UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-3563

MONEY MARKET VARIABLE ACCOUNT

(Exact name of registrant as specified in charter)

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: December 31

Date of reporting period: December 31, 2007

ITEM 1. REPORTS TO STOCKHOLDERS.

]

PROFESSIONALLY MANAGED COMBINATION

FIXED/VARIABLE ANNUITIES

FOR PERSONAL INVESTMENTS AND

QUALIFIED RETIREMENT PLANS

ANNUAL REPORT Ÿ December 31, 2007

Capital Appreciation Variable Account

Global Governments Variable Account

Government Securities Variable Account

High Yield Variable Account

Money Market Variable Account

Total Return Variable Account

Issued by

Sun Life Assurance Company of Canada (U.S.),

A Wholly Owned Subsidiary of

Sun Life of Canada (U.S.) Holdings, Inc.

Table of Contents

Letter from the CEO of MFS	1
Management Reviews	1
Performance Summary	4
Portfolio Composition	5
Portfolio of Investments	11
Statements of Assets and Liabilities	31
Statements of Operations	33
Statements of Changes in Net Assets	34
Financial Highlights	36
Notes to Financial Statements	48
Report of Independent Registered Public Accounting Firm	56
Managers and Officers	57
Board Review of Investment Advisory Agreements	61
MFS® Privacy Notice	64

Proxy Voting Policies and Information	Back Cover
Quarterly Portfolio Disclosure	Back Cover

This report is prepared for the general information of contract owners. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.

NOT FDIC INSURED                      MAY LOSE VALUE                      NO BANK OR CREDIT UNION GUARANTEE

NOT A DEPOSIT                      NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

Letter from the CEO of MFS

Dear Contract Owners:

The past year has been a great example of why investors should keep their eyes on the long term.

In 2006 the Dow Jones Industrial Average returned 19% and was fairly stable. This year we have seen a greater level of volatility than has been experienced in recent years. The Dow hit several new highs but also experienced swift drops as a global credit crisis swept through markets, spurred by defaults on U.S. subprime loans and a liquidity crunch. Still, even with this volatility, the Dow ended the first three quarters of 2007 with a return near 13%.

U.S. Treasury bonds gained ground, especially in the third quarter as investors sought less risky asset classes. The spreads of many lower-quality debt investments widened.

In 2007 the U.S. dollar fell against the euro, oil prices hit their highest levels yet, and gold spiked to its steepest price in 28 years. Around the globe, stocks sold off as risk aversion mounted. As we have said before, markets can be volatile, and investors should make sure they have an investment plan that can carry them through the peaks and troughs.

If you are focused on a long-term investment strategy, the short-term ups and downs of the markets should not necessarily dictate portfolio action on your part. In our view, investors who remain committed to a long-term plan are more likely to achieve their financial goals.

In any market environment, we believe individual investors are best served by following a three-pronged investment strategy of allocating their holdings across the major asset classes, diversifying within each class, and regularly rebalancing their portfolios to maintain their desired allocations. Of course, these strategies cannot guarantee a profit or protect against a loss. Investing and planning for the long term require diligence and patience, two traits that in our experience are essential to capitalizing on the many opportunities the financial markets can offer — through both up and down economic cycles.

Respectfully,

Robert J. Manning

Chief Executive Officer and Chief Investment Officer

MFS Investment Management^®

February 15, 2008

The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.

Management Reviews

The following management reviews, for the twelve months ended December 31, 2007, exclude the Money Market Variable Account.

Market Environment

Despite seemingly robust growth rates during the second and third quarters of 2007, underlying economic activity in the U.S. remained muted relative to other major economies. Overall, global economies witnessed moderate to strong growth during the reporting period as domestic demand improved and world trade accelerated.

With the strong global growth, however, concerns emerged about rising global inflation, especially as capacity became more constrained, wages rose, and energy and food prices advanced. During the reporting period, global central banks (with the exception of the U.S. Federal Reserve Board) tightened monetary conditions, which in turn pushed global bond yields to their highest levels during this economic expansion.

However, financial markets — particularly in the mortgage and structured-products areas — experienced substantial volatility in recent months. Beginning in late July, heightened uncertainty and distress concerning the subprime mortgage market caused several global credit markets to tighten up, forcing central banks to inject liquidity and to reassess their tightening biases as sovereign bond yields declined and credit spreads widened. While credit conditions improved somewhat by late October as the Federal Reserve Board cut interest rates, the level of market turbulence remained significant through year end. Increased market turmoil was also exacerbated by U.S. home foreclosures and uncertainties surrounding falling housing prices. Despite increased volatility across all asset classes and the widening in credit spreads, U.S. labor markets were resilient and wages rose modestly. More broadly, global equity markets rebounded following summer losses and generally held those gains through the end of the reporting period.

Capital Appreciation Variable Account

Summary of Results

For the twelve months ended December 31, 2007, Compass 2 provided a total return of 9.58%, Compass 3 provided a total return of 9.48%, and Compass 3 — Level 2 provided a total return of 9.64%. These compare with a return of 11.81% for the account’s benchmark, the Russell 1000 Growth Index.

Detractors from performance

Stock selection in the health care sector detracted from the account’s performance relative to the benchmark. Eye care medical products maker Advanced Medical Optics, biotechnology firm Amgen, and pharmaceutical and diagnostic company Roche Holding^(aa) (Switzerland) were among the account’s largest detractors within this sector. Shares of Advanced Medical Optics suffered a steady decline during the period due to several recalls of its lens solution products, which resulted in a dramatic decrease in eye care sales. Shares of Amgen suffered, in part, due to studies that raised concerns about the safety profile of the company’s anemia drug Aranesp.

An underweighted position in the basic materials sector hindered relative returns. In particular, our positioning in strong-performing agrichemical products company Monsanto^(g) was the principal negative factor in this sector.

Several individual securities in other sectors that dampened relative results included investment management and banking firm UBS^(aa) (Switzerland), billing software company Amdocs, discount retailer Family Dollar Stores^(g), office supply superstore operator Staples, and upscale apparel retailer Nordstrom. Our underweighted position in computer and personal electronics maker Apple also held back relative returns as this benchmark constituent turned in strong performance over the reporting period.

1

Management Reviews — continued

Contributors to performance

Security selection in the retailing sector contributed to the account’s relative performance. Avoiding poor-performing home improvement retailer Home Depot aided relative results.

Our underweighted position and stock selection in the autos and housing sector boosted relative returns. No individual holdings within this sector were among the account’s top contributors.

Stock selection in the industrial goods and services sector also benefited relative performance. Aerospace metal parts manufacturer Precision Castparts was a strong contributor in this sector.

Standout performers in other sectors included financial exchange Deutsche Boerse^(aa) (Germany) and global integrated energy company Hess^(aa). Shares of Deutsche Boerse rose significantly during the year. The company acquired International Securities Exchange Holdings, which we believe positioned the company as a key player in the U.S. options market and in global derivatives trading. Shares of Hess surged in recent months due largely to hopes that an oil field discovery off the coast of Brazil could nearly double the company’s reserves.

Elsewhere, oil field services company Schlumberger, offshore drilling company Noble, network equipment manufacturer Juniper Networks, credit card transactions processor First Data^(g), enterprise software giant Oracle, and food company Nestle^(aa) (Switzerland) also boosted relative performance.

During the reporting period, currency exposure was a contributor to relative performance. All of MFS’ investment decisions are driven by the fundamentals of each individual opportunity and, as such, it is common for our portfolios to have different currency exposure than the benchmark.

Global Governments Variable Account

Summary of Results

For the twelve months ended December 31, 2007, Compass 2 provided a total return of 7.34%; Compass 3 provided a total return of 7.18%; and Compass 3 — Level 2 provided a total return of 7.34%. These compare with a return of 10.81% for the account’s benchmark, the JPMorgan Global Government Bond Index Unhedged.

Detractors from performance

The account’s U.S. yield curve^(y) positioning had a negative impact on relative performance as interest rates generally declined over the reporting period.

During the latter half of the period, as swap and credit spreads widened, the account’s exposure to “AAA”^(s) rated commercial mortgage-backed securities (CMBS), delegated underwriting services (DUS) pools, Small Business Association (SBA) bonds, and emerging markets debt securities detracted from relative results.

Contributors to performance

The account’s underweighted exposure to the U.S. dollar, particularly versus the Euro, modestly contributed to relative performance as the value of the dollar weakened relative to most of the world’s major currencies.

Our duration^(d) positioning in European bonds also benefited investment results during the reporting period.

Security selection, particularly from some of the account’s holdings of European government bonds also helped relative performance.

Government Securities Variable Account

Summary of Results

For the twelve months ended December 31, 2007, Compass 2 provided a total return of 5.66%, Compass 3 provided a total return of 5.55%, and Compass 3 — Level 2 provided a total return of 5.71%. These compare with a return of 7.72% for the account’s benchmark, the Lehman Brothers U.S. Government/Mortgage Bond Index.

Detractors from performance

Relative to the benchmark, the account’s duration^(d) positioning held back performance as interest rates generally declined over the reporting period.

Our greater exposure to government agency debt also dampened investment results as the sector lagged the returns of the benchmark.

Contributors to performance

The account’s lesser relative exposure to mortgage-backed securities added to performance as credit spreads widened dramatically during the recent subprime market crisis.

Our exposure to U.S. Treasury securities, which outperformed the benchmark over the investment period, also helped relative results.

High Yield Variable Account

Summary of Results

For the twelve months ended December 31, 2007, Compass 2 provided a total return of 0.43%, Compass 3 provided a total return of 0.33%, and Compass 3 — Level 2 provided a total return of 0.48%. These compare with a return of 1.87% for the account’s benchmark, the Lehman Brothers U.S. High-Yield Corporate Bond Index.

Detractors from performance

Over the reporting period, yield was a negative factor in performance relative to the benchmark. Our relative exposure to financial issues and to “B” rated^(s) bonds, in general, also hurt.

Debt holdings that detracted from results included the bonds of General Motors Acceptance Corp. (GMAC), Tropicana Entertainment, ARCap, Harrah’s Operating Co., Realogy^(g), Ford Motor Credit, Freescale Semiconductor^(g), and Umbrella Acquisition^(g).

Contributors to performance

Our lower exposure to industrial debt was a relative positive for the account as was overall security selection. For the reporting period, the debt of FMG Finance was among the account’s leading contributors relative to the benchmark. Additionally, our smaller exposure to lower-rated debt, particularly in “BB” and, to a lesser extent, “CCC” rated securities, helped relative performance.

Total Return Variable Account

Summary of Results

For the twelve months ended December 31, 2007, Compass 2 provided a total return of 2.60%, Compass 3 provided a total return

2

Management Reviews — continued

of 2.45%, and Compass 3—Level 2 provided a total return of 2.60%. These compare with a return of 5.49% for the account’s benchmark, the Standard & Poor’s 500 Stock Index (S&P 500 Index). The account’s other benchmark, the Lehman Brothers U.S. Aggregate Bond Index (Lehman Aggregate Index), generated a total return of 6.97%.

Detractors from performance

Within the equity portion of the account, an overweighted position in the poor-performing financial services sector held back performance relative to the S&P 500 Index. Insurance companies, Genworth Financial, Conseco^(aa), and Allstate, along with mortgage lending firm Countrywide Financial^(g) and electronic brokerage firm E*TRADE Financial, were among the account’s top detractors.

Stock selection and an underweighted position in the technology sector also dampened relative performance. Telecommunications equipment manufacturer Nortel Networks^(aa) was a top detractor. We believe Nortel’s weaker-than-expected fundamentals and management’s inability to turn the business around contributed to the decline of the company’s stock price. Not holding strong-performing computer and personal electronics maker Apple also hurt relative results.

In the health care sector, security selection detracted from relative returns. No individual securities within this sector were among the account’s top detractors for the period.

Elsewhere, retailer Macy’s, home improvement products maker Masco, and media titan The New York Times held back relative performance. Masco’s shares were hurt by the deterioration of the housing markets and the company’s pessimistic guidance that cited decreased housing starts.

Within the fixed income portion of the account, our exposure to bonds in the financial sector and to structured products, particularly commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS), held back performance relative to the Lehman Aggregate Index, as these securities suffered from the recent turmoil in the subprime market.

Credit quality, particularly holdings of lower-quality “BBB”^(s) rated securities, detracted from performance as credit spreads widened over the reporting period.

Contributors to performance

Within the equity portion of the account, stock selection and an overweighted position in the strong-performing energy sector boosted performance relative to the S&P 500 Index. Global integrated energy company Hess, and oil and gas producers, Anadarko Petroleum, Devon Energy, and Apache, were all strong contributors over the reporting period. Shares of Hess surged in recent months due largely to hopes that an oil field discovery off the coast of Brazil could nearly double the company’s reserves.

A strong showing in the basic materials sector was principally due to stock selection. Packaging manufacturer Owens-Illinois^(aa)(g) was a top contributor within this sector. The company reported quarterly earnings that exceeded consensus expectations. The firm attributed the positive results to better operating performance in its glass factories and improved pricing and product sales mix.

Elsewhere, agricultural equipment manufacturer Deere & Co. and global financial services provider Bank of New York Mellon were top contributors. Deere’s stock price gain was driven by strong capital management and better-than-expected results throughout

the period which pushed its shares up in excess of the market. Not holding poor-performing financial services firm Wachovia and cable services provider Comcast benefited results, while our small positioning in insurance company American International Group, which struggled during the reporting period, also helped relative returns.

During the reporting period, currency exposure was a contributor to relative performance. All of MFS’ investment decisions are driven by the fundamentals of each individual opportunity and, as such, it is common for our portfolios to have different currency exposure than the benchmark.

Within the fixed income portion of the account, our defensive positioning in shorter duration^(d) corporate bond holdings, relative to the Lehman Aggregate Index, boosted relative performance as credit spreads widened.

The account generated a higher level of income than the benchmark over the reporting period which also benefited relative results.

(aa) Security is not a benchmark constituent.

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(g) Security was not held in the portfolio at period end.

(s) Bonds rated “BBB”, “Baa”, or higher are considered investment grade; bonds rated “BB”, “Ba”, or below are considered non-investment grade. The primary source for bond quality ratings is Moody’s Investors Service. If not available, ratings by Standard & Poor’s are used, else ratings by Fitch, Inc. For securities which are not rated by any of the three agencies, the security is considered Not Rated.

(y) A yield curve graphically depicts the yields of different maturity bonds of the same credit quality and type; a normal yield curve is upward sloping, with short-term rates lower than long-term rates.

Index Definitions

JPMorgan Global Government Bond Index Unhedged — measures developed government bond markets around the world.

Lehman Brothers U.S. Aggregate Bond Index — a market capitalization-weighted index that measures the performance of the U.S. investment-grade, fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities with at least one year to final maturity.

Lehman Brothers U.S. Government/Mortgage Bond Index — measures debt issued by the U.S. Government, and its agencies, as well as mortgage-backed pass-through securities of Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC).

Lehman Brothers U.S. High-Yield Corporate Bond Index — a market capitalization-weighted index that measures the performance of non-investment grade, fixed rate debt. Eurobonds and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela, etc.) are excluded.

Russell 1000 Growth Index — constructed to provide a comprehensive barometer for growth securities in the large-cap segment of the U.S. equity universe. Companies in this index generally have higher price-to-book ratios and higher forecasted growth values.

Standard & Poor's 500 Stock Index — a market capitalization-weighted index of 500 widely held equity securities, designed to measure broad U.S. equity performance.

It is not possible to invest directly in an index.

3

Performance Summary

These performance results reflect the mortality and expense risks charges but do not reflect the deduction of surrender charges or any other applicable contract fees. If surrender charges and all other contract fees were included, the results would be lower.

Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your units, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. For most recent month-end performance, please visit sunlife-usa.com. The performance shown does not reflect the deduction of taxes, if any, that a contract holder would pay on distributions or redemption of contract units.

Year end performance through December 31, 2007

	Compass 2		Compass 3		Compass 3 – Level 2
Capital Appreciation Variable Account	9.58	%	9.48	%	9.64	%
Global Governments Variable Account	7.34	%	7.18	%	7.34	%
Government Securities Variable Account	5.66	%	5.55	%	5.71	%
High Yield Variable Account	0.43	%	0.33	%	0.48	%
Money Market Variable Account	3.32	%	3.22	%	3.38	%
Total Return Variable Account	2.60	%	2.45	%	2.60	%

Before investing, you should consider carefully the investment objectives, risks, and charges and expenses of each investment option. All of this information is explained in the prospectus for each of the Variable Accounts. You should read the prospectus carefully before investing.

Performance results reflect any applicable expense subsidies and waivers in effect during the periods shown. Without such subsidies and waivers the accounts' performance results would be less favorable. Please see the prospectus for complete details. All results are historical and assume the reinvestment of any dividends and capital gains distributions.

Money Market Variable Account performance results reflect any applicable expense subsidies, waivers and adjustments in effect during the periods shown. Subsidies and fee waivers may be imposed to enhance a portfolio's yield during periods when the portfolio's operating expenses have a significant impact on the portfolio's yield due to lower interest rates. Without such subsidies, waivers and adjustments the results would have been less favorable. Please see the prospectus for complete details. All results are historical and assume the reinvestment of any dividends and capital gains distributions.

From time to time the variable accounts may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

4

Portfolio Composition — Capital Appreciation Variable Account

Portfolio Structure

Top ten holdings
Microsoft Corp.	3.0%
Google, Inc., “A”	2.8%
Cisco Systems, Inc.	2.5%
Oracle Corp.	2.5%
Genzyme Corp.	2.2%
Procter & Gamble Co.	2.2%
Amdocs Ltd.	2.2%
State Street Corp.	2.1%
Medtronic, Inc.	2.1%
Roche Holding AG	2.0%

Equity sectors
Technology	23.8%
Health Care	18.6%
Financial Services	10.2%
Consumer Staples	9.1%
Retailing	9.0%
Industrial Goods & Services	7.0%
Special Products & Services	5.7%
Energy	5.6%
Leisure	4.7%
Utilities & Communications	1.8%
Transportation	1.2%
Basic Materials	1.1%
Autos & Housing	0.8%

Percentages are based on net assets as of 12/31/07.

The portfolio is actively managed and current holdings may be different.

5

Portfolio Composition — Global Governments Variable Account

Portfolio Structure (i)

Fixed income sectors (i)
Non-U.S. Government Bonds	67.1%
U.S. Treasury Securities	13.5%
Commercial Mortgage-Backed Securities	4.5%
Emerging Market Bonds	3.1%
U.S. Government Agencies	2.5%
Mortgage-Backed Securities	1.2%
Municipal Bonds	0.6%

Credit quality of bonds (r)
AAA	61.6%
AA	12.6%
A	22.4%
BBB	3.4%
Portfolio facts
Average Duration (d)(i)	6.6
Average Life (i)(m)	8.9 yrs.
Average Maturity (i)(m)	9.9 yrs.
Average Credit Quality of Rated Securities (long-term) (a)	AA+
Average Credit Quality of Rated Securities (short-term) (a)	A-1
Country weightings (i)
United States	29.4%
Japan	23.8%
United Kingdom	10.1%
Germany	8.4%
France	5.2%
Belgium	4.2%
Italy	4.1%
Spain	4.1%
Netherlands	3.4%
Other Countries	7.3%

(a) The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i) For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(m) The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates.

(r) Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 12/31/07.

Percentages are based on net assets as of 12/31/07, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

6

Portfolio Composition — Government Securities Variable Account

Portfolio Structure (i)

Fixed income sectors (i)
Mortgage-Backed Securities	56.0%
U.S. Treasury Securities	24.0%
U.S. Government Agencies	22.0%
Municipal Bonds	2.0%

Credit quality of bonds (r)
AAA	99.2%
AA	0.8%
Portfolio facts
Average Duration (d)(i)	4.2
Average Life (i)(m)	6.1 yrs.
Average Maturity (i)(m)	14.4 yrs.
Average Credit Quality of Rated Securities (long-term) (a)	AAA
Average Credit Quality of Rated Securities (short-term) (a)	A-1

(a) The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i) For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable, which may result in the investment in a sector of less than 0%.

(m) The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates.

(r) Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 12/31/07.

Percentages are based on net assets as of 12/31/07, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

7

Portfolio Composition — High Yield Variable Account

Portfolio Structure (i)

Top five industries (i)
Medical & Health Technology & Services	9.0%
Broadcasting	8.0%
Gaming & Lodging	6.1%
Utilities — Electric Power	5.2%
Energy — Independent	5.2%

Credit quality of bonds (r)
AAA	1.2%
AA	0.4%
BBB	3.2%
BB	30.1%
B	50.2%
CCC	14.4%
Not Rated	0.5%
Portfolio facts
Average Duration (d)(i)	4.3
Average Life (i)(m)	6.9 yrs.
Average Maturity (i)(m)	7.5 yrs.
Average Credit Quality of Rated Securities (long-term) (a)	B+
Average Credit Quality of Rated Securities (short-term) (a)	A-1

(a) The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d) Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i) For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(m) The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates.

(o) Less than 0.1%.

(r) Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 12/31/07.

Percentages are based on net assets as of 12/31/07, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

8

Portfolio Composition — Money Market Variable Account

Portfolio Structure (u)

Short-term credit quality (q)
Average Credit Quality Short-Term Bonds (a)	A-1
All holdings are rated “A-1”
Maturity breakdown (u)
0 - 29 days	46.5%
30 - 59 days	36.1%
60 - 89 days	9.5%
90 - 366 days	8.3%
Other Assets Less Liabilities	(0.4)%

(a) The average credit quality is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(q) Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. If not rated by any of the three agencies, the security is considered Not Rated. U.S. Treasuries and U.S. Agency securities are included in the “A-1”-rating category. Percentages are based on the total market value of investments as of 12/31/07.

(u) For purposes of this presentation, accrued interest, where applicable, is included.

From time to time “Other Assets Less Liabilities” may be negative due to timing of cash receipts.

