions of Sections 403(b) or 401(k), I have ownership in the value of my Employer Account. o I understand that the Company will process transactions only with my employer's written direction to the Company. I agree to be bound by my employer's interpretation of the Plan provisions and its written direction to the Company. o My employer may permit me to make investment selections under the Employee Account and/or the Employer Account directly with the Company under the terms of the Contract. Without my employer's written permission, I will be unable to make any investment selections under the Contract. o On my behalf, my employer may request a loan in accordance with the terms of the Contract and the provisions of the Plan. The Company will make payment of the loan amount directly to me. I will be responsible for making repayments directly to the Company in a timely manner. o In the event of my death, my employer is the named Beneficiary under the terms of the Contract. I have the right to name a personal Beneficiary as determined under the terms of the Plan and file that Beneficiary election with my employer. It is my employer's responsibility to direct the Company to properly pay any death benefits. 55 Appendix V Fund Descriptions - -------------------------------------------------------------------------------- The investment results of the funds are likely to differ significantly and there is no assurance that any of the funds will achieve their respective investment objectives. Except as noted, all funds are diversified, as defined under the Investment Company Act of 1940. The contract holder may designate some or all of the mutual funds described below as variable funding options under a contract. Availability of the fund(s) may vary. See "Investment Options" for availability and other information. o Aetna Balanced VP, Inc. seeks to maximize investment return, consistent with reasonable safety of principal by investing in a diversified portfolio of one or more of the following asset classes: stocks, bonds and cash equivalents, based on the investment adviser's judgment of which of those sectors or mix thereof offers the best investment prospects.(1) o Aetna Income Shares d/b/a Aetna Bond VP seeks to maximize total return, consistent with reasonable risk, through investments in a diversified portfolio consisting primarily of debt securities.(1) o Aetna Variable Fund d/b/a Aetna Growth and Income VP seeks to maximize total return through investments in a diversified portfolio of common stocks and securities convertible into common stock.(1) o Aetna Variable Encore Fund d/b/a Aetna Money Market VP 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.(1) o Aetna Generation Portfolios, Inc.--Aetna Ascent VP seeks to provide capital appreciation. The Portfolio is designed for investors who have an investment horizon exceeding 15 years and who have a high level of risk tolerance.(1) o Aetna Generation Portfolios, Inc.--Aetna Crossroads VP seeks to provide total return (i.e., income and capital appreciation, both realized and unrealized). The Portfolio is designed for investors who have an investment horizon exceeding 10 years and who have a moderate level of risk tolerance.(1) o Aetna Generation Portfolios, Inc.--Aetna Legacy VP seeks to provide total return consistent with preservation of capital. The Portfolio is designed for investors who have an investment horizon exceeding five years and who have a low level of risk tolerance.(1) o Aetna Variable Portfolios, Inc.--Aetna Growth VP seeks growth of capital through investment in a diversified portfolio of common stocks and securities convertible into common stocks believed to offer growth potential.(1) o Aetna Variable Portfolios, Inc.--Aetna High Yield VP seeks high current income and growth of capital primarily through investment in a diversified portfolio of fixed income securities rated lower than BBB by Standard and Poor's Corporation or lower than Baa3 by Moody's Investors Service, Inc.(1) o Aetna Variable Portfolios, Inc.--Aetna Index Plus Large Cap VP seeks to outperform the total return performance of publicly traded common stocks represented in the S&P 500 Composite Stock Price Index.(1) o Aetna Variable Portfolios, Inc.--Aetna Index Plus Mid Cap VP seeks to outperform the total return performance of publicly traded common stocks represented in the S&P 400.(1) o Aetna Variable Portfolios, Inc.--Aetna Index Plus Small Cap VP seeks to outperform the total return performance of publicly traded common stocks represented by the S&P SmallCap 600 Index, a stock market index composed of 600 common stocks selected by Standard and Poor's Corporation.(1) o Aetna Variable Portfolios, Inc.--Aetna International VP seeks long-term capital growth primarily through investment in a diversified portfolio of common stocks principally traded in countries outside of the United States. Aetna International VP will not target any given level of current income.(1) o Aetna Variable Portfolios, Inc.--Aetna Real Estate Securities VP seeks maximum total return primarily through investment in a diversified portfolio of equity securities issued by real estate companies, the majority of which are real estate investment trusts (REITs).(1) 56 o Aetna Variable Portfolios, Inc.--Aetna Small Company VP seeks growth of capital primarily through investment in a diversified portfolio of common stocks and securities convertible into common stocks of companies with smaller market capitalizations.(1) o Aetna Variable Portfolios, Inc.--Aetna Value Opportunity VP seeks growth of capital primarily through investment in a diversified portfolio of common stocks and securities convertible into common stock(1)(a) o AIM V.I. Capital Appreciation Fund seeks capital appreciation through investments in common stocks, with emphasis on medium-sized and smaller emerging growth companies.(2) o AIM V.I. Growth Fund seeks growth of capital principally through investment in common stocks of seasoned and better capitalized companies considered by AIM to have strong earnings momentum. Current income will not be an important criterion of investment selection, and any such income should be considered incidental.(2) o AIM V.I. Growth and Income Fund seeks growth of capital, with current income as a secondary objective. Although the amount of the Fund's current income will vary from time to time, it is anticipated that the current income realized by the Fund will generally be greater than that realized by the mutual funds whose sole objective is growth of capital.(2) o AIM V.I. Value Fund seeks to achieve long-term growth of capital by investing primarily in equity securities judged by AIM to be undervalued relative to the current or projected earnins of the companies issuing the securities, or relative to the current market values of assets owned by the companies issuing the securities, or relative to the equity market, generally.(2) o Calvert Social Balanced Portfolio is a nondiversified portfolio that seeks to achieve a total return above the rate of inflation through an actively managed, nondiversified portfolio of common and preferred stocks, bonds and money market instruments which offer income and capital growth opportunity and which satisfy the social criteria established for the Portfolio.(3) o Fidelity Investments Variable Insurance Products Fund--Equity-Income Portfolio seeks reasonable income by investing primarily in income-producing equity securities. In selecting investments, the Fund also considers the potential for capital appreciation.(4) o Fidelity Investments Variable Insurance Products Fund--Growth Portfolio seeks capital appreciation by investing mainly in common stocks, although its investments are not restricted to any one type of security.(4) o Fidelity Investments Variable Insurance Products Fund--Overseas Portfolio seeks long-term growth by investing mainly in foreign securities (at least 65% of the Fund's total assets in securities of foreign issuers). Foreign investments involve greater risks than U.S. investments, including political and economic risks and the risk of currency fluctuation.(4) o Fidelity Investments Variable Insurance Products Fund II--Contrafund Portfolio seeks maximum total return over the long term by investing mainly in securities of companies whose value the investment adviser believes is not fully recognized by the public.(4) o Janus Aspen Series--Aggressive Growth Portfolio is a nondiversified portfolio that seeks long-term growth of capital. The Portfolio pursues its investment objective by normally investing at least 50% of its equity assets in securities issued by medium-sized companies. Medium-sized companies are those whose market capitalizations fall within the range of companies in the S&P MidCap 400 Index, which as of December 31, 1998 included companies with capitalizations between approximately $__ million and $__ billion, but which is expected to change on a regular basis.(5) o Janus Aspen Series--Balanced Portfolio seeks long-term capital growth, consistent with preservation of capital and balanced by current income. The Portfolio pursues its investment objective by, under normal circumstances, investing 40%-60% of its assets in securities selected primarily for their growth potential and 40%-60% of its assets in securities selected primarily for their income potential.(5) o Janus Aspen Series--Flexible Income Portfolio seeks to obtain maximum total return, consistent with preservation of capital. The Portfolio pursues its investment objective primarily through investments in income-producing securities. Total return is expected to result from a combination of current income and capital appreciation. The Portfolio invests in all types of income-producing securities and may have substantial holdings of 57 debt securities rated below investment grade (e.g., junk bonds).(5) Janus Aspen Series--Growth Portfolio seeks long-term growth of capital in a manner consistent with the preservation of capital. The Portfolio pursues its investment objective by investing primarily in common stocks of issuers of any size. This Portfolio generally invests in larger, more established issuers.(5) Janus Aspen Series--Worldwide Growth Portfolio seeks long-term growth of capital in a manner consistent with preservation of capital. The Portfolio pursues its investment objective primarily through investments in common stocks of foreign and domestic issuers.(5) 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. Transfers or deposits are not allowed into the subaccount investing in this fund, except from accounts established under the contract before May 1, 1998. As soon as all those who have current allocations to the subaccount under the contract have redirected their allocations to other investment options, we will close the subaccount to all investments (except reinvested dividends and capital gains earned on amounts already invested in the fund through the separate account and loan repayments that we automatically deposit into the fund according to our loan repayment procedures.) o Oppenheimer Global Securities Fund seeks long-term capital appreciation by investing a substantial portion of its assets in securities of foreign issuers, "growth-type" companies, cyclical industries and special situations which are considered to have appreciation possibilities but which may be considered to be speculative.(7) o Oppenheimer Strategic Bond Fund seeks a high level of current income principally derived from interest on debt securities and seeks to enhance such income by writing covered call options on debt securities. The Fund intends to invest principally in (i) foreign government and corporate debt securities, (ii) securities of the U.S. Government and its agencies and instrumentalities ("U.S. Government securities"), and (iii) lower-rated high yield domestic debt securities, commonly known as "junk bonds," which are subject to a greater risk of loss of principal and nonpayment of interest than higher-rated securities. These securities may be considered to be speculative. Current income is not an objective.(7) o Portfolio Partners, Inc.--MFS Emerging Equities Portfolio seeks to provide long-term growth of capital. Dividend and interest income from portfolio securities, if any, is incidental to the Portfolio's investment objective.(8a) o Portfolio Partners, Inc.--MFS Research Growth Portfolio seeks long-term growth of capital and future income.(8a) o Portfolio Partners, Inc.--MFS Value Equity Portfolio seeks capital appreciation. Dividend income, if any, is a consideration incidental to the Portfolio's objective of capital appreciation.(8a) o Portfolio Partners, Inc.--Scudder International Growth Portfolio seeks long-term growth of capital primarily through a diversified portfolio of marketable foreign equity securities.(8b) o Portfolio Partners, Inc.--T. Rowe Price Growth Equity Portfolio seeks long-term growth of capital and, secondarily, to increase dividend income by investing primarily in common stocks of well established growth companies.(8c) Investment Advisers for each of the Funds: (1) Aeltus Investment Management, Inc. (a) Bradley, Foster & Sargent, Inc. (subadviser) (2) AIM Advisors, Inc. (3) Calvert Asset Management Company, Inc. (4) Fidelity Management & Research Company (5) Janus Capital Corporation (6) Lexington Management Corporation (adviser); Market Systems Research Advisors, Inc. (subadviser) (7) OppenheimerFunds, Inc. (8) Aetna Life Insurance and Annuity Company (adviser); (a) Massachusetts Financial Services Company (subadviser) (b) Scudder Kemper Investments, Inc. (subadviser) (c) T. Rowe Price Associates, Inc. (subadviser) 58 APPENDIX VI CONDENSED FINANCIAL INFORMATION TABLE OF CONTENTS Table I - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 0.40%, 0.45%, and 0.50%.................................................................................. 60 Table II - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 0.75%, 0.80%, and 0.85%.................................................................................. 64 Table III - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 0.90% and 0.95%.......................................................................................... 68 Table IV - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 1.00% and 1.05%.......................................................................................... 72 Table V - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 1.10% and 1.15%.......................................................................................... 76 Table VI - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 1.20% and Those Issued Since 1996 with Total Separate Account Charges of 1.25%................................................................................. 80 Table VII - For Contracts Issued Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 1.30% and 1.40%.......................................................................................... 84 Table VIII - For Contracts Issued Since 1996 Under 403(b), 401(a) and 401(k) Plans with Total Separate Account Charges of 1.50%................................................................................................. 87 Table IX - For Contracts Issued Under 403(b) Plans and Deferred Compensation Plans with Total Separate Account Charges of 1.25%......................................................................................... 90 Table X - For Multiple Option Contracts Issued to San Bernardino County and Macomb County with Total Separate Account Charges of 1.25%........................................................................ 95 Table XI - For Contracts Issued Under 403(b) Plans and Deferred Compensation Plans with Total Separate Account Charges of 1.50% (including a 0.25% Administrative Expense Charge Beginning April 7, 1997).......................................................................... 99 Table XII - For Contracts Containing Limits on Fees Issued Under 403(b) Plans and Deferred Compensation Plans....................................................... 102 Table XIII - For Deferred Compensation Contracts with Total Separate Account Charges of 0.95% Effective On January 15, 1996...................................................................................... 105 Table XIV - For Deferred Compensation Contracts with Total Separate Account Charges of 0.95% Effective On May 25, 1996.......................................................................................... 110 Table XV - For Deferred Compensation Contracts with Total Separate Account Charges of 0.95% Effective On or After December 16, 1996............................................................................ 115
59 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE I FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.40%, 0.45%, AND 0.50% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for the period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
0.40% Total Charges 0.45% Total Charges 0.50% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- AETNA ASCENT VP 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 AETNA BALANCED VP, 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 AETNA BOND VP 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 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP 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 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP 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 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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
60 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.40% Total Charges 0.45% Total Charges 0.50% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL 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 FIDELITY VIP EQUITY-INCOME 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 FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH 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
61 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.40% Total Charges 0.45% Total Charges 0.50% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- JANUS ASPEN 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 JANUS ASPEN FLEXIBLE INCOME 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 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST 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 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES 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 PORTFOLIO PARTNERS MFS RESEARCH GROWTH 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 PORTFOLIO PARTNERS MFS VALUE EQUITY 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 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH 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
62 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.40% Total Charges 0.45% Total Charges 0.50% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- PORTFOLIO PARTNERS T. ROWE PRICE GROWTH 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
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. 63 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE II FOR CONTRACTS ISSUED UNDER 403(b), 401(a) and 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.75%, 0.80%, AND 0.85% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for the period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
0.75% Total Charges 0.80% Total Charges 0.85% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- AETNA ASCENT VP 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 AETNA BALANCED VP, 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 AETNA BOND VP 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 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP 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 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP 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 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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
64 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.75% Total Charges 0.80% Total Charges 0.85% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL 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 FIDELITY VIP EQUITY-INCOME 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 FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH 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
65 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.75% Total Charges 0.80% Total Charges 0.85% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- JANUS ASPEN 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 JANUS ASPEN FLEXIBLE INCOME 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 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST 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 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES 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 PORTFOLIO PARTNERS MFS RESEARCH GROWTH 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 PORTFOLIO PARTNERS MFS VALUE EQUITY 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 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH 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
66 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.75% Total Charges 0.80% Total Charges 0.85% Total Charges --------------------- --------------------- -------------------- 1998 1998 1998 --------------------- --------------------- -------------------- PORTFOLIO PARTNERS T. ROWE PRICE GROWTH 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
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. 67 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE III FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.90% AND 0.95% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods ended December 31, 1998, 1997 and 1996 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
0.90% Total Charges 0.95% Total Charges ------------ ----------------------------------------------------- 1998 1998 1997 1996 ------------ ---------- ------------------ ------------------- AETNA ASCENT VP Value at beginning of period $ $13.624 $ 11.472 $ 10.000(2) Value at end of period $ 13.624 $ 11.472 Increase (decrease) in value of accumulation unit(1) 18.76% 14.72%(2) Number of accumulation units outstanding at end of period 119,471 20,237 AETNA BALANCED VP, INC. Value at beginning of period $13.226 $ 10.902 $ 10.000(2) Value at end of period $ 13.226 $ 10.902 Increase (decrease) in value of accumulation unit(1) 21.32% 9.02%(2) Number of accumulation units outstanding at end of period 986,711 702,222 AETNA BOND VP Value at beginning of period $11.268 $ 10.503 $ 10.000(2) Value at end of period $ 11.268 $ 10.503 Increase (decrease) in value of accumulation unit(1) 7.28% 5.03%(2) Number of accumulation units outstanding at end of period 251,156 161,765 AETNA CROSSROADS VP Value at beginning of period $12.980 $ 11.146 $ 10.000(2) Value at end of period $ 12.980 $ 11.146 Increase (decrease) in value of accumulation unit(1) 16.46% 11.46%(2) Number of accumulation units outstanding at end of period 117,725 7,882 AETNA GROWTH VP Value at beginning of period $13.202 $ 12.787 Value at end of period $ 13.202 Increase (decrease) in value of accumulation unit(1) 3.25%(3) Number of accumulation units outstanding at end of period 1,880 AETNA GROWTH AND INCOME VP Value at beginning of period $14.756 $ 11.469 $ 10.000(2) Value at end of period $ 14.756 $ 11.469 Increase (decrease) in value of accumulation unit(1) 28.66% 14.69%(2) Number of accumulation units outstanding at end of period 3,760,076 2,876,728 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.500 $ 10.934 $ 10.000(4) Value at end of period $ 14.500 $ 10.934 Increase (decrease) in value of accumulation unit(1) 32.62% 9.34%(4) Number of accumulation units outstanding at end of period 62,360 2,697
68 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.90% Total Charges 0.95% Total Charges ------------ ----------------------------------------------- 1998 1998 1997 1996 ------------ ---------- --------------- ---------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $12.369 $10.905 $ 10.000(2) Value at end of period $12.369 $ 10.905 Increase (decrease) in value of accumulation unit(1) 13.43% 9.05%(2) Number of accumulation units outstanding at end of period 47,726 61 AETNA MONEY MARKET VP Value at beginning of period $10.738 $10.277 $ 10.000(2) Value at end of period $10.738 $ 10.277 Increase (decrease) in value of accumulation unit(1) 4.48% 2.77%(2) Number of accumulation units outstanding at end of period 147,123 39,811 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.684 $13.119 Value at end of period $13.684 Increase (decrease) in value of accumulation unit(1) 4.31%(5) Number of accumulation units outstanding at end of period 2,124 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.290 $12.912 Value at end of period $13.290 Increase (decrease) in value of accumulation unit(1) 2.93%(5) Number of accumulation units outstanding at end of period 587 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.994 $10.924 $ 10.000(2) Value at end of period $12.994 $ 10.924 Increase (decrease) in value of accumulation unit(1) 18.95% 9.24%(2) Number of accumulation units outstanding at end of period 93,905 19,808 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.729 $10.819 $ 10.000(2) Value at end of period $13.729 $ 10.819 Increase (decrease) in value of accumulation unit(1) 26.90% 8.19%(2) Number of accumulation units outstanding at end of period 125,669 27,639
69 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.90% Total Charges 0.95% Total Charges ------------ ---------------------------------------------- 1998 1998 1997 1996 ------------ ---------- ------------ ------------------ FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $ $12.674 $ 10.362 $ 10.000(2) Value at end of period $ 12.674 $ 10.362 Increase (decrease) in value of accumulation unit(1) 22.31% 3.62%(2) Number of accumulation units outstanding at end of period 150,612 54,133 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.783 $ 10.664 $ 10.000(2) Value at end of period $ 11.783 $ 10.664 Increase (decrease) in value of accumulation unit(1) 10.50% 6.64%(2) Number of accumulation units outstanding at end of period 20,273 3,820 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.825 $ 11.243 $ 10.000(2) Value at end of period $ 13.825 $ 11.243 Increase (decrease) in value of accumulation unit(1) 22.97% 12.43%(2) Number of accumulation units outstanding at end of period 266,396 95,199 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.613 $ 9.510 $ 10.000(2) Value at end of period $ 10.613 $ 9.510 Increase (decrease) in value of accumulation unit(1) 11.60% (4.90)%(2) Number of accumulation units outstanding at end of period 416,100 125,232 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $13.431 $ 11.105 $ 10.000(2) Value at end of period $ 13.431 $ 11.105 Increase (decrease) in value of accumulation unit(1) 20.95% 11.05%(2) Number of accumulation units outstanding at end of period 42,699 9,188 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $12.069 $ 10.902 $ 10.000(4) Value at end of period $ 12.069 $ 10.902 Increase (decrease) in value of accumulation unit(1) 10.70% 9.02%(4) Number of accumulation units outstanding at end of period 29,665 1,402 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.242 $ 10.891 $ 10.000(2) Value at end of period $ 13.242 $ 10.891 Increase (decrease) in value of accumulation unit(1) 21.59% 8.91%(2) Number of accumulation units outstanding at end of period 92,666 39,841 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.757 $ 11.370 $ 10.000(2) Value at end of period $ 13.757 $ 11.370 Increase (decrease) in value of accumulation unit(1) 21.00% 13.70%(2) Number of accumulation units outstanding at end of period 555,448 151,935 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $12.082 $ 11.383 $ 10.000(2) Value at end of period $ 12.082 $ 11.383 Increase (decrease) in value of accumulation unit(1) 6.14% 13.83%(2) Number of accumulation units outstanding at end of period 85,577 5,295
70 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
0.90% Total Charges 0.95% Total Charges ------------ -------------------------------------- 1998 1998 1997 1996 ------------ --------- ------------------ ----- OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $ 9.940 $ 10.062 Value at end of period $ 9.940 Increase (decrease) in value of accumulation unit(1) (1.21)%(6) Number of accumulation units outstanding at end of period 795,375 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $ 8.727 $ 8.897 Value at end of period $ 8.727 Increase (decrease) in value of accumulation unit(1) (1.90)%(6) Number of accumulation units outstanding at end of period 484,407 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $12.478 $ 12.296 Value at end of period $ 12.478 Increase (decrease) in value of accumulation unit(1) 1.47%(6) Number of accumulation units outstanding at end of period 96,338 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.522 $ 11.376 Value at end of period $ 11.522 Increase (decrease) in value of accumulation unit(1) 1.28%(6) Number of accumulation units outstanding at end of period 351,150 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $13.332 $ 13.062 Value at end of period $ 13.332 Increase (decrease) in value of accumulation unit(1) 2.07%(6) Number of accumulation units outstanding at end of period 238,562
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established during May 1996 when the fund became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (3) Reflects less than a full year of performance activity. Funds were first received in this option during August 1997. (4) Reflects less than a full year of performance activity. The initial accumulation unit value was established during August 1996 when the fund became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (5) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (6) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 71 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE IV FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.00% AND 1.05% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods ended December 31, 1998, 1997 and 1996 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1.00% Total Charges 1.05% Total Charges -------------------------------------------------- ----------------------------- 1998 1997 1996 1998 1997 ---------- ------------------ ---------------- ---------- ---------------- AETNA ASCENT VP Value at beginning of period $13.613 $11.468 $ 10.000(2) $13.602 $ 11.629 Value at end of period $13.613 $ 11.468 $ 13.602 Increase (decrease) in value of accumulation unit(1) 18.70% 14.68%(2) 16.96%(3) Number of accumulation units outstanding at end of period 14,463 13 24,508 AETNA BALANCED VP, INC. Value at beginning of period $13.215 $13.054 $13.204 $ 12.677 Value at end of period $13.215 $ 13.204 Increase (decrease) in value of accumulation unit(1) 1.23%(4) 4.16%(4) Number of accumulation units outstanding at end of period 57,737 4,205 AETNA BOND VP Value at beginning of period $11.258 $10.500 $ 10.000(2) $11.249 $ 10.587 Value at end of period $11.258 $ 10.500 $ 11.249 Increase (decrease) in value of accumulation unit(1) 7.22% 5.00%(2) 6.25%(3) Number of accumulation units outstanding at end of period 64,958 679 11,619 AETNA CROSSROADS VP Value at beginning of period $12.970 $12.945 $12.959 $ 11.292 Value at end of period $12.970 $ 12.959 Increase (decrease) in value of accumulation unit(1) 0.19%(5) 14.76%(3) Number of accumulation units outstanding at end of period 2,786 12,847 AETNA GROWTH VP Value at beginning of period $13.192 $ 13.184 Value at end of period $ 13.192 Increase (decrease) in value of accumulation unit(1) 0.06%(6) Number of accumulation units outstanding at end of period 31 AETNA GROWTH AND INCOME VP Value at beginning of period $14.744 $11.465 $ 10.000(2) $14.732 $ 12.312 Value at end of period $14.744 $ 11.465 $ 14.732 Increase (decrease) in value of accumulation unit(1) 28.60% 14.65%(2) 19.66%(3) Number of accumulation units outstanding at end of period 362,675 13,125 44,425 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.491 $14.289 $14.481 $ 14.043 Value at end of period $14.491 $ 14.481 Increase (decrease) in value of accumulation unit(1) 1.41%(7) 3.12%(4) Number of accumulation units outstanding at end of period 29 1,083
72 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.00% Total Charges 1.05% Total Charges ------------------------------------------------ ----------------------------- 1998 1997 1996 1998 1997 ---------- ---------------- ---------------- ---------- ---------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $12.358 $12.242 $12.348 $ 11.009 Value at end of period $12.358 $ 12.348 Increase (decrease) in value of accumulation unit(1) 0.95%(3) 12.16%(3) Number of accumulation units outstanding at end of period 64 6,221 AETNA MONEY MARKET VP Value at beginning of period $10.729 $10.274 $ 10.000(2) $10.720 $ 10.322 Value at end of period $10.729 $ 10.274 $ 10.720 Increase (decrease) in value of accumulation unit(1) 4.43% 2.74%(2) 3.86%(3) Number of accumulation units outstanding at end of period 65,496 1,551 1,863 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.674 $ 12.485 Value at end of period $ 13.674 Increase (decrease) in value of accumulation unit(1) 9.52%(4) Number of accumulation units outstanding at end of period 125 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.281 $ 12.796 Value at end of period $ 13.281 Increase (decrease) in value of accumulation unit(1) 3.79%(6) Number of accumulation units outstanding at end of period 17 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.983 $12.982 $12.972 $ 12.278 Value at end of period $12.983 $ 12.972 Increase (decrease) in value of accumulation unit(1) 0.01%(8) 5.65%(4) Number of accumulation units outstanding at end of period 25,620 766 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.718 $13.438 $13.706 $ 11.435 Value at end of period $13.718 $ 13.706 Increase (decrease) in value of accumulation unit(1) 2.08%(8) 19.86%(3) Number of accumulation units outstanding at end of period 29,808 34,010
73 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.00% Total Charges 1.05% Total Charges ---------------------------------------------------- ------------------------------- 1998 1997 1996 1998 1997 ---------- ------------------ ------------------ ---------- ------------------ FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $12.663 $ 10.358 $ 10.000(2) $12.653 $ 10.988 Value at end of period $ 12.663 $ 10.358 $ 12.653 Increase (decrease) in value of accumulation unit(1) 22.25% 3.58%(2) 15.16%(3) Number of accumulation units outstanding at end of period 61,043 21 22,425 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.774 $ 11.818 $11.764 $ 10.798 Value at end of period $ 11.774 $ 11.764 Increase (decrease) in value of accumulation unit(1) (0.37)%(7) 8.95%(3) Number of accumulation units outstanding at end of period 1,294 3,858 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.814 $ 11.239 $ 10.000(2) $13.802 $ 12.865 Value at end of period $ 13.814 $ 11.239 $ 13.802 Increase (decrease) in value of accumulation unit(1) 22.91% 12.39%(2) 7.28%(4) Number of accumulation units outstanding at end of period 139,417 20,020 9,650 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.604 $ 9.507 $ 10.000(2) $10.596 $ 8.894 Value at end of period $ 10.604 $ 9.507 $ 10.596 Increase (decrease) in value of accumulation unit(1) 11.54% (4.93)%(2) 19.14%(3) Number of accumulation units outstanding at end of period 106,350 17,055 38,785 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $13.420 $ 13.490 $13.409 $ 11.587 Value at end of period $ 13.420 $ 13.409 Increase (decrease) in value of accumulation unit(1) (0.52)%(8) 15.73%(3) Number of accumulation units outstanding at end of period 5,846 14,527 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $12.059 $ 10.857 $12.049 $ 11.571 Value at end of period $ 12.059 $ 12.049 Increase (decrease) in value of accumulation unit(1) 11.07%(9) 4.13%(4) Number of accumulation units outstanding at end of period 12,527 700 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.231 $ 10.929 $13.220 $ 13.078 Value at end of period $ 13.231 $ 13.220 Increase (decrease) in value of accumulation unit(1) 21.07%(9) 1.08%(4) Number of accumulation units outstanding at end of period 17,098 7,726 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.746 $ 11.366 $ 10.000(2) $13.735 $ 12.089 Value at end of period $ 13.746 $ 11.366 $ 13.735 Increase (decrease) in value of accumulation unit(1) 20.94% 13.66%(2) 13.61%(3) Number of accumulation units outstanding at end of period 207,630 36,305 59,673 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $12.072 $ 13.838 $12.062 $ 12.407 Value at end of period $ 12.072 $ 12.062 Increase (decrease) in value of accumulation unit(1) (12.77)%(8) (2.78)%(4) Number of accumulation units outstanding at end of period 12,963 791
74 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.00% Total Charges 1.05% Total Charges --------------------------------------- ------------------------------ 1998 1997 1996 1998 1997 --------- ------------------ ------ --------- ------------------ OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $ 9.932 $ 10.054 $ 9.923 $ 10.046 Value at end of period $ 9.932 $ 9.923 Increase (decrease) in value of accumulation unit(1) (1.21)%(7) (1.22)%(7) Number of accumulation units outstanding at end of period 180,890 26,577 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $ 8.720 $ 8.890 $ 8.713 $ 8.883 Value at end of period $ 8.720 $ 8.713 Increase (decrease) in value of accumulation unit(1) (1.91)%(7) (1.91)%(7) Number of accumulation units outstanding at end of period 55,616 1,465 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $12.467 $ 12.287 $12.457 $ 12.277 Value at end of period $ 12.467 $ 12.457 Increase (decrease) in value of accumulation unit(1) 1.47%(7) 1.47%(7) Number of accumulation units outstanding at end of period 68,968 1,514 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.512 $ 11.367 $11.503 $ 11.358 Value at end of period $ 11.512 $ 11.503 Increase (decrease) in value of accumulation unit(1) 1.27%(7) 1.27%(7) Number of accumulation units outstanding at end of period 80,978 8,780 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $13.321 $ 13.052 $13.310 $ 13.042 Value at end of period $ 13.321 $ 13.310 Increase (decrease) in value of accumulation unit(1) 2.06%(7) 2.06%(7) Number of accumulation units outstanding at end of period 65,906 18,429
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established during May 1996 when the fund became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (3) Reflects less than a full year of performance activity. Funds were first received in this option during February 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during July 1997. (5) Reflects less than a full year of performance activity. Funds were first received in this option during September 1997. (6) Reflects less than a full year of performance activity. Funds were first received in this option during August 1997. (7) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. (8) Reflects less than a full year of performance activity. Funds were first received in this option during October 1997. (9) Reflects less than a full year of performance activity. Funds were first received in this option during January 1997. 75 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE V FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.10% AND 1.15% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods ended December 31, 1998, 1997 and 1996 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1.10% Total Charges 1.15% Total Charges ------------------------------- --------------------------------------- 1998 1997 1998 1997 1996 ---------- ------------------ ---------- ------------------ ----- AETNA ASCENT VP Value at beginning of period $13.590 $ 13.275 $13.579 $ 11.525 Value at end of period $ 13.590 $ 13.579 Increase (decrease) in value of accumulation unit(1) 2.37%(2) 17.82%(3) Number of accumulation units outstanding at end of period 42 6,392 AETNA BALANCED VP, INC. Value at beginning of period $13.194 $ 12.915 $13.183 $ 11.130 Value at end of period $ 13.194 $ 13.183 Increase (decrease) in value of accumulation unit(1) 2.16%(2) 18.44%(3) Number of accumulation units outstanding at end of period 294 250,060 AETNA BOND VP Value at beginning of period $11.240 $ 11.219 $11.231 $ 10.476 Value at end of period $ 11.240 $ 11.231 Increase (decrease) in value of accumulation unit(1) 0.19%(4) 7.20%(3) Number of accumulation units outstanding at end of period 6 89,517 AETNA CROSSROADS VP Value at beginning of period $12.949 $ 12.904 $12.938 $ 11.182 Value at end of period $ 12.949 $ 12.938 Increase (decrease) in value of accumulation unit(1) 0.34%(2) 15.70%(3) Number of accumulation units outstanding at end of period 14 7,129 AETNA GROWTH VP Value at beginning of period $13.188 $ 13.325 $13.183 $ 13.348 Value at end of period $ 13.188 $ 13.183 Increase (decrease) in value of accumulation unit(1) (1.03)%(2) (1.24)%(5) Number of accumulation units outstanding at end of period 37 118 AETNA GROWTH AND INCOME VP Value at beginning of period $14.720 $ 14.520 $14.708 $ 11.805 Value at end of period $ 14.720 $ 14.708 Increase (decrease) in value of accumulation unit(1) 1.37%(2) 24.59%(3) Number of accumulation units outstanding at end of period 570 508,938 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.472 $ 14.078 $14.463 $ 11.663 Value at end of period $ 14.472 $ 14.463 Increase (decrease) in value of accumulation unit(1) 2.80%(2) 24.01%(3) Number of accumulation units outstanding at end of period 215 5,517
76 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.10% Total Charges 1.15% Total Charges ----------------------------- -------------------------------------------------- 1998 1997 1998 1997 1996 ---------- ---------------- ---------- ------------------ ---------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $12.338 $12.223 $12.328 $ 10.927 Value at end of period $12.338 $ 12.328 Increase (decrease) in value of accumulation unit(1) 0.94%(3) 12.82%(3) Number of accumulation units outstanding at end of period 851 21,027 AETNA MONEY MARKET VP Value at beginning of period $10.711 $10.663 $10.702 $ 10.264 $ 10.000(6) Value at end of period $10.711 $ 10.702 $ 10.264 Increase (decrease) in value of accumulation unit(1) 0.45%(2) 4.27% 2.64%(6) Number of accumulation units outstanding at end of period 145 44,265 9,856 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.669 $13.331 $13.664 $ 13.709 Value at end of period $13.669 $ 13.664 Increase (decrease) in value of accumulation unit(1) 2.54%(2) (0.33)%(5) Number of accumulation units outstanding at end of period 650 119 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.276 $12.952 $13.271 $ 13.244 Value at end of period $13.276 $ 13.271 Increase (decrease) in value of accumulation unit(1) 2.50%(2) 0.20%(5) Number of accumulation units outstanding at end of period 46 47 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.951 $ 11.071 Value at end of period $ 12.951 Increase (decrease) in value of accumulation unit(1) 16.98%(3) Number of accumulation units outstanding at end of period 37,416 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.695 $13.343 $13.684 $ 10.805 $ 10.000(6) Value at end of period $13.695 $ 13.684 $ 10.805 Increase (decrease) in value of accumulation unit(1) 2.64%(2) 26.64% 8.05%(6) Number of accumulation units outstanding at end of period 589 40,977 4,215
77 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.10% Total Charges 1.15% Total Charges ------------------------------- -------------------------------------------------- 1998 1997 1998 1997 1996 ---------- ------------------ ---------- ---------------- ------------------ FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $12.643 $ 12.740 $12.632 $ 10.348 $ 10.000(6) Value at end of period $ 12.643 $ 12.632 $ 10.348 Increase (decrease) in value of accumulation unit(1) (0.77)%(2) 22.07% 3.48%(6) Number of accumulation units outstanding at end of period 416 43,953 4,472 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.754 $ 11.651 $11.745 $ 10.662 Value at end of period $ 11.754 $ 11.745 Increase (decrease) in value of accumulation unit(1) 0.89%(4) 10.15%(2) Number of accumulation units outstanding at end of period 5 6,203 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.791 $ 13.502 $13.780 $ 11.228 $ 10.000(6) Value at end of period $ 13.791 $ 13.780 $ 11.228 Increase (decrease) in value of accumulation unit(1) 2.14%(2) 22.72% 12.28%(6) Number of accumulation units outstanding at end of period 110 56,042 4,169 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.587 $ 10.337 $10.578 $ 9.498 $ 10.000(6) Value at end of period $ 10.587 $ 10.578 $ 9.498 Increase (decrease) in value of accumulation unit(1) 2.42%(2) 11.38% (5.02)%(6) Number of accumulation units outstanding at end of period 269 77,340 4,932 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $13.398 $ 13.138 $13.387 $ 11.090 $ 10.000(6) Value at end of period $ 13.398 $ 13.387 $ 11.090 Increase (decrease) in value of accumulation unit(1) 1.98%(2) 20.71% 10.90%(6) Number of accumulation units outstanding at end of period 256 15,461 13 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $12.039 $ 11.872 $12.029 $ 10.882 Value at end of period $ 12.039 $ 12.029 Increase (decrease) in value of accumulation unit(1) 1.41%(2) 10.54%(3) Number of accumulation units outstanding at end of period 12 4,140 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.209 $ 12.995 $13.198 $ 11.138 Value at end of period $ 13.209 $ 13.198 Increase (decrease) in value of accumulation unit(1) 1.65%(2) 18.49%(3) Number of accumulation units outstanding at end of period 498 22,179 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.724 $ 13.565 $13.712 $ 11.355 $ 10.000(6) Value at end of period $ 13.724 $ 13.712 $ 11.355 Increase (decrease) in value of accumulation unit(1) 1.17%(2) 20.76% 13.55%(6) Number of accumulation units outstanding at end of period 971 77,286 9 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $12.042 $ 11.865 Value at end of period $ 12.042 Increase (decrease) in value of accumulation unit(1) 1.50%(3) Number of accumulation units outstanding at end of period 12,454
78 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.10% Total Charges 1.15% Total Charges ------------------------------ -------------------------------------- 1998 1997 1998 1997 1996 --------- ------------------ --------- ------------------ ----- OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $9.915 $ 10.039 $ 9.907 $ 10.031 Value at end of period $ 9.915 $ 9.907 Increase (decrease) in value of accumulation unit(1) (1.23)%(2) (1.23)%(2) Number of accumulation units outstanding at end of period 16 165,668 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $ 8.698 $ 8.869 Value at end of period $ 8.698 Increase (decrease) in value of accumulation unit(1) (1.92)%(2) Number of accumulation units outstanding at end of period 122,863 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $12.437 $ 12.258 Value at end of period $ 12.437 Increase (decrease) in value of accumulation unit(1) 1.46%(2) Number of accumulation units outstanding at end of period 79,382 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.484 $ 11.341 Value at end of period $ 11.484 Increase (decrease) in value of accumulation unit(1) 1.26%(2) Number of accumulation units outstanding at end of period 77,528 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $13.288 $ 13.021 Value at end of period $ 13.288 Increase (decrease) in value of accumulation unit(1) 2.05%(2) Number of accumulation units outstanding at end of period 42,110
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. (3) Reflects less than a full year of performance activity. Funds were first received in this option during January 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (5) Reflects less than a full year of performance activity. Funds were first received in this option during September 1997. (6) Reflects less than a full year of performance activity. The initial accumulation unit value was established during May 1996 when the fund became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. 79 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE VI FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.20% AND THOSE ISSUED SINCE 1996 WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.25% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the two-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
Issued Since 1996 with 1.25% Total 1.20% Total Charges Charges ----------------------------- ---------------------------- 1998 1997 1998 1997 ---------- ---------------- ---------- --------------- AETNA ASCENT VP Value at beginning of period $ $13.557 $ 12.564 Value at end of period $ 13.557 Increase (decrease) in value of accumulation unit(1) 7.91%(2) Number of accumulation units outstanding at end of period 253 AETNA BALANCED VP, INC. Value at beginning of period $13.161 $ 11.921 Value at end of period $ 13.161 Increase (decrease) in value of accumulation unit(1) 10.40%(2) Number of accumulation units outstanding at end of period 133 AETNA BOND VP 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 AETNA CROSSROADS VP Value at beginning of period $12.917 $ 12.024 Value at end of period $ 12.917 Increase (decrease) in value of accumulation unit(1) 7.42%(2) Number of accumulation units outstanding at end of period 93 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $14.696 $13.746 $14.684 $ 12.851 Value at end of period $14.696 $ 14.684 Increase (decrease) in value of accumulation unit(1) 6.91%(3) 14.26%(4) Number of accumulation units outstanding at end of period 25 1,646 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.453 $13.642 $14.444 $ 14.070 Value at end of period $14.453 $ 14.444 Increase (decrease) in value of accumulation unit(1) 5.95%(2) 2.66%(5) Number of accumulation units outstanding at end of period 24 10
80 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
Issued Since 1996 with 1.25% 1.20% Total Total Charges Charges ------------------ ------------------------------- 1998 1997 1998 1997 --------- ------ ---------- ------------------ AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $12.308 $ 12.362 Value at end of period $ 12.308 Increase (decrease) in value of accumulation unit(1) (0.44)%(6) Number of accumulation units outstanding at end of period 2 AETNA MONEY MARKET VP 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.930 $ 12.790 Value at end of period $ 12.930 Increase (decrease) in value of accumulation unit(1) 1.09%(7) Number of accumulation units outstanding at end of period 6 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.661 $ 13.299 Value at end of period $ 13.661 Increase (decrease) in value of accumulation unit(1) 2.73%(7) Number of accumulation units outstanding at end of period 6
81 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
Issued Since 1996 with 1.25% Total 1.20% Total Charges Charges ------------------------------- ------------------------------- 1998 1997 1998 1997 ---------- ------------------ ---------- ------------------ FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $ $12.612 $ 11.704 Value at end of period $ 12.612 Increase (decrease) in value of accumulation unit(1) 7.76%(2) Number of accumulation units outstanding at end of period 214 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.726 $ 12.512 Value at end of period $ 11.726 Increase (decrease) in value of accumulation unit(1) (6.28)%(5) Number of accumulation units outstanding at end of period 22 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.768 $ 12.889 $13.757 $ 11.902 Value at end of period $ 13.768 $ 13.757 Increase (decrease) in value of accumulation unit(1) 6.82%(2) 15.59%(4) Number of accumulation units outstanding at end of period 27 390 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.561 $ 9.646 Value at end of period $ 10.561 Increase (decrease) in value of accumulation unit(1) 9.48%(2) Number of accumulation units outstanding at end of period 262 JANUS ASPEN 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 JANUS ASPEN FLEXIBLE INCOME 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 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.177 $ 13.270 Value at end of period $ 13.177 Increase (decrease) in value of accumulation unit(1) (0.70)%(5) Number of accumulation units outstanding at end of period 32 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.701 $ 13.856 $13.690 $ 13.125 Value at end of period $ 13.701 $ 13.690 Increase (decrease) in value of accumulation unit(1) (1.12)%(2) 4.30%(2) Number of accumulation units outstanding at end of period 27 273 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $12.022 $ 11.717 Value at end of period $ 12.022 Increase (decrease) in value of accumulation unit(1) 2.60%(2) Number of accumulation units outstanding at end of period 35
82 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
Issued Since 1996 with 1.25% 1.20% Total Total Charges Charges ------------------ ------------------------------ 1998 1997 1998 1997 --------- ------ --------- ------------------ OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $ 9.891 $ 10.015 Value at end of period $ 9.891 Increase (decrease) in value of accumulation unit(1) (1.24)%(7) Number of accumulation units outstanding at end of period 99 PORTFOLIO PARTNERS MFS RESEARCH GROWTH 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 PORTFOLIO PARTNERS MFS VALUE EQUITY 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 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.465 $ 11.323 Value at end of period $ 11.465 Increase (decrease) in value of accumulation unit(1) 1.25%(7) Number of accumulation units outstanding at end of period 189 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY 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
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. Funds were first received in this option during June 1997. (3) Reflects less than a full year of performance activity. Funds were first received in this option during July 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during May 1997. (5) Reflects less than a full year of performance activity. Funds were first received in this option during September 1997. (6) Reflects less than a full year of performance activity. Funds were first received in this option during October 1997. (7) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 83 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE VII FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS SINCE 1996 WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.30% AND 1.40% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods ended December 31, 1998 and 1997 (as applicable), is derived from the financial statements of the separate account, which have been audited by __________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1.30% Total Charges 1.40% Total Charges ----------------------------- -------------------- 1998 1997 1998 ---------- ---------------- -------------------- AETNA ASCENT VP Value at beginning of period $13.546 $ 11.759 $ Value at end of period $ 13.546 Increase (decrease) in value of accumulation unit(1) 15.20%(2) Number of accumulation units outstanding at end of period 855 AETNA BALANCED VP, INC. Value at beginning of period $13.150 $ 11.717 Value at end of period $ 13.150 Increase (decrease) in value of accumulation unit(1) 12.23%(3) Number of accumulation units outstanding at end of period 459 AETNA BOND VP Value at beginning of period $11.203 $ 10.974 Value at end of period $ 11.203 Increase (decrease) in value of accumulation unit(1) 2.09%(2) Number of accumulation units outstanding at end of period 279 AETNA CROSSROADS VP Value at beginning of period $12.906 $ 11.380 Value at end of period $ 12.906 Increase (decrease) in value of accumulation unit(1) 13.41%(2) Number of accumulation units outstanding at end of period 641 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $14.672 $ 12.519 Value at end of period $ 14.672 Increase (decrease) in value of accumulation unit(1) 17.20%(2) Number of accumulation units outstanding at end of period 3,082 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.435 $ 11.470 Value at end of period $ 14.435 Increase (decrease) in value of accumulation unit(1) 25.85%(4) Number of accumulation units outstanding at end of period 8,665 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA LEGACY VP Value at beginning of period $12.298 $ 11.401 Value at end of period $ 12.298 Increase (decrease) in value of accumulation unit(1) 7.86%(3) Number of accumulation units outstanding at end of period 74
84 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.30% Total Charges 1.40% Total Charges ------------------------------- -------------------- 1998 1997 1998 ---------- ------------------ -------------------- AETNA MONEY MARKET VP Value at beginning of period $10.676 $ 10.358 $ Value at end of period $ 10.676 Increase (decrease) in value of accumulation unit(1) 3.07%(4) Number of accumulation units outstanding at end of period 8,302 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.919 $ 11.742 Value at end of period $ 12.919 Increase (decrease) in value of accumulation unit(1) 10.02%(3) Number of accumulation units outstanding at end of period 44 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.650 $ 10.942 Value at end of period $ 13.650 Increase (decrease) in value of accumulation unit(1) 24.75%(4) Number of accumulation units outstanding at end of period 7,817 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $12.601 $ 10.724 Value at end of period $ 12.601 Increase (decrease) in value of accumulation unit(1) 17.51%(2) Number of accumulation units outstanding at end of period 2,031 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.716 $ 11.785 Value at end of period $ 11.716 Increase (decrease) in value of accumulation unit(1) (0.58)%(2) Number of accumulation units outstanding at end of period 348 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.746 $ 11.031 Value at end of period $ 13.746 Increase (decrease) in value of accumulation unit(1) 24.61%(4) Number of accumulation units outstanding at end of period 7,728 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.552 $ 8.944 Value at end of period $ 10.552 Increase (decrease) in value of accumulation unit(1) 17.98%(2) Number of accumulation units outstanding at end of period 2,527 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $13.354 $ 12.113 Value at end of period $ 13.354 Increase (decrease) in value of accumulation unit(1) 10.24%(3) Number of accumulation units outstanding at end of period 369 JANUS ASPEN FLEXIBLE INCOME 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 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.166 $ 10.962 Value at end of period $ 13.166 Increase (decrease) in value of accumulation unit(1) 20.11%(4) Number of accumulation units outstanding at end of period 637
85 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1.30% Total Charges 1.40% Total Charges ------------------------------- -------------------- 1998 1997 1998 ---------- ------------------ -------------------- JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.679 $ 11.961 $ Value at end of period $ 13.679 Increase (decrease) in value of accumulation unit(1) 14.36%(4) Number of accumulation units outstanding at end of period 2,018 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $12.012 $ 10.678 Value at end of period $ 12.012 Increase (decrease) in value of accumulation unit(1) 12.49%(4) Number of accumulation units outstanding at end of period 5 OPPENHEIMER GLOBAL SECURITIES FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $ 9.883 $ 10.007 Value at end of period $ 9.883 Increase (decrease) in value of accumulation unit(1) (1.25)%(5) Number of accumulation units outstanding at end of period 3,595 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $ 8.677 $ 8.848 Value at end of period $ 8.677 Increase (decrease) in value of accumulation unit(1) (1.94)%(5) Number of accumulation units outstanding at end of period 1,788 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $12.406 $ 12.230 Value at end of period $ 12.406 Increase (decrease) in value of accumulation unit(1) 1.44%(5) Number of accumulation units outstanding at end of period 237 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.456 $ 11.314 Value at end of period $ 11.456 Increase (decrease) in value of accumulation unit(1) 1.25%(5) Number of accumulation units outstanding at end of period 200 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH PORTFOLIO Value at beginning of period $13.256 $ 12.991 Value at end of period $ 13.256 Increase (decrease) in value of accumulation unit(1) 2.04%(5) Number of accumulation units outstanding at end of period 1,649
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. Funds were first received in this option during May 1997. (3) Reflects less than a full year of performance activity. Funds were first received in this option during June 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during April 1997. (5) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 86 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE VIII FOR CONTRACTS ISSUED UNDER 403(b), 401(a) AND 401(k) PLANS SINCE 1996 WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.50% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the three-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ________________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1998 1997 1996 ---------- ---------------- ---------------- AETNA ASCENT VP Value at beginning of period $13.502 $ 11.422 Value at end of period $ 13.502 Increase (decrease) in value of accumulation unit(1) 18.20%(2) Number of accumulation units outstanding at end of period 9,985 AETNA BALANCED VP, INC. Value at beginning of period $13.107 $ 11.009 Value at end of period $ 13.107 Increase (decrease) in value of accumulation unit(1) 19.05%(2) Number of accumulation units outstanding at end of period 7,997 AETNA BOND VP Value at beginning of period $11.166 $ 10.442 Value at end of period $ 11.166 Increase (decrease) in value of accumulation unit(1) 6.94%(2) Number of accumulation units outstanding at end of period 2,940 AETNA CROSSROADS VP Value at beginning of period $12.864 $ 11.093 Value at end of period $ 12.864 Increase (decrease) in value of accumulation unit(1) 15.96%(2) Number of accumulation units outstanding at end of period 30,806 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $14.624 $ 11.429 $ 10.000(3) Value at end of period $ 14.624 $ 11.429 Increase (decrease) in value of accumulation unit(1) 27.96% 14.29%(3) Number of accumulation units outstanding at end of period 40,309 5 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.397 $ 11.374 Value at end of period $ 14.397 Increase (decrease) in value of accumulation unit(1) 26.58%(2) Number of accumulation units outstanding at end of period 3,156 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA LEGACY VP Value at beginning of period $12.257 $ 10.835 Value at end of period $ 12.257 Increase (decrease) in value of accumulation unit(1) 13.13%(4) Number of accumulation units outstanding at end of period 14,983
87 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 ---------- ------------------ ------------------ AETNA MONEY MARKET VP Value at beginning of period $10.641 $ 10.249 Value at end of period $ 10.641 Increase (decrease) in value of accumulation unit(1) 3.82%(2) Number of accumulation units outstanding at end of period 13,868 AETNA SMALL COMPANY VP Value at beginning of period $13.629 $ 13.952 Value at end of period $ 13.629 Increase (decrease) in value of accumulation unit(1) (2.31)%(5) Number of accumulation units outstanding at end of period 47 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.237 $ 12.103 Value at end of period $ 13.237 Increase (decrease) in value of accumulation unit(1) 9.37%(6) Number of accumulation units outstanding at end of period 795 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $12.877 $ 10.955 Value at end of period $ 12.877 Increase (decrease) in value of accumulation unit(1) 17.54%(2) Number of accumulation units outstanding at end of period 1,007 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $13.606 $ 10.905 Value at end of period $ 13.606 Increase (decrease) in value of accumulation unit(1) 24.77%(2) Number of accumulation units outstanding at end of period 9,207 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $12.560 $ 10.537 Value at end of period $ 12.560 Increase (decrease) in value of accumulation unit(1) 19.20%(2) Number of accumulation units outstanding at end of period 2,793 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $11.678 $ 10.566 Value at end of period $ 11.678 Increase (decrease) in value of accumulation unit(1) 10.52%(2) Number of accumulation units outstanding at end of period 107 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $13.701 $ 11.436 Value at end of period $ 13.701 Increase (decrease) in value of accumulation unit(1) 19.81%(2) Number of accumulation units outstanding at end of period 8,704 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $10.518 $ 9.477 $ 10.000(3) Value at end of period $ 10.518 $ 9.477 Increase (decrease) in value of accumulation unit(1) 10.99% (5.23)%(3) Number of accumulation units outstanding at end of period 12,648 9 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $13.310 $ 11.136 Value at end of period $ 13.310 Increase (decrease) in value of accumulation unit(1) 19.52%(2) Number of accumulation units outstanding at end of period 2,801 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $11.960 $ 10.955 Value at end of period $ 11.960 Increase (decrease) in value of accumulation unit(1) 9.18%(4) Number of accumulation units outstanding at end of period 118 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $13.123 $ 11.002 Value at end of period $ 13.123 Increase (decrease) in value of accumulation unit(1) 19.27%(2) Number of accumulation units outstanding at end of period 5,724
88 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 ---------- ------------------ ----- JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $13.634 $ 11.483 Value at end of period $ 13.634 Increase (decrease) in value of accumulation unit(1) 18.73%(2) Number of accumulation units outstanding at end of period 16,828 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $11.973 $ 11.712 Value at end of period $ 11.973 Increase (decrease) in value of accumulation unit(1) 2.23%(2) Number of accumulation units outstanding at end of period 627 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $ 9.850 $ 9.976 Value at end of period $ 9.850 Increase (decrease) in value of accumulation unit(1) (1.26)%(7) Number of accumulation units outstanding at end of period 2,413 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $ 8.649 $ 8.821 Value at end of period $ 8.649 Increase (decrease) in value of accumulation unit(1) (1.95)%(7) Number of accumulation units outstanding at end of period 442 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $12.365 $ 12.192 Value at end of period $ 12.365 Increase (decrease) in value of accumulation unit(1) 1.42%(7) Number of accumulation units outstanding at end of period 80 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $11.418 $ 11.279 Value at end of period $ 11.418 Increase (decrease) in value of accumulation unit(1) 1.23%(7) Number of accumulation units outstanding at end of period 2,665 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH PORTFOLIO Value at beginning of period $13.212 $ 12.951 Value at end of period $ 13.212 Increase (decrease) in value of accumulation unit(1) 2.02%(7) Number of accumulation units outstanding at end of period 3,802
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. (2) Reflects less than a full year of performance activity. Funds were first received in this option during January 1997. (3) Reflects less than a full year of performance activity. The initial accumulation unit value was established during May 1996 when the fund became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (4) Reflects less than a full year of performance activity. Funds were first received in this option during April 1997. (5) Reflects less than a full year of performance activity. Funds were first received in this option during September 1997. (6) Reflects less than a full year of performance activity. Funds were first received in this option during July 1997. (7) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 89 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE IX FOR CONTRACTS ISSUED UNDER 403(b) PLANS AND DEFERRED COMPENSATION PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.25% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the ten-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ______________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1998 1997 1996 1995 ---------- -------------------- ----------------- ------------------- AETNA ASCENT VP Value at beginning of period $15.422 $ 13.025 $ 10.673 $ 10.000(2) Value at end of period $ 15.422 $ 13.025 $ 10.673 Increase (decrease) in value of accumulation unit(1) 18.40% 22.04% 6.73% Number of accumulation units outstanding at end of period 3,543,367 1,314,997 393,053 AETNA BALANCED VP Value at beginning of period $18.811 $ 15.551 $ 13.673 $ 10.868 Value at end of period $ 18.811 $ 15.551 $ 13.673 Increase (decrease) in value of accumulation unit(1) 20.96% 13.73% 25.81% Number of accumulation units outstanding at end of period 34,194,804 36,147,028 38,152,395 AETNA BOND VP Value at beginning of period $13.238 $ 12.377 $ 12.098 $ 10.360 Value at end of period $ 13.238 $ 12.377 $ 12.098 Increase (decrease) in value of accumulation unit(1) 6.96% 2.30% 16.78% Number of accumulation units outstanding at end of period 18,047,780 20,036,622 21,379,976 AETNA CROSSROADS VP Value at beginning of period $14.456 $ 12.450 $ 10.612 $ 10.000(2) Value at end of period $ 14.456 $ 12.450 $ 10.612 Increase (decrease) in value of accumulation unit(1) 16.11% 17.32% 6.12% Number of accumulation units outstanding at end of period 2,469,082 918,336 294,673 AETNA GROWTH VP Value at beginning of period $13.173 $ 11.635 Value at end of period $ 13.173 Increase (decrease) in value of accumulation unit(1) 13.22%(6) Number of accumulation units outstanding at end of period 41,928 AETNA GROWTH AND INCOME VP Value at beginning of period $22.194 $ 17.302 $ 14.077 $ 10.778 Value at end of period $ 22.194 $ 17.302 $ 14.077 Increase (decrease) in value of accumulation unit(1) 28.28% 22.91% 30.61% Number of accumulation units outstanding at end of period 177,627,474 185,328,132 188,964,022 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.444 $ 10.924 $ 10.000(8) Value at end of period $ 14.444 $ 10.924 Increase (decrease) in value of accumulation unit(1) 32.23% 9.24% Number of accumulation units outstanding at end of period 4,796,644 879,588 1994 1993 1992 1991 1990 1989 ----------------- -------------- ---------------- -------------- -------------- ---------------- AETNA ASCENT VP 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 AETNA BALANCED VP Value at beginning of period $ 11.057 $ 10.189 $ 12.736 $ 10.896 $ 10.437 $ 10.000(4) Value at end of period $ 10.868 $ 11.057 $ 10.189(3) $ 12.736 $ 10.896 $ 10.437 Increase (decrease) in value of accumulation unit(1) (1.71)% 8.52% (3) 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 AETNA BOND VP Value at beginning of period $ 10.905 $ 10.068 $ 36.789 $ 31.192 $ 28.943 $ 25.574 Value at end of period $ 10.360 $ 10.905 $ 10.068(5) $ 36.789 $ 31.192 $ 28.943 Increase (decrease) in value of accumulation unit(1) (5.00)% 8.31% (5) 17.94% 7.77% 13.17% Number of accumulation units outstanding at end of period 11,713,354 4,084,142 3,870 7,844,412 6,984,793 6,202,834 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $ 11.020 $ 10.454 $ 97.165 $ 77.845 $ 76.311 $ 59.871 Value at end of period $ 10.778 $ 11.020 $ 10.454(7) $ 97.165 $ 77.845 $ 76.311 Increase (decrease) in value of accumulation unit(1) (2.20)% 5.41% (7) 24.82% 2.01% 27.46% Number of accumulation units outstanding at end of period 114,733,035 44,166,470 21,250 20,948,226 18,362,906 17,142,820 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP 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
90 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- ------------------ -------------- ------------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $13.491 $ 11.930 $ 10.580 $ 10.000(2) Value at end of period $ 13.491 $ 11.930 $ 10.580 Increase (decrease) in value of accumulation unit(1) 13.08% 12.76% 5.80% Number of accumulation units outstanding at end of period 1,624,842 513,590 143,637 AETNA MONEY MARKET VP Value at beginning of period $11.951 $ 11.473 $ 11.026 $ 10.528 Value at end of period $ 11.951 $ 11.473 $ 11.026 Increase (decrease) in value of accumulation unit(1) 4.16% 4.05% 4.73% Number of accumulation units outstanding at end of period 12,191,085 13,898,826 12,999,680 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.654 $ 12.299 Value at end of period $ 13.654 Increase (decrease) in value of accumulation unit(1) 11.02%(10) Number of accumulation units outstanding at end of period 253,548 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.261 $ 12.913 Value at end of period $ 13.261 Increase (decrease) in value of accumulation unit(1) 2.69%(11) Number of accumulation units outstanding at end of period 100,928 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.840 $ 15.044 $ 13.527 $ 10.554 Value at end of period $ 17.840 $ 15.044 $ 13.527 Increase (decrease) in value of accumulation unit(1) 18.59% 11.22% 28.17% Number of accumulation units outstanding at end of period 1,499,989 1,313,324 966,098 FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $15.837 $ 12.518 $ 11.092 $ 10.000(2) Value at end of period $ 15.837 $ 12.518 $ 11.092 Increase (decrease) in value of accumulation unit(1) 26.52% 12.86% 10.92% Number of accumulation units outstanding at end of period 7,111,490 5,007,706 1,660,304 1994 1993 1992 1991 1990 1989 -------------- ------------- ------------------ ------------- -------------- ------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP Value at beginning of period $ 10.241 $ 10.048 $ 33.812 $ 32.138 $ 30.012 $ 27.783 Value at end of period $ 10.528 $ 10.241 $ 10.048(9) $ 33.812 $ 32.138 $ 30.012 Increase (decrease) in value of accumulation unit(1) 2.80% 1.92% (9) 5.21% 7.08% 8.02% 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $ 11.036 $ 10.278 $ 10.000(12) 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 FIDELITY VIP EQUITY- INCOME 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
91 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- -------------- ------------- ----------------- FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.904 $ 11.402 $ 10.066 $ 10.000(2) Value at end of period $ 13.904 $ 11.402 $ 10.066 Increase (decrease) in value of accumulation unit(1) 21.95% 13.27% 0.66% Number of accumulation units outstanding at end of period 6,586,698 5,171,098 1,833,794 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.269 $ 11.137 $ 9.961 $ 10.000(2) Value at end of period $ 12.269 $ 11.137 $ 9.961 Increase (decrease) in value of accumulation unit(1) 10.17% 11.80% (0.39)% Number of accumulation units outstanding at end of period 718,565 487,709 196,090 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.270 $ 12.455 $ 10.397 $ 10.000(2) Value at end of period $ 15.270 $ 12.455 $ 10.397 Increase (decrease) in value of accumulation unit(1) 22.60% 19.79% 3.97% Number of accumulation units outstanding at end of period 11,399,666 6,812,870 2,116,732 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.801 $ 14.202 $ 13.322 $ 10.581 Value at end of period $ 15.801 $ 14.202 $ 13.322 Increase (decrease) in value of accumulation unit(1) 11.26% 6.60% 25.91% Number of accumulation units outstanding at end of period 9,271,525 8,835,470 4,887,060 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.012 $ 12.449 $ 10.850 $ 10.000(2) Value at end of period $ 15.012 $ 12.449 $ 10.850 Increase (decrease) in value of accumulation unit(1) 20.58% 14.73% 8.50% Number of accumulation units outstanding at end of period 1,911,789 996,510 93,304 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.373 $ 13.022 $ 12.077 $ 9.873 Value at end of period $ 14.373 $ 13.022 $ 12.077 Increase (decrease) in value of accumulation unit(1) 10.37% 7.83% 22.33% Number of accumulation units outstanding at end of period 934,053 619,287 315,361 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.414 $ 12.716 $ 10.870 $ 10.000(2) Value at end of period $ 15.414 $ 12.716 $ 10.870 Increase (decrease) in value of accumulation unit(1) 21.22% 16.98% 8.70% Number of accumulation units outstanding at end of period 3,100,436 2,018,527 259,196 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $15.720 $ 13.860 $ 10.877 $ 10.000(2) Value at end of period $ 16.720 $ 13.860 $ 10.877 Increase (decrease) in value of accumulation unit(1) 20.64% 27.43% 8.77% Number of accumulation units outstanding at end of period 17,194,687 8,715,825 1,036,040 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.541 $ 14.686 $ 11.720 $ 10.154 Value at end of period $ 15.541 $ 14.686 $ 11.720 Increase (decrease) in value of accumulation unit(1) 5.82% 25.31% 15.42% Number of accumulation units outstanding at end of period 1,786,409 966,482 711,892 1994 1993 1992 1991 1990 1989 ------------------ ------------ ------------------ ------ ------ ----- FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $ 10.000(13) 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 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 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $ 10.000(13) 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 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $ 10.877 $ 9.832 $ 10.000(12) 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
92 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 ---------- ------------------------- ------ ------ ------ ------ ------ ------ ------ ----- OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $14.927 $ 15.114 Value at end of period $ 14.927 Increase (decrease) in value of accumulation unit(1) (1.24)%(14) Number of accumulation units outstanding at end of period 16,549,322 PORTFOLIO PARTNERS MFS RESEARCH PORTFOLIO Value at beginning of period $13.795 $ 14.067 Value at end of period $ 13.795 Increase (decrease) in value of accumulation unit(1) (1.93)%(14) Number of accumulation units outstanding at end of period 11,539,850 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.291 $ 19.016 Value at end of period $ 19.291 Increase (decrease) in value of accumulation unit(1) 1.45%(14) Number of accumulation units outstanding at end of period 2,879,845 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $16.986 $ 16.776 Value at end of period $ 16.986 Increase (decrease) in value of accumulation unit(1) 1.25%(14) Number of accumulation units outstanding at end of period 6,242,299 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $14.400 $ 14.112 Value at end of period $ 14.400 Increase (decrease) in value of accumulation unit(1) 2.04%(14) Number of accumulation units outstanding at end of period 8,296,964
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract. (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 $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%. 93 (4) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 on June 23, 1989, the date on which the fund commenced operations. (5) 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%. (6) Reflects less than a full year of performance activity. Funds were first received in this option during June 1997. (7) 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%. (8) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during August 1996, when the Portfolio became available under the contract. (9) 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%. (10) Reflects less than a full year of performance activity. Funds were first received in this option during July 1997. (11) Reflects less than a full year of performance activity. Funds were first received in this option during August 1997. (12) Reflects less than a full year of performance activity. 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. (13) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option. (14) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 94 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE X FOR MULTIPLE OPTION CONTRACTS ISSUED TO SAN BERNARDINO COUNTY AND MACOMB COUNTY WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.25% (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the ten-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1998 1997 1996 1995 ---------- -------------------- ------------- ------------- AETNA ASCENT VP Value at beginning of period $ 15.422 $ 13.291 Value at end of period $ 15.422 Increase (decrease) in value of accumulation unit(1) 16.04%(2) Number of accumulation units outstanding at end of period 380 AETNA BALANCED VP, INC. Value at beginning of period $ 24.700 $ 20.419 $ 17.954 $ 14.270 Value at end of period $ 24.700 $ 20.419 $ 17.954 Increase (decrease) in value of accumulation unit(1) 20.96% 13.73% 25.82% Number of accumulation units outstanding at end of period 2,160,305 2,716,641 9,193,181 AETNA BOND VP Value at beginning of period $ 51.330 $ 47.992 $ 46.913 $ 40.173 Value at end of period $ 51.330 $ 47.992 $ 46.913 Increase (decrease) in value of accumulation unit(1) 6.96% 2.30% 16.78% Number of accumulation units outstanding at end of period 959,336 835,724 2,377,622 AETNA CROSSROADS VP Value at beginning of period $ 14.456 $ 12.577 Value at end of period $ 14.456 Increase (decrease) in value of accumulation unit(1) 14.94%(2) Number of accumulation units outstanding at end of period 873 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $217.359 $ 169.448 $ 137.869 $ 105.558 Value at end of period $ 217.359 $ 169.448 $ 137.869 Increase (decrease) in value of accumulation unit(1) 28.27% 22.91% 30.61% Number of accumulation units outstanding at end of period 1,826,355 2,071,139 6,364,000 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $ 14.444 $ 14.493 Value at end of period $ 14.444 Increase (decrease) in value of accumulation unit(1) (0.34)%(2) Number of accumulation units outstanding at end of period 17,771 AETNA INDEX PLUS MID CAP VP 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 1994 1993 1992 1991 1990 1989 ----------------- -------------- -------------- -------------- -------------- ---------------- AETNA ASCENT VP 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 AETNA BALANCED VP, INC. Value at beginning of period $ 14.519 $ 13.379 $ 12.736 $ 10.896 $ 10.437 $ 10.000(3) Value at end of period $ 14.270 $ 14.519 $ 13.379 $ 12.736 $ 10.896 $ 10.437 Increase (decrease) in value of accumulation unit(1) (1.71)% 8.52% 5.05% 16.89% 4.40% 4.37% Number of accumulation units outstanding at end of period 21,990,186 30,784,750 34,802,433 22,898,099 17,078,985 9,535,986 AETNA BOND VP Value at beginning of period $ 42.283 $ 39.038 $ 36.789 $ 31.192 $ 28.943 $ 25.574 Value at end of period $ 40.173 $ 42.283 $ 39.038 $ 36.789 $ 31.192 $ 28.943 Increase (decrease) in value of accumulation unit(1) (4.99)% 8.31% 6.11% 17.94% 7.77% 13.17% Number of accumulation units outstanding at end of period 5,108,720 8,210,666 8,507,292 7,844,412 6,984,793 6,202,834 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $ 107.925 $ 102.383 $ 97.165 $ 77.845 $ 76.311 $ 59.871 Value at end of period $ 105.558 $ 107.925 $ 102.383 $ 97.165 $ 77.845 $ 76.311 Increase (decrease) in value of accumulation unit(1) (2.19)% 5.41% 5.37% 24.82% 2.01% 27.46% Number of accumulation units outstanding at end of period 13,966,072 21,148,863 24,201,565 20,948,226 18,362,906 17,142,820 AETNA INDEX PLUS LARGE CAP VP 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 AETNA INDEX PLUS MID CAP VP 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
95 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- -------------------- ------------- ---------------- AETNA INDEX PLUS SMALL CAP VP 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 AETNA LEGACY VP Value at beginning of period $13.491 $ 12.296 Value at end of period $ 13.491 Increase (decrease) in value of accumulation unit(1) 9.72%(4) Number of accumulation units outstanding at end of period 2,279 AETNA MONEY MARKET VP Value at beginning of period $41.174 $ 39.528 $ 37.988 $ 36.271 Value at end of period $ 41.174 $ 39.528 $ 37.988 Increase (decrease) in value of accumulation unit(1) 4.16% 4.05% 4.73% Number of accumulation units outstanding at end of period 455,502 597,656 1,836,260 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $23.675 $ 19.965 $ 17.951 $ 13.990 Value at end of period $ 23.675 $ 19.965 $ 17.951 Increase (decrease) in value of accumulation unit(1) 8.59% 11.22% 28.31% Number of accumulation units outstanding at end of period 929,282 898,279 856,361 FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $16.587 $ 13.110 $ 11.617 $ 10.000(6) Value at end of period $ 16.587 $ 13.110 $ 11.617 Increase (decrease) in value of accumulation unit(1) 26.52% 12.86% 16.17% Number of accumulation units outstanding at end of period 2,139,178 1,454,755 628,582 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $14.087 $ 11.843 Value at end of period $ 14.087 Increase (decrease) in value of accumulation unit(1) 18.95%(7) Number of accumulation units outstanding at end of period 29 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.560 $ 11.400 $ 10.197 $ 10.000(8) Value at end of period $ 12.560 $ 11.400 $ 10.197 Increase (decrease) in value of accumulation unit(1) 10.18% 11.80% 1.97% Number of accumulation units outstanding at end of period 0 0 1,302 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $17.276 $ 14.092 $ 11.763 $ 10.000(6) Value at end of period $ 17.276 $ 14.092 $ 11.763 Increase (decrease) in value of accumulation unit(1) 22.59% 19.79% 17.63% Number of accumulation units outstanding at end of period 2,706,862 1,522,169 525,476 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $18.174 $ 16.334 $ 15.323 $ 12.169 Value at end of period $ 18.174 $ 16.334 $ 15.323 Increase (decrease) in value of accumulation unit(1) 11.26% 6.60% 25.91% Number of accumulation units outstanding at end of period 1,939,607 1,893,718 1,280,953 1994 1993 1992 1991 1990 1989 ---------------- ------------- ------------- ------------- -------------- ---------------- AETNA INDEX PLUS SMALL CAP VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP Value at beginning of period $ 35.282 $ 34.619 $ 33.812 $ 32.138 $ 30.012 $ 27.783 Value at end of period $ 36.271 $ 35.282 $ 34.619 $ 33.812 $ 32.138 $ 30.012 Increase (decrease) in value of accumulation unit(1) 2.80% 1.92% 2.39% 5.21% 7.08% 8.02% Number of accumulation units outstanding at end of period 3,679,802 5,086,515 7,534,662 8,430,082 10,220,110 8,286,033 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $ 14.640 $ 13.726 $ 12.913 $ 11.233 $ 10.568 $ 10.000(5) Value at end of period $ 13.990 $ 14.640 $ 13.726 $ 12.913 $ 11.233 $ 10.568 Increase (decrease) in value of accumulation unit(1) (4.44)% 6.66% 6.30% 14.96% 6.29% 5.68% Number of accumulation units outstanding at end of period 743,464 705,415 503,006 355,851 148,576 20,710 FIDELITY VIP EQUITY- INCOME 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 FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $ 10.000(9) Value at end of period $ 12.169 Increase (decrease) in value of accumulation unit(1) 21.69% Number of accumulation units outstanding at end of period 393,553
96 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- ----------------------- ------------- ---------------- JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.016 $ 12.453 $ 10.853 $ 10.000(8) Value at end of period $ 15.016 $ 12.453 $ 10.853 Increase (decrease) in value of accumulation unit(1) 20.58% 14.73% 8.53% Number of accumulation units outstanding at end of period 7,873 231 161 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.430 $ 13.074 $ 12.124 $ 9.911 Value at end of period $ 14.430 $ 13.074 $ 12.124 Increase (decrease) in value of accumulation unit(1) 10.37% 7.83% 22.33% Number of accumulation units outstanding at end of period 5,211 3,761 3,345 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $16.816 $ 13.872 $ 11.859 $ 10.000(8) Value at end of period $ 16.816 $ 13.872 $ 11.859 Increase (decrease) in value of accumulation unit(1) 21.22% 16.98% 18.59% Number of accumulation units outstanding at end of period 1,109,942 663,945 109,717 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $18.690 $ 15.493 $ 12.158 $ 10.000(8) Value at end of period $ 18.690 $ 15.493 $ 12.158 Increase (decrease) in value of accumulation unit(1) 20.64% 27.43% 21.58% Number of accumulation units outstanding at end of period 3,873,511 2,090,908 314,653 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $14.403 $ 13.611 $ 10.862 $ 9.412 Value at end of period $ 14.403 $ 13.611 $ 10.862 Increase (decrease) in value of accumulation unit(1) 5.82% 25.31% 15.41% Number of accumulation units outstanding at end of period 650,486 587,248 530,562 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $15.046 $ 15.236 Value at end of period $ 15.046 Increase (decrease) in value of accumulation unit(1) (1.24)%(11) Number of accumulation units outstanding at end of period 2,707,904 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $12.195 $ 12.195 Value at end of period $ 11.960 Increase (decrease) in value of accumulation unit(1) (1.93)%(11) Number of accumulation units outstanding at end of period 232,418 1994 1993 1992 1991 1990 1989 ------------------ ------------ ----------- ------------- -------------- ---------------- JANUS ASPEN 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 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $ 10.000(10) Value at end of period $ 9.911 Increase (decrease) in value of accumulation unit(1) (0.89)% Number of accumulation units outstanding at end of period 1,555 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $ 10.071 $ 9.193 $ 9.018 $ 9.608 $ 11.441 $ 10.000(5) Value at end of period $ 9.412 $ 10.071 $ 9.193 $ 9.018 $ 9.608 $ 11.441 Increase (decrease) in value of accumulation unit(1) (6.54)% 9.55% 1.94% (6.14)% (16.02)% 14.41% Number of accumulation units outstanding at end of period 533,016 341,771 198,338 144,139 75,052 11,481 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES 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 PORTFOLIO PARTNERS MFS RESEARCH GROWTH 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
97 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 ---------- ---------------------- ------ ------ ------ ------ ------ ------ ------ ----- PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $23.106 $ 23.106 Value at end of period $ 23.440 Increase (decrease) in value of accumulation unit(1) 1.45%(11) Number of accumulation units outstanding at end of period 2,018,219 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $17.709 $ 17.490 Value at end of period $ 17.709 Increase (decrease) in value of accumulation unit(1) 1.25%(11) Number of accumulation units outstanding at end of period 3,237,710 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $16.608 $ 16.276 Value at end of period $ 16.608 Increase (decrease) in value of accumulation unit(1) 2.04%(11) Number of accumulation units outstanding at end of period 1,317,058
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. Funds were first received in this option during February 1997. (3) The initial accumulation unit value was established at $10.000 on June 23, 1989, the date on which the fund commenced operations. (4) Reflects less than a full year of performance activity. Funds were first received in this option during February 1997. (5) The initial accumulation unit value was established at $10.000 on May 31, 1989, the date on which the Fund/Portfolio became available under the contract. (6) The initial accumulation unit value was established at $10.000 during May 1995, when the fund became available under the contract. (7) Reflects less than a full year of performance activity. Funds were first received in this option during January 1997. (8) The initial accumulation unit value was established at $10.000 during July 1995, when the fund became available under the contract. (9) The initial accumulation unit value was established at $10.000 during June 1994, when funds were first received in this option. (10) The initial accumulation unit value was established at $10.000 during November 1994, when funds were first received in this option. (11) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 98 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE XI FOR CONTRACTS ISSUED UNDER 403(b) PLANS AND DEFERRED COMPENSATION PLANS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 1.50% (INCLUDING A 0.25% ADMINISTRATIVE EXPENSE CHARGE BEGINNING APRIL 7, 1997) (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the two-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1998 1997 ---------- -------------------- AETNA ASCENT VP Value at beginning of period $15.394 $ 13.020 Value at end of period $ 15.394 Increase (decrease) in value of accumulation unit(1) 18.24%(2) Number of accumulation units outstanding at end of period 29,840 AETNA BALANCED VP Value at beginning of period $18.776 $ 15.674 Value at end of period $ 18.776 Increase (decrease) in value of accumulation unit(1) 19.79%(2) Number of accumulation units outstanding at end of period 478,177 AETNA BOND VP Value at beginning of period $13.213 $ 12.302 Value at end of period $ 13.213 Increase (decrease) in value of accumulation unit(1) 7.41%(2) Number of accumulation units outstanding at end of period 215,650 AETNA CROSSROADS VP Value at beginning of period $14.430 $ 12.449 Value at end of period $ 14.430 Increase (decrease) in value of accumulation unit(1) 15.91%(2) Number of accumulation units outstanding at end of period 26,483 AETNA GROWTH VP(10) Value at beginning of period $13.149 $ 12.739 Value at end of period $ 13.149 Increase (decrease) in value of accumulation unit(1) 3.22%(3) Number of accumulation units outstanding at end of period 3,326 AETNA GROWTH AND INCOME VP Value at beginning of period $22.153 $ 17.861 Value at end of period $ 22.153 Increase (decrease) in value of accumulation unit(1) 24.03%(2) Number of accumulation units outstanding at end of period 1,699,982 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.418 $ 11.345 Value at end of period $ 14.418 Increase (decrease) in value of accumulation unit(1) 27.09%(2) Number of accumulation units outstanding at end of period 27,945 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $13.467 $ 11.873 Value at end of period $ 13.467 Increase (decrease) in value of accumulation unit(1) 13.42%(2) Number of accumulation units outstanding at end of period 14,817
99 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 ---------- ----------------- AETNA MONEY MARKET VP Value at beginning of period $11.929 $ 11.592 Value at end of period $ 11.929 Increase (decrease) in value of accumulation unit(1) 2.91%(2) Number of accumulation units outstanding at end of period 176,703 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.629 $ 13.629 Value at end of period $ 13.629 Increase (decrease) in value of accumulation unit(1) 0.00%(3) Number of accumulation units outstanding at end of period 82 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.237 $ 13.237 Value at end of period $ 13.237 Increase (decrease) in value of accumulation unit(1) 0.00%(3) Number of accumulation units outstanding at end of period 84 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.808 $ 14.934 Value at end of period $ 17.808 Increase (decrease) in value of accumulation unit(1) 19.24%(2) Number of accumulation units outstanding at end of period 20,521 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $15.808 $ 12.711 Value at end of period $ 15.808 Increase (decrease) in value of accumulation unit(1) 24.37%(2) Number of accumulation units outstanding at end of period 117,588 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.879 $ 11.373 Value at end of period $ 13.879 Increase (decrease) in value of accumulation unit(1) 22.03%(2) Number of accumulation units outstanding at end of period 104,982 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.247 $ 11.253 Value at end of period $ 12.247 Increase (decrease) in value of accumulation unit(1) 8.83%(2) Number of accumulation units outstanding at end of period 8,098 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.242 $ 12.388 Value at end of period $ 15.242 Increase (decrease) in value of accumulation unit(1) 23.04%(2) Number of accumulation units outstanding at end of period 146,381 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.773 $ 12.594 Value at end of period $ 15.773 Increase (decrease) in value of accumulation unit(1) 25.24%(2) Number of accumulation units outstanding at end of period 85,304 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $14.984 $ 12.760 Value at end of period $ 14.984 Increase (decrease) in value of accumulation unit(1) 17.43%(2) Number of accumulation units outstanding at end of period 19,967 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.347 $ 13.025 Value at end of period $ 14.347 Increase (decrease) in value of accumulation unit(1) 10.15%(2) Number of accumulation units outstanding at end of period 8,189 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.386 $ 12.975 Value at end of period $ 15.386 Increase (decrease) in value of accumulation unit(1) 18.58%(2) Number of accumulation units outstanding at end of period 53,182 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $16.689 $ 14.439 Value at end of period $ 16.689 Increase (decrease) in value of accumulation unit(1) 15.59%(2) Number of accumulation units outstanding at end of period 168,191 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.512 $ 13.756 Value at end of period $ 15.512 Increase (decrease) in value of accumulation unit(1) 12.77%(2) Number of accumulation units outstanding at end of period 26,426
100 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 ---------- ------------------ OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $14.899 $ 15.090 Value at end of period $ 14.899 Increase (decrease) in value of accumulation unit(1) (1.26)%(4) Number of accumulation units outstanding at end of period 131,565 PORTFOLIO PARTNERS MFS RESEARCH PORTFOLIO Value at beginning of period $13.770 $ 14.044 Value at end of period $ 13.770 Increase (decrease) in value of accumulation unit(1) (1.95)%(4) Number of accumulation units outstanding at end of period 149,523 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.256 $ 18.985 Value at end of period $ 19.256 Increase (decrease) in value of accumulation unit(1) 1.42%(4) Number of accumulation units outstanding at end of period 25,830 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $16.955 $ 16.749 Value at end of period $ 16.955 Increase (decrease) in value of accumulation unit(1) 1.23%(4) Number of accumulation units outstanding at end of period 48,385 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $14.374 $ 14.090 Value at end of period $ 14.374 Increase (decrease) in value of accumulation unit(1) 2.02%(4) Number of accumulation units outstanding at end of period 79,799
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. Funds were first received in this option during April 1997. (3) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 101 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE XII FOR CONTRACTS CONTAINING LIMITS ON FEES ISSUED UNDER 403(b) PLANS AND DEFERRED COMPENSATION PLANS (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the two-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information.
1998 1997 ---------- -------------------- AETNA ASCENT VP Value at beginning of period $15.453 $ 13.971 Value at end of period $ 15.453 Increase (decrease) in value of accumulation unit(1) 10.61%(2) Number of accumulation units outstanding at end of period 10,257 AETNA BALANCED VP Value at beginning of period $18.837 $ 16.739 Value at end of period $ 18.837 Increase (decrease) in value of accumulation unit(1) 12.53%(2) Number of accumulation units outstanding at end of period 454,232 AETNA BOND VP Value at beginning of period $13.249 $ 12.629 Value at end of period $ 13.249 Increase (decrease) in value of accumulation unit(1) 4.91%(2) Number of accumulation units outstanding at end of period 453,723 AETNA CROSSROADS VP Value at beginning of period $14.485 $ 13.199 Value at end of period $ 14.485 Increase (decrease) in value of accumulation unit(1) 9.74%(2) Number of accumulation units outstanding at end of period 50,297 AETNA GROWTH VP Value at beginning of period $13.173 $ 12.615 Value at end of period $ 13.173 Increase (decrease) in value of accumulation unit(1) 4.42%(3) Number of accumulation units outstanding at end of period 1,565 AETNA GROWTH AND INCOME VP Value at beginning of period $22.226 $ 19.673 Value at end of period $ 22.226 Increase (decrease) in value of accumulation unit(1) 12.97%(2) Number of accumulation units outstanding at end of period 6,093,102 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.452 $ 12.748 Value at end of period $ 14.452 Increase (decrease) in value of accumulation unit(1) 13.37%(2) Number of accumulation units outstanding at end of period 13,748 AETNA INDEX PLUS SMALL CAP VP 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 AETNA LEGACY VP Value at beginning of period $13.518 $ 12.496 Value at end of period $ 13.518 Increase (decrease) in value of accumulation unit(1) 8.18%(2) Number of accumulation units outstanding at end of period 16,060 AETNA MONEY MARKET VP Value at beginning of period $11.951 $ 11.674 Value at end of period $ 11.951 Increase (decrease) in value of accumulation unit(1) 2.37%(2) Number of accumulation units outstanding at end of period 591,901 AETNA SMALL COMPANY VP Value at beginning of period $13.654 $ 13.092 Value at end of period $ 13.654 Increase (decrease) in value of accumulation unit(1) 4.29%(3) Number of accumulation units outstanding at end of period 1,779
102 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 ---------- ------------------ AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.840 $ 16.178 Value at end of period $ 17.840 Increase (decrease) in value of accumulation unit(1) 10.27%(2) Number of accumulation units outstanding at end of period 3,576 FIDELITY VIP EQUITY-INCOME PORTFOLIO Value at beginning of period $15.837 $ 14.065 Value at end of period $ 15.837 Increase (decrease) in value of accumulation unit(1) 12.60%(2) Number of accumulation units outstanding at end of period 49,884 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.904 $ 12.498 Value at end of period $ 13.904 Increase (decrease) in value of accumulation unit(1) 11.26%(2) Number of accumulation units outstanding at end of period 31,477 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.269 $ 12.518 Value at end of period $ 12.269 Increase (decrease) in value of accumulation unit(1) (1.99)%(2) Number of accumulation units outstanding at end of period 1,206 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.270 $ 13.443 Value at end of period $ 15.270 Increase (decrease) in value of accumulation unit(1) 13.59%(2) Number of accumulation units outstanding at end of period 29,365 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.801 $ 14.156 Value at end of period $ 15.801 Increase (decrease) in value of accumulation unit(1) 11.62%(2) Number of accumulation units outstanding at end of period 26,177 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.012 $ 13.573 Value at end of period $ 15.012 Increase (decrease) in value of accumulation unit(1) 10.60%(2) Number of accumulation units outstanding at end of period 8,663 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.373 $ 13.448 Value at end of period $ 14.373 Increase (decrease) in value of accumulation unit(1) 6.88%(2) Number of accumulation units outstanding at end of period 323 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.414 $ 13.985 Value at end of period $ 15.414 Increase (decrease) in value of accumulation unit(1) 10.22%(2) Number of accumulation units outstanding at end of period 6,389 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $16.720 $ 15.828 Value at end of period $ 16.720 Increase (decrease) in value of accumulation unit(1) 5.64%(2) Number of accumulation units outstanding at end of period 63,534 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.541 $ 15.221 Value at end of period $ 15.541 Increase (decrease) in value of accumulation unit(1) 2.10%(2) Number of accumulation units outstanding at end of period 8,053 OPPENHEIMER GLOBAL SECURITIES FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $14.927 $ 15.114 Value at end of period $ 14.927 Increase (decrease) in value of accumulation unit(1) (1.24)%(4) Number of accumulation units outstanding at end of period 56,819 PORTFOLIO PARTNERS MFS RESEARCH PORTFOLIO Value at beginning of period $13.795 $ 14.067 Value at end of period $ 13.795 Increase (decrease) in value of accumulation unit(1) (1.93)%(4) Number of accumulation units outstanding at end of period 55,233
103 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 ---------- --------------- PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.291 $19.016 Value at end of period $19.291 Increase (decrease) in value of accumulation unit(1) 1.45%(4) Number of accumulation units outstanding at end of period 7,188 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $16.986 $16.776 Value at end of period $16.986 Increase (decrease) in value of accumulation unit(1) 1.25%(4) Number of accumulation units outstanding at end of period 6,970 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $14.400 $14.112 Value at end of period $14.400 Increase (decrease) in value of accumulation unit(1) 2.04%(4) Number of accumulation units outstanding at end of period 24,650
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. Funds were first received in this option during June 1997. (3) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (4) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 104 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE XIII FOR DEFERRED COMPENSATION CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.95% EFFECTIVE ON JANUARY 15, 1996 (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the ten-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information. The accumulation unit values and the percentage change in the value of an accumulation unit reflect a mortality and expense risk charge of 1.25% until January 15, 1996, when the mortality and expense risk charge was reduced to 0.95% during the accumulation phase. It will increase to 1.25% during the income phase.
1998 1997 1996 1995 ---------- ------------------ ---------------- ------------------- AETNA ASCENT VP Value at beginning of period $15.514 $ 13.063 $ 10.673 $ 10.000(2) Value at end of period $ 15.514 $ 13.063 $ 10.673 Increase (decrease) in value of accumulation unit(1) 18.76% 22.39% 6.73% Number of accumulation units outstanding at end of period 65,940 22,888 393,053 AETNA BALANCED VP, INC. Value at beginning of period $18.922 $ 15.596 $ 13.673 $ 10.868 Value at end of period $ 18.922 $ 15.596 $ 13.673 Increase (decrease) in value of accumulation unit(1) 21.33% 14.06% 25.81% Number of accumulation units outstanding at end of period 776,268 768,178 38,152,395 AETNA BOND VP Value at beginning of period $13.316 $ 12.413 $ 12.098 $ 10.360 Value at end of period $ 13.316 $ 12.413 $ 12.098 Increase (decrease) in value of accumulation unit(1) 7.28% 2.60% 16.78% Number of accumulation units outstanding at end of period 328,774 354,731 21,379,976 AETNA CROSSROADS VP Value at beginning of period $14.541 $ 12.486 $ 10.612 $ 10.000(2) Value at end of period $ 14.541 $ 12.486 $ 10.612 Increase (decrease) in value of accumulation unit(1) 16.46% 17.66% 6.12% Number of accumulation units outstanding at end of period 71,276 35,151 294,673 AETNA GROWTH VP Value at beginning of period $13.202 $ 12.787 Value at end of period $ 13.202 Increase (decrease) in value of accumulation unit(1) 3.25%(6) Number of accumulation units outstanding at end of period 6,619 AETNA GROWTH AND INCOME VP Value at beginning of period $22.325 $ 17.352 $ 14.077 $ 10.778 Value at end of period $ 22.325 $ 17.352 $ 14.077 Increase (decrease) in value of accumulation unit(1) 28.66% 23.26% 30.61% Number of accumulation units outstanding at end of period 5,232,193 4,796,196 188,964,022 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.500 $ 10.934 $ 10.000(8) Value at end of period $ 14.500 $ 10.934 Increase (decrease) in value of accumulation unit(1) 32.62% 9.34%(8) Number of accumulation units outstanding at end of period 159,318 27,436 1994 1993 1992 1991 1990 1989 ----------------- -------------- ---------------- -------------- -------------- ---------------- AETNA ASCENT VP 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 AETNA BALANCED VP, INC. Value at beginning of period $ 11.057 $ 10.189 $ 12.736 $ 10.896 $ 10.437 $ 10.000(4) Value at end of period $ 10.868 $ 11.057 $ 10.189(3) $ 12.736 $ 10.896 $ 10.437 Increase (decrease) in value of accumulation unit(1) (1.71)% 8.52% (3) 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 AETNA BOND VP Value at beginning of period $ 10.905 $ 10.068 $ 36.789 $ 31.192 $ 28.943 $ 25.574 Value at end of period $ 10.360 $ 10.905 $ 10.068(5) $ 36.789 $ 31.192 $ 28.943 Increase (decrease) in value of accumulation unit(1) (5.00)% 8.31% (5) 17.94% 7.77% 13.17% Number of accumulation units outstanding at end of period 11,713,354 4,084,142 3,870 7,844,412 6,984,793 6,202,834 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $ 11.020 $ 10.454 $ 97.165 $ 77.845 $ 76.311 $ 59.871 Value at end of period $ 10.778 $ 11.020 $ 10.454(7) $ 97.165 $ 77.845 $ 76.311 Increase (decrease) in value of accumulation unit(1) (2.20)% 5.41% (7) 24.82% 2.01% 27.46% Number of accumulation units outstanding at end of period 114,733,035 44,166,470 21,250 20,948,226 18,362,906 17,142,820 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP 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
105 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 --------- ----------------- ------------ ------------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $13.571 $ 11.965 $ 10.580 $ 10.000(2) Value at end of period $ 13.571 $ 11.965 $ 10.580 Increase (decrease) in value of accumulation unit(1) 13.42% 13.09% 5.80% Number of accumulation units outstanding at end of period 38,899 13,861 143,637 AETNA MONEY MARKET VP Value at beginning of period $12.022 $ 11.506 $ 11.026 $ 10.528 Value at end of period $ 12.022 $ 11.506 $ 11.026 Increase (decrease) in value of accumulation unit(1) 4.48% 4.36% 4.73% Number of accumulation units outstanding at end of period 262,519 228,698 12,999,680 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.684 $ 13.119 Value at end of period $ 13.684 Increase (decrease) in value of accumulation unit(1) 4.31%(6) Number of accumulation units outstanding at end of period 1,098 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.290 $ 13.087 Value at end of period $ 13.290 Increase (decrease) in value of accumulation unit(1) 1.94%(10) Number of accumulation units outstanding at end of period 3,417 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.946 $ 15.088 $ 13.527 $ 10.554 Value at end of period $ 17.946 $ 15.088 $ 13.527 Increase (decrease) in value of accumulation unit(1) 18.94% 11.54% 28.17% Number of accumulation units outstanding at end of period 66,428 57,557 966,098 FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $15.931 $ 12.554 $ 11.092 $ 10.000(2) Value at end of period $ 15.931 $ 12.554 $ 11.092 Increase (decrease) in value of accumulation unit(1) 26.90% 13.18% 10.92% Number of accumulation units outstanding at end of period 196,921 116,432 1,660,304 1994 1993 1992 1991 1990 1989 -------------- ------------- ------------------ ------------- -------------- ------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP Value at beginning of period $ 10.241 $ 10.048 $ 33.812 $ 32.138 $ 30.012 $ 27.783 Value at end of period $ 10.528 $ 10.241 $ 10.048(9) $ 33.812 $ 32.138 $ 30.012 Increase (decrease) in value of accumulation unit(1) 2.80% 1.92% (9) 5.21% 7.08% 8.02% 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $ 11.036 $ 10.278 $ 10.000(11) 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 FIDELITY VIP EQUITY- INCOME 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
106 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- ------------ ------------ ----------------- FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.987 $ 11.435 $ 10.066 $ 10.000(2) Value at end of period $ 13.987 $ 11.435 $ 10.066 Increase (decrease) in value of accumulation unit(1) 22.31% 13.60% 0.66% Number of accumulation units outstanding at end of period 181,487 112,748 1,833,794 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.342 $ 11.169 $ 9.961 $ 10.000(2) Value at end of period $ 12.342 $ 11.169 $ 9.961 Increase (decrease) in value of accumulation unit(1) 10.50% 12.13% (0.39)% Number of accumulation units outstanding at end of period 22,047 10,848 196,090 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.360 $ 12.491 $ 10.397 $ 10.000(2) Value at end of period $ 15.360 $ 12.491 $ 10.397 Increase (decrease) in value of accumulation unit(1) 22.97% 20.14% 3.97% Number of accumulation units outstanding at end of period 171,832 92,021 2,116,732 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.895 $ 14.243 $ 13.322 $ 10.581 Value at end of period $ 15.895 $ 14.243 $ 13.322 Increase (decrease) in value of accumulation unit(1) 11.60% 6.91% 25.91% Number of accumulation units outstanding at end of period 253,316 226,504 4,887,060 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.100 $ 12.485 $ 10.850 $ 10.000(2) Value at end of period $ 15.100 $ 12.485 $ 10.850 Increase (decrease) in value of accumulation unit(1) 20.95% 15.07% 8.50% Number of accumulation units outstanding at end of period 45,503 29,442 93,304 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.458 $ 13.060 $ 12.077 $ 9.873 Value at end of period $ 14.458 $ 13.060 $ 12.077 Increase (decrease) in value of accumulation unit(1) 10.70% 8.14% 22.33% Number of accumulation units outstanding at end of period 13,925 6,607 315,361 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.505 $ 12.753 $ 10.870 $ 10.000(2) Value at end of period $ 15.505 $ 12.753 $ 10.870 Increase (decrease) in value of accumulation unit(1) 21.59% 17.31% 8.70% Number of accumulation units outstanding at end of period 83,855 51,761 259,196 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $16.819 $ 13.900 $ 10.877 $ 10.000(2) Value at end of period $ 16.819 $ 13.900 $ 10.877 Increase (decrease) in value of accumulation unit(1) 21.00% 27.80% 8.77% Number of accumulation units outstanding at end of period 511,940 212,494 1,036,040 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.633 $ 14.729 $ 11.720 $ 10.154 Value at end of period $ 15.633 $ 14.729 $ 11.720 Increase (decrease) in value of accumulation unit(1) 6.14% 25.67% 15.42% Number of accumulation units outstanding at end of period 73,258 42,174 711,892 1994 1993 1992 1991 1990 1989 ------------------ ------------ ------------------ ------ ------ ----- FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $ 10.000(12) 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 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 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $ 10.000(12) 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 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $ 10.877 $ 9.832 $ 10.000(11) 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
107 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 ---------- -------------------- ------ ------ ------ ------ ------ ------ ------ ----- OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $15.015 $ 15.199 Value at end of period $ 15.015 Increase (decrease) in value of accumulation unit(1) (1.21)%(13) Number of accumulation units outstanding at end of period 573,528 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $13.877 $ 14.147 Value at end of period $ 13.877 Increase (decrease) in value of accumulation unit(1) (1.90)%(13) Number of accumulation units outstanding at end of period 418,965 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.405 $ 19.123 Value at end of period $ 19.405 Increase (decrease) in value of accumulation unit(1) 1.47%(13) Number of accumulation units outstanding at end of period 192,553 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $17.087 $ 16.871 Value at end of period $ 17.087 Increase (decrease) in value of accumulation unit(1) 1.28%(13) Number of accumulation units outstanding at end of period 295,952 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $14.485 $ 14.192 Value at end of period $ 14.485 Increase (decrease) in value of accumulation unit(1) 2.07%(13) Number of accumulation units outstanding at end of period 212,654
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract. (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 $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%. 108 (4) The initial accumulation unit value was established at $10.000 on June 23, 1989, the date on which the fund commenced operations. (5) 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%. (6) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (7) 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%. (8) Reflects less than a full year of performance activity. The initial accumulation unit value was established during August 1996 when the portfolio became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (9) 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%. (10) Reflects less than a full year of performance activity. Funds were first received in this option during August 1997. (11) 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. (12) The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option. (13) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 109 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE XIV FOR DEFERRED COMPENSATION CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.95% EFFECTIVE ON MAY 25, 1996 (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the ten-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by ____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information. The accumulation unit values and the percentage change in the value of an accumulation unit reflect a mortality and expense risk charge of 1.25% until May 25, 1996, when the mortality and expense risk charge was reduced to 0.95% during the accumulation phase. It will increase to 1.25% during the income phase.
1998 1997 1996 1995 ---------- ------------------ ---------------- ------------------- AETNA ASCENT VP Value at beginning of period $15.497 $ 13.049 $ 10.673 $ 10.000(2) Value at end of period $ 15.497 $ 13.049 $ 10.673 Increase (decrease) in value of accumulation unit(1) 18.76% 22.26% 6.73% Number of accumulation units outstanding at end of period 178,233 35,180 393,053 AETNA BALANCED VP, INC. Value at beginning of period $18.901 $ 15.579 $ 13.673 $ 10.868 Value at end of period $ 18.901 $ 15.579 $ 13.673 Increase (decrease) in value of accumulation unit(1) 21.33% 13.94% 25.81% Number of accumulation units outstanding at end of period 1,511,041 1,528,051 38,152,395 AETNA BOND VP Value at beginning of period $13.301 $ 12.399 $ 12.098 $ 10.360 Value at end of period $ 13.301 $ 12.399 $ 12.098 Increase (decrease) in value of accumulation unit(1) 7.28% 2.48% 16.78% Number of accumulation units outstanding at end of period 463,068 493,485 21,379,976 AETNA CROSSROADS VP Value at beginning of period $14.526 $ 12.473 $ 10.612 $ 10.000(2) Value at end of period $ 14.526 $ 12.473 $ 10.612 Increase (decrease) in value of accumulation unit(1) 16.46% 17.54% 6.12% Number of accumulation units outstanding at end of period 99,660 28,829 294,673 AETNA GROWTH VP Value at beginning of period $13.202 $ 12.975 Value at end of period $ 13.202 Increase (decrease) in value of accumulation unit(1) 1.75%(6) Number of accumulation units outstanding at end of period 4,360 AETNA GROWTH AND INCOME VP Value at beginning of period $22.301 $ 17.333 $ 14.077 $ 10.778 Value at end of period $ 22.301 $ 17.333 $ 14.077 Increase (decrease) in value of accumulation unit(1) 28.66% 23.13% 30.61% Number of accumulation units outstanding at end of period 7,667,724 7,250,286 188,964,022 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.500 $ 10.934 $ 10.000(8) Value at end of period $ 14.500 $ 10.934 Increase (decrease) in value of accumulation unit(1) 32.62% 9.34%(8) Number of accumulation units outstanding at end of period 190,348 28,473 1994 1993 1992 1991 1990 1989 ---------------- -------------- ---------------- -------------- -------------- ---------------- AETNA ASCENT VP 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 AETNA BALANCED VP, INC. Value at beginning of period $ 11.057$ 10.189 $ 12.736 $ 10.896 $ 10.437 $ 10.000(4) Value at end of period $ 10.868$ 11.057 $ 10.189(3) $ 12.736 $ 10.896 $ 10.437 Increase (decrease) in value of accumulation unit(1) (1.71)% 8.52% (3) 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 AETNA BOND VP Value at beginning of period $ 10.905 $ 10.068 $ 36.789 $ 31.192 $ 28.943 $ 25.574 Value at end of period $ 10.360 $ 10.905 $ 10.068(5) $ 36.789 $ 31.192 $ 28.943 Increase (decrease) in value of accumulation unit(1) (5.00)% 8.31% (5) 17.94% 7.77% 13.17% Number of accumulation units outstanding at end of period 11,713,354 4,084,142 3,870 7,844,412 6,984,793 6,202,834 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $ 11.020 $ 10.454 $ 97.165 $ 77.845 $ 76.311 $ 59.871 Value at end of period $ 10.778 $ 11.020 $ 10.454(7) $ 97.165 $ 77.845 $ 76.311 Increase (decrease) in value of accumulation unit(1) (2.20) % 5.41% (7) 24.82% 2.01% 27.46% Number of accumulation units outstanding at end of period 114,733,035 44,166,470 21,250 20,948,226 18,362,906 17,142,820 AETNA HIGH YIELD VP 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 AETNA INDEX PLUS LARGE CAP VP 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
110 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 1994 ---------- --------------- ------------ ------------------- -------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $13.557 $ 11.953 $ 10.580 $ 10.000(2) Value at end of period $ 13.557 $ 11.953 $ 10.580 Increase (decrease) in value of accumulation unit(1) 13.42% 12.98% 5.80% Number of accumulation units outstanding at end of period 58,121 15,755 143,637 AETNA MONEY MARKET VP Value at beginning of period $12.009 $ 11.494 $ 11.026 $ 10.528 $ 10.241 Value at end of period $ 12.009 $ 11.494 $ 11.026 $ 10.528 Increase (decrease) in value of accumulation unit(1) 4.48% 4.24% 4.73% 2.80% Number of accumulation units outstanding at end of period 328,674 351,832 12,999,680 7,673,528 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.684 $ 13.248 Value at end of period $ 13.684 Increase (decrease) in value of accumulation unit(1) 3.29%(6) Number of accumulation units outstanding at end of period 12,603 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.290 $ 13.093 Value at end of period $ 13.290 Increase (decrease) in value of accumulation unit(1) 1.50%(6) Number of accumulation units outstanding at end of period 8,131 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.926 $ 15.071 $ 13.527 $ 10.554 $ 11.036 Value at end of period $ 17.926 $ 15.071 $ 13.527 $ 10.554 Increase (decrease) in value of accumulation unit(1) 18.94% 11.42% 28.17% (4.37)% Number of accumulation units outstanding at end of period 40,783 35,511 966,098 521,141 FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $15.914 $ 12.541 $ 11.092 $ 10.000(2) Value at end of period $ 15.914 $ 12.541 $ 11.092 Increase (decrease) in value of accumulation unit(1) 26.90% 13.06% 10.92% Number of accumulation units outstanding at end of period 121,281 82,568 1,660,304 1993 1992 1991 1990 1989 ------------- ------------------ ------------- -------------- ------------- AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP Value at beginning of period $ 10.048 $ 33.812 $ 32.138 $ 30.012 $ 27.783 Value at end of period $ 10.241 $ 10.048(9) $ 33.812 $ 32.138 $ 30.012 Increase (decrease) in value of accumulation unit(1) 1.92% (9) 5.21% 7.08% 8.02% Number of accumulation units outstanding at end of period 2,766,044 825 8,430,082 10,220,110 8,286,033 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $ 10.278 $ 10.000(10) Value at end of period $ 11.036 $ 10.278 Increase (decrease) in value of accumulation unit(1) 7.37% 2.78% Number of accumulation units outstanding at end of period 144,168 2,556 FIDELITY VIP EQUITY- INCOME 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
111 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- ------------ ------------ ----------------- FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.972 $ 11.423 $ 10.066 $ 10.000(2) Value at end of period $ 13.972 $ 11.423 $ 10.066 Increase (decrease) in value of accumulation unit(1) 22.31% 13.48% 0.66% Number of accumulation units outstanding at end of period 176,877 135,704 1,833,794 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.328 $ 11.157 $ 9.961 $ 10.000(2) Value at end of period $ 12.328 $ 11.157 $ 9.961 Increase (decrease) in value of accumulation unit(1) 10.50% 12.01% (0.39)% Number of accumulation units outstanding at end of period 40,516 29,108 196,090 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.343 $ 12.477 $ 10.397 $ 10.000(2) Value at end of period $ 15.343 $ 12.477 $ 10.397 Increase (decrease) in value of accumulation unit(1) 22.97% 20.01% 3.97% Number of accumulation units outstanding at end of period 320,226 175,463 2,116,732 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.878 $ 14.227 $ 13.322 $ 10.581 Value at end of period $ 15.878 $ 14.227 $ 13.322 Increase (decrease) in value of accumulation unit(1) 11.60% 6.80% 25.91% Number of accumulation units outstanding at end of period 211,783 171,747 4,887,060 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.084 $ 12.472 $ 10.850 $ 10.000(2) Value at end of period $ 15.084 $ 12.472 $ 10.850 Increase (decrease) in value of accumulation unit(1) 20.95% 14.94% 8.50% Number of accumulation units outstanding at end of period 58,999 29,198 93,304 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.442 $ 13.046 $ 12.077 $ 9.873 Value at end of period $ 14.442 $ 13.046 $ 12.077 Increase (decrease) in value of accumulation unit(1) 10.70% 8.02% 22.33% Number of accumulation units outstanding at end of period 11,145 9,054 315,361 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.489 $ 12.739 $ 10.870 $ 10.000(2) Value at end of period $ 15.489 $ 12.739 $ 10.870 Increase (decrease) in value of accumulation unit(1) 21.59% 17.19% 8.70% Number of accumulation units outstanding at end of period 86,733 67,001 259,196 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $16.800 $ 13.885 $ 10.877 $ 10.000(2) Value at end of period $ 16.800 $ 13.885 $ 10.877 Increase (decrease) in value of accumulation unit(1) 21.00% 27.66% 8.77% Number of accumulation units outstanding at end of period 586,164 241,823 1,036,040 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.616 $ 14.713 $ 11.720 $ 10.154 Value at end of period $ 15.616 $ 14.713 $ 11.720 Increase (decrease) in value of accumulation unit(1) 6.14% 25.54% 15.42% Number of accumulation units outstanding at end of period 72,475 43,665 711,892 1994 1993 1992 1991 1990 1989 ------------------ ------------ ------------------ ------ ------ ----- FIDELITY VIP GROWTH 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 FIDELITY VIP OVERSEAS 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 FIDELITY VIP II CONTRAFUND 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 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $ 10.000(11) 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 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 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $ 10.000(11) 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 JANUS ASPEN GROWTH 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 JANUS ASPEN WORLDWIDE GROWTH 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 LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $ 10.877 $ 9.832 $ 10.000(10) 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
112 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 ---------- -------------------- ------ ------ ------ ------ ------ ------ ------ ----- OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $14.999 $ 15.183 Value at end of period $ 14.999 Increase (decrease) in value of accumulation unit(1) (1.21)%(12) Number of accumulation units outstanding at end of period 586,517 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $13.862 $ 14.131 Value at end of period $ 13.862 Increase (decrease) in value of accumulation unit(1) (1.90)%(12) Number of accumulation units outstanding at end of period 317,033 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.384 $ 19.102 Value at end of period $ 19.384 Increase (decrease) in value of accumulation unit(1) 1.47%(12) Number of accumulation units outstanding at end of period 84,592 PORTFOLIO PARTNERS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $17.068 $ 16.853 Value at end of period $ 17.068 Increase (decrease) in value of accumulation unit(1) 1.28%(12) Number of accumulation units outstanding at end of period 273,402 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $14.470 $ 14.176 Value at end of period $ 14.470 Increase (decrease) in value of accumulation unit(1) 2.07%(12) Number of accumulation units outstanding at end of period 227,469
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract. (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 $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%. 113 (4) The initial accumulation unit value was established at $10.000 on June 23, 1989, the date on which the fund commenced operations. (5) 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%. (6) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (7) 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%. (8) Reflects less than a full year of performance activity. The initial accumulation unit value was established during August 1996 when the portfolio became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (9) 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%. (10) 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. (11) The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option. (12) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 114 Condensed Financial Information - -------------------------------------------------------------------------------- TABLE XV FOR DEFERRED COMPENSATION CONTRACTS WITH TOTAL SEPARATE ACCOUNT CHARGES OF 0.95% EFFECTIVE ON OR AFTER DECEMBER 16, 1996 (Selected data for accumulation units outstanding throughout each period) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The condensed financial information presented below for each of the periods in the ten-year period ended December 31, 1998 (as applicable), is derived from the financial statements of the separate account, which have been audited by _____________, independent auditors. The financial statements and the independent auditors' report thereon for the year ended December 31, 1998 are included in the Statement of Additional Information. The accumulation unit values and the percentage change in the value of an accumulation unit reflect a mortality and expense risk charge of 1.25% until December 16, 1996, when the mortality and expense risk charge was reduced to 0.95% during the accumulation phase. It will increase to 1.25% during the income phase. The class of accumulation unit value shown below may also be used for contracts with 0.95% total separate account charges issued after December 16, 1996; however, the condensed financial information for periods prior to December 16, 1996 will not be applicable.
1998 1997 1996 1995 ---------- ---------------- ------------- ------------------- AETNA ASCENT VP Value at beginning of period $15.471 $ 13.027 $ 10.673 $ 10.000(2) Value at end of period $ 15.471 $ 13.027 $ 10.673 Increase (decrease) in value of accumulation unit(1) 18.76% 22.06% 6.73% Number of accumulation units outstanding at end of period 86,255 32,497 393,053 AETNA BALANCED VP, INC. Value at beginning of period $18.870 $ 15.553 $ 13.673 $ 10.868 Value at end of period $ 18.870 $ 15.553 $ 13.673 Increase (decrease) in value of accumulation unit(1) 21.33% 13.75% 25.81% Number of accumulation units outstanding at end of period 1,144,876 270,688 38,152,395 AETNA BOND VP Value at beginning of period $13.279 $ 12.379 $ 12.098 $ 10.360 Value at end of period $ 13.279 $ 12.379 $ 12.098 Increase (decrease) in value of accumulation unit(1) 7.28% 2.31% 16.78% Number of accumulation units outstanding at end of period 553,279 159,594 21,379,976 AETNA CROSSROADS VP Value at beginning of period $14.501 $ 12.452 $ 10.612 $ 10.000(2) Value at end of period $ 14.501 $ 12.452 $ 10.612 Increase (decrease) in value of accumulation unit(1) 16.46% 17.34% 6.12% Number of accumulation units outstanding at end of period 101,836 9,415 294,673 AETNA GROWTH VP Value at beginning of period $13.202 $ 12.912 Value at end of period $ 13.202 Increase (decrease) in value of accumulation unit(1) 2.25%(6) Number of accumulation units outstanding at end of period 7 AETNA GROWTH AND INCOME VP Value at beginning of period $22.264 $ 17.304 $ 14.077 $ 10.778 Value at end of period $ 22.264 $ 17.304 $ 14.077 Increase (decrease) in value of accumulation unit(1) 28.66% 22.92% 30.61% Number of accumulation units outstanding at end of period 8,238,898 3,033,655 188,964,022 AETNA HIGH YIELD VP 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 1994 1993 1992 1991 1990 1989 ----------------- -------------- ---------------- -------------- -------------- ---------------- AETNA ASCENT VP 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 AETNA BALANCED VP, INC. Value at beginning of period $ 11.057 $ 10.189 $ 12.736 $ 10.896 $ 10.437 $ 10.000(4) Value at end of period $ 10.868 $ 11.057 $ 10.189(3) $ 12.736 $ 10.896 $ 10.437 Increase (decrease) in value of accumulation unit(1) (1.71)% 8.52% (3) 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 AETNA BOND VP Value at beginning of period $ 10.905 $ 10.068 $ 36.789 $ 31.192 $ 28.943 $ 25.574 Value at end of period $ 10.360 $ 10.905 $ 10.068(5) $ 36.789 $ 31.192 $ 28.943 Increase (decrease) in value of accumulation unit(1) (5.00)% 8.31% (5) 17.94% 7.77% 13.17% Number of accumulation units outstanding at end of period 11,713,354 4,084,142 3,870 7,844,412 6,984,793 6,202,834 AETNA CROSSROADS VP 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 AETNA GROWTH VP 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 AETNA GROWTH AND INCOME VP Value at beginning of period $ 11.020 $ 10.454 $ 97.165 $ 77.845 $ 76.311 $ 59.871 Value at end of period $ 10.778 $ 11.020 $ 10.454(7) $ 97.165 $ 77.845 $ 76.311 Increase (decrease) in value of accumulation unit(1) (2.20)% 5.41% (7) 24.82% 2.01% 27.46% Number of accumulation units outstanding at end of period 114,733,035 44,166,470 21,250 20,948,226 18,362,906 17,142,820 AETNA HIGH YIELD VP 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
115 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- --------------- ------------------ ----------------- AETNA INDEX PLUS LARGE CAP VP Value at beginning of period $14.489 $ 10.925 $ 11.038(8) Value at end of period $ 14.489 $ 10.925 Increase (decrease) in value of accumulation unit(1) 32.62% (1.02)%(8) Number of accumulation units outstanding at end of period 293,223 23,856 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP Value at beginning of period $13.534 $ 11.932 $ 10.580 $ 10.000(2) Value at end of period $ 13.534 $ 11.932 $ 10.580 Increase (decrease) in value of accumulation unit(1) 13.42% 12.78% 5.80% Number of accumulation units outstanding at end of period 82,178 7,543 143,637 AETNA MONEY MARKET VP Value at beginning of period $11.989 $ 11.475 $ 11.026 $ 10.528 Value at end of period $ 11.989 $ 11.475 $ 11.026 Increase (decrease) in value of accumulation unit(1) 4.48% 4.07% 4.73% Number of accumulation units outstanding at end of period 477,490 179,361 12,999,680 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP Value at beginning of period $13.684 $ 13.248 Value at end of period $ 13.684 Increase (decrease) in value of accumulation unit(1) 3.29%(6) Number of accumulation units outstanding at end of period 4,993 AETNA VALUE OPPORTUNITY VP Value at beginning of period $13.290 $ 13.093 Value at end of period $ 13.290 Increase (decrease) in value of accumulation unit(1) 1.50%(6) Number of accumulation units outstanding at end of period 4,910 CALVERT SOCIAL BALANCED PORTFOLIO Value at beginning of period $17.896 $ 15.046 $ 13.527 $ 10.554 Value at end of period $ 17.896 $ 15.046 $ 13.527 Increase (decrease) in value of accumulation unit(1) 18.94 11.23% 28.17% Number of accumulation units outstanding at end of period 62,328 21,317 966,098 1994 1993 1992 1991 1990 1989 -------------- ------------- ------------------ ------------- -------------- ------------- AETNA INDEX PLUS LARGE CAP VP 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 AETNA INDEX PLUS MID CAP VP 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 AETNA INDEX PLUS SMALL CAP VP 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 AETNA INTERNATIONAL VP 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 AETNA LEGACY VP 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 AETNA MONEY MARKET VP Value at beginning of period $ 10.241 $ 10.048 $ 33.812 $ 32.138 $ 30.012 $ 27.783 Value at end of period $ 10.528 $ 10.241 $ 10.048(9) $ 33.812 $ 32.138 $ 30.012 Increase (decrease) in value of accumulation unit(1) 2.80% 1.92% (9) 5.21% 7.08% 8.02% 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 AETNA REAL ESTATE SECURITIES VP 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 AETNA SMALL COMPANY VP 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 AETNA VALUE OPPORTUNITY VP 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 SOCIAL BALANCED PORTFOLIO Value at beginning of period $ 11.036 $ 10.278 $ 10.000(10) 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
116 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 ---------- ------------ ------------ FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $15.887 $ 12.520 $ 11.092 Value at end of period $ 15.887 $ 12.520 Increase (decrease) in value of accumulation unit(1) 26.90% 12.87% Number of accumulation units outstanding at end of period 114,725 27,814 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $13.948 $ 11.404 $ 10.066 Value at end of period $ 13.948 $ 11.404 Increase (decrease) in value of accumulation unit(1) 22.31% 13.29% Number of accumulation units outstanding at end of period 191,151 60,491 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $12.308 $ 11.138 $ 9.961 Value at end of period $ 12.308 $ 11.138 Increase (decrease) in value of accumulation unit(1) 10.50% 11.82% Number of accumulation units outstanding at end of period 19,949 2,023 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $15.318 $ 12.457 $ 10.397 Value at end of period $ 15.318 $ 12.457 Increase (decrease) in value of accumulation unit(1) 22.97% 19.81% Number of accumulation units outstanding at end of period 263,159 41,394 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $15.851 $ 14.204 $ 13.322 Value at end of period $ 15.851 $ 14.204 Increase (decrease) in value of accumulation unit(1) 11.60% 6.62% Number of accumulation units outstanding at end of period 294,623 122,154 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $15.059 $ 12.451 $ 10.850 Value at end of period $ 15.059 $ 12.451 Increase (decrease) in value of accumulation unit(1) 20.95% 14.75% Number of accumulation units outstanding at end of period 78,052 12,340 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $14.418 $ 13.024 $ 12.077 Value at end of period $ 14.418 $ 13.024 Increase (decrease) in value of accumulation unit(1) 10.70% 7.85% Number of accumulation units outstanding at end of period 13,587 3,861 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $15.463 $ 12.718 $ 10.870 Value at end of period $ 15.463 $ 12.718 Increase (decrease) in value of accumulation unit(1) 21.59% 16.99% Number of accumulation units outstanding at end of period 93,386 29,696 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $16.773 $ 13.862 $ 10.877 Value at end of period $ 16.773 $ 13.862 Increase (decrease) in value of accumulation unit(1) 21.00% 27.45% Number of accumulation units outstanding at end of period 538,281 124,749 1995 1994 1993 1992 1991 1990 1989 ----------------- ------------------ ------ ------ ------ ------ ----- FIDELITY VIP EQUITY- INCOME PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 11.092 Increase (decrease) in value of accumulation unit(1) 10.92% Number of accumulation units outstanding at end of period 1,660,304 FIDELITY VIP GROWTH PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 10.066 Increase (decrease) in value of accumulation unit(1) 0.66% Number of accumulation units outstanding at end of period 1,833,794 FIDELITY VIP OVERSEAS PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 9.961 Increase (decrease) in value of accumulation unit(1) (0.39)% Number of accumulation units outstanding at end of period 196,090 FIDELITY VIP II CONTRAFUND PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 10.397 Increase (decrease) in value of accumulation unit(1) 3.97% Number of accumulation units outstanding at end of period 2,116,732 JANUS ASPEN AGGRESSIVE GROWTH PORTFOLIO Value at beginning of period $ 10.581 $ 10.000(11) Value at end of period $ 13.322 $ 10.581 Increase (decrease) in value of accumulation unit(1) 25.91% 5.81% Number of accumulation units outstanding at end of period 4,887,060 753,862 JANUS ASPEN BALANCED PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 10.850 Increase (decrease) in value of accumulation unit(1) 8.50% Number of accumulation units outstanding at end of period 93,304 JANUS ASPEN FLEXIBLE INCOME PORTFOLIO Value at beginning of period $ 9.873 $ 10.000(11) Value at end of period $ 12.077 $ 9.873 Increase (decrease) in value of accumulation unit(1) 22.33% (1.27)% Number of accumulation units outstanding at end of period 315,361 28,543 JANUS ASPEN GROWTH PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 10.870 Increase (decrease) in value of accumulation unit(1) 8.70% Number of accumulation units outstanding at end of period 259,196 JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO Value at beginning of period $ 10.000(2) Value at end of period $ 10.877 Increase (decrease) in value of accumulation unit(1) 8.77% Number of accumulation units outstanding at end of period 1,036,040
117 Condensed Financial Information (continued) - --------------------------------------------------------------------------------
1998 1997 1996 1995 ---------- -------------------- ------------ ------------ LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $15.590 $ 14.688 $ 11.720 $ 10.154 Value at end of period $ 15.590 $ 14.688 $ 11.720 Increase (decrease) in value of accumulation unit(1) 6.14% 25.33% 15.42% Number of accumulation units outstanding at end of period 103,604 10,977 711,892 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES PORTFOLIO Value at beginning of period $14.974 $ 15.158 Value at end of period $ 14.974 Increase (decrease) in value of accumulation unit(1) (1.21)%(12) Number of accumulation units outstanding at end of period 703,653 PORTFOLIO PARTNERS MFS RESEARCH GROWTH PORTFOLIO Value at beginning of period $13.839 $ 14.108 Value at end of period $ 13.839 Increase (decrease) in value of accumulation unit(1) (1.90)%(12) Number of accumulation units outstanding at end of period 627,658 PORTFOLIO PARTNERS MFS VALUE EQUITY PORTFOLIO Value at beginning of period $19.352 $ 19.071 Value at end of period $ 19.352 Increase (decrease) in value of accumulation unit(1) 1.47%(12) Number of accumulation units outstanding at end of period 206,191 PORTFOLIO PARTNERS MFS SCUDDER INTERNATIONAL GROWTH PORTFOLIO Value at beginning of period $17.040 $ 16.825 Value at end of period $ 17.040 Increase (decrease) in value of accumulation unit(1) 1.28%(12) Number of accumulation units outstanding at end of period 457,354 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY PORTFOLIO Value at beginning of period $ 14.153 Value at end of period $ 14.445 Increase (decrease) in value of accumulation unit(1) 2.07%(12) Number of accumulation units outstanding at end of period 200,374 1994 1993 1992 1991 1990 1989 ------------- ------------ ------------------ ------ ------ ----- LEXINGTON NATURAL RESOURCES TRUST Value at beginning of period $ 10.877 $ 9.832 $ 10.000(10) 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 OPPENHEIMER GLOBAL SECURITIES FUND 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 OPPENHEIMER STRATEGIC BOND FUND 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 PORTFOLIO PARTNERS MFS EMERGING EQUITIES 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 PORTFOLIO PARTNERS MFS RESEARCH GROWTH 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 PORTFOLIO PARTNERS MFS VALUE EQUITY 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 PORTFOLIO PARTNERS MFS SCUDDER INTERNATIONAL GROWTH 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 PORTFOLIO PARTNERS T. ROWE PRICE GROWTH EQUITY 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
- ----------------- (1) The above figures are calculated by subtracting the beginning accumulation unit value from the ending accumulation unit value, and dividing the result by the beginning accumulation unit value. These figures do not reflect the early withdrawal charges or the fixed dollar annual maintenance fee, if any. Inclusion of these charges would reduce the investment results shown. (2) Reflects less than a full year of performance activity. The initial accumulation unit value was established at $10.000 during August 1995, when the fund became available under the contract. 118 (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 $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%. (4) The initial accumulation unit value was established at $10.000 on June 23, 1989, the date on which the fund commenced operations. (5) 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%. (6) Reflects less than a full year of performance activity. Funds were first received in this option during December 1997. (7) 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%. (8) Reflects less than a full year of performance activity. The initial accumulation unit value was established during December 1996 when the portfolio became available under the contract, when funds were first received in this option or when the applicable daily asset charge was first utilized. (9) 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%. (10) 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. (11) The initial accumulation unit value was established at $10.000 during October 1994, when the funds were first received in this option. (12) Reflects less than a full year of performance activity. Funds were first received in this option during November 1997. 119 For Master Applications Only - -------------------------------------------------------------------------------- I hereby acknowledge receipt of an Account C prospectus dated May 3, 1999, as well as all current prospectuses for the funds available under the Contracts. ___ Please send an Account C Statement of Additional Information (Form No. SAI.01107-99) dated May 3, 1999. - -------------------------------------------------------------------------------- CONTRACT HOLDER'S SIGNATURE - -------------------------------------------------------------------------------- DATE PROS.01107-99 120 - -------------------------------------------------------------------------------- VARIABLE ANNUITY ACCOUNT C OF AETNA LIFE INSURANCE AND ANNUITY COMPANY - -------------------------------------------------------------------------------- Statement of Additional Information dated May 3, 1999 This Statement of Additional Information is not a prospectus and should be read in conjunction with the current prospectus dated May 3, 1999. The contracts offered in connection with the prospectus are group or individual deferred variable annuity contracts funded through Variable Annuity Account C (the "separate account"). A free prospectus is available upon request from the local Aetna Life Insurance and Annuity Company office or by writing to or calling: Aetna Life Insurance and Annuity Company Customer Service 151 Farmington Avenue Hartford, Connecticut 06156 1-800-525-4225 Read the prospectus before you invest. Unless otherwise indicated, terms used in this Statement of Additional Information shall have the same meaning as in the prospectus. TABLE OF CONTENTS
Page 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 Income Phase Payments........................................................... 7 Sales Material and Advertising.................................................. 8 Independent Auditors............................................................ 8 Financial Statements of the Separate Account.................................... S-1 Financial Statements of Aetna Life Insurance and Annuity Company................ F-1
GENERAL INFORMATION AND HISTORY Aetna Life Insurance and Annuity Company (the "Company," we, us, our) is a stock life insurance company which was organized under the insurance laws of the State of Connecticut in 1976. Through a merger, it succeeded to the business of Aetna Variable Annuity Life Insurance Company (formerly Participating Annuity Life Insurance Company organized in 1954). As of December 31, 1998, the Company (ALIAC) had $____ billion invested through its products, including $____ billion in its separate accounts (of which the Company or an affiliate oversees the management of $____ billion) and $___ billion in its mutual funds offered outside of its separate accounts. The Company is ranked among the top _% of all U.S. life insurance companies based on assets as of December 31, 1998. The Company is an indirect wholly owned subsidiary of Aetna Inc. The Company is engaged in the business of issuing life insurance policies and annuity contracts. Our Home Office is located at 151 Farmington Avenue, Hartford, Connecticut 06156. In addition to serving as the principal underwriter and the depositor for the separate account, the Company is a registered investment adviser under the Investment Advisers Act of 1940, and a registered broker-dealer under the Securities Exchange Act of 1934. We provide investment advice to several of the registered management investment companies offered as variable investment options under the contracts funded by the separate account (see "Variable Annuity Account C" below). Other than the mortality and expense risk charge and administrative expense charge described in the prospectus, all expenses incurred in the operations of the separate account are borne by the Company. (See "Fees" in the prospectus.) We receive reimbursement for certain administrative costs from some advisers of the funds used as funding options under the contract. These fees generally range up to 0.425%. The assets of the separate account are held by the Company. The separate account has no custodian. However, the funds in whose shares the assets of the separate account are invested each have custodians, as discussed in their respective prospectuses. From this point forward, the term "contract(s)" refers only to those offered through the prospectus. VARIABLE ANNUITY ACCOUNT C Variable Annuity Account C is a separate account established by the Company for the purpose of funding variable annuity contracts issued by the Company. The separate account is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940, as amended. Payments to accounts under the contract may be allocated to one or more of the subaccounts. Each subaccount invests in the shares of only one of the funds listed below. We may make additions to, deletions from or substitutions of available investment options as permitted by law and subject to the conditions of the contract. The availability of the funds is subject to applicable regulatory authorization. Not all funds are available in all jurisdictions, under all contracts, or under all plans. 2 The funds currently available under the contract are as follows: o Aetna Ascent VP o AIM V.I. Value Fund o Aetna Balanced VP, Inc. o Calvert Social Balanced Portfolio o Aetna Income Shares d/b/a Aetna Bond VP o Fidelity VIP Equity-Income Portfolio o Aetna Crossroads VP o Fidelity VIP Growth Portfolio o Aetna Growth VP o Fidelity VIP Overseas Portfolio o Aetna Variable Fund d/b/a Aetna Growth and Income VP o Fidelity VIP II Contrafund Portfolio o Aetna High Yield VP o Janus Aspen Aggressive Growth Portfolio o Aetna Index Plus Large Cap VP o Janus Aspen Balanced Portfolio o Aetna Index Plus Mid Cap VP o Janus Aspen Flexible Income Portfolio o Aetna Index Plus Small Cap VP o Janus Aspen Growth Portfolio o Aetna International VP o Janus Aspen Worldwide Growth Portfolio o Aetna Legacy VP o Lexington Natural Resources Trust* o Aetna Variable Encore Fund d/b/a Aetna Money Market VP o Oppenheimer Global Securities Fund o Aetna Real Estate Securities VP o Oppenheimer Strategic Bond Fund o Aetna Small Company VP o Portfolio Partners MFS Emerging Equities Portfolio o Aetna Value Opportunity VP o Portfolio Partners MFS Research Growth Portfolio o AIM V.I. Capital Appreciation Fund o Portfolio Partners MFS Value Equity Portfolio o AIM V.I. Growth Fund o Portfolio Partners Scudder International Growth Portfolio o AIM V.I. Growth and Income Fund o Portfolio Partners T. Rowe Price Growth Equity Portfolio
* Transfers or deposits are not allowed into the subaccount investing in this fund, except from accounts established under the contract before May 1, 1998. As soon as all those who have current allocations to the subaccount under the contract have redirected their allocations to other investment options, we will close the subaccount to all investments (except loan repayments that we automatically deposit into the subaccount according to our loan repayment procedures). A complete description of each of the funds, including their investment objectives, policies, risks and fees and expenses, is contained in the prospectus and statement of additional information for each of the funds. OFFERING AND PURCHASE OF CONTRACTS The Company is both the depositor and the principal underwriter for the securities sold under the prospectus. We offer the contracts through life insurance agents licensed to sell variable annuities who are registered representatives of the Company or of other registered broker-dealers who have sales agreements with the Company. The offering of the contracts is continuous. A description of the manner in which contracts are purchased may be found in the prospectus under the sections titled "Contract Ownership and Rights" and "Your Account Value." PERFORMANCE DATA General From time to time, we may advertise different types of historical performance for the subaccounts of the separate account available under the contracts. We may advertise the "standardized average annual total returns," calculated in a manner prescribed by the Securities and Exchange Commission (the "standardized total return"), as well as the "non-standardized total return," both of which are described below. The standardized and non-standardized total return figures are computed according to a formula in which a hypothetical initial payment of $1,000 is applied to the various subaccounts under the contract, and then related to the ending redeemable values over one, five and ten year periods (or fractional periods thereof). The redeemable value is then divided by the initial investment and this quotient is taken to the Nth root (N represents the number of years in the period) and 1 is subtracted from the result which is then expressed as a percentage, carried to at least the nearest hundredth of a percent. The standardized figures use the actual returns of the fund since the date contributions were first received in the fund under the separate account and then adjust them to reflect the deduction of all recurring charges under the contracts during each period (e.g., mortality and expense risk charges, administrative expense charges, maintenance fees and early withdrawal charges). These 3 charges will be deducted on a pro rata basis in the case of fractional periods. The maintenance fee is converted to a percentage of assets based on the average account size under the contracts described in the prospectus. The total return figures shown below may be different from the actual historical total return under your contract because for periods prior to 1994, the subaccount's investment performance reflected the investment performance of the underlying fund plus any cash held by the subaccount. The non-standardized total return figures will be calculated in a similar manner, except that they will not reflect the deduction of any applicable early withdrawal charge, and in some advertisements will also exclude the effect of any applicable maintenance fee. The deduction of the early withdrawal charge and the maintenance fee would decrease the level of performance shown if reflected in these calculations. The non-standardized figures may also include monthly, quarterly, year-to-date and three year periods, and may include returns calculated from the fund's inception date and/or the date contributions were first received in the fund under the separate account. The non-standardized returns shown in the tables below reflect the deduction of all charges under the contract except the early withdrawal charge. The maximum maintenance fee has been deducted for the purposes of calculating the returns. Investment results of the funds will fluctuate over time, and any presentation of the subaccounts' total return quotations for any prior period should not be considered as a representation of how the subaccounts will perform in any future period. Additionally, the contract value and/or account value upon redemption may be more or less than your original cost. Average Annual Total Return Quotations - Standardized and Non-Standardized The tables below reflect the average annual standardized and non-standardized total return quotation figures for the periods ended December 31, 1998 for the subaccounts under the contracts. The standardized returns (Table A) assume the maximum mortality and expense risk charge of 1.25%, administrative expense charge of 0.25%, maximum maintenance fee of $20 and early withdrawal charges corresponding to Schedule I in the prospectus that is based on completed payment periods. The non-standardized returns (Table B) assume the same charges but do not include the early withdrawal charges. We may also advertise returns based on other fee schedules that apply to a particular contract. These fee schedules may result in higher returns than those shown. For the subaccounts funded by the Portfolio Partners portfolios, two sets of performance returns are shown for each subaccount: one showing performance based solely on the performance of the Portfolio Partners portfolio from November 28, 1997, the date the Portfolio commenced operations; and one quotation based on (a) performance through November 26, 1997 of the fund it replaced under many contracts and; (b) after November 26, 1997, based on the performance of the Portfolio Partners portfolio. For those subaccounts where results are not available for the full calendar period indicated, performance for such partial periods is shown in the column labeled "Since Inception." For standardized performance, the "Since Inception" column shows the average annual return since the date contributions were first received in the fund under the separate account. For non-standardized performance, the "Since Inception" column shows average annual total return since the fund's inception date. 4