Percentages are based on net assets as of 12/31/07, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

9

Portfolio Composition — Total Return Variable Account

Portfolio Structure (i)

Top ten holdings (i)
Fannie Mae, 5.5%, 30 years	4.3%
Fannie Mae, 6.0%, 30 years	2.1%
Exxon Mobil Corp.	2.0%
U.S. Treasury Notes, 4.5%, 2009	1.9%
Altria Group, Inc.	1.7%
U.S. Treasury Notes, 4.875%, 2009	1.6%
Lockheed Martin Corp.	1.5%
U.S. Treasury Notes, 3.125%, 2008	1.5%
U.S. Treasury Bonds 5.375%, 2031	1.2%
TOTAL S.A., ADR	1.2%

Equity sectors
Financial Services	14.8%
Energy	8.1%
Utilities & Communications	6.3%
Health Care	5.6%
Consumer Staples	5.4%
Industrial Goods & Services	4.8%
Retailing	3.2%
Technology	2.9%
Basic Materials	1.9%
Leisure	1.8%
Autos & Housing	1.6%
Transportation	0.7%
Special Products & Services	0.4%
Fixed income sectors (i)
Mortgage-Backed Securities	16.1%
High Grade Corporates	9.9%
U.S. Treasury Securities	9.3%
Commercial Mortgage-Backed Securities	2.3%
U.S. Government Agencies	2.2%
Non-U.S. Government Bonds	0.9%
Asset-Backed Securities	0.5%
Emerging Market Bonds	0.3%
High Yield Corporates	0.2%
Municipal Bonds	0.1%
Residential Mortgage-Backed Securities (o)	0.0%
Collateralized Debt Obligations (o)	0.0%

(i) For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(o) Less than 0.1%

Percentages are based on net assets as of 12/31/07, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

10

Portfolio of Investments — December 31, 2007

Capital Appreciation Variable Account

Issuer	Shares/Par	Value ($)
COMMON STOCKS - 98.6%
Aerospace - 2.8%
Precision Castparts Corp.	11,750	$	1,629,725
United Technologies Corp.	51,060		3,908,132
		$	5,537,857
Alcoholic Beverages - 1.4%
Diageo PLC	129,200	$	2,765,585
Apparel Manufacturers - 2.9%
LVMH Moet Hennessy Louis Vuitton S.A.	27,350	$	3,287,207
NIKE, Inc., “B”	38,010		2,441,762
		$	5,728,969
Automotive - 0.8%
Bayerische Motoren Werke AG	26,150	$	1,614,791
Biotechnology - 4.2%
Amgen, Inc. (a)	19,380	$	900,007
Celgene Corp. (a)	17,620		814,220
Genentech, Inc. (a)	13,170		883,312
Genzyme Corp. (a)	57,330		4,267,645
Millipore Corp. (a)	18,830		1,377,979
		$	8,243,163
Broadcasting - 2.0%
News Corp., “A”	103,210	$	2,114,773
Omnicom Group, Inc.	39,050		1,856,047
		$	3,970,820
Brokerage & Asset Managers - 3.5%
Charles Schwab Corp.	101,290	$	2,587,960
Deutsche Boerse AG	14,070		2,777,150
Franklin Resources, Inc.	3,150		360,455
ICAP PLC	81,980		1,179,934
		$	6,905,499
Business Services - 4.5%
Amdocs Ltd. (a)	122,840	$	4,234,295
Automatic Data Processing, Inc.	29,110		1,296,268
Fidelity National Information Services, Inc.	20,770		863,824
Western Union Co.	96,830		2,351,032
		$	8,745,419
Cable TV - 0.9%
Comcast Corp., “A” (a)	97,090	$	1,772,863
Computer Software - 6.7%
Citrix Systems, Inc. (a)	33,490	$	1,272,955
Microsoft Corp.	163,560		5,822,736
Oracle Corp. (a)	216,970		4,899,183
VeriSign, Inc. (a)	30,230		1,136,950
		$	13,131,824
Computer Software - Systems - 4.3%
Apple Computer, Inc. (a)	13,160	$	2,606,733
Dell, Inc. (a)	62,860		1,540,699
EMC Corp. (a)	88,330		1,636,755
International Business Machines Corp.	14,930		1,613,933
Network Appliance, Inc. (a)	41,780		1,042,829
		$	8,440,949
Consumer Goods & Services - 4.0%
Apollo Group, Inc., “A” (a)	13,000	$	911,950
Colgate-Palmolive Co.	16,470		1,284,001
eBay, Inc. (a)	44,340		1,471,645
Procter & Gamble Co.	58,040		4,261,297
		$	7,928,893

Issuer	Shares/Par	Value ($)
COMMON STOCKS - continued
Electrical Equipment - 4.2%
Danaher Corp.	43,600	$	3,825,464
General Electric Co.	78,860		2,923,340
W.W. Grainger, Inc.	16,660		1,458,083
		$	8,206,887
Electronics - 6.2%
Intel Corp.	143,950	$	3,837,707
Intersil Corp., “A”	40,190		983,851
KLA-Tencor Corp.	36,800		1,772,288
National Semiconductor Corp.	49,940		1,130,642
Samsung Electronics Co. Ltd., GDR	8,146		2,364,087
Taiwan Semiconductor Manufacturing Co. Ltd., ADR	214,874		2,140,145
		$	12,228,720
Energy - Integrated - 2.7%
Exxon Mobil Corp.	33,350	$	3,124,562
Hess Corp.	11,130		1,122,572
Marathon Oil Corp.	16,500		1,004,190
		$	5,251,324
Food & Beverages - 4.3%
General Mills, Inc.	23,600	$	1,345,200
Nestle S.A.	8,124		3,722,528
PepsiCo, Inc.	44,150		3,350,985
		$	8,418,713
Food & Drug Stores - 2.1%
CVS Caremark Corp.	76,729	$	3,049,978
Walgreen Co.	27,050		1,030,064
		$	4,080,042
Gaming & Lodging - 1.8%
International Game Technology	29,880	$	1,312,628
Royal Caribbean Cruises Ltd.	49,550		2,102,902
		$	3,415,530
General Merchandise - 0.9%
Target Corp.	33,870	$	1,693,500
Health Maintenance Organizations - 0.8%
UnitedHealth Group, Inc.	27,630	$	1,608,066
Insurance - 1.1%
Aflac, Inc.	35,440	$	2,219,607
Internet - 3.1%
Google, Inc., “A” (a)	8,040	$	5,559,499
Yahoo!, Inc. (a)	24,800		576,848
		$	6,136,347
Major Banks - 3.2%
Bank of New York Mellon Corp.	42,674	$	2,080,784
State Street Corp.	51,260		4,162,312
		$	6,243,096
Medical & Health Technology & Services - 0.5%
Cardinal Health, Inc.	17,770	$	1,026,217
Medical Equipment - 4.7%
Advanced Medical Optics, Inc. (a)	66,980	$	1,643,019
C.R. Bard, Inc.	11,790		1,117,692
Medtronic, Inc.	81,830		4,113,594
ResMed, Inc. (a)	32,410		1,702,497
Zimmer Holdings, Inc. (a)	10,730		709,789
		$	9,286,591
Network & Telecom - 3.5%
Cisco Systems, Inc. (a)	182,580	$	4,942,441
Juniper Networks, Inc. (a)	24,650		818,380
QUALCOMM, Inc.	28,200		1,109,670
		$	6,870,491

11-CAVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
COMMON STOCKS - continued
Oil Services - 2.9%
Halliburton Co.		54,620	$	2,070,644
Noble Corp.		25,920		1,464,739
Schlumberger Ltd.		10,680		1,050,592
Weatherford International Ltd. (a)		17,060		1,170,316
			$	5,756,291
Other Banks & Diversified Financials - 2.4%
American Express Co.		48,860	$	2,541,697
Moody’s Corp.		22,260		794,682
UBS AG		29,915		1,389,235
			$	4,725,614
Pharmaceuticals - 8.4%
Allergan, Inc.		32,640	$	2,096,794
Bayer AG		15,240		1,389,500
Johnson & Johnson		51,560		3,439,052
Merck KGaA		8,800		1,130,441
Novartis AG, ADR		29,470		1,600,516
Roche Holding AG		23,310		4,015,179
Wyeth		63,570		2,809,158
			$	16,480,640
Specialty Chemicals - 1.1%
Praxair, Inc.		24,850	$	2,204,444
Specialty Stores - 3.1%
CarMax, Inc. (a)		52,850	$	1,043,788
Lowe’s Cos., Inc.		42,270		956,147
Nordstrom, Inc.		35,750		1,313,098
Staples, Inc.		119,470		2,756,173
			$	6,069,206
Telecommunications - Wireless - 1.8%
America Movil S.A.B. de C.V., “L”, ADR		39,790	$	2,442,708
Rogers Communications, Inc., “B”		23,630		1,069,257
			$	3,511,965
Tobacco - 0.6%
Altria Group, Inc.		15,790	$	1,193,408
Trucking - 1.2%
FedEx Corp.		11,770	$	1,049,531
United Parcel Service, Inc., “B”		16,770		1,185,974
			$	2,235,505
Total Common Stocks (Identified Cost, $175,030,722)			$	193,648,836
SHORT-TERM OBLIGATIONS - 2.2%
American Express Credit Corp., 4.12%, due 1/02/08, at Amortized Cost and Value (y)	$	4,259,000	$	4,258,513
Total Investments (Identified Cost, $179,289,235)			$	197,907,349
OTHER ASSETS, LESS LIABILITIES - (0.8)%				(1,577,945	)
NET ASSETS - 100.0%			$	196,329,404

See portfolio footnotes and notes to financial statements.

12-CAVA

Portfolio of Investments — December 31, 2007

Global Governments Variable Account

Issuer		Shares/Par	Value ($)
BONDS - 91.4%
Foreign Bonds - 69.3%
Belgium - 4.1%
Kingdom of Belgium, 5.5%, 2017	EUR	210,000	$	331,987
Canada - 2.5%
Canada Housing Trust, 4.6%, 2011	CAD	51,000	$	52,488
Government of Canada, 4.5%, 2015	CAD	129,000		135,266
Government of Canada, 5.75%, 2033	CAD	13,000		16,566
			$	204,320
Denmark - 0.6%
Kingdom of Denmark, 4%, 2015	DKK	261,000	$	49,892
France - 5.1%
Republic of France, 6%, 2025	EUR	173,000	$	294,968
Republic of France, 4.75%, 2035	EUR	79,000		116,885
			$	411,853
Germany - 8.1%
Federal Republic of Germany, 5.25%, 2010	EUR	168,000	$	252,320
Federal Republic of Germany, 3.75%, 2015	EUR	72,000		102,136
Federal Republic of Germany, 6.25%, 2030	EUR	168,000		299,049
			$	653,505
Italy - 4.1%
Republic of Italy, 4.75%, 2013	EUR	220,000	$	329,213
Japan - 23.8%
Development Bank of Japan, 1.4%, 2012	JPY	27,000,000	$	245,820
Government of Japan, 0.8%, 2010	JPY	7,000,000		62,738
Government of Japan, 1.3%, 2014	JPY	111,000,000		999,636
Government of Japan, 1.7%, 2017	JPY	23,000,000		210,440
Government of Japan, 2.1%, 2024	JPY	28,000,000		255,893
Government of Japan, 2.2%, 2027	JPY	11,000,000		100,213
Government of Japan, 2.4%, 2037	JPY	5,000,000		45,293
			$	1,920,033
Malaysia - 1.6%
Petronas Capital Ltd., 7.875%, 2022	$	100,000	$	125,055
Mexico - 0.9%
United Mexican States, 5.625%, 2017	$	6,000	$	6,081
United Mexican States, 6.75%, 2034		60,000		66,270
			$	72,351
Netherlands - 3.3%
Kingdom of Netherlands, 3.75%, 2014	EUR	190,000	$	270,264
Russia - 0.6%
Gazprom International S.A., 7.201%, 2020	$	48,946	$	49,988
Spain - 4.0%
Kingdom of Spain, 5%, 2012	EUR	215,000	$	324,789
Sweden - 0.6%
Kingdom of Sweden, 4.5%, 2015	SEK	330,000	$	51,698
United Kingdom - 10.0%
United Kingdom Treasury, 9%, 2011	GBP	73,000	$	166,820
United Kingdom Treasury, 8%, 2015	GBP	147,000		358,648
United Kingdom Treasury, 8%, 2021	GBP	44,000		117,506
United Kingdom Treasury, 4.25%, 2036	GBP	83,000		163,320
			$	806,294
Total Foreign Bonds			$	5,601,242

Issuer		Shares/Par	Value ($)
BONDS - continued
U.S. Bonds - 22.1%
Asset Backed & Securitized - 4.5%
Bayview Commercial Asset Trust, FRN, 5.158%, 2023 (n)	CAD	30,000	$	27,253
Commercial Mortgage Asset Trust, FRN, 0.876%, 2032 (i)(n)	$	1,362,539		42,045
Commercial Mortgage Pass-Through Certificates, FRN, 5.217%, 2017 (n)		59,000		58,705
Commercial Mortgage Pass-Through Certificates, FRN, 5.227%, 2017 (n)		100,000		97,686
First Union National Bank Commercial Mortgage Trust, FRN, 0.931%, 2043 (i)(n)		1,557,876		37,137
IMPAC CMB Trust, FRN, 5.215%, 2036		87,824		83,856
Lehman Brothers Floating Rate Commercial Mortgage Trust, FRN, 5.187%, 2018 (n)		17,580		17,553
			$	364,235
Mortgage Backed - 1.2%
Fannie Mae, 5.37%, 2013	$	24,471	$	25,211
Fannie Mae, 4.78%, 2015		24,161		24,078
Fannie Mae, 5.09%, 2016		25,000		25,243
Fannie Mae, 5.423%, 2016		24,468		25,287
			$	99,819
Municipals - 0.6%
Minnesota Public Facilities Authority, Water Pollution Control Rev., “B”, 5%, 2018	$	45,000	$	49,954
U.S. Government Agencies - 2.5%
Aid-Egypt, 4.45%, 2015	$	49,000	$	48,747
Small Business Administration, 4.57%, 2025		41,159		39,701
Small Business Administration, 5.21%, 2026		110,173		111,632
			$	200,080
U.S. Treasury Obligations - 13.3%
U.S. Treasury Bonds, 4.75%, 2017	$	262,000	$	276,717
U.S. Treasury Bonds, 8%, 2021		52,000		71,167
U.S. Treasury Bonds, 4.75%, 2037		23,000		24,071
U.S. Treasury Bonds, TIPS, 2.375%, 2025		84,235		88,434
U.S. Treasury Notes, 3.125%, 2008		1,000		998
U.S. Treasury Notes, 4%, 2010		187,000		190,798
U.S. Treasury Notes, 4.75%, 2012		43,000		45,325
U.S. Treasury Notes, 4%, 2015		323,000		327,569
U.S. Treasury Notes, TIPS, 2%, 2014		45,228		46,715
			$	1,071,794
Total U.S. Bonds			$	1,785,882
Total Bonds (Identified Cost, $7,269,033)			$	7,387,124

13 - GGVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
SHORT-TERM OBLIGATIONS - 3.5%
Federal Home Loan Bank, 2.5%, due 1/02/08, at Amortized Cost and Value (y)	$	286,000	$	285,980
REPURCHASE AGREEMENTS - 4.5%
Merrill Lynch & Co., 4.5%, dated 12/31/07, due 1/02/08, total to be received $363,091(secured by various U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	363,000	$	363,000
Total Investments (Identified Cost, $7,918,013) (k)			$	8,036,104
OTHER ASSETS, LESS LIABILITIES - 0.6%				45,670
NET ASSETS - 100.0%			$	8,081,774

Forward Foreign Currency Exchange Contracts at 12/31/07

	Type	Currency	Contracts to Deliver/ Receive	Settlement Date Range	In Exchange For		Contracts at Value		Net Unrealized Appreciation (Depreciation)
Appreciation
	BUY	AUD	21,000	1/16/08	$	18,352	$	18,423	$	71
	SELL	AUD	6,000	1/16/08		5,329		5,264		65
	SELL	CAD	89,716	1/09/08		91,149		90,913		236
	BUY	DKK	42,612	2/07/08		8,347		8,360		13
	BUY	EUR	71,055	2/05/08 - 2/13/08		103,186		103,950		764
	SELL	EUR	404,230	1/16/08 - 2/13/08		593,796		591,365		2,431
	SELL	GBP	258,286	2/05/08 - 2/14/08		526,692		513,525		13,167
	BUY	IDR	122,438,885	1/28/08		12,984		13,020		36
	BUY	JPY	102,527,487	1/15/08 - 2/05/08		917,639		919,795		2,156
	SELL	JPY	172,744,053	1/15/08 - 2/06/08		1,583,116		1,550,706		32,410
	BUY	MYR	46,050	1/28/08		13,829		13,936		107
	SELL	SEK	177,675	1/15/08		28,000		27,494		506
									$	51,962
Depreciation
	BUY	AUD	86,094	1/16/08	$	77,322	$	75,527	$	(1,795	)
	SELL	AUD	46,515	1/16/08		40,418		40,806		(388	)
	BUY	CAD	40,956	1/09/08		42,874		41,502		(1,372	)
	SELL	CAD	52,852	1/09/08		52,135		53,558		(1,423	)
	BUY	CHF	25,667	2/04/08		23,072		22,721		(351	)
	BUY	EUR	962,758	1/16/08 - 2/13/08		1,412,318		1,408,111		(4,207	)
	SELL	EUR	134,957	1/16/08 - 2/13/08		195,145		197,403		(2,258	)
	BUY	GBP	68,283	2/14/08		137,320		135,754		(1,566	)
	BUY	JPY	158,946,633	1/15/08 - 2/05/08		1,460,216		1,426,581		(33,635	)
	SELL	JPY	34,501,095	1/15/08 - 2/05/08		307,620		309,617		(1,997	)
	BUY	NOK	115,161	2/19/08		21,255		21,180		(75	)
	BUY	SEK	241,871	1/15/08		38,397		37,428		(969	)
									$	(50,036	)

At December 31, 2007, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

14-GGVA

Portfolio of Investments — December 31, 2007

Government Securities Variable Account

Issuer	Shares/Par		Value ($)
BONDS - 97.4%
Agency - Other - 5.2%
Financing Corp., 9.4%, 2018	$	780,000	$	1,083,485
Financing Corp., 10.35%, 2018		1,150,000		1,699,301
Financing Corp., STRIPS, 0%, 2017		1,220,000		778,337
			$	3,561,123
Mortgage Backed - 55.9%
Fannie Mae, 5.78%, 2008	$	179,644	$	179,618
Fannie Mae, 4.73%, 2012		92,595		93,121
Fannie Mae, 4.79%, 2012-2015		1,033,600		1,042,608
Fannie Mae, 4.845%, 2013		255,739		258,095
Fannie Mae, 5%, 2013-2027		2,942,207		2,951,466
Fannie Mae, 5.06%, 2013-2017		192,995		195,167
Fannie Mae, 4.547%, 2014		118,492		117,667
Fannie Mae, 4.6%, 2014		123,078		122,449
Fannie Mae, 4.621%, 2014		400,925		399,684
Fannie Mae, 4.77%, 2014		104,056		104,224
Fannie Mae, 4.839%, 2014		822,938		828,390
Fannie Mae, 4.871%, 2014		471,965		476,063
Fannie Mae, 5.1%, 2014		135,333		137,632
Fannie Mae, 4.56%, 2015		158,720		156,580
Fannie Mae, 4.62%, 2015		176,854		175,250
Fannie Mae, 4.665%, 2015		107,121		106,298
Fannie Mae, 4.7%, 2015		123,096		122,390
Fannie Mae, 4.74%, 2015		99,041		98,651
Fannie Mae, 4.81%, 2015		125,765		125,537
Fannie Mae, 4.815%, 2015		117,000		116,896
Fannie Mae, 4.82%, 2015		337,637		337,881
Fannie Mae, 4.89%, 2015		86,679		87,066
Fannie Mae, 4.925%, 2015		341,051		343,646
Fannie Mae, 5.471%, 2015		118,952		123,301
Fannie Mae, 6.5%, 2016-2036		1,490,680		1,540,327
Fannie Mae, 4.994%, 2017		299,887		303,112
Fannie Mae, 5.5%, 2017-2035		9,763,359		9,784,755
Fannie Mae, 6%, 2017-2037		2,700,563		2,750,159
Fannie Mae, 4.5%, 2019-2020		2,547,806		2,505,849
Fannie Mae, 4.88%, 2020		87,060		87,429
Fannie Mae, 5.19%, 2020		82,213		82,801
Fannie Mae, 7.5%, 2022-2031		155,355		166,075
Freddie Mac, 4.5%, 2013-2021		329,911		329,405
Freddie Mac, 4.375%, 2015		450,702		448,510
Freddie Mac, 5%, 2016-2027		3,061,424		3,067,510
Freddie Mac, 6%, 2021-2037		2,506,818		2,550,075
Freddie Mac, 5.5%, 2022-2035		4,156,947		4,167,408
Freddie Mac, 6.5%, 2032-2037		664,592		686,720
Ginnie Mae, 5.5%, 2033		1,409,763		1,420,923
			$	38,590,738
Municipals - 2.0%
California Educational Facilities Authority Rev. (Stanford University), “T-1”, 5%, 2039	$	670,000	$	747,620
Clark County Nevada School District, 5%, 2017		480,000		525,749
Minnesota Public Facilities Authority, Water Pollution Control Rev., “B”, 5%, 2018		105,000		116,559
			$	1,389,928
U.S. Government Agencies - 16.4%
Aid-Egypt, 4.45%, 2015	$	473,000	$	470,536
Aid-Israel, 6.6%, 2008		137,559		137,814
Aid-Peru, 9.98%, 2008		182,081		182,866
Empresa Energetica Cornito Ltd., 6.07%, 2010		1,363,000		1,418,801
Farmer Mac, 5.5%, 2011 (n)		690,000		730,758

Issuer	Shares/Par		Value ($)
BONDS - continued
U.S. Government Agencies - continued
Federal Home Loan Bank, 4.625%, 2008	$	1,750,000	$	1,749,953
Federal Home Loan Bank, 5.25%, 2009		1,065,000		1,082,087
Small Business Administration, 8.7%, 2009		18,208		18,517
Small Business Administration, 10.05%, 2009		2,409		2,448
Small Business Administration, 6.44%, 2021		440,743		461,796
Small Business Administration, 6.625%, 2021		545,631		580,383
Small Business Administration, 4.98%, 2023		213,617		214,849
Small Business Administration, 4.77%, 2024		500,707		498,257
Small Business Administration, 4.86%, 2024		278,426		278,097
Small Business Administration, 4.88%, 2024		246,221		246,064
Small Business Administration, 4.99%, 2024		367,023		368,983
Small Business Administration, 5.11%, 2025		297,884		299,102
U.S. Department of Housing & Urban Development, 6.36%, 2016		500,000		532,335
U.S. Department of Housing & Urban Development, 6.59%, 2016		2,045,000		2,073,953
			$	11,347,599
U.S. Treasury Obligations - 17.9%
U.S. Treasury Bonds, 9.25%, 2016	$	409,000	$	558,381
U.S. Treasury Bonds, 7.5%, 2016		810,000		1,016,740
U.S. Treasury Bonds, 4.75%, 2017		500,000		528,086
U.S. Treasury Bonds, 7.875%, 2021		396,000		532,620
U.S. Treasury Bonds, 6.25%, 2023		1,009,001		1,208,032
U.S. Treasury Bonds, 6.75%, 2026		939,000		1,201,920
U.S. Treasury Bonds, 5.25%, 2028		346,000		380,681
U.S. Treasury Bonds, 4.5%, 2036		554,000		556,813
U.S. Treasury Bonds, 5%, 2037		133,000		144,960
U.S. Treasury Notes, 6.5%, 2010 (f)		2,216,000		2,369,562
U.S. Treasury Notes, 5.125%, 2011		2,289,000		2,431,884
U.S. Treasury Notes, 4.125%, 2012		886,000		912,234
U.S. Treasury Notes, 12%, 2013		19,000		19,989
U.S. Treasury Notes, 4%, 2014		477,000		487,323
			$	12,349,225
Total Bonds (Identified Cost, $66,469,009)			$	67,238,613
REPURCHASE AGREEMENTS - 1.7%
Merrill Lynch, 4.5%, dated 12/31/07, due 1/02/08, total to be received $1,146,287 (secured by U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	1,146,000	$	1,146,000
Total Investments (Identified Cost, $67,615,009) (k)			$	68,384,613
OTHER ASSETS, LESS LIABILITIES - 0.9%				610,857
NET ASSETS - 100.0%			$	68,995,470

15-GSVA

Portfolio of Investments — continued

Futures contracts outstanding at 12/31/07

Description	Contracts	Value		Expiration Date	Unrealized Appreciation (Depreciation)
U.S. Treasury Bond (Short)	14	$	1,629,250	Mar-08	$	8,373
U.S. Treasury Note 5 yr (Long)	51		5,624,344	Mar-08		25,228
					$	33,601