TABLE A - ------------------------------------------------------------------------------------------------------------------------------------ Date Contributions First ($20 Maintenance Fee) STANDARDIZED Received Under the Separate Account - ------------------------------------------------------------------------------------------------------------------------------------ Since SUBACCOUNT 1 Year 5 Year 10 Year Inception* - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Ascent VP 07/31/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Balanced VP, Inc. 04/03/89 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Bond VP(1) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Crossroads VP 07/04/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Growth VP 05/30/97 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Growth and Income VP(1) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Index Plus Large Cap VP 10/31/96 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Legacy VP 07/31/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Money Market VP(1)(2) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Small Company VP 05/30/97 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Value Opportunity VP 05/30/97 - ------------------------------------------------------------------------------------------------------------------------------------ Calvert Social Balanced Portfolio 05/31/89 - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Equity-Income Portfolio 05/31/94 - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Growth Portfolio 05/31/94 - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Overseas Portfolio 05/31/94 - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP II Contrafund Portfolio 05/31/95 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Aggressive Growth Portfolio 06/30/94 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Balanced Portfolio 06/30/95 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Flexible Income Portfolio 10/31/94 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Growth Portfolio 06/30/95 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Worldwide Growth Portfolio 05/31/95 - ------------------------------------------------------------------------------------------------------------------------------------ Lexington Natural Resources Trust 10/14/91 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Emerging Equities Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Alger American Small Cap/Portfolio Partners MFS Emerging Equities(3) 09/30/93 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Research Growth Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ American Century VP Capital Appreciation/Portfolio Partners MFS Research Growth(3) 08/31/92 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Value Equity Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Neuberger Berman AMT Growth/Portfolio Partners MFS Value Equity(3) 05/31/89 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners Scudder International Growth Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Scudder International Portfolio Class A/Portfolio Partners Scudder International Growth(3) 07/31/89 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners T. Rowe Price Growth Equity Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Alger American Growth/Portfolio Partners T. Rowe Price Growth Equity 10/31/94 - ------------------------------------------------------------------------------------------------------------------------------------
Please refer to the discussion preceding Table A for an explanation of the charges included and methodology used in the standardized and non-standardized figures. These figures represent historical performance and should not be considered a projection of future performance. * Reflects performance from the date contributions were first received in the fund under the separate account. (1) These funds have been available through the separate account for more than ten years. (2) The current yield for the subaccount for the 7-day period ended December 31, 1998 (on an annualized basis) was _____%. Current yield more closely reflects current earnings than does total return. The current yield reflects the deduction of all charges under the contract that are deducted from the total return quotations shown above except the maximum 5% early withdrawal charge. (3) The fund first listed was replaced with the applicable Portfolio Partners Portfolio after the close of business on November 26, 1997. The performance shown is based on the performance of the replaced fund until November 26, 1997, and the performance of the applicable Portfolio Partners Portfolio after that date. The replaced fund may not have been available under all contracts. The "Date Contributions First Received Under the Separate Account" refers to the applicable date for the replaced fund. 5
TABLE B - ------------------------------------------------------------------------------------------------------------------------------------ Fund ($20 Maintenance Fee) NON-STANDARDIZED Inception Date - ------------------------------------------------------------------------------------------------------------------------------------ Since SUBACCOUNT 1 Year 3 Years 5 Years 10 Years Inception** - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Ascent VP 07/05/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Balanced VP, Inc. 04/03/89 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Bond VP(1) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Crossroads VP 07/05/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Growth VP 12/13/96 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Growth and Income VP(1) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Index Plus Large Cap VP 09/16/96 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Legacy VP 07/05/95 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Money Market VP(1)(2) - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Small Company VP 12/27/96 - ------------------------------------------------------------------------------------------------------------------------------------ Aetna Value Opportunity VP 12/13/96 - ------------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Capital Appreciation Fund 05/05/93 - ------------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Growth Fund 05/05/93 - ------------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Growth and Income Fund 05/02/94 - ------------------------------------------------------------------------------------------------------------------------------------ AIM V.I. Value Fund 05/05/93 - ------------------------------------------------------------------------------------------------------------------------------------ Calvert Social Balanced Portfolio(1) - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Equity-Income Portfolio(1) - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Growth Portfolio(1) - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Overseas Portfolio(1) - ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP II Contrafund Portfolio 01/03/95 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Aggressive Growth Portfolio 09/13/93 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Balanced Portfolio 09/13/93 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Flexible Income Portfolio 09/13/93 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Growth Portfolio 09/13/93 - ------------------------------------------------------------------------------------------------------------------------------------ Janus Aspen Worldwide Growth Portfolio 09/13/93 - ------------------------------------------------------------------------------------------------------------------------------------ Lexington Natural Resources Trust 10/14/91 - ------------------------------------------------------------------------------------------------------------------------------------ Oppenheimer Global Securities Fund 11/12/90 - ------------------------------------------------------------------------------------------------------------------------------------ Oppenheimer Strategic Bond Fund 05/03/93 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Emerging Equities Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Alger American Small Cap/Portfolio Partners MFS Emerging Equities(3) 09/21/88 - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Research Growth Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ American Century VP Capital Appreciation/Portfolio Partners MFS Research Growth(3) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners MFS Value Equity Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Neuberger & Berman AMT Growth/Portfolio Partners MFS Value Equity(3) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners Scudder International Growth Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Scudder International Portfolio Class A/Portfolio Partners Scudder International Growth(3) - ------------------------------------------------------------------------------------------------------------------------------------ Portfolio Partners T. Rowe Price Growth Equity Portfolio 11/28/97 - ------------------------------------------------------------------------------------------------------------------------------------ Alger American Growth/Portfolio Partners T. Rowe Price Growth Equity(3) 01/09/89 - ------------------------------------------------------------------------------------------------------------------------------------
Please refer to the discussion preceding Table A for an explanation of the charges included and methodology used in the standardized and non-standardized figures. These figures represent historical performance and should not be considered a projection of future performance. ** Reflects performance from the fund's inception date. (1) These funds have been in operation for more than ten years. (2) The current yield for the subaccount for the 7-day period ended December 31, 1998 (on an annualized basis) was ____%. Current yield more closely reflects current earnings than does total return. The current yield reflects the deduction of all charges under the contract that are deducted from the total return quotations shown above. As in the table above the maximum 5% early withdrawal charge is not reflected. (3) The fund first listed was replaced with the applicable Portfolio Partners Portfolio after the close of business on November 26, 1997. The performance shown is based on the performance of the replaced fund until November 26, 1997, and the performance of the applicable Portfolio Partners Portfolio after that date. The replaced fund may not have been available under all contracts. The "Fund Inception Date" refers to the applicable date for the replaced fund. If no date is shown, the replaced fund has been in operation for more than ten years. 6 INCOME PHASE PAYMENTS When you begin receiving payments under the contract during the income phase (see "Income Phase" in the prospectus), the value of your account is determined using accumulation unit values as of the tenth valuation before the first payment is due. Such value (less any applicable premium tax) is applied to provide payments to you in accordance with the payment option and investment options elected. The Annuity option tables found in the contract show, for each option, the amount of the first payment for each $1,000 of value applied. Thereafter, variable payments fluctuate as the Annuity Unit value(s) fluctuates with the investment experience of the selected investment option(s). The first payment and subsequent payments also vary depending on the assumed net investment rate selected (3.5% or 5% per annum). Selection of a 5% rate causes a higher first payment, but payments will increase thereafter only to the extent that the net investment rate increases by more than 5% on an annual basis. Payments would decline if the rate failed to increase by 5%. Use of the 3.5% 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. When the income phase begins, the annuitant is credited with a fixed number of Annuity Units (which does not change thereafter) in each of the designated investment options. This number is calculated by dividing (a) by (b), where (a) is the amount of the first payment based on a particular investment option, and (b) is the then current Annuity Unit value for that investment option. As noted, Annuity Unit values fluctuate from one valuation to the next (see "Your Account Value" in the prospectus); such fluctuations reflect changes in the net investment factor for the appropriate subaccount(s) (with a ten valuation lag which gives the Company time to process payments) and a mathematical adjustment which offsets the assumed net investment rate of 3.5% or 5% per annum. The operation of all these factors can be illustrated by the following hypothetical example. These procedures will be performed separately for the investment options selected during the income phase. EXAMPLE: Assume that, at the date payments are to begin, there are 3,000 accumulation units credited under a particular contract or account and that the value of an accumulation unit for the tenth valuation prior to retirement was $13.650000. This produces a total value of $40,950. Assume also that no premium tax is payable and that the Annuity table in the contract provides, for the payment option elected, a first monthly variable payment of $6.68 per $1000 of value applied; the annuitant's first monthly payment would thus be 40.950 multiplied by $6.68, or $273.55. Assume then that the value of an Annuity Unit upon the valuation on which the first payment was due was $13.400000. When this value is divided into the first monthly payment, the number of Annuity Units is determined to be 20.414. The value of this number of Annuity Units will be paid in each subsequent month. If the net investment factor with respect to the appropriate subaccount is 1.0015000 as of the tenth valuation preceding the due date of the second monthly payment, multiplying this factor by .9999058* (to neutralize the assumed net investment rate of 3.5% per annum built into the number of Annuity Units determined above) produces a result of 1.0014057. This is then multiplied by the Annuity Unit value for the prior valuation (assume such value to be $13.504376) to produce an Annuity Unit value of $13.523359 for the valuation occurring when the second payment is due. 7 The second monthly payment is then determined by multiplying the number of Annuity Units by the current Annuity Unit value, or 20.414 times $13.523359, which produces a payment of $276.07. *If an assumed net investment rate of 5% is elected, the appropriate factor to neutralize such assumed rate would be .9998663. SALES MATERIAL AND ADVERTISING We may include hypothetical illustrations in our sales literature that explain the mathematical principles of dollar cost averaging, compounded interest, tax deferred accumulation, and the mechanics of variable annuity contracts. We may also discuss the difference between variable annuity contracts and other types of savings or investment products such as personal savings accounts and certificates of deposit. We may distribute sales literature that compares the percentage change in accumulation unit values for any of the subaccounts to established market indices such as the Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average or to the percentage change in values of other management investment companies that have investment objectives similar to the subaccount being compared. We may publish in advertisements and reports, 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. We may categorize the underlying funds in terms of the asset classes they represent and use such categories in marketing materials for the contracts. We may illustrate in advertisements the performance of the underlying funds, if accompanied by performance which also shows the performance of such funds reduced by applicable charges under the separate account. We may also show in advertisements the portfolio holdings of the underlying funds, updated at various intervals. From time to time, we will quote articles from newspapers and magazines or other publications or reports such as The Wall Street Journal, Money magazine, USA Today and The VARDS Report. We may provide in advertising, sales literature, periodic publications or other materials information on various topics of interest to current and prospective contract holders or participants. These topics may include the relationship between sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies and techniques (such as value investing, market timing, dollar cost averaging, asset allocation, constant ratio transfer and account rebalancing), the advantages and disadvantages of investing in tax-deferred and taxable investments, customer profiles and hypothetical purchase and investment scenarios, financial management and tax and retirement planning, and investment alternatives to certificates of deposit and other financial instruments, including comparison between the contracts and the characteristics of and market for such financial instruments. INDEPENDENT AUDITORS KPMG Peat Marwick LLP, CityPlace II, Hartford, Connecticut 06103-4103, are the independent auditors for the separate account and for the Company. The services provided to the separate account include primarily the examination of the separate account's financial statements and review of filings made with the SEC. 8 FINANCIAL STATEMENTS VARIABLE ANNUITY ACCOUNT C Index Statement of Assets and Liabilities....................................... S-2 Statements of Operations and Changes in Net Assets........................ S-5 Notes to Financial Statements ............................................ S-6 Independent Auditors' Report.............................................. S-17
S-1 [To be Filed by amendment] Form No. SAI.01107-99 ALIAC Ed. May 1999 VARIABLE ANNUITY ACCOUNT C PART C - OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements:* (1) Included in Part A: Condensed Financial Information (2) Included in Part B: Financial Statements of Variable Annuity Account C:* - Statement of Assets and Liabilities as of December 31, 1998 - Statements of Operations and Changes in Net Assets for the years ended December 31, 1998 and 1997 - Notes to Financial Statements - Independent Auditors' Report Financial Statements of the Depositor:* - Independent Auditors' Report - Consolidated Statements of Income for the years ended December 31, 1998, 1997 and 1996 - Consolidated Balance Sheets as of December 31, 1998 and 1997 - Consolidated Statements of Changes in Shareholder's Equity for the years ended December 31, 1998, 1997 and 1996 - Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1997 and 1996 - Notes to Consolidated Financial Statements *To be filed by amendment (b) Exhibits (1) Resolution of the Board of Directors of Aetna Life Insurance and Annuity Company establishing Variable Annuity Account C(1) (2) Not applicable (3.1) Broker-Dealer Agreement(2) (3.2) Alternative Form of Wholesaling Agreement and Related Selling Agreement(3) (4.1) Form of Variable Annuity Contract (G-CDA(99)) (4.2) Form of Variable Annuity Contract Certificate (CDACERT(99)) (4.3) Group Combination Annuity Contract (Nonparticipating) (A001RP95)(4) (4.4) Group Combination Annuity Certificate (Nonparticipating) (A007RC95)(4) (4.5) Group Combination Annuity Contract (Nonparticipating) (A020RV95)(4) (4.6) Group Combination Annuity Certificate (Nonparticipating) (A027RV95)(4) (4.7) Variable Annuity Contract (G-CDA-IA(RP))(3) (4.8) Variable Annuity Contract Certificate (GTCC-IA(RP)) (4.9) Variable Annuity Contract (G-CDA-IA(RPM/XC))(3) (4.10) Variable Annuity Contract (G-CDA-HF)(5) (4.11) Variable Annuity Certificate (GTCC-HF)(6) (4.12) Variable Annuity Contract (G-CDA-HD)(7) (4.13) Variable Annuity Contract Certificate (GTCC-HD) (4.14) Variable Annuity Contract (GID-CDA-HO)(8) (4.15) Variable Annuity Contract (GLID-CDA-HO)(8) (4.16) Variable Annuity Contract (GSD-CDA-HO)(8) (4.17) Variable Annuity Contract (GST-CDA-HO)(9) (4.18) Variable Annuity Contract (I-CDA-HD)(9) (4.19) Variable Annuity Contract (G-CDA-IB(ATORP))(10) (4.20) Variable Annuity Contract and Certificate (G-CDA-95(TORP)) and (GTCC-95(TORP))(10) (4.21) Variable Annuity Contract (G-CDA-IB(AORP))(10) (4.22) Variable Annuity Contract and Certificate (G-CDA-95(ORP)) and (GTCC-95(ORP))(10) (4.23) Variable Annuity Contracts and Certificate (G-CDA-ORP), (CDA-IB(TORP)) and (GTCC-95(TORP))(10) (4.24) Variable Annuity Contract (G-CDA-96(TORP))(11) (4.25) Variable Annuity Contract (IA-CDA-IA)(12) (4.26) Variable Annuity Contract (GIT-CDA-HO)(9) (4.27) Variable Annuity Contract (GLIT-CDA-HO)(9) (4.28) Variable Annuity Contract (I-CDA-98(ORP)) (4.29) Endorsement for Exchanged Contracts (EINRP95) to Contract A001RP95(4) (4.30) Endorsement for Exchanged Contracts (EINRV95) to Contract A020RV95(4) (4.31) Endorsement (GET 9/96) to Contracts A001RP95 and A020RV95(11) (4.32) Endorsement (GET-1 (9/96)) to Contract A001RP95 and A020RV95(13) (4.33) Endorsement (E1OMNI97) to Contract A001RP95(14) (4.34) Endorsement (E2OMNI97) to Contract A001RP95(14) (4.35) Endorsement (E1FXPL97) to Contract A001RP95(14) (4.36) Endorsement (E3FXPL97) to Contracts A001RP95 and A020RV95 (4.37) Endorsement (EINRP97) to Contract A001RP95 (4.38) Endorsement (EINRV97) to Contract A020RV95 (4.39) Endorsement (E1PAY97) to Contracts A001RP95 and A020RV95 (4.40) Endorsement (E4OMNI98) to Contracts A001RP95 and A020RV95(15) (4.41) Endorsement (EINRV98) to Contract A020RV95 (4.42) Endorsement (EINRP98) to Contract A001RP95 (4.43) Endorsement (EGET-IC(R)) to Contracts G-CDA-IA(RP), G-CDA-HF, G-CDA-IB(ATORP), G-CDA-IB(AORP) and G-CDA-HD(3) (4.44) Endorsement (EGETE-IC(R)) to Contract G-CDA-IA(RPM/XC) and GLID-CDA-HO(16) (4.45) Endorsement (EGHDHFRPSDO97) to Contracts G-CDA-HF, G-CDA-HD and G-CDA-IA(RP)(17) (4.46) Endorsement (EG403-GIE-98) to Contracts G-CDA-HF, G-CDA-HD, G-CDA-IA(RP), A001RP95, A020RV95 and Certificates GTCC-HF, GTCC-HD, GTCC-IA(RP), A007RC95 and A027RV95 (18) (4.47) Endorsement (EG403-GIHC-98) to Contracts G-CDA-IA(RP), A001RP95 and A020RV95 and Certificates GTCC-IA(RP), A007RC95 and A027RV95(18) (4.48) Endorsement (EG403-GI-98) to Contract G-CDA-HF and Certificate GTCC-HF(19) (4.49) Endorsement (EFUND97) to Contracts GID-CDA-HO, GLID-CDA-HO, GSD-CDA-HO, and GST-CDA-HO(20) (4.50) Endorsement (E98-G-CDA-HF/HD) to Contracts G-CDA-HF and G-CDA-HD and Certificates GTCC-HD and GTCC-HF(21) (4.51) Endorsement (E98-CDA-HO) to Contracts GLID-CDA-HO, GD-CDA-HO and GSD-CDA-HO(21) (4.52) Endorsement (E3KSDC96) to Variable Annuity Contract GLID-CDA-HO(22) (4.53) Endorsement (EMETHO96) to Variable Annuity Contract GLID-CDA-HO(23) (4.54) Endorsement (ENEMHF96) to Variable Annuity Contract G-CDA-HF(23) (4.55) Endorsement (E2ME96) to Variable Annuity Contract GLID-CDA-HO(24) (4.56) Endorsement (GET 9/96) to Variable Annuity Contracts G-CDA-95(TORP) and G-CDA-95(ORP) and Certificates GTCC-95(TORP) and GTCC-95(ORP)(11) (4.57) Endorsements (EIGET-IC(R)), (EIGF-IC) and (EGF-IC(SPD)) to Contract IA-CDA-IA(25) (4.58) Endorsement (EIHDIASDO) to Contracts I-CDA-HD and IA-CDA-IA(26) (4.59) Endorsement (EHOSDO) to Contracts GIT-CDA-HO, GLIT-CDA-HO and GST-CDA-HO(26) (4.60) Endorsement (EHOTABLE97) to Contracts GIT-CDA-HO, GLIT-CDA-HO and GST-CDA-HO(26) (4.61) Endorsement (EI403-GI-98) to Contract IA-CDA-IA (4.62) Form of Endorsement (EMMGDB(99)) to Contract and Certificate CDACERT(99) (4.63) Form of Endorsement (EMMFPEX(99)) to Contract G-CDA(99) and Certificate CDACERT(99) (4.64) Form of Endorsement (EMMCDALOAN(99)) to Contract G-CDA(99) and Certificate CDACERT(99) (4.65) Form of Endorsement (EMLSWC(99)) to Contract G-CDA(99) and Certificate CDACERT(99) (4.66) Form of Endorsement (EMMTC (5/99)) to Contract G-CDA(99) and Certificate CDACERT(99) (4.67) Variable Annuity Contract Schedule I (A001RP95(1/98)) (4.68) Variable Annuity Contract Schedule I (A020RV95)(1/98) (5.1) Variable Annuity Contract Application (300-MOP-96)(27) (5.2) Variable Annuity Contract Application (300-GTD-IA)(28) (5.3) Variable Annuity Contract Application (710.00.16H(11/97))(29) (5.4) Variable Annuity Contract Application (710.00.16H(NY)(11/97))(29) (5.5) Variable Annuity Contract Application (_________________)* (6.1) Certification of Incorporation of Aetna Life Insurance and Annuity Company(29) (6.2) Amendment of Certificate of Incorporation of Aetna Life Insurance and Annuity Company(9) (6.3) By-Laws as amended September 17, 1997 of Aetna Life Insurance and Annuity Company(30) (7) Not applicable (8.1) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and AIM dated June 30, 1998(31) (8.2) Service Agreement between Aetna Life Insurance and Annuity Company and AIM effective June 30, 1998(31) (8.3) Fund Participation Agreement by and among Aetna Life Insurance and Annuity Company and Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each of its series, and Aeltus Investment Management, Inc. dated as of May 1, 1998(2) (8.4) Amendment dated November 9, 1998 to Fund Participation Agreement by and among Aetna Life Insurance and Annuity Company and Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series, Aetna Variable Portfolios, Inc. on behalf of each of its series, and Aeltus Investment Management, Inc. dated as of May 1, 1998(32) (8.5) Service Agreement between Aeltus Investment Management, Inc. and Aetna Life Insurance and Annuity Company in connection with the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series, and Aetna Variable Portfolios, Inc. on behalf of each of its series dated as of May 1, 1998(2) (8.6) Amendment dated November 4, 1998 to Service Agreement between Aeltus Investment Management, Inc. and Aetna Life Insurance and Annuity Company in connection with the sale of shares of Aetna Variable Fund, Aetna Variable Encore Fund, Aetna Income Shares, Aetna Balanced VP, Inc., Aetna GET Fund on behalf of each of its series, Aetna Generation Portfolios, Inc. on behalf of each of its series and Aetna Variable Portfolios, Inc. on behalf of each of its series dated as of May 1, 1998(32) (8.7) Fund Participation Agreement among Calvert Responsibly Invested Balanced Portfolio, Calvert Asset Management Company, Inc. and Aetna Life Insurance and Annuity Company dated December 1, 1997(33) (8.8) Service Agreement between Calvert Asset Management Company, Inc. and Aetna Life Insurance and Annuity Company Dated December 1, 1997(33) (8.9) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996(9) (8.10) Fifth Amendment dated as of May 1, 1997 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996(34) (8.11) Sixth Amendment dated November 6, 1997 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997(35) (8.12) Seventh Amendment dated as of May 1, 1998 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996, May 1, 1997 and November 6, 1997(2) (8.13) Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1,1996(9) (8.14) Fifth Amendment dated as of May 1, 1997 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996 and March 1, 1996(34) (8.15) Sixth Amendment dated as of January 20, 1998 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996 and May 1, 1997(36) (8.16) Seventh Amendment dated as of May 1, 1998 to the Fund Participation Agreement between Aetna Life Insurance and Annuity Company, Variable Insurance Products Fund II and Fidelity Distributors Corporation dated February 1, 1994 and amended on December 15, 1994, February 1, 1995, May 1, 1995, January 1, 1996, March 1, 1996, May 1, 1997 and January 20, 1998(2) (8.17) Service Agreement between Aetna Life Insurance and Annuity Company and Fidelity Investments Institutional Operations Company dated as of November 1, 1995(23) (8.18) Amendment dated January 1, 1997 to Service Agreement between Aetna Life Insurance and Annuity Company and Fidelity Investments Institutional Operations Company dated as of November 1, 1995(34) (8.19) Service Contract between Fidelity Distributors Corporation and Aetna Life Insurance and Annuity Company dated May 2, 1997(32) (8.20) Fund Participation Agreement among Janus Aspen Series and Aetna Life Insurance and Annuity Company and Janus Capital Corporation dated December 8, 1997(23) (8.21) Amendment dated October 12, 1998 to Fund Participation Agreement among Janus Aspen Series and Aetna Life Insurance and Annuity Company and Janus Capital Corporation dated December 8, 1997(32) (8.22) Service Agreement between Janus Capital Corporation and Aetna Life Insurance and Annuity Company dated December 8, 1997(37) (8.23) Fund Participation Agreement between Aetna Life Insurance and Annuity Company and Lexington Management Corporation regarding Natural Resources Trust dated December 1, 1988 and amended February 11, 1991(3) (8.24) Fund Participation Agreement dated March 11, 1997 between Aetna Life Insurance and Annuity Company and Oppenheimer Variable Annuity Account Funds and Oppenheimer Funds, Inc.(38) (8.25) Service Agreement effective as of March 11, 1997 between Oppenheimer Funds, Inc. and Aetna Life Insurance and Annuity Company(38) (9) Opinion and Consent of Counsel* (10) Consent of Independent Auditors* (11) Not applicable (12) Not applicable (13) Schedule for Computation of Performance Data(15) (14) Not applicable (15.1) Powers of Attorney(31) (15.2) Authorization for Signatures(3) * To be filed by amendment 1. Incorporated by reference to Post-Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 33-75986), as filed electronically on April 22, 1996 (Accession No. 0000950146-96-000563). 2. Incorporated by reference to Registration Statement on Form N-4 (File No. 333-56297), as filed electronically on June 8, 1998 (Accession No. 0000950146-98-000983). 3. Incorporated by reference to Post-Effective Amendment No. 5 to Registration Statement on Form N-4 (File No. 33-75986), as filed electronically on April 12, 1996 (Accession No. 0000912057-96-006383). 4. Incorporated by reference to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on February 21, 1996 (Accession No. 0000906287-96-000020). 5. Incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on July 29, 1997 (Accession No. 0000950146-97-001101). 6. Incorporated by reference to Post-Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 33-75980), as filed electronically on February 12, 1997 (Accession No. 0000950146-97-000171). 7. Incorporated by reference to Post-Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 33-75982), as filed electronically on April 22, 1996 (Accession No. 0000912057-96-006790). 8. Incorporated by reference to Post-Effective Amendment No. 12 to Registration Statement on Form N-4 (File No. 33-75982), as filed electronically on February 20, 1997 (Accession No. 0000950146-97-000217). 9. Incorporated by reference to Post-Effective Amendment No. 12 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on February 11, 1997 (Accession No. 0000950146-97-000159). 10.Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form N-4 (File No. 33-91846), as filed electronically on April 15, 1996 (Accession No. 0000912057-96-006418). 11.Incorporated by reference to Post-Effective Amendment No. 6 to Registration Statement on Form N-4 (File No. 33-91846), as filed electronically on August 6, 1996 (Accession No. 0000912057-96-016381). 12.Incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on July 29, 1997 (Accession No. 0000950146-97-001101). 13.Incorporated by reference to Post-Effective Amendment No. 10 to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on July 22, 1998 (Accession No. 0000950146-98-001225). 14.Incorporated by reference to Post-Effective Amendment No. 4 to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on February 26, 1997 (Accession No. 0000950146-97-000241). 15.Incorporated by reference to Post-Effective Amendment No. 9 to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on April 7, 1998 (Accession No. 0000950146-98-000564). 16.Incorporated by reference to Post-Effective Amendment No. 8 to Registration Statement on Form N-4 (File No. 33-75986), as filed electronically on August 30, 1996 (Accession No. 0000928389-96-000152). 17.Incorporated by reference to Post-Effective Amendment No. 13 to Registration Statement on Form N-4 (File No. 33-75986), as filed electronically on April 11, 1997 (Accession No. 0000950146-97-000582). 18.Incorporated by reference to Post-Effective Amendment No. 11 to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on September 10, 1998 (Accession No. 0000950146-98-001550). 19.Incorporated by reference to Post-Effective Amendment No. 15 to Registration Statement on Form N-4 (File No. 33-75962), as filed electronically on September 15, 1998 (Accession No. 0000950146-98-001581). 20.Incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on July 29, 1997 (Accession No. 0000950146-97-001101). 21.Incorporated by reference to Post-Effective Amendment No. 15 to Registration Statement on Form N-4 (File No. 33-75982), as filed electronically on April 13, 1998 (Accession No. 0000950146-98-000610). 22.Incorporated by reference to Post-Effective Amendment No. 1 to Registration Statement on Form N-4 (File No. 33-88720), as filed electronically on April 22, 1996 (Accession No. 0000912057-96-006788). 23.Incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form N-4 (File No. 33-88720), as filed electronically on June 28, 1996 (Accession No. 0000928389-96-000136). 24.Incorporated by reference to Post-Effective Amendment No. 5 to Registration Statement on Form N-4 (File No. 33-88720), as filed electronically on February 21, 1997 (Accession No. 0000950146-97-000613). 25.Incorporated by reference to Post Effective Amendment No. 8 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on August 30, 1996 (Accession No. 0000928389-96-000150). 26.Incorporated by reference to Post-Effective Amendment No. 13 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on April 11, 1997 (Accession No. 0000950146-97-000583). 27.Incorporated by reference to Post-Effective Amendment No. 13 to Registration Statement on Form N-4 (File No. 33-91846), as filed electronically on April 13, 1998 (Accession No. 0000950146-98-000611). 28.Incorporated by reference to Post-Effective Amendment No. 14 to Registration Statement on Form N-4 (File No. 33-75986), as filed electronically on August 19, 1997 (Accession No. 0000950146-97-001302). 29.Incorporated by reference to Post-Effective Amendment No. 1 to Registration Statement on Form S-1 (File No. 33-60477), as filed electronically on April 15, 1996 (Accession No. 0000950146-96-000534). 30.Incorporated by reference to Post-Effective Amendment No. 12 to Registration Statement on Form N-4 (File No. 33-91846), as filed electronically on October 30, 1997 (Accession No. 0000950146-97-001589). 31.Incorporated by reference to Pre-Effective Amendment No. 1 to Registration Statement on Form N-4 (File No. 333-56297), as filed electronically on August 4, 1998 (Accession No. 0000950146-98-001283). 32.Incorporated by reference to Post-Effective Amendment No. 2 to Registration Statement on Form N-4 (File No. 333-56297), as filed electronically on December 14, 1998 (Accession No. 0000950146-98-002092). 33.Incorporated by reference to Post-Effective Amendment No. 8 to Registration Statement on Form N-4 (File No. 333-01107), as filed electronically on February 19, 1998 (Accession No. 0000950146-98-000248). 34.Incorporated by reference to Post-Effective Amendment No. 30 to Registration Statement on Form N-4 (File No. 33-34370), as filed electronically on September 29, 1997 (Accession No. 0000950146-97-001485). 35.Incorporated by reference to Post-Effective Amendment No. 16 to Registration Statement on Form N-4 (File No. 33-75964), as filed electronically on February 9, 1998 (Accession No. 0000950146-98-000179). 36.Incorporated by reference to Post-Effective Amendment No. 7 to Registration Statement on Form S-6 (File No. 33-75248), as filed electronically on February 24, 1998 (Accession No. 0000950146-98-000267). 37.Incorporated by reference to Post-Effective Amendment No. 10 to Registration Statement on Form N-4 (File No. 33-75992), as filed electronically on December 31, 1997 (Accession No. 0000950146-97-001982). 38.Incorporated by reference to Post-Effective Amendment No. 27 to Registration Statement on Form N-4 (File No. 33-34370), as filed electronically on April 16, 1997 (Accession No. 0000950146-97-000617). Item 25. Directors and Officers of the Depositor
Name and Principal Business Address* Positions and Offices with Depositor - ----------------- ------------------------------------ Thomas J. McInerney Director and President Catherine H. Smith Director, Chief Financial Officer and Senior Vice President Shaun P. Mathews Director and Senior Vice President Deborah Koltenuk Vice President, Treasurer and Corporate Controller Therese M. Squillacote Vice President and Chief Compliance Officer Kirk P. Wickman Vice President, General Counsel and Corporate Secretary
* The principal business address of all directors and officers listed is 151 Farmington Avenue, Hartford, Connecticut 06156. Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant Incorporated herein by reference to Item 26 of Post-Effective Amendment No. 2 to Registration Statement on Form N-4 (File No. 333-56297), as filed electronically on December 14, 1998 (Accession No. 0000950146-98-002092). Item 27. Number of Contract Owners As of December 31, 1998, there were 616,272 individuals holding interests in variable annuity contracts funded through Variable Annuity Account C. Item 28. Indemnification Section 21 of Public Act No. 97-246 of the Connecticut General Assembly (the "Act") provides that a corporation may provide indemnification of or advance expenses to a director, officer, employee or agent only as permitted by Sections 33-770 to 33-778, inclusive, of the Connecticut General Statutes, as amended by Sections 12 to 20, inclusive, of this Act. Reference is hereby made to Section 33-771(e) of the Connecticut General Statutes ("CGS") regarding indemnification of directors and Section 33-776(d) of CGS regarding indemnification of officers, employees and agents of Connecticut corporations. These statutes provide in general that Connecticut corporations incorporated prior to January 1, 1997 shall, except to the extent that their certificate of incorporation expressly provides otherwise, indemnify their directors, officers, employees and agents against "liability" (defined as the obligation to pay a judgment, settlement, penalty, fine, including an excise tax assessed with respect to an employee benefit plan, or reasonable expenses incurred with respect to a proceeding) when (1) a determination is made pursuant to Section 33-775 that the party seeking indemnification has met the standard of conduct set forth in Section 33-771 or (2) a court has determined that indemnification is appropriate pursuant to Section 33-774. Under Section 33-775, the determination of and the authorization for indemnification are made (a) by the disinterested directors, as defined in Section 33-770(3); (b) by special counsel; (c) by the shareholders; or (d) in the case of indemnification of an officer, agent or employee of the corporation, by the general counsel of the corporation or such other officer(s) as the board of directors may specify. Also, Section 33-772 provides that a corporation shall indemnify an individual who was wholly successful on the merits or otherwise against reasonable expenses incurred by him in connection with a proceeding to which he was a party because he was a director. In the case of a proceeding by or in the right of the corporation or with respect to conduct for which the director, officer, agent or employee was adjudged liable on the basis that he received a financial benefit to which he was not entitled, indemnification is limited to reasonable expenses incurred in connection with the proceeding against the corporation to which the individual was named a party. The statute does specifically authorize a corporation to procure indemnification insurance on behalf of an individual who was a director, officer, employer or agent of the corporation. Consistent with the statute, Aetna Inc. has procured insurance from Lloyd's of London and several major United States excess insurers for its directors and officers and the directors and officers of its subsidiaries, including the Depositor. Item 29. Principal Underwriter (a) In addition to serving as the principal underwriter and depositor for the Registrant, Aetna Life Insurance and Annuity Company (Aetna) also acts as the principal underwriter, only, for Aetna Variable Encore Fund, Aetna Variable Fund, Aetna Generation Portfolios, Inc., Aetna Income Shares, Aetna Balanced VP, Inc. (formerly Aetna Investment Advisers Fund, Inc.), Aetna GET Fund, and Aetna Variable Portfolios, Inc. and as the principal underwriter and investment adviser for Portfolio Partners, Inc. (all management investment companies registered under the Investment Company Act of 1940 (1940 Act)). Additionally, Aetna acts as the principal underwriter and depositor for Variable Life Account B of Aetna, Variable Annuity Account B of Aetna and Variable Annuity Account G of Aetna (separate accounts of Aetna registered as unit investment trusts under the 1940 Act). Aetna is also the principal underwriter for Variable Annuity Account I of Aetna Insurance Company of America (AICA) (a separate account of AICA registered as a unit investment trust under the 1940 Act). (b) See Item 25 regarding the Depositor. (c) Compensation as of December 31, 1998: *
(1) (2) (3) (4) (5) Name of Net Underwriting Compensation Principal Discounts and on Redemption Brokerage Underwriter Commissions or Annuitization Commissions Compensation** Aetna Life $_______ $_______ Insurance and Annuity Company
* To be filed by amendment. ** Compensation shown in column 5 includes deductions for mortality and expense risk guarantees and contract charges assessed to cover costs incurred in the sales and administration of the contracts issued under Variable Annuity Account C. Item 30. Location of Accounts and Records All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the rules under it relating to the securities described in and issued under this Registration Statement are located at the home office of the Depositor as follows: Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, Connecticut 06156 Item 31. Management Services Not applicable Item 32. Undertakings Registrant hereby undertakes: (a) to file a post-effective amendment to this registration statement on Form N-4 as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for as long as payments under the variable annuity contracts may be accepted; (b) to include as part of any application to purchase a contract offered by a prospectus which is part of this registration statement on Form N-4, a space that an applicant can check to request a Statement of Additional Information; and (c) to deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-4 promptly upon written or oral request. (d) The Company hereby represents that it is relying upon and complies with the provisions of Paragraphs (1) through (4) of the SEC Staff's No-Action Letter dated November 22, 1988 with respect to language concerning withdrawal restrictions applicable to plans established pursuant to Section 403(b) of the Internal Revenue Code. See American Counsel of Life Insurance; SEC No-Action Letter, [1989 Transfer Binder] Fed. SEC. L. Rep. (CCH) S. 78,904 at 78,523 (November 22, 1988). (e) Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (f) Aetna Life Insurance and Annuity Company represents that the fees and charges deducted under the contracts covered by this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Variable Annuity Account C of Aetna Life Insurance and Annuity Company, has duly caused this Post-Effective Amendment to its Registration Statement on Form N-4 (File No. 333-01107) to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hartford, State of Connecticut, on the 4th day of February, 1999. VARIABLE ANNUITY ACCOUNT C OF AETNA LIFE INSURANCE AND ANNUITY COMPANY (Registrant) By: AETNA LIFE INSURANCE AND ANNUITY COMPANY (Depositor) By: Thomas J. McInerney* ------------------------------------------ Thomas J. McInerney President As required by the Securities Act of 1933, this Post-Effective Amendment No. 12 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date - --------- ----- ---- Thomas J. McInerney* Director and President ) - -------------------------- (principal executive officer) ) Thomas J. McInerney ) ) Catherine H. Smith* Director and Chief Financial Officer ) February 4, - -------------------------- ) 1999 Catherine H. Smith ) ) Shaun P. Mathews* Director ) - -------------------------- ) Shaun P. Mathews ) ) Deborah Koltenuk* Vice President, Treasurer and Corporate ) - -------------------------- Controller ) Deborah Koltenuk )
By: /s/ Julie E. Rockmore ---------------------------- Julie E. Rockmore *Attorney-in-Fact VARIABLE ANNUITY ACCOUNT C Exhibit Index
Exhibit No. Exhibit Page - ----------- ------- ---- 99-B.4.1 Form of Variable Annuity Contract (G-CDA(99)) --------- 99-B.4.2 Form of Variable Annuity Contract Certificate (CDACERT(99)) --------- 99-B.4.8 Variable Annuity Contract Certificate (GTCC-IA(RP)) --------- 99-B.4.13 Variable Annuity Contract Certificate (GTCC-HD) --------- 99-B.4.28 Variable Annuity Contract (I-CDA-98(ORP)) --------- 99-B.4.36 Endorsement (E3FXPL97) to Contracts A001RP95 and A020RV95 --------- 99-B.4.37 Endorsement (EINRP97) to Contract A001RP95 --------- 99-B.4.38 Endorsement (EINRV97) to Contract A020RV95 --------- 99-B.4.39 Endorsement (E1PAY97) to Contracts A001RP95 and A020RV95 --------- 99-B.4.41 Endorsement (EINRV98) to Contract A020RV95 --------- 99-B.4.42 Endorsement (EINRP98) to Contract A001RP95 --------- 99-B.4.61 Endorsement (EI403-GI-98) to Contract IA-CDA-IA --------- 99-B.4.62 Form of Endorsement (EMMGDB(99)) to Contract G-CDA(99) and Certificate CDACERT(99) --------- 99-B.4.63 Form of Endorsement (EMMFPEX(99)) to Contract G-CDA(99) and Certificate CDACERT(99) --------- 99-B.4.64 Form of Endorsement (EMMCDALOAN(99)) to Contract G-CDA(99) and Certificate CDACERT(99) --------- 99-B.4.65 Form of Endorsement (EMLSWC(99)) to Contract G-CDA(99) and Certificate CDACERT(99) --------- 99-B.4.66 Form of Endorsement (EMMTC(5/99)) to Contract G-CDA(99) and Certificate CDACERT(99) --------- 99-B.4.67 Variable Annuity Contract Schedule I (A001RP95(1/98) --------- 99-B.4.68 Variable Annuity Contract Schedule I (A020RV95(1/98) --------- 99-B.5.5 Variable Annuity Contract Application (________________) * 99-B.9 Opinion and Consent of Counsel * 99-B.10 Consent of Independent Auditors *
*To Be filed by Amendment EX-99.B.4.1 2 FORM OF VARIABLE ANNUITY CONTRACT [Aetna Logo] ----------------------------------------------------------------- Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, Connecticut 06150 800-525-4225 If you have questions about the Contract, call the toll-free number shown. Group Combination Deferred Annuity Contract (Nonparticipating) Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay benefits according to the terms and conditions set forth in this Contract. This Contract is delivered in [YOUR STATE] and is subject to the laws of that jurisdiction. Please read this Contract carefully. It states ALIAC's contractual rights and obligations as well as the rights and obligations of the Contract Holder and Participants. Specifications - ------------------------------------------------------------------------------- Plan SPECIMEN - ------------------------------------------------------------------------------- Type of Plan SPECIMEN - ------------------------------------------------------------------------------- Contract Holder SPECIMEN - ------------------------------------------------------------------------------- Contract No. SPECIMEN - ------------------------------------------------------------------------------- Contract Effective Date SPECIMEN Right to Cancel - ------------------------------------------------------------------------------- The Contract Holder may cancel this Contract within 10 days of receiving it by returning it to ALIAC at the address shown above, or to the agent from whom it was purchased. Within seven days of receiving the cancellation request at its Home Office, ALIAC will return any Contributions received, plus any increase, or minus any decrease in value, on the amount, if any, allocated to the Separate Account. Signed at the Home Office on the Effective Date. [signature of Kirk P. Wickman] /s/ Thomas J. McInerney /s/ Kirk P. Wickman President Secretary All payments and values provided by the group Contract, when based on the investment experience of a Separate Account, are variable and the fixed dollar amount is not guaranteed. Amounts allocated to the Guaranteed Accumulation Account, if withdrawn before a guaranteed term maturity date, may be subject to a market value adjustment. The market value adjustment may result in an increase, or a decrease, in the Individual Account value. G-CDA(99) Table of Contents
Page Contract Schedule I. Accumulation Phase Contract Schedule II. Annuity Phase Definitions Section 1. General Contract Provisions 1.01 Entire Contract ................................................. 1.02 Nonparticipating Contract 1.03 Control of Contract ............................................. 1.04 Certificate .................................................... 1.05 Incontestability ................................................ 1.06 Grace Period .................................................... 1.07 Change of Contract .............................................. 1.08 Payments ........................................................ 1.09 Deferral of Payment ............................................. 1.10 Proof of Age .................................................... 1.11 Evidence of Survival ............................................ 1.12 Misstatements and Adjustments ................................... 1.13 Reports ......................................................... 1.14 State Laws....................................................... 1.15 Claims of Creditors ............................................. 1.16 Maintenance Fee ................................................. 1.17 Charges for Additional Services ................................. 1.18 Charges Subject to Change....................................... Part I. Accumulation Phase Section 2. Contributions and Individual Account Value 2.01 Contributions ................................................... 2.02 Premium Tax ..................................................... 2.03 Individual Account .............................................. 2.04 Experience Credit................................................ 2.05 Individual Account Value ........................................ Section 3. Separate Account 3.01 General ......................................................... 3.02 Funds Available ................................................. 3.03 Change or Substitution of Funds ................................. 3.04 Accumulation Units 3.05 Accumulation Unit Value 3.06 Net Investment Factor 3.07 Charges to the Separate Account ................................. 3.08 Separate Account Transfers....................................... 3.09 Withdrawals from the Separate Account............................ Section 4. Aetna GET Fund 4.01 GET Fund Guarantee Period ....................................... 4.02 GET Fund Offering Period ........................................ 4.03 GET Fund Guarantee .............................................. 4.04 GET Fund Maturity Date .......................................... 4.05 Transfers or Withdrawals from the GET Fund ......................
Section 5. Fixed Account 5.01 Fixed Account Minimum Guaranteed Interest Rate .................. 5.02 Transfers from the Fixed Account 5.03 Withdrawals from the Fixed Account Section 6. Fixed Plus Account 6.01 Fixed Plus Account Minimum Guaranteed Interest Rate ............. 6.02 Transfers from the Fixed Plus Account 6.03 Partial Withdrawals from the Fixed Plus Account ................. 6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account ... 6.05 Waiver of Fixed Plus Account Full Withdrawal Provision .......... Section 7. Guaranteed Accumulation Account (GAA) 7.01 Nonunitized Separate Account .................................... 7.02 GAA Minimum Guaranteed Interest Rate ............................ 7.03 Deposit Period .................................................. 7.04 Guaranteed Term ................................................. 7.05 Guaranteed Term Groups .......................................... 7.06 Maturity Date, Maturity Value and Reinvestment .................. 7.07 Transfers and Withdrawals from the GAA .......................... 7.08 Application of the Market Value Adjustment ...................... 7.09 Market Value Adjustment (MVA) ................................... Section 8. Transfers, Withdrawals and Distributions 8.01 Transfers ....................................................... 8.02 Withdrawals ..................................................... 8.03 Withdrawal Restrictions Under the Code .......................... 8.04 Withdrawal Charge ............................................... 8.05 Waiver of Withdrawal Charge ..................................... 8.06 Reinstatement ................................................... 8.07 Required Distributions .......................................... 8.08 Systematic Distribution Options (SDOs) .......................... 8.09 Individual Account Termination .................................. Section 9. Loans 9.01 Loan Availability ............................................... Section 10. Death Benefit During the Accumulation Phase 10.01 Death Benefit ................................................. 10.02 Contract Beneficiary .......................................... 10.03 Distribution of Death Benefit Part II. Annuity Phase Section 11. General Provisions 11.01 Election ...................................................... 11.02 Change of Annuity Provisions .................................. 11.03 Annuity Options ............................................... 11.04 Mortality Table ............................................... 11.05 Minimum Payment Amount ........................................ 11.06 Investment Options ............................................ 11.07 Fixed Annuity Minimum Guaranteed Interest Rate ................ 11.08 Fixed Annuity Payment Amount .................................. 11.09 Variable Annuity Funds ........................................ 11.10 Variable Annuity Transfers .................................... 11.11 Variable Annuity Payment Amount ............................... 11.12 Death Benefit During the Annuity Phase ........................
Annuity Tables Contract Schedule I. Accumulation Phase Control of Contract (see 1.03) [The Contract Holder controls this Contract. By notifying us in writing, the Contract Holder may allow Participants to choose Investment Options for an Individual Account. The Contract Holder may, however, retain the right to choose Investment Options for employer contributions. Unless otherwise provided by the Plan, we will make payments only at the written direction of the Contract Holder and Participant. Unless otherwise specified by the Plan, we will make an inservice transfer under Internal Revenue Service Revenue Ruling 90-24 only at the written direction of the Contract Holder and Participant and will make checks payable to the acquiring investment provider(s). The Contract and Individual Accounts are nontransferable and nonassignable except to us in the event of a loan (if allowed under the Contract) or in the event of a qualified domestic relations order as allowed under the Retirement Equity Act of 1984. Participants have a nonforfeitable right to the value of employer Contributions made to their Individual Accounts subject to any Plan vesting limits as determined by the Contract Holder. Participants have a nonforfeitable right to the value of employee Contributions made to their Individual Accounts as provided by Code Section 403(b) and subject to the terms of the Plan. The Contract Holder must notify us in writing if the Plan is, or becomes, subject to the Employee Retirement Income Security Act of 1974 (ERISA) and/or related law or regulations including the Retirement Equity Act of 1984 (REA). We will rely on the Contract Holder's determination and representation of the applicability of such laws. If the Plan is subject to ERISA, before we will make a distribution from an Individual Account, the Contract Holder must certify in writing that all applicable REA requirements have been met and that the distribution complies with the Plan.] Maximum Maintenance Fee (see 1.16) The maintenance fee for each Individual Account will never be more than [$30] Contribution Limits (see 2.01) [Each year, Contributions to the Contract are limited to the lesser of: (a) The maximum exclusion allowance (MEA) limit under Code Section 403(b); or (b) The amount set forth in Code Section 415, generally, 25% of compensation up to $30,000. In addition, salary reduction contributions as defined in Code Section 402(g) may not exceed $10,000, or such larger amount as adjusted by the Secretary of the Treasury unless the alternative limitation under Code Section 402(g)(8) applies.] Maximum Daily Charges to the Separate Account (see 3.07) Charges to the Separate Account will never be more than the following: Mortality and Expense Risks Charge: [1.25%] (annual basis) Administrative Charge: [0.25%] (annual basis) Aetna GET Fund Availability (see Section 4) [The GET Fund is available.] Fixed Interest Options Available (see Section 5, Section 6, and Section 7) [Fixed Account Fixed Account is available for transferred amounts only (no ongoing Contributions). Fixed Plus Account Guaranteed Accumulation Account] Fixed Account Minimum Guaranteed Interest Rate (see 5.01) The interest rate will never be less than [3%] (effective annual yield) Fixed Account Annual Transfer Limit (see 5.02) [10%] Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01) The interest rate will never be less than [3%] (effective annual yield) Fixed Plus Account Transfer and Partial Withdrawal Limit (see 6.02 and 6.03) [20%] Full Withdrawal from the Fixed Plus Account (see 6.04) When a full withdrawal from the Fixed Plus Account is requested, the Individual Account value in the Fixed Plus Account may be withdrawn as follows: [(a) Twenty percent of the Individual Account value in the Fixed Plus Account as of the January 1 preceding the withdrawal request. The 20% is reduced by the amount, if any, transferred, withdrawn, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the prior 12 months; then, (b) Twenty-five percent of the remaining Individual Account value 12 months later; (c) Thirty-three and one-third percent of the remaining Individual Account value 12 months later; then, (d) One-half of the remaining Individual Account value 12 months later; and then, (e) The balance of the Individual Account value in the Fixed Plus Account 12 months later.] Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05) [When a full withdrawal is requested, payment from the Fixed Plus Account is not limited as described in 6.04 when the withdrawal is made: [(a) To a Participant who has attained age 59 1/2 and, if applicable, has completed nine Contribution periods; (b) When a Participant is separated from service, and when: (1) Separation from service is certified by the employer; (2) The amount is paid directly to the Participant; and (3) When the amount paid for all withdrawals due to separation from service during the previous 12-month period does not exceed 20% of the average value of all Individual Accounts under the Contract during that period. (c) Due to financial hardship, or hardship due to an unforeseeable emergency, as defined in the Code, and when: (1) The financial hardship or unforeseeable emergency is certified by the employer; (2) The amount is paid directly to the Participant; and (3) When the amount paid for all withdrawals due to financial hardship or unforeseeable emergency during the previous 12-month period does not exceed 20% of the average value of all Individual Accounts under the Contract during that period. (d) When the amount in the Fixed Plus Account is [$2,000] or less and during the previous [12] months no amounts have been withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments; (e) Due to a Participant's death before Annuity payments begin and paid with six months of the Participant's death; (f) As provided in Section 8.09; or (g) To purchase Annuity payments on a life-contingent basis or payments for a stated period on a fixed-only basis.] Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02) The interest rate will never be less than [3%] (effective annual yield) Withdrawal Restrictions Under the Code (see 8.03) [Withdrawals are limited to the "restricted amount" which is the sum of: (1) Contributions attributable to a Participant's salary reduction contributions made on and after January 1, 1989; plus (2) The net increase, if any, in the Individual Account value after December 31, 1988 attributable to investment gains and losses and credited interest. Generally, withdrawals of the "restricted amount" are permitted only when a Participant has: (a) Separated from service when certified by the employer; (b) Attained age 59 1/2; (c) Died; (d) Become disabled, as defined by the Code; (e) Experienced financial hardship, as defined by the Code and as the amount is limited by the Code(in this situation the amount available is; or (f) Met other circumstances as otherwise allowed by federal law, regulations or rulings. No limitations apply to salary reduction Contributions made and earnings credited to such Contributions made on or before December 31, 1988. In addition, any portion of an Individual Account representing amounts transferred from a Code Section 403(b)(7) custodial account will be subject to the restrictions set forth in the Code.] Withdrawal Charge (see 8.04) For each withdrawal from an Individual Account, we may deduct a withdrawal charge. This charge is a percentage of the amount withdrawn. The withdrawal charge is as follows.