At December 31, 2007, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements

16-GSVA

Portfolio of Investments — December 31, 2007

High Yield Variable Account

Issuer	Shares/Par		Value ($)
BONDS - 84.8%
Aerospace - 1.5%
Bombardier, Inc., 8%, 2014 (n)	$	151,000	$	157,795
Hawker Beechcraft Acquisition Co., 9.75%, 2017 (n)		235,000		233,825
TransDigm, Inc., 7.75%, 2014		100,000		101,500
Vought Aircraft Industries, Inc., 8%, 2011		255,000		241,613
			$	734,733
Airlines - 0.8%
Continental Airlines, Inc., 6.9%, 2017	$	59,946	$	57,548
Continental Airlines, Inc., 6.748%, 2017		53,114		50,724
Continental Airlines, Inc., 6.795%, 2018		102,076		96,972
Continental Airlines, Inc., 7.566%, 2020		174,181		168,955
			$	374,199
Apparel Manufacturers - 0.1%
Levi Strauss & Co., 9.75%, 2015	$	75,000	$	74,813
Asset Backed & Securitized - 2.0%
ARCap REIT, Inc., CDO, “H”, 6.1%, 2045 (n)	$	165,567	$	66,227
Asset Securitization Corp., FRN, 8.825%, 2029 (z)		200,000		207,500
Crest Ltd., CDO, 7%, 2040		154,000		122,967
First Union National Bank Commercial Mortgage Corp., 6.75%, 2032		165,000		165,481
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 6.062%, 2051		110,000		102,036
Merrill Lynch Mortgage Trust, FRN, 5.829%, 2050		110,000		100,654
Wachovia Credit, CDO, FRN, 6.233%, 2026 (z)		250,000		201,718
			$	966,583
Automotive - 3.3%
Allison Transmission, Inc., 11%, 2015 (n)	$	260,000	$	236,600
Ford Motor Credit Co., 8.625%, 2010		190,000		176,311
Ford Motor Credit Co. LLC, 9.75%, 2010		821,000		783,400
General Motors Corp., 8.375%, 2033		421,000		338,905
TRW Automotive, Inc., 7%, 2014 (n)		115,000		105,800
			$	1,641,016
Broadcasting - 7.1%
Allbritton Communications Co., 7.75%, 2012	$	368,000	$	364,320
Bonten Media Acquisition Co., 9%, 2015 (n)(p)		135,000		117,788
CanWest MediaWorks LP, 9.25%, 2015 (n)		230,000		225,113
Clear Channel Communications, Inc., 5.5%, 2014		320,000		243,915
Intelsat Bermuda Ltd., 11.25%, 2016		355,000		366,538
Intelsat Corp., 0% to 2010, 9.25% to 2015		235,000		192,113
Intelsat Ltd., FRN, 10.828%, 2013		90,000		92,250
ION Media Networks, Inc., FRN, 11.492%, 2013 (n)		240,000		236,100
Lamar Media Corp., 6.625%, 2015 (n)		145,000		141,013
Lamar Media Corp., 6.625%, 2015		220,000		213,950
LBI Media, Inc., 8.5%, 2017 (n)		150,000		144,563
LIN TV Corp., 6.5%, 2013		320,000		301,200
Local TV Finance LLC, 9.25%, 2015 (n)(p)		235,000		224,425
Nexstar Broadcasting Group, Inc., 7%, 2014		165,000		153,656
Univision Communications, Inc., 9.75%, 2015 (n)(p)		520,000		473,850
			$	3,490,794

Issuer	Shares/Par		Value ($)
BONDS - continued
Brokerage & Asset Managers - 0.3%
Nuveen Investments, Inc., 10.5%, 2015 (z)	$	145,000	$	144,456
Building - 1.2%
Interface, Inc., 10.375%, 2010	$	167,000	$	174,933
Interface, Inc., 9.5%, 2014		30,000		31,350
Nortek Holdings, Inc., 8.5%, 2014		175,000		140,000
Ply Gem Industries, Inc., 9%, 2012		315,000		244,125
			$	590,408
Business Services - 0.8%
SunGard Data Systems, Inc., 10.25%, 2015	$	366,000	$	374,235
Cable TV - 2.6%
CCH I Holdings LLC, 11%, 2015	$	255,000	$	207,825
CCO Holdings LLC, 8.75%, 2013		335,000		319,925
CSC Holdings, Inc., 6.75%, 2012		355,000		339,469
Mediacom LLC, 9.5%, 2013		150,000		139,313
NTL Cable PLC, 9.125%, 2016		128,000		126,720
Videotron Ltee, 6.875%, 2014		140,000		137,025
			$	1,270,277
Chemicals - 3.5%
Innophos, Inc., 8.875%, 2014	$	265,000	$	263,675
Koppers Holdings, Inc., 0% to 2009, 9.875% to 2014		348,000		292,320
Koppers, Inc., 9.875%, 2013		220,000		231,550
Momentive Performance Materials, Inc., 9.75%, 2014 (n)		250,000		230,000
Mosaic Co., 7.875%, 2016 (n)		305,000		329,400
Nalco Co., 7.75%, 2011		75,000		75,938
Nalco Co., 8.875%, 2013		300,000		312,750
			$	1,735,633
Computer Software - 0.4%
First Data Corp., 9.875%, 2015 (n)	$	220,000	$	204,600
Consumer Goods & Services - 2.7%
Corrections Corp. of America, 6.25%, 2013	$	180,000	$	177,300
GEO Group, Inc., 8.25%, 2013		180,000		181,800
Jarden Corp., 7.5%, 2017		150,000		129,000
Kar Holdings, Inc., 10%, 2015 (n)		170,000		151,725
Service Corp. International, 7.375%, 2014		115,000		116,294
Service Corp. International, 7%, 2017		440,000		421,300
Visant Holding Corp., 8.75%, 2013		134,000		134,670
			$	1,312,089
Containers - 1.3%
Crown Americas LLC, 7.625%, 2013	$	150,000	$	153,375
Graham Packaging Co. LP, 9.875%, 2014		165,000		151,800
Greif, Inc., 6.75%, 2017		165,000		161,288
Owens-Brockway Glass Container, Inc., 8.25%, 2013		175,000		181,563
			$	648,026
Defense Electronics - 1.0%
L-3 Communications Corp., 6.125%, 2014	$	270,000	$	264,600
L-3 Communications Corp., 5.875%, 2015		215,000		207,475
			$	472,075

17-HYVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
BONDS - continued
Electronics - 0.9%
Avago Technologies Finance, 11.875%, 2015	$	120,000	$	128,250
Flextronics International Ltd., 6.25%, 2014		175,000		166,688
Spansion LLC, 11.25%, 2016 (n)		185,000		157,250
			$	452,188
Emerging Market Sovereign - 0.5%
Republic of Argentina, FRN, 5.389%, 2012	$	303,750	$	270,114
Energy - Independent - 5.1%
Chaparral Energy, Inc., 8.875%, 2017 (n)	$	250,000	$	225,625
Chesapeake Energy Corp., 7%, 2014		184,000		184,920
Chesapeake Energy Corp., 6.375%, 2015		305,000		295,088
Forest Oil Corp., 7.25%, 2019 (n)		150,000		150,750
Hilcorp Energy I LP, 7.75%, 2015 (n)		90,000		88,425
Hilcorp Energy I LP, 9%, 2016 (n)		260,000		269,100
Mariner Energy, Inc., 8%, 2017		265,000		252,081
Newfield Exploration Co., 6.625%, 2014		250,000		247,500
OPTI Canada, Inc., 8.25%, 2014 (n)		220,000		217,800
Plains Exploration & Production Co., 7%, 2017		355,000		339,469
Quicksilver Resources, Inc., 7.125%, 2016		260,000		255,450
			$	2,526,208
Entertainment - 0.4%
AMC Entertainment, Inc., 11%, 2016	$	185,000	$	194,713
Financial Institutions - 1.5%
General Motors Acceptance Corp., 6.875%, 2011	$	619,000	$	529,551
Residential Capital LLC, 7.625%, 2008		240,000		190,800
Residential Capital LLC, 8%, 2012		28,000		17,220
			$	737,571
Food & Beverages - 1.9%
ARAMARK Corp., 8.5%, 2015	$	420,000	$	425,250
B&G Foods, Inc., 8%, 2011		175,000		171,500
Del Monte Corp., 6.75%, 2015		185,000		174,825
Michael Foods, Inc., 8%, 2013		175,000		173,250
			$	944,825
Forest & Paper Products - 2.2%
Buckeye Technologies, Inc., 8%, 2010	$	56,000	$	55,440
Buckeye Technologies, Inc., 8.5%, 2013		375,000		381,563
Catalyst Paper Corp., 8.625%, 2011		75,000		62,250
Jefferson Smurfit Corp., 8.25%, 2012		254,000		250,190
JSG Funding PLC, 7.75%, 2015		25,000		23,750
Millar Western Forest Products Ltd., 7.75%, 2013		235,000		175,075
NewPage Holdings Corp., 10%, 2012 (z)		150,000		150,750
			$	1,099,018
Gaming & Lodging - 6.0%
Fontainebleau Las Vegas Holdings LLC, 10.25%, 2015 (n)	$	200,000	$	173,500
Harrah’s Operating Co., Inc., 5.375%, 2013		170,000		129,200
Harrah’s Operating Co., Inc., 5.75%, 2017		500,000		338,750
Isle of Capri Casinos, Inc., 7%, 2014		170,000		139,400
Mandalay Resort Group, 9.375%, 2010		175,000		181,125
MGM Mirage, Inc., 8.5%, 2010		140,000		145,250
MGM Mirage, Inc., 8.375%, 2011		155,000		158,488
MGM Mirage, Inc., 6.75%, 2013		200,000		194,000

Issuer	Shares/Par		Value ($)
BONDS - continued
Gaming & Lodging - continued
MGM Mirage, Inc., 5.875%, 2014	$	195,000	$	178,425
MGM Mirage, Inc., 7.5%, 2016		385,000		381,150
Pinnacle Entertainment, Inc., 8.25%, 2012		185,000		186,850
Station Casinos, Inc., 6.5%, 2014		420,000		315,000
Station Casinos, Inc., 6.875%, 2016		55,000		40,150
Tropicana Entertainment LLC, 9.625%, 2014		155,000		98,425
Wynn Las Vegas LLC, 6.625%, 2014		320,000		314,400
			$	2,974,113
Industrial - 1.5%
Blount, Inc., 8.875%, 2012	$	205,000	$	205,513
JohnsonDiversey Holdings, Inc., “B”, 9.625%, 2012		470,000		480,575
Wesco Distribution, Inc., 7.5%, 2017		55,000		51,150
			$	737,238
Insurance - Health - 0.4%
Centene Corp., 7.25%, 2014	$	180,000	$	175,500
Insurance - Property & Casualty - 0.3%
USI Holdings Corp., 9.75%, 2015 (n)	$	215,000	$	173,075
Machinery & Tools - 0.7%
Case New Holland, Inc., 7.125%, 2014	$	350,000	$	349,125
Medical & Health Technology & Services - 7.6%
Community Health Systems, Inc., 8.875%, 2015	$	410,000	$	417,688
Cooper Cos., Inc., 7.125%, 2015		270,000		262,575
DaVita, Inc., 6.625%, 2013		125,000		124,375
DaVita, Inc., 7.25%, 2015		445,000		446,113
HCA, Inc., 6.375%, 2015		445,000		376,025
HCA, Inc., 9.25%, 2016		735,002		771,750
HealthSouth Corp., 10.75%, 2016		85,000		88,825
LVB Acquisition Merger Sub, Inc., 10%, 2017 (n)		240,000		244,800
LVB Acquisition Merger Sub, Inc., 11.625%, 2017 (n)		105,000		103,425
Psychiatric Solutions, Inc., 7.75%, 2015		270,000		269,325
U.S. Oncology, Inc., 10.75%, 2014		325,000		320,938
Universal Hospital Services, Inc., 8.5%, 2015 (p)		155,000		156,550
Universal Hospital Services, Inc., FRN, 8.287%, 2015		45,000		45,000
VWR Funding, Inc., 10.25%, 2015 (n)(p)		135,000		128,588
			$	3,755,977
Metals & Mining - 4.2%
Arch Western Finance LLC, 6.75%, 2013	$	175,000	$	169,750
FMG Finance Ltd., 10.625%, 2016 (n)		320,000		366,400
Foundation PA Coal Co., 7.25%, 2014		80,000		79,000
Freeport-McMoRan Copper & Gold, Inc., 8.25%, 2015		125,000		132,500
Freeport-McMoRan Copper & Gold, Inc., 8.375%, 2017		505,000		541,613
Freeport-McMoRan Copper & Gold, Inc., FRN, 8.394%, 2015		105,000		106,575
Peabody Energy Corp., 5.875%, 2016		225,000		211,500
Peabody Energy Corp., 7.375%, 2016		175,000		179,375
PNA Group, Inc., 10.75%, 2016		200,000		188,000
Ryerson, Inc., 12%, 2015 (n)		95,000		93,813
			$	2,068,526
Natural Gas - Distribution - 0.9%
AmeriGas Partners LP, 7.125%, 2016	$	200,000	$	194,000
Inergy LP, 6.875%, 2014		235,000		228,538
			$	422,538

18-HYVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
BONDS - continued
Natural Gas - Pipeline - 3.1%
Atlas Pipeline Partners LP, 8.125%, 2015	$	270,000	$	267,300
Deutsche Bank (El Paso Performance-Linked Trust, CLN), 7.75%, 2011 (n)		310,000		318,131
El Paso Corp., 7.75%, 2032		140,000		142,111
Knight Energy, Inc., 7.25%, 2028		135,000		126,691
Transcontinental Gas Pipe Line Corp., 7%, 2011		55,000		57,681
Williams Cos., Inc., 7.125%, 2011		132,000		139,425
Williams Cos., Inc., 8.75%, 2032		204,000		249,390
Williams Partners LP, 7.25%, 2017		205,000		211,150
			$	1,511,879
Network & Telecom - 3.6%
Cincinnati Bell, Inc., 8.375%, 2014	$	300,000	$	292,500
Citizens Communications Co., 9.25%, 2011		225,000		243,563
Nordic Telephone Co. Holdings, 8.875%, 2016 (n)		205,000		210,125
Qwest Capital Funding, Inc., 7.25%, 2011		175,000		172,375
Qwest Corp., 7.875%, 2011		95,000		98,800
Qwest Corp., 8.875%, 2012		300,000		321,000
Time Warner Telecom Holdings, Inc., 9.25%, 2014		105,000		107,363
Windstream Corp., 8.625%, 2016		335,000		351,750
			$	1,797,476
Oil Services - 1.1%
Basic Energy Services, Inc., 7.125%, 2016	$	290,000	$	272,600
Compagnie Generale de Geophysique - Veritas, 7.75%, 2017		140,000		141,400
GulfMark Offshore, Inc., 7.75%, 2014		110,000		111,100
			$	525,100
Printing & Publishing - 4.1%
American Media Operations, Inc., 10.25%, 2009	$	225,000	$	192,094
Dex Media, Inc., 0% to 2008, 9% to 2013		425,000		386,750
Dex Media, Inc., 0% to 2008, 9% to 2013		300,000		273,000
Idearc, Inc., 8%, 2016		670,000		614,725
Nielsen Finance LLC, 10%, 2014		145,000		148,263
Nielsen Finance LLC, 0% to 2011, 12.5% to 2016		210,000		147,525
R.H. Donnelley Corp., 8.875%, 2016		305,000		285,175
			$	2,047,532
Retailers - 1.0%
Buhrmann U.S., Inc., 7.875%, 2015	$	195,000	$	183,788
Couche-Tard, Inc., 7.5%, 2013		150,000		149,625
Rite Aid Corp., 7.5%, 2017		155,000		136,594
Rite Aid Corp., 9.5%, 2017		40,000		33,100
			$	503,107
Specialty Stores - 0.6%
Michaels Stores, Inc., 10%, 2014	$	150,000	$	142,500
Payless ShoeSource, Inc., 8.25%, 2013		160,000		150,400
			$	292,900
Supermarkets - 0.7%
Stater Brothers Holdings, Inc., 7.75%, 2015	$	165,000	$	159,225
SUPERVALU, Inc., 7.5%, 2014		185,000		189,625
			$	348,850
Telecommunications - Wireless - 1.4%
Alltel Corp., 7%, 2012	$	211,000	$	181,988
American Tower Corp., 7%, 2017 (n)		95,000		95,475

Issuer	Shares/Par		Value ($)
BONDS - continued
Telecommunications - Wireless - continued
MetroPCS Communications Wireless, Inc., 9.25%, 2014	$	160,000	$	150,400
Wind Acquisition Finance S.A., 10.75%, 2015 (n)		250,000		272,500
			$	700,363
Transportation - Services - 0.7%
Hertz Corp., 8.875%, 2014	$	360,000	$	364,950
U.S. Treasury Obligations - 0.7%
U.S. Treasury Bonds, 4.5%, 2036	$	354,000	$	355,798
Utilities - Electric Power - 5.1%
AES Corp., 9.375%, 2010	$	255,000	$	267,750
Dynegy Holdings, Inc., 7.5%, 2015		130,000		121,550
Edison Mission Energy, 7%, 2017		510,000		501,075
Intergen N.V., 9%, 2017 (n)		125,000		131,563
Mirant North American LLC, 7.375%, 2013		240,000		240,600
NRG Energy, Inc., 7.375%, 2016		750,000		731,250
Reliant Energy, Inc., 6.75%, 2014		75,000		75,188
Reliant Energy, Inc., 7.875%, 2017		355,000		351,450
Sierra Pacific Resources, 8.625%, 2014		115,000		122,881
			$	2,543,307
Total Bonds (Identified Cost, $43,204,861)			$	41,905,928
FLOATING RATE LOANS (g)(r) - 9.5%
Aerospace - 0.3%
Hawker Beechcraft Acquisition Co., Letter of Credit, 6.93%, 2014	$	6,191	$	5,871
Hawker Beechcraft Acquisition Co., Term Loan, 6.83%, 2014		151,343		143,524
			$	149,395
Automotive - 1.7%
Allison Transmission, Inc., Term Loan B, 7.96%, 2014	$	84,582	$	78,894
Ford Motor Co., Term Loan B, 8%, 2013		322,333		297,800
Goodyear Tire & Rubber Co., Second Lien Term Loan, 6.43%, 2014		315,101		294,915
Mark IV Industries, Inc., Second Lien Term Loan, 10.77%, 2011		169,464		157,601
			$	829,210
Broadcasting - 0.8%
Gray Television, Inc., Term Loan, 6.73%, 2014	$	128,430	$	119,280
Univision Communications, Inc., Term Loan B, 7.21%, 2014 (o)		299,417		272,544
			$	391,824
Building - 0.2%
Building Materials Corp. of America, Second Lien Term Loan, 10.69%, 2014 (o)	$	164,142	$	118,387
Cable TV - 1.2%
Charter Communications Operating LLC, Term Loan, 6.99%, 2013	$	262,676	$	245,184
CSC Holdings, Inc., Incremental Term Loan, 6.9%, 2013		196,427		185,399
Mediacom Illinois LLC, Term Loan A, 6.53%, 2011		177,515		164,646
			$	595,229
Chemicals - 0.5%
Celanese AG, Dollar Term Loan, 6.98%, 2014	$	278,604	$	268,405

19-HYVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
FLOATING RATE LOANS - continued
Computer Software - 0.3%
First Data Corp., Term Loan B-1, 7.63%, 2014	$	132,043	$	125,204
Containers - 0.1%
Altivity Packaging LLC, Second Lien Term Loan, 9.98%, 2013	$	14,119	$	14,128
Altivity Packaging LLC, Second Lien Term Loan, 9.98%, 2013		44,121		44,149
			$	58,277
Food & Beverages - 0.8%
Dean Foods Co., Term Loan B, 6.58%, 2014	$	213,378	$	201,109
Dole Food Co., Inc., Letter of Credit, 6.99%, 2013		18,525		17,112
Dole Food Co., Inc., Term Loan, 7.16%, 2013		40,951		37,829
Dole Food Co., Inc., Term Loan C, 7.22%, 2013		136,504		126,095
			$	382,145
Forest & Paper Products - 0.6%
Georgia-Pacific Corp., Term Loan, 6.87%, 2012	$	289,309	$	275,356
Georgia-Pacific Corp., Term Loan B-2, 6.84%, 2012		18,961		18,047
			$	293,403
Medical & Health Technology & Services - 1.2%
Advanced Medical Optics, Inc., Term Loan, 6.66%, 2014	$	98,454	$	91,809
Community Health Systems, Inc., Term Loan B, 7.33%, 2014		154,929		148,965
HCA, Inc., Term Loan B, 7.08%, 2013		374,428		360,351
			$	601,125
Natural Gas - Pipeline - 0.2%
Kinder Morgan, Term Loan, 6.35%, 2014	$	92,522	$	91,863
Pollution Control - 0.4%
Allied Waste North America, Inc., Term Loan, 6.59%, 2012	$	121,799	$	116,352
Allied Waste North America, Inc., Term Loan A, Credit Linked Deposit, 6.62%, 2012		77,146		73,696
			$	190,048
Printing & Publishing - 0.5%
Nielsen Finance LLC, Term Loan B, 7.28%, 2013	$	246,581	$	233,415
Retailers - 0.3%
Neiman-Marcus Group, Inc., Term Loan, 2013 (o)	$	163,681	$	157,196
Specialty Stores - 0.4%
Michaels Stores, Inc., Term Loan B, 7.61%, 2013	$	227,747	$	208,832
Total Floating Rate Loans (Identified Cost, $4,947,887)			$	4,693,958
COMMON STOCKS - 2.0%
Automotive - 0.0%
Oxford Automotive, Inc. (a)		53	$	0
Cable TV - 0.6%
Comcast Corp., “A” (a)		11,300	$	206,338
Time Warner Cable, Inc. (a)		2,800		77,280
			$	283,618
Construction - 0.3%
Goodman Global, Inc. (a)		5,600	$	137,424

Issuer	Shares/Par		Value ($)
COMMON STOCKS - continued
Consumer Goods & Services - 0.0%
Central Garden & Pet Co. (a)		2,300	$	13,248
Electronics - 0.1%
Intel Corp.		2,300	$	61,318
Energy - Integrated - 0.2%
Chevron Corp.		1,000	$	93,330
Forest & Paper Products - 0.1%
Louisiana-Pacific Corp.		2,600	$	35,568
Major Banks - 0.1%
Bank of America Corp.		600	$	24,756
JPMorgan Chase & Co.		600		26,190
			$	50,946
Pharmaceuticals - 0.1%
Johnson & Johnson		900	$	60,030
Printing & Publishing - 0.0%
Golden Books Family Entertainment, Inc. (a)		21,250	$	0
Real Estate - 0.2%
Host Hotels & Resorts, Inc., REIT		5,000	$	85,200
Telephone Services - 0.3%
Knology, Inc. (a)		116	$	1,482
Windstream Corp.		12,000		156,223
			$	157,705
Total Common Stocks (Identified Cost, $1,157,213)			$	978,387
PREFERRED STOCKS - 0.0%
Real Estate - 0.0%
HRPT Properties Trust, “B”, REIT, 8.75% (Identified Cost, $3,200)		117	$	2,920
SHORT-TERM OBLIGATIONS - 1.7%
American Express Credit Corp., 4.12%, due 1/02/08, at Amortized Cost and Value (y)	$	854,000	$	853,902
Total Investments (Identified Cost, $50,167,063) (k)			$	48,435,095
OTHER ASSETS, LESS LIABILITIES - 2.0%				978,788
NET ASSETS - 100.0%			$	49,413,883

20-HYVA

Portfolio of Investments — continued

Unfunded Loan Commitments

As of December 31, 2007, the variable account had the following unfunded loan commitments of $18,188 which could be extended at the option of the borrower:

Borrower	Unfunded Loan Commitment		Unrealized Appreciation (Depreciation)
Community Health Systems, Inc., Delayed Draw Term Loan, 2014	$	7,792	$	(300	)
Univision Communications, Inc., Delayed Draw Term Loan, 2014		10,396		(125	)
	$	18,188	$	(425	)

At December 31, 2007, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these contracts.

Swap Agreements at 12/31/07

Expiration	Notional Amount		Counterparty	Cash Flows to Receive	Cash Flows to Pay	Value
Credit Default Swaps
6/20/09	USD	200,000	JPMorgan Chase Bank	4.10% (fixed rate)	(1)	$	(13,290	)
6/20/09	USD	100,000	JPMorgan Chase Bank	4.80% (fixed rate)	(1)		(5,709	)
6/20/12	USD	200,000	Morgan Stanley Capital Services, Inc.	3.76% (fixed rate)	(2)		(38,242	)
6/20/12	USD	100,000	Morgan Stanley Capital Services, Inc.	4.15% (fixed rate)	(2)		(17,944	)
6/20/12	USD	500,000	JPMorgan Chase Bank (a)	(3)	4.207% (fixed rate)		23,737
9/20/12	USD	200,000	Goldman Sachs International	3.75% (fixed rate)	(4)		1,177
3/20/17	USD	35,000	JPMorgan Chase Bank	(5)	0.80% (fixed rate)		(216	)
3/20/17	USD	35,000	JPMorgan Chase Bank	(5)	0.78% (fixed rate)		(164	)
3/20/17	USD	30,000	Merrill Lynch International	(5)	0.81% (fixed rate)		(207	)
						$	(50,857	)

(1) Variable account to pay notional amount upon a defined credit event by Abitibi-Consolidated, Inc., 8.375%, 4/01/15.

(2) Variable account to pay notional amount upon a defined credit event by Bowater, Inc., 6.5%, 6/15/13.

(3) Variable account to receive notional amount upon a defined credit event by a reference obligation specified in the CDX High Yield Index.

(4) Variable account to pay notional amount upon a defined credit event by Allied Waste North America, Inc., 7.375%, 4/15/14.

(5) Variable account to receive notional amount upon defined credit event by Waste Management, Inc., 7.375%, 8/01/10.

(a) Premiums paid by the variable account amounted to $25,113.

At December 31, 2007 the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

21-HYVA

Portfolio of Investments — December 31, 2007

Money Market Variable Account

Issuer	Shares/Par		Value ($)
CERTIFICATES OF DEPOSIT - 14.8%
Financial Institutions - 3.0%
Swedbank (NY), 4.88%, due 2/11/08	$	1,360,000	$	1,360,000
Major Banks - 5.9%
Bank of Scotland PLC (NY), 4.845%, due 2/04/08	$	1,350,000	$	1,350,000
Barclays Bank PLC (NY), 4.99%, due 1/23/08		1,350,000		1,350,000
			$	2,700,000
Other Banks & Diversified Financials - 5.9%
DEPFA Bank PLC (NY), 5.125%, due 1/23/08	$	1,350,000	$	1,350,000
Fortis Bank, NY, 4.82%, due 2/07/08		1,350,000		1,350,000
			$	2,700,000
Total Certificates of Deposit, at Amortized Cost and Value			$	6,760,000
COMMERCIAL PAPER (y) - 72.8%
Alcoholic Beverages - 2.6%
Anheuser-Busch Co. Inc., 4.15%, due 2/25/08 (t)	$	1,213,000	$	1,205,309
Automotive - 3.0%
Toyota Motor Credit Corp., 4.27%, due 2/28/08	$	1,380,000	$	1,370,506
Brokerage & Asset Managers - 9.1%
Goldman Sachs Group, Inc., 4%, due 1/02/08	$	11,000	$	10,999
Goldman Sachs Group, Inc., 4.6%, due 2/14/08		1,368,000		1,360,309
Merrill Lynch & Co., Inc., 5%, due 2/19/08		1,417,000		1,407,357
Morgan Stanley, 4.79%, due 6/13/08		1,135,000		1,110,233
Morgan Stanley, 4.8%, due 6/13/08		265,000		259,205
			$	4,148,103
Financial Institutions - 9.1%
American Express Credit Corp., 4.42%, due 3/20/08	$	1,387,000	$	1,373,547
Cargill, Inc., 5%, due 2/29/08 (t)		1,384,000		1,372,659
General Electric Capital Corp., 5.17%, due 1/23/08 (t)		1,395,000		1,390,593
			$	4,136,799
Food & Beverages - 9.1%
Archer Daniels Midland Co., 4.28%, due 4/08/08 (t)	$	1,393,000	$	1,376,770
Hershey Foods Corp., 4.5%, due 1/14/08 (t)		1,370,000		1,367,774
Nestle Capital Corp., 4.71%, due 3/20/08 (t)		1,419,000		1,404,333
			$	4,148,877
Insurance - 3.0%
AIG Funding, Inc., 4.85%, due 2/01/08	$	1,381,000	$	1,375,232
Major Banks - 20.3%
ABN Amro North America Finance, Inc., 5.105%, due 1/10/08	$	1,382,000	$	1,380,236
Abbey National North America LLC, 4%, due 1/02/08		53,000		52,994
Abbey National North America LLC, 4.74%, due 4/11/08		1,050,000		1,036,037
BNP Paribas Finance, Inc., 4.663%, due 1/14/08		1,379,000		1,376,678
Bank of America Corp., 4.72%, due 2/11/08		730,000		726,076
Bank of America Corp., 4.7%, due 3/07/08		653,000		647,373
JPMorgan Chase & Co., 5.05%, due 1/04/08		764,000		763,678
JPMorgan Chase & Co., 5.03%, due 1/22/08		623,000		621,172
Natexis Banques Populaires U.S. Financial Company LLC, 5.07%, due 2/04/08		1,372,000		1,365,430

Issuer	Shares/Par		Value ($)
COMMERCIAL PAPER (y) - continued
Major Banks - continued
Societe Generale North America, Inc., 5.155%, due 1/09/08	$	1,308,000	$	1,306,502
			$	9,276,176
Network & Telecom - 3.0%
AT&T, Inc., 3.95%, due 1/02/08 (t)	$	1,371,000	$	1,370,850
Other Banks & Diversified Financials - 8.7%
Citigroup Funding, Inc., 4.88%, due 2/25/08	$	457,000	$	453,593
Citigroup Funding, Inc., 4.9%, due 3/26/08		931,000		920,229
Dexia Delaware LLC, 5.22%, due 1/14/08		345,000		344,350
ING America Insurance Holdings, Inc., 4.65%, due 2/28/08		915,000		908,145
UBS Finance Delaware LLC, 4.875%, due 2/19/08		883,000		877,141
UBS Financial Delaware LLC, 4.86%, due 1/02/08		490,000		489,934
			$	3,993,392
Specialty Chemicals - 1.9%
DuPont (E.I.) de Nemours & Co., 4.2%, due 1/11/08 (t)	$	870,000	$	868,985
Utilities - Electric Power - 3.0%
Florida Power & Light Co., 4.27%, due 1/11/08	$	1,375,000	$	1,373,369
Total Commercial Paper, at Amortized Cost and Value			$	33,267,598
U.S. GOVERNMENT AGENCIES - 2.7%
Federal Home Loan Bank, 2.5%, due 1/02/08, at Amortized Cost and Value (y)	$	1,238,000	$	1,237,914
REPURCHASE AGREEMENTS - 10.0%
Merrill Lynch, 4.50%, dated 12/31/07, due 1/02/08, total to be received $4,571,143 (secured by various U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	4,570,000	$	4,570,000
Total Investments, at Amortized Cost and Value			$	45,835,512
OTHER ASSETS, LESS LIABILITIES - (0.3)%				(146,459	)
NET ASSETS - 100.0%			$	45,689,053

See portfolio footnotes and notes to financial statements

22-MMVA

Portfolio of Investments — December 31, 2007

Total Return Variable Account

Issuer	Shares/Par	Value ($)
COMMON STOCKS - 57.5%
Aerospace - 2.7%
Lockheed Martin Corp.	22,520	$	2,370,455
Northrop Grumman Corp.	6,680		525,315
Raytheon Co.	1,240		75,268
United Technologies Corp.	16,760		1,282,810
		$	4,253,848
Alcoholic Beverages - 0.6%
Diageo PLC	41,766	$	894,020
Apparel Manufacturers - 0.6%
NIKE, Inc., “B”	13,590	$	873,022
Automotive - 0.6%
Bayerische Motoren Werke AG	2,530	$	156,230
Harley-Davidson, Inc.	4,850		226,544
Johnson Controls, Inc.	17,770		640,431
		$	1,023,205
Biotechnology - 0.4%
Amgen, Inc. (a)	6,500	$	301,860
Genzyme Corp. (a)	4,590		341,680
		$	643,540
Broadcasting - 0.7%
Citadel Broadcasting Corp.	365	$	752
E.W. Scripps Co., “A”	6,160		277,262
Omnicom Group, Inc.	9,120		433,474
Walt Disney Co.	7,280		234,998
WPP Group PLC	10,240		131,100
		$	1,077,586
Brokerage & Asset Managers - 2.8%
Bear Stearns Cos., Inc.	7,430	$	655,697
E*TRADE Financial Corp. (a)	37,860		134,403
Franklin Resources, Inc.	5,260		601,902
Goldman Sachs Group, Inc.	5,720		1,230,086
KKR Private Equity Investments LP, IEU (z)	6,600		119,856
KKR Private Equity Investors	2,630		47,854
Legg Mason, Inc.	3,190		233,349
Lehman Brothers Holdings, Inc.	12,730		833,051
Merrill Lynch & Co., Inc.	10,680		573,302
		$	4,429,500
Business Services - 0.4%
Accenture Ltd., “A”	10,020	$	361,021
Automatic Data Processing, Inc.	2,030		90,396
Fidelity National Information Services, Inc.	5,300		220,427
		$	671,844
Cable TV - 0.3%
Time Warner Cable, Inc. (a)	15,170	$	418,692
Chemicals - 0.9%
3M Co.	4,050	$	341,496
Dow Chemical Co.	2,670		105,251
PPG Industries, Inc.	13,120		921,418
Syngenta AG	390		98,953
		$	1,467,118
Computer Software - 0.5%
Oracle Corp. (a)	34,940	$	788,945
Computer Software - Systems - 1.3%
Hewlett-Packard Co.	14,980	$	756,190
International Business Machines Corp.	11,640		1,258,284
		$	2,014,474
Construction - 0.8%
D.R. Horton, Inc.	23,270	$	306,466

Issuer	Shares/Par	Value ($)
COMMON STOCKS - continued
Construction - continued
Masco Corp.	21,780	$	470,666
Sherwin-Williams Co.	2,340		135,814
Toll Brothers, Inc. (a)	17,700		355,062
		$	1,268,008
Consumer Goods & Services - 1.1%
Clorox Co.	6,970	$	454,235
Procter & Gamble Co.	17,030		1,250,343
		$	1,704,578
Containers - 0.0%
Smurfit-Stone Container Corp. (a)	4,980	$	52,589
Electrical Equipment - 1.4%
General Electric Co.	30,320	$	1,123,962
Rockwell Automation, Inc.	3,000		206,880
W.W. Grainger, Inc.	6,720		588,134
WESCO International, Inc. (a)	8,440		334,562
		$	2,253,538
Electronics - 0.8%
Flextronics International Ltd. (a)	20,840	$	251,330
Intel Corp.	34,190		911,505
Samsung Electronics Co. Ltd., GDR	509		147,719
		$	1,310,554
Energy - Independent - 2.4%
Anadarko Petroleum Corp.	10,750	$	706,167
Apache Corp.	11,410		1,227,031
CONSOL Energy, Inc.	1,200		85,824
Devon Energy Corp.	11,800		1,049,138
EOG Resources, Inc.	2,740		244,545
Sunoco, Inc.	4,190		303,524
Ultra Petroleum Corp. (a)	2,130		152,295
		$	3,768,524
Energy - Integrated - 5.5%
Chevron Corp.	5,875	$	548,314
ConocoPhillips	4,910		433,553
Exxon Mobil Corp.	33,522		3,140,676
Hess Corp.	18,260		1,841,704
Marathon Oil Corp.	11,630		707,802
Royal Dutch Shell PLC, ADR	2,120		178,504
TOTAL S.A., ADR	22,610		1,867,586
		$	8,718,139
Food & Beverages - 2.0%
General Mills, Inc.	15,710	$	895,470
Kellogg Co.	10,870		569,914
Nestle S.A.	2,398		1,098,796
PepsiCo, Inc.	8,570		650,463
		$	3,214,643
Food & Drug Stores - 1.2%
CVS Caremark Corp.	22,354	$	888,571
Kroger Co.	8,820		235,582
Safeway, Inc.	14,540		497,413
Walgreen Co.	7,660		291,693
		$	1,913,259
Forest & Paper Products - 0.2%
AbitibiBowater, Inc.	4,824	$	99,423
MeadWestvaco Corp.	9,300		291,090
		$	390,513
Furniture & Appliances - 0.2%
Jarden Corp. (a)	9,260	$	218,629
Whirlpool Corp.	1,870		152,648
		$	371,277

23-TRVA

Portfolio of Investments — continued

Issuer	Shares/Par	Value ($)
COMMON STOCKS - continued
Gaming & Lodging - 0.6%
Royal Caribbean Cruises Ltd.	22,710	$	963,812
General Merchandise - 0.9%
Macy’s, Inc.	46,040	$	1,191,055
Wal-Mart Stores, Inc.	6,190		294,211
		$	1,485,266
Health Maintenance Organizations - 1.1%
UnitedHealth Group, Inc.	10,040	$	584,328
WellPoint, Inc. (a)	13,830		1,213,306
		$	1,797,634
Insurance - 4.5%
Allstate Corp.	35,210	$	1,839,018
Ambac Financial Group, Inc.	5,240		135,035
American International Group, Inc.	3,360		195,888
Chubb Corp.	3,390		185,026
Conseco, Inc. (a)	26,240		329,574
Genworth Financial, Inc., “A”	55,500		1,412,475
Hartford Financial Services Group, Inc.	10,050		876,260
Max Capital Group Ltd.	8,730		244,353
Mbia, Inc.	4,340		80,854
MetLife, Inc.	16,100		992,082
Principal Financial Group, Inc.	2,470		170,035
Prudential Financial, Inc.	2,510		233,530
Travelers Cos., Inc.	7,490		402,962
		$	7,097,092
Internet - 0.1%
Yahoo!, Inc. (a)	3,180	$	73,967
Leisure & Toys - 0.1%
Polaris Industries, Inc.	3,380	$	161,463
Machinery & Tools - 0.7%
Deere & Co.	4,260	$	396,691
Eaton Corp.	1,120		108,584
Kennametal, Inc.	4,020		152,197
Timken Co.	15,090		495,707
		$	1,153,179
Major Banks - 4.7%
Bank of America Corp.	43,678	$	1,802,154
Bank of New York Mellon Corp.	37,002		1,804,217
Huntington Bancshares, Inc.	9,020		133,135
JPMorgan Chase & Co.	32,832		1,433,117
PNC Financial Services Group, Inc.	12,250		804,213
State Street Corp.	8,090		656,908
SunTrust Banks, Inc.	13,520		844,865
		$	7,478,609
Medical & Health Technology & Services - 0.1%
DaVita, Inc. (a)	2,720	$	153,272
Omnicare, Inc.	3,350		76,414
		$	229,686
Medical Equipment - 0.5%
Advanced Medical Optics, Inc. (a)	6,500	$	159,445
Boston Scientific Corp. (a)	25,890		301,101
Cooper Cos., Inc.	2,890		109,820
Pall Corp.	4,960		199,987
		$	770,353
Metals & Mining - 0.3%
Allegheny Technologies, Inc.	1,760	$	152,064
BHP Billiton PLC	6,630		204,036
Century Aluminum Co. (a)	2,950		159,123
		$	515,223

Issuer	Shares/Par	Value ($)
COMMON STOCKS - continued
Natural Gas - Distribution - 0.3%
Sempra Energy	8,840	$	547,019
Natural Gas - Pipeline - 0.4%
Williams Cos., Inc.	19,420	$	694,848
Network & Telecom - 0.2%
Motorola, Inc.	8,400	$	134,736
Nortel Networks Corp. (a)	7,327		110,564
		$	245,300
Oil Services - 0.2%
Halliburton Co.	4,240	$	160,738
Noble Corp.	3,710		209,652
		$	370,390
Other Banks & Diversified Financials - 2.8%
American Express Co.	11,780	$	612,796
Citigroup, Inc.	43,236		1,272,868
Fannie Mae	23,300		931,534
Freddie Mac	7,270		247,689
New York Community Bancorp, Inc.	31,960		561,857
UBS AG	10,737		498,620
UBS AG	8,560		393,760
		$	4,519,124
Pharmaceuticals - 3.5%
Abbott Laboratories	3,480	$	195,402
Eli Lilly & Co.	4,570		243,992
GlaxoSmithKline PLC	6,420		162,919
Johnson & Johnson	23,850		1,590,795
Merck & Co., Inc.	20,980		1,219,148
Merck KGaA	2,000		256,918
Pfizer, Inc.	6,470		147,063
Warner Chilcott Ltd., “A” (a)	6,890		122,160
Wyeth	36,660		1,620,005
		$	5,558,402
Printing & Publishing - 0.1%
New York Times Co., “A”	7,090	$	124,288
Railroad & Shipping - 0.5%
Burlington Northern Santa Fe Corp.	5,500	$	457,765
Norfolk Southern Corp.	5,340		269,350
		$	727,115
Specialty Chemicals - 0.5%
Air Products & Chemicals, Inc.	5,720	$	564,164
Praxair, Inc.	1,890		167,662
		$	731,826
Specialty Stores - 0.5%
Advance Auto Parts, Inc.	1,780	$	67,622
Lowe’s Cos., Inc.	2,010		45,466
Staples, Inc.	29,590		682,641
		$	795,729
Telecommunications - Wireless - 0.3%
Sprint Nextel Corp.	14,550	$	191,042
Vodafone Group PLC, ADR	8,929		333,230
		$	524,272
Telephone Services - 2.6%
AT&T, Inc.	37,364	$	1,552,848
Embarq Corp.	18,580		920,267
Qwest Communications International, Inc.	119,510		837,765
TELUS Corp.	4,630		231,934
TELUS Corp. (non-voting shares)	6,118		297,609
Verizon Communications, Inc.	7,640		333,792
		$	4,174,215

24-TRVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
COMMON STOCKS - continued
Tobacco - 1.7%
Altria Group, Inc.		36,140	$	2,731,461
Trucking - 0.2%
United Parcel Service, Inc., “B”		4,460	$	315,411
Utilities - Electric Power - 2.7%
American Electric Power Co., Inc.		7,260	$	338,026
Dominion Resources, Inc.		8,504		403,515
DPL, Inc.		11,160		330,894
Entergy Corp.		2,090		249,797
FPL Group, Inc.		14,500		982,810
NRG Energy, Inc. (a)		10,730		465,038
Pepco Holdings, Inc.		6,560		192,405
PG&E Corp.		10,330		445,120
PPL Corp.		2,030		105,743
Public Service Enterprise Group, Inc.		8,500		835,040
			$	4,348,388
Total Common Stocks (Identified Cost, $83,992,773)			$	91,655,488
BONDS - 41.5%
Agency - Other - 0.0%
Financing Corp., 9.65%, 2018	$	45,000	$	64,099
Asset Backed & Securitized - 2.8%
Banc of America Commercial Mortgage, Inc., FRN, 5.482%, 2049	$	48,384	$	47,704
Bayview Financial Revolving Mortgage Loan Trust, FRN, 5.6%, 2040 (z)		250,000		200,000
BlackRock Capital Finance LP, 7.75%, 2026 (n)		34,182		32,165
Chase Commercial Mortgage Securities Corp., 7.543%, 2032		44,584		45,029
Countrywide Asset-Backed Certificates, FRN, 4.823%, 2035		24,368		24,209
Countrywide Asset-Backed Certificates, FRN, 5.689%, 2046		90,000		83,916
Credit Suisse Commercial Mortgage Trust, 5.509%, 2039		128,277		126,197
Credit Suisse Mortgage Capital Certificate, 5.343%, 2039		98,568		95,737
CRIIMI MAE Commercial Mortgage Trust, CDO, 7%, 2033 (n)		20,076		20,219
Falcon Franchise Loan LLC, 7.382%, 2010 (n)		4,499		4,450
GE Commercial Mortgage Corp., FRN, 5.339%, 2044		130,000		128,084
GMAC Mortgage Corp. Loan Trust, FRN, 5.805%, 2036		115,000		93,777
Greenwich Capital Commercial Funding Corp., 4.305%, 2042		107,385		106,053
Greenwich Capital Commercial Funding Corp., FRN, 5.317%, 2036		60,728		61,801
JPMorgan Chase Commercial Mortgage Securities Corp., 4.78%, 2042		152,000		143,042
JPMorgan Chase Commercial Mortgage Securities Corp., 5.552%, 2045		97,000		98,422
JPMorgan Chase Commercial Mortgage Securities Corp., 5.372%, 2047		170,000		165,929
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.21%, 2041		39,903		40,553
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.475%, 2043		210,000		212,364
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.855%, 2043		200,000		202,443

Issuer	Shares/Par		Value ($)
BONDS - continued
Asset Backed & Securitized - continued
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.875%, 2045	$	210,000	$	218,497
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.038%, 2046		197,476		191,927
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.532%, 2047		78,278		64,349
Merrill Lynch Mortgage Trust, FRN, 5.829%, 2017		84,000		75,281
Morgan Stanley Capital I, Inc., 5.168%, 2042		48,533		47,601
Morgan Stanley Capital I, Inc., FRN, 0.522%, 2030 (i)(n)		6,279,593		53,144
Multi-Family Capital Access One, Inc., 6.65%, 2024		26,312		26,395
Nomura Asset Securities Corp., FRN, 9.779%, 2027 (z)		210,628		234,800
Residential Asset Mortgage Products, Inc., 4.109%, 2035		51,374		50,950
Residential Asset Mortgage Products, Inc., FRN, 4.97%, 2034		92,000		87,951
Residential Funding Mortgage Securities, Inc., FRN, 5.32%, 2035		129,000		118,410
Spirit Master Funding LLC, 5.05%, 2023 (z)		178,332		174,947
Structured Asset Securities Corp., FRN, 4.67%, 2035		189,364		189,091
Wachovia Bank Commercial Mortgage Trust, FRN, 4.847%, 2041		50,000		48,202
Wachovia Bank Commercial Mortgage Trust, FRN, 5.083%, 2042		185,000		180,741
Wachovia Bank Commercial Mortgage Trust, FRN, 5.118%, 2042		200,000		196,552
Wachovia Bank Commercial Mortgage Trust, FRN, 5.513%, 2043		55,500		48,466
Wachovia Bank Commercial Mortgage Trust, FRN, 5.466%, 2045		189,000		186,756
Wachovia Bank Commercial Mortgage Trust, FRN, 5.961%, 2045		140,000		143,404
Wachovia Bank Commercial Mortgage Trust, FRN, 5.795%, 2045		150,000		150,599
Wachovia Bank Commercial Mortgage Trust, FRN, 5.776%, 2047		99,000		81,990
			$	4,502,147
Automotive - 0.1%
Johnson Controls, Inc., 5.5%, 2016	$	136,000	$	134,006
Broadcasting - 0.2%
CBS Corp., 6.625%, 2011	$	137,000	$	142,100
News America Holdings, 8.5%, 2025		99,000		117,977
News America, Inc., 6.2%, 2034		42,000		41,403
			$	301,480
Brokerage & Asset Managers - 0.6%
Goldman Sachs Group, Inc., 5.625%, 2017	$	176,000	$	171,877
Lehman Brothers Holdings, Inc., 6.5%, 2017		170,000		172,016
Merrill Lynch & Co., Inc., 6.05%, 2016		200,000		196,514
Merrill Lynch & Co., Inc., 6.11%, 2037		130,000		114,815
Morgan Stanley, 5.75%, 2016		100,000		98,677
Morgan Stanley Group, Inc., 6.75%, 2011		156,000		163,510
			$	917,409