[Number of Years Since Individual Account Established] Withdrawal Charge [Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%]
The withdrawal charge will never exceed [8 1/2%] of total Contributions, or the maximum permitted by National Association of Securities Dealers, Inc. (NASD) rules. Waiver of Withdrawal Charge (see 8.05) The withdrawal charge does not apply when the withdrawal is: [(a) Used to purchase Annuity Payments; (b) Used to purchase a single premium immediate annuity or individual retirement annuity issued by ALIAC or one of its affiliates, provided that the right to cancel under the new Contract is not exercised. We will treat exercise of the right to cancel as a reinstatement and any subsequent withdrawal may then be subject to the withdrawal charge applicable on the date of the withdrawal; (c) Under a systematic distribution option (see 8.08); (d) In an amount equal to [10%] of the Individual Account value when the withdrawal is the first partial withdrawal in a calendar year and is made to a Participant who is at least age 59 1/2 and not older than age 70 1/2 (not available when a systematic distribution option is in effect); (e) When we terminate an Individual Account as provided in 8.09; (f) When the Individual Account value is [$3,500] or less and during the previous 12 months no amounts have been withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments; (g) Made by a Participant who has attained age 59 1/2 and, if applicable, has completed nine Contribution periods; (h) Made to a Participant who is separated from service when certified by the employer; (i) Due to financial hardship, or hardship due to an unforeseeable emergency, as defined in the Code; or (j) Due to a Participant's death before Annuity payments begin.] Required Distributions (see 8.07) [Generally, for Contributions made and earnings credited after December 31, 1986, distribution must begin by April 1 of the calendar year following the later of (1) the calendar year in which a Participant attains age 70 1/2, or (2) retires. For Individual Account values as of December 31, 1986, distribution must begin by the last day of the year in which a Participant attains age 75 or retires, whichever is later. Distribution of benefits to a Participant who is a five percent owner must begin by the April 1 following the calendar year in which the Participant attains age 70 1/2. If the Contract Holder is a governmental entity or church, distribution of Contributions and earnings credited to such Contributions must be made or begin to be made no later than April 1 of the calendar year in which the Participant attains age 70 1/2 or retires, whichever is later. In addition, any portion of an Individual Account representing amounts transferred from a Code Section 403(b)(7) custodial account will be subject to the restrictions set forth in the Code. The entire Individual Account value must be distributed, or begin to be distributed, over the life or life expectancy of a Participant or a Participant and a Beneficiary.] Contract Beneficiary (see 10.02) [The Contract Holder is the Contract beneficiary. A Participant may designate a beneficiary under the Plan (the Plan beneficiary.] Contract Schedule II. Annuity Phase Guaranteed Payment Period (see 11.03) The period for which we will guarantee Annuity payments must be at [least five years and no more than 30 years]. Mortality Table (see 11.04) [Society of Actuaries' 1983 Table a] Maximum Number of Funds (see 11.07) The maximum number of Funds is [five]. Fixed Annuity Minimum Guaranteed Interest Rate (see 11.08) [3%] (annual basis) Number of Annual Transfers Among Funds (see 11.11) Each calendar year, we allow [five] transfers among funds. Maximum Daily Charges to the Separate Account (see 11.12) Charges to the Separate Account will never be more than the following: Mortality and Expense Risks Charge: [1.25%] (annual basis) Administrative Charge: [0.25%] (annual basis) Definitions - -------------------------------------------------------------------------------- Accumulation Phase The time between an Individual Account Effective Date and the date on which the entire Individual Account value is used to purchase Annuity payments, or otherwise distributed. Aetna GET Fund (GET Fund) The Aetna GET Fund is an Investment Option which may be available during the Accumulation Phase. The GET Fund operates as a series offering. Each series is a separate Fund. Aetna Life Insurance and Annuity Company (ALIAC) Aetna Life Insurance and Annuity Company, ("we," and "our," and "us" refer to ALIAC). Annuitant The person whose life expectancy determines the amount and/or duration of the payments under a life-contingent Annuity option. Annuity Payment of an income: (a) For a stated period; (b) For the life of one or two people; or (c) Some combination of (a) and (b). A fixed Annuity is one in which the payment amount does not vary. A variable Annuity is one in which the payment amount may vary based on the net investment results of the Funds. Annuity Phase The time during which we make Annuity payments. Business Day Each day our Home Office is open for business. Code The Internal Revenue Code of 1986, as it is amended from time to time. Contract This agreement between ALIAC and the Contract Holder. Contract Holder The entity or person named on the specifications page, to which the Contract is issued. Contribution The payment, less any applicable premium tax, made to us during the Accumulation Phase. Effective Date The date, shown on the specifications page, on which we issue the Contract or establish an Individual Account. Fixed Account A Fixed Interest Option. The Fixed Account is an obligation of our General Account. Fixed Interest Options Investment options, including the Fixed Account, the Fixed Plus Account and the Guaranteed Accumulation Account that credit interest. The Fixed Interest Options available during the Accumulation Phase are shown on Contract Schedule I under Fixed Interest Options Available. Fixed Plus Account A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus Account. The Fixed Plus Account is an obligation of our General Account. Fund One of the variable Investment Options available under this Contract. The Funds are open-end, registered investment management companies (mutual funds) in which the Separate Account invests. General Account The account that holds our assets other than those held in the Separate Account or Nonunitized Separate Account. Guaranteed Accumulation Account (GAA) A Fixed Interest Option that may be available during the Accumulation Phase. Under this option, we guarantee specified rates of interest for specified periods of time. We hold amounts allocated to the Guaranteed Accumulation Account in the Nonunitized Separate Account. Good Order Instructions that are complete and clear enough to allow us to act without exercising discretion. Home Office Our main office located at 151 Farmington Avenue, Hartford, Connecticut. Individual Account An account, or accounts (including, if applicable, employer and employee accounts) established for each Participant to maintain a record of transactions and the value of Contributions as invested. Investment Options The Funds and Fixed Interest Options available under this Contract. Maturity Date The last day of a GAA guaranteed term. The last day of the guarantee period of an Aetna GET Fund series. Nonunitized Separate Account A separate account that holds assets allocated to the Guaranteed Accumulation Account. Participant A person who is covered under the retirement Plan or program for which this Contract is issued and who has an interest in this Contract. Plan The retirement plan or program for which this Contract is issued. Premium Tax Any tax assessed by any governmental entity on Contributions or amounts used to purchase Annuity payments. Separate Account An account that, through its subaccounts, buys and holds shares of the Funds. Valuation Date The date and time at which accumulation unit values and annuity unit values are calculated. Currently, this calculation is made after the close of business of the New York Stock Exchange on any the New York Stock Exchange is open. Section 1. General Contract Provisions - ------------------------------------------------------------------------------- 1.01 Entire Contract The entire Contract consists of this document and any endorsements incorporated. The Plan, if applicable, is not part of the Contract and ALIAC is not bound by its terms. 1.02 Nonparticipating Contract This Contract is nonparticipating. The Contract Holder, a Participant or a Contract beneficiary have no right to share in our earnings. 1.03 Control of Contract This Contract is issued to fund a plan or program which provides retirement income. Control of the Contract is as shown on Contract Schedule I under Control of Contract. 1.04 Certificate Any certificate provided to a Participant summarizes Contract provisions; it is for information only and is not part of the Contract. We will provide certificates as required by state in the state where the Contract is delivered. 1.05 Incontestability We will not cancel this Contract because of any error of fact. 1.06 Grace Period Except as provided in 8.09, this Contract and all Individual Accounts will remain in effect even if Contributions are not continued. 1.07 Change of Contract Only an ALIAC officer at the level of Vice President or higher, or an officer with written authorization from a Vice President or higher officer, may change the terms of this Contract. No other ALIAC employee, agent or representative can change this Contract. Except as noted below, this contract may be changed at any time by written mutual agreement between the Contract Holder and ALIAC. For changes we initiate requiring Contract Holder consent, we notify the Contract Holder 60 days in advance of the change and consider that the Contract Holder has agreed to the change unless we receive written notice that the Contract Holder does not agree to the change at least 30 days before the effective date of the change. If we propose a change requiring Contract Holder consent and the Contract Holder does not agree to the change, we have the right to not establish new Individual Accounts and to stop accepting Contributions to existing Individual Accounts. We will not change the guaranteed minimum interest rate for the Fixed Account and Fixed Plus Account. We have the right to change the following without Contract Holder consent: (a) Net Investment Factor (see 3.06) We may change the Net Investment Factor by notifying the Contract Holder in writing at least 30 days before the change becomes effective. If we do this, the change will apply only to Individual Accounts established, and Contributions received, after the effective date of the change (b) Guaranteed Accumulation Account A Market Value Adjustment (see 7.10) We may change the GAA Market Value Adjustment (see 7.10) by notifying the Contract Holder in writing at least 90 days before the change becomes effective. If we do this, the change will apply only to guaranteed terms offered in deposit periods after the effective date of the change. (c) Systematic Distribution Options (see 8.08) We may change the systematic distribution options by notifying the Contract Holder in writing at least 30 days before the change becomes effective. If we do this, the change will not apply to Participants or beneficiaries receiving payments under the option before the effective date of the change. (d) Annuity Options (see 11.02) We may change Annuity Options by notifying the Contract Holder in writing at least 30 days before the effective date of the change. If we do this, the change will not take effect until at least 12 months after the Effective Date of the Contract, or until at least 12 months after any previous change. Any change will not apply to Participants or beneficiaries receiving Annuity payments before the effective date of the change. (e) Mortality Table (see 11.04) We may change the mortality table by notifying the Contract Holder in writing at least 30 days before the effective date of the change. If we do this, the new table will not apply to Individual Accounts established before the Effective Date of the change. In addition, we may change this Contract as required to comply with state and federal law without Contract Holder consent by notifying the Contract Holder at least 30 days before the effective date of the change. Any unilateral change will not apply to Individual Accounts established before the effective date of the change, but will apply to Individual Accounts established on or after the change becomes effective. If we make a unilateral change, the Contract Holder or Participants, as applicable, are permitted to terminate participation in the Contract before the effective date of the change under the terms of the Contract in effect prior to the effective date of the change. We will make any change of Contract by endorsement, which may be subject to regulatory approval in the state where the Contract is issued. 1.08 Payments We make payments as directed by the Contract Holder or a Participant, as applicable. Payment requests must be in writing or as we otherwise allow in our administrative practice. We determine the amount of any payment based on the Individual Account value as of the Valuation Date following our receipt of a payment request in Good Order at our Home Office. Generally, we make payments within seven calendar days. 1.09 Deferral of Payment We may defer payment up to a period of six months or as otherwise provided by state and/or federal law. 1.10 Proof of Age If a life-contingent Annuity option is elected, we may require proof of the age of an Annuitant. 1.11 Evidence of Survival We may require proof that any Annuitant under a life-contingent Annuity option is living. 1.12 Misstatements and Adjustments If we learn that the age of any Annuitant or second Annuitant is misstated, we will use the correct age to adjust payments. We reserve the right to obtain reimbursement, or to adjust future payments for any amount we overpaid. We will pay the amount of any underpayment. 1.13 Reports Each calendar year we provide the Contract Holder or a Participant, as applicable, with a report of the Individual Account value. We also provide an annual report for the Separate Account. 1.14 State Laws This Contract complies with the laws of the state in which it is delivered. Any cash, death or Annuity payments are equal to or greater than the minimum required. To determine legal reserve valuation, we use Annuity tables required by law; such tables may be different from those we use to determine Annuity payments. 1.15 Claims of Creditors Individual Accounts are not subject to the claim of any creditor of the Contract Holder, a Participant or Beneficiary, except to the extent permitted by law. 1.16 Maintenance Fee We may deduct an annual maintenance fee during the Accumulation Phase. The amount of the maintenance fee, if any, for this Contract will never be more than the amount shown on Contract Schedule I under Maximum Maintenance Fee. The fee, if any, is deducted proportionately from each Investment Option in which the Individual Account is invested on the anniversary of the Individual Account Effective Date. The fee is also deducted if the entire Individual Account value is withdrawn. No fee is deducted, however, when a full withdrawal occurs within 90 calendar days of the date on which the fee was last deducted. If a Participant has more than one Individual Account, we may deduct the fee proportionately from all Individual Accounts. We may eliminate the fee for an Individual Account established with one Contribution. 1.17 Charges for Additional Services At the request of the Contract Holder, we, or our authorized representatives, may provide administrative services to the Plan. We reserve the right to charge for such services. 1.18 Charges Subject to Change The maintenance fee (see 1.15) and charges to the Separate Account (see 3.07) may vary (increase, decrease, or be eliminated) based on the total assets held in all Individual Accounts under the Contract. In determining total assets, we may aggregate Individual Accounts established under different ALIAC contracts. The aggregate amount is equal to the sum of assets in all Individual Accounts under this Contract, plus the value of Individual Accounts under other ALIAC contracts of the same class issued to the Contract Holder. We may determine the amount of the maintenance fee and/or charges to the Separate Account based on total assets on an annual basis. We will determine initial charges based on our estimate of the amount that will be allocated to the Contract during the first two years. Part I. Accumulation Phase Section 2. Contributions and Individual Account Value - ------------------------------------------------------------------------------ 2.01 Contributions We allocate Contributions in whole percentages among the Investment Options available as directed by the Contract Holder or a Participant, as applicable. Changes in future Contribution allocation may be made at any time, without charge. The Contract Holder or a Participant, as applicable, may also establish an Individual Account with a lump-sum Contribution. We reserve the right to establish minimum Contribution amounts and to refuse to accept any Contribution. Contributions to Individual Accounts may be limited as provided in the Code. The limits, if any, are shown on Contract Schedule I under Contribution Limits. 2.02 Premium Tax We pay any applicable premium tax when it is due. We will deduct the amount of any applicable premium tax from the Individual Account value no earlier than when there is a tax liability. 2.03 Individual Account We will establish an Individual Account for each Participant. If required, we will provide accounts that distinguish between employer and employee Contributions for each Participant. 2.04 Experience Credit We may apply experience credits (investment, administrative, mortality or other) under this Contract and may apply such credits as: (a) A reduction in the maintenance fee; (b) A reduction in the mortality and expense risks charge to the Separate Account; (c) A reduction in the administrative charge to the Separate Account; and (d) An increase in a Fixed Interest Option interest rate. We will apply experience credits at our sole discretion as we deem appropriate for the class of contracts to which the Contract is issued. 2.05 Individual Account Value As of the most recent Valuation Date, the Individual Account value is equal to the total of all Contributions: (a) Plus any interest added on the amount, if any, allocated to a Fixed Interest Option(s), (b) Plus or minus the investment experience on the amount, if any, held in the Separate Account; (c) Minus any applicable maintenance fees, any amounts withdrawn, or used to purchase Annuity payments, or any applicable premium tax; and (d) Minus any applicable fees or charges deducted. Section 3. Separate Account - ------------------------------------------------------------------------------- 3.01 General The Separate Account, established under Title 38a, Section 38a-433 of the Connecticut General Statutes, buys and holds shares of the Funds available. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940. We own the assets held in the Separate Account; we are not a trustee of those assets. Income, gains or losses, realized or unrealized, are credited to or charged against the Separate Account without regard to our other income, gains or losses. Except to the extent of reserves and other Contract liabilities, Separate Account assets cannot be charged with liabilities arising out of any other business we conduct. 3.02 Funds Available We reserve the right to limit the number of Funds in which an Individual Account may be invested, at one time or cumulatively, during the Accumulation Phase and/or Annuity Phase. 3.03 Change or Substitution of Funds We reserve the right to stop offering any Fund or to add Funds. We may substitute shares of a Fund for shares of another Fund. We will provide the Contract Holder with reasonable advance notice of any elimination, addition or substitution of a Fund. If the Plan is subject to ERISA, we will seek Contract Holder consent in advance of any Fund substitution. Consent will be deemed given unless, following notice of substitution and within a prescribed time period, the Contract Holder notifies us in writing that it does not consent and provides us with alternative investment instructions for the shares that would otherwise be affected by the substitution. 3.04 Accumulation Units Each Contribution allocated to one or more of the Funds is credited to an Individual Account as accumulation units. The number of accumulation units is calculated by dividing the amount of the Contribution allocated to the Fund by the accumulation unit value (see 3.05) as of the next Valuation Date after the Contribution is received at our Home Office in Good Order. 3.05 Accumulation Unit Value The value of each accumulation unit for any Fund for each Valuation Date is computed by multiplying the net investment factor (see 3.06) by the accumulation unit value for such Valuation Date. Accumulation unit values may increase or decrease from Valuation Date to Valuation Date. 3.06 Net Investment Factor The net investment factor is used to compute the accumulation unit value for any Fund. For each Valuation Date, for each Fund, the net investment factor is equal to 1.0000000, plus the net return rate. The net return rate equals: [a - b - c] ----------------------- - e - f, where: d a is the value of the shares of the Fund held by the Separate Account at the end of a Valuation Period; b is the value of the shares of the Fund held by the Separate Account at the start of the Valuation Period; c is taxes or provisions for taxes, if any, on the Separate Account (with any federal income tax liability offset by foreign tax credits to the extent allowed); d is the total value of the accumulation units and annuity units of the Separate Account at the start of the Valuation Period; e is Separate Account daily charges for mortality and expense risks and a daily administrative charge as shown on Contract Schedules I and II under Daily Charges to the Separate Account; and f is if applicable, a fee for the GET Fund Guarantee, which is deducted daily during the Guarantee Period. The fee, which is determined before the beginning of each offering period, is shown on Contract Schedule I under GET Fund Guarantee Fee. The net return rate may be greater or less than zero percent. 3.07 Charges to the Separate Account During the Accumulation Phase, we may deduct a mortality and expense risks charge from the Individual Account value invested in the Separate Account. In addition, we reserve the right to impose an administrative charge. The charges to the Separate Account are shown on Contracts Schedules I under Maximum Daily Charges to the Separate Account and are deducted daily. 3.08 Separate Account Transfers During the Accumulation Phase, any portion or all of the Individual Account value held in a Fund may be transferred to any other Fund or any available Fixed Interest Option. The Individual Account value will be based on the Fund's accumulation unit value next determined after we receive a transfer request in Good Order. 3.09 Withdrawals from the Separate Account If the Contract Holder or a Participant, as applicable, requests a partial or full withdrawal (see 8.02) from the Funds, a withdrawal charge may apply (see 8.04). Section 4. Aetna GET Fund (GET Fund) - ------------------------------------------------------------------------------- The following provisions apply if the GET Fund is available as shown on Contract Schedule I under Aetna GET Fund Availability. 4.01 GET Fund Guarantee Period For each GET Fund series, the period for which the GET Fund Guarantee applies. The Guarantee Period ends on the Maturity Date. 4.02 GET Fund Offering Period The period, usually from one to three months, during which the Contract Holder or a Participant, as applicable, may allocate (transfer or deposit) amounts to a GET Fund series. Each GET Fund series has a specific offering period. We will specify a minimum total asset amount required at the end of an offering period to offer a GET Fund series. If the minimum is not achieved, we reserve the right to not start the Guaranteed Period. If a GET Fund series is terminated, we will send written notification to all Contract Holders or Participants, as applicable, who have made allocations to that GET Fund series. We inform Contract Holder or Participant, as applicable, no later than 15 days after the end of the offering period. The Contract Holder or a Participant, as applicable, then has 45 days from the end of the offering period to reallocate the amount allocated to the GET Fund to any other available Investment Options. During this time, GET Fund assets are invested in money market instruments. If Contract Holder or a Participant, as applicable, makes no election by the end of the 45-day period, at the next Valuation Date, we will allocate the amount in the terminated GET Fund series to the money market fund. We reserve the right to specify a maximum total asset amount for a GET Fund series. If the maximum is achieved, we reserve the right to set a date on which we will stop accepting allocations for that GET Fund series. We will announce the date on which we will stop accepting transfer and allocations 10 days prior to that date. 4.03 GET Fund Guarantee On the Maturity Date of each GET Fund series, the GET Fund accumulation unit value for that series will not be less than the Fund accumulation unit value determined at the close of business on the last day of the offering period. If necessary to offset any shortfall in the GET Fund accumulation unit value, we will transfer funds from our General Account to the GET Fund. The GET Fund guarantee does not apply to transfers or withdrawals made before the Maturity Date. If GET Fund accumulation units are adjusted at any time during the guaranteed period, the GET Fund guarantee will be restated. We calculate the restated guarantee so that it is equivalent to the original guarantee for that GET Fund series. A daily charge is assessed on the amount, if any, allocated to the GET Fund. This charge for the GET Fund guarantee will range between 0.25% and 1.25% on an annual basis (the prospectus for each GET Fund series offering provides the charge applicable to that offering). 4.04 GET Fund Maturity Date The GET Fund Maturity Date is the date on which the guarantee period ends and GET Fund accumulation units are liquidated. Prior to the Maturity Date for each series, we send a written notice to each Contract Holder or Participant, as applicable, who has an Individual Account value in that series. In response, the Contract Holder or Participant, as applicable, must tell us to which available Investment Option to transfer the amount in the GET Fund on the Maturity Date. If we do not receive instructions, on the Maturity Date we transfer the portion of the Individual Account value held in the GET Fund to another GET Fund series, if available. If no GET Fund series is available, we transfer the amount to the Fund or Funds we designate. 4.05 Transfers or Withdrawals from the GET Fund Transfers or withdrawals from the GET Fund before the Maturity Date are based on the GET Fund Unit value for the Valuation Date next following the date on which we receive the request in Good Order (see 8.01 and 8.02). Section 5. Fixed Account - ------------------------------------------------------------------------------- The following provisions apply if the Fixed Account is available as shown on Contact Schedule I under Fixed Interest Options Available. 5.01 Fixed Account Minimum Guaranteed Interest Rate The Fixed Account minimum guaranteed interest rate is shown on Contract Schedule I under Fixed Account Minimum Guaranteed Interest Rate. Each calendar year, we will set an annual minimum guaranteed interest rate which will apply to all amounts held in the Fixed Account during the calendar year. The one year minimum guaranteed interest rate will be established prior to each calendar year and will be made available to the Contract Holder or Participants, as applicable, in advance of the calendar year. We, at our discretion, may credit a higher interest rate, which is not guaranteed; we will make the current rate, and the period for which it will be credited, available to the Contract Holder or Participants, as applicable. 5.02 Transfers from the Fixed Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Account Annual Transfer Limit of the amount in the Fixed Account may be transferred to any available Investment Option. The amount available for transfer will be based on the Individual Account value in the Fixed Account as of the January 1 preceding the transfer request. There is no limit on the amount that may be transferred to the Fixed Plus Account. We may, on a temporary basis, allow transfer of a larger percentage. 5.03 Withdrawals from the Fixed Account If the Contract Holder or a Participant, as applicable, requests a partial or full withdrawal (see 8.02) from the Fixed Account, a withdrawal charge may apply (see 8.04). Section 6. Fixed Plus Account - ------------------------------------------------------------------------------- The following provisions apply if the Fixed Plus Account is available as shown on Contract Schedule I under Fixed Interest Options Available. 6.01 Fixed Plus Account Minimum Guaranteed Interest Rate The Fixed Plus Account minimum guaranteed interest rate is shown on Contract Schedule I under Fixed Plus Account Minimum Guaranteed Interest Rate. Each calendar year, we will set an annual minimum guaranteed interest rate which will apply to all amounts held in the Fixed Plus Account during the calendar year. The one year minimum guaranteed interest rate will be established prior to each calendar year and will be made available to the Contract Holder or Participants, as applicable, in advance of the calendar year. We, at our discretion, may credit a higher interest rate, which is not guaranteed; we will make the current rate, and the period for which it will be credited, available to the Contract Holder or Participants, as applicable. 6.02 Transfers from the Fixed Plus Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Plus Account Annual Transfer and Withdrawal Limit of the amount in the Fixed Plus Account may be transferred to any available Investment Option. The amount available for transfer is based on the Individual Account value in the Fixed Plus Account on the January 1 preceding the transfer request reduced by any amount withdrawn, transferred, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the previous 12 months. In addition, we reserve the right to reduce the amount available for transfer by amounts withdrawn under a systematic distribution option. We reserve the right to waive the transfer limit when the amount in the Fixed Plus Account is $2,000 or less. In addition, 20% of the amount in the Fixed Plus Account may be transferred in each of four consecutive 12-month periods with the balance transferred in the succeeding 12-month period subject to the following conditions: (a) During the five-year period, no additional amounts are allocated to or transferred from the Fixed Plus Account; (b) We will include any amount transferred, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the prior 12-month period when calculating the amount which equals 20%; and (c) We reserve the right to include amounts paid under a systematic distribution option when calculating the amount which equals 20%. 6.03 Partial Withdrawals from the Fixed Plus Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Plus Account Transfer and Withdrawal Limit may be withdrawn from the Fixed Plus Account. The amount available for withdrawal is based on the amount of the Individual Account value in the Fixed Plus Account on the January 1 preceding the withdrawal request reduced by any amount withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments during the preceding 12-month period. In addition, we reserve the right to reduce the amount available by deducting any amount withdrawn under a systematic distribution option. The withdrawal limit does not apply when the partial withdrawal is: (a) Due to a Participant's death during the Accumulation Phase and is made within six months of the date of death (this exception applies to only one partial withdrawal); (b) Used to purchase Annuity payments; or (c) Due to other conditions as we may allow without discrimination. 6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account The Contract Holder, or a Participant, as applicable, may withdraw the full amount held in the Fixed Plus Account. When we receive a request for a full withdrawal, no additional transfers, partial withdrawals or loans (if allowed under the Contract) are allowed. The Individual Account value held in the Fixed Plus Account may be withdrawn as shown on Contract Schedule I under Full Withdrawal from the Fixed Plus Account. No withdrawal charge applies to amounts withdrawn. The Contract Holder or Participant, as applicable, may cancel a full withdrawal request from the Fixed Plus Account at any time. 6.05 Waiver of Fixed Plus Account Full Withdrawal Provision The restriction on payment of a full withdrawal from the Fixed Plus Account (see x.xx) does not apply to any of the circumstances shown on Contract Schedule I under Waiver of Fixed Plus Account Full Withdrawal Provision. Section 7. Guaranteed Accumulation Account (GAA) - -------------------------------------------------------------------------------- 7.01 Nonunitized Separate Account The Nonunitized Separate Account is established under Title 38a, Section 38a-433 of the Connecticut General Statutes. There are no discrete units for this account. We own the assets held in the Nonunitized Separate Account; we are not a trustee of those assets. Income, gains or losses, realized or unrealized, are credited to or charged against the Nonunitized Separate Account without regard to our other income, gains or losses. Except to the extent of reserves and other Contract liabilities, Nonunitized Separate Account assets cannot be charged with liabilities arising out of any other business we conduct. 7.02 GAA Minimum Guaranteed Interest Rate All Contributions allocated to a GAA guaranteed term (see 7.04) earn a rate of interest which we determine and which is guaranteed when the Contribution remains in the guaranteed term until the Maturity Date. The rate credited will never be less than the minimum interest rate shown on Contract Schedule I under Guaranteed Accumulation Account Minimum Guaranteed Interest Rate. For guaranteed terms of one year or less, one guaranteed rate is credited for the full guaranteed term. For longer guaranteed terms, we may credit an initial guaranteed interest rate from the date of deposit to the end of a specified period within the guaranteed term. We may credit different interest rates for subsequent specified periods throughout the guaranteed term. 7.03 Deposit Period A deposit period is the period of time we determine during which we accept allocations (Contributions, transfers, or reinvestments) to one or more guaranteed terms. We reserve the right to extend the deposit period. 7.04 Guaranteed Term A guaranteed term is the period of time for which we guarantee the declared interest rate for allocations (Contributions, transfers, or reinvestments) to GAA guaranteed terms. We may offer guaranteed terms ranging in duration from one to ten years. During each deposit period, we may offer more than one guaranteed term of varying lengths. The guaranteed term begins the day after the deposit period ends. The Contract Holder or a Participant, as applicable, may allocate new Contributions or transfers to any or all guaranteed terms available in the current deposit period. 7.05 Guaranteed Term Groups A guaranteed term group is comprised of all GAA guaranteed terms of the same duration. 7.06 Maturity Date, Maturity Value and Reinvestment The Maturity Date is the last day of a guaranteed term. The maturity value is the amount we pay at the end of a guaranteed term. At least 18 days before any guaranteed term Maturity Date, we notify the Contract Holder or a Participant, as applicable, of the projected maturity value and the guaranteed terms (and the guaranteed interest rates for each) available during the then-current deposit period. The Contract Holder, or a Participant, as applicable, may then tell us how to allocate the maturity value. If the Contract Holder or a Participant, as applicable, does not tell us how to reinvest the maturity value, we reinvest it in a guaranteed term of the same duration if one is available. If no guaranteed term of the same duration is available, we reinvest the maturity value in the guaranteed term with the next shortest duration. If no shorter guaranteed term is available, we reinvest the maturity value in the next longest term. We mail a confirmation of reinvestment. The confirmation includes the guaranteed term in which we have reinvested the maturity value and the guaranteed interest rate for that term. If we have reinvested the maturity value, during the month following the Maturity Date, the Contract Holder or a Participant, as applicable, may transfer or withdraw the reinvested amount, with interest earned (as of the date we receive the request) without incurring a Market Value Adjustment. 7.07 Transfers and Withdrawals from the GAA Except as noted below, the Contract Holder or a Participant, as applicable, may transfer any portion or all of the amount held in the GAA. Transfers or withdrawals before the Maturity date may be subject to a Market Value Adjustment (see 7.10). Amounts invested in a guaranteed term may not be transferred during the deposit period or for a period of 90 days after the close of the deposit period. Unless directed otherwise, when the Contract Holder or a Participant, as applicable, requests a transfer or withdrawal from the GAA, we withdraw amounts proportionately from each guaranteed term in which the Individual Account is invested. Within a guaranteed term group, we withdraw first from the oldest deposit period and then from the next oldest and so on until the amount requested is withdrawn. 7.08 Application of the Market Value Adjustment Transfers or withdrawals from the GAA before the Maturity date are subject to a Market Value Adjustment, except for: (a) A one-month period following the Maturity Date on which we have automatically reinvested the value on the Maturity Date; (b) Distributions under certain systematic distribution options; and (c) When the withdrawal is equal to the minimum distribution amount required under the Code, using a method permitted by the Code and which we offer. If the amount withdrawn is used to purchase life-contingent Annuity payments, the Market Value Adjustment applies only if it is positive. For withdrawals and transfers from the GAA made (1) within six months of a Participant's death; or (2) to purchase Annuity payments under a life-contingent Annuity option, the amount withdrawn from the GAA is the greater of: (a) The aggregate MVA amount which is the sum of all market value adjusted amounts calculated due to a withdrawal before the Maturity Date (which may be positive or negative); or (b) The amount in the GAA. For withdrawals made after the six month period following death, the withdrawal or transfer amount is the aggregate MVA amount. An MVA applies to amounts withdrawn to purchase Annuity payment under a period certain Annuity option. We may change the GAA Market Value Adjustment by notifying the Contract Holder in writing at least 90 days before the change becomes effective. Any such change will apply only to guaranteed terms offered in deposit periods after the effective date of the change and will apply to existing and new Individual Accounts. 7.09 Market Value Adjustment (MVA) The Market Value Adjustment reflects any change in yields on U.S. Treasury Notes from the time an amount is allocated to a GAA guaranteed term to the time of a transfer or withdrawal prior to the Maturity Date. When the Market Value Adjustment is applied, the amount transferred or withdrawn from the GAA is multiplied by a factor which is calculated as follows: x ------- 365 (1 + i) ----------------------- x ------- 365 (1 + j) Where: i is the deposit period yield j is the current yield x is the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term. The deposit period yield and the current yield are determined as follows: Deposit Period Yield -------------------- At the close of the last business day of each week of a deposit period, we compute a yield that is the average of the yields on U.S. Treasury Notes which mature in the last three months of the guaranteed term. The deposit period yield is the average of those yields for the deposit period. If a withdrawal is made prior to the close of the deposit period, the deposit period yield is the average of the yields of U.S. Treasury Notes for each week preceding the withdrawal. In the event that no U.S. Treasury Notes will mature in the last three months of the guaranteed term, we reserve the right to use the U.S. Treasury Notes that mature in a following quarter. Current Yield ------------- The Current Yield is the average of the yields of the same U.S. Treasury Notes used to calculate the deposit period yield on the last business day of the week preceding withdrawal. Section 8. Transfers, Withdrawals and Distributions - -------------------------------------------------------------------------------- 8.01 Transfers During the Accumulation Phase, the Contract Holder or a Participant, as applicable, may transfer all or any portion of the Individual Account value among the available Investment Options. The Individual Account value on any amount transferred from a Fund will be based on the Fund's accumulation unit value next determined after we receive the transfer request In Good Order. The Contract Holder or a Participant, as applicable, may request a transfer by properly completing a transfer request form and sending it to our Home Office, or by otherwise complying with our administrative procedures. We reserve the right to establish a minimum transfer amount. 8.02 Withdrawals As allowed by the Plan, if applicable, and subject to provisions of the Code (see 8.03), during the Accumulation Phase, the Contract Holder or a Participant, as applicable, may withdraw any portion or all of the Individual Account value. The Individual Account value of any amount withdrawn from a Fund will be based on the Fund's accumulation unit value next determined after we receive the transfer request In Good Order. The Contract Holder or a Participant, as applicable, may request a withdrawal by properly completing a withdrawal request form and forwarding it to our Home Office, or by otherwise complying with our administrative procedures. Unless the Contract Holder or Participant, as applicable, requests otherwise, the withdrawal will be made pro rata from the Investment Options in which the Individual Account is invested. A withdrawal charge may apply to amounts withdrawn (see 8.04). In addition, a market value adjustment may apply to amounts withdrawn from the GAA (see 7.08 and 7.09) and limitations may apply to withdrawals from the Fixed Plus Account (see 6.04). 8.03 Withdrawal Restrictions Under the Code The Code may impose restrictions on the amount and timing of withdrawals. The restrictions, if any, applicable to this Contract are shown on Contract Schedule I under Withdrawal Restrictions Under the Code. Withdrawals that do not comply with the Code may be subject to tax penalties. 8.04 Withdrawal Charge During the Accumulation Phase, we may deduct a withdrawal charge from the Individual Account value withdrawn. The charge, if any, is a percentage of the amount withdrawn from the Funds and/or Fixed Interest Options (except, if applicable, the Fixed Plus Account). The withdrawal charge will never exceed 8.5% of the total amount of Contributions. The withdrawal charge, if any, is shown on Contract Schedule I under Withdrawal Charge. 8.05 Waiver of Withdrawal Charge The withdrawal charge (see 8.04) does not apply in any of the circumstances shown on Contract Schedule I under Waiver of Withdrawal Charge. In addition, we reserve the right to reduce, waive or eliminate the withdrawal charge. 8.06 Reinstatement Within 30 days after a withdrawal, the Contract Holder or a Participant, as applicable may elect to reinstate all or a portion of the proceeds of a full withdrawal if allowed by applicable law. We must receive the reinstated amount within 60 days of the withdrawal. Any maintenance fee and withdrawal charge imposed at the time of the withdrawal is included in the reinstatement. If only a portion of the amount withdrawn is reinstated, the amount of any maintenance fee and withdrawal charge deducted will be restored proportionally. The amount of any market value adjustment deducted from any amount withdrawn from GAA is not included in the amount reinstated. Any amount reinstated to the GA Account will be credited to guaranteed terms available in the current deposit period. We will reinvest it in a guaranteed term of the same duration if one is available. If no guaranteed term of the same duration is available, we reinvest the maturity value in the guaranteed term with the next shortest duration. If no shorter guaranteed term is available, we reinvest the maturity value in the next longest term. Amounts withdrawn from a GET Fund series are reinstated to the current offering period if one is available. If no GET Fund offering period is available, any amount withdrawn from the GET Fund is reinstated equally among all other Investment Options in which the Individual Account is invested. Amounts are reinstated among the Investment Options in the same proportion as they were held at the time of withdrawal, except, as noted above, for amounts from the GET Fund. Any maintenance fee which falls due after the withdrawal and before the reinstatement is deducted from the amount reinstated. The number of accumulation units reinstated to any Fund is based on the accumulation unit value(s) next computed after we receive the reinstatement request in Good Order at our Home Office. Reinstatement is permitted only once. 8.07 Required Distributions While an Individual Account remains in the Accumulation Phase, the Code may require distribution of all or a portion of the Individual Account value. The Contract Holder, a Participant or Contract beneficiary, as applicable, must tell us when to begin distributions. We have no responsibility for adverse tax consequences as the result of the Contract Holder, Participant or Contract beneficiary, as applicable, not complying with minimum distribution requirements. The distribution requirements, if any, are shown on Contract Schedule I under Required Distributions. Generally, to meet distribution requirements, the Contract Holder, a Participant or Contract beneficiary, as applicable, may request partial withdrawals, a systematic distribution option (see 8.08) or an annuity option. 8.08 Systematic Distribution Options (SDOs) During the Accumulation Phase, we may offer one or more distribution options under which we make regularly scheduled automatic partial distributions of the Individual Account value. To request an SDO, the Contract Holder, a Participant or Contract beneficiary, as applicable, must complete an SDO election form and forward it to our Home Office. Each option is available without discrimination to any class of Contracts. The availability of any specific option may be subject to terms and conditions applicable to that option. We may discontinue the availability of an SDO option for future election; payments will, however, continue to Participants who elected the option before the date it is no longer available. 8.09 Individual Account Termination If the Individual Account value is $3,500 or less, and we have received no Contributions for 12 months, we reserve the right to terminate an Individual Account. Before we do this, we notify the Contract Holder or Participant, as applicable, 90 days in advance. When we terminate an Individual Account, we do not deduct a withdrawal charge. We do not exercise this right when the Individual Account value is $3,500 or less due to investment performance. Section 9. Loans - ------------------------------------------------------------------------------- 9.01 Loan Availability If loans are available under the Contract, a loan endorsement is attached. Section 10. Death Benefit During the Accumulation Phase - ------------------------------------------------------------------------------- 10.01 Death Benefit If a Participant dies during the Accumulation Phase, we pay a death benefit. The amount of the death benefit is the Individual Account value as of the Valuation Date following the date we receive acceptable proof of death at our Home Office (see 7.10 for amounts in the GAA). 10.02 Contract Beneficiary The Contract beneficiary is shown on Contract Schedule I under Contract beneficiary. Generally, the Participant may name a beneficiary under the Plan (the Plan beneficiary). If allowed by the Plan, when designating the Beneficiary, the Contract Holder or a Participant, as applicable, may specify, the form of payment as permitted by the Code. The Contract beneficiary and the form of payment, if applicable, may be designated or changed in writing or as we may otherwise allow in our administrative procedures. 10.03 Distribution of Death Benefit Generally, if the Plan beneficiary is the Participant's surviving spouse, distribution of the death benefit must begin no later than the year the Participant would have attained age 70 1/2 or any other date allowed under federal law or regulations. If the Plan beneficiary is not the Participant's surviving spouse, generally, the death benefit must be used to purchase Annuity payments within one year of the year of the Participant's death or otherwise paid within five years of the year of the Participant's death. Annuity payments to a Plan beneficiary may not extend beyond the period specified in the Code. Part II. Annuity Phase Section 11. General Provisions - ------------------------------------------------------------------------------- 11.01 Election The Contract Holder, a Participant , Contract or Plan beneficiary, as applicable, may elect an Annuity option by properly completing an election form and forwarding it to our Home Office no later than 30 days before the desired first Annuity payment date. All elections of an Annuity option must comply with the minimum distribution requirements of Code Section and any applicable laws and regulations. All or any portion of the Individual Account value (after the deduction of any applicable premium tax) may be used to purchase Annuity payments (for amounts from the GAA, see 7.08). The Contract Holder, a Participant, Contract or Plan beneficiary, as applicable, must also select an Annuity option (see 11.03) and the Investment Option(s) (see 11.06). Once payments begin, an Annuity option may not be changed. 11.02 Change of Annuity Provisions We reserve the right to change Annuity options (see 11.03) and the mortality table (see 11.04) we use to calculate payment rates for life-contingent Annuity payments. If we do this, the change will not take effect until at least 12 months after the Contract Effective Date, or until at least 12 months after any previous change. A change to Annuity options or the mortality table used to calculate payment rates will not apply to Individual Accounts established before the effective date of the change. 11.03 Annuity Options The Contract Holder, a Participant, Contract or Plan beneficiary, as applicable, must elect one of the following: Payments for a Stated Period ---------------------------- This option provides payments for a stated period. The number of years in the stated period must fall within the range shown on Contract Schedule II under Guaranteed Payment Period. If payments for this option are under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested within five years of the first payment, the lump sum payment is treated as a withdrawal during the Accumulation Phase and any applicable withdrawal charge applies (see 8.04). If the payments are fixed-only, an annual increase of one, two or three percent (compounded annually) may be elected at the time the Annuity option is chosen (if permitted by the Code). Life Income for One Annuitant ----------------------------- This option provides payments for the life of the Annuitant. If this option is elected, the Contract Holder, a Participant or Contract beneficiary, as applicable, must also choose one of the following: (a) Payments cease at the death of the Annuitant; or (b) Payments are guaranteed for a period within the range shown on Contract Schedule II under Guaranteed Payment Period; or (c) Fixed-only cash refund: at the death of the Annuitant, the Beneficiary receives a lump sum payment in an amount equal to the amount applied to the Annuity, less the amount of payments made to the Annuitant. Under (a) or (b), if the payments are fixed-only, an annual increase of one, two or three percent (compounded annually) may be elected at the time the Annuity option is chosen (if permitted by the Code). Life Income for Two Annuitants ------------------------------ This option provides payments for the lives of the Annuitant and a second Annuitant. Payments continue until both Annuitants have died. If this option is elected, the Contract Holder or a Participant, as applicable, must also choose one of the following: (a) 100% of the payment amount to continue after the first death; or (b) 66 2/3% of the payment amount to continue after the first death; or (c) 50% of the payment amount to continue after the first death; or (d) 100% of the payment amount to continue after the first death with payments guaranteed to the Beneficiary after the second death for a period within the range shown on Contract Schedule II under Guaranteed Payment Period; or (e) 100% of the payment amount to continue at the death of the specified second Annuitant and 50% of the payment amount to continue at the death of the specified Annuitant; or (f) 100% of the fixed-only payment amount to continue after the first death with a cash refund to the Contract beneficiary after the second death. The amount of the cash refund is equal to the amount applied to the Annuity, less the amount of payments made. Under (a) or (d), if the payments are fixed-only, an annual increase of one, two or three percent (compounded annually may be elected at the time the Annuity option is chosen (if permitted by the Code). Other Options ------------- We may make other options available. 11.04 Mortality Table The mortality table used for calculating Annuity payments for life is shown on Contract Schedule II under Mortality Table. To calculate the payments for a fixed Annuity, or a variable Annuity guaranteed first payment, we use the Annuitant's and, if applicable, the second Annuitant's, adjusted age. The adjusted age is the person's age as of his or her nearest birthday closest to the day Annuity payments begin, reduced as follows: (a) Reduced by one year for payments before January 31, 1999; (b) Reduced by two years for payments beginning during the period from January 1, 2000 through December 31, 2009; (c) Starting on January 1, 2010, reduced by one additional year for payments beginning in each succeeding decade. 11.05 Minimum First Payment Amount The minimum first payment amount is shown on Contract Schedule II under Minimum Payment Amount. We reserve the right to increase the minimum first payment amount, if allowed by state law, based on increases reflected in the Consumer Price Index-Urban (CPI-U) since July 1, 1993. 11.06 Investment Options When an Annuity option is elected, the Contract Holder, a Participant, Contract or Plan beneficiary, as applicable, must also select: (a) A fixed Annuity; (b) A variable Annuity for which the underlying investment is one or more of the available Funds; or (c) A combination of (a) and (b). For a variable Annuity, the maximum number of Funds available during the Annuity Phase is shown on Contract Schedule II under Maximum Number of Funds. The Contract Holder, a Participant or Contract beneficiary, as applicable, may transfer amounts allocated to Funds during the Annuity Phase. If a fixed Annuity is elected, we will use the applicable current settlement option rates if these will provide high fixed Annuity payments. 11.07 Fixed Annuity Minimum Guaranteed Interest Rate For a Fixed Annuity, the interest rate is never less than the minimum guaranteed rate shown on Contract Schedule II under Fixed Annuity minimum Guaranteed Interest Rate. 11.08 Fixed Annuity Payment Amount The amount of Fixed Annuity payments is a function of the Annuity option elected, the adjusted age of the Annuitant(s) for life-contingent options, the rates in effect at the time payments begin and payment frequency. Sample rates are shown on the charts beginning on page XX. 11.09 Variable Annuity Funds The Funds available during the Annuity Phase may not be the same as those available during the Accumulation Phase. 11.10 Variable Annuity Transfers If a variable Annuity is elected, the Contract Holder, a Participant, Contract or Plan beneficary, as applicable, may request that we transfer all or a portion of the amount allocated to a Fund to any other available Fund. Transfer requests must be expressed as a percentage of the allocation among the Funds on which the variable payment is based. The number of transfers allowed each calendar year is shown on Contract Schedule II under Number of Annual Transfers Among Funds. We reserve the right to allow additional transfers. Transfers are effective as of the next Valuation Date after we receive a transfer request in Good Order at our Home Office. 11.11 Variable Annuity Payment Amount The first variable Annuity payment is calculated by multiplying the Individual Account value (minus any applicable premium tax), by an Annuity rate per $1,000. The Annuity rate is calculated based on: (a) The Annuity option elected; (b) Payment frequency; (c) The assumed investment rate (AIR); and (d) The adjusted age of the Annuitant(s). The Contact Holder, a Participant or Contract beneficiary, as applicable, must elect an AIR of 3.5% or 5.0%. Sample rates for each AIR are shown on the charts beginning on page xx. After the first payment, payment amounts are determined by comparing the performance of the net investment rate (NIR) of the Fund(s) to the AIR. For the amount of the payment to stay the same, or increase, the NIR of the Fund(s) must be equal to or greater than the AIR after the deduction of the daily mortality and expense risks charge and any applicable administrative charge. The amount of the daily mortality and expense risks charge and the administrative charge are shown on Contract Schedule II under Separate Account Daily Mortality and Expense Risks Charge and Separate Account Daily Administrative Charge. If the NIR is less than the AIR, the payment amount decreases. The assumed investment rate for 3.5% is 0.9999058; for 5.0% is 0.9998663. The net investment factor(s) for each Fund is equal to 1.0000000 plus the net return rate. The net return rate equals: [a - b + c] ----------------------- - e - f, where d a is the value of the shares of the Fund held by the Separate Account at the end of a Valuation Period; b is the value of the shares of the Fund held by the Separate Account at the start of the Valuation Period; c is taxes or provisions for taxes, if any, on the Separate Account (with any federal income tax liability offset by foreign tax credits to the extent allowed); d is the total value of the accumulation units and annuity units of the Separate Account at the start of the Valuation Period; e is Separate Account daily charges for mortality and expense risks and a daily administrative charge as shown on Contract Schedules I and II under Daily Charges to the Separate Account; and A net return rate may be more or less than 0%. 11.12 Death Benefit During the Annuity Phase The Contract Holder or Participant, as applicable, must name a beneficiary for the Annuity Phase. If an Annuitant(s) dies, any remaining guaranteed payments continue to the beneficiary. Payments are made at least as rapidly as provided by the option in effect at the death of the Annuitant. Annuity payments to an beneficiary may not extend beyond (1) the life of the beneficiary, or (2) any period certain greater than the beneficiary's life expectancy as determined by the Code. The beneficiary may also elect a lump sum payment equal to the present value of any remaining payments. The interest rate used to determine the first Annuity payment is used to calculate the present value. The present value is determined as of the Valuation Date in which we receive acceptable proof of death and a written claim for the death benefit. If the beneficiary dies while receiving payments, the present value of any remaining guaranteed payments is paid in a lump sum to the Contract beneficiary's estate.
OPTION 1: Payments for a Specified Period - --------------------------------------------------------------------------------------- Monthly Amount for Each $1,000* Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate - --------------------------------------------------------------------------------------- Years Payment Years Payment - --------------------------------------------------------------------------------------- 5 $17.91 20 $5.51 10 9.61 25 4.71 15 6.87 30 4.18 - --------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------- First Monthly Amount for Each $1,000* Rates for a Variable Annuity with a 3.5% AIR - --------------------------------------------------------------------------------------- Years Payment Years Payment - --------------------------------------------------------------------------------------- 5 $18.12 20 $5.75 10 9.83 25 4.96 15 7.10 30 4.45 - --------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------- First Monthly Amount for Each $1,000* Rates for a Variable Annuity with a 5% AIR - --------------------------------------------------------------------------------------- Years Payment Years Payment - --------------------------------------------------------------------------------------- 5 $18.74 20 $6.51 10 10.51 25 5.76 15 7.82 30 5.28 - ---------------------------------------------------------------------------------------
* Net of any applicable premium tax deduction G-CDA(99) Page
Option 2: Life Income Based on the Life of One Annuitant - ----------------------------------------------------------------------------------------------------------------------------------- Monthly Payment Amount for Each $1,000* Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate - ----------------------------------------------------------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c): Adjusted payments for payments payments payments payments Cash Refund Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years - ----------------------------------------------------------------------------------------------------------------------------------- 55 4.44 4.42 4.39 4.32 4.22 4.19 60 4.95 4.93 4.86 4.73 4.55 4.57 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 70 6.64 6.54 6.23 5.76 5.19 5.70 75 8.06 7.82 7.14 6.25 5.38 6.51 - ----------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate ------------------------------------------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Adjusted payments for payments payments payments payments Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years ------------------------------------------------------------------------------------------------------------------- 55 4.72 4.71 4.67 4.60 4.50 60 5.23 5.21 5.13 5.00 4.82 65 5.94 5.89 5.73 5.48 5.15 70 6.92 6.81 6.49 6.00 5.43 75 8.35 8.08 7.38 6.48 5.62 ------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 5% Assumed Interest Rate - -------------------------------------------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Adjusted payments for payments payments payments payments Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years - ------------------------------------------------------------------------------------------------------------------- 55 5.63 5.61 5.56 5.47 5.36 60 6.12 6.09 6.00 5.85 5.65 65 6.82 6.75 6.57 6.30 5.95 70 7.80 7.67 7.30 6.78 6.21 75 9.23 8.93 8.16 7.23 6.38 - -------------------------------------------------------------------------------------------------------------------
* Net of any applicable premium tax deduction G-CDA(99) Page
Option 3: Life Income Based on the Lives of Two Annuitants - ----------------------------------------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate - ----------------------------------------------------------------------------------------------------------------------------------- Adjusted Ages - ----------------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f) - ----------------------------------------------------------------------------------------------------------------------------------- 55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67 55 60 3.99 4.44 4.71 3.98 4.20 3.94 65 60 4.38 4.97 5.32 4.38 4.93 4.29 65 70 4.93 5.68 6.15 4.91 5.27 4.74 75 70 5.69 6.68 7.32 5.62 6.67 5.29 75 80 6.78 8.11 8.99 6.54 7.36 5.93 - ----------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate - -------------------------------------------------------------------------------------------------------------------------- Adjusted Ages - ---------------------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) - -------------------------------------------------------------------------------------------------------------------------- 55 50 $3.97 $4.35 $4.56 $3.97 $4.31 55 60 4.27 4.73 5.00 4.26 4.48 65 60 4.66 5.25 5.61 4.65 5.22 65 70 5.19 5.97 6.44 5.17 5.54 75 70 5.95 6.96 7.61 5.87 6.95 75 80 7.04 8.39 9.29 6.79 7.64 - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 5% Assumed Interest Rate - -------------------------------------------------------------------------------------------------------------------------- Adjusted Ages - ---------------------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) - -------------------------------------------------------------------------------------------------------------------------- 55 50 $4.88 $5.26 $5.48 $4.88 $5.23 55 60 5.15 5.63 5.91 5.14 5.38 65 60 5.52 6.14 6.51 5.51 6.10 65 70 6.04 6.84 7.34 6.00 6.41 75 70 6.77 7.84 8.51 6.68 7.81 75 80 7.86 9.28 10.20 7.57 8.49 - --------------------------------------------------------------------------------------------------------------------------
* Net of any applicable premium tax deduction G-CDA(99) Page - -------------------------------------------------------------------------------- Aetna Life Insurance and Annuity Company Home Office: 151 Farmington Avenue Hartford, Connecticut 06150 (800) 525-4547 Group Combination, Deferred Annuity Contract (Nonparticipating) - -------------------------------------------------------------------------------- G-CDA(99) EX-99.B.4.2 3 FORM OF VAR. ANN. CONTRACT CERT. EX-99.B.4.2 Form of Variable Annuity Contract Certificate --------------------------------------------------- Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, Connecticut 06150 800-525-4225 If you have questions about this Certificate, call the toll-free number shown. Group Combination Deferred Annuity Certificate (Nonparticipating) Aetna Life Insurance and Annuity Company (ALIAC), a stock company, will pay benefits according to the terms and conditions set forth in the group Contract. The Contract is delivered in [YOUR STATE] and is subject to the laws of that jurisdiction. This Certificate summarizes provisions of the group annuity Contract in which you have an interest. This Certificate is for information only and is not part of the Contract. Please read this Certificate carefully. It states ALIAC's rights and obligations under the group Contract as well as the rights and obligations of the Contract Holder and Participants. Specifications |------------------------------------------------------------------------------- | Group Contract Holder | SPECIMEN |------------------------------------------------------------------------------- | Group Annuity Contract Number | SPECIMEN |------------------------------------------------------------------------------- | Participant | SPECIMEN |------------------------------------------------------------------------------- | Certificate Number | SPECIMEN |------------------------------------------------------------------------------- | Effective Date | SPECIMEN Right to Cancel - -------------------------------------------------------------------------------- You may cancel your interest in Contract within 10 days of receiving this Certificate by returning it to ALIAC at the address shown above, or to the agent from whom it was purchased. Within seven days of receiving the cancellation request at its Home Office, ALIAC will return any Contributions received, plus any increase, or minus any decrease in value, on the amount, if any, allocated to the Separate Account. Signed at the Home Office on the Effective Date. President Secretary All payments and values provided by the group Contract, when based on the investment experience of a Separate Account, are variable and the fixed dollar amount is not guaranteed. Amounts allocated to the Guaranteed Accumulation Account, if withdrawn before a guaranteed term maturity date, may be subject to a market value adjustment. The market value adjustment may result in an increase, or a decrease, in the Individual Account value. C-CDA(99) Table of Contents
Page Contract Schedule I. Accumulation Phase Contract Schedule II. Annuity Phase Definitions Section 1. General Contract Provisions 1.01 Entire Contract ...................................... 1.02 Nonparticipating Contract ............................ 1.03 Control of Contract .................................. 1.04 Certificate .......................................... 1.05 Incontestability ..................................... 1.06 Grace Period ......................................... 1.07 Change of Contract ................................... 1.08 Payments ............................................. 1.09 Deferral of Payment .................................. 1.10 Proof of Age ......................................... 1.11 Evidence of Survival ................................. 1.12 Misstatements and Adjustments ........................ 1.13 Reports .............................................. 1.14 State Laws ........................................... 1.15 Claims of Creditors .................................. 1.16 Maintenance Fee ...................................... 1.17 Charges for Additional Services ...................... 1.18 Charges Subject to Change ............................ Part I. Accumulation Phase Section 2. Contributions and Individual Account Value 2.01 Contributions ........................................ 2.02 Premium Tax .......................................... 2.03 Individual Account ................................... 2.04 Experience Credit .................................... 2.05 Individual Account Value ............................. Section 3. Separate Account 3.01 General .............................................. 3.02 Funds Available ...................................... 3.03 Change or Substitution of Funds ...................... 3.04 Accumulation Units ................................... 3.05 Accumulation Unit Value .............................. 3.06 Net Investment Factor ................................ 3.07 Charges to the Separate Account ...................... 3.08 Separate Account Transfers ........................... 3.09 Withdrawals from the Separate Account ................
C-CDA(99) Page Section 4. Aetna GET Fund 4.01 GET Fund Guarantee Period ............................ 4.02 GET Fund Offering Period ............................. 4.03 GET Fund Guarantee ................................... 4.04 GET Fund Maturity Date ............................... 4.05 Transfers or Withdrawals from the GET Fund ........... Section 5. Fixed Account 5.01 Fixed Account Minimum Guaranteed Interest Rate ....... 5.02 Transfers from the Fixed Account ..................... 5.03 Withdrawals from the Fixed Account ................... Section 6. Fixed Plus Account 6.01 Fixed Plus Account Minimum Guaranteed Interest Rate .. 6.02 Transfers from the Fixed Plus Account ................ 6.03 Partial Withdrawals from the Fixed Plus Account ...... 6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account ......................................... 6.05 Waiver of Fixed Plus Account Full Withdrawal Provision ............................................ Section 7. Guaranteed Accumulation Account (GAA) 7.01 Nonunitized Separate Account ......................... 7.02 GAA Minimum Guaranteed Interest Rate ................. 7.03 Deposit Period ....................................... 7.04 Guaranteed Term ...................................... 7.05 Guaranteed Term Groups ............................... 7.06 Maturity Date, Maturity Value and Reinvestment ....... 7.07 Transfers and Withdrawals from the GAA ............... 7.08 Application of the Market Value Adjustment ........... 7.09 Market Value Adjustment (MVA) ........................ Section 8. Transfers, Withdrawals and Distributions 8.01 Transfers ............................................ 8.02 Withdrawals .......................................... 8.03 Withdrawal Restrictions Under the Code ............... 8.04 Withdrawal Charge .................................... 8.05 Waiver of Withdrawal Charge .......................... 8.06 Reinstatement ........................................ 8.07 Required Distributions ............................... 8.08 Systematic Distribution Options (SDOs) ............... 8.09 Individual Account Termination ....................... Section 9. Loans 9.01 Loan Availability .................................... Section 10. Death Benefit During the Accumulation Phase 10.01 Death Benefit ........................................ 10.02 Contract Beneficiary ................................. 10.03 Distribution of Death Benefit ........................
C-CDA(99) Page Part II. Annuity Phase Section 11. General Provisions 11.01 Election ............................................. 11.02 Change of Annuity Provisions ......................... 11.03 Annuity Options ...................................... 11.04 Mortality Table ...................................... 11.05 Minimum Payment Amount ............................... 11.06 Investment Options ................................... 11.07 Fixed Annuity Minimum Guaranteed Interest Rate ....... 11.08 Fixed Annuity Payment Amount ......................... 11.09 Variable Annuity Funds ............................... 11.10 Variable Annuity Transfers ........................... 11.11 Variable Annuity Payment Amount ...................... 11.12 Death Benefit During the Annuity Phase ...............
Annuity Tables C-CDA(99) Page Contract Schedule I Accumulation Phase Control of Contract (see 1.03) [The Contract Holder controls this Contract. By notifying us in writing, the Contract Holder may allow you to choose Investment Options for an Individual Account. The Contract Holder may, however, retain the right to choose Investment Options for employer contributions. Unless otherwise provided by the Plan, we will make payments only at the written direction of the Contract Holder and you. Unless otherwise specified by the Plan, we will make an inservice transfer under Internal Revenue Service Revenue Ruling 90-24 only at the written direction of the Contract Holder and you and will make checks payable to the acquiring investment provider(s). The Contract and Individual Accounts are nontransferable and nonassignable except to us in the event of a loan (if allowed under the Contract) or in the event of a qualified domestic relations order as allowed under the Retirement Equity Act of 1984. You have a nonforfeitable right to the value of employer Contributions made to their Individual Accounts subject to any Plan vesting limits as determined by the Contract Holder. You have a nonforfeitable right to the value of employee Contributions made to their Individual Accounts as provided by Code Section 403(b) and subject to the terms of the Plan. The Contract Holder must notify us in writing if the Plan is, or becomes, subject to the Employee Retirement Income Security Act of 1974 (ERISA) and/or related law or regulations including the Retirement Equity Act of 1984 (REA). We will rely on the Contract Holder's determination and representation of the applicability of such laws. If the Plan is subject to ERISA, before we will make a distribution from an Individual Account, the Contract Holder must certify in writing that all applicable REA requirements have been met and that the distribution complies with the Plan.] Maximum Maintenance Fee (see 1.16) The maintenance fee for each Individual Account will never be more than [$30]. Contribution Limits (see 2.01) [Each year, Contributions to the Contract are limited to the lesser of: (a) The maximum exclusion allowance (MEA) limit under Code Section 403(b); or (b) The amount set forth in Code Section 415, generally, 25% of compensation up to $30,000. In addition, salary reduction contributions as defined in Code Section 402(g) may not exceed $10,000, or such larger amount as adjusted by the Secretary of the Treasury unless the alternative limitation under Code Section 402(g)(8) applies.] Maximum Daily Charges to the Separate Account (see 3.07) Charges to the Separate Account will never be more than the following: Mortality and Expense Risks Charge: [1.25%] (annual basis) Administrative Charge: [0.25%] (annual basis)
Aetna GET Fund Availability (see Section 4 [The GET Fund is available.] Fixed Interest Options Available (see Section 5, Section 6, and Section 7) [Fixed Account Fixed Account is available for transferred amounts only (no ongoing Contributions). Fixed Plus Account Guaranteed Accumulation Account] Fixed Account Minimum Guaranteed Interest Rate (see 5.01) The interest rate will never be less than [3%] (effective annual yield). Fixed Account Annual Transfer Limit (see 5.02) [10%.] Fixed Plus Account Minimum Guaranteed Interest Rate (see 6.01) The interest rate will never be less than [3%] (effective annual yield) Fixed Plus Account Transfer and Partial Withdrawal Limit (see 6.02 and 6.03) [20%.] Full Withdrawal from the Fixed Plus Account (see 6.04 When a full withdrawal from the Fixed Plus Account is requested, the Individual Account value in the Fixed Plus Account may be withdrawn as follows: (a) Twenty percent of the Individual Account value in the Fixed Plus Account as of the January 1 preceding the withdrawal request. The 20% is reduced by the amount, if any, transferred, withdrawn, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the prior 12 months; then, (b) Twenty-five percent of the remaining Individual Account value 12 months later; (c) Thirty-three and one-third percent of the remaining Individual Account value 12 months later; then, (d) One-half of the remaining Individual Account value 12 months later; and then, (e) The balance of the Individual Account value in the Fixed Plus Account 12 months later.] Waiver of Fixed Plus Account Full Withdrawal Provision (see 6.05) [When a full withdrawal is requested, payment from the Fixed Plus Account is not limited as described in 6.04 when the withdrawal is made: (a) If you have attained age 59-1/2 and, if applicable, have completed nine Contribution periods; (b) When you have separated from service, and when: (1) Separation from service is certified by the employer; (2) The amount is paid directly to you; and (3) When the amount paid for all withdrawals due to separation from service during the previous 12-month period does not exceed 20% of the average value of all Individual Accounts under the Contract during that period. (c) Due to financial hardship, or hardship due to an unforeseeable emergency, as defined in the Code, and when: (1) The financial hardship or unforeseeable emergency is certified by the employer; (2) The amount is paid directly to you; and (3) When the amount paid for all withdrawals due to financial hardship or unforeseeable emergency during the previous 12-month period does not exceed 20% of the average value of all Individual Accounts under the Contract during that period. (d) When the amount in the Fixed Plus Account is [$2,000] or less and during the previous [12] months no amounts have been withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments; (e) Due to your death before Annuity payments begin and paid with six months of your death; (f) As provided in Section 8.09; or (g) To purchase Annuity payments on a life-contingent basis or payments for a stated period on a fixed-only basis.] Guaranteed Accumulation Account Minimum Guaranteed Interest Rate (see 7.02) The interest rate will never be less than [3%] (effective annual yield). Withdrawal Restrictions Under the Code (see 8.03) [Withdrawals are limited to the "restricted amount" which is the sum of: (1) Contributions attributable to your salary reduction contributions made on and after January 1, 1989; plus (2) The net increase, if any, in the Individual Account value after December 31, 1988 attributable to investment gains and losses and credited interest. Generally, withdrawals of the "restricted amount" are permitted only when you have: (a) Separated from service when certified by your employer; (b) Attained age 59-1/2; (c) Died; (d) Become disabled, as defined by the Code; (e) Experienced financial hardship, as defined by the Code and as the amount is limited by the Code(in this situation the amount available is; or (f) Met other circumstances as otherwise allowed by federal law, regulations or rulings. No limitations apply to salary reduction Contributions made and earnings credited to such Contributions made on or before December 31, 1988. In addition, any portion of an Individual Account representing amounts transferred from a Code Section 403(b)(7) custodial account will be subject to the restrictions set forth in the Code.] Withdrawal Charge (see 8.04) For each withdrawal from an Individual Account, we may deduct a withdrawal charge. This charge is a percentage of the amount withdrawn. The withdrawal charge is as follows.
[Number of Years Since Individual Account Established] Withdrawal Charge [Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%]
The withdrawal charge will never exceed [8-1/2%] of total Contributions, or the maximum permitted by National Association of Securities Dealers, Inc. (NASD) rules. Waiver of Withdrawal Charge (see 8.05) The withdrawal charge does not apply when the withdrawal is: (a) Used to purchase Annuity Payments; (b) Used to purchase a single premium immediate annuity or individual retirement annuity issued by ALIAC or one of its affiliates, provided that the right to cancel under the new Contract is not exercised. We will treat exercise of the right to cancel as a reinstatement and any subsequent withdrawal may then be subject to the withdrawal charge applicable on the date of the withdrawal; (c) Under a systematic distribution option (see 8.08); (d) In an amount equal to [10%] of the Individual Account value when the withdrawal is the first partial withdrawal in a calendar year and is made when you are at least age 59-1/2 and not older than age 70-1/2 (not available when a systematic distribution option is in effect); (e) When we terminate an Individual Account as provided in 8.09; (f) When the Individual Account value is [$3,500] or less and during the previous 12 months no amounts have been withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments; (g) If you have attained age 59-1/2 and, if applicable, have completed nine Contribution periods; (h) You have separated from service when certified by your employer; (i) Due to financial hardship, or hardship due to an unforeseeable emergency, as defined in the Code; or (j) Due to your death before Annuity payments begin.] Required Distributions (see 8.07) [Generally, for Contributions made and earnings credited after December 31, 1986, distribution must begin by April 1 of the calendar year following the later of (1) the calendar year in which you attain age 70-1/2, or (2) retire. For Individual Account values as of December 31, 1986, distribution must begin by the last day of the year in which you attain age 75 or retire, whichever is later. Distribution of benefits to a Participant who is a five percent owner must begin by the April 1 following the calendar year in which you attain age 70-1/2. If the Contract Holder is a governmental entity or church, distribution of Contributions and earnings credited to such Contributions must be made or begin to be made no later than April 1 of the calendar year in which you attain age 70-1/2 or retire, whichever is later. In addition, any portion of an Individual Account representing amounts transferred from a Code Section 403(b)(7) custodial account will be subject to the restrictions set forth in the Code. The entire Individual Account value must be distributed, or begin to be distributed, over your life or life expectancy, or that of you and a Beneficiary.] Contract Beneficiary (see 10.02) [The Contract Holder is the Contract beneficiary. You designate a beneficiary under the Plan (the Plan beneficiary.] C-CDA(99) Page Contract Schedule II. Annuity Phase Guaranteed Payment Period (see 11.03) The period for which we will guarantee Annuity payments must be at [least five years and no more than 30 years]. Mortality Table (see 11.04) [Society of Actuaries' 1983 Table a.] Maximum Number of Funds (see 11.07) The maximum number of Funds is [five]. Fixed Annuity Minimum Guaranteed Interest Rate (see 11.08) [3%] (annual basis). Number of Annual Transfers Among Funds (see 11.11) Each calendar year, we allow [five] transfers among funds. Maximum Daily Charges to the Separate Account (see 11.12) Charges to the Separate Account will never be more than the following: Mortality and Expense Risks Charge: [1.25%] (annual basis) Administrative Charge: [0.25%] (annual basis) C-CDA(99) Page Definitions - -------------------------------------------------------------------------------- Accumulation Phase The time between an Individual Account Effective Date and the date on which the entire Individual Account value is used to purchase Annuity payments, or otherwise distributed. Aetna GET Fund (GET Fund) The Aetna GET Fund is an Investment Option which may be available during the Accumulation Phase. The GET Fund operates as a series offering. Each series is a separate Fund. Aetna Life Insurance and Annuity Company (ALIAC) Aetna Life Insurance and Annuity Company, ("we," and "our," and "us" refer to ALIAC). Annuitant The person whose life expectancy determines the amount and/or duration of the payments under a life-contingent Annuity option. Annuity Payment of an income: (a) For a stated period; (b) For the life of one or two people; or (c) Some combination of (a) and (b). A fixed Annuity is one in which the payment amount does not vary. A variable Annuity is one in which the payment amount may vary based on the net investment results of the Funds. Annuity Phase The time during which we make Annuity payments. Business Day Each day our Home Office is open for business. Code The Internal Revenue Code of 1986, as it is amended from time to time. Contract This agreement between ALIAC and the Contract Holder. Contract Holder The entity or person named on the specifications page, to which the Contract is issued. Contribution The payment, less any applicable premium tax, made to us during the Accumulation Phase. Effective Date The date, shown on the specifications page, on which we issue the Contract or establish an Individual Account. Fixed Account A Fixed Interest Option. The Fixed Account is an obligation of our General Account. Fixed Interest Options Investment options, including the Fixed Account, the Fixed Plus Account and the Guaranteed Accumulation Account that credit interest. The Fixed Interest Options available during the Accumulation Phase are shown on Contract Schedule I under Fixed Interest Options Available. Fixed Plus Account A Fixed Interest Option. Limitations apply to withdrawals from the Fixed Plus Account. The Fixed Plus Account is an obligation of our General Account. Fund One of the variable Investment Options available under this Contract. The Funds are open-end, registered investment management companies (mutual funds) in which the Separate Account invests. General Account The account that holds our assets other than those held in the Separate Account or Nonunitized Separate Account. Guaranteed Accumulation Account (GAA) A Fixed Interest Option that may be available during the Accumulation Phase. Under this option, we guarantee specified rates of interest for specified periods of time. We hold amounts allocated to the Guaranteed Accumulation Account in the Nonunitized Separate Account. Good Order Instructions that are complete and clear enough to allow us to act without exercising discretion. Home Office Our main office located at 151 Farmington Avenue, Hartford, Connecticut. Individual Account An account, or accounts (including, if applicable, employer and employee accounts) established for you to maintain a record of transactions and the value of Contributions as invested. Investment Options The Funds and Fixed Interest Options available under this Contract. Maturity Date The last day of a GAA guaranteed term. The last day of the guarantee period of an Aetna GET Fund series. Nonunitized Separate Account A separate account that holds assets allocated to the Guaranteed Accumulation Account. Participant A person who is covered under the retirement Plan or program for which this Contract is issued and who has an interest in this Contract (you). Plan The retirement plan or program for which this Contract is issued. Premium Tax Any tax assessed by any governmental entity on Contributions or amounts used to purchase Annuity payments. Separate Account An account that, through its subaccounts, buys and holds shares of the Funds. Valuation Date The date and time at which accumulation unit values and annuity unit values are calculated. Currently, this calculation is made after the close of business of the New York Stock Exchange on any the New York Stock Exchange is open. C-CDA(99) Page Section 1. General Contract Provisions - -------------------------------------------------------------------------------- 1.01 Entire Contract The entire Contract consists of this document and any endorsements incorporated. The Plan, if applicable, is not part of the Contract and ALIAC is not bound by its terms. 1.02 Nonparticipating Contract This Contract is nonparticipating. The Contract Holder, you, or a Contract beneficiary have no right to share in our earnings. 1.03 Control of Contract This Contract is issued to fund a plan or program which provides retirement income. Control of the Contract is as shown on Contract Schedule I under Control of Contract. 1.04 Certificate Any certificate provided to a Participant summarizes Contract provisions; it is for information only and is not part of the Contract. We will provide certificates as required by state in the state where the Contract is delivered. 1.05 Incontestability We will not cancel this Contract because of any error of fact. 1.06 Grace Period Except as provided in 8.09, this Contract and all Individual Accounts will remain in effect even if Contributions are not continued. 1.07 Change of Contract Only an ALIAC officer at the level of Vice President or higher, or an officer with written authorization from a Vice President or higher officer, may change the terms of this Contract. No other ALIAC employee, agent or representative can change this Contract. Except as noted below, this contract may be changed at any time by written mutual agreement between the Contract Holder and ALIAC. For changes we initiate requiring Contract Holder consent, we notify the Contract Holder 60 days in advance of the change and consider that the Contract Holder has agreed to the change unless we receive written notice that the Contract Holder does not agree to the change at least 30 days before the effective date of the change. If we propose a change requiring Contract Holder consent and the Contract Holder does not agree to the change, we have the right to not establish new Individual Accounts and to stop accepting Contributions to existing Individual Accounts. We will not change the guaranteed minimum interest rate for the Fixed Account and Fixed Plus Account. We have the right to change the following without Contract Holder consent: (a) Net Investment Factor (see 3.06) We may change the Net Investment Factor by notifying the Contract Holder in writing at least 30 days before the change becomes effective. If we do this, the change will apply only to Individual Accounts established, and Contributions received, after the effective date of the change. (b) Guaranteed Accumulation Account A Market Value Adjustment (see 7.10) We may change the GAA Market Value Adjustment (see 7.10) by notifying the Contract Holder in writing at least 90 days before the change becomes effective. If we do this, the change will apply only to guaranteed terms offered in deposit periods after the effective date of the change. (c) Systematic Distribution Options (see 8.08) We may change the systematic distribution options by notifying the Contract Holder in writing at least 30 days before the change becomes effective. If we do this, the change will not apply to you or beneficiaries receiving payments under the option before the effective date of the change. (d) Annuity Options (see 11.02) We may change Annuity Options by notifying the Contract Holder in writing at least 30 days before the effective date of the change. If we do this, the change will not take effect until at least 12 months after the Effective Date of the Contract, or until at least 12 months after any previous change. Any change will not apply to you or beneficiaries receiving Annuity payments before the effective date of the change. (e) Mortality Table (see 11.04) We may change the mortality table by notifying the Contract Holder in writing at least 30 days before the effective date of the change. If we do this, the new table will not apply to Individual Accounts established before the Effective Date of the change. In addition, we may change this Contract as required to comply with state and federal law without Contract Holder consent by notifying the Contract Holder at least 30 days before the effective date of the change. Any unilateral change will not apply to Individual Accounts established before the effective date of the change, but will apply to Individual Accounts established on or after the change becomes effective. If we make a unilateral change, the Contract Holder or you, as applicable, are permitted to terminate participation in the Contract before the effective date of the change under the terms of the Contract in effect prior to the effective date of the change. We will make any change of Contract by endorsement, which may be subject to regulatory approval in the state where the Contract is issued. 1.08 Payments We make payments as directed by the Contract Holder or you, as applicable. Payment requests must be in writing or as we otherwise allow in our administrative practice. We determine the amount of any payment based on the Individual Account value as of the Valuation Date following our receipt of a payment request in Good Order at our Home Office. Generally, we make payments within seven calendar days. 1.09 Deferral of Payment We may defer payment up to a period of six months or as otherwise provided by state and/or federal law. 1.10 Proof of Age If a life-contingent Annuity option is elected, we may require proof of the age of an Annuitant. 1.11 Evidence of Survival We may require proof that any Annuitant under a life-contingent Annuity option is living. 1.12 Misstatements and Adjustments If we learn that the age of any Annuitant or second Annuitant is misstated, we will use the correct age to adjust payments. We reserve the right to obtain reimbursement, or to adjust future payments for any amount we overpaid. We will pay the amount of any underpayment. 1.13 Reports Each calendar year we provide the Contract Holder or you, as applicable, with a report of the Individual Account value. We also provide an annual report for the Separate Account. 1.14 State Laws This Contract complies with the laws of the state in which it is delivered. Any cash, death or Annuity payments are equal to or greater than the minimum required. To determine legal reserve valuation, we use Annuity tables required by law; such tables may be different from those we use to determine Annuity payments. 1.15 Claims of Creditors Individual Accounts are not subject to the claim of any creditor of the Contract Holder, you, or any Beneficiary, except to the extent permitted by law. 1.16 Maintenance Fee We may deduct an annual maintenance fee during the Accumulation Phase. The amount of the maintenance fee, if any, for this Contract will never be more than the amount shown on Contract Schedule I under Maximum Maintenance Fee. The fee, if any, is deducted proportionately from each Investment Option in which the Individual Account is invested on the anniversary of the Individual Account Effective Date. The fee is also deducted if the entire Individual Account value is withdrawn. No fee is deducted, however, when a full withdrawal occurs within 90 calendar days of the date on which the fee was last deducted. If you have more than one Individual Account, we may deduct the fee proportionately from all Individual Accounts. We may eliminate the fee for an Individual Account established with one Contribution. 1.17 Charges for Additional Services At the request of the Contract Holder, we, or our authorized representatives, may provide administrative services to the Plan. We reserve the right to charge for such services. 1.18 Charges Subject to Change The maintenance fee (see 1.15) and charges to the Separate Account (see 3.07) may vary (increase, decrease, or be eliminated) based on the total assets held in all Individual Accounts under the Contract. In determining total assets, we may aggregate Individual Accounts established under different ALIAC contracts. The aggregate amount is equal to the sum of assets in all Individual Accounts under this Contract, plus the value of Individual Accounts under other ALIAC contracts of the same class issued to the Contract Holder. We may determine the amount of the maintenance fee and/or charges to the Separate Account based on total assets on an annual basis. We will determine initial charges based on our estimate of the amount that will be allocated to the Contract during the first two years. Part I. Accumulation Phase Section 2. Contributions and Individual Account Value - -------------------------------------------------------------------------------- 2.01 Contributions We allocate Contributions in whole percentages among the Investment Options available as directed by the Contract Holder or you, as applicable. Changes in future Contribution allocation may be made at any time, without charge. The Contract Holder or you, as applicable, may also establish an Individual Account with a lump-sum Contribution. We reserve the right to establish minimum Contribution amounts and to refuse to accept any Contribution. Contributions to Individual Accounts may be limited as provided in the Code. The limits, if any, are shown on Contract Schedule I under Contribution Limits. 2.02 Premium Tax We pay any applicable premium tax when it is due. We will deduct the amount of any applicable premium tax from the Individual Account value no earlier than when there is a tax liability. 2.03 Individual Account We will establish an Individual Account for you. If required, we will provide accounts that distinguish between your Contributions and those of your employer. 2.04 Experience Credit We may apply experience credits (investment, administrative, mortality or other) under this Contract and may apply such credits as: (a) A reduction in the maintenance fee; (b) A reduction in the mortality and expense risks charge to the Separate Account; (c) A reduction in the administrative charge to the Separate Account; and (d) An increase in a Fixed Interest Option interest rate. We will apply experience credits at our sole discretion as we deem appropriate for the class of contracts to which the Contract is issued. 2.05 Individual Account Value As of the most recent Valuation Date, the Individual Account value is equal to the total of all Contributions: (a) Plus any interest added on the amount, if any, allocated to a Fixed Interest Option(s), (b) Plus or minus the investment experience on the amount, if any, held in the Separate Account; (c) Minus any applicable maintenance fees, any amounts withdrawn, or used to purchase Annuity payments, or any applicable premium tax; and (d) Minus any applicable fees or charges deducted. Section 3. Separate Account - -------------------------------------------------------------------------------- 3.01 General The Separate Account, established under Title 38a, Section 38a-433 of the Connecticut General Statutes, buys and holds shares of the Funds available. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940. We own the assets held in the Separate Account; we are not a trustee of those assets. Income, gains or losses, realized or unrealized, are credited to or charged against the Separate Account without regard to our other income, gains or losses. Except to the extent of reserves and other Contract liabilities, Separate Account assets cannot be charged with liabilities arising out of any other business we conduct. 3.02 Funds Available We reserve the right to limit the number of Funds in which an Individual Account may be invested, at one time or cumulatively, during the Accumulation Phase and/or Annuity Phase. 3.03 Change or Substitution of Funds We reserve the right to stop offering any Fund or to add Funds. We may substitute shares of a Fund for shares of another Fund. We will provide the Contract Holder with reasonable advance notice of any elimination, addition or substitution of a Fund. If the Plan is subject to ERISA, we will seek Contract Holder consent in advance of any Fund substitution. Consent will be deemed given unless, following notice of substitution and within a prescribed time period, the Contract Holder notifies us in writing that it does not consent and provides us with alternative investment instructions for the shares that would otherwise be affected by the substitution. 3.04 Accumulation Units Each Contribution allocated to one or more of the Funds is credited to an Individual Account as accumulation units. The number of accumulation units is calculated by dividing the amount of the Contribution allocated to the Fund by the accumulation unit value (see 3.05) as of the next Valuation Date after the Contribution is received at our Home Office in Good Order. 3.05 Accumulation Unit Value The value of each accumulation unit for any Fund for each Valuation Date is computed by multiplying the net investment factor (see 3.06) by the accumulation unit value for such Valuation Date. accumulation unit values may increase or decrease from Valuation Date to Valuation Date. 3.06 Net Investment Factor The net investment factor is used to compute the accumulation unit value for any Fund. For each Valuation Date, for each Fund, the net investment factor is equal to 1.0000000, plus the net return rate. The net return rate equals: [a - b - c] -------------- - e - f d Where: a is the value of the shares of the Fund held by the Separate Account at the end of a Valuation Period; b is the value of the shares of the Fund held by the Separate Account at the start of the Valuation Period; c is taxes or provisions for taxes, if any, on the Separate Account (with any federal income tax liability offset by foreign tax credits to the extent allowed); d is the total value of the accumulation units and annuity units of the Separate Account at the start of the Valuation Period; e is Separate Account daily charges for mortality and expense risks and a daily administrative charge as shown on Contract Schedules I and II under Daily Charges to the Separate Account; and f is if applicable, a fee for the GET Fund Guarantee, which is deducted daily during the Guarantee Period. The fee, which is determined before the beginning of each offering period, is shown on Contract Schedule I under GET Fund Guarantee Fee. The net return rate may be greater or less than zero percent. 3.07 Charges to the Separate Account During the Accumulation Phase, we may deduct a mortality and expense risks charge from the Individual Account value invested in the Separate Account. In addition, we reserve the right to impose an administrative charge. The charges to the Separate Account are shown on Contracts Schedules I under Maximum Daily Charges to the Separate Account and are deducted daily. 3.08 Separate Account Transfers During the Accumulation Phase, any portion or all of the Individual Account value held in a Fund may be transferred to any other Fund or any available Fixed Interest Option. The Individual Account value will be based on the Fund's accumulation unit value next determined after we receive a transfer request in Good Order. 3.09 Withdrawals from the Separate Account If the Contract Holder or you, as applicable, requests a partial or full withdrawal (see 8.02) from the Funds, a withdrawal charge may apply (see 8.04). Section 4. Aetna GET Fund (GET Fund) - -------------------------------------------------------------------------------- The following provisions apply if the GET Fund is available as shown on Contract Schedule I under Aetna GET Fund Availability. 4.01 GET Fund Guarantee Period For each GET Fund series, the period for which the GET Fund Guarantee applies. The Guarantee Period ends on the Maturity Date. 4.02 GET Fund Offering Period The period, usually from one to three months, during which the Contract Holder or you, as applicable, may allocate (transfer or deposit) amounts to a GET Fund series. Each GET Fund series has a specific offering period. We will specify a minimum total asset amount required at the end of an offering period to offer a GET Fund series. If the minimum is not achieved, we reserve the right to not start the Guaranteed Period. If a GET Fund series is terminated, we will send written notification to all Contract Holders or you, as applicable, who have made allocations to that GET Fund series. We inform Contract Holder or you, as applicable, no later than 15 days after the end of the offering period. The Contract Holder or you, as applicable, then has 45 days from the end of the offering period to reallocate the amount allocated to the GET Fund to any other available Investment Options. During this time, GET Fund assets are invested in money market instruments. If Contract Holder or you, as applicable, makes no election by the end of the 45-day period, at the next Valuation Date, we will allocate the amount in the terminated GET Fund series to the money market fund. We reserve the right to specify a maximum total asset amount for a GET Fund series. If the maximum is achieved, we reserve the right to set a date on which we will stop accepting allocations for that GET Fund series. We will announce the date on which we will stop accepting transfer and allocations 10 days prior to that date. 4.03 GET Fund Guarantee On the Maturity Date of each GET Fund series, the GET Fund accumulation unit value for that series will not be less than the Fund accumulation unit value determined at the close of business on the last day of the offering period. If necessary to offset any shortfall in the GET Fund accumulation unit value, we will transfer funds from our General Account to the GET Fund. The GET Fund guarantee does not apply to transfers or withdrawals made before the Maturity Date. If GET Fund accumulation units are adjusted at any time during the guaranteed period, the GET Fund guarantee will be restated. We calculate the restated guarantee so that it is equivalent to the original guarantee for that GET Fund series. A daily charge is assessed on the amount, if any, allocated to the GET Fund. This charge for the GET Fund guarantee will range between 0.25% and 1.25% on an annual basis (the prospectus for each GET Fund series offering provides the charge applicable to that offering). 4.04 GET Fund Maturity Date The GET Fund Maturity Date is the date on which the guarantee period ends and GET Fund accumulation units are liquidated. Prior to the Maturity Date for each series, we send a written notice to each Contract Holder or you, as applicable, who has an Individual Account value in that series. In response, the Contract Holder or you, as applicable, must tell us to which available Investment Option to transfer the amount in the GET Fund on the Maturity Date. If we do not receive instructions, on the Maturity Date we transfer the portion of the Individual Account value held in the GET Fund to another GET Fund series, if available. If no GET Fund series is available, we transfer the amount to the Fund or Funds we designate. 4.05 Transfers or Withdrawals from the GET Fund Transfers or withdrawals from the GET Fund before the Maturity Date are based on the GET Fund Unit value for the Valuation Date next following the date on which we receive the request in Good Order (see 8.01 and 8.02). Section 5. Fixed Account - -------------------------------------------------------------------------------- The following provisions apply if the Fixed Account is available as shown on Contact Schedule I under Fixed Interest Options Available. 5.01 Fixed Account Minimum Guaranteed Interest Rate The Fixed Account minimum guaranteed interest rate is shown on Contract Schedule I under Fixed Account Minimum Guaranteed Interest Rate. Each calendar year, we will set an annual minimum guaranteed interest rate which will apply to all amounts held in the Fixed Account during the calendar year. The one year minimum guaranteed interest rate will be established prior to each calendar year and will be made available to the Contract Holder or you, as applicable, in advance of the calendar year. We, at our discretion, may credit a higher interest rate, which is not guaranteed; we will make the current rate, and the period for which it will be credited, available to the Contract Holder or you, as applicable. 5.02 Transfers from the Fixed Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Account Annual Transfer Limit of the amount in the Fixed Account may be transferred to any available Investment Option. The amount available for transfer will be based on the Individual Account value in the Fixed Account as of the January 1 preceding the transfer request. There is no limit on the amount that may be transferred to the Fixed Plus Account. We may, on a temporary basis, allow transfer of a larger percentage. 5.03 Withdrawals from the Fixed Account If the Contract Holder or you, as applicable, requests a partial or full withdrawal (see 8.02) from the Fixed Account, a withdrawal charge may apply (see 8.04). Section 6. Fixed Plus Account - ------------------------------------------------------------------------------- The following provisions apply if the Fixed Plus Account is available as shown on Contract Schedule I under Fixed Interest Options Available. 6.01 Fixed Plus Account Minimum Guaranteed Interest Rate The Fixed Plus Account minimum guaranteed interest rate is shown on Contract Schedule I under Fixed Plus Account Minimum Guaranteed Interest Rate. Each calendar year, we will set an annual minimum guaranteed interest rate which will apply to all amounts held in the Fixed Plus Account during the calendar year. The one year minimum guaranteed interest rate will be established prior to each calendar year and will be made available to the Contract Holder or you, as applicable, in advance of the calendar year. We, at our discretion, may credit a higher interest rate, which is not guaranteed; we will make the current rate, and the period for which it will be credited, available to the Contract Holder or you, as applicable. 6.02 Transfers from the Fixed Plus Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Plus Account Annual Transfer and Withdrawal Limit of the amount in the Fixed Plus Account may be transferred to any available Investment Option. The amount available for transfer is based on the Individual Account value in the Fixed Plus Account on the January 1 preceding the transfer request reduced by any amount withdrawn, transferred, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the previous 12 months. In addition, we reserve the right to reduce the amount available for transfer by amounts withdrawn under a systematic distribution option. We reserve the right to waive the transfer limit when the amount in the Fixed Plus Account is $2,000 or less. In addition, 20% of the amount in the Fixed Plus Account may be transferred in each of four consecutive 12-month periods with the balance transferred in the succeeding 12-month period subject to the following conditions: (a) During the five-year period, no additional amounts are allocated to or transferred from the Fixed Plus Account; (b) we will include any amount transferred, taken as a loan (if allowed under the Contract) or used to purchase Annuity payments during the prior 12-month period when calculating the amount which equals 20%; and (c) we reserve the right to include amounts paid under a systematic distribution option when calculating the amount which equals 20%. 6.03 Partial Withdrawals from the Fixed Plus Account During each rolling 12-month period, the percentage shown on Contract Schedule I under Fixed Plus Account Transfer and Withdrawal Limit may be withdrawn from the Fixed Plus Account. The amount available for withdrawal is based on the amount of the Individual Account value in the Fixed Plus Account on the January 1 preceding the withdrawal request reduced by any amount withdrawn, transferred, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments during the preceding 12-month period. In addition, we reserve the right to reduce the amount available by deducting any amount withdrawn under a systematic distribution option. The withdrawal limit does not apply when the partial withdrawal is: (a) Due to your death during the Accumulation Phase and is made within six months of the date of death (this exception applies to only one partial withdrawal); (b) Used to purchase Annuity payments; or (c) Due to other conditions as we may allow without discrimination. 6.04 Full Withdrawal of the Total Amount in the Fixed Plus Account The Contract Holder, or you, as applicable, may withdraw the full amount held in the Fixed Plus Account. When we receive a request for a full withdrawal, no additional transfers, partial withdrawals or loans (if allowed under the Contract) are allowed. The Individual Account value held in the Fixed Plus Account may be withdrawn as shown on Contract Schedule I under Full Withdrawal from the Fixed Plus Account. No withdrawal charge applies to amounts withdrawn. The Contract Holder or you, as applicable, may cancel a full withdrawal request from the Fixed Plus Account at any time. 6.05 Waiver of Fixed Plus Account Full Withdrawal Provision The restriction on payment of a full withdrawal from the Fixed Plus Account (see x.xx) does not apply to any of the circumstances shown on Contract Schedule I under Waiver of Fixed Plus Account Full Withdrawal Provision. Section 7. Guaranteed Accumulation Account (GAA) - -------------------------------------------------------------------------------- 7.01 Nonunitized Separate Account The Nonunitized Separate Account is established under Title 38a, Section 38a-433 of the Connecticut General Statutes. There are no discrete units for this account. We own the assets held in the Nonunitized Separate Account; we are not a trustee of those assets. Income, gains or losses, realized or unrealized, are credited to or charged against the Nonunitized Separate Account without regard to our other income, gains or losses. Except to the extent of reserves and other Contract liabilities, Nonunitized Separate Account assets cannot be charge with liabilities arising out of any other business we conduct. 7.02 GAA Minimum Guaranteed Interest Rate All Contributions allocated to a GAA guaranteed term (see 7.04) earn a rate of interest which we determine and which is guaranteed when the Contribution remains in the guaranteed term until the Maturity Date. The rate credited will never be less than the minimum interest rate shown on Contract Schedule I under Guaranteed Accumulation Account Minimum Guaranteed Interest Rate. For guaranteed terms of one year or less, one guaranteed rate is credited for the full guaranteed term. For longer guaranteed terms, we may credit an initial guaranteed interest rate from the date of deposit to the end of a specified period within the guaranteed term. We may credit different interest rates for subsequent specified periods throughout the guaranteed term. 7.03 Deposit Period A deposit period is the period of time we determine during which we accept allocations (Contributions, transfers, or reinvestments) to one or more guaranteed terms. We reserve the right to extend the deposit period. 7.04 Guaranteed Term A guaranteed term is the period of time for which we guarantee the declared interest rate for allocations (Contributions, transfers, or reinvestments) to GAA guaranteed terms. We may offer guaranteed terms ranging in duration from one to ten years. During each deposit period, we may offer more than one guaranteed term of varying lengths. The guaranteed term begins the day after the deposit period ends. The Contract Holder or you, as applicable, may allocate new Contributions or transfers to any or all guaranteed terms available in the current deposit period. 7.05 Guaranteed Term Groups A guaranteed term group is comprised of all GAA guaranteed terms of the same duration. 7.06 Maturity Date, Maturity Value and Reinvestment The Maturity Date is the last day of a guaranteed term. The maturity value is the amount we pay at the end of a guaranteed term. At least 18 days before any guaranteed term Maturity Date, we notify the Contract Holder or you, as applicable, of the projected maturity value and the guaranteed terms (and the guaranteed interest rates for each) available during the then-current deposit period. The Contract Holder, or you, as applicable, may then tell us how to allocate the maturity value. If the Contract Holder or you, as applicable, does not tell us how to reinvest the maturity value, we reinvest it in a guaranteed term of the same duration if one is available. If no guaranteed term of the same duration is available, we reinvest the maturity value in the guaranteed term with the next shortest duration. If no shorter guaranteed term is available, we reinvest the maturity value in the next longest term. We mail a confirmation of reinvestment. The confirmation includes the guaranteed term in which we have reinvested the maturity value and the guaranteed interest rate for that term. If we have reinvested the maturity value, during the month following the Maturity Date, the Contract Holder or you, as applicable, may transfer or withdraw the reinvested amount, with interest earned (as of the date we receive the request) without incurring a Market Value Adjustment. 7.07 Transfers and Withdrawals from the GAA Except as noted below, the Contract Holder or you, as applicable, may transfer any portion or all of the amount held in the GAA. Transfers or withdrawals before the Maturity date may be subject to a Market Value Adjustment (see 7.10). Amounts invested in a guaranteed term may not be transferred during the deposit period or for a period of 90 days after the close of the deposit period. Unless directed otherwise, when the Contract Holder or you, as applicable, requests a transfer or withdrawal from the GAA, we withdraw amounts proportionately from each guaranteed term in which the Individual Account is invested. Within a guaranteed term group, we withdraw first from the oldest deposit period and then from the next oldest and so on until the amount requested is withdrawn. 7.08 Application of the Market Value Adjustment Transfers or withdrawals from the GAA before the Maturity date are subject to a Market Value Adjustment, except for: (a) A one-month period following the Maturity Date on which we have automatically reinvested the value on the Maturity Date; (b) Distributions under certain systematic distribution options; and (c) When the withdrawal is equal to the minimum distribution amount required under the Code, using a method permitted by the Code and which we offer. If the amount withdrawn is used to purchase life-contingent Annuity payments, the Market Value Adjustment applies only if it is positive. For withdrawals and transfers from the GAA made (1) within six months of your death; or (2) to purchase Annuity payments under a life-contingent Annuity option, the amount withdrawn from the GAA is the greater of: (a) The aggregate MVA amount which is the sum of all market value adjusted amounts calculated due to a withdrawal before the Maturity Date (which may be positive or negative); or (b) The amount in the GAA. For withdrawals made after the six month period following death, the withdrawal or transfer amount is the aggregate MVA amount. An MVA applies to amounts withdrawn to purchase Annuity payment under a period certain Annuity option. We may change the GAA Market Value Adjustment by notifying the Contract Holder in writing at least 90 days before the change becomes effective. Any such change will apply only to guaranteed terms offered in deposit periods after the effective date of the change and will apply to existing and new Individual Accounts. 7.09 Market Value Adjustment (MVA) The Market Value Adjustment reflects any change in yields on U.S. Treasury Notes from the time an amount is allocated to a GAA guaranteed term to the time of a transfer or withdrawal prior to the Maturity Date. When the Market Value Adjustment is applied, the amount transferred or withdrawn from the GAA is multiplied by a factor which is calculated as follows: x --- 365 (1 + I) ----------- x --- 365 (1 + j) Where: I is the deposit period yield j is the current yield x is the number of days remaining (computed from Wednesday of the week of withdrawal) in the guaranteed term. The deposit period yield and the current yield are determined as follows: Deposit Period Yield At the close of the last business day of each week of a deposit period, we compute a yield that is the average of the yields on U.S. Treasury Notes which mature in the last three months of the guaranteed term. The deposit period yield is the average of those yields for the deposit period. If a withdrawal is made prior to the close of the deposit period, the deposit period yield is the average of the yields of U.S. Treasury Notes for each week preceding the withdrawal. In the event that no U.S. Treasury Notes will mature in the last three months of the guaranteed term, we reserve the right to use the U.S. Treasury Notes that mature in a following quarter. Current Yield The Current Yield is the average of the yields of the same U.S. Treasury Notes used to calculate the deposit period yield on the last business day of the week preceding withdrawal. Section 8. Transfers, Withdrawals and Distributions - -------------------------------------------------------------------------------- 8.01 Transfers During the Accumulation Phase, the Contract Holder or you, as applicable, may transfer all or any portion of the Individual Account value among the available Investment Options. The Individual Account value on any amount transferred from a Fund will be based on the Fund's accumulation unit value next determined after we receive the transfer request In Good Order. The Contract Holder or you, as applicable, may request a transfer by properly completing a transfer request form and sending it to our Home Office, or by otherwise complying with our administrative procedures. We reserve the right to establish a minimum transfer amount. 8.02 Withdrawals As allowed by the Plan, if applicable, and subject to provisions of the Code (see 8.03), during the Accumulation Phase, the Contract Holder or you, as applicable, may withdraw any portion or all of the Individual Account value. The Individual Account value of any amount withdrawn from a Fund will be based on the Fund's accumulation unit value next determined after we receive the transfer request In Good Order. The Contract Holder or you, as applicable, may request a withdrawal by properly completing a withdrawal request form and forwarding it to our Home Office, or by otherwise complying with our administrative procedures. Unless the Contract Holder or you, as applicable, requests otherwise, the withdrawal will be made pro rata from the Investment Options in which the Individual Account is invested. A withdrawal charge may apply to amounts withdrawn (see 8.04). In addition, a market value adjustment may apply to amounts withdrawn from the GAA (see 7.08 and 7.09) and limitations may apply to withdrawals from the Fixed Plus Account (see 6.04). 8.03 Withdrawal Restrictions Under the Code The Code may impose restrictions on the amount and timing of withdrawals. The restrictions, if any, applicable to this Contract are shown on Contract Schedule I under Withdrawal Restrictions Under the Code. Withdrawals that do not comply with the Code may be subject to tax penalties. 8.04 Withdrawal Charge During the Accumulation Phase, we may deduct a withdrawal charge from the Individual Account value withdrawn. The charge, if any, is a percentage of the amount withdrawn from the Funds and/or Fixed Interest Options (except, if applicable, the Fixed Plus Account). The withdrawal charge will never exceed 8.5% of the total amount of Contributions. The withdrawal charge, if any, is shown on Contract Schedule I under Withdrawal Charge. 8.05 Waiver of Withdrawal Charge The withdrawal charge (see 8.04) does not apply in any of the circumstances shown on Contract Schedule I under Waiver of Withdrawal Charge. In addition, we reserve the right to reduce, waive or eliminate the withdrawal charge. 8.06 Reinstatement Within 30 days after a withdrawal, the Contract Holder or you, as applicable may elect to reinstate all or a portion of the proceeds of a full withdrawal if allowed by applicable law. We must receive the reinstated amount within 60 days of the withdrawal. Any maintenance fee and withdrawal charge imposed at the time of the withdrawal is included in the reinstatement. If only a portion of the amount withdrawn is reinstated, the amount of any maintenance fee and withdrawal charge deducted will be restored proportionally. The amount of any market value adjustment deducted from any amount withdrawn from GAA is not included in the amount reinstated. Any amount reinstated to the GA Account will be credited to guaranteed terms available in the current deposit period. We will reinvest it in a guaranteed term of the same duration if one is available. If no guaranteed term of the same duration is available, we reinvest the maturity value in the guaranteed term with the next shortest duration. If no shorter guaranteed term is available, we reinvest the maturity value in the next longest term. Amounts withdrawn from a GET Fund series are reinstated to the current offering period if one is available. If no GET Fund offering period is available, any amount withdrawn from the GET Fund is reinstated equally among all other Investment Options in which the Individual Account is invested. Amounts are reinstated among the Investment Options in the same proportion as they were held at the time of withdrawal, except, as noted above, for amounts from the GET Fund. Any maintenance fee which falls due after the withdrawal and before the reinstatement is deducted from the amount reinstated. The number of accumulation units reinstated to any Fund is based on the accumulation unit value(s) next computed after we receive the reinstatement request in Good Order at our Home Office. Reinstatement is permitted only once. 8.07 Required Distributions While an Individual Account remains in the Accumulation Phase, the Code may require distribution of all or a portion of the Individual Account value. The Contract Holder, you or Contract beneficiary, as applicable, must tell us when to begin distributions. We have no responsibility for adverse tax consequences as the result of the Contract Holder, you or Contract beneficiary, as applicable, not complying with minimum distribution requirements. The distribution requirements, if any, are shown on Contract Schedule I under Required Distributions. Generally, to meet distribution requirements, the Contract Holder, you or Contract beneficiary, as applicable, may request partial withdrawals, a systematic distribution option (see 8.08) or an annuity option. 8.08 Systematic Distribution Options (SDOs) During the Accumulation Phase, we may offer one or more distribution options under which we make regularly scheduled automatic partial distributions of the Individual Account value. To request an SDO, the Contract Holder, you or Contract beneficiary, as applicable, must complete an SDO election form and forward it to our Home Office. Each option is available without discrimination to any class of Contracts. The availability of any specific option may be subject to terms and conditions applicable to that option. We may discontinue the availability of an SDO option for future election; payments will, however, continue to you if you elected the option before the date it is no longer available. 8.09 Individual Account Termination If the Individual Account value is $3,500 or less, and we have received no Contributions for 12 months, we reserve the right to terminate an Individual Account. Before we do this, we notify the Contract Holder or you, as applicable, 90 days in advance. When we terminate an Individual Account, we do not deduct a withdrawal charge. We do not exercise this right when the Individual Account value is $3,500 or less due to investment performance. Section 9. Loans - -------------------------------------------------------------------------------- 9.01 Loan Availability If loans are available under the Contract, a loan endorsement is attached. Section 10. Death Benefit During the Accumulation Phase - -------------------------------------------------------------------------------- 10.01 Death Benefit If you die during the Accumulation Phase, we pay a death benefit. The amount of the death benefit is the Individual Account value as of the Valuation Date following the date we receive acceptable proof of death at our Home Office (see 7.10 for amounts in the GAA). 10.02 Contract Beneficiary The Contract beneficiary is shown on Contract Schedule I under Contract beneficiary. Generally, you may name a beneficiary under the Plan (the Plan beneficiary). If allowed by the Plan, when designating the Beneficiary, the Contract Holder or you, as applicable, may specify, the form of payment as permitted by the Code. The Contract beneficiary and the form of payment, if applicable, may be designated or changed in writing or as we may otherwise allow in our administrative procedures. 10.03 Distribution of Death Benefit Generally, if the Plan beneficiary is your surviving spouse, distribution of the death benefit must begin no later than the year the you have attained age 70-1/2 or any other date allowed under federal law or regulations. If the Plan beneficiary is not the your surviving spouse, generally, the death benefit must be used to purchase Annuity payments within one year of the year of your death or otherwise paid within five years of the year of your death. Annuity payments to a Plan beneficiary may not extend beyond the period specified in the Code. Part II. Annuity Phase Section 11. General Provisions - -------------------------------------------------------------------------------- 11.01 Election The Contract Holder, you, a Contract or Plan beneficiary, as applicable, may elect an Annuity option by properly completing an election form and forwarding it to our Home Office no later than 30 days before the desired first Annuity payment date. All elections of an Annuity option must comply with the minimum distribution requirements of Code Section and any applicable laws and regulations. All or any portion of the Individual Account value (after the deduction of any applicable premium tax) may be used to purchase Annuity payments (for amounts from the GAA, see 7.08). The Contract Holder, you, a Contract or Plan beneficiary, as applicable, must also select an Annuity option (see 11.03) and the Investment Option(s) (see 11.06). Once payments begin, an Annuity option may not be changed. 11.02 Change of Annuity Provisions We reserve the right to change Annuity options (see 11.03) and the mortality table (see 11.04) we use to calculate payment rates for life-contingent Annuity payments. If we do this, the change will not take effect until at least 12 months after the Contract Effective Date, or until at least 12 months after any previous change. A change to Annuity options or the mortality table used to calculate payment rates will not apply to Individual Accounts established before the effective date of the change. 11.03 Annuity Options The Contract Holder, you, a Contract or Plan beneficiary, as applicable, must elect one of the following: Payments for a Stated Period This option provides payments for a stated period. The number of years in the stated period must fall within the range shown on Contract Schedule II under Guaranteed Payment Period. If payments for this option are under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested within five years of the first payment, the lump sum payment is treated as a withdrawal during the Accumulation Phase and any applicable withdrawal charge applies (see 8.04). If the payments are fixed-only, an annual increase of one, two or three percent (compounded annually) may be elected at the time the Annuity option is chosen (if permitted by the Code). Life Income for One Annuitant This option provides payments for the life of the Annuitant. If this option is elected, the Contract Holder, you, or a Contract beneficiary, as applicable, must also choose one of the following: (a) Payments cease at the death of the Annuitant; or (b) Payments are guaranteed for a period within the range shown on Contract Schedule II under Guaranteed Payment Period; or (c) Fixed-only cash refund: at the death of the Annuitant, the Beneficiary receives a lump sum payment in an amount equal to the amount applied to the Annuity, less the amount of payments made to the Annuitant. Under (a) or (b), if the payments are fixed-only, an annual increase of one, two or three percent (compounded annually) may be elected at the time the Annuity option is chosen (if permitted by the Code). Life Income for Two Annuitants This option provides payments for the lives of the Annuitant and a second Annuitant. Payments continue until both Annuitants have died. If this option is elected, the Contract Holder, you, or a Contract or Plan beneficiary, as applicable, must also choose one of the following: (a) 100% of the payment amount to continue after the first death; or (b) 66-2/3% of the payment amount to continue after the first death; or (c) 50% of the payment amount to continue after the first death; or (d) 100% of the payment amount to continue after the first death with payments guaranteed to the Beneficiary after the second death for a period within the range shown on Contract Schedule II under Guaranteed Payment Period; or (e) 100% of the payment amount to continue at the death of the specified second Annuitant and 50% of the payment amount to continue at the death of the specified Annuitant; or (f) 100% of the fixed-only payment amount to continue after the first death with a cash refund to the Contract beneficiary after the second death. The amount of the cash refund is equal to the amount applied to the Annuity, less the amount of payments made. Under (a) or (d), if the payments are fixed-only, an annual increase of one, two or three percent (compounded annually may be elected at the time the Annuity option is chosen (if permitted by the Code). Other Options We may make other options available. 11.04 Mortality Table The mortality table used for calculating Annuity payments for life is shown on Contract Schedule II under Mortality Table. To calculate the payments for a fixed Annuity, or a variable Annuity guaranteed first payment, we use the Annuitant's and, if applicable, the second Annuitant's, adjusted age. The adjusted age is the person's age as of his or her nearest birthday closest to the day Annuity payments begin, reduced as follows: (a) Reduced by one year for payments before January 31, 1999; (b) Reduced by two years for payments beginning during the period from January 1, 2000 through December 31, 2009; (c) Starting on January 1, 2010, reduced by one additional year for payments beginning in each succeeding decade. 11.05 Minimum First Payment Amount The minimum first payment amount is shown on Contract Schedule II under Minimum Payment Amount. We reserve the right to increase the minimum first payment amount, if allowed by state law, based on increases reflected in the Consumer Price Index-Urban (CPI-U) since July 1, 1993. 11.06 Investment Options When an Annuity option is elected, the Contract Holder, you, a Contract or Plan beneficiary, as applicable, must also select: (a) A fixed Annuity; (b) A variable Annuity for which the underlying investment is one or more of the available Funds; or (c) A combination of (a) and (b). For a variable Annuity, the maximum number of Funds available during the Annuity Phase is shown on Contract Schedule II under Maximum Number of Funds. The Contract Holder, you, or a Contract beneficiary, as applicable, may transfer amounts allocated to Funds during the Annuity Phase. If a fixed Annuity is elected, we will use the applicable current settlement option rates if these will provide high fixed Annuity payments. 11.07 Fixed Annuity Minimum Guaranteed Interest Rate For a Fixed Annuity, the interest rate is never less than the minimum guaranteed rate shown on Contract Schedule II under Fixed Annuity minimum Guaranteed Interest Rate. 11.08 Fixed Annuity Payment Amount The amount of Fixed Annuity payments is a function of the Annuity option elected, the adjusted age of the Annuitant(s) for life-contingent options, the rates in effect at the time payments begin and payment frequency. Sample rates are shown on the charts beginning on page XX. 11.09 Variable Annuity Funds The Funds available during the Annuity Phase may not be the same as those available during the Accumulation Phase. 11.10 Variable Annuity Transfers If a variable Annuity is elected, the Contract Holder, you, or a Contract or Plan beneficiary, as applicable, may request that we transfer all or a portion of the amount allocated to a Fund to any other available Fund. Transfer requests must be expressed as a percentage of the allocation among the Funds on which the variable payment is based. The number of transfers allowed each calendar year is shown on Contract Schedule II under Number of Annual Transfers Among Funds. We reserve the right to allow additional transfers. Transfers are effective as of the next Valuation Date after we receive a transfer request in Good Order at our Home Office. 11.11 Variable Annuity Payment Amount The first variable Annuity payment is calculated by multiplying the Individual Account value (minus any applicable premium tax), by an Annuity rate per $1,000. The Annuity rate is calculated based on: (a) The Annuity option elected; (b) Payment frequency; (c) The assumed investment rate (AIR); and (d) The adjusted age of the Annuitant(s). The Contact Holder, you, or a Contract or Plan beneficiary, as applicable, must elect an AIR of 3.5% or 5.0%. Sample rates for each AIR are shown on the charts beginning on page xx. After the first payment, payment amounts are determined by comparing the performance of the net investment rate (NIR) of the Fund(s) to the AIR. For the amount of the payment to stay the same, or increase, the NIR of the Fund)s) must be equal to or greater than the AIR after the deduction of the daily mortality and expense risks charge and any applicable administrative charge. The amount of the daily mortality and expense risks charge and the administrative charge are shown on Contract Schedule II under Separate Account Daily Mortality and Expense Risks Charge and Separate Account Daily Administrative Charge. If the NIR is less than the AIR, the payment amount decreases. The assumed investment rate for 3.5% is 0.9999058; for 5.0% is 0.9998663. The net investment factor(s) for each Fund is equal to 1.0000000 plus the net return rate. The net return rate equals: [a - b + c] ------------ - e - f d Where: a is the value of the shares of the Fund held by the Separate Account at the end of a Valuation Period; b is he value of the shares of the Fund held by the Separate Account at the start of the Valuation Period; c is taxes or provisions for taxes, if any, on the Separate Account (with any federal income tax liability offset by foreign tax credits to the extent allowed); d is the total value of the accumulation units and annuity units of the Separate Account at the start of the Valuation Period; e is Separate Account daily charges for mortality and expense risks and a daily administrative charge as shown on Contract Schedules I and II under Daily Charges to the Separate Account; and A net return rate may be more or less than 0%. 11.12 Death Benefit During the Annuity Phase The Contract Holder or you, as applicable, must name a beneficiary for the Annuity Phase. If an Annuitant(s) dies, any remaining guaranteed payments continue to the beneficiary. Payments are made at least as rapidly as provided by the option in effect at the death of the Annuitant. Annuity payments to an beneficiary may not extend beyond (1) the life of the beneficiary, or (2) any period certain greater than the beneficiary's life expectancy as determined by the Code. The beneficiary may also elect a lump sum payment equal to the present value of any remaining payments. The interest rate used to determine the first Annuity payment is used to calculate the present value. The present value is determined as of the Valuation Date in which we receive acceptable proof of death and a written claim for the death benefit. If the beneficiary dies while receiving payments, the present value of any remaining guaranteed payments is paid in a lump sum to the Contract beneficiary's estate. C-CDA(99) OPTION 1: Payments for a Specified Period
- ---------------------------------------------------------------------- Monthly Amount for Each $1,000* Rates for a Fixed Annuity with a 3% Guaranteed Interest Rate - ---------------------------------------------------------------------- Years Payment Years Payment - ---------------------------------------------------------------------- 5 $17.91 20 $5.51 10 9.61 25 4.71 15 6.87 30 4.18 - ----------------------------------------------------------------------
- ---------------------------------------------------------------------- First Monthly Amount for Each $1,000* Rates for a Variable Annuity with a 3.5% AIR - ---------------------------------------------------------------------- Years Payment Years Payment - ---------------------------------------------------------------------- 5 $18.12 20 $5.75 10 9.83 25 4.96 15 7.10 30 4.45 - ----------------------------------------------------------------------
- ---------------------------------------------------------------------- First Monthly Amount for Each $1,000* Rates for a Variable Annuity with a 5% AIR - ---------------------------------------------------------------------- Years Payment Years Payment - ---------------------------------------------------------------------- 5 $18.74 20 $6.51 10 10.51 25 5.76 15 7.82 30 5.28 - ----------------------------------------------------------------------
* Net of any applicable premium tax deduction C-CDA(99) Option 2: Life Income Based on the Life of One Annuitant
- ----------------------------------------------------------------------------------------------- Monthly Payment Amount for Each $1,000* Rates for a Fixed Annuity Payment with 3% Guaranteed Interest Rate - ----------------------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Option 2(c): Adjusted payments for payments payments payments payments Cash Refund Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years - ----------------------------------------------------------------------------------------------- 55 4.44 4.42 4.39 4.32 4.22 4.19 60 4.95 4.93 4.86 4.73 4.55 4.57 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 70 6.64 6.54 6.23 5.76 5.19 5.70 75 8.06 7.82 7.14 6.25 5.38 6.51 - -----------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate - ---------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Adjusted payments for payments payments payments payments Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years - ---------------------------------------------------------------------------------- 55 4.72 4.71 4.67 4.60 4.50 60 5.23 5.21 5.13 5.00 4.82 65 5.94 5.89 5.73 5.48 5.15 70 6.92 6.81 6.49 6.00 5.43 75 8.35 8.08 7.38 6.48 5.62 - ----------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 5% Assumed Interest Rate - ---------------------------------------------------------------------------------- Option 2(a): Option 2(b): Option 2(b): Option 2(b): Option 2(b): Adjusted payments for payments payments payments payments Age of life guaranteed guaranteed guaranteed guaranteed Annuitant 5 years 10 years 15 years 20 years - ---------------------------------------------------------------------------------- 55 5.63 5.61 5.56 5.47 5.36 60 6.12 6.09 6.00 5.85 5.65 65 6.82 6.75 6.57 6.30 5.95 70 7.80 7.67 7.30 6.78 6.21 75 9.23 8.93 8.16 7.23 6.38 - ----------------------------------------------------------------------------------
* Net of any applicable premium tax deduction C-CDA(99) Option 3: Life Income Based on the Lives of Two Annuitants
- --------------------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Fixed Annuity Payment with 3.0% Guaranteed Interest Rate - --------------------------------------------------------------------------------------------------- Adjusted Ages - -------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) Option 3(f) - --------------------------------------------------------------------------------------------------- 55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.67 55 60 3.99 4.44 4.71 3.98 4.20 3.94 65 60 4.38 4.97 5.32 4.38 4.93 4.29 65 70 4.93 5.68 6.15 4.91 5.27 4.74 75 70 5.69 6.68 7.32 5.62 6.67 5.29 75 80 6.78 8.11 8.99 6.54 7.36 5.93 - ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 3.5% Assumed Interest Rate - ---------------------------------------------------------------------------------------- Adjusted Ages - --------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) - ---------------------------------------------------------------------------------------- 55 50 $3.97 $4.35 $4.56 $3.97 $4.31 55 60 4.27 4.73 5.00 4.26 4.48 65 60 4.66 5.25 5.61 4.65 5.22 65 70 5.19 5.97 6.44 5.17 5.54 75 70 5.95 6.96 7.61 5.87 6.95 75 80 7.04 8.39 9.29 6.79 7.64 - ----------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------- First Monthly Payment Amount for Each $1,000* Rates for a Variable Annuity Payment with 5% Assumed Interest Rate - ----------------------------------------------------------------------------------------- Adjusted Ages - ---------------------- payments guaranteed Primary Secondary 10 years Annuitant Annuitant Option 3(a) Option 3(b) Option 3(c) Option 3(d) Option 3(e) - ----------------------------------------------------------------------------------------- 55 50 $4.88 $5.26 $ 5.48 $4.88 $5.23 55 60 5.15 5.63 5.91 5.14 5.38 65 60 5.52 6.14 6.51 5.51 6.10 65 70 6.04 6.84 7.34 6.00 6.41 75 70 6.77 7.84 8.51 6.68 7.81 75 80 7.86 9.28 10.20 7.57 8.49 - -----------------------------------------------------------------------------------------
* Net of any applicable premium tax deduction C-CDA(99) - -------------------------------------------------------------------------------- Aetna Life Insurance and Annuity Company Home Office: 151 Farmington Avenue Hartford, Connecticut 06150 (800) 525-4547 Group Combination, Deferred Annuity Contract (Nonparticipating) - -------------------------------------------------------------------------------- C-CDA(99) EX-99.B.4.8 4 CERTIFICATE OF GROUP ANNUITY COVERAGE Ex-99.B.4.8 Aetna Life Insurance and Annuity Company Home Office: 151 FARMINGTON AVE. HARTFORD, CONNECTICUT 06156 1-800-525-4225 Aetna Life Insurance and Annuity Company, herein called Aetna, agrees to pay the benefits stated in the Contract. Certificate of Group Annuity Coverage To the Employee: Aetna certifies that coverage is in force for you under the stated Group Annuity Contract and Certificate numbers. All data shown here is taken from Aetna records and is based upon information furnished by you. This Certificate is a summary of the Group Annuity Contract provisions. It replaces any and all prior certificates, riders, or amendments issued to you under the stated contract and Certificate numbers. This Certificate is for information only and is not a part of the Contract. THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV. RIGHT TO CANCEL You may cancel this Certificate within 10 days of receiving it by returning this Certificate along with a written notice to Aetna at the above address or to the agent from whom it was purchased. Within 7 days after it receives the notice of cancellation and this Certificate at its Home Office, Aetna will return the entire consideration paid plus any increase or minus any decrease in the cash value of any funds allocated to the Separate Account. /s/ Kirk P. Wickman /s/ Thomas J. McInerney Secretary President ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY. GTCC-IA (RP) (7/98) SPECIFICATIONS Guaranteed Interest Rate - There are guaranteed interest rates for amounts held in the Fixed Account (See 3.05) and the GA Account (see 3.04(c)). Surrender Fee - There will be a charge deducted for early surrender. (See 5.02.) Deductions from the Separate Account - There will be deductions for mortality and expense risks and administrative fees. (See 3.09.) Deduction from Purchase Payment(s) - Purchase Payment(s) are subject to a deduction for premium taxes, if any. (See 3.01.) - -------------------------------------------------------------------------------- CONTRACT HOLDER GROUP ANNUITY CONTRACT NO. - -------------------------------------------------------------------------------- YOUR NAME CERTIFICATE NO. - -------------------------------------------------------------------------------- TYPE OF PLAN - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
I. GENERAL DEFINITIONS Page 1.01 Annuity..............................................................5 1.02 Fixed Annuity........................................................5 1.03 Variable Annuity.....................................................5 1.04 Plan.................................................................5 1.05 Annuitant............................................................5 1.06 Participant (You)....................................................5 1.07 Purchase Payment(s)..................................................5 1.08 General Account......................................................5 1.09 Separate Account.....................................................5 1.10 Fixed Account........................................................5 1.11 Fund(s)..............................................................5 1.12 Guaranteed Accumulation Account (GA Account).........................5 1.13 Nonunitized Separate Account.........................................5 1.14 Maturity Date........................................................5 1.15 Matured Term Value...................................................5 1.16 Valuation Period.....................................................5 II. GENERAL PROVISIONS 2.01 Change of Contract...................................................6 2.02 Change of Fund(s)....................................................6 2.03 Nonparticipating Contract............................................6 2.04 Payments.............................................................6 2.05 State Laws...........................................................7 2.06 Control of Contract..................................................7 2.07 Designation of Beneficiary...........................................8 2.08 Misstatements and Adjustments........................................8 2.09 Incontestability.....................................................8 2.10 Grace Period.........................................................8 III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS 3.01 Net Purchase Payment(s)..............................................9 3.02 Individual Accounts..................................................9 3.03 Limitation on Contributions..........................................9 3.04 Guaranteed Accumulation Account......................................9 3.05 Guaranteed Interest Rate -Fixed Account.............................13 3.06 Experience Credits..................................................13 3.07 Maintenance Fee.....................................................13 3.08 Fund Record Units -Separate Account.................................13 3.09 Net Return Factor(s) -Separate Account..............................13 3.10 Fund Record Unit Value - Separate Account...........................14 3.11 Current Value.......................................................14 3.12 Transfer of Current Value from the Funds to GA Account..............14 3.13 Transfer of Current Value from the Fixed Account....................15 3.14 Loan Value..........................................................15 3 Page 3.15 Notice to the Contract Holders......................................17 3.16 Distribution Options................................................17 3.17 Sum Payable at Death (Before Annuity Payments Start)................20 3.18 Surrender Value.....................................................21 3.19 Surrender Restrictions..............................................21 3.20 Timing of Distributions.............................................22 3.21 Payment of Surrender Value..........................................22 3.22 Reinstatement.......................................................22 IV. ANNUITY PROVISIONS 4.01 Choices to be Made..................................................24 4.02 Terms of Annuity Options............................................24 4.03 Death of Annuitant/Beneficiary......................................24 4.04 Fund(s) Annuity Units-Separate Account..............................25 4.05 Fund(s) Annuity Unit Value-Separate Account.........................25 4.06 Annuity Options.....................................................26 V. FEE SCHEDULE 5.01 Maintenance Fee.....................................................35 5.02 Surrender Fee.......................................................35
4 I. GENERAL DEFINITIONS 1.01. Annuity: Payment of an income: (a) For the life of one or two persons; (b) For a stated period; or (c) For some combination of (a) and (b). 1.02. Fixed Annuity: An Annuity with payments which do not vary in amount. 1.03. Variable Annuity: An Annuity with payments which vary with the net investment results of a Separate Account. 1.04. Plan: The Plan named on the Specifications. The Plan is not a part of the Contract. Aetna is not bound by the terms of the Plan. 1.05. Annuitant: A person on whose life an Annuity has been effected under this Certificate. 1.06. Participant (You) : A person who participates in the Plan named on the Specifications page of this Certificate. 1.07. Purchase Payment(s): Payments made to Aetna. 1.08. General Account: The Account holding the assets of Aetna, other than those assets held in the Separate Accounts or the Nonunitized Separate Account. 1.09. Separate Account: An account which buys and holds shares of the Fund(s). Income, gains or losses, realized or unrealized are credited or charged to this account without regard to other income, gains or losses of Aetna. Aetna owns the assets held in a separate account and is not a trustee as to such amounts. These accounts generally are not guaranteed and are held at market value. The assets of such accounts, to the extent of reserves and other contract liabilities of the account, shall not be charged with other Aetna liabilities. 1.10. Fixed Account: An accumulation option with a guaranteed minimum interest rate. Aetna may credit a higher rate which is not guaranteed. 1.11. Fund(s): The open-end registered management investment companies (mutual funds) made available by Aetna under this Contract. 1.12. Guaranteed Accumulation Account: An accumulation option which guarantees a stipulated rate of interest for a specified period of time. 1.13. Nonunitized Separate Account: An Account set up by Aetna under Title 38, Section 38-154a, of the Connecticut General Statutes which is used to hold assets for GA Account Terms greater than three years. The Contract Holder does not participate in the investment gain or loss from the assets held in this Account. 1.14. Maturity Date: The last day of a GA Account Term. 1.15. Matured Term Value: The amount payable on a GA Account Term's Maturity Date. 1.16. Valuation Period: The period of time from the end of one business day on the New York Stock Exchange to the end of the next business day. 5 II. GENERAL PROVISIONS 2.01. Change of Contract: Only an authorized officer of Aetna may change the terms of the Contract by notifying the Contract Holder, in writing, at least 30 days before the effective date of the change. Any change will not affect the amount or terms of any Annuity which begins before the change. Aetna may make a change that affects the GA Account Market Value Adjustment (see 3.04 (g)) with at least 30 days advance written notice to the Contract Holder. Any such change shall become effective for any present or future Participant. Any change that affects the following provisions of the Contract will not apply to existing Individual Accounts: (a) Net Purchase Payment(s) (b) Guaranteed GA Account Interest Rate (c) Guaranteed Interest Rate - Fixed Account (d) Net Return Factor(s) - Separate Account (e) Current Value (f) Surrender Value (g) Fund(s) Annuity Unit Value - Separate Account. Any change that affects the Annuity Options and the tables for the Options cannot be made: (1) Until at least 12 months after the Effective Date of this Contract; and (2) Until at least 12 months after the effective date of any such prior change. If the Contract Holder does not agree to any change under this provision, no new certificate holders will be covered under this Contract. Aetna will continue to accept Purchase Payments for the Participants covered under the Contract before the change. The Contract may also be changed as required by federal or state law. 2.02. Change of Fund(s): Aetna, or the Separate Account may: (a) Change the Fund(s) which may be invested in by the Separate Account; and (b) Replace the shares of any Fund(s) held in the Separate Account with shares of any other Fund(s). Changes must be: (a) Approved by a majority vote of persons having an interest in the Separate Account and the Fund(s); (b) Deemed necessary by Aetna under the Investment Company Act of 1940; or (c) Deemed necessary by Aetna to accomplish the purpose of the Separate Account. Aetna will notify the Contract Holder of any change. 2.03. Non-Participating Contract: You, your beneficiary or the Contract Holder will not have a right to share in the earnings of Aetna. 2.04. Payments: Aetna will make Annuity payments as and when due. Aetna will make other payments within 7 days of receipt at its Home Office of a written 6 claim for payment which is in good order, except as provided in 3.18. 2.05. State Laws: The Contract and this Certificate complies with the laws of the state in which it is delivered. Any cash, death or Annuity payments are equal to or greater than the minimum required by such laws. Annuity tables for legal reserve valuation shall be as required by state law. Such tables may be different from Annuity tables used to determine Annuity payments. 2.06. Control of Contract: The Contract Holder may make any choices allowed by the Contract for the Employer Account and the Employee Account. Choices made under the Contract must be in writing or in a form satisfactory to Aetna. Until receipt of such choices in its Home Office, Aetna may rely on any previous choices made. The Contract Holder may, however, by written direction to Aetna, allow Participants to select the investment options of the Employer Account and/or the Employee Account. No distributions will be made from the Employer Account or the Employee Account without the Contract Holder's written direction to Aetna. The Contract Holder may direct Aetna to make an in-service transfer pursuant to IRS Revenue Ruling 90-24. Checks for in-service transfers will be made payable only to the acquiring investment provider. Participants have no rights to direct Aetna as to payments under the Contract unless countersigned by the Contract Holder. (a) Nontransferable and Nonassignable: The Contract and any Individual Accounts are nontransferable and nonassignable, except to Aetna in the event of a loan or pursuant to a "qualified domestic relations order" as set forth under the Retirement Equity Act of 1984 (REA). In the event a loan is requested, the Current Value of the Employee Account necessary to cover the loan amount plus interest must be assigned to Aetna. (b) ERISA/REA Requirements: The Contract Holder shall notify Aetna in writing of the applicability of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), as amended by subsequent law including REA, to the Plan. Aetna shall rely on the Contract Holder's determination and representation of applicability. With respect to any distribution made from an Employee or Employer Account from a Contract subject to ERISA, the Contract Holder must certify in writing that all the appropriate REA requirements have been met and that the distribution is in accordance with the terms of the Plan. (c) Participant Rights/Employee Account: You have a nonforfeitable right to the value of your Employee Account pursuant to Code Section 403(b) and the terms of the Plan as interpreted by the Contract Holder (see 1.06). (d) Participant Rights/Employer Account: You have a nonforfeitable right to the value of your Employer Account pursuant to the terms of, and to the extent of your vested percentage under, the Plan as interpreted by the Contract Holder. It is the Contract Holder's responsibility to maintain records of your vesting percentages. Aetna will not maintain nor keep such records. You and the Contract Holder hereunder have agreed in writing to the above terms 7 and conditions, to have the Contract Holder make all choices under the Contract, and to be bound by the Contract Holder's direction(s) to Aetna. 2.07. Designation of Beneficiary: The Contract Holder is the beneficiary of the Employer and Employee Account. Aetna will pay any portion of the Individual Account(s) Current Value to the Plan beneficiary as directed by the Contract Holder. 2.08. Misstatements and Adjustments: If Aetna finds the age of any payee to be misstated, the correct facts will be used to adjust payment. 2.09. Incontestability: Aetna cannot cancel the Contract or this Certificate because of any error of fact on the application. 2.10. Grace Period: The Contract and this Certificate will remain in effect if Purchase Payments are not continued. 8 III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS 3.01. Net Purchase Payment(s): The actual Purchase Payment less any premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (see Part IV). If Aetna determines that a premium tax is due when Purchase Payments are received or at any other time, it will deduct the tax at that time. The Net Purchase Payment(s) may be credited among: (a) The Fixed Account; and (b) The Guaranteed Accumulation Account; and (c) The Fund(s) in which the Separate Account invests. Aetna must be told the percentage of the Net Purchase Payment(s) to be applied to each investment above. During any calendar year, the Contract Holder or, if allowed by the Plan, the Participant may tell Aetna to change the investment mix twelve times. Should Aetna allow additional changes, each may be subject to a fee of up to $10. 3.02. Individual Account(s): The Contract is issued to the Contract Holder. However, Individual Accounts for Plan Participants are explained below. Aetna will maintain two Individual Accounts for each Participant. These will be: (a) Employer Account: This Individual Account will be credited with employer Net Purchase Payment(s); and (b) Employee Account: This Individual Account will be credited with employee Net Purchase Payment(s), specifically employee salary reduction contributions. In addition to any Purchase Payment(s) stated to be made to the Contract, a lump-sum Purchase Payment(s), of not less than a minimum amount stated by Aetna, may be made on behalf of one or more Participants. Aetna may maintain an Individual Account for each lump sum payment. Such Individual Account(s) will be designated as an Employer Account(s) or an Employee Account(s) as instructed by the Contract Holder. 3.03. Limitation on Contributions: The Purchase Payment(s) made to your Individual Account(s) in any year cannot exceed the lesser of the amount determined under the exclusion allowance of Code Section 403 (b) (2) or the annual additions limitation of Code Section 415 (c) (1). In addition, in no event may the Purchase Payment(s) attributable to elective deferrals as defined in Code Section 402 (g) exceed $9,500 (or, such larger amount as adjusted by the Secretary of the Treasury) during any calendar year, unless the alternate limitation of Code Section 402 (g) (8) applies. 3.04. Guaranteed Accumulation Account (GA Account): The GA Account guarantees stipulated rates of interest for stated periods of time (see (a) and (c) below). Amounts withdrawn before the end of a Guaranteed Term may be subject to a Market Value Adjustment (MVA) (see (g) below). (a) Deposit Period - A calendar month, a calendar quarter, or any other period of time specified by Aetna during which Net Purchase Payment(s) and transfers are accepted into the GA Account for one or more Guaranteed Terms. 9 (b) Guaranteed Term (Term) - The period of time for which interest rates are guaranteed on Net Purchase Payment(s) and on transfers made into a Deposit Period of the GA Account. Terms are offered at Aetna's discretion for various lengths of time ranging up to and including ten years. (c) Guaranteed Term Classifications - The grouping of Terms according to their time to maturity. The following are the Classifications. (1) Short-Term: Terms of up to and including 3 years; or (2) Long-Term: Terms of greater than 3 years and up to and including 10 years. During a Deposit Period, Aetna may make available one or more Terms within a Classification. The Contract Holder has the option to allocate Net Purchase Payment(s) and transfers into any or all of the available Deposit Period Terms. If no specific direction is given, Net Purchase Payment(s) and transfers will go into available Terms on a pro rata basis within the Classification(s) previously chosen by the Contract Holder. At least one Term in the Short-Term Classification will be available each Deposit Period. (d) Guaranteed GA Account Interest Rates (Guaranteed Rates) - Aetna will declare all interest rate(s) applicable to a specific Term at the start of the Deposit Period for that Term. These rate(s) are guaranteed by Aetna for that Deposit Period and the ensuing Term and are not based on the actual investment experience of the underlying assets in the GA Account. The Guaranteed Rates are annual effective yields. The interest is credited daily at a rate that will produce the guaranteed annual effective yield over the period of a year. No annual rate will ever be less than 4%. For Terms of one year or less, one Guaranteed Interest Rate is set and announced for that full Term. For other Terms, there may be two or more rates. The rate(s) will be set and announced prior to the Deposit Period for that Term and will not be subject to change. (e) Withdrawals from GA Account - Full or partial surrenders may be requested at any time from the GA Account. However, amounts withdrawn prior to the Maturity Date of a Term to satisfy a surrender request may be subject to an MVA (see (g) below). Full and partial surrenders are satisfied by withdrawing amounts from each of the investment options in which the Individual Account is invested (the Fund(s), the Fixed Account, the GA Account Short-Term Classification and the GA Account Long-Term Classification) on a pro rata basis. However, the Contract Holder may specify a particular order in which investment options will be liquidated in order to satisfy a partial surrender request. For purpose of withdrawals, Terms within the GA Account Short-Term and Long-Term Classifications are considered as two separate investment options. Amounts will be removed within a GA Account Classification starting with the Term still in effect with the oldest 10 Deposit Period. Any withdrawal which is a surrender will be subject to the Maintenance Fee and Surrender Fee as appropriate. Amounts may be transferred at any time subject to Contract specifications (see 3.11, 3.12 or 3.13 below). Amounts transferred prior to the Maturity Date of a Term are subject to an MVA (see (g) below). Fund(s) will be removed within the elected Classification starting with the Term still in effect with the oldest Deposit Period. During the Deposit Period and the 90 days following the close of the Deposit Period, any amounts applied to the GA Account during that Deposit Period may not be withdrawn unless due to: (1) A full or partial surrender; (2) A payment of a premium for an Annuity Option; or (3) The Sum Payable at Death provision. (f) Maturity Date/Reinvestment - For all GA Account Term(s) existing as of the effective date of this endorsement in addition to GA Account Term(s) announced subsequent to that date, the Contract Holder or you, as applicable, will be mailed a notice at least 18 calendar days before a Term's Maturity Date. This notice will contain the current Deposit Period's Guaranteed Rate(s), Term(s) and a projected Matured Term Value. The Matured Term Value may be surrendered or transferred on the Term's Maturity Date without an MVA. If no specific direction is given by the Contract Holder or you, as applicable, prior to the Maturity Date, each Matured Term Value will be reinvested in a Term of the same duration. In the event that a Term of the same duration is unavailable, each Matured Term Value will automatically be reinvested in the next shortest Term available in the same Classification during the then current Deposit Period. If however, only one Term is available within the Classification, then the Matured Term Value will automatically be reinvested in that Term. Within two business days after the Maturity Date, the Contract Holder or you, as applicable, will be mailed a confirmation statement. This Statement will state the Terms and Guaranteed Rates which will apply to the reinvested Matured Term Value. During the calendar month following the Term's Maturity Date, one exception is allowed to the 90 day transfer restriction and MVA under (e) and (g). This exception is applicable to each Matured Term Value plus any interest accrued thereon, provided no part of the Matured Term Value was transferred on the Maturity Date. During this calendar month period, the Contract Holder may notify Aetna's Home Office to transfer or surrender all or part of the Matured Term Value plus any interest accrued thereon from the GA Account without an MVA. This provision only applies to the first such request received from the Contract Holder during this period for any Matured Term Value. The Matured Term Value plus any 11 interest accrued thereon may be transferred upon such request without an MVA: (1) To any other Terms of the GA Account available in the current Deposit Period; or (2) To any other allowable Fund(s). If no such notification is given, the Matured Term Value will remain subject to the terms and conditions of the new Term. All surrender and transfer requests will be processed as of the date they are received in good order at Aetna's Home Office. (g) Market Value Adjustment (MVA) - There will be an MVA for a withdrawal from the GA Account before the end of a Term when the withdrawal is due to: (1) A transfer; (2) A full or partial surrender; or (3) A payment of a premium for Annuity Option 2. The amount of the withdrawal will be adjusted to a market value amount as described below. The market value adjusted amount will be equal to the amount withdrawn multiplied by the following ratio: X (1+i) ----- 365 ------------ X (1+j) ----- 365 Where: i is the Deposit Yield j is the Current Yield x is the number of days remaining, (computed from Wednesday of the week of withdrawal) in the Guaranteed Term. The Deposit Period Yield will be determined as follows: [bullet] At the close of the last business day of each week of the Deposit Period, a yield will be computed as the average of the yields on that day of U.S. Treasury Notes which mature in the last three months of the Guaranteed Term. [bullet] The Deposit Period Yield is the average of those yields for the Deposit Period. If withdrawal is made prior to the close of the Deposit Period, it is the average of those yields on each week preceding withdrawal. The Current Yield is the average of the yields on the last business day of the week preceding withdrawal on the same U.S. Treasury Notes included in the Deposit Period Yield. In the event that no U.S. Treasury Notes which mature in the last three months of the Guaranteed Term exist, Aetna reserves the right to use the U.S. Treasury Notes that mature in a following quarter. Full and partial surrenders as well as transfers made within six months on the date of your death under the Sum Payable at Death provision will be the greater of: [bullet] The aggregate MVA amount which is the sum of all market value adjusted amounts calculated due to a withdrawal of amounts (for surrender or 12 transfer) from Terms prior to the end of those Terms. The aggregate MVA may be either positive or negative; or [bullet] The applicable portion of the Current Value in the GA Account. After the six month period, the surrender or transfer will be the aggregate MVA amount (i.e., including all MVAs). The greater of the aggregate MVA amount or the applicable portion of the Current Value in the GA Account is applied to amounts withdrawn from the GA Account for payment of a premium under Annuity Options 3 or 4. Aetna may make any change to Section 3.02 or 3.03 with 30 days advance written notice to the Contract Holder. Any such change shall become effective for Purchase Payment(s), transfers or reinvestments made to any new Term. (h) Deposits to the GA Account - All amounts in the GA Account under the Short-Term Classification are made to the General Account. All amounts in the GA Account under the Long-Term Classifications are made to a Nonunitized Separate Account. There are no discrete units for this Nonunitized Separate Account. The Contract Holder or you, as applicable, does not participate in the gain or loss from the assets held in the Nonunitized Separate Account. Such gain or loss is borne entirely by Aetna. These assets may be chargeable with liabilities arising out of any other business of Aetna. For Terms under both the Short-Term and Long-Term Classifications, Aetna guarantees stipulated interest rates to be credited to the GA Account. All assets of Aetna including amounts made to the GA Account are available to meet the guarantees under the GA Account. 3.05. Guaranteed Interest Rate - Fixed Account: On any Purchase Payment(s) made to the Fixed Account, Aetna will add interest daily at any annual rate no less than 4%. Aetna may add interest daily at any higher rate determined by its Board of Directors. 3.06. Experience Credits: Aetna may apply Experience Credits under this Contract. Any such Credits will be computed as decided by Aetna. 3.07. Maintenance Fee: The Maintenance Fee (see 5.01) will be deducted from the Current Value of the Employee and Employer Account on each anniversary of the Individual Account effective date and upon surrender of the entire Individual Account unless otherwise directed by the Contract Holder. 3.08. Fund Record Units - Separate Account: The portion of the Net Purchase Payment(s) applied to the Separate Account will determine the number of each Fund's Record Units. This number is equal to the Net Purchase Payment applied to the Fund divided by the Fund Record Unit Value (see 3.10) for the Valuation Period in which the Purchase Payment is received in good order. 3.09. Net Return Factor(s) - Separate Account: The Net Return Factors are used 13 to compute all Separate Account Values and payments for any Fund. The Net Return Factor for each Fund is equal to 1.0000000 plus the Net Return Rate. The Net Return Rate is equal to: (a) The value of the shares of the Fund held by the Separate Account at the end of a Valuation Period; minus (b) The value of the shares of the Fund held by the Separate Account at the start of the Valuation Period; plus or minus (c) Taxes (or reserves for taxes) on the Separate Account (if any); divided by (d) The total value of the Fund Record Units and Fund Annuity Units of the Separate Account (see 3.10 and 4.06) at the start of the Valuation Period; minus (e) A daily actuarial charge at an annual rate of 1.25% for Annuity mortality and expense risks and profit and a daily administrative charge which will not exceed 0.25% on an annual basis. The administrative charge may be changed annually except for amounts which have been used to purchase an Annuity. A Net Return Rate may be more or less than 0. The value of a share of the Fund is equal to the net assets of the Fund divided by the number of shares outstanding. 3.10. Fund Record Unit Value - Separate Account: Each Fund's Record Unit Value is computed by multiplying the Net Return Factor for the current Valuation Period by the Fund's Record Unit Value for the previous Period. The dollar value of a Fund's Record Unit, Separate Account assets, and Variable Annuity payments may go up or down due to investment gain or loss. 3.11. Current Value: The Current Value is equal to: (a) Any amounts in the Fixed Account, including Fixed Account interest added by Aetna; plus (b) Any amounts in the GA Account, including GA Account interest added by Aetna; plus (c) The sum of any Separate Account Record Unit Value(s); plus (d) Any amount due to Experience Credits; less (e) Any Maintenance Fee(s) due. Current Value does not include amounts used to purchase an Annuity. 3.12. Transfer of Current Value from the Funds or GA Account: Before an Annuity Option is elected, all or any portion of the Current Value may be transferred from any Fund or the GA Account to: (a) Any other Fund; (b) The Fixed Account; or (c) The GA Account's current Deposit Period. Amounts in a specific GA Account Term cannot be transferred to the Deposit Period of another Term within the same Classification except at the Term's Maturity. Amounts applied to Classifications of the GA Account may not be transferred to the 14 Fund(s) during the Deposit Period or for 90 days after the close of the Deposit Period. Transfers from the GA Account are subject to the Withdrawal and Market Value Adjustment provisions. (See 3.04 (e) and (g).) For each Individual Account, twelve transfers of Current Value (excluding transfers from the GA Account at the end of a Guaranteed Term) can be made during a calendar year period. Should Aetna allow additional transfers, each may be subject to a fee of up to $10. 3.13. Transfer of Current Value from the Fixed Account: Before an Annuity Option is elected, 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s). Such transfer will be: (a) Without charge; and (b) Allowed once per calendar year. Aetna may, on a temporary basis, allow any larger percent to be transferred. The Current Value of the Fixed Account, as used above, is the value when the request is received at the Home Office of Aetna. 3.14. Loan Value: During the accumulation period, the Contract Holder may request a loan on your behalf from the Employee Account by submitting a loan request form to Aetna's Home Office. If there is more than one Employee Account, a separate loan request form is required for each Employee Account. If a Contract is subject to ERISA, the Contract Holder must provide written certification to Aetna that the REA requirements have been satisfied before the loan will be made. A loan will not be allowed within 12 months from the date of any prior loan. The Loan Effective Date will be the date the Home Office receives the loan request form and, if required, certification of REA compliance, in good order. All loans are subject to the following conditions: (a) The minimum Employee Account Current Value must be $2,000. The loan amount must be at least $1,000. The loan amount may not exceed the lesser of: (1) 50% of the Employee Account Current Value reduced by any outstanding loan balance(s) on the date on which the loan is made; or (2) $50,000, reduced by the highest outstanding balance(s) of loans, during the preceding 12 months ending on the day before the current loan is made. (b) The values in the Fund(s), Fixed Account and GA Account are included in determining the Employee Account Current Value for purposes of paragraph (a). However, only amounts held in the Fund(s) and Fixed Account are available for making the actual loan from the Employee Account. If a Contract Holder intends to request a loan in excess of the Current Value of the Fund(s) and the Fixed Account in the Employee Account, the excess amount must first be transferred from the GA Account to any other Fund(s) or to the Fixed Account. Amounts transferred from the GA Account will be subject to the GA Account withdrawal and Market Value Adjustment (MVA) provisions (see 3.04 (e) and (g)). Aetna reserves the right to restrict or limit the amount that may be loaned from any investment option at any time. 15 When a loan is made, the number of accumulation units equal to the loan amount will be withdrawn from the Employee Account. The amount of the loan to be made will be withdrawn on a pro rata basis from the Fixed Account and from each of the Fund(s). Accumulation units withdrawn from the Employee Account to provide a loan do not participate in the investment experience of the investment options from which they were withdrawn. (c) On the first business day of each calendar month, Aetna will determine a Loan Interest Rate. This rate will be equal to Moody's Corporate Bond Yield Average Monthly Average Corporates as published by Moody's Investor Service, Inc. for the calendar month beginning two months before the date on which the new Loan Interest Rate is effective. The Loan Interest Rate for the calendar month in which the loan is effective will apply for one year from the Loan Effective Date. Annually on the anniversary of the Loan Effective Date, the rate will be adjusted to equal the Loan Interest Rate determined for the month in which the loan anniversary occurs. (d) Principal and interest on loans must be amortized in quarterly installments over a 5-year term. If the Loan Interest Rate is adjusted, future repayments will be adjusted so that the outstanding loan balance is amortized in equal quarterly installments over the remaining term. A quarterly processing fee equal to .74% of the outstanding loan balance will be deducted from each repayment and retained by Aetna. The remainder of each repayment will be credited to the Employee Account. Repayment amounts credited to the Employee Account will be allocated among the same investment options and in the same proportions as amounts were withdrawn to make the loan. (e) A bill in the amount of the quarterly repayment due will be mailed to you in advance of the repayment due date. The repayment due date will be the first business day of the third calendar month following the 7th calendar day after the loan effective date. The repayment will be in default if it is not received by Aetna at its Home Office before the end of the month in which the due date falls. (f) If a repayment is in default, an amount equal to the repayment amount and any applicable Surrender Fee will be deducted from the Employee Account as a deemed partial surrender. The date of the surrender will be the first business day following the last day of the month in which the repayment was due. The surrendered amount will automatically be applied to make the repayment that is in default and will thereafter be subject to (d). (g) If a repayment is received in excess of a billed amount, the excess will be applied towards the Employee Account principal portion of the outstanding loan. Repayments received which are less than the billed amount will be returned to you; therefore, the repayment will be in default and (f) will apply. (h) Prepayment of the entire loan balance will be allowed. At the time of prepayment, Aetna will bill you for any accrued Loan Interest, which will 16 be applied in accordance with (d). Aetna will consider the loan paid when this amount is received. (i) If the Employee Account is surrendered while there is an outstanding loan balance, accrued Loan Interest and any applicable Surrender Fee will be deducted from the Employee Account Current Value. (j) Upon the election of an Annuity Option or your death, the loan will be canceled resulting in a distribution of the outstanding loan balance. Accrued Loan Interest will be deducted from the Employee Account Current Value and this interest will then be treated as a quarterly repayment under (d). 