25-TRVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
BONDS - continued
Building - 0.1%
CRH America, Inc., 6.95%, 2012	$	208,000	$	219,942
Business Services - 0.1%
Xerox Corp., 5.5%, 2012	$	80,000	$	81,329
Xerox Corp., 6.4%, 2016		40,000		40,931
			$	122,260
Cable TV - 0.2%
Cox Communications, Inc., 4.625%, 2013	$	159,000	$	152,117
Time Warner Entertainment Co. LP, 8.375%, 2033		110,000		132,507
			$	284,624
Conglomerates - 0.2%
General Electric Co., 5.25%, 2017	$	80,000	$	79,829
Kennametal, Inc., 7.2%, 2012		211,000		229,298
			$	309,127
Consumer Goods & Services - 0.2%
Fortune Brands, Inc., 5.125%, 2011	$	158,000	$	157,679
Western Union Co., 5.4%, 2011		210,000		211,607
			$	369,286
Defense Electronics - 0.1%
BAE Systems Holdings, Inc., 5.2%, 2015 (n)	$	103,000	$	100,016
Electronics - 0.1%
Tyco Electronics Ltd., 6.55%, 2017 (n)	$	128,000	$	131,657
Emerging Market Sovereign - 0.1%
State of Israel, 4.625%, 2013	$	112,000	$	110,361
Energy - Independent - 0.3%
Nexen, Inc., 5.875%, 2035	$	100,000	$	94,221
Ocean Energy, Inc., 7.25%, 2011		165,000		179,323
XTO Energy, Inc., 5.65%, 2016		190,000		191,350
			$	464,894
Financial Institutions - 0.6%
American Express Co., 5.5%, 2016	$	200,000	$	198,824
Capital One Financial Co., 6.15%, 2016		130,000		115,355
Capmark Financial Group, Inc., 5.875%, 2012 (n)		170,000		134,566
CIT Group, Inc., 6.1% to 2017, FRN to 2067		10,000		7,261
Countrywide Financial Corp., 6.25%, 2016		171,000		98,422
General Electric Capital Corp., 5.375%, 2016		60,000		60,766
HSBC Finance Corp., 5.25%, 2011		145,000		144,951
ORIX Corp., 5.48%, 2011		210,000		209,993
			$	970,138
Food & Beverages - 0.4%
Coca Cola Co., 5.35%, 2017	$	150,000	$	153,681
Diageo Finance B.V., 5.5%, 2013		230,000		233,346
Miller Brewing Co., 5.5%, 2013 (n)		276,000		279,670
			$	666,697
Food & Drug Stores - 0.1%
CVS Caremark Corp., 6.125%, 2016	$	110,000	$	112,913
CVS Caremark Corp., 5.75%, 2017		70,000		70,451
			$	183,364
Forest & Paper Products - 0.0%
MeadWestvaco Corp., 6.8%, 2032	$	69,000	$	64,985
Gaming & Lodging - 0.2%
Marriott International, Inc., 6.375%, 2017	$	160,000	$	164,156
Wyndham Worldwide Corp., 6%, 2016		100,000		94,840
			$	258,996

Issuer	Shares/Par		Value ($)
BONDS - continued
Insurance - 0.3%
American International Group, Inc., 6.25%, 2037	$	100,000	$	89,442
ING Groep N.V., 5.775% to 2015, FRN to 2049		223,000		206,163
MetLife, Inc., 6.5%, 2032		48,000		48,301
MetLife, Inc., 6.4%, 2036		120,000		109,979
			$	453,885
Insurance - Property & Casualty - 0.3%
Allstate Corp., 6.125%, 2032	$	185,000	$	179,608
Chubb Corp., 6.375% to 2017, FRN to 2037		200,000		195,082
Fund American Cos., Inc., 5.875%, 2013		117,000		117,252
			$	491,942
International Market Quasi-Sovereign - 0.3%
Hydro-Quebec, 6.3%, 2011	$	262,000	$	280,555
Province of Ontario, 5%, 2011		200,000		206,678
			$	487,233
Machinery & Tools - 0.1%
Atlas Copco AB, 5.6%, 2017 (n)	$	160,000	$	160,058
Major Banks - 1.0%
Bank of America Corp., 5.3%, 2017	$	250,000	$	243,094
BNP Paribas, 7.195% to 2037, FRN to 2049(n)		100,000		98,591
DBS Capital Funding Corp., 7.657% to 2011, FRN to 2049(n)		170,000		181,654
MUFG Capital Finance 1 Ltd., 6.346% to 2016, FRN to 2049		200,000		189,427
PNC Funding Corp., 5.625%, 2017		90,000		87,593
Royal Bank of Scotland Group PLC, 6.99% to 2017, FRN to 2049(n)		100,000		99,699
UniCredito Italiano Capital Trust II, 9.2% to 2010, FRN to 2049(n)		208,000		226,672
Unicredito Luxembourg Finance S.A., 6%, 2017 (n)		100,000		99,012
Wachovia Corp., 5.25%, 2014		81,000		79,197
Wells Fargo National Bank, 4.75%, 2015		315,000		300,862
			$	1,605,801
Medical & Health Technology & Services - 0.3%
Baxter International, Inc., 5.9%, 2016	$	136,000	$	141,309
Cardinal Health, Inc., 6.3%, 2016 (n)		75,000		76,870
Covidien Ltd., 6%, 2017 (n)		40,000		41,389
Covidien Ltd., 6.55%, 2037 (n)		30,000		31,156
HCA, Inc., 8.75%, 2010		40,000		40,350
Hospira, Inc., 5.55%, 2012		50,000		50,844
Hospira, Inc., 6.05%, 2017		174,000		174,836
			$	556,754
Metals & Mining - 0.1%
Vale Overseas Ltd., 6.25%, 2017	$	150,000	$	150,466
Mortgage Backed - 16.1%
Fannie Mae, 4.01%, 2013	$	18,683	$	18,143
Fannie Mae, 4.547%, 2014		128,201		127,309
Fannie Mae, 4.63%, 2014		46,279		46,092
Fannie Mae, 4.839%, 2014		65,871		66,308
Fannie Mae, 4.56%, 2015		38,465		37,946
Fannie Mae, 4.78%, 2015		38,658		38,524
Fannie Mae, 4.925%, 2015		260,944		262,930
Fannie Mae, 5.09%, 2016		40,000		40,389
Fannie Mae, 5.5%, 2016-2036		7,879,553		7,894,873
Fannie Mae, 4.994%, 2017		87,943		88,889
Fannie Mae, 5.05%, 2017		39,000		39,271

26-TRVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value ($)
BONDS - continued
Mortgage Backed - continued
Fannie Mae, 6%, 2017-2037	$	3,996,584	$	4,067,929
Fannie Mae, 4.5%, 2018-2035		868,822		844,717
Fannie Mae, 5%, 2018-2036		2,775,276		2,739,450
Fannie Mae, 6.5%, 2031-2037		1,210,802		1,251,456
Fannie Mae, 7.5%, 2031		21,313		22,729
Freddie Mac, 6%, 2016-2037		2,036,982		2,072,354
Freddie Mac, 5%, 2017-2035		2,044,253		2,005,591
Freddie Mac, 4.5%, 2018-2035		707,749		690,495
Freddie Mac, 5.5%, 2020-2035		1,510,738		1,513,492
Freddie Mac, 6.5%, 2034-2037		404,725		416,559
Ginnie Mae, 4.5%, 2033-2034		141,692		135,012
Ginnie Mae, 5%, 2033-2034		148,687		146,241
Ginnie Mae, 5.5%, 2033-2035		613,694		618,470
Ginnie Mae, 6%, 2033-2035		412,073		422,044
Ginnie Mae, 6.5%, 2035-2036		71,000		73,381
			$	25,680,594
Municipals - 0.1%
Massachusetts Bay Transportation Authority, 5.25%, 2017	$	130,000	$	145,452
Natural Gas - Pipeline - 0.3%
CenterPoint Energy Resources Corp., 7.875%, 2013	$	112,000	$	122,974
Kinder Morgan Energy Partners LP, 6.75%, 2011		165,000		173,094
Kinder Morgan Energy Partners LP, 5.125%, 2014		46,000		44,820
Kinder Morgan Energy Partners LP, 7.75%, 2032		71,000		79,306
Spectra Energy Capital LLC, 8%, 2019		53,000		61,058
			$	481,252
Network & Telecom - 0.8%
AT&T, Inc., 6.5%, 2037	$	139,000	$	145,349
BellSouth Corp., 6.55%, 2034		146,000		151,008
Deutsche Telekom International Finance B.V., 5.75%, 2016		176,000		176,165
Telecom Italia Capital, 5.25%, 2013		60,000		59,300
Telefonica Emisiones S.A.U., 7.045%, 2036		110,000		122,956
Telefonica Europe B.V., 7.75%, 2010		50,000		53,518
TELUS Corp., 8%, 2011		180,000		195,024
Verizon New York, Inc., 6.875%, 2012		286,000		303,448
			$	1,206,768
Oil Services - 0.0%
Weatherford International, Inc., 6.35%, 2017 (n)	$	40,000	$	41,346
Oils - 0.1%
Valero Energy Corp., 6.875%, 2012	$	111,000	$	118,443
Other Banks & Diversified Financials - 0.7%
Commonwealth Bank, 5%, 2012 (n)	$	230,000	$	234,726
Mizuho Capital Investment 1 Ltd., 6.686% to 2016, FRN to 2049 (n)		190,000		177,770
Nordea Bank AB, 5.424% to 2015, FRN to 2049 (n)		100,000		90,411
UBS Preferred Funding Trust V, 6.243% to 2016, FRN to 2049		190,000		182,943
UFJ Finance Aruba AEC, 6.75%, 2013		145,000		157,524
Woori Bank, 6.125% to 2011, FRN to 2016 (n)		220,000		221,132
			$	1,064,506
Pharmaceuticals - 0.1%
Allergan, Inc., 5.75%, 2016	$	160,000	$	163,884

Issuer	Shares/Par		Value ($)
BONDS - continued
Pollution Control - 0.1%
Waste Management, Inc., 7.375%, 2010	$	134,000	$	141,544
Railroad & Shipping - 0.1%
CSX Corp., 6.75%, 2011	$	35,000	$	36,727
CSX Corp., 7.9%, 2017		120,000		134,448
			$	171,175
Real Estate - 0.5%
Boston Properties, Inc., REIT, 5%, 2015	$	42,000	$	38,908
ERP Operating LP, REIT, 5.75%, 2017		180,000		171,406
HRPT Properties Trust, REIT, 6.25%, 2016		180,000		171,109
Kimco Realty Corp., REIT, 5.783%, 2016		100,000		96,545
ProLogis, REIT, 5.75%, 2016		179,000		168,017
Simon Property Group LP, REIT, 5.1%, 2015		193,000		181,456
			$	827,441
Retailers - 0.3%
Federated Retail Holdings, Inc., 5.35%, 2012	$	40,000	$	38,972
Home Depot, Inc., 5.875%, 2036		110,000		92,829
Limited Brands, Inc., 5.25%, 2014		132,000		118,480
Wal-Mart Stores, Inc., 5.25%, 2035		194,000		172,081
			$	422,362
Supermarkets - 0.0%
Kroger Co., 6.4%, 2017	$	30,000	$	31,377
Supranational - 0.6%
European Investment Bank, 5.125%, 2017	$	876,000	$	913,884
Telecommunications - Wireless - 0.2%
Cingular Wireless LLC, 6.5%, 2011	$	35,000	$	36,847
Nextel Communications, Inc., 5.95%, 2014		180,000		169,194
Vodafone Group PLC, 5.625%, 2017		182,000		181,227
			$	387,268
U.S. Government Agencies - 2.1%
Aid-Egypt, 4.45%, 2015	$	152,000	$	151,208
Fannie Mae, 6.625%, 2009-2010		1,188,000		1,275,619
Fannie Mae, 6%, 2011		165,000		177,062
Federal Home Loan Bank, 3.9%, 2008		40,000		39,957
Freddie Mac, 5.5%, 2017		700,000		751,081
Small Business Administration, 4.35%, 2023		35,986		35,136
Small Business Administration, 4.77%, 2024		88,360		87,928
Small Business Administration, 4.99%, 2024		125,837		126,508
Small Business Administration, 5.18%, 2024		143,896		145,861
Small Business Administration, 5.52%, 2024		213,341		219,249
Small Business Administration, 4.95%, 2025		96,213		94,661
Small Business Administration, 5.09%, 2025		121,212		122,124
Small Business Administration, 5.39%, 2025		91,436		93,305
			$	3,319,699
U.S. Treasury Obligations - 9.2%
U.S. Treasury Bonds, 8%, 2021	$	37,000	$	50,638
U.S. Treasury Bonds, 6.25%, 2023		211,000		252,623
U.S. Treasury Bonds, 6%, 2026		15,000		17,752

27-TRVA

Portfolio of Investments — continued

Issuer	Shares/Par		Value($)
BONDS - continued
U.S. Treasury Obligations - continued
U.S. Treasury Bonds, 6.75%, 2026	$	341,000	$	436,480
U.S. Treasury Bonds, 5.375%, 2031		1,707,000		1,923,176
U.S. Treasury Bonds, 4.5%, 2036		778,000		781,951
U.S. Treasury Notes, 5.625%, 2008		1,010,000		1,018,127
U.S. Treasury Notes, 3.125%, 2008		2,315,000		2,311,021
U.S. Treasury Notes, 4.75%, 2008		46,000		46,518
U.S. Treasury Notes, 4.5%, 2009		2,916,000		2,964,753
U.S. Treasury Notes, 4%, 2009		23,000		23,300
U.S. Treasury Notes, 4.875%, 2009		2,415,000		2,481,789
U.S. Treasury Notes, 6.5%, 2010		128,000		136,870
U.S. Treasury Notes, 5.125%, 2011		180,000		191,236
U.S. Treasury Notes, 3.875%, 2013		940,000		958,800
U.S. Treasury Notes, 4.25%, 2013		250,000		259,199
U.S. Treasury Notes, 4.75%, 2014		150,000		159,504
U.S. Treasury Notes, 4.875%, 2016		600,000		638,906
			$	14,652,643
Utilities - Electric Power - 1.4%
Bruce Mansfield Unit, 6.85%, 2034	$	210,000	$	211,153
Dominion Resources, Inc., 5.15%, 2015		141,000		136,436
EDP Finance B.V., 6%, 2018 (n)		110,000		107,287
Enel Finance International, 6.25%, 2017 (n)		170,000		172,025
Exelon Generation Co. LLC, 6.95%, 2011		232,000		242,062
Exelon Generation Co. LLC, 6.2%, 2017		80,000		79,506
FirstEnergy Corp., 6.45%, 2011		209,000		215,817
MidAmerican Energy Holdings Co., 3.5%, 2008		118,000		117,225
MidAmerican Energy Holdings Co., 5.875%, 2012		61,000		63,226
MidAmerican Funding LLC, 6.927%, 2029		154,000		169,785
Oncor Electric Delivery Co., 7%, 2022		152,000		157,463
Pacific Gas & Electric Co., 4.8%, 2014		45,000		43,750
PSEG Power LLC, 6.95%, 2012		71,000		75,694
PSEG Power LLC, 5.5%, 2015		90,000		88,112
System Energy Resources, Inc., 5.129%, 2014 (n)		85,401		87,465
Waterford 3 Funding Corp., 8.09%, 2017		326,415		326,542
			$	2,293,548
Total Bonds (Identified Cost, $66,003,762)			$	66,144,813
SHORT-TERM OBLIGATIONS - 0.6%
American Express Credit Corp., 4.12%, due 1/02/08, at Amortized Cost and Value (y)	$	1,057,000	$	1,056,879
Total Investments (Identified Cost, $151,053,414) (k)			$	158,857,180
OTHER ASSETS, LESS LIABILITIES - 0.4%				631,644
NET ASSETS - 100.0%			$	159,488,824

See portfolio footnotes and notes to financial statements.

28-TRVA

Portfolio of Investments — continued

Portfolio Footnotes:

(a) Non-income producing security.

(f) All or a portion of the security has been segregated as collateral for an open futures contract.

(g) The rate shown represents a weighted average coupon rate on settled positions at period end.

(i) Interest only security for which the variable account receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security.

(k) As of December 31, 2007, the following variable accounts held securities fair valued in accordance with the policies adopted by the Board of Managers. An independent pricing service provided an evaluated bid for a percent of the market value.

Variable Account	Market Value		% of Market Value		Evaluated Bid %
Global Governments Variable Account	$	7,359,871	91.59	%	90.03	%
Government Securities Variable Account		67,238,613	98.32		98.32
High Yield Variable Account		41,037,402	84.73		84.73	(1)
Total Return Variable Account		66,144,813	41.64		41.64

(1) Non-evaluated bid percentage less than 0.01%

(n) Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was:

Variable Account	Market Value		% of Net Assets
Global Governments Variable Account	$	280,379	3.5	%
Government Securities Variable Account		730,758	1.1
High Yield Variable Account		6,699,169	13.6
Total Return Variable Account		2,903,150	1.8

(o) All or a portion of this position has not settled. Upon settlement date, interest rates will be determined.

(p) Payment-in-kind security.

(r) Remaining maturities of floating rate loans may be less than stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. These loans may be subject to restrictions on resale. Floating rate loans generally have rates of interest which are determined periodically by reference to a base lending rate plus a premium.

(t) Security exempt from registration with the U.S. Securities and Exchange Commission under Section 4(2) of the Securities Act of 1933.

(y) The rate shown represents an annualized yield at time of purchase.

(z) Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The variable accounts holds the following restricted securities:

Variable Account	Restricted Securities	Acquisition Date	Acquisition Cost		Current Market Value		Total % of Net Assets
High Yield Variable Account	Asset Securitization Corp., FRN, 8.825%, 2029	1/25/05	$	172,565	$	207,500
	NewPage Holdings Corp., 10%, 2012	12/07/07 - 12/11/07		151,450		150,750
	Nuveen Investments, Inc., 10.5%, 2015	10/31/07		145,000		144,456
	Wachovia Credit, CDO, FRN, 6.233%, 2026	6/08/06		250,000		201,718
	Total Restricted Securities				$	704,424	1.4%
Total Return Variable Account	Bayview Financial Revolving Mortgage Loan Trust, FRN, 5.6%, 2040	3/01/06	$	250,000	$	200,000
	KKR Private Equity Investments LP, IEU	5/03/06		165,000		119,856
	Nomura Asset Securities Corp., FRN, 9.779%, 2027	7/16/07		231,896		234,800
	Spirit Master Funding LLC, 5.05%, 2023	10/04/05		176,033		174,947
	Total Restricted Securities				$	729,603	0.5%

The following abbreviations are used in this report and are defined:

ADR American Depository Receipt

CDO Collateralized Debt Obligation

CLN Credit-Linked Note

FRN Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.

GDR Global Depository Receipt

IEU International Equity Unit

REIT Real Estate Investment Trust

STRIPS Separate Trading of Registered Interest and Principal of Securities

TIPS Treasury Inflation Protected Security

29-TRVA

Portfolio of Investments — continued

Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below:

AUD	Australian Dollar	IDR	Indonesian Rupiah
CAD	Canadian Dollar	JPY	Japanese Yen
CHF	Swiss Franc	MYR	Malaysian Ringgit
DKK	Danish Krone	NOK	Norwegian Krone
EUR	Euro	SEK	Swedish Krona
GBP	British Pound

See portfolio footnotes and notes to financial statements.

30-TRVA

Statements of Assets and Liabilities — December 31, 2007

(000 Omitted)

	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Assets:
Investments —
Investments, cost	$	179,289		$	7,918		$	67,615		$	50,167		$	45,836		$	151,053
Unrealized appreciation (depreciation)		18,618			118			770			(1,732	)		—			7,804
Total investments, at value	$	197,907		$	8,036		$	68,385		$	48,435		$	45,836		$	158,857
Cash		1			1			0	*		138			0	*		7
Foreign currency, at value (identified cost, $0*)		—			0	*		—			—			—			—
Receivable for forward foreign currency exchange contracts		—			52			—			—			—			—
Receivable for daily variation on open futures contracts		—			—			7			—			—			—
Receivable for investments sold		—			27			—			399			—			107
Receivable for units sold		23			0	*		1			4			1			14
Interest and dividends receivable		155			96			665			926			57			791
Receivable from Investment Adviser		10			15			—			—			—			9
Receivable from Sponsor		8			—			9			—			1			7
Swaps, at value (premiums paid, $25)		—			—			—			25			—			—
Other assets		26			1			3			2			2			68
Total assets	$	198,130		$	8,228		$	69,070		$	49,929		$	45,897		$	159,860
Liabilities:
Payable for forward foreign currency exchange contracts	$	—		$	50		$	—		$	—		$	—		$	—
Payable for investments purchased		1,528			9			—			332			—			127
Payable for units surrendered		196			28			18			39			174			154
Unrealized depreciation on unfunded loan commitments		—			—			—			0	*		—			—
Swaps, at value		—			—			—			76			—			—
Payable to affiliates —
Investment Adviser		16			1			4			4			2			13
Administrative services fee		0	*		0	*		0	*		0	*		0	*		0	*
Sponsor		—			0	*		—			8			—			—
Accrued expenses and other liabilities		61			58			53			56			32			77
Total liabilities	$	1,801		$	146		$	75		$	515		$	208		$	371
Net assets	$	196,329		$	8,082		$	68,995		$	49,414		$	45,689		$	159,489

* Amount was less than $500.

See notes to financial statements.

31

Statements of Assets and Liabilities — December 31, 2007 — continued

(000 Omitted except for unit values)

	Units	Unit Value		Capital Appreciation Variable Account		Global Governments Variable Account		Government Securities Variable Account		High Yield Variable Account		Money Market Variable Account		Total Return Variable Account
Net assets applicable to contract owners:
Capital Appreciation Variable Account —
Compass 2	1,980	$	63.669	$	126,051
Compass 3	73		41.858		3,077
Compass 3 – Level 2	3,671		17.501		64,240
Global Governments Variable Account —
Compass 2	85	$	27.622			$	2,350
Compass 3	15		26.814				416
Compass 3 – Level 2	332		15.798				5,243
Government Securities Variable Account —
Compass 2	1,269	$	40.804					$	51,759
Compass 3	28		28.419						797
Compass 3 – Level 2	889		16.717						14,865
High Yield Variable Account —
Compass 2	958	$	40.344							$	38,656
Compass 3	21		29.556								607
Compass 3 – Level 2	579		15.890								9,196
Money Market Variable Account —
Compass 2	887	$	21.676									$	19,231
Compass 3	64		17.704										1,131
Compass 3 – Level 2	1,871		13.330										24,946
Total Return Variable Account —
Compass 2	948	$	52.709												$49,944
Compass 3	107		51.169												5,495
Compass 3 – Level 2	4,116		24.850												102,279
Net assets applicable to owners of deferred contracts					193,368		8,009		67,421		48,459		45,308		157,718
Reserve for variable annuities —
Compass 2 Contracts					2,672		18		1,530		911		299		1,278
Compass 3 Contracts					1		1		—		1		1		2
Compass 3 – Level 2 Contracts					288		54		44		43		81		491
Net assets				$	196,329	$	8,082	$	68,995	$	49,414	$	45,689	$	159,489

See notes to financial statements.