3.15. Notice to the Contract Holder: Aetna will notify the Contract Holder each year of: (a) The value of any amounts held in: (1) The Fixed Account; (2) The GA Account; (3) The Fund(s) for the Separate Account; (b) The number of any Fund(s) Record Units; (c) The Fund(s) Record Unit Value(s); and (d) The Surrender Values of these amounts. Such number or values will be as of a date no more than 60 days before the date of the notice. 3.16. Distribution Options: The following distribution options may be elected by the Contract Holder on your behalf. (a) Estate Conservation Option (ECO): A distribution option under which a portion of the Individual Account(s) Current Value will automatically be surrendered and distributed each year. (1) An ECO payment will be determined in the following manner: a. Payments will commence no earlier than the year in which the Participant attains age 70-1/2 , and will be calculated on the full Current Value of the Individual Account(s), except as provided in "b". b. If Aetna maintains separate records of the value of the account as of December 31, 1986, (see below), payments made on or after the year in which you attain age 70-1/2 and before the year in which you attain age 75 will only be calculated on amounts contributed after December 31, 1986, plus all interest credited on all amounts after that date. The method under this rule is elected by the Contract Holder and will no longer be effective if the Contract Holder submits a withdrawal request in addition to a scheduled ECO payment from the Individual Account(s), at which time ECO payments will then be determined under "a". Aetna will maintain separate records if the Contract Holder has not requested any withdrawals from your Individual 17 Account(s) since December 31, 1986. If you attained age 70-1/2 prior to 1988 or you participate in a governmental or church plan, you must be retired in order to qualify under "b". (2) Amount of Distribution: Each year that ECO is in effect, Aetna will calculate and distribute an amount equal to the minimum required distribution under the Code. The annual distribution will be determined by dividing the Individual Account(s) Current Value, including any current loan(s) outstanding, as of December 31 of the year prior to the year for which the payment is to be made, by a life expectancy factor. As elected by the Contract Holder, the factor is either the single life or joint life expectancy based on tables in Section 401(a)(9) of the Code or related regulations. If joint life expectancy is elected and you or your spouse dies, payments will be calculated based on the survivor's life expectancy. These calculations may be changed as necessary to comply with the Code minimum distribution rules. The joint life expectancy factor can only be elected based on the joint life expectancy of you and your spouse, and such spouse must be named as the Plan beneficiary of any death benefits under the Contract while ECO is in effect. (3) Minimum Current Value: At its discretion, Aetna may require a minimum initial Current Value for election of this option. If after election of this option the Current Value is insufficient to make a scheduled ECO payment, Aetna will distribute the entire balance of the Individual Account(s). (4) Date of Distribution: The Contract Holder shall specify the initial distribution date. The earliest date is the first day of the calendar year in which you attain age 70-1/2. Subsequent distributions will be made annually on the 15th of the month the initial payment was made or such other date Aetna may designate or allow. (5) Elections and Revocation: ECO may be elected by the Contract Holder, on your behalf, by submitting a completed and signed election form to Aetna's Home Office. If the Contract Holder has notified Aetna that the Plan is subject to Title I of the Employee Retirement Income Security Act of 1974 as amended, the Contract Holder must also certify in writing that all the appropriate REA requirements have been met and that the distribution is in accordance with the terms of the Plan. Once elected, this option may be revoked by the Contract Holder by submitting a written request to Aetna at its Home Office. Any revocation will apply only to amounts not yet paid. ECO may be elected only 18 once under the provisions of this Certificate. (6) Reservation of Rights: Aetna reserves the right to change the terms of ECO for future elections and discontinue the availability of this option after proper notification. Aetna also reserves the right to allow payments to be made more frequently than annually. (b) Systematic Withdrawal Option (SWO): A distribution option under which a portion of the Individual Account(s) Current Value attributable to a particular Participant will automatically be surrendered and distributed each year. (1) Amount of Distribution: The Contract Holder may elect one of the two payment methods described below. (a) Specified Amount: Payments of a designated dollar amount which must be no greater than 10% of the initial Current Value and shall remain constant unless a higher amount is required under Code minimum distribution rules. Each year that the Specified Amount is in effect, Aetna will calculate the minimum required distribution under the Code and distribute this amount if it is larger than the amount elected by the Contract Holder. The life expectancy factor for this purpose will be your life expectancy at the time of the election of this option, and with each subsequent calendar year the factor will be reduced by one. The minimum required distribution will be determined by dividing the Individual Account Current Value, including any current loan(s) outstanding, as of December 31 of the year prior to the year for which the payment is to be made, by a life expectancy factor. At its discretion, Aetna may require a minimum initial payment amount; or (b) Specified Period: Payments which are made over a period of time which must be at least 10 years, unless otherwise required by Code minimum distribution rules. The maximum specified period will be limited by the Code minimum distribution rules. The annual amount paid each year is calculated by dividing the Individual Account(s) Current Value as of December 31 of the prior year, including any outstanding loan(s), by the number of payment years remaining. The life expectancy factor is either the single life or joint life expectancy, as elected by the Contract Holder, based on tables in Section 401(a)(9) of the Code or related regulations. If the joint life expectancy is elected, upon your or your spouse's death, the minimum required distribution for the Specified Amount payment method will continue to be calculated in the same manner as described in (b)(1). Payments upon your death will 19 continue in the manner described above, unless the Contract Holder on behalf of the spouse elects an alternate payment mode. Any mode elected must provide payments to be made at least as rapidly as those made prior to your death. These calculations may be changed as necessary to comply with the Code minimum distribution rules. The joint life expectancy factor can only be elected based on the joint life expectancy of you and your spouse, and such spouse must be named as the Plan beneficiary of any death benefits under the Contract while SWO is in effect. (2) Minimum Initial Current Value: At its discretion, Aetna may require a minimum initial Current Value for election of this option. If after election of this option the Current Value is insufficient to make a scheduled SWO payment, Aetna will distribute the entire balance of the Individual Account(s). (3) Date of Distribution: The Contract Holder shall specify the initial distribution date. The earliest date is the first day of the calendar year in which you attain age 70-1/2. SWO payments will be made annually. Subsequent distributions will be made annually on the 15th of the month the initial payment was made or such other date Aetna may designate or allow. (5) Elections and Revocations: SWO may be elected by the Contract Holder by submitting a completed and signed election form to Aetna's Home Office. If the Contract Holder has notified Aetna that the TDA Plan is subject to Title I of the Employee Retirement Income Security Act of 1974 as amended, the Contract Holder must also certify in writing that all the appropriate REA requirements have been met and that the distribution is in accordance with the terms of the Plan. Once elected, this option may be revoked by the Contract Holder by submitting a written request to Aetna at its Home Office. Any revocation will apply only to amounts not yet paid. SWO may be elected only once. (6) Reservation of Rights: Aetna reserves the right to change the terms of SWO for future elections and discontinue the availability of this option after proper notification. Aetna also reserves the right to allow payments to be made more frequently than annually. 3.17 Sum Payable at Death (Before Annuity Payments Start): The Employee Account Current Value payable under the terms of this section will be reduced by the amount of the accrued interest on any outstanding loan. Aetna will pay any portion of the Individual Account(s) Current Value to the individual and in the manner directed in writing by the Contract Holder when: (a) You die before Annuity payments start; and 20 (b) The notice of death is received in good order by Aetna. The sum payable will be the Current Value on the date when the notice is received in good order. The Contract Holder may choose to apply any sum under an Annuity Option (see Annuity Provisions), subject to any other terms and conditions of this Contract, or to have the Current Value paid in a lump sum. If the payee of the death proceeds is your surviving spouse (as your designated beneficiary under the Plan), the first Annuity payment or the lump sum payment may be deferred to a date not later than when you would have attained age 70-1/2 or such later date as may be allowed under federal law or regulations. If the payee is not the surviving spouse, all of the Current Value must either be applied to an Annuity Option within one year of your death or be paid to the payee within 5 years of your death (See Part IV). 3.18 Surrender Value: After deduction of the Maintenance Fee (if any), the amount payable by Aetna upon the surrender of any portion of an Individual Account shall be reduced by a Surrender Fee. The Surrender Fee will be in accordance with the Surrender Fee table in 5.02. The Fee on a total surrender of an Individual Account will not exceed 8.5% of the actual Purchase Payments made to that Account. For a partial or full surrender from any Individual Account, Aetna must receive written direction from the Contract Holder on a form acceptable to Aetna. If the Contract is subject to ERISA, this direction must include certification that all of the REA requirements have been satisfied. Aetna may defer payment of the surrender value until appropriate Contract Holder certification is received. 3.19 Surrender Restrictions: Limitations apply to full and partial surrenders of the Restricted Amount from this Contract, as required by Code Section 403(b)(11). The Restricted Amount is the sum of: (a) Net Purchase Payments attributable to Participant salary reduction contributions made on and after January 1, 1989; plus (b) The net increase, if any, in the Current Value of the Employee Account after December 31, 1988 attributable to investment gains and losses and credited interest. The Restricted Amount may be fully or partially surrendered only if one or more of the following conditions are met: (a) You have reached age 59-1/2; (b) You have separated from service; (c) You have died; (d) You have become disabled, within the meaning of Code Section 72(m)(7); or (e) The withdrawal is otherwise allowed by federal law, regulations or rulings. A full or partial surrender is also allowed if you incur a "hardship" as that term is defined in the Code or regulations under Code Section 403(b). However, the amount available for hardship is limited to the lesser of the amount necessary to satisfy the need, or the Net Purchase Payments attributable to your salary reduction contributions made on and after January 1, 1989. 21 The Contract Holder must certify that one of these conditions has been met before a surrender request will be considered to be in good order. The Contract Holder must notify Aetna in writing when a lump sum payment is to be made or Annuity payments are to commence. If, pursuant to Revenue Ruling 90-24, amounts are transferred to this Contract from a Code Section 403(b)(7) custodial account, the December 31, 1988 value from such transferred amount may be distributed upon the Contract Holder's request. The Contract Holder must certify that one of the conditions mentioned above has been met or that you have incurred a hardship. The remaining transferred value from the Employee Account will be considered a Restricted Amount subject to the Surrender Restrictions of this subsection. 3.20 Timing of Distributions: The distribution of benefits accrued after December 31, 1986, must be made in a lump sum or must begin not later than the April 1 of the calendar year following the calendar year in which you attain age 70-1/2. However, if you attained age 70-1/2 before January 1, 1988, the distribution of such benefits must be made or must begin not later than the April 1 of the calendar year following the calendar year in which you retire. The above does not apply if the Contract Holder is a governmental entity or a church. For Participants of such an employer, the distribution of benefits accrued after December 31, 1986, must be made or must begin not later than the April 1 of the calendar year following the calendar year in which you attain age 70-1/2 or retire, whichever occurs later. The required distribution described in either of the above rules must be made over your life (or the joint lives of you and the Plan beneficiary) or over a period not exceeding your life expectancy (or the joint life expectancies of you and the Plan beneficiary). If the Contract Holder does not request commencement of benefits as described above, Aetna will not be responsible for compliance with the Code Section 401(a)(9) minimum distribution requirements and for any adverse tax consequences that may result. 3.21. Payment of Surrender Value: Under certain emergency conditions, Aetna may defer payment: (a) For a period of up to 6 months (unless not allowed by state law); and (b) As provided by federal law. Aetna may pay any Fixed Account Surrender Value with interest in equal payments over a period not to exceed 60 months when the amount held in the Fixed Account under this Contract exceeds $250,000. This will apply only if the sum of the amounts surrendered within the past 12 months exceeds 20% of such Fixed Account amount. Interest, as used above, will not be more than two percentage points below any rate determined prospectively by the Board of Directors for this class of Contract. In no event will the interest rate be less than 4%. 3.22. Reinstatement: All or a portion of the proceeds of a full surrender of this Certificate may be reinvested within 30 days after the surrender if allowed by law. Any Maintenance Fee and Surrender Fee charged at the time of surrender on the amount being reinvested will be included in the reinstatement. Any Market Value Adjustment deducted from GA Account surrenders will not be included in the reinstatement. Amounts will be reinstated among the Fixed Account, GA Account, 22 and the Fund(s) in the same proportion as they were at the time of surrender. Any amounts reinstated to the GA Account will be credited to the current Deposit Period. The number of Record Units reinstated will be based on the Record Unit Value(s) next computed after receipt at Aetna's Home Office of the reinstatement request and the amount to be reinvested. Any Maintenance Fee which falls due after the surrender and before the reinstatement will be deducted from the amount reinstated. Reinstatement is permitted only once. 23 IV. ANNUITY PROVISIONS 4.01. Choices to be Made: The Contract Holder may elect an Annuity Option on your behalf by telling Aetna to pay all or any portion of the Current Value (minus any premium tax) as a premium for an Annuity under Option 2, 3, or 4 (see 4.07). The present value of the expected payments to the Annuitant when payments start shall be determined in accordance with the tables under Code Section 401(a)(9) regulations in order to comply with the incidental death benefit test. This restriction does not apply if Option 4(e) is chosen and the second Annuitant is the spouse of the Annuitant. Generally, the first Annuity payment must be made no later than the April 1 of the calendar year following the year in which you turn age 70-1/2 or such later date as may be allowed under federal law or regulations (see 3.20). For distributions taken in a lump sum, see Surrender Value (3.17). For any election of an Annuity Option, the Contract Holder must provide certification that the REA requirements, as applicable, and Code Section 403(b)(11) withdrawal restrictions have been satisfied. When an Annuity Option is chosen, Aetna must also be told if payments are to be made other than monthly and to pay: (a) A Fixed Annuity using the General Account; (b) A Variable Annuity using any of the Fund(s) made available by Aetna for Annuity purposes; or (c) A combination of (a) and (b). If a Fixed Annuity is chosen, Aetna will add interest daily at an annual rate no less than 3.5%. Aetna may add interest daily at any higher rate. If a Variable Annuity is chosen, an Assumed Annual Net Return Rate of 5% may be chosen. If not chosen, Aetna will use an Assumed Annual Net Return Rate of 3.5%. With the exception of Option 2 on a variable basis, once elected, an Annuity Option may not be revoked. 4.02. Annuity Payments to Annuitant: In no event may any payments to the Annuitant under any Annuity Option extend beyond: (a) The life of the Annuitant; (b) The lives of the Annuitant and the Plan beneficiary; (c) A period certain greater than the Annuitant's life expectancy according to regulations under Code Section 401(a)(9), determined as of the date payments are to commence; or (d) A period certain greater than the life expectancies of the Annuitant and the Plan beneficiary according to regulations under Code Section 401(a)(9) determined as of the date payments are to begin. 4.03. Death of Annuitant: When an Annuitant dies under Options 2, and 3, the present value of any remaining guaranteed payments will be paid in one sum to the Plan beneficiary as directed in writing by the Contract Holder, or upon election by the Annuitant's Plan beneficiary, any remaining payments will continue to the Plan beneficiary. If no Plan beneficiary exists, the present value of any remaining 24 guaranteed payments will be paid in one lump sum to the Contract Holder. In no event may any payments to the Plan beneficiary under an Annuity Option extend beyond: (a) The life of the payee determined as of the date payments are to commence; or (b) Any certain period greater than the payee's life expectancy as determined by regulations under Code Section 401(a)(9) as of the date payments are to begin. However, if a Plan beneficiary dies while under Option 1 or while receiving Annuity payments, the present value of any remaining payments will be paid in one lump sum to the estate of the Plan beneficiary. The interest rate used to determine the first payment will be used to calculate the present value. 4.04. Fund(s) Annuity Units - Separate Account: The number of Fund(s) Annuity Units is based on the amount of the first Variable Annuity payment which is equal to: (a) The portion of Current Value (minus any premium tax) applied to pay a Variable Annuity; divided by (b) 1,000; multiplied by (c) The payment rate for the Option chosen. Such amount, or portion, of the Variable Payment will be divided by the appropriate Fund(s) Annuity Unit Value (see 4.05) on the tenth Valuation Period before the due date of the first payment to determine the number of each Fund Annuity Units. The number of each Fund Annuity Units remains fixed. Each future payment is equal to the sum of the products of each Fund Annuity Unit Value multiplied by the appropriate number of Units. The Fund Annuity Unit Value on the tenth Valuation Period prior to the due date of the payment is used. 4.05. Fund(s) Annuity Unit Value - Separate Account: For any Valuation Period, a Fund(s) Annuity Unit Value is equal to: (a) The Value for the previous Period; multiplied by (b) The Net Return Factor(s) (see 3.08) for the Period; multiplied by (c) A factor to reflect the Assumed Annual Net Return Rate. The factor for 3.5% per year is .9999058; for 5% per year it is .9998663. The dollar value of a Fund(s) Annuity Unit Values and payments may go up or down due to investment gain or loss. If Variable Annuity payments are not to decrease, Aetna must earn a gross return on the assets of the Separate Account of: [bullet] 4.75% on an annual basis plus an annual return of up to 0.25% needed to offset the administrative charge set at the time Annuity payments commence if an Assumed Annual Net Return Rate of 3.5% is chosen; or [bullet] 6.25% on an annual basis plus an annual return of up to 0.25% needed to offset the administrative charge set at the time Annuity payments commence if an Assumed Annual Net Return Rate of 5% is chosen. Payments shall not changed due to changes in the mortality or expense results or administrative charges. 25 4.06. Annuity Options: Option 1 - Payments of Interest on Sum Left with Aetna - This Option may be used only by the Plan beneficiary when the Participant dies before Aetna has started paying an Annuity. A portion or all of the sum paid upon death may be held under this Option and will be held in the General Account of Aetna at interest (see 4.01). The Contract Holder, on behalf of the Plan beneficiary, may later tell Aetna to: (a) Pay a portion or all of the sum held by Aetna; or (b) Apply a portion or all of the sum held by Aetna to any Annuity Option below. If the Plan beneficiary is your surviving spouse, the lump-sum payment may be deferred to a date no later than when the Participant would have attained age 70-1/2. If the Plan beneficiary is not a spouse, the Contract Holder must tell Aetna to pay the full sum within 5 years after the death of the Participant. Option 2 - Payments for a Stated Period of Time - An Annuity will be paid for the number of years chosen. The number of years must be at least 3 and not more than 30. If payments for this Option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested within 3 years after the start of payments, it will be treated as a surrender (see 3.17). Option 3 - Life Income - An Annuity will be paid for the life of the Annuitant. If also chosen, Aetna will guarantee payments for 60, 120, 180 or 240 months. Option 4 - Life Income for Two Payees - An Annuity will be paid during the lives of the Annuitant and a second Annuitant. At the death of either, payments will continue to the survivor. When this Option is chosen, a choice must be made of: (a) 100% of the payment to continue to the survivor; (b) 66-2/3% of the payment to continue to the survivor; (c) 50% of the payment to continue to the survivor; or (d) Payments for a minimum of 120 months with 100% of the payment to continue to the survivor. (e) 100% of the payment to continue to the survivor if the survivor is the Annuitant and 50% of the payment to continue to the survivor if the survivor is the second Annuitant. Other Options - Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. 26 OPTION 2 PAYMENTS FOR A STATED PERIOD OF TIME AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Years of Amount of Years of Amount of Years of Amount of Payments Payments Payments Payments Payments Payments -------- -------- -------- -------- -------- -------- 3 $29.19 13 $7.94 22 $5.39 4 22.27 14 7.49 23 5.24 5 18.12 15 7.10 24 5.09 6 15.35 16 6.76 25 4.96 7 13.38 17 6.47 26 4.84 8 11.90 18 6.20 27 4.73 9 10.75 19 5.97 28 4.63 10 9.83 20 5.75 29 4.53 11 9.09 21 5.56 30 4.45 12 8.46
Rates for a Variable Annuity with Assumed Net Return Rate of 5%
Years of Amount of Years of Amount of Years of Amount of Payments Payments Payments Payments Payments Payments -------- -------- -------- -------- -------- -------- 3 $29.80 13 $8.64 22 $6.17 4 22.89 14 8.20 23 6.02 5 18.74 15 7.82 24 5.88 6 15.99 16 7.49 25 5.76 7 14.02 17 7.20 26 5.65 8 12.56 18 6.94 27 5.54 9 11.42 19 6.71 28 5.45 10 10.51 20 6.51 29 5.36 11 9.77 21 6.33 30 5.28 12 9.16
27 OPTION 3 LIFE INCOME AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Months
Age of Annuitant None 60 120 180 240 --------- ---- -- --- --- --- 50 $4.34 $4.34 $4.31 $4.27 $4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 5.46 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62
Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 28 OPTION 3 LIFE INCOME AMOUNT OF FIRST MONTHLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Months
Age of Annuitant None 60 120 180 240 --------- ---- -- --- --- --- 50 $5.26 $5.25 $5.22 $5.17 $5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38
Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 29 OPTION 4 LIFE INCOME FOR TWO PAYEES JOINT AND LAST SURVIVOR ANNUITY 100% TO THE SURVIVOR NO MINIMUM PERIOD AMOUNT OF FIRST MONTLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $3.69 $3.75 $3.81 $3.84 $3.87 $3.90 $3.91 $3.92 $ 3.92 50 3.75 3.89 3.97 4.04 4.09 4.13 4.15 4.17 4.18 55 3.81 3.97 4.16 4.27 4.35 4.42 4.47 4.50 4.51 60 3.84 4.04 4.27 4.51 4.66 4.78 4.86 4.92 4.95 65 3.87 4.09 4.35 4.66 4.99 5.19 5.35 5.46 5.53 70 3.90 4.13 4.42 4.78 5.19 5.67 5.95 6.17 6.31 75 3.91 4.15 4.47 4.86 5.35 5.95 6.64 7.04 7.34 80 3.92 4.17 4.50 4.92 5.46 6.17 7.04 8.04 8.63 85 3.92 4.18 4.51 4.95 5.53 6.31 7.34 8.63 10.05
Rates for a Variable Annuity with Assumed Net Return Rate of 5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $4.63 $4.68 $4.73 $4.77 $4.80 $4.82 $4.84 $4.85 $ 4.86 50 4.68 4.80 4.88 4.95 5.00 5.04 5.06 5.08 5.10 55 4.73 4.88 5.04 5.15 5.24 5.30 5.35 5.39 5.41 60 4.77 4.95 5.15 5.37 5.52 5.63 5.72 5.79 5.83 65 4.80 5.00 5.24 5.52 5.83 6.04 6.20 6.31 6.39 70 4.82 5.04 5.30 5.63 6.04 6.49 6.77 6.99 7.15 75 4.84 5.06 5.35 5.72 6.20 6.77 7.45 7.86 8.16 80 4.85 5.08 5.39 5.79 6.31 6.99 7.86 8.84 9.43 85 4.86 5.10 5.41 5.83 6.39 7.15 8.16 9.43 10.86
30 OPTION 4 LIFE INCOME FOR TWO PAYEES JOINT AND LAST SURVIVOR ANNUITY 66-2/3% TO THE SURVIVOR NO MINIMUM PERIOD AMOUNT OF FIRST MONTLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $3.94 $4.05 $4.18 $4.32 $4.48 $4.66 $4.84 $ 5.02 $ 5.19 50 4.05 4.20 4.35 4.51 4.69 4.89 5.09 5.30 5.49 55 4.18 4.35 4.54 4.73 4.95 5.18 5.42 5.65 5.87 60 4.32 4.51 4.73 4.99 5.25 5.53 5.82 6.11 6.37 65 4.48 4.69 4.95 5.25 5.61 5.97 6.33 6.69 7.02 70 4.66 4.89 5.18 5.53 5.97 6.49 6.96 7.43 7.88 75 4.84 5.09 5.42 5.82 6.33 6.96 7.73 8.39 9.02 80 5.02 5.30 5.65 6.11 6.69 7.43 8.39 9.54 10.46 85 5.19 5.49 5.87 6.37 7.02 7.88 9.02 10.46 12.15
Rates for a Variable Annuity with Assumed Net Return Rate of 5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $4.87 $4.99 $5.12 $5.27 $5.44 $5.64 $5.86 $ 6.09 $ 6.30 50 4.99 5.12 5.26 5.43 5.63 5.85 6.09 6.33 6.57 55 5.12 5.26 5.44 5.63 5.85 6.11 6.38 6.65 6.92 60 5.27 5.43 5.63 5.87 6.14 6.44 6.75 7.07 7.38 65 5.44 5.63 5.85 6.14 6.49 6.84 7.23 7.62 8.00 70 5.64 5.85 6.11 6.44 6.84 7.35 7.84 8.34 8.83 75 5.86 6.09 6.38 6.75 7.23 7.84 8.60 9.28 9.93 80 6.09 6.33 6.65 7.07 7.62 8.34 9.28 10.42 11.35 85 6.30 6.57 6.92 7.38 8.00 8.83 9.93 11.35 13.04
31 OPTION 4 LIFE INCOME FOR TWO PAYEES JOINT AND LAST SURVIVOR ANNUITY 50% TO THE SURVIVOR NO MINIMUM PERIOD AMOUNT OF FIRST MONTLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $4.07 $4.22 $4.40 $4.61 $4.87 $5.17 $ 5.49 $ 5.84 $ 6.18 50 4.22 4.37 4.56 4.79 5.06 5.39 5.75 6.13 6.51 55 4.40 4.56 4.76 5.00 5.31 5.66 6.06 6.49 6.91 60 4.61 4.79 5.00 5.27 5.61 6.01 6.46 6.95 7.43 65 4.87 5.06 5.31 5.61 5.99 6.44 6.96 7.54 8.11 70 5.17 5.39 5.66 6.01 6.44 6.99 7.61 8.29 9.00 75 5.49 5.75 6.06 6.46 6.96 7.61 8.43 9.29 10.17 80 5.84 6.13 6.49 6.95 7.54 8.29 9.29 10.54 11.71 85 6.18 6.51 6.91 7.43 8.11 9.00 10.17 11.71 13.57
Rates for a Variable Annuity with Assumed Net Return Rate of 5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $5.01 $5.15 $5.33 $5.56 $5.83 $ 6.17 $ 6.55 $ 6.98 $ 7.40 50 5.15 5.29 5.48 5.71 6.01 6.36 6.78 7.23 7.68 55 5.33 5.48 5.66 5.91 6.23 6.61 7.05 7.54 8.05 60 5.56 5.71 5.91 6.16 6.51 6.93 7.42 7.96 8.53 65 5.83 6.01 6.23 6.51 6.87 7.34 7.89 8.51 9.16 70 6.17 6.36 6.61 6.93 7.34 7.87 8.51 9.23 10.00 75 6.55 6.78 7.05 7.42 7.89 8.51 9.33 10.20 11.14 80 6.98 7.23 7.54 7.96 8.51 9.23 10.20 11.44 12.64 85 7.40 7.68 8.05 8.53 9.16 10.00 11.14 12.64 14.51
32 OPTION 4 LIFE INCOME FOR TWO PAYEES JOINT AND LAST SURVIVOR ANNUITY 100% TO THE SURVIVOR 120 MONTHS MINIMUM PERIOD AMOUNT OF FIRST MONTLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $3.69 $3.75 $3.80 $3.84 $3.87 $3.89 $3.91 $3.91 $3.92 50 3.75 3.89 3.97 4.04 4.09 4.13 4.15 4.16 4.17 55 3.80 3.97 4.15 4.26 4.35 4.41 4.46 4.48 4.49 60 3.84 4.04 4.26 4.50 4.65 4.76 4.84 4.89 4.91 65 3.87 4.09 4.35 4.65 4.98 5.17 5.31 5.41 5.46 70 3.89 4.13 4.41 4.76 5.17 5.62 5.87 6.05 6.15 75 3.91 4.15 4.46 4.84 5.31 5.87 6.48 6.79 6.98 80 3.91 4.16 4.48 4.89 5.41 6.05 6.79 7.50 7.83 85 3.92 4.17 4.49 4.91 5.46 6.15 6.98 7.83 8.50
Rates for a Variable Annuity with Assumed Net Return Rate of 5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $4.63 $4.68 $4.73 $4.77 $4.80 $4.82 $4.84 $4.85 $4.85 50 4.68 4.80 4.88 4.94 4.99 5.03 5.06 5.07 5.08 55 4.73 4.88 5.04 5.14 5.23 5.29 5.34 5.37 5.38 60 4.77 4.94 5.14 5.37 5.51 5.62 5.70 5.75 5.78 65 4.80 4.99 5.23 5.51 5.82 6.00 6.15 6.24 6.30 70 4.82 5.03 5.29 5.62 6.00 6.44 6.68 6.86 6.96 75 4.84 5.06 5.34 5.70 6.15 6.68 7.27 7.57 7.76 80 4.85 5.07 5.37 5.75 6.24 6.86 7.57 8.26 8.58 85 4.85 5.08 5.38 5.78 6.30 6.96 7.76 8.58 9.23
33 OPTION 4 LIFE INCOME FOR TWO PAYEES JOINT AND 1/2 CONTINGENT LIFE INCOME ANNUITY NO MINIMUM PERIOD AMOUNT OF FIRST MONTLY PAYMENT FOR EACH $1,000 AFTER DEDUCTION OF ANY CHARGE FOR PREMIUM TAXES Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5% and Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $3.86 $3.89 $3.93 $3.94 $3.96 $3.97 $3.98 $ 3.98 $ 3.98 50 4.02 4.10 4.15 4.18 4.21 4.23 4.24 4.25 4.26 55 4.22 4.31 4.42 4.48 4.53 4.57 4.59 4.61 4.61 60 4.43 4.56 4.70 4.84 4.93 4.99 5.04 5.07 5.09 65 4.69 4.84 5.02 5.22 5.42 5.54 5.63 5.69 5.73 70 4.99 5.17 5.39 5.65 5.93 6.23 6.40 6.52 6.60 75 5.33 5.54 5.82 6.14 6.52 6.95 7.40 7.64 7.81 80 5.70 5.96 6.29 6.69 7.17 7.75 8.41 9.08 9.45 85 6.07 6.38 6.75 7.24 7.84 8.59 9.49 10.51 11.50
Rates for a Variable Annuity with Assumed Net Return Rate of 5% Age of Second Annuitant
Age of Annuitant 45 50 55 60 65 70 75 80 85 --------- -- -- -- -- -- -- -- -- -- 45 $4.80 $4.83 $4.86 $4.88 $4.89 $4.90 $ 4.91 $ 4.92 $ 4.92 50 4.95 5.02 5.06 5.10 5.13 5.15 5.16 5.17 5.18 55 5.14 5.23 5.32 5.38 5.43 5.46 5.49 5.51 5.52 60 5.36 5.47 5.59 5.72 5.80 5.86 5.91 5.95 5.97 65 5.63 5.77 5.93 6.10 6.29 6.41 6.50 6.56 6.60 70 5.96 6.12 6.31 6.54 6.81 7.08 7.25 7.37 7.46 75 6.35 6.54 6.77 7.06 7.42 7.81 8.25 8.49 8.66 80 6.79 7.01 7.30 7.66 8.11 8.65 9.28 9.93 10.29 85 7.26 7.53 7.86 8.29 8.85 9.55 10.41 11.39 12.37
These Annuity rates are based on mortality from 1983 Table a. 34 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $15 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; (d) On and after the tenth anniversary of the Effective Date of the Individual Account; GTRP-IA 35 (e) When the Individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $12.50 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; GTRPA-IA 35 (d) On and after the tenth anniversary of the Effective Date of the Individual Account; (e) When the Individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $10 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; (d) On and after the tenth anniversary of the Effective Date of the Individual Account; GTRPB-IA 35 (e) When the Individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $7.50 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; GTRPC-IA 35 (d) On and after the tenth anniversary of the Effective Date of the Individual Account; (e) When the individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $5 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; (d) On and after the tenth anniversary of the Effective Date of the Individual Account; GTRPD-IA 35 (e) When the Individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN RETIREMENT PLUS 5.01. Maintenance Fee: The Maintenance Fee will be $2.50 per Individual Account. However, for a Separate Individual Account maintained pursuant to a lump-sum payment, the Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from an Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for the Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by the Participant. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since the Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee 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%
For each surrender from an Individual Account maintained pursuant to a lump-sum payment, the Surrender Fee will vary according to the period of time between the Effective Date of the Individual Account and the date of surrender as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of the Individual Account which is paid: (a) At the death of a Participant before Annuity payments start; (b) As a premium for an Annuity for a Participant under this Contract; (c) After a Participant has reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for the Individual Account being surrendered; GTRPE-IA 35 (d) On and after the tenth anniversary of the Effective Date of the Individual Account; (e) When the Individual Account Current Value is $2,500 or less and no surrenders have been taken from the Individual Account within the prior 12 months. If there is more than one Individual Account under the Contract for a Participant, then this provision will only apply when the total in all of the Participant's Individual Accounts is $2,500 or less; (f) In an amount equal to or less than 10% of the current Individual Account Current Value, as part of the first partial surrender request in a calendar year to a Participant who is at least age 59-1/2 and less than age 70-1/2. The Individual Account Current Value is calculated as of the date the partial surrender request is received in good order at Aetna's Home Office. Any outstanding loans from the Participant's Individual Account are excluded when calculating its Individual Account Current Value. This provision does not apply to partial surrenders due to loan defaults made from Individual Account Current Values and does not apply to full surrender requests; (g) To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Internal Revenue Code or other appropriate Internal Revenue Service sources; or (h) On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. 36 ================================================================================ Aetna Life Insurance and Annuity Company Home Office: 151 FARMINGTON AVE. HARTFORD, CONNECTICUT 06156 1-800-525-4225 CERTIFICATE OF GROUP ANNUITY COVERAGE ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CERTIFICATE CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY. GTCC-IA(RP) (7/98) ================================================================================ EX-99.B.4.13 5 CERTIFICATE OF GROUP ANNUITY COVERAGE Ex.-99.B.4.13 Aetna Life Insurance and Annuity Company Home Office: 151 FARMINGTON AVE. HARTFORD, CONNECTICUT 06156 (203) 273-0123 Herein called Aetna. Certificate of Group Annuity Coverage To the Employee: Aetna certifies that coverage is in force for you under the stated Group Annuity Contract and Certificate numbers. All data shown here are taken from Aetna records and are based upon information furnished by you. This Certificate is a summary of the Group Annuity Contract provisions. It replaces any and all prior certificates, riders or amendments issued to you under the stated Contract and Certificate numbers. This Certificate is for information only and is not a part of the Contract. THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV. RIGHT TO CANCEL You may cancel this Certificate within 10 days of receiving it, by returning this Certificate along with a written notice to Aetna at the above address or to the agent from whom it was purchased. Within 7 days after it receives the notice of cancellation and this Certificate at its Home Office, Aetna will return the entire consideration paid; plus any increase or minus any decrease in the cash value of any funds allocated to the Separate Account. /s/ William O. Bailey President ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, GTCC-HD ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. SPECIFICATIONS Guaranteed Interest Rate - There are guaranteed interest rates for amounts held in the General Account. (See 1.03 and 1.07.) Surrender Fee - There will be a charge deducted for early surrender. (See 3.11.) Deductions from the Separate Account - There will be deductions for mortality and expense risks and administrative fees. (See 3.05.) Deduction from Purchase Payment(s) - Purchase Payment(s) are subject to a deduction for premium taxes, if any. (See 3.01.) - -------------------------------------------------------------------------------- CONTRACT HOLDER GROUP ANNUITY CONTRACT NO. - -------------------------------------------------------------------------------- YOUR NAME CERTIFICATE NO. - -------------------------------------------------------------------------------- GTCC-HD 2 TABLE OF CONTENTS
I. GENERAL DEFINITIONS Page 1.01 Annuitant............................................................5 1.02 Annuity..............................................................5 1.03 Fixed Account........................................................5 1.04 Fixed Annuity........................................................5 1.05 Fund(s)..............................................................5 1.06 General Account......................................................5 1.07 Guaranteed Accumulation Account......................................5 1.08 Plan.................................................................5 1.09 Purchase Payments....................................................5 1.10 Separate Accounts....................................................5 1.11 Valuation Period.....................................................5 1.12 Variable Annuity.....................................................5 II. GENERAL PROVISIONS 2.01 Change of Contract...................................................6 2.02 Non-Participating Contract...........................................6 2.03 Payments.............................................................6 2.04 Control of Contract..................................................6 2.05 Designation of Beneficiary...........................................6 2.06 Misstatements and Adjustments........................................6 2.07 Incontestability.....................................................6 2.08 Grace Period.........................................................6 III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS 3.01 NetPurchase Payment(s)...............................................7 3.02 Individual Account...................................................7 3.03 Maintenance Fee......................................................7 3.04 Fund(s) Record Units - Separate Account..............................7 3.05 Fund(s) Record Unit Value - Separate Account.........................7 3.06 Current Value........................................................7 3.07 Transfer of Current Value from the Funds or GA Account...............7 3.08 Transfer of Current Value from the Fixed Account.....................8 3.09 Notice to You........................................................8 3.10 Sum Payable at Death (Before Annuity Payments Start).................8 3.11 Surrender Value......................................................8 3.12 Payment of Surrender Value...........................................8 3.13 Reinstatement........................................................9 IV. ANNUITY PROVISIONS 4.01 Choices to be Made..................................................10 4.02 Terms of Annuity Options............................................10 4.03 Variable Annuity Payments...........................................10 4.04 Annuity Options.....................................................10 3 Page V. FEE SCHEDULE 5.01 Maintenance Fee.....................................................12 5.02 Surrender Fee.......................................................12
4 I. GENERAL DEFINITIONS 1.01. Annuitant - A person on whose life an Annuity has been effected under the Contract. 1.02. Annuity - Payment of an income: (a) for the life of one or two persons; (b) for a stated period, or amount; or, (c) for some mix of (a) and (b). 1.03. Fixed Account - An accumulation option with a guaranteed minimum interest rate of 4%. Aetna may credit a higher rate which is not guaranteed. 1.04. Fixed Annuity - An Annuity with payments which do not vary in amount. 1.05. Fund(s) - The open-end registered management investment companies (mutual funds) made available by Aetna under the Contract. 1.06. General Account - The Account holding the assets of Aetna, other than those assets held in the Separate Accounts. 1.07. Guaranteed Accumulation Account (GA Account) - A part of the General Account that guarantees Purchase Payment(s) and certain interest rates (never less than 4%). Amounts withdrawn before the end of the Guaranteed Term may be subject to a Market Value Adjustment. 1.08. Plan - The Plan named on the Specifications page of the Contract. The term includes all written documents describing the Plan. The Plan is not a part of the Contract. Aetna is not bound by the terms of the Plan. 1.09. Purchase Payments - Payments made to Aetna. 1.10. Separate Accounts - Accounts set up by Aetna under the Connecticut Insurance Laws which purchase shares of the Fund(s). 1.11. Valuation Period (Period) - The period of time from the end of one business day on the New York Stock Exchange to the end of the next business day. 1.12. Variable Annuity - An Annuity with payments which vary with the net investment results of a Separate Account. 5 II. GENERAL PROVISIONS 2.01. Change of Contract: Only an authorized officer of Aetna may change the terms of the Group Annuity Contract. Aetna will notify the Contract Holder in writing at least 30 days before the effective date of any change. Any change will not affect the amount or terms of any Annuity which begins before the change. 2.02. Non-Participating Contract: You, your beneficiary or the Contract Holder will not have a right to share in the earnings of Aetna. 2.03. Payments: Aetna will make Annuity payments as and when due. Aetna will make other payments within 7 days of receipt at its Home Office of a written claim for payment which is in good order, except as provided in 3.12. 2.04. Control of Contract:You own all amounts held in your Individual Account. You may make any choices allowed by the Contract for your Individual Account. Choices made under the Contract must be in writing. Until receipt of such choices in the Home Office of Aetna, Aetna may rely on any previous choices made. The Contract, this Certificate and your Individual Account shall not be subject to the claims of any creditors. The Contract, this Certificate and your Individual Account are non-assignable and non-transferable. 2.05. Designation of Beneficiary: Your beneficiary shall be as named by you and may be changed at any time. 2.06. Misstatements and Adjustments: If Aetna finds the age, or any other relevant facts to be misstated, the correct facts will be used to adjust payments. 2.07. Incontestability: Aetna cannot cancel the Contract or this Certificate because of any error of fact on the application. 2.08. Grace Period: The Contract and this Certificate will remain in effect even if Purchase Payments are not continued. 6 III. PURCHASE PAYMENT, CURRENT VALUE AND SURRENDER PROVISIONS 3.01. Net Purchase Payment(s): The actual Purchase Payment less any state premium tax. The Net Purchase Payment(s) will be credited among: (a) the Fixed Account; (b) the Guaranteed Accumulation Account; (c) the Fund(s) in which the Separate Account invests. Aetna must be told by you the percentage of the Net Purchase Payment(s) to be applied to each investment above. During any calendar year, you may tell Aetna to change the investment mix four times. If additional changes are allowed, each may be subject to a fee of up to $10. 3.02. Individual Account: Aetna will maintain an Individual Account for you. 3.03. Maintenance Fee: The Maintenance Fee (see 5.01) will be deducted from the Current Value on each anniversary of your Individual Account effective date and upon surrender of your entire Individual Account. 3.04. Fund(s) Record Units - Separate Account: The portion of the Net Purchase Payment(s) applied to the Separate Account will determine the number of Fund(s) Record Units. This number is equal to the Net Purchase Payment divided by the Fund(s) Record Unit Value (see 3.05) for the Valuation Period in which the Purchase Payment is received in good order. 3.05. Fund(s) Record Unit Value - Separate Account: The Fund(s) Record Unit Value is computed by multiplying the Net Return Factor for the current Valuation Period by the Fund(s) Record Unit Value for the previous Period. The dollar value of the Fund(s) Record Units, Separate Account assets, and Variable Annuity payments may go up or down due to investment gain or loss. The calculation to determine the Net Return Factor includes deductions totaling 1.25% on an actual basis for annuity mortality and expense risks and profit; and a daily administrative charge which will not exceed .25% on an annual basis. The administrative charge may be changed annually except for amounts which have been used to purchase an annuity. 3.06. Current Value: The Current Value is the value of your Individual Account at the end of a Valuation Period and is equal to: (a) Any amounts in the Fixed Account, including Fixed Account interest added by Aetna; plus (b) Any amounts in the GA Account, including GA Account interest added by Aetna; plus (c) The sum of any Separate Account Record Unit value(s); less (d) Any Maintenance Fee(s) due. Current Value does not include amounts used to purchase an Annuity. 3.07. Transfer of Current Value from the Funds or GA Account: Before an annuity option is elected, all or any portion of the Current Value may be transferred from any Fund to any other Fund, to the Fixed Account, or to the GA Account's current 7 Deposit Period. Any portion of the Current Value in the GA Account may be transferred to any Fund or to the Fixed Account. Transfers from the GA Account are subject to the Withdrawal and Market Value Adjustment provisions. Four transfers of Current Value (except for transfers from the GA Account at the end of a Guaranteed Term) can be made during a calendar year period. If additional transfers are allowed, each may be subject to a fee of up to $10. 3.08. Transfer of Current Value from the Fixed Account: 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s) or to the GA Account's current Deposit Period. Such transfer will be: (a) without charge; (b) allowed once per calendar year; (c) not allowed under an annuity option. Aetna may, on a temporary basis, allow any larger percent to be transferred. The Current Value of the Fixed Account, as used above, is the value when the request is received at the Home Office of Aetna. 3.09. Notice to You: Aetna will notify you each year of: (a) The value of any amounts held in: (1) the Fixed Account; and (2) the GA Account; and (3) the Fund(s) for the Separate Account; and (b) the number of any Fund(s) Record Units; and (c) the Fund(s) Record Unit Value(s). Such number or values will be as of a date no more than 60 days before the date of the notice. 3.10. Sum Payable at Death (Before Annuity Payments Start): Aetna will pay the Current Value to your beneficiary if: (a) You die before Annuity Payments start; and (b) The notice of your death is received in good order by Aetna. The sum paid will be the Current Value on the date the notice is received at Aetna's Home Office. The amount paid from the Fixed Account will not be less than the Net Purchase Payment(s) allocated to the Fixed Account under your Individual Account (less any prior transfers (see 3.08) or surrenders). Your beneficiary may choose to apply all or any portion of the payment to any Annuity Option (See Part IV). If no beneficiary exists, the payment will be made to your estate. 3.11. Surrender Value: After deduction of the Maintenance Fee (if any), the amount paid by Aetna upon the surrender of any portion of your Individual Account shall be reduced by a Surrender Fee. The Surrender Fee will be in accordance with the Surrender Fee table in 5.02. The Fee on a total surrender of your Individual Account will not exceed 8.5% of the actual Purchase Payments made to the Account. 3.12. Payment of Surrender Value: Under certain conditions, Aetna may defer payment of the Surrender Value for certain periods of time. The conditions and times are stated in the Contract. 8 3.13. Reinstatement: Certain surrendered amounts may be reinstated to the Contract according to the terms stated in the Contract. 9 IV. ANNUITY PROVISIONS 4.01. Choices to be Made: You may elect an Annuity Option by telling Aetna to pay all or any portion of the Current Value (minus any premium tax) as a premium for an Annuity under Option 2, 3, 4 or 5 (see 4.04). The first Annuity payment must generally be made no later than the first day of the month following your 75th birthday. Aetna may be told to make the first Annuity payment during any prior month. When an Option is chosen, Aetna must also be told whether payments are to be made other than monthly and (except for Option 2) to pay: (a) a Fixed Annuity using the General Account; or (b) a Variable Annuity using any of the Fund(s) made available by Aetna for Annuity purposes; or (c) a mix of (a) and (b). If a Fixed Annuity is chosen, Aetna will add interest daily at an annual rate no less than 3.5%. Aetna may add interest daily at any higher rate. If a Variable Annuity is chosen, an Assumed Annual Net Return Rate of 5% may be chosen. If not chosen, Aetna will use an Assumed Annual Net Return Rate of 3.5%. 4.02. Terms of Annuity Options: Specific terms governing the Annuity Options and a table of annuity rates for each Annuity Option can be found in the Contract. The annuity rates do not differ by sex. 4.03. Variable Annuity Payments: The amount of the first Variable Annuity Payment will be divided by the Fund(s) Annuity Unit Value on the tenth Valuation Period before the date the first payment is due to determine the number of Fund(s) Annuity Units. The number of Fund(s) Annuity Units remains fixed. Each future payment is equal to this number times the Fund(s) Annuity Unit Value on the tenth Valuation Period prior to the due date of the payment. Payments shall not be changed due to changes in the mortality or expense results or administrative charges. 4.04. Annuity Options: Option 1 - Payment of Interest on Sum Left with Aetna - This option may be used only by your beneficiary if you die before Aetna has started paying an Annuity. A portion or all of the sum paid upon your death may be held under this Option and will be held in the General Account of Aetna at interest (see 4.01). Your beneficiary may later tell Aetna to: (a) pay a portion, or all, of the sum held by Aetna; or (b) apply a portion, or all, of the sum held by Aetna to any Annuity Option below. Option 2 - Payments of a Stated Dollar Amount - This option may only be elected as a Fixed Annuity. An Annuity of a chosen amount will be paid until no funds are left. The payments to be made in a year must be greater than $65 for each $1,000 applied to this Option, but cannot exceed an amount which would deplete the funds in less than 3 years. During any year, Aetna reserves the right to make as a minimum payment an amount equal to 105% of the interest for that year. 10 Option 3 - Payments for a Stated Period of Time - An Annuity will be paid for the number of years chosen. The number of years must be at least 3 and not more than 30. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested within 3 years after the start of payments, it will be treated as a surrender (see 3.11). Option 4 - Life Income - An Annuity will be paid for the life of the Annuitant. If also chosen, Aetna will guarantee payments for 60, 120, 180 or 240 months. Option 5 - Life Income for Two Payees - An Annuity will be paid during the lives of the Annuitant and a second Annuitant. At the death of either, payments will continue to the survivor. When this option is chosen, a choice must be made of: (a) 100% of the payment to continue to the survivor; (b) 66-2/3% of the payment to continue to the survivor; (c) 50% of the payment to continue to the survivor; or (d) Payments for a minimum of 120 months, with 100% of the payment to continue to the survivor. Other Options - Aetna may make other options available as allowed by the laws of the state in which the Contract is delivered. 11 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN 5.01. Maintenance Fee: The Maintenance Fee will be $0. 5.02. Surrender Fee: For each surrender from your Individual Account, the Surrender Fee will vary according to the period of time between the effective date of your Individual Account and the date of surrender. The Surrender Fee will be determined as follows:
If Period of Time is Surrender Fee Less than 5 years 5% From 5 to 6 years 4% From 6 to 7 years 3% From 7 to 8 years 2% From 8 to 9 years 1% 9 or more years 0%
No Surrender Fee is deducted from any portion of your Individual Account which is paid: (1) At your death before Annuity payments start; or (2) As a premium for an Annuity under the Contract. 12 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN 5.01. Maintenance Fee: The Maintenance Fee will be $15. 5.02. Surrender Fee: For each surrender from your Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for your Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by you. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since your Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee Less than 5 5% 5 or more but less than 7 4% 7 or more but less than 9 3% 9 or more but less than 19 2% 19 or more 0%
No Surrender Fee is deducted from any portion of your Individual Account which is paid: (1) At your death before Annuity payments start; or (2) As a premium for an Annuity under the Contract; or (3) After you have reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for your Individual Account being surrendered. 12 V. FEE SCHEDULE TAX DEFERRED ANNUITY PLAN 5.01. Maintenance Fee: The Maintenance Fee will be $20. 5.02. Surrender Fee: For each surrender from your Individual Account, the Surrender Fee will vary according to the number of Purchase Payment Cycles completed for your Individual Account being surrendered. The number and amount of Purchase Payments to be made in a year is chosen by you. A Purchase Payment Cycle is completed when this number and amount of Purchase Payments have been made. The number of Purchase Payment Cycles completed may not be greater than the number of whole years since your Individual Account was established. For each surrender, the Fee will be as follows:
Number of Purchase Payment Cycles Completed Surrender Fee Less than 5 5% 5 or more but less than 7 4% 7 or more but less than 9 3% 9 or more 2%
No Surrender Fee is deducted from any portion of your Individual Account which is paid: (1) At your death before Annuity payments start; or (2) As a premium for an Annuity under the Contract; or (3) After you have reached age 59-1/2 and 9 or more Purchase Payment Cycles have been completed for your Individual Account being surrendered. 12 ================================================================================ Aetna Life Insurance and Annuity Company Home Office: 151 FARMINGTON AVE. HARTFORD, CONNECTICUT 06156 (203) 273-0123 CERTIFICATE OF GROUP ANNUITY COVERAGE ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT GTCC-HD ================================================================================ EX-99.B.4.28 6 CONTRACT [AETNA logo] Ex-99-B.4.28 --------------------------------------------- Aetna Life Insurance and Annuity Company Home Office: 151 Farmington Avenue Hartford, Connecticut 06156 (800) 525-4225 You may call the toll-free number shown above if you have questions on this Contract. Aetna Life Insurance and Annuity Company, herein called Aetna, agrees to pay the benefits stated in this Contract. Specifications - -------------------------------------------------------------------------------- Plan Higher Education - -------------------------------------------------------------------------------- Type of Plan Retirement Plan for Higher Education - -------------------------------------------------------------------------------- Contract Holder Specimen - -------------------------------------------------------------------------------- Contract No. Specimen - -------------------------------------------------------------------------------- Effective Date Specimen - -------------------------------------------------------------------------------- This Contract is Delivered in Anystate and is Subject to the Laws of that Jurisdiction. THE VARIABLE FEATURES OF THIS CONTRACT ARE DESCRIBED IN PARTS III AND V. Right to Cancel - -------------------------------------------------------------------------------- The Contract Holder may cancel this Contract within 10 days of receiving it by returning this Contract along with a written notice to Aetna at the above address or to the agent from whom it was purchased. Within 7 days after it receives the notice of cancellation and this Contract at its Home Office, Aetna will return the entire consideration paid plus any increase or minus any decrease in the current value of any funds allocated to the Separate Account. Signed at the Home Office on the Effective Date. /s/ Thomas J. McInerney /s/ Kirk P. Wickman President Secretary Individual Combination Annuity Contract Nonparticipating ALL PAYMENTS AND VALUES PROVIDED BY THIS ANNUITY CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY. I-CDA-98(ORP)
Specifications - -------------------------------------------------------------------------- Guaranteed There is a guaranteed interest rate for Interest Rate Contribution(s) held in the Fixed Plus Account and the GA Account. (See Contract Schedule I.) - -------------------------------------------------------------------------- Deductions from There will be deductions for mortality and expense the Separate risks. There also may be deductions for Account administrative charges and asset based sales charges. (See 3.05 and 5.06.) - -------------------------------------------------------------------------- Deduction from Contribution(s) are subject to a deduction for Contribution(s) premium taxes, if any. (See 3.01.)
This Contract is a legal contract. This Contract and any attached document and subsequent endorsements constitutes the entire legal relationship between Aetna and the Contract Holder. This Contract sets forth, in detail, all of the rights and obligations of both you and Aetna. IT IS, THEREFORE, IMPORTANT THAT YOU READ THIS CONTRACT CAREFULLY. 2 Contract Schedule I Accumulation Period
Separate Account - --------------------------------------------------------------------------- Separate Account: Variable Annuity Account C Charges to A daily charge is deducted from any portion of the Separate Account: Current Value allocated to the Separate Account. The daily charge is at an annual effective rate of [1.25%] for Annuity mortality and expense risks, [0.15%] for asset based sales charge and a daily administrative charge which will not exceed [0.25%] on an annual basis. The daily charge for the Aetna GET Fund Guarantee will be at an annual rate of [0.25%]. Fixed Plus Account [Is Available] - --------------------------------------------------------------------------- Minimum Guaranteed [3%] (effective annual rate of return). Interest Rate: Partial Withdrawal: The [20%] limit applicable to partial withdrawal from the Fixed Plus Account will be waived when the withdrawal is: (a) due to the Participant's death, (and made within [six (6)] months of the Participant's date of death), before Annuity payments begin. This partial withdrawal may only be exercised once; or (b) used to purchase Annuity benefits. Guaranteed Accumulation Account (GA Account) [Is Available] - --------------------------------------------------------------------------- Minimum Guaranteed [3%] (effective annual rate of return). Interest Rate:
i Contract Schedule I Accumulation Period (Cont'd)
Separate Account, Fixed Plus Account and GA Account - --------------------------------------------------------------------------- Loans: [Are Available] Loan Interest Rate: [6%] on an annual basis. Systematic [Is Available] Withdrawal Option (SWO): The Specified Payment may not be greater than [20%] of the Individual Account's Current Value at the time of election. The Specified Period may not be less than [five years]. The Specified Percentage may not be greater than [20%]. Estate Conservation [Is Available] Option (ECO): Life Expectancy [Is Available] Option (LEO):
See Section 1. - DEFINITIONS for explanations. ii Contract Schedule II Annuity Period
Separate Account - ------------------------------------------------------------------------------- Fund Transfers: Maximum number of allowable transfers in the Annuity Period is [4]. Charges to A daily charge at an annual effective rate of Separate Account: [1.25%] for Annuity mortality and expense risks. The administrative charge is established upon election of an Annuity option. This charge will not exceed [0.25%]. Variable Annuity If a Variable Annuity is chosen, an assumed annual net Assumed Annual Net return rate of [5.0%] may be elected. If [5.0%] is not Return elected, Aetna will use an assumed annual net Rate: return rate of [3.5%]. The assumed annual net return rate factor for [3.5%] per year is [0.9999058]. The assumed annual net return rate factor for [5.0%] per year is [0.9998663]. If the portion of a Variable Annuity payment for any Fund is not to decrease, the Annuity return factor under the Separate Account for that Fund must be: (a) [4.75%] on an annual basis plus an annual return of up to [0.25%] to offset the administrative charge set at the time Annuity payments commence if an assumed annual net return rate of [3.5%] is chosen; or (b) [6.25%] on an annual basis plus an annual return of up to [0.25%] to offset the administrative charge set at the time Annuity payments commence, if an assumed annual net return rate of [5%] is chosen. Annuity Option: Under the option "Payments for a Stated Period of Time": For amounts invested in the GA Account or one or more of the Fund(s), the number of years must be at least [five (5)] and not more than [thirty (30)] and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least [five (5)] and not more than [thirty (30)] and the Annuity must be a Fixed Annuity. Fixed Annuity - --------------------------------------------------------------------------- Minimum Guaranteed [3%] (effective annual rate of return). Interest Rate:
See Section 1. - DEFINITIONS for explanations. iii TABLE OF CONTENTS
I. DEFINITIONS - --------------------------------------------------------------- Page 1.01 Accumulation Period ................................ 6 1.02 Adjusted Current Value ............................. 6 1.03 Aetna GET Fund Offering Period ..................... 6 1.04 Aetna GET Fund Guaranteed Period ................... 6 1.05 Aetna GET Fund Maturity Date ....................... 6 1.06 Annuitant .......................................... 6 1.07 Annuity ............................................ 6 1.08 Beneficiary ........................................ 7 1.09 Code ............................................... 7 1.10 Contract Holder .................................... 7 1.11 Contribution ....................................... 7 1.12 Current Value ...................................... 7 1.13 Deposit Period ..................................... 7 1.14 Fixed Plus Account ................................. 7 1.15 Fixed Plus Account Guaranteed Interest Rate ........ 7 1.16 Fixed Annuity ...................................... 7 1.17 Fund(s) ............................................ 7 1.18 Fund Transfer(s) ................................... 7 1.19 General Account .................................... 8 1.20 Guaranteed Accumulation Account (GA Account) ....... 8 1.21 GA Account Guaranteed Interest Rate ................ 8 1.22 Guaranteed Term .................................... 8 1.23 Individual Account ................................. 8 1.24 Loan Account ....................................... 9 1.25 Loan Effective Date ................................ 9 1.26 Loan Interest Rate ................................. 9 1.27 Market Value Adjustment (MVA) ...................... 9 1.28 Matured Term Value ................................. 9 1.29 Matured Term Value Transfer ........................ 9 1.30 Maturity Date ...................................... 9 1.31 Net Contribution ................................... 9 1.32 Nonunitized Separate Account ....................... 10 1.33 Participant ........................................ 10 1.34 Plan ............................................... 10
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Page 1.35 Reinvestment ....................................... 10 1.36 Separate Account ................................... 10 1.37 Valuation Date ..................................... 10 1.38 Valuation Period ................................... 10 1.39 Variable Annuity ................................... 11 II. GENERAL PROVISIONS - --------------------------------------------------------------- 2.01 Change of Contract ................................. 11 2.02 Change of Fund ..................................... 11 2.03 Nonparticipating Contract .......................... 11 2.04 Payments ........................................... 11 2.05 State Laws ......................................... 12 2.06 Control of Contract ................................ 12 2.07 Designation of Beneficiary ......................... 12 2.08 Misstatements and Adjustments ...................... 12 2.09 Incontestability ................................... 12 2.10 Grace Period ....................................... 13 III. CONTRIBUTIONS, CURRENT VALUE, and WITHDRAWAL PROVISIONS - --------------------------------------------------------------- 3.01 Net Contribution(s) ................................ 13 3.02 Experience Credits ................................. 13 3.03 Fund Record Units .................................. 13 3.04 Fund Record Unit Value ............................. 13 3.05 Fund Net Return Factors ............................ 13 3.06 Market Value Adjustment ............................ 14 3.07 Fund Transfer(s) ................................... 16 3.08 Aetna GET Fund Offering Period ..................... 17 3.09 Aetna GET Fund Guarantee ........................... 17 3.10 Aetna GET Fund Maturity Date ....................... 17 3.11 Loans .............................................. 17 3.12 Notice to the Participant .......................... 19 3.13 Manner and Timing of Distributions ................. 20 3.14 Withdrawal ......................................... 20 3.15 Partial Withdrawal from the Fixed Plus Account ..... 21 3.16 Payment of Fixed Plus Account Full Withdrawal ...... 21 3.17 Amount Payable at Death (Before Annuity Payments Start) ................................... 22 3.18 Reinstatement ...................................... 23
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IV. NON-ANNUITY DISTRIBUTION OPTIONS - --------------------------------------------------------------- Page 4.01 Distribution Options .............................. 24 4.02 Estate Conservation Option ........................ 25 4.03 Life Expectancy Option ............................ 25 4.04 Systematic Withdrawal Option ...................... 26 V. ANNUITY PROVISIONS - --------------------------------------------------------------- 5.01 General Provisions ................................ 27 5.02 Annuity Options ................................... 28 5.03 Payments .......................................... 29 5.04 Investment Option ................................. 29 5.05 Fund Annuity Units ................................ 30 5.06 Fund Annuity Unit Value ........................... 30 5.07 Fund Annuity Net Return Factor .................... 31 5.08 Fund Transfers During the Annuity Period .......... 31 5.09 Death Benefit ..................................... 32
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I. DEFINITIONS - --------------------------------------------------------------------------- 1.01 Accumulation The period during which Net Contribution(s) are Period: applied to an Individual Account. 1.02 Adjusted The Current Value (See 1.12) of an Individual Current Value: Account (See 1.23) plus or minus any applicable aggregate GA Account Market Value Adjustment. (See 3.06). 1.03 Aetna GET Fund The period, usually from one to three months, Offering during which Participants may transfer or Period: deposit amounts to an Aetna GET Fund series. (Offering Each Aetna GET Fund series has a specified Period) Offering Period. Amounts transferred or deposited prior to the date on which the Guaranteed Period begins are invested in money market instruments. Aetna reserves the right to state the minimum amount a Participant may transfer or deposit to each Offering Period. Aetna also reserves the right to extend an Offering Period or accept Fund transfers or deposits to an Aetna GET Fund series during the series' Guaranteed Period. 1.04 Aetna GET Fund For each Aetna GET Fund series, the period for Guaranteed which the Aetna GET Fund Guarantee applies. Period: The Guaranteed Period ends on the Maturity Date. (Guaranteed Period) 1.05 Aetna GET Fund The date on which a series' Guaranteed Period Maturity ends and GET Fund Record Units for the series Date: are liquidated. (Maturity Date) 1.06 Annuitant: If an Annuity provides lifetime benefits, the person whose life expectancy determines the amount and/or duration of Annuity benefit payments. 1.07 Annuity: Payment of an income under the Annuity Provisions of Section V: (a) For the life of one or two persons; (b) For a stated period; or (c) For some combination of (a) and (b). 1.08 Beneficiaries: The person(s) named to receive any benefits which remain under the Contract after the Participant's death. Participant designates a Beneficiary for the Individual Account. (See 2.07) 1.09 Code: The Internal Revenue Code of 1986, as amended. 1.10 Contract The entity or person, named on the cover of Holder: this Contract, to which the Contract is issued. Contractholder may also be the Participant.
6 1.11 Contribution: A payment received at Aetna's Home Office and allocated to this Contract. The payment must be made in accordance with the Code and the terms of the Plan. 1.12 Current Value: For an Individual Account (See 1.23), the Current Value is the total of: (a) The amount, if any, in the Fixed Plus Account, with interest earned to date; (b) The amount, if any, in the GA Account, with interest earned to date; and (c) The value of all Fund Record Units (See 3.03), if any, as of the most recent Valuation Period. 1.13 Deposit Period: A calendar month, a calendar quarter, or any other period of time specified by Aetna during which Net Contribution(s), Fund Transfers and Reinvestments are accepted into the GA Account for one or more Guaranteed Terms. 1.14 Fixed Plus If offered as an investment option under the Account: Contract (see Contract Schedule I) the Fixed Plus Account is an accumulation option with a guaranteed minimum interest rate. Aetna may credit a higher rate which is not guaranteed. The portion that may be withdrawn or transferred in a 12 month period is restricted (See 3.07, 3.15 and 3.16). 1.15 Fixed Plus If the Fixed Plus Account is an investment option Account under the Plan (see Contract Schedule I) then Aetna Guaranteed will add interest at an annual rate no less than that Interest Rate: shown on Contract Schedule I on any Net Contribution(s) to the Fixed Plus Account. Aetna may add interest at a higher rate determined by its Board of Directors. 1.16 Fixed Annuity: An Annuity with payments that do not vary in amount. 1.17 Fund(s): The open-end registered management investment companies whose shares are purchased by the Separate Account to fund the benefits provided by the Contract. Each Aetna GET Fund series is a separate Fund. 1.18 Fund Transfers: The movement of invested amounts among the available Fund(s); the Fixed Plus Account (if available) and the GA Account (if available). 1.19 General The account holding the assets of Aetna, other Account: than those assets held in Aetna's Separate Account(s) and Nonunitized Separate Account(s). 1.20 Guaranteed If offered as an investment option under the Contract Accumulation (see Contract Schedule I), the Guaranteed Accumulation Account Account (GA Account) is an accumulation option where (GA Account): Aetna guarantees stipulated rate(s) of interest for a specified period of time. All assets of Aetna, including amounts in the Nonunitized Separate Account, are available to meet the guarantees for the GA Account.
7 1.21 GA Account If the GA Account is an investment option under Guaranteed the Contract (see Contract Schedule I) then Interest Rate: Aetna will declare the interest rate(s) applicable to a specific Guaranteed Term at the start of the Deposit Period for that Guaranteed Term. The rate(s) are guaranteed by Aetna for that Deposit Period and the ensuing Guaranteed Term. The Guaranteed Interest Rates are annual effective yields. That is, interest is credited at a rate that will produce the Guaranteed Interest Rate over the period of a year. No Guaranteed Interest Rate will ever be less than the Minimum Guaranteed Interest Rate shown on Contract Schedule I. For Guaranteed Terms of one year or less, one Guaranteed Interest Rate is credited for the full Guaranteed Term. For longer Guaranteed Terms, an initial Guaranteed Interest Rate is credited from the date of deposit to the end of a specified period within the Guaranteed Term. There may be different Guaranteed Interest Rate(s) declared for subsequent specified time intervals throughout the Guaranteed Term. 1.22 Guaranteed The period of time for which GA Account Term: Guaranteed Interest Rates are guaranteed on Net Contributions, Fund Transfers and Reinvestments made into a current Deposit Period for the GA Account. Such period begins on the day following the close of the Deposit Period and ends on the designated Maturity Date. Guaranteed Terms are offered at Aetna's discretion for various lengths of time ranging up to and including ten years and are classified as follows: Short-term. Three (3) or fewer years. Amounts allocated to a short-term Term are held in the General Account. Long-term. More than three (3) years, but not more than ten (10). Amounts allocated to a long-term Term are held in the Nonunitized Separate Account. During a Deposit Period, Aetna may make available any number of Guaranteed Terms. The Participant may allocate Net Contributions and Fund Transfers into any or all of the available Guaranteed Terms. 1.23 Individual This Contract is issued to the Contract Account: Holder. However, Aetna will maintain an Individual Account for the Participant to keep a record of Current Value (See 1.12) and transactions. These may include: (a) An Employer Account: This Individual Account will be credited with employer Net Contribution(s) and transferred amounts of 401(a) or 403(a) funds, attributable to employer contributions; and (b) An Employee Account: This Individual Account will be credited with employee Net Contribution(s), specifically amounts subject to Code Section 414(h) and transferred amounts of 401(a) or 403(a) funds, attributable to 414(h) contributions and any after tax contributions. 1.24 Loan Account: For each loan taken by a Participant, the loan amount transferred from the investment options is credited to the Loan Account.
8 1.25 Loan Effective The date on which Aetna receives a loan Date: agreement in good order at its home office. 1.26 Loan Interest The interest rate Aetna charges on a loan, Rate: (see Contract Schedule I). 1.27 Market Value An adjustment to the amount withdrawn or Adjustment transferred from a GA Account Guaranteed Term (MVA): prior to the end of that Guaranteed Term. The adjustment reflects the change in the value of the investment due to changes in interest rates since the date of deposit and is computed using the formula given in 3.06. The adjustment is expressed as a percentage of each dollar being withdrawn. 1.28 Matured Term The amount payable on a GA Account Guaranteed Value: Term's Maturity Date. 1.29 Matured Term During the calendar month following a GA Value Transfer: Account Maturity Date, the Participant may notify Aetna's Home Office in writing to transfer or withdraw all or part of the Matured Term Value, plus interest at the new Guaranteed Rate accrued thereon, from the GA Account without an MVA. This provision only applies to the first such written request received from the Participant during this period for any Matured Term Value. 1.30 Maturity Date: The last day of a GA Account Guaranteed Term. 1.31 Net A Contribution less any applicable premium Contribution: taxes. 1.32 Nonunitized An account established by Aetna under Section Separate 38a-433 of the Connecticut General Statutes Account: that holds assets for GA Account Terms (See 1.22) greater than three years. The Contract Holder or Participant does not participate in the investment gain or loss from the assets held in the Nonunitized Separate Account. Such gain or loss is borne entirely by Aetna. Assets in this account may be charged with liabilities arising out of any other Aetna business. 1.33 Participant: A person who participates in the Plan named on the cover of this Contract. 1.34 Plan: The Plan named on the cover of this Contract and established under Section 401(a) or 403(a) of the Code.
9 1.35 Reinvestment: Aetna will mail a notice to the Participant at least 18 calendar days before a Guaranteed Term's Maturity Date. This notice will contain the Guaranteed Terms available during the current Deposit Periods with their Guaranteed Interest Rate(s) and projected Matured Term Value. If no specific direction is given by the Participant prior to the Maturity Date, each Matured Term Value will be reinvested in the current Deposit Period for a Guaranteed Term of the same duration. If a Guaranteed Term of the same duration is unavailable, each Matured Term Value will automatically be reinvested in the current Deposit Period for the next shortest Guaranteed Term available in the same classification. If no shorter Guaranteed Term is available, the next longer Guaranteed Term will be used. Aetna will mail a confirmation statement to the Participant, the next business day after the Maturity Date. This notice will state the Guaranteed Term and Guaranteed Interest Rate(s) which will apply to the reinvested Matured Term Value. 1.36 Separate An account, established by Aetna under Section Account: 38a-433 of the Connecticut General Statutes, that buys and holds shares of the Fund(s) available under this Contract. Income, gains or losses, realized or unrealized are credited or charged to the Separate Account without regard to other income, gains or losses of Aetna. Aetna owns the assets held in the Separate Account and is not a trustee of such amounts. Amounts in the Separate Account are not generally guaranteed and are held at market value. The assets of the Separate Account, to the extent of reserves and other contract liabilities of the Separate Account, cannot be charged with other Aetna liabilities. 1.37 Valuation Date: The date and time on which a Fund annuity unit value and a Fund record unit value are calculated. Currently, this calculation will be determined at the close of business of the New York Stock Exchange on any normal business day, Monday through Friday, that the New York Stock Exchange is open. 1.38 Valuation The period of time commencing at the end of one Period: Valuation Date and ending at the end of the next Valuation Date. 1.39 Variable An Annuity with payments that vary with the net Annuity: investment results of the Funds available during the Annuity period.
II. GENERAL PROVISIONS - --------------------------------------------------------------------------- 2.01 Change of Only an authorized officer of Aetna may change Contract: the terms of this Contract. Aetna reserves the right to modify this Contract to meet the requirements of applicable state and federal laws or regulations. Aetna will notify the Contract Holder in writing of any changes.
10 2.01 Change of Aetna may change the tables for determining the Contract amount of Annuity benefit payments attributable (Cont'd): only to Contributions accepted after the effective date of change, without Contract Holder consent. Such a change will not become effective earlier than twelve months after (1) the effective date of the Contract, or (2) the effective date of a previous change. Aetna will notify the Contract Holder in writing at least thirty days before the effective date of the change. Aetna may not make Contract changes which adversely affect the Annuity benefits attributable to Contributions already made to the Contract. 2.02 Change of Fund: The assets of the Separate Account are segregated by Fund. If the shares of any Fund are no longer available for investment by the Separate Account or if in our judgment, further investment in such shares should become inappropriate in view of the purpose of the Contract, Aetna may cease to make such Fund shares available for investment under the Contract prospectively, or Aetna may substitute shares of another Fund for shares already acquired. Aetna may also, from time to time, add additional Funds. Any elimination, substitution or addition of Funds will be done in accordance with applicable state and federal securities laws. Aetna reserves the right to substitute shares of another Fund for shares already acquired without a proxy vote. 2.03 Nonparticipating The Contract Holder, Participant, or Beneficiaries Contract: will not have a right to share in the earnings of Aetna. 2.04 Payments: (a) Aetna will make distributions as directed by the Contract Holder, provided the distributions are made in accordance with the terms of the Plan. Aetna will determine the amount of payments based on the Individual Account's Current Value as of the date on which a request is received in good order at Aetna's Home Office. Payments will be made within seven (7) calendar days of receipt of a written request in good order at Aetna's Home Office. (b) Aetna may defer payments: (1) for a period of up to six (6) months (unless not allowed by state law); and (2) as allowed by federal law. 2.05 State Laws: This Contract complies with the laws of the state in which it is delivered. Any cash, death or Annuity payments are equal to or greater than the minimum required by such laws. Annuity tables for legal reserve valuation shall be as required by state law. Such tables may be different from Annuity tables used to determine Annuity payments. 2.06 Control of This Contract is designed to fund a Plan which Contract: provides for retirement income. The Contract Holder may, by written direction to Aetna, allow the Participant to select the investment options of the Employer and/or Employee Accounts. Choices made under this Contract must be in writing or in a form satisfactory to Aetna. Until receipt of such choices in its Home Office, Aetna may rely on any previous choices made.
11 2.06 Control of (a) Nontransferable and Nonassignable: This Contract Contract and the Individual Account are nontransferable and (Cont'd): nonassignable, except to Aetna in the event of a loan, or pursuant to a "qualified domestic relations order" as set forth under the Internal Revenue Code of 1986, as it may be amended from time to time. (b) Distributions: A Participant may apply for a distribution from his or her Employee Account or Employer Account. The distribution is subject to the terms of the Plan. (c) Participant Rights/Employee Account: The Participant has a nonforfeitable right to the value of his or her Employee Account pursuant to the terms of the Plan. (d) Participant Rights/Employer Account: The Participant has a nonforfeitable right to the value of his or her Employer Account pursuant to the terms of, and to the extent of his or her vested percentage under the Plan. 2.07 Designation of The Participant shall designate a Beneficiary, Beneficiary: in accordance with the terms of the Plan. 2.08 Misstatements If Aetna finds the age of any payee to be and misstated, the correct facts will be used to Adjustments: adjust payments. 2.09 Incontest- Aetna cannot cancel this Contract because of any error ability: of fact. 2.10 Grace Period: This Contract will remain in effect even if Contributions are not continued.
III. CONTRIBUTIONS, CURRENT VALUE, AND WITHDRAWAL PROVISIONS - -------------------------------------------------------------------------------- 3.01 Net The Net Contribution equals the actual Contribution Contribution(s): less any applicable premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (See Section V). If Aetna determines that under applicable state law, it must pay a premium tax when the Contribution is received, or at any other time, it may deduct the tax at that time. The Net Contribution(s) may be allocated among the following investment options: (a) The Fixed Plus Account (if available); and (b) The current Deposit Period(s) for Guaranteed Terms under the GA Account (if available); and (c) The Fund(s) in which the Separate Account invests. 3.01 Net Aetna must be told the percentage of all Net Contribution(s) Contributions to allocate to one or more of the (Cont'd): investment options. Aetna reserves the right to require a minimum Contribution amount.
12 Aetna reserves the right not to accept any Contribution. 3.02 Experience Aetna may apply experience credits under this Credits: Contract. Any such credits will be computed as decided by Aetna. 3.03 Fund Record The portion of the Net Contribution(s) applied Units: to each Fund under the Separate Account will determine the number of Fund record units credited to the Individual Account for that Fund. This number is equal to the Net Contribution applied to the Fund divided by the Fund record unit value (See 3.04) for the Valuation Period in which the Contribution is received in good order. 3.04 Fund Record A Fund record unit value is computed by Unit Value: multiplying the net return factor (See 3.05) for the current Valuation Date by the Fund record unit value for the previous Valuation Date. The dollar value of a Fund record unit, Separate Account assets, and Variable Annuity payments may go up or down due to investment gain or loss. 3.05 Fund Net The net return factor(s) are used to compute all Return Factors: Separate Account record units for any Fund. The net return factor for each Fund is equal to 1.0000000 plus the net return rate. The net return rate is equal to: (a) The value of the shares of the Fund held by the Separate Account at the end of a Valuation Period, minus (b) The value of the shares of the Fund held by the Separate Account at the start of the Valuation Period, plus or minus (c) Taxes (or reserves for taxes) on the Separate Account (if any); divided by (d) The total value of the Fund record units and Fund annuity units of the Separate Account at the start of the Valuation Period; minus (e) A Separate Account charge at an annual effective rate as shown on Contract Schedule I for Annuity mortality and expense risks, asset based sales charge, if any and a daily administrative charge which will not exceed the amount shown on Contract Schedule I on an annual basis. The administrative charge may be changed annually except for amounts which have been used to purchase an Annuity; minus 3.05 Fund Net (f) A fee for the Aetna GET Fund Guarantee which is Return Factors deducted daily during the Guaranteed Period. The (Cont'd): fee, which is determined prior to the beginning of each series' Offering Period, is as shown on Contract Schedule I.
13 A net return rate may be more or less than 0%. The value of a share of the Fund is equal to the net assets of the Fund divided by the number of shares outstanding. 3.06 Market Value (a) An MVA will be applied to any withdrawal from a GA Adjustment Account Term before the Maturity Date due to: (MVA): (1) A Fund Transfer; (2) A full or partial withdrawal, except for an amount paid under ECO (See 4.01); or (3) A payment of a premium for Annuity Option 1. The amount of the withdrawal will be adjusted to a market value amount as described in (b). (b) Market value adjusted amounts will be equal to the amount withdrawn multiplied by the following ratio: x --- 365 (1 + i) ----------- x --- 365 (1 + j) Where: i is the Deposit Period Yield j is the Current Yield x is the number of days remaining, (computed from Wednesday of the week of withdrawal) in the Term. (c) The Deposit Period Yield will be determined as follows: (1) At the close of the last business day of each week of the Deposit Period, a yield will be computed as the average of the yields on that day of U.S. Treasury Notes which mature in the last three months of the Term. 3.06 Market Value (2) The Deposit Period Yield is the average of Adjustment those yields for the Deposit Period. If (MVA) (Cont'd): withdrawal is made prior to the close of the Deposit Period, it is the average of those yields on each week preceding withdrawal.
14 (3) The Current Yield is the average of the yields on the last business day of the week preceding withdrawal on the same U.S. Treasury Notes included in the Deposit Period Yield. (4) In the event that no U.S. Treasury Notes which mature in the last three months of the Term exist, Aetna reserves the right to use the U.S. Treasury Notes that mature in a following quarter. (d) If a lump-sum distribution or Annuity Option is elected six months or more after Participant's death, the Beneficiary will receive the Account Value, plus or minus any MVA that would apply to any portion of the Account allocated to GAA. If a full or partial withdrawal is made within six months after Participant's death, the Beneficiary will receive the Account Value, plus any positive MVA that would apply to any portion of the Account allocated to GAA. The value of the Account is determined as of the Valuation Date on which proof of death acceptable to us and a request for payment are received at our Home Office. (e) After the six month period, the withdrawal or Fund Transfer will be the aggregate MVA amount (i.e., including all MVAs). (f) The greater of the aggregate MVA amount or the applicable portion of the Current Value in the GA Account is applied to amounts withdrawn from the GA Account for payment of a premium under Annuity options 2 or3. 3.07 Fund All or any portion of the Adjusted Current Transfer(s): Value of the Individual Account (subject to the limitations described below) may be transferred from any Fund, the Fixed Plus Account (if available) or the GA Account (if available): (a) To any Fund; or (b) To the Fixed Plus Account (if available); or (c) To any Guaranteed Term of the GA Account (if available) with a different classification available in the Current Deposit Period. Fund Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a minimum Fund Transfer amount. Within a Guaranteed Term classification, the amount transferred will be withdrawn from the oldest Deposit Period, then from the next oldest, and so on until the amount requested is satisfied. 3.07 Fund Amounts applied to Guaranteed Terms of the GA Transfer(s) Account may not be transferred to the Funds, (Cont'd): the Fixed Plus Account or to another Guaranteed Term during the Deposit Period or 90 days after the close of the Deposit Period except for Matured Term Value(s) during the calendar month following the Term's Maturity Date.