32

Statements of Operations — Year Ended December 31, 2007

(000 Omitted)

	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Net Investment income (loss):
Income —
Interest	$	193		$	350		$	3,835		$	4,454		$	2,469		$	3,845
Dividends		2,338			—			—			25			—			2,068
Foreign taxes withheld		(41	)		—			—			—			—			(18	)
Total investment income	$	2,490		$	350		$	3,835		$	4,479		$	2,469		$	5,895
Expenses —
Mortality and expense risk charges	$	2,617		$	108		$	921		$	697		$	591		$	2,156
Management fee		1,553			65			402			414			234			1,308
Boards of Managers fees		20			1			7			5			4			17
Distribution fee		6			1			1			1			2			10
Administrative fee		54			10			19			14			12			46
Custodian fee		48			39			28			12			13			53
Printing		29			11			17			16			28			21
Auditing fees		35			45			41			46			22			48
Legal fees		6			6			6			6			6			6
Miscellaneous		19			6			9			10			9			22
Total expenses	$	4,387		$	292		$	1,451		$	1,221		$	921		$	3,687
Fees paid indirectly		(1	)		0	*		(1	)		(4	)		0	*		(2	)
Reduction of expenses by investment adviser		(28	)		(74	)		—			(28	)		—			(28	)
Net expenses	$	4,358		$	218		$	1,450		$	1,189		$	921		$	3,657
Net investment income (loss)	$	(1,868	)	$	132		$	2,385		$	3,290		$	1,548		$	2,238
Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) —
Investment transactions	$	19,822		$	450		$	578		$	253		$	(5	)	$	11,872
Futures contracts		—			(7	)		124			—			—			—
Swap transactions		—			—			—			32			—			—
Foreign currency transactions		0	*		2			—			—			—			(3	)
Net realized gain (loss) on investments and foreign currency transactions	$	19,822		$	445		$	702		$	285		$	(5	)	$	11,869
Change in unrealized appreciation (depreciation) —
Investments	$	1,265		$	19		$	899		$	(3,098	)	$	—		$	(9,247	)
Futures contracts		—			—			(9	)		—			—			—
Swap transactions		—			—			—			(76	)		—			—
Translation of assets and liabilities in foreign currencies		2			10			—			—			—			1
Unfunded loan commitments		—			—			—			(0	)*		—			—
Net unrealized gain (loss) on investments and foreign currency translation	$	1,267		$	29		$	890		$	(3,174	)	$	—		$	(9,246	)
Net realized and unrealized gain (loss) on investments and foreign currency	$	21,089		$	474		$	1,592		$	(2,889	)	$	(5	)	$	2,623
Change in net assets from operations	$	19,221		$	606		$	3,977		$	401		$	1,543		$	4,861

* Amount was less than $500.

See notes to financial statements.

33

Statements of Changes in Net Assets

(000 Omitted)

	Capital Appreciation Variable Account						Global Governments Variable Account						Government Securities Variable Account
	Year Ended 12/31						Year Ended 12/31						Year Ended 12/31
	2007			2006			2007			2006			2007			2006
Change in net assets:
From operations:
Net investment income (loss)	$	(1,868	)	$	(2,616	)	$	132		$	140		$	2,385		$	2,792
Net realized gain (loss) on investments and foreign currency transactions		19,822			3,539			445			(100	)		702			(433	)
Net unrealized gain (loss) on investments and foreign currency translation		1,267			9,410			29			282			890			(392	)
Change in net assets from operations	$	19,221		$	10,333		$	606		$	322		$	3,977		$	1,967
Participant transactions:
Accumulation activity:
Purchase payments received	$	3,083		$	4,393		$	182		$	279		$	888		$	1,459
Net transfers between variable and fixed accumulation accounts		(6,076	)		(6,547	)		(63	)		(22	)		(2,041	)		(1,158	)
Withdrawals, surrenders, annuitizations, and contract charges		(37,910	)		(48,533	)		(1,776	)		(1,676	)		(12,438	)		(16,396	)
Net accumulation activity	$	(40,903	)	$	(50,687	)	$	(1,657	)	$	(1,419	)	$	(13,591	)	$	(16,095	)
Annuitization activity:
Annuitizations	$	139		$	293		$	17		$	—		$	240		$	309
Annuity payments and contract charges		(409	)		(449	)		(6	)		(7	)		(252	)		(234	)
Net transfers among accounts for annuity reserves		(168	)		—			—			—			—			—
Adjustments to annuity reserves		41			(39	)		(5	)		5			26			(24	)
Net annuitization activity	$	(397	)	$	(195	)	$	6		$	(2	)	$	14		$	51
Change in net assets from participations transactions	$	(41,300	)	$	(50,882	)	$	(1,651	)	$	(1,421	)	$	(13,577	)	$	(16,044	)
Total change in net assets	$	(22,079	)	$	(40,549	)	$	(1,045	)	$	(1,099	)	$	(9,600	)	$	(14,077	)
Net assets:
At beginning of period		218,408			258,957			9,127			10,226			78,595			92,672
At end of period	$	196,329		$	218,408		$	8,082		$	9,127		$	68,995		$	78,595

See notes to financial statements.

34

Statements of Changes in Net Assets — continued

(000 Omitted)

	High Yield Variable Account						Money Market Variable Account						Total Return Variable Account
	Year Ended 12/31						Year Ended 12/31						Year Ended 12/31
	2007			2006			2007			2006			2007			2006
Change in net assets:
From operations:
Net investment income	$	3,290		$	3,577		$	1,548		$	1,655		$	2,238		$	2,660
Net realized gain (loss) on investments and foreign currency transactions		285			(1,046	)		(5	)		—			11,869			10,962
Net unrealized gain (loss) on investments and foreign currency translation		(3,174	)		2,730			—			—			(9,246	)		4,841
Change in net assets from operations	$	401		$	5,261		$	1,543		$	1,655		$	4,861		$	18,463
Participant transactions:
Accumulation activity:
Purchase payments received	$	702		$	761		$	1,063		$	1,321		$	3,595		$	4,300
Net transfers between variable and fixed accumulation accounts		(2,554	)		(749	)		6,899			(342	)		1,562			2,227
Withdrawals, surrenders, annuitizations, and contract charges		(8,241	)		(10,582	)		(11,300	)		(11,845	)		(32,427	)		(36,753	)
Net accumulation activity	$	(10,093	)	$	(10,570	)	$	(3,338	)	$	(10,866	)	$	(27,270	)	$	(30,226	)
Annuitization activity:
Annuitizations	$	30		$	69		$	(68	)	$	15		$	18		$	35
Annuity payments and contract charges		(156	)		(172	)		(118	)		(161	)		(315	)		(341	)
Net transfers among accounts for annuity reserves		—			—			0	*		—			168			—
Adjustments to annuity reserves		(42	)		30			79			(75	)		(6	)		6
Net annuitization activity	$	(168	)	$	(73	)	$	(107	)	$	(221	)	$	(135	)	$	(300	)
Change in net assets from participations transactions	$	(10,261	)	$	(10,643	)	$	(3,445	)	$	(11,087	)	$	(27,405	)	$	(30,526	)
Total change in net assets	$	(9,860	)	$	(5,382	)	$	(1,902	)	$	(9,432	)	$	(22,544	)	$	(12,063	)
Net assets:
At beginning of period		59,274			64,656			47,591			57,023			182,033			194,096
At end of period	$	49,414		$	59,274		$	45,689		$	47,591		$	159,489		$	182,033

* Amount was less than $500.

See notes to financial statements.

35

Financial Highlights

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	Capital Appreciation Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	58.101		$	55.446		$	55.625		$	50.814		$	39.859
Investment income	$	0.751		$	0.560		$	0.580		$	0.744		$	0.402
Expenses		(1.319	)		(1.198	)		(1.179	)		(1.109	)		(0.951	)
Net investment loss	$	(0.568	)	$	(0.638	)	$	(0.599	)	$	(0.365	)	$	(0.549	)
Net realized and unrealized gain (loss) on investments and foreign currency transactions		6.136			3.293			0.420			5.176			11.504
Change in unit value	$	5.568		$	2.655		$	(0.179	)	$	4.811		$	10.955
Unit value:
Net asset value — end of period	$	63.669		$	58.101		$	55.446		$	55.625		$	50.814
Total Return (%) (k)(s)		9.58			4.79			(0.32	)		9.47	(b)		27.48	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.15			2.15			2.16			2.14			2.12
Expenses after expense reductions (f)		2.14			N/A			N/A			N/A			N/A
Net investment loss		(0.91	)		(1.11	)		(1.08	)		(0.70	)		(1.20	)
Portfolio turnover (%)		63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		1,980			2,419			3,018			3,544			4,040
	Capital Appreciation Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	38.235		$	36.524		$	36.678		$	33.539		$	26.334
Investment income	$	0.490		$	0.355		$	0.370		$	0.458		$	0.260
Expenses		(0.903	)		(0.807	)		(0.795	)		(0.753	)		(0.648	)
Net investment loss	$	(0.413	)	$	(0.452	)	$	(0.425	)	$	(0.295	)	$	(0.388	)
Net realized and unrealized gain (loss) on investments and foreign currency transactions		4.036			2.163			0.271			3.434			7.593
Change in unit value	$	3.623		$	1.711		$	(0.154	)	$	3.139		$	7.205
Unit value:
Net asset value — end of period	$	41.858		$	38.235		$	36.524		$	36.678		$	33.539
Total Return (%) (k)(s)		9.48			4.69			(0.42	)		9.36	(b)		27.36	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.25			2.25			2.26			2.24			2.22
Expenses after expense reductions (f)		2.24			N/A			N/A			N/A			N/A
Net investment loss		(1.04	)		(1.30	)		(1.20	)		(0.87	)		(1.31	)
Portfolio turnover (%)		63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		73			128			237			413			621

36

Financial Highlights — continued

	Capital Appreciation Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	15.963		$	15.226		$	15.267		$	13.940		$	10.929
Investment income	$	0.203		$	0.152		$	0.158		$	0.205		$	0.109
Expenses		(0.352	)		(0.320	)		(0.316	)		(0.297	)		(0.254	)
Net investment loss	$	(0.149	)	$	(0.168	)	$	(0.158	)	$	(0.092	)	$	(0.145	)
Net realized and unrealized gain (loss) on investments and foreign currency transactions		1.687			0.905			0.117			1.419			3.156
Change in unit value	$	1.538		$	0.737		$	(0.041	)	$	1.327		$	3.011
Unit value:
Net asset value — end of period	$	17.501		$	15.963		$	15.226		$	15.267		$	13.940
Total Return (%) (k)(s)		9.64			4.84			(0.27	)		9.52	(b)		27.55	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.10			2.10			2.11			2.09			2.07
Expenses after expense reductions (f)		2.09			N/A			N/A			N/A			N/A
Net investment loss		(0.88	)		(1.13	)		(1.05	)		(0.65	)		(1.17	)
Portfolio turnover (%)		63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		3,671			4,378			5,248			5,798			6,086

(b) The variable account’s net asset value and total return calculation include a non-recurring accrual recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales. The non-recurring accrual resulted in an increase in the net asset value of $0.039, $0.026, and $0.010 per unit for Compass 2, Compass 3, and Compass 3 – Level 2, respectively, based on units outstanding on the day the proceeds were recorded.

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(j) The variable account’s net asset value and total return calculation include proceeds received on March 26, 2003 for the partial payment of a non-recurring litigation settlement from Cendant Corporation, recorded as a realized gain on investment transactions. The proceeds resulted in an increase in the net asset value of $0.900, $0.594, and $0.247 per unit for Compass 2, Compass 3, and Compass 3 – Level 2, respectively, based on units outstanding on the day the proceeds were received. Excluding the effect of this payment from the ending net asset value per unit, the Compass 2, Compass 3, and Compass 3 – Level 2 total return per unit value for the year ended December 31, 2003 would have been lower by approximately 2.24%, 2.24%, and 2.25%, respectively.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(s) From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

37

Financial Highlights — continued

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	Global Governments Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	25.732		$	24.865		$	27.240		$	25.169		$	22.125
Investment income	$	1.052		$	1.003		$	0.925		$	0.872		$	0.877
Expenses		(0.653	)		(0.629	)		(0.651	)		(0.633	)		(0.584	)
Net investment income	$	0.399		$	0.374		$	0.274		$	0.239		$	0.293
Net realized and unrealized gain (loss) on investments and foreign currency transactions		1.491			0.493			(2.649	)		1.832			2.751
Change in unit value	$	1.890		$	0.867		$	(2.375	)	$	2.071		$	3.044
Unit value:
Net asset value — end of period	$	27.622		$	25.732		$	24.865		$	27.240		$	25.169
Total Return (%) (k)(r)		7.34			3.49			(8.72	)		8.23			13.76
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.35			3.39			2.95			2.67			2.47
Expenses after expense reductions (f)		2.50			2.50			2.50			2.50			N/A
Net investment income		1.52			1.48			1.04			0.94			1.23
Portfolio turnover (%)		141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		85			104			116			128			161
	Global Governments Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	25.017		$	24.209		$	26.561		$	24.578		$	21.638
Investment income	$	1.044		$	1.025		$	0.949		$	0.883		$	0.869
Expenses		(0.678	)		(0.659	)		(0.688	)		(0.662	)		(0.600	)
Net investment income	$	0.366		$	0.366		$	0.261		$	0.221		$	0.269
Net realized and unrealized gain (loss) on investments and foreign currency transactions		1.431			0.442			(2.613	)		1.762			2.671
Change in unit value	$	1.797		$	0.808		$	(2.352	)	$	1.983		$	2.940
Unit value:
Net asset value — end of period	$	26.814		$	25.017		$	24.209		$	26.561		$	24.578
Total Return (%) (k)(r)		7.18			3.34			(8.85	)		8.07			13.59
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.50			3.54			3.10			2.82			2.62
Expenses after expense reductions (f)		2.65			2.65			2.65			2.65			N/A
Net investment income		1.44			1.41			0.97			0.85			1.15
Portfolio turnover (%)		141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		15			18			26			28			41

38

Financial Highlights — continued

	Global Governments Variable Account
	Compass 3 — Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	14.718		$	14.221		$	15.580		$	14.396		$	12.655
Investment income	$	0.608		$	0.574		$	0.526		$	0.497		$	0.494
Expenses		(0.377	)		(0.361	)		(0.371	)		(0.361	)		(0.331	)
Net investment income	$	0.231		$	0.213		$	0.155		$	0.136		$	0.163
Net realized and unrealized gain (loss) on investments and foreign currency transactions		0.849			0.284			(1.514	)		1.048			1.578
Change in unit value	$	1.080		$	0.497		$	(1.359	)	$	1.184		$	1.741
Unit value:
Net asset value — end of period	$	15.798		$	14.718		$	14.221		$	15.580		$	14.396
Total Return (%) (k)(r)		7.34			3.49			(8.72	)		8.23			13.76
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.35			3.39			2.95			2.67			2.47
Expenses after expense reductions (f)		2.50			2.50			2.50			2.50			N/A
Net investment income		1.53			1.47			1.04			0.94			1.21
Portfolio turnover (%)		141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		332			403			468			500			559

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(r) Certain expenses have been reduced without which performance would have been lower.

See notes to financial statements.

39

Financial Highlights — continued

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	Government Securities Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	38.619		$	37.679		$	37.338		$	36.470		$	36.124
Investment income	$	2.117		$	2.024		$	1.936		$	1.834		$	1.482
Expenses		(0.802	)		(0.757	)		(0.752	)		(0.726	)		(0.711	)
Net investment income	$	1.315		$	1.267		$	1.184		$	1.108		$	0.771
Net realized and unrealized gain (loss) on investments		0.870			(0.327	)		(0.843	)		(0.240	)		(0.425	)
Change in unit value	$	2.185		$	0.940		$	0.341		$	0.868		$	0.346
Unit value:
Net asset value — end of period	$	40.804		$	38.619		$	37.679		$	37.338		$	36.470
Total Return (%) (k)		5.66			2.50			0.91			2.38			0.96
Ratios (%) (to average net assets):
Expenses (f)		2.02			2.01			2.01			1.97			1.95
Net investment income		3.26			3.28			3.09			2.96			2.08
Portfolio turnover (%)		35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		1,269			1,538			1,852			2,125			2,447
	Government Securities Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	26.924		$	26.295		$	26.082		$	25.501		$	25.284
Investment income	$	1.470		$	1.352		$	1.316		$	1.244		$	1.045
Expenses		(0.583	)		(0.538	)		(0.543	)		(0.525	)		(0.514	)
Net investment income	$	0.887		$	0.814		$	0.773		$	0.719		$	0.531
Net realized and unrealized gain (loss) on investments		0.608			(0.185	)		(0.560	)		(0.138	)		(0.314	)
Change in unit value	$	1.495		$	0.629		$	0.213		$	0.581		$	0.217
Unit value:
Net asset value — end of period	$	28.419		$	26.924		$	26.295		$	26.082		$	25.501
Total Return (%) (k)		5.55			2.40			0.82			2.28			0.86
Ratios (%) (to average net assets):
Expenses (f)		2.12			2.11			2.11			2.07			2.05
Net investment income		3.25			3.15			2.96			2.82			2.08
Portfolio turnover (%)		35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		28			40			69			100			147

40

Financial Highlights — continued

	Government Securities Variable Account
	Compass 3 — Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	15.814		$	15.421		$	15.274		$	14.912		$	14.763
Investment income	$	0.848		$	0.813		$	0.781		$	0.742		$	0.597
Expenses		(0.318	)		(0.300	)		(0.299	)		(0.289	)		(0.282	)
Net investment income	$	0.530		$	0.513		$	0.482		$	0.453		$	0.315
Net realized and unrealized gain (loss) on investments		0.373			(0.120	)		(0.335	)		(0.091	)		(0.166	)
Change in unit value	$	0.903		$	0.393		$	0.147		$	0.362		$	0.149
Unit value:
Net asset value — end of period	$	16.717		$	15.814		$	15.421		$	15.274		$	14.912
Total Return (%) (k)		5.71			2.55			0.96			2.43			1.01
Ratios (%) (to average net assets):
Expenses (f)		1.97			1.96			1.96			1.92			1.90
Net investment income		3.29			3.30			3.12			2.99			2.10
Portfolio turnover (%)		35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		889			1,054			1,280			1,377			1,562

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

See notes to financial statements.

41

Financial Highlights — continued

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	High Yield Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	40.172		$	36.840		$	36.669		$	34.056		$	28.505
Investment income	$	3.391		$	3.121		$	2.959		$	2.857		$	2.769
Expenses		(0.901	)		(0.847	)		(0.820	)		(0.770	)		(0.689	)
Net investment income	$	2.490		$	2.274		$	2.139		$	2.087		$	2.080
Net realized and unrealized gain (loss) on investments and foreign currency transactions		(2.318	)		1.058			(1.968	)		0.526			3.471
Change in unit value	$	0.172		$	3.332		$	0.171		$	2.613		$	5.551
Unit value:
Net asset value — end of period	$	40.344		$	40.172		$	36.840		$	36.669		$	34.056
Total Return (%) (k)(r)(s)		0.43			9.04			0.47			7.67			19.47
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.25			2.32			2.28	(o)		2.21			2.20
Expenses after expense reductions (f)		2.20			2.22			2.25			N/A			N/A
Net investment income		5.96			5.84			5.76			5.91			6.53
Portfolio turnover (%)		66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		958			1,119			1,323			1,601			1,827
	High Yield Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	29.459		$	27.043		$	26.943		$	25.048		$	20.986
Investment income	$	2.445		$	2.212		$	2.118		$	2.021		$	1.964
Expenses		(0.681	)		(0.635	)		(0.620	)		(0.576	)		(0.514	)
Net investment income	$	1.764		$	1.577		$	1.498		$	1.445		$	1.450
Net realized and unrealized gain (loss) on investments and foreign currency transactions		(1.667	)		0.839			(1.398	)		0.450			2.612
Change in unit value	$	0.097		$	2.416		$	0.100		$	1.895		$	4.062
Unit value:
Net asset value — end of period	$	29.556		$	29.459		$	27.043		$	26.943		$	25.048
Total Return (%) (k)(r)(s)		0.33			8.94			0.37			7.57			19.35
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.35			2.42			2.38	(o)		2.31			2.30
Expenses after expense reductions (f)		2.30			2.32			2.35			N/A			N/A
Net investment income		5.93			5.71			5.64			5.75			6.41
Portfolio turnover (%)		66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		21			34			47			67			115

42

Financial Highlights — continued

	High Yield Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	15.814		$	14.495		$	14.421		$	13.386		$	11.199
Investment income	$	1.310		$	1.202		$	1.142		$	1.019		$	1.161
Expenses		(0.344	)		(0.323	)		(0.312	)		(0.275	)		(0.286	)
Net investment income	$	0.966		$	0.879		$	0.830		$	0.744		$	0.875
Net realized and unrealized gain (loss) on investments and foreign currency		(0.890	)		0.440			(0.756	)		0.291			1.312
Change in unit value	$	0.076		$	1.319		$	0.074		$	1.035		$	2.187
Unit value:
Net asset value — end of period	$	15.890		$	15.814		$	14.495		$	14.421		$	13.386
Total Return (%) (k)(r)(s)		0.48			9.10			0.52			7.73			19.53
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.20			2.27			2.23	(o)		2.16			2.15
Expenses after expense reductions (f)		2.15			2.17			2.20			N/A			N/A
Net investment income		5.98			5.86			5.81			5.77			6.57
Portfolio turnover (%)		66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		579			774			937			971			2,631

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(o) Due to a revision, the ratios of expenses before expense reductions for the year ended December 31, 2005 not previously reported, were 2.28%, 2.38% and 2.23% for Compass 2, Compass 3, and Compass 3 – Level 2, respectively. There was no impact to net assets or the expenses charged to the shareholder.

(r) Certain expenses have been reduced without which performance would have been lower.

(s) From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

43

Financial Highlights — continued

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	Money Market Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	20.979		$	20.331		$	20.073		$	20.188		$	20.322
Investment income	$	1.145		$	1.051		$	0.661		$	0.281		$	0.247
Expenses		(0.431	)		(0.403	)		(0.403	)		(0.396	)		(0.381	)
Net investment income (loss)	$	0.714		$	0.648		$	0.258		$	(0.115	)	$	(0.134	)
Net realized and unrealized gain (loss) on investments		(0.017	)(g)		—			(0.000	)(w)		—			—
Change in unit value	$	0.697		$	0.648		$	0.258		$	(0.115	)	$	(0.134	)
Unit value:
Net asset value — end of period	$	21.676		$	20.979		$	20.331		$	20.073		$	20.188
Total Return (%) (k)		3.32			3.19			1.29			(0.57	)		(0.66	)
Ratios (%) (to average net assets):
Expenses (f)		2.00			1.95			1.99			1.96			1.87
Net investment income (loss)		3.29			3.15			1.38			(0.56	)		(0.63	)
Number of units outstanding at end of period (000 Omitted)		887			928			1,128			1,009			1,172
	Money Market Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	17.152		$	16.638		$	16.443		$	16.553		$	16.680
Investment income	$	0.902		$	0.852		$	0.539		$	0.229		$	0.198
Expenses		(0.356	)		(0.338	)		(0.344	)		(0.339	)		(0.325	)
Net investment income (loss)	$	0.546		$	0.514		$	0.195		$	(0.110	)	$	(0.127	)
Net realized and unrealized gain (loss) on investments		0.006	(g)		—			(0.000	)(w)		—			—
Change in unit value	$	0.552		$	0.514		$	0.195		$	(0.110	)	$	(0.127	)
Unit value:
Net asset value — end of period	$	17.704		$	17.152		$	16.638		$	16.443		$	16.553
Total Return (%) (k)		3.22			3.09			1.19			(0.67	)		(0.76	)
Ratios (%) (to average net assets):
Expenses (f)		2.10			2.05			2.09			2.06			1.97
Net investment income (loss)		3.20			3.00			1.42			(0.71	)		(0.74	)
Number of units outstanding at end of period (000 Omitted)		64			131			218			97			155

44

Financial Highlights — continued

	Money Market Variable Account
	Compass 3 — Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	12.895		$	12.491		$	12.326		$	12.390		$	12.466
Investment income	$	0.695		$	0.644		$	0.405		$	0.181		$	0.131
Expenses		(0.257	)		(0.240	)		(0.240	)		(0.245	)		(0.207	)
Net investment income (loss)	$	0.438		$	0.404		$	0.165		$	(0.064	)	$	(0.076	)
Net realized and unrealized gain (loss) on investments		(0.003	)(g)		—			(0.000	)(w)		—			—
Change in unit value	$	0.435		$	0.404		$	0.165		$	(0.064	)	$	(0.076	)
Unit value:
Net asset value — end of period	$	13.330		$	12.895		$	12.491		$	12.326		$	12.390
Total Return (%) (k)		3.38			3.24			1.34			(0.52	)		(0.61	)
Ratios (%) (to average net assets):
Expenses (f)		1.95			1.90			1.94			1.91			1.82
Net investment income (loss)		3.32			3.18			1.39			(0.48	)		(0.61	)
Number of units outstanding at end of period (000 Omitted)		1,871			1,969			2,384			2,259			896

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(g) The per share amount is not in accordance with the net realized and unrealized gain/loss for the period because of the timing of sales of variable account units and the per unit amount of realized and unrealized gains and losses at such time.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(w) Per unit amount was less than $0.01.

See notes to financial statements.

45

Financial Highlights — continued

The financial highlights table is intended to help you understand the variable account’s financial performance for the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.

	Total Return Variable Account
	Compass 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	51.373		$	46.459		$	45.729		$	41.571		$	35.950
Investment income	$	1.832		$	1.749		$	1.521		$	1.450		$	1.237
Expenses		(1.126	)		(1.033	)		(0.970	)		(0.905	)		(0.800	)
Net investment income	$	0.706		$	0.716		$	0.551		$	0.545		$	0.437
Net realized and unrealized gain (loss) on investments and foreign currency transactions		0.630			4.198			0.179			3.613			5.184
Change in unit value	$	1.336		$	4.914		$	0.730		$	4.158		$	5.621
Unit value:
Net asset value — end of period	$	52.709		$	51.373		$	46.459		$	45.729		$	41.571
Total Return (%) (k)(r)(s)		2.60			10.58			1.60			10.00	(b)		15.64
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.12			2.14			2.12			2.11			2.10
Expenses after expense reductions (f)		2.11			N/A			N/A			N/A			N/A
Net investment income		1.30			1.46			1.18			1.25			1.13
Portfolio turnover (%)		54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		948			1,156			1,349			1,511			1,688
	Total Return Variable Account
	Compass 3
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	49.947		$	45.236		$	44.592		$	40.597		$	35.160
Investment income	$	1.770		$	1.645		$	1.450		$	1.375		$	1.200
Expenses		(1.165	)		(1.051	)		(1.019	)		(0.929	)		(0.823	)
Net investment income	$	0.605		$	0.594		$	0.431		$	0.446		$	0.377
Net realized and unrealized gain (loss) on investments and foreign currency transactions		0.617			4.117			0.213			3.549			5.060
Change in unit value	$	1.222		$	4.711		$	0.644		$	3.995		$	5.437
Unit value:
Net asset value — end of period	$	51.169		$	49.947		$	45.236		$	44.592		$	40.597
Total Return (%) (k)(r)(s)		2.45			10.42			1.45			9.84	(b)		15.46
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.27			2.29			2.27			2.26			2.25
Expenses after expense reductions (f)		2.26			N/A			N/A			N/A			N/A
Net investment income		1.18			1.28			0.97			1.07			1.01
Portfolio turnover (%)		54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		107			142			217			315			453

46

Financial Highlights — continued

	Total Return Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	24.220		$	21.903		$	21.559		$	19.599		$	16.949
Investment income	$	0.849		$	0.812		$	0.710		$	0.676		$	0.575
Expenses		(0.527	)		(0.484	)		(0.457	)		(0.425	)		(0.376	)
Net investment income	$	0.322		$	0.328		$	0.253		$	0.251		$	0.199
Net realized and unrealized gain (loss) on investments and foreign currency transactions		0.308			1.989			0.091			1.709			2.451
Change in unit value	$	0.630		$	2.317		$	0.344		$	1.960		$	2.650
Unit value:
Net asset value — end of period	$	24.850		$	24.220		$	21.903		$	21.559		$	19.599
Total Return (%) (k)(r)(s)		2.60			10.58			1.60			10.00	(b)		15.64
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.12			2.14			2.12			2.11			2.10
Expenses after expense reductions (f)		2.11			N/A			N/A			N/A			N/A
Net investment income		1.28			1.44			1.17			1.24			1.11
Portfolio turnover (%)		54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		4,116			4,695			5,462			5,646			5,946

(b) The variable account’s net asset value and total return calculation include a non-recurring accrual recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales. The non-recurring accrual did not have a material impact on the net asset value per share based on the shares outstanding on the day the proceeds were recorded.

(d) Per unit data are based on the average number of units outstanding during each year.

(f) Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k) The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(r) Certain expenses have been reduced without which performance would have been lower.

(s) From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

47

Notes to Financial Statements

(1) Business and Organization

Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account, and Total Return Variable Account (the variable account(s)) are separate accounts established by Sun Life Assurance Company of Canada (U.S.), the Sponsor, in connection with the issuance of Compass 2 and Compass 3 combination fixed/variable annuity contracts. The variable accounts operate as open-end management investment companies as those terms are defined in the Investment Company Act of 1940, as amended.

(2) Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The High Yield Variable Account can invest up to 100% of its portfolio in high-yield securities rated below investment grade. Investments in high-yield securities involve greater degrees of credit and market risk than investments in higher-rated securities and tend to be more sensitive to economic conditions. The Capital Appreciation Variable Account, Global Governments Variable Account, High Yield Variable Account and Total Return Variable Account can invest in foreign securities, including securities of emerging market issuers. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s legal, political, and economic environment. The markets of emerging markets countries are generally more volatile than the markets of developed countries with more mature economies. All of the risks of investing in foreign securities previously described are heightened when investing in emerging markets countries.

Investment Valuations – Money market instruments are valued at amortized cost, which approximates market value. Amortized cost involves valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. Each money market fund’s use of amortized cost is subject to the fund’s compliance with Rule 2a-7 under the Investment Company Act of 1940. The amortized cost value of an instrument can be different from the market value of an instrument. Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities for which there were no sales reported that day, equity securities are generally valued at the last quoted daily bid quotation as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities held short for which there were no sales reported for the day, the position is generally valued at the last quoted daily ask quotation as reported by an independent pricing service on the market or exchange on which such securities are primarily traded. Debt instruments (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as reported by an independent pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing price as reported by an independent pricing service on the exchange on which such options are primarily traded. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation as reported by an independent pricing service on the exchange on which such options are primarily traded. Options not traded on an exchange are generally valued at a broker-dealer bid quotation. Foreign currency options are generally valued using an external pricing model that uses market data from an independent source. Futures contracts are generally valued at last posted settlement price as reported by an independent pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as reported by an independent pricing service on the market on which such futures contracts are primarily traded. Forward foreign currency contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates reported by an independent pricing service for proximate time periods. Swaps are generally valued at an evaluated bid as reported by an independent pricing service. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. Values obtained from pricing services can utilize both dealer-supplied valuations and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates reported by an independent pricing service.

The Board of Managers has delegated primary responsibility for determining or causing to be determined the value of the variable accounts’ investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Managers. Under the variable accounts’ valuation policies and procedures, market quotations are not considered to be readily available for many types of debt instruments and certain types of derivatives. These investments are generally valued at fair value based on information from independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the variable accounts’ net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur on a frequent basis after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the variable accounts’ net asset value may be deemed to have a material affect on the value of securities traded in foreign markets. Accordingly, the variable accounts’ foreign equity securities may often be valued at fair value. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same

48

Notes to Financial Statements — continued

or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the variable accounts’ net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine the variable accounts’ net asset value may differ from quoted or published prices for the same investments.

In September 2006, FASB Statement No. 157, Fair Value Measurements (the “Statement”) was issued, and is effective for fiscal years beginning after November 15, 2007 and for all interim periods within those fiscal years. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Management is evaluating the application of the Statement to the variable accounts, and believes the impact will be limited to expanded disclosures resulting from the adoption of this Statement in the variable accounts’ financial statements.

Repurchase Agreements – Each variable account may enter into repurchase agreements with institutions that the variable accounts’ investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. The variable accounts require that the securities collateral in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the variable account to obtain those securities in the event of a default under the repurchase agreement. The variable accounts monitor, on a daily basis, the value of the collateral to ensure that its value, including accrued interest, is greater than amounts owed to the variable accounts under each such repurchase agreement. The variable accounts and other funds managed by Massachusetts Financial Services Company (MFS), may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Inflation-Adjusted Debt Securities – Certain variable accounts invest in inflation-adjusted debt securities issued by the U.S. Treasury. The variable accounts may also invest in inflation-adjusted debt securities issued by U.S. Government agencies and instrumentalities other than the U.S. Treasury and by other entities such as U.S. and foreign corporations and foreign governments. The principal value of these debt securities is adjusted through income according to changes in the Consumer Price Index or another general price or wage index. These debt securities typically pay a fixed rate of interest, but this fixed rate is applied to the inflation-adjusted principal amount. The principal paid at maturity of the debt security is typically equal to the inflation-adjusted principal amount, or the security’s original par value, whichever is greater. Other types of inflation-adjusted securities may use other methods to adjust for other measures of inflation.

Foreign Currency Translation – Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign exchange rate movements on income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.

Derivative Risk – Certain variable accounts may invest in derivatives for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the variable accounts use derivatives as an investment to gain market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost. Derivative instruments include purchased options, futures contracts, and forward foreign currency exchange contracts for the Global Governments Variable Account, futures contracts for the Government Securities Variable Account and swap agreements for the High Yield Variable Account.

Purchased Options – Certain variable accounts may purchase call or put options for a premium. Purchasing call options may be a hedge against an anticipated increase in the dollar cost of securities to be acquired or to increase the variable account’s exposure to the underlying instrument. Purchasing put options may hedge against a decline in the value of portfolio securities. The premium paid is included as an investment in the Statement of Assets and Liabilities and is subsequently adjusted to the current value of the option. Premiums paid for purchased options which have expired are treated as realized losses on investments in the Statement of Operations. Premiums paid for purchased options which are exercised or closed are added to the amount paid or offset against the proceeds on the underlying security or financial instrument to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid.

Futures Contracts – Certain variable accounts may enter into futures contracts for the delayed delivery of securities or currency, or contracts based on financial indices at a fixed price on a future date. In entering such contracts, the variable accounts are required to deposit with the broker either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by the variable account each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the variable accounts. Upon entering into such contracts, the variable accounts bear the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the variable accounts may not achieve the anticipated benefits of the futures contracts and may realize a loss.

Forward Foreign Currency Exchange Contracts – Certain variable accounts may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the contract. The variable accounts may enter into forward foreign currency exchange contracts for hedging purposes as well as for non-hedging purposes. For hedging purposes, the variable accounts may enter into contracts to deliver or receive foreign currency it will receive from or require for its normal investment activities. The

49

Notes to Financial Statements — continued

variable accounts may also use contracts in a manner intended to protect foreign currency denominated securities from declines in value due to unfavorable exchange rate movements. For non-hedging purposes, the variable accounts may enter into contracts with the intent of changing the relative exposure of the variable accounts portfolio of securities to different currencies to take advantage of anticipated changes. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded as unrealized until the contract settlement date. On contract settlement date, the gains or losses are recorded as realized gains or losses on foreign currency transactions.

Swap Agreements – Certain variable accounts may enter into swap agreements. A swap is an exchange of cash payments between the variable accounts and another party. Net cash payments are exchanged at specified intervals and are recorded as a realized gain or loss in the Statement of Operations. The value of the swap is adjusted daily and the change in value, including accruals of periodic amounts of interest to be paid or received, is recorded as unrealized appreciation or depreciation in the Statement of Operations. Amounts paid or received at the inception of the swap are reflected as premiums paid or received on the Statement of Assets and Liabilities and are amortized using the effective interest method over the term of the agreement. A liquidation payment received or made upon early termination is recorded as a realized gain or loss in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the variable accounts custodian in connection with these agreements. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include the possible lack of a liquid market, failure of the counterparty to perform under the terms of the agreements, and unfavorable market movement of the underlying instrument. All swap agreements entered into by the variable accounts with the same counterparty are generally governed by a single master agreement, which provides for the netting of all amounts owed by the parties under the agreement upon the occurrence of an event of default, thereby reducing the credit risk to which such party is exposed.

The High Yield Variable Account holds a credit default swap in which one party makes a stream of payments based on a fixed percentage applied to the notional amount to another party in exchange for the right to receive a specified return in the event of a default by a third party, such as a corporate issuer or foreign issuer, on its obligation. The variable accounts may enter into credit default swaps to limit or to reduce its risk exposure to defaults of corporate and sovereign issuers or to create direct or synthetic short or long exposure to corporate debt securities or certain sovereign debt securities to which it is not otherwise exposed.

Loans and Other Direct Debt Instruments – Certain variable accounts may invest in loans and loan participations or other receivables. These investments may include standby financing commitments, including revolving credit facilities, which obligate the variable account to supply additional cash to the borrower on demand. At December 31, 2007, the High Yield Variable Account had unfunded loan commitments of $18,188, which could be extended at the option of the borrower and which are covered by sufficient cash and/or liquid securities held by the variable account. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary.

Indemnifications – Under each variable account’s organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the variable account. Additionally, in the normal course of business, each variable account enters into agreements with service providers that may contain indemnification clauses. Each variable account’s maximum exposure under these agreements is unknown as this would involve future claims that may be made against the variable account that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. For the Money Market Variable Account all premium and discount is amortized and accreted for financial statement purposes and tax reporting purposes in accordance with generally accepted accounting principles and federal tax regulations, respectively. For all other variable accounts, all premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. All discount is accreted for tax reporting purposes as required by federal income tax regulations. Certain variable accounts earn certain fees in connection with their floating rate loan purchasing activities. These fees are in addition to interest payments earned and may include amendment fees, commitment fees, facility fees, consent fees, and prepayment fees. Commitment fees are recorded on an accrual basis as income in the accompanying financial statements. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the variable account is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date.

The variable accounts may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the variable accounts or in unrealized gain/loss if the security is still held by the variable accounts. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

Fees Paid Indirectly – The variable accounts custody fees may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the variable accounts. This amount, for the year ended December 31, 2007, is shown as a reduction of total expenses on the Statement of Operations.

Federal Income Taxes – The variable accounts are funding vehicles for individual variable annuities. The operations of the variable accounts are part of the operations of Sun Life Assurance Company of Canada (U.S.), the Sponsor, and are not taxed separately; the variable accounts are not taxed as regulated investment companies. The Sponsor qualifies for the federal income tax treatment granted to life insurance companies under Subchapter L of the Internal Revenue Code. Accordingly, no provision for federal income or excise tax is necessary. Foreign taxes have been provided for on interest and dividend income earned on foreign investments in accordance with the applicable country’s tax rates and to the extent unrecoverable are recorded as a reduction of investment income.

50

Notes to Financial Statements — continued

(3) Contract Charges

The Sponsor makes a deduction from the variable accounts at the end of each valuation period, during both the accumulation period and after annuity payments begin, for assuming the mortality and expense risks under the contracts. The rate of the deduction may be changed annually but in no event may it exceed 1.25% of the average net assets of each variable account attributable to Compass 3 contracts, or, with respect to Compass 2 contracts, 1.30% of the assets of Capital Appreciation Variable Account, Government Securities Variable Account, High Yield Variable Account, and Money Market Variable Account, or 1.25% of the assets of Global Governments Variable Account, and Total Return Variable Account attributable to such contracts.

For assuming the distribution expense risk under Compass 3 contracts, the Sponsor makes a deduction from the variable accounts at the end of each valuation period for the first seven contract years at an effective annual rate of 0.15% of the net assets of the variable accounts attributable to such contracts. Contracts are transferred from Compass 3 to Compass 3 — Level 2 in the month following the seventh contract anniversary. No deduction is made after the seventh contract anniversary. No deduction is made with respect to assets attributable to Compass 2 contracts.

Each year, on the contract anniversary, a contract maintenance charge of $25 with respect to Compass 2 contracts and $30 with respect to Compass 3 contracts is deducted from each contract’s accumulation account and paid to the Sponsor to cover administrative expenses relating to the contract. After the annuity commencement date, the annual contract maintenance charge is deducted pro rata from each annuity payment made during the year.

The Sponsor does not deduct a sales charge from purchase payments. However, a withdrawal charge (contingent deferred sales charge) may be deducted to cover certain expenses relating to the sale of the contract. In no event shall the aggregate withdrawal charges (including the distribution expense charge described above applicable to Compass 3 contracts) exceed 5% of the purchase payments made under a Compass 2 contract or 9% of the purchase payments made under a Compass 3 contract.

(4) Annuity Reserves

Annuity reserves for contracts with annuity commencement dates prior to February 1, 1987 have been calculated using the 1971 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates between February 1, 1987 and December 31, 1998 have been calculated using the 1983 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates on or after January 1, 1999 have been calculated using the Annuity Mortality 2000 table. Annuity reserves for contracts in payment period are calculated using an assumed interest rate of 4%. Required adjustments are accomplished by transfers to or from the Sponsor.

(5) Transactions with Affiliates

Each variable account has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the variable accounts. The management fee is computed daily and paid monthly at the following annual rates based on a percentage of each variable account’s average daily net assets:

	Annual Rate of Management Fee Based on Average Daily Net Assets Not Exceeding $300 Million		Annual Rate of Management Fee Based on Average Daily Net Assets In Excess of $300 Million		Effective Management Fees
Capital Appreciation Variable Account	0.75	%	0.675	%	0.75	%
Global Governments Variable Account	0.75	%	0.675	%	0.75	%
Government Securities Variable Account	0.55	%	0.495	%	0.55	%
High Yield Variable Account	0.75	%(a)	0.675	%	0.70	%
Money Market Variable Account	0.50	%(b)	0.50	%(b)	0.50	%
Total Return Variable Account	0.75	%	0.675	%	0.75	%

(a) The investment adviser had agreed to reduce its management fee to 0.70% for the first $300 million of average daily net assets. This written agreement will continue through August 31, 2008, unless changed or rescinded by the variable account’s Board of Managers. This management fee reduction amounted to $27,575, which is shown as a reduction of total expenses in the Statement of Operations.

(b) The investment adviser has agreed in writing to reduce its management fee to 0.45% of average daily net assets in excess of $500 million. This written agreement may be rescinded only upon consent of the variable account’s Board of Managers. For the year ended December 31, 2007, the Money Market Variable Account’s average daily net assets did not exceed $500 million, and therefore, the management fee was not reduced.

The investment adviser has agreed in writing to pay each variable account’s operating expenses, exclusive of certain expenses and charges, such that total annual operating expenses do not exceed 1.25% annually of each variable account’s average daily net assets. These agreements are contained in the investment advisory agreement between MFS and the variable accounts and may not be rescinded without shareholder approval. For the year ended December 31, 2007, this reduction amounted to $73,812 for the Global Governments Variable Account and is reflected as a reduction of total expenses in the Statement of Operations. Each of the other variable accounts did not exceed the limit and therefore, the investment adviser did not pay any portion of the variable accounts’ expenses. In addition, the investment adviser has agreed in writing to pay the High Yield Variable Account’s total annual operating expenses, exclusive of certain expenses and charges, such that total annual operating expenses do not exceed 0.90% annually of the High Yield Variable Account’s average daily net assets. This written agreement will continue through August 31, 2008 unless changed or rescinded by the variable account’s Board of Managers. The High Yield Variable Account did not exceed the limit and therefore, the investment adviser did not pay any portion of the variable account’s expenses.

51

Notes to Financial Statements — continued

Effective September 1, 2007, the investment adviser has agreed in writing to pay the Capital Appreciation Variable Account’s and Total Return Variable Account’s total annual operating expenses, exclusive of certain expenses and charges, such that total annual operating expenses do not exceed 0.82% and 0.85%, respectively, annually of the variable account’s average daily net assets. These written agreements will continue through August 31, 2008 unless changed or rescinded by the variable accounts’ Board of Managers. For the year ended December 31, 2007, this reduction amounted to $28,483 and $28,332, for the Capital Appreciation Variable Account and Total Return Variable Account, respectively.

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each variable account. Under an administrative services agreement, each variable account partially reimburses MFS the costs incurred to provide these services. Each variable account is charged an annual fixed amount of $10,000 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2007, was equivalent to the following annual effective rate of the variable accounts’ average daily net assets:

	Capital Appreciation Variable Account		Global Governments Variable Account		Government Securities Variable Account		High Yield Variable Account		Money Market Variable Account		Total Return Variable Account
Percent of average daily net assets	0.0263	%	0.1150	%	0.0255	%	0.0253	%	0.0258	%	0.0262	%

Managers’ and Officers’ Compensation – Each variable account pays compensation to managers in the form of a retainer, attendance fees, and additional compensation to the Board chairperson. Each variable account does not pay compensation directly to officers who are affiliated with the Investment Adviser or the Sponsor. Certain officers of the variable accounts are officers or directors of MFS, MFD, (MFS Fund Distributors, Inc.), and MFSC ( MFS Service Center, Inc.).

Other – These variable accounts and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO. For the year ended December 31, 2007, the fees paid to Tarantino LLC were as follows:

Capital Appreciation Variable Account	$	1,002
Global Governments Variable Account		42
Government Securities Variable Account		348
High Yield Variable Account		267
Money Market Variable Account		223
Total Return Variable Account		846

(6) Portfolio Securities

Purchases and sales of investments, other than U.S. government securities, purchased option transactions, and short-term obligations were as follows:

	Purchases		Sales
Capital Appreciation Variable Account	$	127,156,238	$	170,234,197
Global Governments Variable Account		8,578,078		9,862,812
Government Securities Variable		1,320,720		4,032,461
High Yield Variable Account		35,267,304		42,696,618
Total Return Variable Account		77,332,576		101,671,253

Purchases and sales of investments for the Money Market Variable Account, exclusive of securities subject to repurchase agreements, aggregated $733,719,714 and $742,283,689 respectively.