15 Fund Transfers from Guaranteed Terms of the GA Account are subject to the MVA provisions of 3.06. During each rolling twelve (12) month period, up to 20% of the Fixed Plus Account value may be transferred to one or more of the Fund(s), and/or the GA Account's then-current Deposit Period. The 20% limit is reduced by any partial withdrawals, Fund Transfers or amounts taken as a loan or used to purchase an Annuity during the twelve (12) month period. Aetna reserves the right to include amounts paid under ECO, LEO and SWO provisions for purposes of applying this 20% limit. This limit is waived when the balance in the Fixed Plus Account is $1,000 or less on the date the Fund Transfer request is received in good order at Aetna's Home Office. The Participant may make an unlimited number of Fund Transfers during the Accumulation Period. A Fund Transfer or withdrawal from an Aetna GET Fund series before the Maturity Date will be based on the GET Fund Record Unit Value for the next Valuation Period following the date on which Aetna receives a transfer request in good order at its home office. 3.08 Aetna GET Fund Aetna will specify a minimum total asset amount Offering required at the end of an Offering Period to Period: offer an Aetna GET Fund series. If the minimum is not achieved, Aetna reserves the right to not start the Guaranteed Period. If an Aetna GET Fund series is terminated, Aetna will send written notification of the termination to the Participant if he or she has made Fund Transfers or deposits to that Aetna GET Fund Series. Notice will be mailed no later than 15 calendar days after the end of the Offering Period. The Participant then has 45 days from the end of the Offering Period to redirect amounts in the terminated Aetna GET Fund series to one or more investment options available under the Contract. During this time, Funds are invested in money market instruments. If no election is made by the end of the 45-day Period, at the next Valuation Period, Aetna will transfer the amount in the terminated Aetna GET Fund series to the money market fund. Aetna reserves the right to specify a maximum total asset amount for an Aetna GET Fund series. If the maximum is achieved, Aetna also reserves the right to set a date on which it will stop accepting Fund Transfers or deposits for that Aetna GET Fund series. Aetna will announce the date on which it will stop accepting Fund Transfers and deposits ten calendar days prior to that date.
16 3.09 Aetna GET Fund On the Maturity Date of each Aetna GET Fund Guarantee: series, the GET Fund Record Unit Value for that series will not be less than the GET Fund Record Unit Value determined at the beginning of the Guaranteed Period. If necessary, Aetna will transfer funds from its General Account to the Aetna GET Fund series to offset any shortfall in the GET Fund Record Unit Value. The Aetna GET Fund Guarantee does not apply to withdrawals or Transfers made before the Maturity Date. If Aetna GET Fund Record Units are adjusted at any time during an Aetna GET Fund Guaranteed Period, the Aetna GET Fund Guarantee will be restated. The restated Aetna GET Fund Guarantee will be calculated so that it is not less than the original Aetna GET Fund Guarantee for that series. 3.10 Aetna GET Fund Prior to the Maturity Date for each Aetna GET Maturity Date: Fund series, Aetna sends a written notice of the date to the Participant if he or she has Current Value in that series. The Participant must then inform Aetna of the investment option(s) to which to transfer that Current Value. If a Participant does not make an election, on the Maturity Date Aetna will transfer the Current Value to the then available Aetna GET Fund series' Offering Period. If no Offering Period is available, Aetna will transfer the Current Value to the fund or funds designated by Aetna. 3.11 Loans: If loans are included as an option under the Contract (See Contract Schedule I), then the following will apply. During the accumulation period, loans are granted (1) as permitted under applicable law; (2) subject to the terms of the Plan; (3) subject to the terms and conditions of the loan agreement; and, (4) in accordance with the following provisions. (a) Amount available for loan: The amount available for loan is limited to the vested Individual Account Current Value attributable to Participant Contributions, plus any amounts allowed by the Plan. Amounts available from some investment options may be subject to limitations specified in the loan agreement. To obtain the loan amount requested, these limitations may require the Participant to transfer funds. A Market Value Adjustment may apply to amounts transferred. The minimum loan amount is defined in the loan agreement. The maximum loan amount is the lesser of: (1) Fifty percent (50%) of the vested Individual Account Current Value, including any Loan Account, reduced by the amount of any outstanding loan balance on the Loan Effective Date; or (2) Fifty thousand dollars ($50,000) reduced by the highest outstanding loan balance for the preceding 12 months.
17 3.11 Loans (Cont'd): The amount of all outstanding loans cannot exceed $50,000. (b) The Loan Interest Rate is specified on Contract Schedule I. (c) Earned interest: The Loan Account is credited with interest at a rate which is not less than the Loan Interest Rate, less 3%, on an annual basis. (d) Loan repayment: Repayment is as set forth in the loan agreement, or a Participant may repay a loan in full at any time. (e) Amount available for partial surrender while a loan is outstanding: While a loan is outstanding, the amount available for partial surrender is equal to the vested Individual Account Current Value, including the Loan Account, minus 125% of the outstanding loan balance. (f) Full surrenders while a loan is outstanding: If the Participant requests a full surrender from the vested Individual Account Current Value while a loan is outstanding, one of the following occurs: (1) If the amount of the vested Individual Account Current Value available for distribution is sufficient to repay (a) the outstanding loan balance, plus (b) any applicable Fixed Plus Account default charge, then that amount, minus the Loan Account balance, is deducted from the vested Individual Account Current Value and the loan is canceled. (2) If the amount of the vested Individual Account Current Value available for distribution is not sufficient to repay (a) the outstanding loan balance, plus (b) any applicable Fixed Plus Account default charge, then the surrender amount cannot exceed the vested Individual Account Current Value, including the Loan Account, reduced by 125% of the outstanding loan balance. (g) Electing an Annuity option while a loan is outstanding: Before all or any portion of the vested Individual Account Current Value is applied to an Annuity option, the Participant may repay any outstanding loan balance, or the vested Individual Account Current Value is adjusted as described in (f). (h) Death of the Participant while a loan is outstanding: If a death benefit claim is submitted for an Individual Account with an outstanding loan, the Individual Account Current Value, including the amount of the Loan Account, is reduced by the amount of the outstanding loan balance before the death benefit amount is determined. (i) Loan payment default: If Aetna does not receive a loan payment when due, the defaulted payment is treated as follows:
18 3.11 Loans (Cont'd): (1) If the amount of the vested Individual Account Current Value available for distribution is sufficient to repay (a) the amount of the defaulted payment, plus (b) any applicable Fixed Plus Account default charge, then that amount is deducted from the vested Individual Account Current Value. (2) If the amount of the vested Individual Account Current Value available for distribution is not sufficient to repay (a) the amount of the defaulted payment, plus (b) any applicable Fixed Plus Account default charge, until such time that the amount due can be distributed, the Loan Account continues to earn interest, and interest is charged on the defaulted payment. At that time, the amount due is surrendered from the vested Individual Account Current Value. 3.12 Notice to the Each year, Aetna will notify the Participant of: Participant: (a) The value of any amounts held in: (i) The Fixed Plus Account (if available), (ii) The GA Account (if available), (iii) The Fund(s) for the Separate Account; (b) The number of any fund(s) record units; (c) The fund(s) record unit value(s); (d) The amount available for withdrawal; and (e) The Loan Account value. This information will be as of a date no more than sixty (60) days before the date of the notice. 3.13 Manner and (a) A distribution to a Participant or Beneficiary may Timing of be made in a lump sum, as one of the Distribution Distributions: Options described in Section IV, or as one of the Annuity options in Section V. The Participant or Beneficiary may elect the form of distribution subject to the terms of the Plan. All distributions must satisfy the minimum distribution rules set forth in Code Section 401(a)(9). (b) The distribution of benefits from the Employee and Employer Accounts must generally begin no later than April 1 of the calendar year following the calendar year in which the Participant attains age 70-1/2 or retires, if later.
19 3.13 Manner and The entire value of the Individual Account must be Timing of distributed, or distribution must be made over the Distributions life of the Participant, the joint lives of the (Cont'd): Participant and Beneficiary or over a period that does not extend beyond the life expectancy of the Participant or the joint life expectancies of the Participant and Beneficiary. (c) If the Participant does not request commencement of benefits from the Employee and Employer Accounts as described above, Aetna will not be responsible for compliance with the Code Section 401(a)(9) minimum distribution requirements or for any adverse tax or other consequences that may result. 3.14 Withdrawal: (a) The Participant may withdraw any portion or all of an Individual Account Adjusted Current Value and transfer such amount to another investment provider under the Plan. The withdrawal and transfer request must be permitted under the terms of the Plan and submitted in writing to Aetna. (b) Unless the Participant specifies otherwise, partial withdrawals are satisfied by withdrawing amounts on a pro rata basis from each of the investment options in which the Individual Account is invested. (c) When amounts are withdrawn from the GA Account, amounts in Short-Term and Long-Term Classifications are treated as separate investment options and amounts are taken on a pro rata basis. Within a Classification, amounts will be withdrawn starting with the Term still in effect with the oldest Deposit Period. (d) Any amount withdrawn from the Fixed Plus Account will be subject to the limitations in 3.15 and 3.16. 3.15 Partial The amount eligible for partial withdrawal is Withdrawal 20% of the Current Value of the amount held in from the the Fixed Plus Account on the day Aetna's Home Fixed Plus Office receives a written request, reduced by Account: any previous Fund Transfer, partial withdrawal or amounts taken as a loan or used to purchase Annuity benefits during the prior 12 months. Aetna reserves the right to include amounts paid under ECO, LEO and SWO for purposes of applying this 20% limit. However, SWO and LEO are unavailable if a Fixed Plus Account Transfer or withdrawal is requested within the current 12 month Period. The 20% limit applicable to partial withdrawals from the Fixed Plus Account will be waived under certain conditions and will apply when the partial withdrawal is made on a pro rata basis from all options used under the Participant's Individual Account. (See Contract Schedule I).
20 3.16 Payment of When Aetna receives a full withdrawal request, Fixed Plus no additional partial withdrawals or Fund Account Full Transfers from the Fixed Plus Account are Withdrawal: permitted during the payout period. If a full withdrawal is requested, Aetna will pay any Current Value from the Fixed Plus Account in five payments as follows: (a) One-fifth of the Current Value on the day the request is received in good order at Aetna's Home Office, reduced by any amount from the Fixed Plus Account that was transferred, withdrawn or used for a loan or to purchase Annuity benefits during the prior 12 months; (b) One-fourth of the remaining Current Value 12 months later; (c) One-third of the remaining Current Value 12 months later; (d) One-half of the remaining Current Value 12 months later; and (e) The balance of the Current Value 12 months later. The Fixed Plus Account full withdrawal payment provision will be waived when a withdrawal is: (a) Due to the Participant's death before Annuity benefit payments begin; (b) Used to purchase Annuity benefits; (c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been withdrawn, transferred, taken as a loan or used to purchase Annuity benefits during the previous 12 months; (d) Due to hardship when the following conditions are met: (1) the withdrawal is due to an employer certified hardship; (2) the amount withdrawn is paid directly to the Participant. (e) Due to separation from service provided that: (1) the withdrawal is due to the Participant's separation from service with the employer; (2) the employer certifies that the Participant has separated from service;and (3) the amount withdrawn is paid directly to the Participant. Any full withdrawal from the Fixed Plus Account may be cancelled at any time before the end of the payment period. 3.17 Amount Payable Aetna will pay any portion of the Individual at Death Account Current Value, to the Beneficiary when: (Before Annuity (a) The Participant dies before Annuity payments Payments start; and Start): (b) The certified copy of the death certificate is received by Aetna; and (c) A completed and signed election form is submitted to the Home Office. The Beneficiary must be eligible for a distribution under the terms of the Plan.
21 3.17 Amount Payable The amount payable will be the Current Value of the at Death Individual Account plus aggregate positive MVA, as (Before applicable, on the date the notice of death and the Annuity request for payment are received in good order at Payments Aetna's Home Office. Start)(Cont'd): If the Participant dies before distributions begin in accordance with the provisions of Code Section 401(a)(9), the entire value of the Account must be distributed by December 31 of the calendar year containing the fifth anniversary of the date of the Participant's death. Alternatively, if the Participant has a designated Beneficiary, payments may be made over the life of the Beneficiary or over a period not extending beyond the life expectancy of the Beneficiary provided distribution to a non-spouse Beneficiary begins by December 31 of the calendar year following the calendar year of the Participant's death. For a spousal Beneficiary, such payments must begin by the later of December 31 of the calendar year of the Participant's death or December 31 of the calendar year in which the Participant would have attained age 70-1/2. If the Participant dies after distributions begin in accordance with the provisions of Code Section 401(a)(9), payments to the Beneficiary must be made at least as rapidly as the method of distribution in effect at the time of the Participant's death. If the minimum distribution requirements have been met by partial withdrawals based on the Participant's life expectancy or the joint life expectancies of the Participant and Beneficiary, death benefit payments to the Beneficiary must also satisfy any additional requirements of Code Section 401(a)(9). Amounts in the GA Account will be payable as described in Section 3.06(d). 3.18 Reinstatement: All or a portion of the proceeds of a full withdrawal of an Individual Account may be reinvested within 30 days after the surrender if allowed by law. Any Market Value Adjustment deducted from GA Account withdrawals will not be included in the reinstatement. Amounts will be reinstated among the Fixed Plus Account, GA Account, and the Fund(s) in the same proportion as they were at the time of withdrawal. Any amount reinstated to the GA Account will be credited to the current Deposit Period. The number of record units reinstated will be based on the record unit value(s) next computed after receipt at Aetna's Home Office of the reinstatement request and the amount to be reinvested. Amounts attributable to an Aetna GET Fund series will be reinstated to the current Offering Period of the Aetna GET Fund series. If no Aetna GET Fund series Offering Period is available, amounts withdrawn from the Aetna GET Fund series will be allocated, pro rata, among all other investment options in which the Individual Account is invested. A Reinstatement is permitted only once.
22
IV. NON-ANNUITY DISTRIBUTION OPTIONS - -------------------------------------------------------------------------------- 4.01 Distribution Distribution Options: ECO, LEO and SWO are Options: distribution options under which a portion of the Individual Account Current Value will automatically be surrendered and distributed each calendar year. The distributed amount is withdrawn pro rata from each investment option under the Individual Account. The distributions will be made in accordance with terms of the Plan. Market Value Adjustment: A Market Value Adjustment will not be applied to any portion of the Current Value which is paid under ECO. Minimum Current Value: At its discretion, Aetna may require a minimum initial Current Value for election of a distribution option. If after election of the option the Current Value is insufficient to make a scheduled payment, Aetna will distribute the entire Individual Account balance. Reservations of Rights: Aetna reserves the right to change the terms of ECO, LEO or SWO for future elections, to discontinue the availability of these options after proper notification, or to make other distribution options available as allowed by the state in which this Contract is delivered. Aetna also reserves the right to allow ECO and LEO payments to be made more frequently than annually. Election and Revocation: The Participant or Beneficiary may elect a distribution option by submitting a completed and signed election form to Aetna's Home Office. However, the elected distribution option must be in accordance with the terms of the Plan. Once elected, the Participant or Beneficiary may revoke the option by submitting a written request to Aetna's Home Office. Any revocation will apply only to amounts not yet paid. Availability of ECO, LEO and SWO: The Participant may elect any one of the following three distribution options, if they are available as an option under the Contract (See Contract Schedule I) and the election is in accordance with the terms of the Plan. The Beneficiary may elect either ECO or SWO, if they are available as an option under the Contract (See Contract Schedule I) and the election is in accordance with the terms of the Plan. An individual who has revoked ECO, LEO or SWO may not subsequently elect that option again, nor may the individual elect another withdrawal option unless permitted under the Code minimum distribution rules. LEO and SWO are not available if there is an outstanding loan under the Individual Account, or if a Fixed Plus Account transfer or surrender has occurred within the prior 12 month period. Payments will cease if a loan is granted while LEO or SWO is in effect.
23 4.01 Distribution If LEO is in effect and the Participant dies, Options or if ECO or SWO is in effect and the (Cont'd): Participant dies before the required beginning date for minimum distributions, payments will cease. A Beneficiary may elect ECO or SWO provided the election satisfies the Code minimum distribution rules. If ECO or SWO is in effect and the Participant dies after the required beginning date for minimum distributions, payments will continue as permitted under the Code minimum distribution rules, unless revoked. 4.02 Estate Amount of Distribution: Each year that ECO is Conservation in effect, Aetna will calculate and distribute Option (ECO): an amount equal to the minimum required distribution under the Code. The annual distribution will be determined by dividing the Individual Account Current Value as of December 31 of the year prior to the year for which payment is to be made by a life expectancy factor based on expected return multiples in Table V and VI of Section 1.72-9 of the Income Tax Regulations. The Participant may elect either the single or joint life expectancy factor. If the joint life expectancy factor is elected, the second life must be the Beneficiary under the Plan. If the Beneficiary selects ECO after the Participant's death, only a single life expectancy factor may be used. The life expectancy or joint life expectancy factor will be recalculated each year in accordance with the rules under Code Section 401(a)(9). Date of Distribution: The Participant shall specify the initial distribution date. The earliest date is the first day of the calendar year in which the Participant attains age 70-1/2 or retires, if later. If a Beneficiary elects ECO, the earliest date is the date of the Participant's death. Subsequent distribution will be made annually on such date as Aetna may designate or allow. 4.03 Life Amount of Distribution: Each year that LEO is Expectancy in effect, Aetna will calculate and distribute Option (LEO): an amount determined by dividing the Individual Account Current Value as of December 31 of the year prior to the year for which payment is to be made by a life expectancy factor based on expected return multiples in Table V and VI of Section 1.72-9 of the Income Tax Regulations. Payments will be made each year until the year the Participant attains age 70-1/2, or until the Participant dies, if earlier. The Participant may elect either the single or joint life expectancy factor. If the joint life expectancy factor is elected, the second life must be the Beneficiary under the Plan. The life expectancy or joint life expectancy factor will be recalculated each year in accordance with the rules under Code Section 401(a)(9), or reduced by one for each calendar year which has elapsed since the life expectancy was first calculated, as elected by the Participant.
24 4.03 Life Date of Distribution: The Participant shall specify Expectancy the initial distribution date. The earliest date is Option (LEO) the date on which the Participant separates from (Cont'd): service with the employer. Subsequent distribution will be made annually on such date as Aetna may designate or allow. 4.04 Systematic Amount of Distribution: The Participant may elect one Withdrawal of the three payment methods described below. Option (SWO): (1) Specified Payment: Payments of a designated dollar amount. The annual amount may not be greater than the percentage of the Current Value at time of election as shown in Contract Schedule I. This annual dollar amount will remain constant, unless a higher amount is required under Code minimum distribution rules. At its discretion, Aetna may require a minimum initial payment amount; or (2) Specified Period: Payments which are made over a period of time which must be at least the minimum number of years shown in Contract Schedule I. The annual amount paid each year is calculated by dividing the Current Value as of December 31 of the prior year by the number of payment years remaining; or (3) Specified Percentage: Payment of a designated percentage which cannot be greater than the percentage of the Current Value at the time of election as shown in Contract Schedule I. The percentage may be changed by written request. Aetna reserves the right to limit the number of times the percentage may be changed. The annual amount is calculated by multiplying the Current Value as of December 31 of the year prior to the payment by the designated percentage. Payments will be made each year until the year the Participant attains age 70-1/2. Minimum Distribution Requirements: If distributions are made under SWO after payments are required to begin under the minimum distribution requirements of Code Section 401(a)(9), the amount distributed in any year will be increased if required under the Code minimum distribution rules.
25 4.04 Systematic For this purpose, the minimum required distribution Withdrawal will be determined each year by dividing the Option (SWO) Individual Account Current Value as of December 31 of (Cont'd): the year prior to the year for which payment is to be made by a life expectancy factor, which for the initial distribution year shall be based on either the single life expectancy factor or joint life expectancy factor in Table V or VI of Section 1.72-9 of the Income Tax Regulations, as elected by the Participant. If the joint life expectancy factor is elected, the second life must be the Beneficiary under the Plan. If a Beneficiary elects SWO after the Participant's death, only a single life expectancy factor may be used. Minimum distributions for any subsequent year will be calculated based on such life expectancy factor reduced by one for each calendar year which has elapsed since the life expectancy was first calculated. If the specified period method is elected, the maximum specified period will be limited by the single life expectancy factor or joint life expectancy factor in Table V or VI of Section 1.72-9 of the Income Tax Regulations, as elected by the Participant. If elected by a Beneficiary, only a single life expectancy may be used. Date of Distribution: The Participant shall specify the initial distribution date. The earliest date is the date on which the Participant attains age 59-1/2 or age 55, if separated from service with the employer at or after age 55. If a Beneficiary elects SWO, the earliest date is the date of the Participant's death. SWO payments will be made on a monthly, quarterly, semi-annual or annual basis, as elected by the Participant or Beneficiary. If SWO payments are made more frequently than annually, the designated annual amount is divided by the number of payments due each calendar year. Subsequent distribution will be made periodically on such date as Aetna may designate or allow.
V. ANNUITY PROVISIONS - --------------------------------------------------------------------------- 5.01 General (a) Upon the Participant's total disability, Provisions: acceptance of retirement or separation from service, the Participant has the right to elect an Annuity option. The Participant must transfer any portion of the Current Value held in an Aetna GET Fund series to another investment option before an Annuity option is elected. (b) The Participant may elect an Annuity option by telling Aetna to pay all or any portion of the Individual Account(s) Current Value (minus any applicable premium tax if not previously deducted) as a premium for an Annuity under Option 1, 2, or 3 (See 5.02). (c) A completed and signed election form must be submitted to the Home Office. Participant must be eligible for a distribution under the terms of the Plan and the Annuity option chosen must be permitted under the terms of the Plan.
26 5.01 General (d) Any election of an Annuity option must comply with Provisions the minimum distribution requirements of Code (Cont'd): Section 401(a)(9), including the incidental death benefit rule, and the regulations thereunder. This restriction does not apply if Option 3 is chosen and the second Annuitant is the spouse of the Participant. (e) Once elected, an Annuity option may not be revoked, except for Option 1 when elected on a variable basis. 5.02 Annuity Option 1 - Payments for a Stated Period of Time Options: - An Annuity will be paid for the number of years chosen (See Contract Schedule II). If payments for this option are made under a variable Annuity, the present value of any remaining payments may be withdrawn at any time. Option 2 - Life Income based on the life of the Annuitant. Payments will be made until the death of the Annuitant. When this option is chosen, a choice of the following must be made: (a) Payments cease at the death of the Annuitant; (b) Payments may be guaranteed for 5-30 years; or (c) Payments may be guaranteed for the amount applied to the Annuity option. If the Annuitant dies prior to the payment of the amount applied to the Annuity option (less any premium tax), any remaining balance will be paid in one sum to the Beneficiary. This option is only available on a fixed basis. Option 3 - Life Income based upon the lives of two Annuitants. 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 of the following must be made: (a) 100% of the payment to continue after the first death; (b) 66-2/3% of the payment to continue after the first death; (c) 50% of the payment to continue after the first death; (d) 100% of the payment to continue after the first death with a guarantee of 5-30 years; (e) 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; or (f) 100% of the payment to continue after the first death. Payments are guaranteed for the amount applied to the Annuity option. If both Annuitants die prior to the total payment of the amount applied to the Annuity option (less any premium tax), any remaining balance will be paid in one sum to the Beneficiary. This option is only available on a fixed basis.
27 5.02 Annuity If a fixed Annuity option is chosen under Options Option 1, Option 2 (a) or (b) or Option 3 (a) (Cont'd): or (d), then the Participant may elect a payment increase of 1, 2 or 3%, compounded annually. An election of such a payment increase will result in an adjustment of the policy guarantees by an actuarially equivalent payment factor. Other Options - Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. 5.03 Payments: (a) Upon written direction from the Contract Holder, Aetna will pay Annuity benefits directly to the Participant and as payor, Aetna will be responsible for withholding any applicable federal or state taxes and reporting such sums and filing any related forms with the Internal Revenue Service and/or to any applicable state taxing authorities. (b) Generally, the first Annuity payment must be made by April 1 of the calendar year following the year in which the Participant turns age 70-1/2 or retires, if later. (c) Payments will be made on a monthly basis unless the Participant requests otherwise. If payments are made on a quarterly, semi-annual or annual basis, Aetna will calculate an actuarially equivalent payment factor. (d) No choice of any Annuity option may be made if the first payment would be less than $50 per month or if the total payments in a year would be less than $250. (e) For purposes of calculating the guaranteed first payment of a variable Annuity or the payments for a fixed Annuity, the Annuitant's and second Annuitant's adjusted age will be used. The Annuitant's and second Annuitant's adjusted age is his or her age as of the birthday closest to the Annuity commencement date reduced by one year for Annuity commencement dates occurring during the period of time from July 1, 1992 through December 31, 1999. The Annuitant's and second Annuitant's age will be reduced by two years for Annuity commencement dates occurring during the period of time from January 1, 2000 through December 31, 2009. The Annuitant's and second Annuitant's age will be reduced by one additional year for Annuity commencement dates occurring in each succeeding decade. (f) If a Fixed Annuity under Option 1, 2 or 3 is elected, Aetna will use the applicable current settlement option rates if these will provide higher fixed Annuity payments.
28 5.04 Investment (a) When an Annuity option is chosen the Participant Option: must designate whether the Annuity will be fixed or variable and whether the underlying investment will be: (1) The General Account; (2) One or more of the available Fund(s) ; or (3) A combination of (1) and (2). If a fixed Annuity is chosen, the Annuity purchase rate for the option chosen reflects at least the Minimum Guaranteed Interest Rate (See Contract Schedule II), but may reflect a higher interest rate. If a variable Annuity is chosen, the initial Annuity payment for the option chosen reflects the Assumed Annual Net Return Rate elected (See Contract Schedule II). The Assumed Annual Net Return Rate is the interest rate used to determine the amount of the first Annuity payment under a variable Annuity. The Separate Account must earn this rate plus enough to cover the mortality and expense risk charges (which may include profit) (at the annual rate shown on Contract Schedule II) and a daily administrative charge if future variable Annuity payments are to remain level. 5.05 Fund Annuity The number of Fund(s) annuity units is based on Units: the amount of the first variable Annuity payment which is equal to: (a) The portion of the Current Value (minus any premium tax) applied to pay a variable Annuity; divided by (b) 1,000; multiplied by (c) the payment rate for the option chosen. Such amount, or portion, of the variable payment will be divided by the appropriate Fund(s) Annuity unit value (See 5.06) on the tenth Valuation Date before the due date of the first payment to determine the number of each Fund Annuity units. The number of each Fund Annuity units remains fixed. Each future payment is equal to the sum of the products of each Fund Annuity unit value multiplied by the appropriate number of Units. The Fund Annuity unit value on the tenth Valuation Date prior to the due date of the payment is used. 5.06 Fund Annuity For any Valuation Date, a Fund(s) Annuity unit Unit Value: value is equal to: (a) The value for the previous Valuation Date; multiplied by (b) The Annuity net return factor(s) (See 5.07) for the Period; multiplied by (c) A factor to reflect the assumed annual net return rate. (See Contract Schedule II). The dollar value of a Fund Annuity unit and Annuity payments may go up or down due to investment gain or loss. Payments shall not be changed due to changes in the mortality or expense results or administrative charges.
29 5.07 Fund Annuity The Annuity net return factor(s) are used to Net Return compute all Separate Account Annuity payments Factor: for any Fund. The Annuity net return factor(s) for each Fund is equal to 1.0000000 plus the net return rate. The net return rate is equal to: (a) The value of the shares of the Fund held by the Separate Account at the end of a Valuation Period, minus (b) The value of the shares of the Fund held by the Separate Account at the start of the Valuation Period, plus or minus (c) Taxes (or reserves for taxes) on the Separate Account (if any); divided by (d) The total value of the Fund(s) record units and Fund(s) Annuity units of the Separate Account at the start of the Valuation Period; minus (e) A daily charge for Annuity mortality and expense risks, which may include a profit, (at the annual rate as shown on Contract Schedule II), and a daily administrative charge. A net return rate may be more or less than 0%. The value of a share of the Fund is equal to the net assets of the Fund divided by the number of shares outstanding. 5.08 Fund Transfers At the request of the Contract Holder or the During the Participant if the Contract Holder has directed Annuity Period: Aetna to accept such a request from the Participant, all or any portion of the Current Value may be transferred from any variable Fund to any other allowable Fund. Aetna reserves the right to allow no more than four Funds to be selected at any one time. Fund Transfers will be processed as of the Valuation Date next following when a transfer request is received in good order at Aetna's Home Office. The maximum number of allowable transfers (during the Annuity period) in a calendar year is shown on Contract Schedule II. Fund Transfer requests must be expressed as a percentage of each Fund's allocation to the Annuity payment. Aetna may establish a minimum transfer amount. 5.09 Death Benefit: Upon the death of the Annuitant(s), any remaining guaranteed payments will continue to the Beneficiary unless the Beneficiary elects to receive the present value of any remaining guaranteed payments in a lump sum. Such payments will be paid at least as rapidly as under the method of distribution then in effect. If the Beneficiary dies while receiving payments, the present value of any remaining guaranteed payments will be paid in one sum to the Beneficiary's estate.
30 5.09 Death Benefit The interest rate used to determine the first (Cont'd): Annuity payment will be used to calculate the present value. The present value will be determined as of the Valuation Period in which proof of death acceptable to Aetna and a request for payment is received at Aetna's Home Office.
31 OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- -------------------------- ------------------------ ----------------------- ------------------------ Monthly Monthly Years Payment Years Payment - -------------------------- ------------------------ ----------------------- ------------------------ 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - -------------------------- ------------------------ ----------------------- ------------------------
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.5%
- -------------------------- ------------------------ ----------------------- ------------------------ Monthly Monthly Years Payment Years Payment - -------------------------- ------------------------ ----------------------- ------------------------ 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - -------------------------- ------------------------ ----------------------- ------------------------
32 OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- -------------------------- ------------------------ ----------------------- ------------------------ Monthly Monthly Years Payment Years Payment - -------------------------- ------------------------ ----------------------- ------------------------ 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - -------------------------- ------------------------ ----------------------- ------------------------
33 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ------------------- --------------- --------------- -------------- --------------- --------------- --------------- Adjusted Age of None 5 10 15 20 Cash Annuitant Refund - ------------------- --------------- --------------- -------------- --------------- --------------- --------------- 50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ------------------- --------------- --------------- -------------- --------------- --------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 34 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- ------------------- --------------- --------------- -------------- --------------- --------------- Adjusted Age of Annuitant None 5 10 15 20 - ------------------- --------------- --------------- -------------- --------------- --------------- 50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - ------------------- --------------- --------------- -------------- --------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 35 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- ------------------- --------------- --------------- -------------- --------------- --------------- Adjusted Age of Annuitant None 5 10 15 20 - ------------------- --------------- --------------- -------------- --------------- --------------- 50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - ------------------- --------------- --------------- -------------- --------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 36 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- -------------------------------- -------------- ------------ -------------- -------------- --------------- ---------------- Adjusted Ages - -------------------------------- Option 3d Second 10 Years Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e Option 3f - --------------- ---------------- -------------- ------------ -------------- -------------- --------------- ---------------- 55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - --------------- ---------------- -------------- ------------ -------------- -------------- --------------- ----------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 37 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ----------------------------------- Option 3d Second 10 Years Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 38 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ----------------------------------- Option 3d Second 10 Years Annuitant Annuitant Option 3a Option 3b Option 3c Guaranteed Option 3e - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 39 - -------------------------------------------------------------------------------- [Aetna logo] Aetna Life Insurance and Annuity Company Home Office: 151 Farmington Avenue Hartford, Connecticut 06156 (800) 525-4225 Individual Combination Annuity Contract Nonparticipating - -------------------------------------------------------------------------------- ALL PAYMENTS AND VALUES PROVIDED BY THIS ANNUITY CONTRACT, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY. I-CDA-98(ORP) EX-99.B.4.36 7 ENDORSEMENT Exhibit 99-B.4.36 Aetna Life Insurance and Annuity Company ENDORSEMENT The Contract and Certificate are hereby endorsed as follows: I. The following provisions apply to amounts attributable to Net Contributions made to the Contract on or after the effective date of this endorsement. 1. In the section entitled Fixed Plus Account in Contract Schedule I: Replace the Minimum Guaranteed Interest Rate provision with the following: Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 2. Replace the Full Withdrawal provision with the following: Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within [six (6)] months after the Participant's date of death; b) Used to purchase Annuity benefits; c) Made when the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months; d) Due to hardship from 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 Participant; and 3) the amount paid for all withdrawals due to hardship during the previous 12 month period does not exceed 10% of the average value of all Accounts under the Contract during that same period; or e) Due to separation from service with the employer, provided that: 1) the employer certifies that the Participant separated from service; 2) the amount is withdrawn within one year from separation from service or, if withdrawn after one year from separation from service, the amount withdrawn is paid directly the Participant; and 3) the amount paid for all partial and full withdrawals due to separation from service during the previous 12 month period does not exceed 20% of the average value of all Accounts under the Contract during that same period. II. All amounts transferred or allocated to the Fixed Plus Account on or after the effective date of this endorsement will be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after that date. E3FXPL97 III. One Time Election with Respect to Existing Fixed Plus Account Values. a. During the [three (3)] month period beginning on the effective date of this endorsement, Participants will have a one-time opportunity to elect, by giving notice to Aetna, to have all amounts held in the Fixed Plus Account be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after the effective date of this endorsement. Participants who make the election described in the preceding sentence will not be entitled to be credited, beginning on the tenth anniversary of their Individual Account, with an interest rate that is higher than the then-declared rate for Individual Accounts before the tenth anniversary on any amounts held in the Fixed Plus Account. An election made pursuant to this provision may not be revoked. b. For Participants who do not make the election allowed under paragraph III (a) above, amounts attributable to their balances in the Fixed Plus Account on the effective date of this endorsement will remain subject to the rules described in the Contract (without giving effect to paragraph (I) of this endorsement) until such time as they are transferred to another investment option or withdrawn. Endorsed and made a part of the Contract and Certificate effective on the date, after any required state approval, as of which it is issued by Aetna. /s/ Dan Kearney EX-99.B.4.37 8 ENDORSEMENT Exhibit 99-B.4.37 Aetna Life Insurance and Annuity Company ENDORSEMENT The Contract and Certificate are hereby endorsed as follows: I. The following provisions apply only to Individual Accounts established with Net Contributions from exchanged Aetna contracts. 1. The Guaranteed Interest Rate section of the Specifications is replaced with the following: There is a guaranteed interest rate for Contributions(s) held in the Fixed Plus Account, the Fixed Account and the GA Account (see Contract Schedule I). 2. Where Aetna is the exclusive Plan provider, the Contract Holder does not have a choice of a Transfer Credit or reduced charges to the Separate Account, as stated in the Transfer Credit Endorsement made a part of this contract. Only the Transfer Credit option applies for exchanged Aetna contracts. Transfer Credit will be applied to Transferred Assets deposited into an exchanged contract which are transferred into an acquired contract, as well as to Transferred Assets deposited into an acquired contract up until the one year anniversary of the first Net Contribution to the exchanged contract. 3. Add the following section to Contract Schedule I: Fixed Account ----------------------------------------------------------------------- Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 4. Replace the section entitled Separate Account and GA Account under Contract Schedule I with the following: Separate Account, Fixed Account and GA Account ----------------------------------------------------------------------- Withdrawal Fee: For each withdrawal from an Individual Account, the Withdrawal Fee will vary according to the number of purchase payment cycles completed for the Individual Account being surrendered. The number and amount of purchase payments to be made in a cycle is chosen by the Participant. A purchase payment cycle is completed when this chosen number and amount of purchase payments have been made. The number of purchase payment cycles completed may not be greater than the number of whole years since the Individual Account was established under this or any other exchanged Aetna contract. The number of purchase payment cycles completed equals the total number completed under this contract and under other Aetna contracts from which Net Contributions to this Contract have been transferred from (exchanged contracts). For each withdrawal, the fee will be as follows:
Number of Purchase Payment Cycles Completed Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%
1 EINRP97 For each withdrawal from an Individual Account maintained pursuant to a lump-sum payment, the Withdrawal Fee will vary according to the period of time between the Effective Date of the Individual Account under your previous exchanged Aetna contract and the date of withdrawal as follows:
If Period of Time is Withdrawal Fee Fewer than 5 years 5% 5 or more, but fewer than 6 years 4% 6 or more, but fewer than 7 years 3% 7 or more, but fewer than 8 years 2% 8 or more, but fewer than 9 years 1% 9 or more years 0%
The withdrawal fee will not be deducted from any portion of the Individual Account Current Value which is paid: - Due to the Participant's death before Annuity payments begin; - Used to purchase Annuity benefits; - Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); - In an amount equal to or less than 10% of the Individual Account Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account are excluded when calculating the Individual Account Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; - When the Individual Account(s) Current Value is $3,500 or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior 12 months; - To relieve a Participant's "financial hardship," as may be allowed for Annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or - On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. - The Withdrawal Fee will never exceed 8-1/2% of the total Contributions made to the Individual Account. 5. Replace the section entitled Separate Account, GA Account, and the Fixed Plus Account with the following: Separate Account, GA Account, Fixed Account and Fixed Plus Account ----------------------------------------------------------------------- Transfers: An unlimited number of Transfers may be made during the Accumulation Period. Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract. 2
Total Assets Maintenance Fee -------------------------- --------------- Less than $500,000 $15.00 500,000 - 1,000,000 $15.00 1,000,001 - 5,000,000 $0.00 5,000,001 - 15,000,000 $0.00 Greater than 15,000,000 $0.00
Initial charges will be based on Aetna's estimated year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than 20% of the Individual Account's Current Value at the time of election. The Specified Period may not be less than 5 years. Loan Interest Rate: a) Plans subject to ERISA: a Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least 0.5% higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: 6% on an annual basis. See Section I. - DEFINITIONS for explanations. 6. Replace the section entitled Annuity Option 2 under Contract Schedule II with the following: Annuity Option 1: For amounts invested in the Fixed Account, GA Account or one or more of the Fund(s), the number of years must be at least five (5) and not more than thirty (30) and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least five (5) and not more than thirty (30) and the Annuity must be a Fixed Annuity. 7. Add the following Definition: Fixed Account: An accumulation option with a guaranteed minimum interest rate shown on the Contract Schedule I. Aetna may credit a higher rate which is not guaranteed. 8. Replace the definition entitled Current Value with the following: Current Value: For an Individual Account, the Current Value is the total of: a) The amount, if any, in the Fixed Plus Account, with interest earned to date; b) The amount, if any, in the GA Account, with interest earned to date; c) The amount, if any in the Fixed Account, with interest earned to date; and d) The value of all Fund Record Units, if any, as of the most recent Valuation Period; plus e) Any amount due to experience credits; less f) Any Maintenance Fee(s) due. 3 9. Replace the definition entitled Transfer with the following: Transfer: The movement of invested amounts among the available Fund(s), the Fixed Plus Account, the Fixed Account and the GA Account during the Accumulation Period. 10. Replace the section entitled Net Contributions with the following: Net Contribution(s): The Net Contribution equals the actual Contribution less any applicable premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (See Section V). If Aetna determines that under applicable state law, it must pay a premium tax when the Contribution is received, or at any other time, it may deduct the tax at that time. The Net Contribution(s) may be allocated among the following investment options: a) The Fixed Plus Account; and b) The current Deposit Period(s) for Guaranteed Terms under the GA Account; and c) The Fund(s) in which the Separate Account invests. The Fixed Account is an investment option available only for Net Contributions previously allocated to the Fixed Account under Aetna contracts that are exchanged into this Contract. The Contract Holder must tell Aetna the percentage of all Net Contributions to allocate to one or more of the investment options. The Contract Holder or, if permitted by the Contract Holder, the Participant may change the allocation of future Net Contributions at any time, without charge. Aetna reserves the right to require a minimum Contribution amount per Individual Account. 11. Replace the section entitled Transfer(s) with the following: Transfer(s): Before an Annuity option is elected, all or any portion of the Adjusted Current Value of the Individual Account may be transferred from any Fund, or the GA Account: a) To any other allowable Fund; or b) To the Fixed Plus Account; or c) To any Guaranteed Term of the GA Account with a different classification available in the current Deposit Period. No Transfers will be allowed into the Fixed Account. Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a minimum transfer amount. Within a Guaranteed Term classification, the amount transferred will be withdrawn from the oldest Deposit Period, then from the next oldest, and so on until the amount requested is satisfied. Amounts applied to Guaranteed Terms of the GA Account may not be transferred to the Funds, the Fixed Plus Account or to another Guaranteed Term during the Deposit Period or 90 days after the close of the Deposit Period except for Matured Term Value(s) during the calendar month following the Term's Maturity Date. Transfers from Guaranteed Terms of the GA Account are subject to the MVA provisions of 3.08. Each Calendar year, 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s) and/or to the GA Account's then-current Deposit Period. Such transfer will be without charge and will not be allowed under an Annuity Option. Transfers will be permitted to the Fixed Plus Account without regard to these limitations. At its discretion, Aetna may allow Contract Holders to transfer a larger percentage and/or take multiple transfers in a calendar year. If Aetna so allows, Aetna reserves the right to reinstate the transfer limitations without notice. 4 During each rolling twelve (12) month period, up to 20% of the Current Value held in the Fixed Plus Account may be transferred to one or more of the Fund(s), and/or the GA Account's then-current Deposit Period. The 20% limit is reduced by any partial withdrawals, loans or amounts used to purchase an Annuity during the twelve (12) month period. Aetna reserves the right to include amounts paid under ECO and SWO provisions for purposes of applying this 20% limit. This limit is waived when the balance in the Fixed Plus Account is $1,000 or less on the date the Transfer request is received in good order at Aetna's Home Office. The Contract Holder, or Participant if authorized in writing by the Contract Holder, may make an unlimited number of Transfers during the Accumulation Period. 12. Replace the section entitled Notice to the Contract Holder with the following: Notice to the Contract Holder: Each year, Aetna will notify the Contract Holder of: a) The value of any amounts held in: 1) The Fixed Plus Account, 2) The GA Account, 3) The Fixed Account, 4) The Fund(s) for the Separate Account; b) The number of any Fund Record units; c) The Fund Record unit value(s); d) The Loan Account balance; and e) The amount available for withdrawal. This information will be as of a date no more than sixty (60) days before the date of the notice. 13. Replace the section entitled Withdrawal Value with the following: Withdrawal Value: After deduction of the Maintenance Fee (if any), the amount payable by Aetna upon the withdrawal of any portion of an Individual Account from the Fund(s), the Fixed Account or the GA Account shall be reduced by a Withdrawal Fee, if applicable. The Withdrawal Fee will be in accordance with the Withdrawal Fee table in Contract Schedule I. No Withdrawal Fee is deducted from any portion of the Current Value which is paid from the Fixed Plus Account. For a partial or full withdrawal from any Individual Account, Aetna must receive written direction from the Contract Holder on a form acceptable to Aetna. If the Contract is subject to ERISA, this direction must include certification that all of the REA waiver and spousal consent requirements have been satisfied. Aetna may defer payment of the withdrawal value until appropriate Contract Holder certification is received. 14. Replace the section entitled Withdrawal Fee Applicable to Funds and GA Account with the following: Withdrawal Fee Applicable to Funds, the Fixed Account and GA Account: A Withdrawal Fee (Deferred Sales Charge) may apply to withdrawals from the GA Account, the Fixed Account and/or Funds. For each withdrawal, the withdrawal fee will be determined as shown on Contract Schedule I. 5 During each rolling 12 month period, up to 20% of the Current Value in the Fixed Plus Account may be withdrawn as a partial surrender. This 20% limit is reduced by any amount(s) transferred, taken as a loan or used to purchase an Annuity during the 12 month period. The 20% limit applicable to partial surrenders from the Fixed Plus Account will be waived when the partial surrender is due to one of the conditions set forth in Contract Schedule I. The waiver will apply provided the partial surrender is taken pro rata from the Fixed Plus Account, the GA Account, and the Fund(s). Aetna reserves the right to include amounts paid under the ECO and SWO provisions for purposes of applying the 20% limit. However, the SWO provision is not available if the Contract Holder on behalf of the Participant requested a Fixed Plus Account Transfer or surrender within the current 12 month period. 15. Replace the fourth sentence of the section entitled Reinstatement with the following: Amounts will be reinstated among the Fixed Plus Account, the GA Account, the Fixed Account and/or the Fund(s) for the Separate Account in the same proportion as they were at the time of withdrawal. 16. Replace a) under the section entitled Estate Conservation Option with the following: a) With the Estate Conservation Option (ECO) a portion of the Individual Account Current Value is automatically surrendered and distributed each year without incurring a Withdrawal Fee. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. 17. Replace a) under the section entitled Systematic Withdrawal Option with the following: a) With the Systematic Withdrawal Option (SWO) a portion of the Individual Account Current Value is automatically distributed each year without incurring a Withdrawal Fee. A SWO payment will be calculated on the Individual Account's Current Value. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. SWO payments may not be elected if a loan is outstanding under an Individual Account. II. The following provisions apply to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date: 1. In the section entitled Fixed Plus Account in Contract Schedule I: Replace the Minimum Guaranteed Interest Rate provision with the following: Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 2. Replace the Full Withdrawal provision with the following: Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months; d) Due to hardship from an unforeseeable emergency, as defined by the Code, if the following conditions are met: 1) the hardship is certified by the employer; 6 2) the amount is paid directly to the Participant; and 3) the amount paid for all withdrawals due to hardship during the previous 12 month period does not exceed 10% of the average value of all Accounts under the Contract during that same period; or e) Due to separation from service with the employer, provided that: 1) the employer certifies that the Participant has separated from service; 2) the amount is withdrawn within one year from separation from service or, if withdrawn after one year from separation from service, the amount withdrawn is paid directly to the Participant; and 3) the amount paid for all partial and full withdrawals due to separation from service during the previous 12 month period does not exceed 20% of the average value of all Accounts under the Contract during that same period. III. All amounts transferred or allocated to the Fixed Plus Account on or after the Contract effective date will be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after that date. IV. One-time election for Individual Accounts established with Net Contributions from exchanged Aetna Contracts. a) During the three (3) month period beginning on the Contract effective date, Participants will have a one-time opportunity to elect, by giving notice to Aetna, to have all amounts held in the Fixed Plus Account be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date. Participants who make the election described in the preceding sentence will not be entitled to be credited, beginning on the tenth anniversary of the effective date of their Individual Account, with an interest rate that is higher than the then declared rate for Individual Accounts before the tenth anniversary on any amounts held in the Fixed Plus Account. An election made pursuant to this provision may not be revoked. b) For Participants who do not make the election allowed under IV(a) above, amounts attributable to their balances in the Fixed Plus Account on the Contract effective date will remain subject to the rules described in the Contract (without giving effect to Part II of this endorsement) until such time as they are transferred to another investment option or withdrawn. V. In the Annuity Provisions section: Add the following to the Choices provision: c) At the request of the Owner, all or any portion of the amount allocated to a Fund may be transferred from any Fund to any other allowable Fund. During the Annuity period, the maximum number of allowable transfers in a calendar year is four. Aetna reserves the right to change the number of allowable transfers. Transfer requests must be expressed as a percentage of the allocation among the Funds of the amount upon which the Variable Annuity will be based. Aetna may establish a minimum transfer amount. Transfers will be processed as of the Valuation Date next following the date when a transfer request is received in good order at Aetna's Home Office. Revise paragraph e) under the Choices provision as follows: e) Once elected, an Annuity option may not be revoked, except for option 1 when elected on a variable basis. Replace paragraph a) under Terms of Annuity Options with the following: No choice of any Annuity option may be made if the first payment would be less than $50 or if the total payments in a year would be less than $250. 7 Replace the last sentence in paragraph b) under Terms of Annuity Options with the following: The Annuity rates for options 2 and 3 are based on mortality from 1983 Table a. Replace the first sentence in the Death Provision with the following: When an Annuitant dies under options 2 and 3, the present value of any remaining guaranteed payments will be paid in one sum or payments will continue at the direction of the Contract Holder, in accordance with the Plan. Delete the last paragraph in the Death Provision. Replace the Annuity Options provision with the following: Annuity Options: The Contract Holder may direct Aetna to make payments according to one of the following options. Option 1 -- Payments for a Stated Period of Time -- An Annuity will be paid for 5 to 30 years. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested prior to the minimum number of years specified on Contract Schedule II, it will be subject to any withdrawal fee, if applicable (see Contract Schedule I). Option 2 -- Life Income Based on the Life of the Annuitant - Payments will be made until the death of the Annuitant. When this option is chosen, a choice from the following must be made: a) payments cease at the death of the Annuitant; b) payments may be guaranteed for 5 - 30 years; or c) cash refund: if the Annuitant dies, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. Option 3 -- Life Income Based Upon the Lives of Two Annuitants - An Annuity will be paid during the lives of the Annuitant and a joint Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice of the following must be made: a) 100% of the payment to continue after the first death; b) 66-2/3% of the payment to continue after the first death; c) 50% of the payment to continue after the first death; d) 100% of the payment to continue after the first death with a guarantee of 5 - 30 years; e) 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; or f) 100% of the payment to continue after the first death with a cash refund feature. If the Annuitant and joint Annuitant die, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. If a Fixed Annuity is chosen under option 1, option 2 a) or b) or option 3 a) or d), the Participant may elect an annual increase of one, two or three percent compounded annually. Other Options -- Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. Replace the tables at the end of the Annuity Provisions section of the Contract and Certificate with the following tables: 8 OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ---------- -------------- ------------ ------------------ Monthly Monthly Years Payment Years Payment - ---------- -------------- ------------ ------------------ 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - ---------- -------------- ------------ ------------------
9 OPTION 1 Payments for a Stated Period of Time Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------- -------------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ----------- -------------- ----------- -------------- 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - ----------- -------------- ---------- ---------------
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ------------ -------------- ------------- ---------------- Monthly Monthly Years Payment Years Payment - ------------ -------------- ------------- ---------------- 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - ------------ -------------- -------------- ---------------
10 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ------------- ----------- ------------ ------------ ------------ ---------- ----------- Adjusted Age of None 5 10 15 20 Cash Annuitant Refund - ------------- ----------- ------------ ------------ ------------ ---------- ----------- 50 $4.05 $4.05 $4.03 $3.99 $3.93 $3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ------------- ----------- ------------ ------------ ------------ ---------- -----------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 11 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- --------------- ----------- ------------ ---------- --------- --------------- Adjusted Age of None 5 10 15 20 Annuitant - --------------- ----------- ------------ ---------- --------- --------------- 50 $4.34 $4.34 $4.31 $4.27 $4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - --------------- ----------- ------------ ---------- --------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 12 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- --------------- ----------- ----------- ----------- --------- -------- Adjusted Age of None 5 10 15 20 Annuitant - --------------- ----------- ----------- ----------- --------- -------- 50 $5.26 $5.25 $ 5.22 $5.17 $5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - --------------- ----------- ----------- ----------- --------- --------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 13 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------- ---------- ---------- ---------- ----------- ---------- ---------- Adjusted Ages - -------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f Annuitant Guaranteed - ------------ -------------- ---------- ---------- ---------- ----------- ---------- ---------- 55 50 $3.69 $4.05 $4.27 $3.69 $4.03 $3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - ------------ -------------- ---------- ---------- ---------- ----------- ---------- ----------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 14 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------------------------- ------------- ----------------- ----------------- ---------------- ----------------- Adjusted Ages - -------------- -------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - -------------- -------------- ------------- ----------------- ----------------- ---------------- ----------------- 55 50 $3.97 $4.35 $4.56 $3.97 $4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - -------------- -------------- ------------- ----------------- ----------------- ---------------- -----------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 15 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ----------------------------- ---------------- ----------------- ----------------- ---------------- ------------- Adjusted Ages - ----------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - --------------- ------------- ---------------- ----------------- ----------------- ---------------- ------------- 55 50 $4.88 $5.26 $5.48 $4.88 $5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - --------------- ------------- ---------------- ----------------- ----------------- ---------------- -------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 16 Endorsed and made a part of the Contract and Certificate on the effective date of the Contract. /s/ Thomas J. McInerney --------------------------------- Thomas J. McInerney President 17 EX-99.B.4.38 9 ENDORSEMENT Exhibit 99-B.4.38 Aetna Life Insurance and Annuity Company ENDORSEMENT The Contract and Certificate are hereby endorsed as follows: I. The following provisions apply only to Individual Accounts established with Net Contributions from exchanged Aetna contracts. 1. The Guaranteed Interest Rate section of the Specifications is replaced with the following: There is a guaranteed interest rate for Contributions(s) held in the Fixed Plus Account, the Fixed Account and the GA Account (see Contract Schedule I). 2. Where Aetna is the exclusive Plan provider, the Contract Holder does not have a choice of a Transfer Credit or reduced charges to the Separate Account, as stated in the Transfer Credit Endorsement made a part of this contract. Only the Transfer Credit option applies for exchanged Aetna contracts. Transfer Credit will be applied to Transferred Assets deposited into an exchanged contract which are transferred into an acquired contract, as well as to Transferred Assets deposited into an acquired contract up until the one year anniversary of the first Net Contribution to the exchanged contract. 3. Add the following section to Contract Schedule I: Fixed Account - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 4. Replace the section entitled Separate Account and GA Account under Contract Schedule I with the following: Separate Account, Fixed Account and GA Account - -------------------------------------------------------------------------------- Withdrawal Fee: For each withdrawal from an Individual Account, the Withdrawal Fee will vary according to the number of purchase payment cycles completed for the Individual Account being surrendered. The number and amount of purchase payments to be made in a cycle is chosen by the Participant. A purchase payment cycle is completed when this chosen number and amount of purchase payments have been made. The number of purchase payment cycles completed may not be greater than the number of whole years since the Individual Account was established under this or any other exchanged Aetna contract. The number of purchase payment cycles completed equals the total number completed under this contract and under other Aetna contracts from which Net Contributions to this Contract have been transferred from (exchanged contracts). For each withdrawal, the fee will be as follows:
Number of Purchase Payment Cycles Completed Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%
For each withdrawal from an Individual Account maintained pursuant to a lump-sum payment, the Withdrawal Fee will vary according to the period of time between the Effective Date of the Individual Account under your previous exchanged Aetna contract and the date of withdrawal as follows: EINRV97
If Period of Time is Withdrawal Fee Fewer than 5 years 5% 5 or more, but fewer than 6 years 4% 6 or more, but fewer than 7 years 3% 7 or more, but fewer than 8 years 2% 8 or more, but fewer than 9 years 1% 9 or more years 0%
The withdrawal fee will not be deducted from any portion of the Individual Account Current Value which is paid: [bullet] Due to the Participant's death before Annuity payments begin; [bullet] Used to purchase Annuity benefits; [bullet] Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); [bullet] In an amount equal to or less than 10% of the Individual Account Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account are excluded when calculating the Individual Account Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; [bullet] When the Individual Account(s) Current Value is $3,500 or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior 12 months; [bullet] To relieve a Participant's "financial hardship," as may be allowed for Annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or [bullet] On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. [bullet] The Withdrawal Fee will never exceed 8-1/2% of the total Contributions made to the Individual Account. 5. Replace the section entitled Separate Account, GA Account, and the Fixed Plus Account with the following: Separate Account, GA Account, Fixed Account and Fixed Plus Account - -------------------------------------------------------------------------------- Transfers: An unlimited number of Transfers may be made during the Accumulation Period. Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract.
Total Assets Maintenance Fee ------------------------------------ --------------------------- Less than $500,000 $15.00 500,000 - 1,000,000 $15.00 1,000,001 - 5,000,000 $0.00 5,000,001 - 15,000,000 $0.00 Greater than 15,000,000 $0.00
Initial charges will be based on Aetna's estimated year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than 20% of the Individual Account's Current Value at the time of election. The Specified Period may not be less than 5 years. Loan Interest Rate: a) Plans subject to ERISA: a Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least 0.5% higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: 6% on an annual basis. See Section I. - DEFINITIONS for explanations. 6. Replace the section entitled Annuity Option 2 under Contract Schedule II with the following: Annuity Option 1: For amounts invested in the Fixed Account, GA Account or one or more of the Fund(s), the number of years must be at least five (5) and not more than thirty (30) and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least five (5) and not more than thirty (30) and the Annuity must be a Fixed Annuity. 7. Add the following Definition: Fixed Account: An accumulation option with a guaranteed minimum interest rate shown on the Contract Schedule I. Aetna may credit a higher rate which is not guaranteed. 8. Replace the definition entitled Current Value with the following: Current Value: For an Individual Account, the Current Value is the total of: a) The amount, if any, in the Fixed Plus Account, with interest earned to date; b) The amount, if any, in the GA Account, with interest earned to date; c) The amount, if any, in the Fixed Account, with interest earned to date; and d) The value of all Fund Record Units, if any, as of the most recent Valuation Period; plus e) Any amount due to experience credits; less f) Any Maintenance Fee(s) due. 9. Replace the definition entitled Transfer with the following: Transfer: The movement of invested amounts among the available Fund(s), the Fixed Plus Account, the Fixed Account and the GA Account during the Accumulation Period. 10. Replace the section entitled Net Contributions with the following: Net Contribution(s): The Net Contribution equals the actual Contribution less any applicable premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (See Section V). If Aetna determines that under applicable state law, it must pay a premium tax when the Contribution is received, or at any other time, it may deduct the tax at that time. The Net Contribution(s) may be allocated among the following investment options: a) The Fixed Plus Account; and b) The current Deposit Period(s) for Guaranteed Terms under the GA Account; and c) The Fund(s) in which the Separate Account invests. The Fixed Account is an investment option available only for Net Contributions previously allocated to the Fixed Account under Aetna contracts that are exchanged into this Contract. The Participant must tell Aetna the percentage of all Net Contributions to allocate to one or more of the investment options. The Participant may change the allocation of future Net Contributions at any time, without charge. Aetna reserves the right to require a minimum Contribution amount per Individual Account. 11. Replace the section entitled Transfer(s) with the following: Transfer(s): Before an Annuity option is elected, all or any portion of the Adjusted Current Value of the Individual Account may be transferred from any Fund, or the GA Account: a) To any other allowable Fund; or b) To the Fixed Plus Account; or c) To any Guaranteed Term of the GA Account with a different classification available in the current Deposit Period. No Transfers will be allowed into the Fixed Account. Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a minimum transfer amount. Within a Guaranteed Term classification, the amount transferred will be withdrawn from the oldest Deposit Period, then from the next oldest, and so on until the amount requested is satisfied. Amounts applied to Guaranteed Terms of the GA Account may not be transferred to the Funds, the Fixed Plus Account or to another Guaranteed Term during the Deposit Period or 90 days after the close of the Deposit Period except for Matured Term Value(s) during the calendar month following the Term's Maturity Date. Transfers from Guaranteed Terms of the GA Account are subject to the MVA provisions of 3.08. Each Calendar year, 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s) and/or to the GA Account's then-current Deposit Period. Such transfer will be without charge and will not be allowed under an Annuity Option. Transfers will be permitted to the Fixed Plus Account without regard to these limitations. At its discretion, Aetna may allow Contract Holders to transfer a larger percentage and/or take multiple transfers in a calendar year. If Aetna so allows, Aetna reserves the right to reinstate the transfer limitations without notice. During each rolling twelve (12) month period, up to 20% of the Current Value held in the Fixed Plus Account may be transferred to one or more of the Fund(s), and/or the GA Account's then-current Deposit Period. The 20% limit is reduced by any partial withdrawals, loans or amounts used to purchase an Annuity during the twelve (12) month period. Aetna reserves the right to include amounts paid under ECO and SWO provisions for purposes of applying this 20% limit. This limit is waived when the balance in the Fixed Plus Account is $1,000 or less on the date the Transfer request is received in good order at Aetna's Home Office. The Participant may make an unlimited number of Transfers during the Accumulation Period. 12. Replace the section entitled Notice to the Participant with the following: Notice to the Participant: Each year, Aetna will notify the Participant of: a) The value of any amounts held in: 1) The Fixed Plus Account, 2) The GA Account, 3) The Fixed Account, 4) The Fund(s) for the Separate Account; b) The number of any Fund record units; c) The Fund record unit Value(s); d) The Loan Account balance; and e) The amount available for withdrawal. This information will be as of a date no more than sixty (60) days before the date of the notice. 13. Replace the section entitled Withdrawal Value with the following: Withdrawal Value: After deduction of the Maintenance Fee (if any), the amount payable by Aetna upon the withdrawal of any portion of an Individual Account from the Fund(s), the Fixed Account or the GA Account shall be reduced by a Withdrawal Fee, if applicable. The Withdrawal Fee will be in accordance with the Withdrawal Fee table in Contract Schedule I. No Withdrawal Fee is deducted from any portion of the Current Value which is paid from the Fixed Plus Account. For a partial or full withdrawal from any Individual Account, Aetna must receive written direction from the Participant on a form acceptable to Aetna. Aetna may defer payment of the withdrawal value until appropriate certification is received. 14. Replace the section entitled Withdrawal Fee Applicable to Funds and GA Account with the following: Withdrawal Fee Applicable to Funds, the Fixed Account and GA Account: A Withdrawal Fee (Deferred Sales Charge) may apply to withdrawals from the GA Account, the Fixed Account and/or Funds. For each withdrawal, the withdrawal fee will be determined as shown on Contract Schedule I. During each rolling 12-month period, up to 20% of the Current Value in the Fixed Plus Account may be withdrawn as a partial surrender. This 20% limit is reduced by any amount(s) transferred, taken as a loan or used to purchase an Annuity during the 12 month period. The 20% limit applicable to partial surrenders from the Fixed Plus Account will be waived when the partial surrender is due to one of the conditions set forth in Contract Schedule I. The waiver will apply provided the partial surrender is taken pro-rata from the Fixed Plus Account, the GA Account, and the Fund(s). Aetna reserves the right to include amounts paid under the ECO and SWO provisions for purposes of applying the 20% limit. However, the SWO provision is not available if the Participant requested a Fixed Plus Account Transfer or surrender within the current 12 month period. 15. Replace the fourth sentence of the section entitled Reinstatement with the following: Amounts will be reinstated among the Fixed Plus Account, the GA Account, the Fixed Account and/or the Fund(s) for the Separate Account in the same proportion as they were at the time of withdrawal. 16. Replace a) under the section entitled Estate Conservation Option with the following: a) With the Estate Conservation Option (ECO) a portion of the Individual Account Current Value is automatically surrendered and distributed each year without incurring a Withdrawal Fee. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. 17. Replace a) under the section entitled Systematic Withdrawal Option with the following: a) With the Systematic Withdrawal Option (SWO) a portion of the Individual Account Current Value is automatically distributed each year without incurring a Withdrawal Fee. A SWO payment will be calculated on the Individual Account's Current Value. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. SWO payments may not be elected if a loan is outstanding under an Individual Account. II. The following provisions apply to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date: 1. In the section entitled Fixed Plus Account in Contract Schedule I: Replace the Minimum Guaranteed Interest Rate provision with the following: Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 2. Replace the Full Withdrawal provision with the following: Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months; d) Due to hardship from 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 you; and 3) the amount paid for all withdrawals due to hardship during the previous 12 month period does not exceed 10% of the average value of all Accounts under the Contract during that same period; or e) Due to separation from service with the employer, provided that: 1) the employer certifies that you have separated from service; 2) the amount is withdrawn within one year from separation from service or, if withdrawn after one year from separation from service, the amount withdrawn is paid directly to you; and 3) the amount paid for all partial and full withdrawals due to separation from service during the previous 12 month period does not exceed 20% of the average value of all Accounts under the Contract during that same period. III. All amounts transferred or allocated to the Fixed Plus Account on or after the Contract effective date will be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after that date. IV. One-time election for Individual Accounts established with Net Contributions from exchanged Aetna Contracts. a) During the [three (3)] month period beginning on the Contract effective date, Participants will have a one-time opportunity to elect, by giving notice to Aetna, to have all amounts held in the Fixed Plus Account be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date. Participants who make the election described in the preceding sentence will not be entitled to be credited, beginning on the tenth anniversary of the effective date of their Individual Account, with an interest rate that is higher than the then declared rate for Individual Accounts before the tenth anniversary on any amounts held in the Fixed Plus Account. An election made pursuant to this provision may not be revoked. For Participants who do not make the election allowed under IV(a) above, amounts attributable to their balances in the Fixed Plus Account on the Contract effective date will remain subject to the rules described in the Contract (without giving effect to Part II of this endorsement) until such time as they are transferred to another investment option or withdrawn. V. In the Annuity Provisions section: Add the following to the Choices provision: c) At the request of the Owner, all or any portion of the amount allocated to a Fund may be transferred from any Fund to any other allowable Fund. During the Annuity period, the maximum number of allowable transfers in a calendar year is four. Aetna reserves the right to change the number of allowable transfers. Transfer requests must be expressed as a percentage of the allocation among the Funds of the amount upon which the Variable Annuity will be based. Aetna may establish a minimum transfer amount. Transfers will be processed as of the Valuation Date next following the date when a transfer request is received in good order at Aetna's Home Office. Revise paragraph e) under the Choices provision as follows: a) Once elected, an Annuity option may not be revoked, except for option 1 when elected on a variable basis. Replace paragraph a) under Terms of Annuity Options with the following: No choice of any Annuity option may be made if the first payment would be less than $50 or if the total payments in a year would be less than $250. Replace the last sentence in paragraph b) under Terms of Annuity Options with the following: The Annuity rates for options 2 and 3 are based on mortality from 1983 Table a. Replace the first sentence in the Death Provision with the following: When an Annuitant dies under options 2 and 3, the present value of any remaining guaranteed payments will be paid in one sum or payments will continue at the direction of the Contract Holder, in accordance with the Plan. Delete the last paragraph in the Death Provision. Replace the Annuity Options provision with the following: Annuity Options: The Contract Holder may direct Aetna to make payments according to one of the following options. Option 1 -- Payments for a Stated Period of Time -- An Annuity will be paid for 5 to 30 years. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested prior to the minimum number of years specified on Contract Schedule II, it will be subject to any withdrawal fee, if applicable (see Contract Schedule I). Option 2 -- Life Income Based on the Life of the Annuitant - Payments will be made until the death of the Annuitant. When this option is chosen, a choice from the following must be made: a) payments cease at the death of the Annuitant; b) payments may be guaranteed for 5 - 30 years; or c) cash refund: if the Annuitant dies, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. Option 3 - Life Income Based Upon the Lives of Two Annuitants - An Annuity will be paid during the lives of the Annuitant and a joint Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice of the following must be made: a) 100% of the payment to continue after the first death; b) 66-2/3% of the payment to continue after the first death; c) 50% of the payment to continue after the first death; d) 100% of the payment to continue after the first death with a guarantee of 5 - 30 years; e) 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; or f) 100% of the payment to continue after the first death with a cash refund feature. If the Annuitant and joint Annuitant die, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. If a Fixed Annuity is chosen under option 1, option 2 a) or b) or option 3 a) or d), the Participant may elect an annual increase of one, two or three percent compounded annually. Other Options -- Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. Replace the tables at the end of the Annuity Provisions section of the Contract and Certificate with the following tables: OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ---------- ----------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ---------- ----------- ----------- -------------- 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - ---------- ----------- ----------- --------------
OPTION 1 Payments for a Stated Period of Time Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ---------- ----------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ---------- ----------- ----------- -------------- 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - ---------- ----------- ----------- --------------
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ---------- ----------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ---------- ----------- ----------- -------------- 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - ---------- ----------- ----------- --------------
OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ------------------ -------- --------- ----------- ---------- ---------- --------------- Adjusted Age of Cash Annuitant None 5 10 15 20 Refund - ------------------ -------- --------- ----------- ---------- ---------- --------------- 50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ------------------ -------- --------- ----------- ---------- ---------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- ------------------ -------- --------- ----------- ---------- ---------- Adjusted Age of Annuitant None 5 10 15 20 - ------------------ -------- --------- ----------- ---------- ---------- 50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - ------------------ -------- --------- ----------- ---------- ----------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- ------------------ -------- --------- ----------- ---------- ---------- Adjusted Age of Annuitant None 5 10 15 20 - ------------------ -------- --------- ----------- ---------- ---------- 50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - ------------------ -------- --------- ----------- ---------- ----------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ------------------------------- ------------- -------------- ------------- ---------------- ------------ ------------- Adjusted Ages - ------------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f Annuitant Guaranteed - ---------------- -------------- ------------- -------------- ------------- ---------------- ------------ ------------- 55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - ---------------- -------------- ------------- -------------- ------------- ---------------- ------------ -------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ------------------ ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ------------------ ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. Endorsed and made a part of the Contract and Certificate on the effective date of the Contract. /s/ Dan Kearney ------------------- Dan Kearney EX-99.B.4.39 10 ENDORSEMENT Exhibit 99-B.4.39 Aetna Life Insurance and Annuity Company Endorsement The Contract and Certificate are hereby endorsed as follows: Replace the section entitled Annuity Option 2 under Contract Schedule II with the following: Annuity Option 1: For amounts invested in the Fixed Account, GA Account or one or more of the Fund(s), the number of years must be at least five (5) and not more than thirty (30) and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least five (5) and not more than thirty (30) and the Annuity must be a Fixed Annuity. In the Annuity Provisions section: Add the following to the Choices provision: c) At the request of the Owner, all or any portion of the amount allocated to a Fund may be transferred from any Fund to any other allowable Fund. During the Annuity period, the maximum number of allowable transfers in a calendar year is four. Aetna reserves the right to change the number of allowable transfers. Transfer requests must be expressed as a percentage of the allocation among the Funds of the amount upon which the Variable Annuity will be based. Aetna may establish a minimum transfer amount. Transfers will be processed as of the Valuation Date next following the date when a transfer request is received in good order at Aetna's Home Office. Revise paragraph e) under the Choices provision as follows: e) Once elected, an Annuity option may not be revoked, except for option 1 when elected on a variable basis. Replace paragraph a) under Terms of Annuity Options with the following: a) No choice of any Annuity option may be made if the first payment would be less than $50 or if the total payments in a year would be less than $250. Replace the last sentence in paragraph b) under Terms of Annuity Options with the following: E1PAY97 The Annuity rates for options 2 and 3 are based on mortality from 1983 Table a. Replace the first sentence in the Death Provision with the following: When an Annuitant dies under options 2 and 3, the present value of any remaining guaranteed payments will be paid in one sum or payments will continue at the direction of the Contract Holder, in accordance with the Plan. Delete the last paragraph in the Death Provision. Replace the Annuity Options provision with the following: Annuity Options: The Contract Holder may direct Aetna to make payments according to one of the following options. Option 1 -- Payments for a Stated Period of Time -- An Annuity will be paid for 5 to 30 years. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested prior to the minimum number of years specified on Contract Schedule II, it will be subject to any withdrawal fee, if applicable (see Contract Schedule I). Option 2 -- Life Income Based on the Life of the Annuitant - Payments will be made until the death of the Annuitant. When this option is chosen, a choice from the following must be made: a) payments cease at the death of the Annuitant; b) payments may be guaranteed for 5 - 30 years; or c) upon the death of the Annuitant, the beneficiary will receive a lump sum payment equal to the amount applied to a Fixed Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if 100% of the Current Value has been applied to a Fixed Annuity. Option 3 -- Life Income Based Upon the Lives of Two Annuitants -- An Annuity will be paid during the lives of the Annuitant and a joint Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice of the following must be made: a) 100% of the payment to continue after the first death; b) 66-2/3% of the payment to continue after the first death; c) 50% of the payment to continue after the first death; d) 100% of the payment to continue after the first death with a guarantee of 5 - 30 years; e) 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; or f) 100% of the payment to continue after the first death with a cash refund feature. If the Annuitant and joint Annuitant die, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. Option 4 -- Payments of Interest on Sum Left with Aetna -- This Option may be used only by the Plan beneficiary when the Participant dies before Aetna has started paying an Annuity. A portion or all of the sum paid upon death may be held under this Option and will be held in the General Account of Aetna at interest. The Contract Holder, on behalf of the Plan beneficiary, may later tell Aetna to: Pay a portion or all of the sum held by Aetna; or Apply a portion or all of the sum held by Aetna to any Annuity Option above. If the Plan beneficiary is the Participant's surviving spouse, the lump-sum payment may be deferred to a date not later than when the Participant would have attained age 70-1/2. If the Plan beneficiary is not a spouse, the Contract Holder must tell Aetna to pay the full sum within 5 years after the death of the Participant. If a Fixed Annuity is chosen under option 1, option 2 a) or b) or option 3 a) or d), the Participant may elect an annual increase of one, two or three percent compounded annually. Other Options -- Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. Replace the tables at the end of the Annuity Provisions section of the Contract and Certificate with the following tables: OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ----------- ------------ ---------- ------------- Monthly Monthly Years Payment Years Payment - ----------- ------------ ---------- ------------- 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - ----------- ------------ ---------- -------------
OPTION 1 Payments for a Stated Period of Time Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------- ------------ ---------- ------------- Monthly Monthly Years Payment Years Payment - ----------- ------------ ---------- ------------- 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - ----------- ------------ ---------- -------------
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ----------- ------------ ---------- ------------- Monthly Monthly Years Payment Years Payment - ----------- ------------ ---------- ------------- 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - ----------- ------------ ---------- -------------
OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Age of Cash Annuitant None 5 10 15 20 Refund ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Adjusted Age of Annuitant None 5 10 15 20 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Adjusted Age of Annuitant None 5 10 15 20 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ------------------------------ -------------- -------------- ------------ ---------------- ------------- ------------ Adjusted Ages - ------------------------------ Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f Annuitant Guaranteed - ---------------- ------------- -------------- -------------- ------------ ---------------- ------------- ------------ 55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - ---------------- ------------- -------------- -------------- ------------ ---------------- ------------- ------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ---------------------------------- ---------------- ---------------- ---------------- ----------------- -------------- Adjusted Ages - ----------------- ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ----------------- ---------------- ---------------- ---------------- ---------------- ----------------- -------------- 55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - ----------------- ---------------- ---------------- ---------------- ---------------- ----------------- --------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ---------------------------------- --------------- --------------- --------------- ------------------- --------------- Adjusted Ages - ----------------- ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ----------------- ---------------- --------------- --------------- --------------- ------------------- --------------- 55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - ----------------- ---------------- --------------- --------------- --------------- ------------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. Endorsed and made a part of the Contract and Certificate on the date, after any required state approval, as of which it is issued by Aetna. /s/ Dan Kearney ---------------------- Dan Kearney President EIPAY97 EX-99.B.4.41 11 ENDORSEMENT EX-99.B.4.41 Aetna Life Insurance and Annuity Company ENDORSEMENT The Contract and Certificate are hereby endorsed as follows: I. The following provisions apply only to Individual Accounts established with Net Contributions from exchanged Aetna contracts. 1. The Guaranteed Interest Rate section of the Specifications is replaced with the following: There is a guaranteed interest rate for Contributions(s) held in the Fixed Plus Account, the Fixed Account and the GA Account (see Contract Schedule I). 2. Where the Transfer Credit endorsement is made a part of the Contract, the Transfer Credit will be applied to Transferred Assets deposited into an exchanged contract which are transferred into an acquired contract, as well as to Transferred Assets deposited into an acquired contract up until the one year anniversary of the first Net Contribution to the exchanged contract. 3. Add the following section to Contract Schedule I: Fixed Account Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 4. Replace the section entitled Separate Account and GA Account under Contract Schedule I with the following: Separate Account, Fixed Account and GA Account - -------------------------------------------------------------------------------- Withdrawal Fee: For each withdrawal from an Individual Account, the Withdrawal Fee will vary according to the number of purchase payment cycles completed for the Individual Account being surrendered. The number and amount of purchase payments to be made in a cycle is chosen by the Participant. A purchase payment cycle is completed when this chosen number and amount of purchase payments have been made. The number of purchase payment cycles completed may not be greater than the number of whole years since the Individual Account was established under this or any other exchanged Aetna contract. The number of purchase payment cycles completed equals the total number completed under this contract and under other Aetna contracts from which Net Contributions to this Contract have been transferred from (exchanged contracts). For each withdrawal, the fee will be as follows:
Number of Purchase Payment Cycles Completed Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%
1 EINRV98 For each withdrawal from an Individual Account maintained pursuant to a lump-sum payment, the Withdrawal Fee will vary according to the period of time between the Effective Date of the Individual Account under your previous exchanged Aetna contract and the date of withdrawal as follows:
If Period of Time is Withdrawal Fee Fewer than 5 years 5% 5 or more, but fewer than 6 years 4% 6 or more, but fewer than 7 years 3% 7 or more, but fewer than 8 years 2% 8 or more, but fewer than 9 years 1% 9 or more years 0%
The withdrawal fee will not be deducted from any portion of the Individual Account Current Value which is paid: [bullet] Due to the Participant's death before Annuity payments begin; [bullet] Used to purchase Annuity benefits; [bullet] Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); [bullet] In an amount equal to or less than 10% of the Individual Account Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account are excluded when calculating the Individual Account Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; [bullet] When the Individual Account(s) Current Value is $3,500 or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior 12 months; [bullet] To relieve a Participant's "financial hardship," as may be allowed for Annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or [bullet] On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. [bullet] The Withdrawal Fee will never exceed 8-1/2% of the total Contributions made to the Individual Account. The Withdrawal Fee may be reduced, waived or eliminated for Individual Accounts acquired by exchange to reflect the differences or expected differences in the amounts of unrecovered distribution costs or services of the types that the charges are intended to defray. 5. Replace the section entitled Separate Account, GA Account, and the Fixed Plus Account with the following: Separate Account, GA Account, Fixed Account and Fixed Plus Account - -------------------------------------------------------------------------------- Transfers: An unlimited number of Transfers may be made during the Accumulation Period. 2 Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract.
Total Assets Maintenance Fee ---------------------------------- --------------------- Less than $500,000 $15.00 500,000 - 1,000,000 $15.00 1,000,001 - 5,000,000 $0.00 5,000,001 - 15,000,000 $0.00 Greater than 15,000,000 $0.00
Initial charges will be based on Aetna's estimated year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than 20% of the Individual Account's Current Value at the time of election. The Specified Period may not be less than 5 years. Loan Interest Rate: a) Plans subject to ERISA: a Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least 0.5% higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: 6% on an annual basis. See Section I. - DEFINITIONS for explanations. 6. Replace the section entitled Annuity Option 2 under Contract Schedule II with the following: Annuity Option 1: For amounts invested in the Fixed Account, GA Account or one or more of the Fund(s), the number of years must be at least five (5) and not more than thirty (30) and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least five (5) and not more than thirty (30) and the Annuity must be a Fixed Annuity. 7. Add the following Definition: Fixed Account: If available under your contract, the Fixed Account is an accumulation option with a guaranteed minimum interest rate shown on the Contract Schedule I. Aetna may credit a higher rate which is not guaranteed. 8. Replace the definition entitled Current Value with the following: 3 Current Value: For an Individual Account, the Current Value is the total of: a) The amount, if any, in the Fixed Plus Account, with interest earned to date; b) The amount, if any, in the GA Account, with interest earned to date; c) The amount, if any, in the Fixed Account, with interest earned to date; and d) The value of all Fund Record Units, if any, as of the most recent Valuation Period; plus e) Any amount due to experience credits; less f) Any Maintenance Fee(s) due. 9. Replace the definition entitled Transfer with the following: Transfer: The movement of invested amounts among the available Fund(s), the Fixed Plus Account, the Fixed Account and the GA Account during the Accumulation Period. 10. Replace the section entitled Net Contributions with the following: Net Contribution(s): The Net Contribution equals the actual Contribution less any applicable premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (See Section V). If Aetna determines that under applicable state law, it must pay a premium tax when the Contribution is received, or at any other time, it may deduct the tax at that time. The Net Contribution(s) may be allocated among the following investment options: a) The Fixed Plus Account; and b) The current Deposit Period(s) for Guaranteed Terms under the GA Account; and c) The Fund(s) in which the Separate Account invests. The Fixed Account is an investment option available only for Net Contributions previously allocated to the Fixed Account under Aetna contracts that are exchanged into this Contract. Contracts that maintain the Fixed Account may not be eligible for reduced charges to the Separate Account. The Participant must tell Aetna the percentage of all Net Contributions to allocate to one or more of the investment options. The Participant may change the allocation of future Net Contributions at any time, without charge. Aetna reserves the right to require a minimum Contribution amount per Individual Account. 11. Replace the section entitled Transfer(s) with the following: Transfer(s): Before an Annuity option is elected, all or any portion of the Adjusted Current Value of the Individual Account may be transferred from any Fund, or the GA Account: a) To any other allowable Fund; or b) To the Fixed Plus Account; or c) To any Guaranteed Term of the GA Account with a different classification available in the current Deposit Period. No Transfers will be allowed into the Fixed Account. Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a minimum transfer amount. Within a Guaranteed Term classification, the amount transferred will be withdrawn from the oldest Deposit Period, then from the next oldest, and so on until the amount requested is satisfied. Amounts applied to Guaranteed Terms of the GA Account may not be transferred to the Funds, the Fixed Plus Account or to another Guaranteed Term during the Deposit Period or 90 days after the close of the Deposit Period except for Matured Term Value(s) during the calendar month following the Term's Maturity Date. Transfers from Guaranteed Terms of the GA Account are subject to the MVA provisions of 3.08. 4 Each Calendar year, 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s) and/or to the GA Account's then-current Deposit Period. Such transfer will be without charge and will not be allowed under an Annuity Option. Transfers will be permitted to the Fixed Plus Account without regard to these limitations. At its discretion, Aetna may allow Contract Holders to transfer a larger percentage and/or take multiple transfers in a calendar year. If Aetna so allows, Aetna reserves the right to reinstate the transfer limitations without notice. During each rolling twelve (12) month period, up to 20% of the Current Value held in the Fixed Plus Account may be transferred to one or more of the Fund(s), and/or the GA Account's then-current Deposit Period. The 20% limit is reduced by any partial withdrawals, loans or amounts used to purchase an Annuity during the twelve (12) month period. Aetna reserves the right to include amounts paid under ECO and SWO provisions for purposes of applying this 20% limit. This limit is waived when the balance in the Fixed Plus Account is $1,000 or less on the date the Transfer request is received in good order at Aetna's Home Office. The Participant may make an unlimited number of Transfers during the Accumulation Period. 12. Replace the section entitled Notice to the Participant with the following: Notice to the Participant: Each year, Aetna will notify the Participant of: a) The value of any amounts held in: 1) The Fixed Plus Account, 2) The GA Account, 3) The Fixed Account, 4) The Fund(s) for the Separate Account; b) The number of any Fund record units; c) The Fund record unit Value(s); d) The Loan Account balance; and e) The amount available for withdrawal. This information will be as of a date no more than sixty (60) days before the date of the notice. 13. Replace the section entitled Withdrawal Value with the following: Withdrawal Value: After deduction of the Maintenance Fee (if any), the amount payable by Aetna upon the withdrawal of any portion of an Individual Account from the Fund(s), the Fixed Account or the GA Account shall be reduced by a Withdrawal Fee, if applicable. The Withdrawal Fee will be in accordance with the Withdrawal Fee table in Contract Schedule I. No Withdrawal Fee is deducted from any portion of the Current Value which is paid from the Fixed Plus Account. For a partial or full withdrawal from any Individual Account, Aetna must receive written direction from the Participant on a form acceptable to Aetna. Aetna may defer payment of the withdrawal value until appropriate certification is received. 14. Replace the section entitled Withdrawal Fee Applicable to Funds and GA Account with the following: Withdrawal Fee Applicable to Funds, the Fixed Account and GA Account: A Withdrawal Fee (Deferred Sales Charge) may apply to withdrawals from the GA Account, the Fixed Account and/or Funds. For each withdrawal, the withdrawal fee will be determined as shown on Contract Schedule I. 5 During each rolling 12-month period, up to 20% of the Current Value in the Fixed Plus Account may be withdrawn as a partial surrender. This 20% limit is reduced by any amount(s) transferred, taken as a loan or used to purchase an Annuity during the 12 month period. The 20% limit applicable to partial surrenders from the Fixed Plus Account will be waived when the partial surrender is due to one of the conditions set forth in Contract Schedule I. The waiver will apply provided the partial surrender is taken pro-rata from the Fixed Plus Account, the GA Account, and the Fund(s). Aetna reserves the right to include amounts paid under the ECO and SWO provisions for purposes of applying the 20% limit. However, the SWO provision is not available if the Participant requested a Fixed Plus Account Transfer or surrender within the current 12 month period. 15. Replace the fourth sentence of the section entitled Reinstatement with the following: Amounts will be reinstated among the Fixed Plus Account, the GA Account, the Fixed Account and/or the Fund(s) for the Separate Account in the same proportion as they were at the time of withdrawal. 16. Replace a) under the section entitled Estate Conservation Option with the following: a) With the Estate Conservation Option (ECO) a portion of the Individual Account Current Value is automatically surrendered and distributed each year without incurring a Withdrawal Fee. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. 17. Replace a) under the section entitled Systematic Withdrawal Option with the following: a) With the Systematic Withdrawal Option (SWO) a portion of the Individual Account Current Value is automatically distributed each year without incurring a Withdrawal Fee. A SWO payment will be calculated on the Individual Account's Current Value. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. SWO payments may not be elected if a loan is outstanding under an Individual Account. II. The following provisions apply to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date: 1. In the section entitled Fixed Plus Account in Contract Schedule I: Replace the Minimum Guaranteed Interest Rate provision with the following: Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 2. Replace the Full Withdrawal provision with the following: Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months; d) Due to hardship from 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 you; and 3) the amount paid for all withdrawals due to hardship during the previous 12 month period does not exceed 10% of the average value of all Accounts under the Contract during that same period; or 6 e) Due to separation from service with the employer, provided that: 1) the employer certifies that you have separated from service; 2) the amount is withdrawn within one year from separation from service or, if withdrawn after one year from separation from service, the amount withdrawn is paid directly to you; and 3) the amount paid for all partial and full withdrawals due to separation from service during the previous 12 month period does not exceed 20% of the average value of all Accounts under the Contract during that same period. III. All amounts transferred or allocated to the Fixed Plus Account on or after the Contract effective date will be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after that date. IV. One-time election for Individual Accounts established with Net Contributions from exchanged Aetna Contracts. a) During the [three (3)] month period beginning on the Contract effective date, Participants will have a one-time opportunity to elect, by giving notice to Aetna, to have all amounts held in the Fixed Plus Account be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date. Participants who make the election described in the preceding sentence will not be entitled to be credited, beginning on the tenth anniversary of the effective date of their Individual Account, with an interest rate that is higher than the then declared rate for Individual Accounts before the tenth anniversary on any amounts held in the Fixed Plus Account. An election made pursuant to this provision may not be revoked. b) For Participants who do not make the election allowed under IV(a) above, amounts attributable to their balances in the Fixed Plus Account on the Contract effective date will remain subject to the rules described in the Contract (without giving effect to Part II of this endorsement) until such time as they are transferred to another investment option or withdrawn. V. In the Annuity Provisions section: Add the following to the Choices provision: c) At the request of the Owner, all or any portion of the amount allocated to a Fund may be transferred from any Fund to any other allowable Fund. During the Annuity period, the maximum number of allowable transfers in a calendar year is four. Aetna reserves the right to change the number of allowable transfers. Transfer requests must be expressed as a percentage of the allocation among the Funds of the amount upon which the Variable Annuity will be based. Aetna may establish a minimum transfer amount. Transfers will be processed as of the Valuation Date next following the date when a transfer request is received in good order at Aetna's Home Office. Revise paragraph e) under the Choices provision as follows: a) Once elected, an Annuity option may not be revoked, except for option 1 when elected on a variable basis. Replace paragraph a) under Terms of Annuity Options with the following: No choice of any Annuity option may be made if the first payment would be less than $50 or if the total payments in a year would be less than $250. Replace the last sentence in paragraph b) under Terms of Annuity Options with the following: The Annuity rates for options 2 and 3 are based on mortality from 1983 Table a. Replace the first sentence in the Death Provision with the following: When an Annuitant dies under options 2 and 3, the present value of any remaining guaranteed payments will be paid in one sum or payments will continue at the direction of the Contract Holder, in accordance with the Plan. Delete the last paragraph in the Death Provision. Replace the Annuity Options provision with the following: 7 Annuity Options: The Contract Holder may direct Aetna to make payments according to one of the following options. Option 1 -- Payments for a Stated Period of Time -- An Annuity will be paid for 5 to 30 years. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested prior to the minimum number of years specified on Contract Schedule II, it will be subject to any withdrawal fee, if applicable (see Contract Schedule I). Option 2 -- Life Income Based on the Life of the Annuitant - Payments will be made until the death of the Annuitant. When this option is chosen, a choice from the following must be made: a) payments cease at the death of the Annuitant; b) payments may be guaranteed for 5 - 30 years; or c) cash refund: if the Annuitant dies, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. Option 3 - Life Income Based Upon the Lives of Two Annuitants - An Annuity will be paid during the lives of the Annuitant and a joint Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice of the following must be made: a) 100% of the payment to continue after the first death; b) 66-2/3% of the payment to continue after the first death; c) 50% of the payment to continue after the first death; d) 100% of the payment to continue after the first death with a guarantee of 5 - 30 years; e) 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; or f) 100% of the payment to continue after the first death with a cash refund feature. If the Annuitant and joint Annuitant die, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. If a Fixed Annuity is chosen under option 1, option 2 a) or b) or option 3 a) or d), the Participant may elect an annual increase of one, two or three percent compounded annually. Other Options -- Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. Replace the tables at the end of the Annuity Provisions section of the Contract and Certificate with the following tables: 8 OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ------------ ------------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ------------ ------------- ----------- -------------- 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - ------------ ------------- ----------- --------------
9 OPTION 1 Payments for a Stated Period of Time Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ------------ ------------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ------------ ------------- ----------- -------------- 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - ------------ ------------- ----------- --------------
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ------------ ------------- ----------- -------------- Monthly Monthly Years Payment Years Payment - ------------ ------------- ----------- -------------- 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - ------------ ------------- ----------- --------------
10 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Age of Cash Annuitant None 5 10 15 20 Refund - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 11 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Adjusted Age of Annuitant None 5 10 15 20 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 12 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ Adjusted Age of Annuitant None 5 10 15 20 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------ 50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - --------------------- ------------------ ------------------- ------------------ ------------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 13 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- ------------------------------- ------------- -------------- ------------- ---------------- ------------ ------------- Adjusted Ages - ------------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f Annuitant Guaranteed - ---------------- -------------- ------------- -------------- ------------- ---------------- ------------ ------------- 55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - ---------------- -------------- ------------- -------------- ------------- ---------------- ------------ -------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 14 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ------------------ ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 15 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ----------------------------------- ---------------- --------------- ---------------- ---------------- --------------- Adjusted Ages - ------------------ ---------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- --------------- 55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - ------------------ ---------------- ---------------- --------------- ---------------- ---------------- ---------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 16 Endorsed and made a part of the Contract and Certificate on the effective date of the Contract. /s/ Thomas J. McInerney ----------------------- Thomas J.McInerney, President 17 EX-99.B.4.42 12 ENDORSEMENT EX-99.B.4.42 Aetna Life Insurance and Annuity Company ENDORSEMENT The Contract and Certificate are hereby endorsed as follows: I. The following provisions apply only to Individual Accounts established with Net Contributions from exchanged Aetna contracts. 1. The Guaranteed Interest Rate section of the Specifications is replaced with the following: There is a guaranteed interest rate for Contributions(s) held in the Fixed Plus Account, the Fixed Account and the GA Account (see Contract Schedule I). 2. Where the Transfer Credit endorsement is made a part of the Contract, the Transfer Credit will be applied to Transferred Assets deposited into an exchanged contract which are transferred into an acquired contract, as well as to Transferred Assets deposited into an acquired contract up until the one year anniversary of the first Net Contribution to the exchanged contract. 3. Add the following section to Contract Schedule I: Fixed Account - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 4. Replace the section entitled Separate Account and GA Account under Contract Schedule I with the following: Separate Account, Fixed Account and GA Account - -------------------------------------------------------------------------------- Withdrawal Fee: For each withdrawal from an Individual Account, the Withdrawal Fee will vary according to the number of purchase payment cycles completed for the Individual Account being surrendered. The number and amount of purchase payments to be made in a cycle is chosen by the Participant. A purchase payment cycle is completed when this chosen number and amount of purchase payments have been made. The number of purchase payment cycles completed may not be greater than the number of whole years since the Individual Account was established under this or any other exchanged Aetna contract. The number of purchase payment cycles completed equals the total number completed under this contract and under other Aetna contracts from which Net Contributions to this Contract have been transferred from (exchanged contracts). For each withdrawal, the fee will be as follows: EINRP98
Number of Purchase Payment Cycles Completed Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 4% 7 or more, but fewer than 9 3% 9 or more, but fewer than 10 2% 10 or more 0%
EINRP98 1 For each withdrawal from an Individual Account maintained pursuant to a lump-sum payment, the Withdrawal Fee will vary according to the period of time between the Effective Date of the Individual Account under your previous exchanged Aetna contract and the date of withdrawal as follows:
If Period of Time is: Withdrawal Fee Fewer than 5 years 5% 5 or more, but fewer than 6 years 4% 6 or more, but fewer than 7 years 3% 7 or more, but fewer than 8 years 2% 8 or more, but fewer than 9 years 1% 9 or more years 0%
The withdrawal fee will not be deducted from any portion of the Individual Account Current Value which is paid: [bullet] Due to the Participant's death before Annuity payments begin; [bullet] Used to purchase Annuity benefits; [bullet] Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); [bullet] In an amount equal to or less than 10% of the Individual Account Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account are excluded when calculating the Individual Account Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; [bullet] When the Individual Account(s) Current Value is $3,500 or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior 12 months; [bullet] To relieve a Participant's "financial hardship," as may be allowed for Annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or [bullet] On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. [bullet] The Withdrawal Fee will never exceed 8-1/2% of the total Contributions made to the Individual Account. The Withdrawal Fee may be reduced, waived or eliminated for Individual Accounts acquired by exchange to reflect the differences or expected differences in the amounts of unrecovered distribution costs or services of the types that the charges are intended to defray. 5. Replace the section entitled Separate Account, GA Account, and the Fixed Plus Account with the following: Separate Account, GA Account, Fixed Account and Fixed Plus Account - -------------------------------------------------------------------------------- Transfers: An unlimited number of Transfers may be made during the Accumulation Period. 2 Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract.
Total Assets Maintenance Fee --------------------------------------------------- Less than $500,000 $15.00 500,000 - 1,000,000 $15.00 1,000,001 - 5,000,000 $0.00 5,000,001 - 15,000,000 $0.00 Greater than 15,000,000 $0.00
Initial charges will be based on Aetna's estimated year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than 20% of the Individual Account's Current Value at the time of election. The Specified Period may not be less than 5 years. Loan Interest Rate: a) Plans subject to ERISA: a Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least 0.5% higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: 6% on an annual basis. See Section I. - DEFINITIONS for explanations. 6. Replace the section entitled Annuity Option 2 under Contract Schedule II with the following: Annuity Option 1: For amounts invested in the Fixed Account, GA Account or one or more of the Fund(s), the number of years must be at least five (5) and not more than thirty (30) and the Annuity may be a Fixed or Variable Annuity. For amounts invested in the Fixed Plus Account, the number of years must be at least five (5) and not more than thirty (30) and the Annuity must be a Fixed Annuity. 7. Add the following Definition: Fixed Account: If available under your contract, the Fixed Account is an accumulation option with a guaranteed minimum interest rate shown on the Contract Schedule I. Aetna may credit a higher rate which is not guaranteed. 8. Replace the definition entitled Current Value with the following: 3 Current Value: For an Individual Account, the Current Value is the total of: a) The amount, if any, in the Fixed Plus Account, with interest earned to date; b) The amount, if any, in the GA Account, with interest earned to date; c) The amount, if any, in the Fixed Account, with interest earned to date; and d) The value of all Fund Record Units, if any, as of the most recent Valuation Period; plus e) Any amount due to experience credits; less f) Any Maintenance Fee(s) due. 9. Replace the definition entitled Transfer with the following: Transfer: The movement of invested amounts among the available Fund(s), the Fixed Plus Account, the Fixed Account and the GA Account during the Accumulation Period. 10. Replace the section entitled Net Contribution(s) with the following: Net Contribution(s): The Net Contribution equals the actual Contribution less any applicable premium tax. Generally, Aetna will deduct the premium tax when Annuity benefits are purchased (See Section V). If Aetna determines that under applicable state law, it must pay a premium tax when the Contribution is received, or at any other time, it may deduct the tax at that time. The Net Contribution(s) may be allocated among the following investment options: a) The Fixed Plus Account; and b) The current Deposit Period(s) for Guaranteed Terms under the GA Account; and c) The Fund(s) in which the Separate Account invests. The Fixed Account is an investment option available only for Net Contributions previously allocated to the Fixed Account under Aetna contracts that are exchanged into this Contract. Contracts that maintain the Fixed Account may not be eligible for reduced charges to the Separate Account. The Contract Holder must tell Aetna the percentage of all Net Contributions to allocate to one or more of the investment options. The Contract Holder or, if permitted by the Contract Holder, the Participant may change the allocation of future Net Contributions at any time, without charge. Aetna reserves the right to require a minimum Contribution amount per Individual Account. 11. Replace the section entitled Transfer(s) with the following: Transfer(s): Before an Annuity option is elected, all or any portion of the Adjusted Current Value of the Individual Account may be transferred from any Fund, or the GA Account: a) To any other allowable Fund; or b) To the Fixed Plus Account; or c) To any Guaranteed Term of the GA Account with a different classification available in the current Deposit Period. No Transfers will be allowed into the Fixed Account. Transfer requests can be submitted as a percentage or as a dollar amount. Aetna may establish a minimum transfer amount. Within a Guaranteed Term classification, the amount transferred will be withdrawn from the oldest Deposit Period, then from the next oldest, and so on until the amount requested is satisfied. Amounts applied to Guaranteed Terms of the GA Account may not be transferred to the Funds, the Fixed Plus Account or to another Guaranteed Term during the Deposit Period or 90 days after the close of the Deposit Period except for Matured Term Value(s) during the calendar month following the Term's Maturity Date. Transfers from Guaranteed Terms of the GA Account are subject to the MVA provisions of 3.08. 4 Each Calendar year, 10% of the Current Value held in the Fixed Account may be transferred to any Fund(s) and/or to the GA Account's then-current Deposit Period. Such transfer will be without charge and will not be allowed under an Annuity Option. Transfers will be permitted to the Fixed Plus Account without regard to these limitations. At its discretion, Aetna may allow Contract Holders to transfer a larger percentage and/or take multiple transfers in a calendar year. If Aetna so allows, Aetna reserves the right to reinstate the transfer limitations without notice. During each rolling twelve (12) month period, up to 20% of the Current Value held in the Fixed Plus Account may be transferred to one or more of the Fund(s), and/or the GA Account's then-current Deposit Period. The 20% limit is reduced by any partial withdrawals, loans or amounts used to purchase an Annuity during the twelve (12) month period. Aetna reserves the right to include amounts paid under ECO and SWO provisions for purposes of applying this 20% limit. This limit is waived when the balance in the Fixed Plus Account is $1,000 or less on the date the Transfer request is received in good order at Aetna's Home Office. The Contract Holder, or Participant if authorized in writing by the Contract Holder, may make an unlimited number of Transfers during the Accumulation Period. 12. Replace the section entitled Notice to the Contract Holder with the following: Notice to the Contract Holder: Each year, Aetna will notify the Contract Holder of: a) The value of any amounts held in: 1) The Fixed Plus Account, 2) The GA Account, 3) The Fixed Account, 4) The Fund(s) for the Separate Account; b) The number of any Fund record units; c) The Fund record unit Value(s); d) The Loan Account balance; and e) The amount available for withdrawal. This information will be as of a date no more than sixty (60) days before the date of the notice. 13. Replace the section entitled Withdrawal Value with the following: Withdrawal Value: After deduction of the Maintenance Fee (if any), the amount payable by Aetna upon the withdrawal of any portion of an Individual Account from the Fund(s), the Fixed Account or the GA Account shall be reduced by a Withdrawal Fee, if applicable. The Withdrawal Fee will be in accordance with the Withdrawal Fee table in Contract Schedule I. No Withdrawal Fee is deducted from any portion of the Current Value which is paid from the Fixed Plus Account. For a partial or full withdrawal from any Individual Account, Aetna must receive written direction from the Contract Holder on a form acceptable to Aetna. If the Contract is subject to ERISA, this direction must include certification that all of the REA waiver and spousal consent requirements have been satisfied. Aetna may defer payment of the withdrawal value until appropriate Contract Holder certification is received. 14. Replace the section entitled Withdrawal Fee Applicable to Funds and GA Account with the following: Withdrawal Fee Applicable to Funds, the Fixed Account and GA Account: A Withdrawal Fee (Deferred Sales Charge) may apply to withdrawals from the GA Account, the Fixed Account and/or Funds. For each withdrawal, the withdrawal fee will be determined as shown on Contract Schedule I. 5 During each rolling 12-month period, up to 20% of the Current Value in the Fixed Plus Account may be withdrawn as a partial surrender. This 20% limit is reduced by any amount(s) transferred, taken as a loan or used to purchase an Annuity during the 12 month period. The 20% limit applicable to partial surrenders from the Fixed Plus Account will be waived when the partial surrender is due to one of the conditions set forth in Contract Schedule I. The waiver will apply provided the partial surrender is taken pro-rata from the Fixed Plus Account, the GA Account, and the Fund(s). Aetna reserves the right to include amounts paid under the ECO and SWO provisions for purposes of applying the 20% limit. However, the SWO provision is not available if the Contract Holder on behalf of the Participant requested a Fixed Plus Account Transfer or surrender within the current 12 month period. 15. Replace the fourth sentence of the section entitled Reinstatement with the following: Amounts will be reinstated among the Fixed Plus Account, the GA Account, the Fixed Account and/or the Fund(s) for the Separate Account in the same proportion as they were at the time of withdrawal. 16. Replace a) under the section entitled Estate Conservation Option with the following: a) With the Estate Conservation Option (ECO) a portion of the Individual Account Current Value is automatically surrendered and distributed each year without incurring a Withdrawal Fee. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. 17. Replace a) under the section entitled Systematic Withdrawal Option with the following: a) With the Systematic Withdrawal Option (SWO) a portion of the Individual Account Current Value is automatically distributed each year without incurring a Withdrawal Fee. A SWO payment will be calculated on the Individual Account's Current Value. Each payment will be withdrawn from the Individual Account in the same proportion as assets are held in the Funds, the GA Account, the Fixed Account and the Fixed Plus Account on the date the payment is made. SWO payments may not be elected if a loan is outstanding under an Individual Account. II. The following provisions apply to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date: 1. In the section entitled Fixed Plus Account in Contract Schedule I: Replace the Minimum Guaranteed Interest Rate provision with the following: Minimum Guaranteed Interest Rate: 3% (effective annual rate of return). 6 2. Replace the Full Withdrawal provision with the following: Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months; d) Due to hardship from 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 during the previous 12 month period does not exceed 10% of the average value of all Accounts under the Contract during that same period; or e) Due to separation from service with the employer, provided that: 1) the employer certifies that the Participant has separated from service; 2) the amount is withdrawn within one year from separation from service or, if withdrawn after one year from separation from service, the amount withdrawn is paid directly to the Participant; and 3) the amount paid for all partial and full withdrawals due to separation from service during the previous 12 month period does not exceed 20% of the average value of all Accounts under the Contract during that same period. III. All amounts transferred or allocated to the Fixed Plus Account on or after the Contract effective date will be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after that date. IV. One-time election for Individual Accounts established with Net Contributions from exchanged Aetna Contracts: a) During the [three (3)] month period beginning on the Contract effective date, Participants will have a one-time opportunity to elect, by giving notice to Aetna, to have all amounts held in the Fixed Plus Account be subject to the Fixed Plus Account rules applicable to amounts attributable to Net Contributions made to the Contract on or after the Contract effective date. Participants who make the election described in the preceding sentence will not be entitled to be credited, beginning on the tenth anniversary of the effective date of their Individual Account, with an interest rate that is higher than the then declared rate for Individual Accounts before the tenth anniversary on any amounts held in the Fixed Plus Account. An election made pursuant to this provision may not be revoked. b) For Participants who do not make the election allowed under IV(a) above, amounts attributable to their balances in the Fixed Plus Account on the Contract effective date will remain subject to the rules described in the Contract (without giving effect to Part II of this endorsement) until such time as they are transferred to another investment option or withdrawn. 7 V. In the Annuity Provisions section: Add the following to the Choices provision: c) At the request of the Owner, all or any portion of the amount allocated to a Fund may be transferred from any Fund to any other allowable Fund. During the Annuity period, the maximum number of allowable transfers in a calendar year is four. Aetna reserves the right to change the number of allowable transfers. Transfer requests must be expressed as a percentage of the allocation among the Funds of the amount upon which the Variable Annuity will be based. Aetna may establish a minimum transfer amount. Transfers will be processed as of the Valuation Date next following the date when a transfer request is received in good order at Aetna's Home Office. Revise paragraph e) under the Choices provision as follows: a) Once elected, an Annuity option may not be revoked, except for option 1 when elected on a variable basis. Replace paragraph a) under Terms of Annuity Options with the following: No choice of any Annuity option may be made if the first payment would be less than $50 or if the total payments in a year would be less than $250. Replace the last sentence in paragraph b) under Terms of Annuity Options with the following: The Annuity rates for options 2 and 3 are based on mortality from 1983 Table a. Replace the first sentence in the Death Provision with the following: When an Annuitant dies under options 2 and 3, the present value of any remaining guaranteed payments will be paid in one sum or payments will continue at the direction of the Contract Holder, in accordance with the Plan. Delete the last paragraph in the Death Provision. Replace the Annuity Options provision with the following: Annuity Options: The Contract Holder may direct Aetna to make payments according to one of the following options. Option 1 -- Payments for a Stated Period of Time -- An Annuity will be paid for 5 to 30 years. If payments for this option are made under a Variable Annuity, the present value of any remaining payments may be withdrawn at any time. If a withdrawal is requested prior to the minimum number of years specified on Contract Schedule II, it will be subject to any withdrawal fee, if applicable (see Contract Schedule I). Option 2 -- Life Income Based on the Life of the Annuitant - Payments will be made until the death of the Annuitant. When this option is chosen, a choice from the following must be made: a) payments cease at the death of the Annuitant; b) payments may be guaranteed for 5 - 30 years; or c) cash refund: if the Annuitant dies, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. Option 3 - Life Income Based Upon the Lives of Two Annuitants - An Annuity will be paid during the lives of the Annuitant and a joint Annuitant. Payments will continue until both Annuitants have died. When this option is chosen, a choice of the following must be made: a) 100% of the payment to continue after the first death; b) 66 2/3% of the payment to continue after the first death; c) 50% of the payment to continue after the first death; d) 100% of the payment to continue after the first death with a guarantee of 5 - 30 years; 8 e) 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; or f) 100% of the payment to continue after the first death with a cash refund feature. If the Annuitant and joint Annuitant die, the beneficiary will receive a lump sum payment equal to the amount applied to the Annuity option (less any premium tax) less the total amount of Fixed Annuity payments paid prior to such death. This cash refund feature is only available if the total amount applied to the Annuity option is allocated to a Fixed Annuity. If a Fixed Annuity is chosen under option 1, option 2 a) or b) or option 3 a) or d), the Participant may elect an annual increase of one, two or three percent compounded annually. Other Options -- Aetna may make other options available as allowed by the laws of the state in which this Contract is delivered. Replace the tables at the end of the Annuity Provisions section of the Contract and Certificate with the following tables: 9 OPTION 1 Payments for a Stated Period of Time Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------------------------- Monthly Monthly Years Payment Years Payment - --------------------------------------------------------------------------------------------------- 5 17.91 18 5.96 6 15.14 19 5.73 7 13.16 20 5.51 8 11.68 21 5.32 9 10.53 22 5.15 10 9.61 23 4.99 11 8.86 24 4.84 12 8.24 25 4.71 13 7.71 26 4.59 14 7.26 27 4.47 15 6.87 28 4.37 16 6.53 29 4.27 17 6.23 30 4.18 - ---------------------------------------------------------------------------------------------------
10 OPTION 1 Payments for a Stated Period of Time Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ------------------------------------------------------------------------------------------------------------------- Monthly Monthly Years Payment Years Payment - ------------------------------------------------------------------------------------------------------------------- 5 18.12 18 6.20 6 15.35 19 5.97 7 13.38 20 5.75 8 11.90 21 5.56 9 10.75 22 5.39 10 9.83 23 5.24 11 9.09 24 5.09 12 8.46 25 4.96 13 7.94 26 4.84 14 7.49 27 4.73 15 7.10 28 4.63 16 6.76 29 4.53 17 6.47 30 4.45 - -------------------------------------------------------------------------------------------------------------------
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ------------------------------------------------------------------------------------------------------------------- Monthly Monthly Years Payment Years Payment - ------------------------------------------------------------------------------------------------------------------- 5 18.74 18 6.94 6 15.99 19 6.71 7 14.02 20 6.51 8 12.56 21 6.33 9 11.42 22 6.17 10 10.51 23 6.02 11 9.77 24 5.88 12 9.16 25 5.76 13 8.64 26 5.65 14 8.20 27 5.54 15 7.82 28 5.45 16 7.49 29 5.36 17 7.20 30 5.28 - -------------------------------------------------------------------------------------------------------------------
11 OPTION 2 Life Income Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0% Payments Guaranteed for a Stated Period of Years
- ---------------------------------------------------------------------------------------------------------- Adjusted Age of Cash Annuitant None 5 10 15 20 Refund - ---------------------------------------------------------------------------------------------------------- 50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93 $ 3.89 51 4.12 4.11 4.09 4.05 3.99 3.94 52 4.19 4.19 4.16 4.11 4.04 4.00 53 4.27 4.26 4.23 4.18 4.10 4.06 54 4.35 4.34 4.31 4.25 4.16 4.12 55 4.44 4.42 4.39 4.32 4.22 4.19 56 4.53 4.51 4.47 4.40 4.29 4.26 57 4.62 4.61 4.56 4.48 4.35 4.33 58 4.72 4.71 4.65 4.56 4.42 4.41 59 4.83 4.81 4.75 4.64 4.49 4.49 60 4.95 4.93 4.86 4.73 4.55 4.57 61 5.07 5.05 4.97 4.83 4.62 4.66 62 5.20 5.17 5.08 4.92 4.69 4.76 63 5.34 5.31 5.20 5.02 4.76 4.85 64 5.49 5.45 5.33 5.12 4.83 4.96 65 5.65 5.61 5.47 5.22 4.89 5.06 66 5.82 5.77 5.61 5.33 4.96 5.18 67 6.01 5.94 5.75 5.44 5.02 5.30 68 6.20 6.13 5.91 5.54 5.08 5.42 69 6.41 6.33 6.07 5.65 5.14 5.56 70 6.64 6.54 6.23 5.76 5.19 5.70 71 6.88 6.76 6.41 5.86 5.24 5.84 72 7.14 7.00 6.59 5.97 5.28 6.00 73 7.43 7.26 6.77 6.06 5.32 6.16 74 7.73 7.53 6.96 6.16 5.35 6.33 75 8.06 7.82 7.14 6.25 5.38 6.51 - ----------------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 12 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5% Payments Guaranteed for a Stated Period of Years
- ------------------------------------------------------------------------------------------------------- Adjusted Age of Annuitant None 5 10 15 20 - ------------------------------------------------------------------------------------------------------- 50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22 51 4.41 4.40 4.38 4.33 4.27 52 4.48 4.47 4.45 4.40 4.32 53 4.56 4.55 4.52 4.46 4.38 54 4.64 4.63 4.59 4.53 4.44 55 4.72 4.71 4.67 4.60 4.50 56 4.81 4.80 4.75 4.67 4.56 57 4.91 4.89 4.84 4.75 4.62 58 5.01 4.99 4.93 4.83 4.69 59 5.12 5.10 5.03 4.92 4.75 60 5.23 5.21 5.13 5.00 4.82 61 5.36 5.33 5.24 5.09 4.88 62 5.49 5.45 5.35 5.19 4.95 63 5.63 5.59 5.47 5.28 5.02 64 5.78 5.73 5.60 5.38 5.08 65 5.94 5.89 5.73 5.48 5.15 66 6.11 6.05 5.87 5.58 5.21 67 6.29 6.22 6.02 5.69 5.27 68 6.49 6.41 6.17 5.79 5.33 69 6.70 6.60 6.33 5.90 5.38 70 6.92 6.81 6.49 6.00 5.43 71 7.17 7.04 6.66 6.10 5.48 72 7.43 7.27 6.84 6.20 5.52 73 7.71 7.53 7.02 6.30 5.55 74 8.02 7.80 7.20 6.39 5.59 75 8.35 8.08 7.38 6.48 5.62 - -------------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 13 OPTION 2 Life Income Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0% Payments Guaranteed for a Stated Period of Years
- ---------------------------------------------------------------------------------------------------- Adjusted Age of Annuitant None 5 10 15 20 - ---------------------------------------------------------------------------------------------------- 50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11 51 5.33 5.32 5.28 5.23 5.15 52 5.40 5.38 5.34 5.29 5.20 53 5.47 5.45 5.41 5.35 5.26 54 5.54 5.53 5.48 5.41 5.31 55 5.63 5.61 5.56 5.47 5.36 56 5.71 5.69 5.63 5.54 5.42 57 5.80 5.78 5.72 5.61 5.47 58 5.90 5.88 5.81 5.69 5.53 59 6.01 5.98 5.90 5.77 5.59 60 6.12 6.09 6.00 5.85 5.65 61 6.24 6.21 6.10 5.93 5.71 62 6.37 6.33 6.21 6.02 5.77 63 6.51 6.46 6.33 6.11 5.83 64 6.66 6.60 6.45 6.20 5.89 65 6.82 6.75 6.57 6.30 5.95 66 6.99 6.91 6.71 6.39 6.01 67 7.17 7.08 6.85 6.49 6.06 68 7.36 7.27 6.99 6.59 6.12 69 7.57 7.46 7.15 6.69 6.17 70 7.80 7.67 7.30 6.78 6.21 71 8.05 7.89 7.47 6.88 6.25 72 8.31 8.13 7.64 6.97 6.29 73 8.59 8.38 7.81 7.06 6.33 74 8.90 8.64 7.99 7.15 6.36 75 9.23 8.93 8.16 7.23 6.38 - ----------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 14 OPTION 3 Life Income for Two Annuitants Amount of Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
- --------------------------------------------------------------------------------------------------------------- Adjusted Ages - ------------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Option 3f Annuitant Guaranteed - --------------------------------------------------------------------------------------------------------------- 55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03 $ 3.69 55 55 3.88 4.25 4.47 3.87 4.14 3.87 55 60 3.99 4.44 4.71 3.98 4.20 3.98 60 55 3.99 4.44 4.71 3.98 4.42 3.98 60 60 4.24 4.71 4.99 4.23 4.57 4.23 60 65 4.38 4.97 5.32 4.38 4.65 4.38 65 60 4.38 4.97 5.32 4.38 4.93 4.38 65 65 4.72 5.33 5.70 4.71 5.14 4.72 65 70 4.93 5.68 6.15 4.91 5.27 4.91 70 65 4.93 5.68 6.15 4.91 5.66 4.91 70 70 5.40 6.21 6.70 5.36 5.96 5.38 70 75 5.69 6.68 7.32 5.62 6.13 5.66 75 70 5.69 6.68 7.32 5.62 6.67 5.66 75 75 6.37 7.45 8.15 6.23 7.12 6.33 75 80 6.78 8.11 8.99 6.54 7.36 6.71 - ---------------------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 15 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
- ----------------------------------------------------------------------------------------------------------- Adjusted Ages - ---------------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ----------------------------------------------------------------------------------------------------------- 55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31 55 55 4.16 4.54 4.76 4.15 4.42 55 60 4.27 4.73 5.00 4.26 4.48 60 55 4.27 4.73 5.00 4.26 4.70 60 60 4.51 4.99 5.27 4.50 4.84 60 65 4.66 5.25 5.61 4.65 4.93 65 60 4.66 5.25 5.61 4.65 5.22 65 65 4.99 5.61 5.99 4.98 5.42 65 70 5.19 5.97 6.44 5.17 5.54 70 65 5.19 5.97 6.44 5.17 5.93 70 70 5.67 6.49 6.99 5.62 6.23 70 75 5.95 6.96 7.61 5.87 6.40 75 70 5.95 6.96 7.61 5.87 6.95 75 75 6.64 7.73 8.43 6.48 7.40 75 80 7.04 8.39 9.29 6.79 7.64 - -----------------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 16 OPTION 3 Life Income for Two Annuitants Amount of First Monthly Payment for Each $1,000 After Deduction of any Charge for Premium Taxes Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
- ------------------------------------------------------------------------------------------------------------ Adjusted Ages - ----------------------------------- Option 3d Annuitant Second Option 3a Option 3b Option 3c 10 Years Option 3e Annuitant Guaranteed - ------------------------------------------------------------------------------------------------------------- 55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23 55 55 5.04 5.44 5.66 5.04 5.32 55 60 5.15 5.63 5.91 5.14 5.38 60 55 5.15 5.63 5.91 5.14 5.59 60 60 5.37 5.87 6.16 5.37 5.72 60 65 5.52 6.14 6.51 5.51 5.80 65 60 5.52 6.14 6.51 5.51 6.10 65 65 5.83 6.49 6.87 5.82 6.29 65 70 6.04 6.84 7.34 6.00 6.41 70 65 6.04 6.84 7.34 6.00 6.81 70 70 6.49 7.35 7.87 6.44 7.08 70 75 6.77 7.84 8.51 6.68 7.25 75 70 6.77 7.84 8.51 6.68 7.81 75 75 7.45 8.60 9.33 7.27 8.25 75 80 7.86 9.28 10.20 7.57 8.49 - ------------------------------------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex. Rates for ages not shown will be provided on request and will be computed on a basis consistent with the rates in the above tables. 17 Endorsed and made a part of the Contract and Certificate on the effective date of the Contract. /s/ Thomas J. McInerney Thomas J. McInerney, President 18 EX-99.B.4.61 13 ENDORSEMENT EX-99.B.4.61 Aetna Life Insurance and Annuity Company ENDORSEMENT This Contract is hereby endorsed as follows: 1. For Contracts with the Fixed Account, the Fixed Account Minimum Guaranteed Interest Rate provision is restated as follows: Aetna will add interest daily to all amounts held in the Fixed Account. For each calendar year, Aetna will set a minimum guaranteed annual interest rate which will apply to all amounts held in the Fixed Account during the calendar year. This rate will never be less than an annual rate of 3%. This one year minimum guaranteed interest rate will be established prior to each calendar year and will be made available to the Contract Holder in advance of the calendar year. Aetna, in its discretion, may credit interest at a rate greater than this one year rate. Aetna will make available to the Contract Holder the rate currently being credited to amounts held in the Fixed Account. 2. For Contracts providing for the payment of any Fixed Account Surrender Value in equal payments over a period not to exceed 60 months, the paragraph describing the interest rate to be credited during the payment period is amended and restated as follows: During the payment period, interest will be credited to the remaining Fixed Account balance at a single fixed rate that will not be more than two percentage points below the rate being credited to the Fixed Account as of the date of surrender. In no event will the credited interest rate be less than 3%. Endorsed and made a part of the Contract effective on the Effective Date of the Contract. /s/ Thomas J. McInerney ------------------- Thomas J. McInerney President Aetna Life Insurance and Annuity Company EI403-GI-98 EX-99.B.4.62 14 FORM OF ENDORSMENT EX-99.B.4.62 Form of Endorsement Aetna Life Insurance and Annuity Company Endorsement The Contract and, if applicable, the Certificate, are endorsed as follows. Delete Section 10.01, Death Benefit, and replace it with the following: If a Participant dies during the Accumulation Phase, we pay a death benefit. If the Contract Beneficiary requests payment of the death benefit as a lump sum or Annuity option within six months of the Participant's death, the amount of the death benefit MVA on the date we receive notice of death and a request for payment in Good Order is guaranteed to be the greater of: (a) The Individual Account value plus any applicable aggregate positive MVA; or (b) The total of Contributions to the Individual Account, minus any amount withdrawn, taken as a loan (if allowed under the Contract), or used to purchase Annuity payments. Endorsed and made part of the Contract and, if applicable, the Certificate on the Effective Date. /s/ Thomas J. McInerney ------------------- Thomas J. McInerney President Aetna Life Insurance and Annuity Company E-MMGDB(99) EX-99.B.4.63 15 FORM OF ENDORSEMENT Ex-99.B.4.63 Form of Endorsement Aetna Life Insurance and Annuity Company Endorsement For an Individual Account established under an Exchanged Contract, any amount allocated to the Fixed Plus Account after the Contract Effective Date will be subject to the Fixed Plus Account provisions stated in this Contract except as provided below. For amounts held in the Fixed Plus Account under the previous ALIAC contract, the amount, if any, transferred to the Fixed Plus Account under this Contract will be subject to the Fixed Plus Account provisions of the previous contract unless the Contract Holder or Participant, as applicable, elects to have the provisions of this Contract apply. During the [three month] period beginning on the Contract Effective Date, Participants may elect to have the amount, if any, in the Fixed Plus Account under the previous ALIAC contract and transferred to the Fixed Plus Account under this Contract subject to Fixed Plus Account provisions stated in this Contract. The election must be in writing or as otherwise allowed by our administrative practices and cannot be revoked. Endorsed and made part of the Contract, and the Certificate if applicable, on the Contract Effective Date. /s/ Thomas J. McInerney ------------------- Thomas J. McInerney President, Aetna Life Insurance and Annuity Company E-MMFPEX(99) EX-99.B.4.64 16 FORM OF ENDORSEMENT Ex-99.B.4.64 Form of Endorsement Aetna Life Insurance and Annuity Company Loan Endorsement The Contract, and the Certificate if applicable, are endorsed as follows. Subject to the provisions below, loans are available under the Contract. During the Accumulation Phase, loans are available (1) as permitted under applicable law, and (2) subject to the terms and conditions of the loan agreement. The Loan Account The loan account is an accounting device used to keep a record of loan activity. For each loan, an amount equal to the loan amount is transferred from the Investment Options in which the Individual Account is invested and is credited to the loan account. The loan account is then credited with interest at a rate which is not less than the loan interest rate, less [2.5%], on an annual basis. Amount Available For Loan The amount available for loan is limited to the Individual Account value attributable to employee contributions, subject to any Plan vesting limits as determined by the Contract Holder (vested Individual Account value), plus any additional amounts allowed by the Plan as determined by the Contract Holder. Amounts available from some Investment Options may be subject to limitations specified in the loan agreement. To obtain the loan amount requested, these limitations may require a transfer of funds among the Investment Options. A Market Value Adjustment may apply to amounts transferred from the GAA Account. The amount, if any, from the Fixed Plus Account may be subject to a default charge if the Participant defaults on the loan. For plans subject to ERISA, the minimum loan amount is $1,000. For plans not subject to ERISA, the minimum loan amount is defined in the loan agreement. The maximum loan amount is the lesser of: (1) Fifty percent of the vested Individual Account value, including the amount, if any, in the loan account, reduced by the amount of any outstanding loan balance on the loan effective date (the loan effective date is the date on which We receive a loan agreement in good order at Our Home Office.); or (2) Fifty thousand dollars reduced by the highest outstanding loan account balance for the preceding 12 months. The total amount of all outstanding loans cannot exceed $50,000. Loan Interest Rate We set a loan interest rate on the first business day of each month. The initial rate for each loan is the rate for the calendar month in which the loan effective date occurs. The initial interest rate is effective for not less than three months and not more than one year. The period is specified in the loan agreement. For each subsequent period, the interest rate is adjusted if the new rate is at least 0.5% higher or lower than the current rate. We provide reasonable notification in writing of any change to the loan interest rate. The loan interest rate is: For plans subject to ERISA: equal to the Monthly Average Corporates (which is Moody's Corporate Bond Yield Average-Monthly Average Corporates published by Moody's Investor Service, or its successor, or a substantially similar average that may be allowed by law or regulation) for the calendar month beginning two months before the loan interest rate is effective. For plans not subject to ERISA: not greater than 8% on an annual basis. Loan repayment A loan may be repaid as described in the loan agreement, or paid in full at any time. Partial Withdrawal(s) While A Loan Is Outstanding While a loan is outstanding, the amount available for partial withdrawal is equal to the vested Individual Account value, including the loan account, minus 125% of the outstanding loan balance. Full Withdrawal While A Loan Is Outstanding When a full withdrawal is requested while a loan is outstanding, one of the following occurs: (1) If the amount of the vested Individual Account value available for distribution is sufficient to repay (a) the outstanding loan balance, plus (b) any applicable Fixed Plus Account default charge, and (c) any applicable Withdrawal Charge due on the outstanding loan balance, that amount (the total of a, b, and c,), minus the loan account balance, is deducted from the vested Individual Account value and the loan is canceled. (2) If the amount of the vested Individual Account value available for distribution is not sufficient to repay (a) the outstanding loan balance, plus (b) any applicable Fixed Plus Account default charge, and (c) any applicable Withdrawal Charge due, the withdrawal amount cannot exceed the vested Individual Account value, including the loan account, reduced by 125% of the outstanding loan balance and a full withdrawal cannot be made until the loan is repaid in full. Electing An Annuity Option While A Loan Is Outstanding Before all or any portion of the vested Individual Account value is used to purchase Annuity payments, the Participant may repay any outstanding loan balance, or the vested Individual Account value is adjusted as described in the section above titled "Full Withdrawal While a Loan Is Outstanding." Death Of The Participant While A Loan Is Outstanding If a death benefit claim is submitted for an Individual Account with an outstanding loan, the Individual Account value, including the amount of the loan account, is reduced by the amount of the outstanding loan balance before the death benefit amount is determined. Loan Default: If we do not receive a loan payment when due, the defaulted payment is treated as follows: (1) If the amount of the vested Individual Account value available for distribution is sufficient to repay (a) the defaulted payment, plus (b) any applicable Fixed Plus Account default charge, and (c) any Withdrawal Charge due on the defaulted loan and that amount (the total of a, b, and c,) is deducted from the vested Individual Account value. The amount of the defaulted payment is reported to the Internal Revenue Service as a distribution. (2) If the amount of the vested Individual Account value available for distribution is not sufficient to repay (a) the loan balance, plus (b) any applicable Fixed Plus Account default charge, and (c) any Withdrawal, until such time that the amount due can be distributed, the loan account continues to earn interest, and interest is charged on the defaulted payment. At that time, the amount due is withdrawn from the vested Individual Account value. The amount of the defaulted payment is reported to the Internal Revenue Service as a distribution. This endorsement is effective and made part of the Contract, and the Certificate if applicable, when accepted on the effective date of the Contract or Certificate. President Aetna Life Insurance and Annuity Company E-MMCDALOAN(99) EX-99.B.4.65 17 FORM OF ENDORSEMENT Ex-99.B.4.65 Form of Endorsement Aetna Life Insurance and Annuity Company Endorsement The Contract and, if applicable, the Certificate are endorsed as follows. For an Individual Account established with a single Contribution, the Withdrawal Charge shown on Contract Schedule I does not apply; it is replaced with the following. Withdrawal Charge (see 8.04) For each withdrawal from an Individual Account, we may deduct a withdrawal charge. This charge is a percentage of the amount withdrawn. The withdrawal charge for an Individual Account established with a single Contribution is: [Number of Years Since Individual Account Established] Withdrawal Charge - ------------ ----------------- [Fewer than 5 years 5% 5 or more, but fewer than 6 years 4% 6 or more, but fewer than 7 years 3% 7 or more, but fewer than 8 years 3% 8 or more, but fewer than 9 years 1% 9 or more years 0%] The withdrawal charge will never exceed [8-1/2%] of total Contributions, or the maximum permitted by National Association of Securities Dealers, Inc. (NASD) rules. Endorsed and made part of the Contract and, if applicable, on the Contract Effective Date. /s/ Thomas J. McInerney ------------------- Thomas J. McInerney President, Aetna Life Insurance and Annuity Company E-MMLSWC(99) EX-99.B.4.66 18 ENDORSEMENT Ex-99.B.4.66 Form of Endorsememt Aetna Life Insurance and Annuity Company Endorsement The Contract, and the Certificate if applicable, are endorsed as follows. When Aetna Life Insurance and Annuity Company (ALIAC) is the exclusive Plan provider, ALIAC will apply a transfer credit to transferred assets allocated to Individual Accounts. Transferred assets are the value of contributions made under a previous contract with another annuity company which are transferred to the ALIAC Contract. The amount of the transfer credit will equal [two percent] of transferred assets allocated to Individual Accounts under the Contract. On the date We receive them in Good Order at Our Home Office, We allocate transferred assets, less any applicable premium tax, to Individual Accounts in amounts and to investment options as directed by the Contract Holder. The transfer credit amount is calculated on the first anniversary of the Individual Account Effective Date. The amount of the transfer credit is based on the Individual Account Current Value on that date. The amount of the transfer credit is deposited in the Fixed Plus Account. In addition to the transfer credit, the amount deposited in the Fixed Plus Account will include interest that would have accrued had the transfer credit amount been deposited to the Fixed Plus Account on the first business day of the calendar month following the Individual Account Effective Date. Endorsed and made part of the Contract, and the Certificate if applicable, on the Contract Effective Date. /s/ Thomas J. McInerney ------------------- Thomas J. McInerney President, Aetna Life Insurance and Annuity Company E-MMTC(5/99) EX-99.B.4.67 19 CONTRACT SCHEDULE EX-99.B.4.67 Contract Schedule I Level [A] Accumulation Period Separate Account - -------------------------------------------------------------------------------- Separate Account: Variable Annuity Account C Charges to Separate Account: A daily charge is deducted from any portion of the Current Value allocated to the Separate Account. The charge is determined by the expenses of administration and the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The daily charge for Annuity mortality and expense risk and profit (M & E) will be adjusted (up or down) no less often than annually to reflect changes in the Current Value of all Plan Accounts. The charge will include a daily administrative charge which will not exceed [0.25%] on an annual basis.
Total Assets M & E Administrative Charge (annual effective rate) (annual effective rate) -------------------------------------- ------------------------------ -------------------------------- Less than $ 500,000 1.25% 0.25% 500,000 - 1,000,000 1.25% 0.25% 1,000,001 - 5,000,000 1.25% 0.25% 5,000,001 - 15,000,000 1.25% 0.25% Greater than 15,000,000 1.25% 0.25%
Initial charges will be based on Aetna's estimated expenses of administration and year end asset level for the Contract Holder. Fixed Plus Account - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: [3%] (effective annual rate of return). Beginning on the [tenth] anniversary of the effective date of an Individual Account, Aetna will credit amounts with an interest rate that is at least [0.25%] higher than the then declared interest rate for Individual Accounts before the tenth anniversary. Partial Withdrawal: The [20%] annual limit applicable to a partial withdrawal from the Fixed Plus Accounts will be waived when the withdrawal is: a) due to the Participant's death (within [six (6)] months of the Participant's date of death), before Annuity benefit payments begin; or b) used to purchase Annuity benefits. Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; or c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months. Guaranteed Accumulation Account (GA Account) - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: [3%] (effective annual rate of return). Separate Account and GA Account - -------------------------------------------------------------------------------- Withdrawal Fee:
Length of Time from Individual Account(s) Effective Date (Years) Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 5% 7 or more, but fewer than 9 5% 9 or more, but fewer than 10 5% 10 or more 5%
The withdrawal fee will not be deducted from any portion of the Individual Account(s) Current Value which is paid: o Due to the Participant's death before Annuity payments begin; o Used to purchase Annuity benefits; o Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); o In an amount equal to or less than [10%] of the Individual Account Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account are excluded when calculating the Individual Account Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; o When the Individual Account(s) Current Value is [$3,500] or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior [12] months; o To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or o On account of a Participant's separation from service. The Contract Holder must submit documentation satisfactory to Aetna to confirm that the Participant is no longer providing services to the employer. o Due to a transfer of the Individual Account Current Value to another retirement product offered by the Company under the Contract Holder's Plan under various conditions as agreed to by us and by the Contract Holder in writing. The withdrawal fee will never exceed 8-1/2% of the total Contributions made to the Individual Account. Separate Account, GA Account and Fixed Plus Account - -------------------------------------------------------------------------------- Transfers: An [unlimited] number of Transfers may be made during the Accumulation Period. Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the [expenses of administration and the] value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract.
Total Assets Maintenance Fee -------------------------------------------------------------- Less than $500,000 $25.00 500,000 - 1,000,000 $25.00 1,000,001 - 5,000,000 $25.00 5,000,001 - 15,000,000 $25.00 Greater than 15,000,000 $25.00
Initial charges will be based on Aetna's estimated [expenses of administration and estimated] year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than [20%] of the Individual Account's Current Value at the time of election. The Specified Period may not be less than [5] years. Loan Interest Rate: a) Plans subject to ERISA: a Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least [0.5%] higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: [6%] on an annual basis. See Section I. - DEFINITIONS for explanations. This page intentionally left blank EX-99.B.4.68 20 CONTRACT SCHEDULE EX-99.B.4.68 Contract Schedule I Level [A] Accumulation Period Separate Account - -------------------------------------------------------------------------------- Separate Account: Variable Annuity Account C Charges to Separate Account: A daily charge is deducted from any portion of the Current Value allocated to the Separate Account. The charge is determined by the expenses of administration and the value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The daily charge for Annuity mortality and expense risk and profit (M & E) will be adjusted (up or down) no less often than annually to reflect changes in the Current Value of all Plan accounts. The charge will include a daily administrative charge which will not exceed [0.25%] on an annual basis.
Total Assets M & E Administrative Charge (annual effective rate) (annual effective rate) ----------------------------------------------------------------------------------------------- Less than $ 500,000 1.25% 0.25% 500,000 - 1,000,000 1.25% 0.25% 1,000,001 - 5,000,000 1.25% 0.25% 5,000,001 - 15,000,000 1.25% 0.25% Greater than 15,000,000 1.25% 0.25%
Initial charges will be based on Aetna's estimated expenses of administration and year end asset level for the Contract Holder. Fixed Plus Account - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: [3%] (effective annual rate of return). Beginning on the [tenth] anniversary of the effective date of an Individual Account, Aetna will credit amounts with an interest rate that is at least [0.25%] higher than the then declared interest rate for Individual Accounts before the [tenth] anniversary. Partial Withdrawal: The [20%] annual limit applicable to a partial withdrawal from the Fixed Plus Account will be waived when the withdrawal is: a) Due to the Participant's death (within [six (6)] months of the Participant's date of death), before Annuity benefit payments begin; or A020RV95(1/98) b) Used to purchase Annuity benefits. Full Withdrawal: The Payment of Fixed Plus Account Full Withdrawal provision will be waived when the withdrawal is: a) Due to the Participant's death before Annuity payments begin and request for payment is received within six (6) months after the Participant's date of death; b) Used to purchase Annuity benefits; or c) When the amount in the Fixed Plus Account is $3,500 or less and no amount has been surrendered, transferred, taken as a loan or used to purchase Annuity benefits during the prior 12 months. Guaranteed Accumulation Account (GA Account) - -------------------------------------------------------------------------------- Minimum Guaranteed Interest Rate: [3%] (effective annual rate of return). Separate Account and GA Account - -------------------------------------------------------------------------------- Withdrawal Fee:
Length of Time from Individual Account(s) Effective Date (Years) Withdrawal Fee Fewer than 5 5% 5 or more, but fewer than 7 5% 7 or more, but fewer than 9 5% 9 or more, but fewer than 10 5% 10 or more 5%
The Withdrawal Fee will not be deducted from any portion of the Individual Account(s) Current Value which is paid: o Due to the Participant's death before Annuity payments begin; o Used to purchase Annuity benefits; o Due to the election of the Estate Conservation Option (ECO) or the Systematic Withdrawal Option (SWO) (see Section IV); o In an amount equal to or less than [10%] of the Individual Account(s) Current Value, as part of the first partial withdrawal request in a calendar year to a Participant who is at least age 59-1/2 and less than 70-1/2. The Individual Account(s) Current Value is calculated as of the date the partial withdrawal request is received in good order at Aetna's Home Office. Any outstanding loans from the Individual Account(s) are excluded when calculating the Individual Account(s) Current Value. This provision does not apply to partial withdrawal due to loan defaults made from the Individual Account(s) and does not apply to full withdrawal requests. This provision may not be exercised if SWO is elected; o When the Individual Account(s) Current Value is [$3,500] or less and no amount has been withdrawn, taken as a loan or used to purchase Annuity benefits during the prior [12] months; o To relieve a Participant's "financial hardship," as may be allowed for annuity contracts under Section 403(b) of the Code or other applicable Internal Revenue Service rules or regulations; or o On account of a Participant's separation from service. The Participant must submit documentation satisfactory to Aetna to confirm that the he/she is no longer providing services to the employer. o Due to a transfer of the Individual Account Current Value to another retirement product offered by the Company under the Contract Holder's Plan under various conditions as agreed to by us and by the Contract Holder in writing. The withdrawal fee will never exceed 8.5% of the total Contributions made to the Individual Account(s). Separate Account, GA Account and Fixed Plus Account - -------------------------------------------------------------------------------- Transfers: An unlimited number of Transfers may be made during the Accumulation Period. Maintenance Fee: An annual Maintenance Fee may be charged, as determined by the [expenses of administration and the] value of total assets held by Aetna under this Contract and other Aetna contracts of the same class, on each anniversary date of this Contract. The Maintenance Fee may go up or down each year. Where applicable, the Maintenance Fee will be charged for each Participant in the Contract.
Total Assets Maintenance Fee -------------------------------------------------------------------- Less than $500,000 $25.00 500,000 - 1,000,000 $25.00 1,000,001 - 5,000,000 $25.00 5,000,001 - 15,000,000 $25.00 Greater than 15,000,000 $25.00
Initial charges will be based on Aetna's estimated [expenses of administration and estimated] year end asset level for the Contract Holder. Systematic Withdrawal Option (SWO): The Specified Payment or Specified Percentage may not be greater than [20%] of the Individual Account's Current Value at the time of election. The Specified Period may not be less than [5] years. Loan Interest Rate: a) Plans subject to Title I of the Employee Retirement Income Security Act of 1974 (ERISA): A Loan Interest Rate is set on the first business day of each month. For each loan, the initial Loan Interest Rate is equal to the Monthly Average Corporates for the calendar month beginning two months before the calendar month in which the Loan Effective Date occurs. The initial Loan Interest Rate is effective for a period of not less than three months and not more than one year. The period is specified in the loan agreement. For each period, the Loan Interest Rate is adjusted if the new rate is at least [0.5%] higher or lower than the previous rate. The Participant will receive reasonable notification of any change to the Loan Interest Rate. b) Plans not subject to ERISA: [6%] on an annual basis. See Section I. - DEFINITIONS for explanations. This page intentionally left blank A02DRV95(1/98) -----END PRIVACY-ENHANCED MESSAGE-----