Purchases and sales of U.S. government securities, other than purchased option transactions and short-term obligations, were as follows:

	Purchases		Sales
Global Governments Variable Account	$	2,427,131	$	2,668,126
Government Securities Variable Account		23,326,940		31,779,966
Total Return Variable Account		15,532,051		16,255,615

52

Notes to Financial Statements — continued

(7) Participant Transactions

The changes in net assets from changes in numbers of outstanding units were as follows:

	Year Ended December 31, 2007 (000 Omitted)
	Purchase Payments Received			Transfers Between Variable Accounts and Fixed Accumulation Account					Withdrawals, Surrenders, Annuitizations, and Contract Charges					Net Accumulation Activity					Net Annuitization Activity			Net Increases (Decrease)
	Units	Dollars		Units		Dollars			Units		Dollars			Units		Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts	14	$	843	(65	)	$	(3,891	)	(388	)	$	(23,761	)	(439	)	$	(26,809	)	$	(361	)	$	(27,170	)
Compass 3 Contracts	12		478	(50	)		(1,999	)	(17	)		(695	)	(55	)	$	(2,216	)		0	*		(2,216	)
Compass 3 – Level 2 Contracts	105		1,762	(14	)		(186	)	(798	)		(13,454	)	(707	)		(11,878	)		(36	)		(11,914	)
		$	3,083			$	(6,076	)			$	(37,910	)			$	(40,903	)	$	(397	)	$	(41,300	)
Global Governments Variable Account
Compass 2 Contracts	1	$	34	(7	)	$	(170	)	(13	)	$	(339	)	(19	)	$	(475	)	$	(3	)	$	(478	)
Compass 3 Contracts	2		62	(3	)		(68	)	(2	)		(65	)	(3	)		(71	)		0	*		(71	)
Compass 3 – Level 2 Contracts	6		86	12			175		(89	)		(1,372	)	(71	)		(1,111	)		9			(1,102	)
		$	182			$	(63	)			$	(1,776	)			$	(1,657	)	$	6		$	(1,651	)
Government Securities Variable Account
Compass 2 Contracts	10	$	383	(36	)	$	(1,401	)	(243	)	$	(9,579	)	(269	)	$	(10,597	)	$	18		$	(10,579	)
Compass 3 Contracts	5		141	(8	)		(234	)	(9	)		(244	)	(12	)		(337	)		—			(337	)
Compass 3 – Level 2 Contracts	23		364	(25	)		(406	)	(163	)		(2,615	)	(165	)		(2,657	)		(4	)		(2,661	)
		$	888			$	(2,041	)			$	(12,438	)			$	(13,591	)	$	14		$	(13,577	)
High Yield Variable Account
Compass 2 Contracts	7	$	304	(21	)	$	(860	)	(147	)	$	(5,999	)	(161	)	$	(6,555	)	$	(162	)	$	(6,717	)
Compass 3 Contracts	4		115	(10	)		(311	)	(7	)		(192	)	(13	)		(388	)		0	*		(388	)
Compass 3 – Level 2 Contracts	18		283	(85	)		(1,383	)	(128	)		(2,050	)	(195	)		(3,150	)		(6	)		(3,156	)
		$	702			$	(2,554	)			$	(8,241	)			$	(10,093	)	$	(168	)	$	(10,261	)
Money Market Variable Account
Compass 2 Contracts	8	$	165	184		$	3,917		(233	)	$	(4,971	)	(41	)	$	(889	)	$	(66	)		(955	)
Compass 3 Contracts	11		190	(59	)		(1,035	)	(19	)		(326	)	(67	)		(1,171	)		(7	)		(1,178	)
Compass 3 – Level 2 Contracts	54		708	306			4,017		(458	)		(6,003	)	(98	)		(1,278	)		(34	)		(1,312	)
		$	1,063			$	6,899				$	(11,300	)			$	(3,338	)	$	(107	)	$	(3,445	)
Total Return Variable Account
Compass 2 Contracts	10	$	543	18		$	932		(236	)	$	(12,501	)	(208	)	$	(11,026	)	$	(2	)	$	(11,028	)
Compass 3 Contracts	14		733	(28	)		(1,444	)	(21	)		(1,098	)	(35	)		(1,809	)		0	*		(1,809	)
Compass 3 – Level 2 Contracts	93		2,319	82			2,074		(754	)		(18,828	)	(579	)		(14,435	)		(133	)		(14,568	)
		$	3,595			$	1,562				$	(32,427	)			$	(27,270	)	$	(135	)	$	(27,405	)

* Amount less than $500

53

Notes to Financial Statements — continued

	Year Ended December 31, 2006 (000 Omitted)
	Purchase Payments Received			Transfers Between Variable Accounts and Fixed Accumulation Account					Withdrawals, Surrenders, Annuitizations, and Contract Charges					Net Accumulation Activity					Net Annuitization Activity			Net Increases (Decrease)
	Units	Dollars		Units		Dollars			Units		Dollars			Units		Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts	28	$	1,602	(78	)	$	(4,354	)	(549	)	$	(30,610	)	(599	)	$	(33,362	)	$	(159	)	$	(33,521	)
Compass 3 Contracts	20		756	(99	)		(3,657	)	(30	)		(1,105	)	(109	)		(4,006	)		0	*		(4,006	)
Compass 3 – Level 2 Contracts	133		2,035	93			1,464		(1,096	)		(16,818	)	(870	)		(13,319	)		(36	)		(13,355	)
		$	4,393			$	(6,547	)			$	(48,533	)			$	(50,687	)	$	(195	)	$	(50,882	)
Global Governments Variable Account
Compass 2 Contracts	2	$	41	9		$	229		(23	)	$	(568	)	(12	)	$	(298	)	$	1		$	(297	)
Compass 3 Contracts	4		109	(7	)		(177	)	(5	)		(127	)	(8	)		(195	)		(38	)		(233	)
Compass 3 – Level 2 Contracts	8		129	(5	)		(74	)	(68	)		(981	)	(65	)		(926	)		35			(891	)
		$	279			$	(22	)			$	(1,676	)			$	(1,419	)	$	(2	)	$	(1,421	)
Government Securities Variable Account
Compass 2 Contracts	22	$	834	(21	)	$	(771	)	(315	)	$	(11,902	)	(314	)	$	(11,839	)	$	51		$	(11,788	)
Compass 3 Contracts	8		204	(29	)		(763	)	(8	)		(205	)	(29	)		(764	)		—			(764	)
Compass 3 – Level 2 Contracts	27		421	25			376		(278	)		(4,289	)	(226	)		(3,492	)		0	*		(3,492	)
		$	1,459			$	(1,158	)			$	(16,396	)			$	(16,095	)	$	51		$	(16,044	)
High Yield Variable Account
Compass 2 Contracts	9	$	332	(13	)	$	(465	)	(200	)	$	(7,644	)	(204	)	$	(7,777	)	$	(72	)	$	(7,849	)
Compass 3 Contracts	6		163	(13	)		(374	)	(6	)		(158	)	(13	)		(369	)		0	*		(369	)
Compass 3 – Level 2 Contracts	18		266	3			90		(184	)		(2,780	)	(163	)		(2,424	)		(1	)		(2,425	)
		$	761			$	(749	)			$	(10,582	)			$	(10,570	)	$	(73	)	$	(10,643	)
Money Market Variable Account
Compass 2 Contracts	9	$	188	2		$	41		(211	)	$	(4,359	)	(200	)	$	(4,130	)	$	(178	)	$	(4,308	)
Compass 3 Contracts	21		356	(80	)		(1,346	)	(28	)		(473	)	(87	)		(1,463	)		(9	)		(1,472	)
Compass 3 – Level 2 Contracts	62		777	77			963		(554	)		(7,013	)	(415	)		(5,273	)		(34	)		(5,307	)
		$	1,321			$	(342	)			$	(11,845	)			$	(10,866	)	$	(221	)	$	(11,087	)
Total Return Variable Account
Compass 2 Contracts	11	$	492	27		$	1,266		(231	)	$	(11,129	)	(193	)	$	(9,371	)	$	(174	)	$	(9,545	)
Compass 3 Contracts	24		1,119	(74	)		(3,480	)	(25	)		(1,142	)	(75	)		(3,503	)		(48	)		(3,551	)
Compass 3 – Level 2 Contracts	119		2,689	193			4,441		(1,079	)		(24,482	)	(767	)		(17,352	)		(78	)		(17,430	)
		$	4,300			$	2,227				$	(36,753	)			$	(30,226	)	$	(300	)	$	(30,526	)

* Amount less than $500

54

Notes to Financial Statements — continued

(8) Line of Credit

The variable accounts and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, the variable accounts and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the year ended December 31, 2007 the variable accounts’ commitment fee and interest expense are included in miscellaneous expense on the Statement of Operations and were as follows:

	Commitment fee		Interest Expense
Capital Appreciation Variable Account	$	913	$	—
Global Governments Variable Account		39		—
Government Securities Variable Account		319		—
High Yield Variable Account		265		84
Money Market Variable Account		248		—
Total Return Variable Account		805		—

55

Report of Independent Registered Public Accounting Firm

To the Participants in and the Board of Managers of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account and the Board of Directors of Sun Life Insurance Company of Canada:

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account (the “Variable Accounts”) as of December 31, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Variable Accounts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Variable Accounts are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Variable Accounts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account as of December 31, 2007, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

February 19, 2008

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Compass Variable Accounts

Members of Boards of Managers and Officers — Identification and Background

The members of the Boards of Managers (“Managers”) and the officers of each Account, as of February 1, 2008, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Manager and officer is 500 Boylston Street, Boston, Massachusetts 02116.

Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(1)	Principal Occupations During the Past Five Years and Other Directorships(2)
INTERESTED MANAGER
David D. Horn(3) (born 06/07/41)	Manager	April 1986	Private investor; Retired; Sun Life Assurance Company of Canada, Former Senior Vice President and General Manager for the United States (until 1997); Retired: Sun Life Assurance Company of Canada, Director (until March 2004)
INDEPENDENT MANAGERS
J. Kermit Birchfield (born 01/08/40)	Chairman	May 1997	Consultant; Century Partners, Inc. (investments), Director (1988 to present); Displaytech, Inc. (technology), Director (1995 to present); Dessin Fournir LLC (furniture manufacturer), Director (2005 to present); Intermountain Gas Company, Inc. & Intermountain Industries, Inc. (oil & gas exploration and production) (1988 to present); Site Watch LLC (software to monitor oil tanks) Managing Director (2006 to present); Juridica Investments (fund investing in judicial matters) Director (2007 to present); Dairy Mart Convenience Stores, Inc. (convenience stores), Chairman (1977 to 2003)
Robert C. Bishop (born 01/13/43)	Manager	May 2001	AutoImmune, Inc. (pharmaceutical product licensing), Chairman, President and Chief Executive Officer (1992 to present); Caliper Life Sciences Corp. (laboratory analytical instruments), Director (2002 to present); Millipore Corporation (biopharmaceutical/research laboratory products), Director (1997 to present); Optobionics Corporation (ophthalmic devices), Director (2002 to 2007) Quintiles Transnational Corp. (contract research services) Director (until 2003)
Frederick H. Dulles (born 03/12/42)	Manager	May 2001	Ten State International Law PLLC (law firm), Of Counsel (since 2006); Prudential Carolina Real Estate, (real estate), Broker (since 2006); Free Enterprise Foundation, Inc. (research institute), Director & Secretary (until 2008); Disher, Hamrick & Myers Residential, Inc. (real estate) Broker (until 2006); Frederick H. Dulles law practice (until 2006); Ten State Street LLP (law firm), Member (until 2005); McFadden, Pilkington & Ward LLP (solicitors and registered foreign lawyers), Member & Of Counsel (until 2003)

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Members of Boards of Managers and Officers — Identification and Background — continued

Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(1)	Principal Occupations During the Past Five Years and Other Directorships(2)
Marcia A. Kean (born 06/30/48)	Manager	April 2005	Feinstein Kean Healthcare (consulting), Chief Executive Officer (since December 2002), Managing Director (prior to May 2001); Ardais Corporation (biotech products), Senior Vice President – Commercialization (February 2002 until November 2002)
Ronald G. Steinhart (born 06/15/40)	Manager	May 2001	Private investor; Penske Automotive Group (automotive retailer), Director (2001 to present); Penson Worldwide, Inc. (securities clearance), Director (2006 to present); Animal Health International, Inc. (animal health products), Director (2007 to present); Texas Industries (concrete/aggregates/cement), Director (2007 to present); Carreker Corporation (technology consulting) Director (until 2005); Prentiss Properties Trust (real estate investment trust), Director (until 2006)
Haviland Wright (born 07/21/48)	Manager	May 2001	Elixir Technologies Corporation (software) Director (2005 to present); Nano Loa Inc. (liquid crystal displays), Director (2003 to present); Silk Displays, Inc. (smart polymers) Director (2007 to present); Displaytech, Inc. (technology) Chairman and CEO (1995 - 2002)
MANAGER EMERITUS
Samuel Adams (born 10/19/25)	Manager Emeritus		Retired; Kirkpatrick & Lockhart Preston Gates Ellis LLP (law firm), Of Counsel
OFFICERS
Maria F. Dwyer(4) (born 12/01/58)	President	November 2005	Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer (since March 2004); Fidelity Management & Research Company, Vice President (prior to March 2004); Fidelity Group of Funds, President and Treasurer (prior to March 2004)
Tracy Atkinson(4) (born 12/30/64)	Treasurer	September 2005	Massachusetts Financial Services Company, Senior Vice President (since September 2004); PricewaterhouseCoopers LLP, Partner (prior to September 2004)
Christopher R. Bohane(4) (born 01/18/74)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel (since April 2003); Kirkpatrick & Lockhart LLP (law firm), Associate (prior to April 2003)

58

Members of Boards of Managers and Officers — Identification and Background — continued

Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(1)	Principal Occupations During the Past Five Years and Other Directorships(2)
Ethan D. Corey(4) (born 11/21/63)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel (since April 2006); Special Counsel (prior to April 2006); Dechert LLP (law firm), Counsel (prior to December 2004)
David L. DiLorenzo(4) (born 08/10/68)	Assistant Treasurer	July 2005	Massachusetts Financial Services Company, Vice President (since June 2005); JP Morgan Investor Services, Vice President (January 2001 to June 2005)
Timothy M. Fagan(4) (born 07/10/68)	Assistant Secretary and Assistant Clerk	September 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel (since September 2005); John Hancock Advisers, LLC, Vice President and Chief Compliance Officer (September 2004 to August 2005) Senior Attorney (prior to September 2004); John Hancock Group of Funds, Vice President and Chief Compliance Officer (September 2004 to December 2004)
Mark D. Fischer(4) (born 10/27/70)	Assistant Treasurer	July 2005	Massachusetts Financial Services Company, Vice President (since May 2005); JP Morgan Investment Management Company, Vice President (prior to May 2005)
Brian E. Langenfeld(4) (born 03/07/73)	Assistant Secretary and Assistant Clerk	May 2006	Massachusetts Financial Services Company, Assistant Vice President and Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (May 2005 to April 2006); John Hancock Advisers, LLC, Attorney and Assistant Secretary (prior to May 2005)
Ellen Moynihan(4) (born 11/13/57)	Assistant Treasurer	May 1997	Massachusetts Financial Services Company, Senior Vice President
Susan S. Newton(4) (born 03/07/50)	Assistant Secretary and Assistant Clerk	May 2005	Massachusetts Financial Services Company, Senior Vice President and Assistant General Counsel (since April 2005); John Hancock Advisers, LLC, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005); John Hancock Group of Funds, Senior Vice President, Secretary and Chief Legal Officer (prior to April 2005)

59

Members of Boards of Managers and Officers — Identification and Background — continued

Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(1)	Principal Occupations During the Past Five Years and Other Directorships(2)
Susan A. Pereira(4) (born 11/05/70)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel (since June 2004); Bingham McCutchen LLP (law firm), Associate (January 2001 to June 2004)
Mark N. Polebaum(4) (born 05/01/52)	Secretary and Assistant Clerk	February 2006	Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (prior to January 2006)
Frank L. Tarantino (born 03/07/44)	Independent Chief Compliance Officer	September 2004	Tarantino LLC (provider of compliance services), Principal (since June 2004); CRA Business Strategies Group (consulting services), Executive Vice President (April 2003 to June 2004); David L. Babson & Co. (investment adviser), Managing Director, Chief Administrative Officer and Director (February 1997 to March 2003)
Richard S. Weitzel(4) (born 7/16/70)	Assistant Secretary and Assistant Clerk	October 2007	Massachusetts Financial Services Company, Vice President and Assistant General Counsel (since 2007); Vice President and Senior Counsel (since May 2004); Massachusetts Department of Business and Technology, General Counsel (February 2003 to April 2004); Massachusetts Office of the Attorney General, Assistant Attorney General (April 2001 to February 2003); Ropes and Gray, Associate (prior to April 2001)
James O. Yost(4) (born 06/12/60)	Assistant Treasurer	April 1992	Massachusetts Financial Services Company, Senior Vice President

⁽¹⁾ Date first appointed to serve as Manager/Trustee/Officer of an MFS fund or a Compass variable account. Each Manager has served continuously since appointment.

⁽²⁾ Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

⁽³⁾ “Interested person” of the Sun Life of Canada (U.S.), within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the Series. The address of Sun Life of Canada (U.S.) is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

⁽⁴⁾ “Interested person” of MFS within the meaning of the 1940 Act. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.

The Accounts do not hold annual meetings for the purpose of electing Managers, and Managers are not elected for fixed terms. Each Manager and officer holds office until his or her successor is chosen and qualified, or until his or her earlier death, resignation, retirement or removal.

All Managers currently serve as Managers of each Account and have served in that capacity since originally elected or appointed. All of the Managers are also Trustees of the MFS Variable Insurance Trust II. The executive officers of the Compass Variable Accounts hold similar offices for the MFS Variable Insurance Trust II and other funds in the MFS fund complex. As of January 1, 2008, each Manager serves as a Trustee or Manager of 35 Accounts/Funds.

The Statement of Additional Information contains further information about the Managers and is available without charge upon request by calling 1-800-752-7215.

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Board Review of Investment Advisory Agreements

The Investment Company Act of 1940 requires that both the full Board of Managers and a majority of the non-interested (“independent”) Managers, voting separately, annually approve the continuation of each Variable Account’s investment advisory agreement with Massachusetts Financial Services Company (MFS) on behalf of the Variable Accounts. The Managers consider matters bearing on the Variable Accounts and their advisory arrangements at their meetings throughout the year, including a review of performance data at each regular meeting. In addition, the independent Managers met several times over the course of three months beginning in May and ending in July 2007 (“contract review meetings”) for the specific purpose of considering whether to approve the continuation of the investment advisory agreements for the Variable Accounts. The independent Managers were assisted in their evaluation of the investment advisory agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately from MFS management during various contract review meetings. The independent Managers were also assisted in this process by the Variable Accounts’ Independent Chief Compliance Officer, a full-time senior officer appointed by and reporting to the independent Managers.

In connection with their deliberations, the Managers, including the independent Managers, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. Each investment advisory agreement was considered separately for each Variable Account, although the Managers also took into account the common interests of all Variable Accounts in their review. As described below, the Managers considered the nature, quality, and extent of the various investment advisory, administrative, and shareholder services performed by MFS under the existing investment advisory agreements and other arrangements with the Variable Accounts.

In connection with their contract review meetings, the Managers received and relied upon materials which included, among other items: (i) information provided by Lipper Inc. on the investment performance of each Variable Account for various time periods ended December 31, 2006, compared to the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Lipper performance universe”), as well as the investment performance of a group of funds identified by objective criteria suggested by MFS (“peer funds”), (ii) information provided by Lipper Inc. on each Variable Account’s advisory fees and other expenses compared to the advisory fees and other expenses of comparable funds identified by Lipper (the “Lipper expense group”), as well as the advisory fees and other expenses of peer funds identified by objective criteria suggested by MFS, (iii) information provided by MFS on the advisory fees of comparable portfolios of its other clients, including institutional separate account and other clients, (iv) information as to whether, and to what extent applicable, expense waivers, reimbursements or fee “breakpoints” are observed for a Variable Account, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Variable Accounts, (vi) MFS’ views regarding the outlook for the mutual fund industry and its strategic business plans, (vii) descriptions of various functions performed by MFS for the Variable Accounts, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Variable Accounts. The comparative performance, fee and expense information prepared and provided by Lipper Inc. was not independently verified, and the independent Managers did not independently verify any information provided to them by MFS.

The Managers’ conclusions as to the continuation of the investment advisory agreements were based on comprehensive consideration of all information provided to the Managers and not the result of any single factor. Some of the factors that figured particularly in the Managers’ deliberations are described below for each Variable Account, while individual Managers may have given different weight to various factors and evaluated the information presented as a whole differently than another Manager. The Managers recognized that the fee arrangements for the Variable Accounts reflect years of review and discussion between the independent Managers and MFS, that certain aspects of such arrangements may receive greater scrutiny in some years than others, and that the Managers’ conclusions may be based, in part, on their consideration of these same arrangements during the course of the year and in prior years.

Based on information provided by Lipper Inc. and MFS, the Managers compared each Variable Account’s total return investment performance to the performance of peer groups of funds and its Lipper performance universe over the one-, three- and five-year periods. The Managers did not rely on performance results for more recent periods, including those shown elsewhere in this report.

In the course of their deliberations, the Managers took into account information provided by MFS during contract review meetings, as well as during investment review meetings conducted with portfolio management personnel during the course of the year. For Variable Accounts whose performance lagged their peer groups, they discussed the factors that contributed thereto and MFS’ efforts to improve such Variable Account’s performance. After reviewing this information, the Managers concluded, within the context of their overall conclusions regarding the investment advisory agreements, that they were satisfied with MFS’ responses and efforts relating to investment performance.

In assessing the reasonableness of each Variable Account’s advisory fee, the Managers considered, among other information, each Variable Account’s advisory fee and the total expense ratio as a percentage of average daily net assets, compared to the advisory fees and total expense ratios of peer groups of funds based on information provided by Lipper Inc. and MFS. The Managers also considered the advisory fees charged by MFS to institutional accounts. In comparing these fees, the Managers considered the generally broader scope of services provided by MFS to the Variable Accounts than those provided to institutional accounts. The Managers also considered the higher demands placed on MFS’ investment personnel and trading infrastructure as a result of the daily cash in-flows and out-flows of the Variable Accounts, and the impact on MFS and related expenses due to the more extensive regulatory regime to which the Variable Accounts are subject, compared to institutional accounts.

61

The Managers also considered whether a Variable Account is likely to benefit from any economies of scale due to future asset growth. In this regard, the Managers reviewed the adequacy of breakpoints and discussed with MFS any adjustments necessary for the shareholders’ benefit.

The Managers also considered information prepared by MFS relating to its costs and profits with respect to each Variable Account and other investment companies and accounts advised by MFS, as well as MFS’ methodologies used to determine and allocate its costs to the Variable Accounts and other accounts and products for purposes of estimating profitability.

After reviewing these and other factors described below, the Managers concluded that the advisory fees charged to the Variable Accounts represent reasonable compensation in light of the nature and quality of the services being provided by MFS.

In addition, the Managers considered MFS’ resources and related efforts to continue to retain, attract and motivate capable personnel to serve the Variable Accounts. The Managers also considered the financial resources of MFS and its parent, Sun Life Financial Inc. The Managers further considered any advantages and possible disadvantages of having an adviser which also serves other investment companies as well as institutional accounts.

The Managers also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Variable Accounts by MFS and its affiliates under agreements and plans other than the investment advisory agreements. The Managers also considered the nature, extent and quality of certain other services MFS performs or arranges on the Variable Accounts’ behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Managers concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Variable Accounts were satisfactory. The Managers also considered the benefits to MFS from the use of the Variable Accounts’ portfolio brokerage commissions to pay for research and other similar services (including MFS’ current policy not to use “soft dollars” generated by Variable Account portfolio transactions to pay for third-party research), and various other factors. Additionally, the Managers considered so-called “fall-out benefits” to MFS such as reputational value derived from serving as investment manager to the Variable Accounts, and determined that any such benefits derived by MFS were reasonable and fair.

Based on their evaluation of factors that they deemed to be material, including those factors described above, the Board of Managers, including a majority of the independent Managers, concluded that the investment advisory agreements should be continued for an additional one-year period, commencing September 1, 2007.

Capital Appreciation Variable Account

The Managers noted the Variable Account’s performance was in the 3rd quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 4th quintile for the three-year period and the 5th quintile for the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS and MFS’ explanation of steps taken to improve performance, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee was approximately at the median and total expense ratio was above the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account, and noted the expense limitation was reduced for the next year. The Managers further concluded that the existing breakpoints were sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Global Governments Variable Account

The Managers noted the Variable Account’s performance was in the 3rd quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 5th quintile for the three-year period and the 3rd quintile for the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS and MFS’ explanation of steps taken to improve performance, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate was below the median and total expense ratio was above the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account. The Managers further concluded that the existing breakpoints were sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Government Securities Variable Account

The Managers noted the Variable Account’s performance was in the 2nd quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 3rd quintile for the three-year period and the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was satisfactory.

62

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each approximately at the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account. The Managers further concluded that the existing breakpoints were sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

High Yield Variable Account

The Managers noted the Variable Account’s performance was in the 2nd quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 4th quintile for the three-year period and the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS and MFS’ explanation of steps taken to improve performance, the Board of Managers concluded that the Variable Account’s performance was satisfactory.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each above the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its management fee waiver and expense limitation for the Variable Account. The Managers further concluded that the existing breakpoints were sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Money Market Variable Account

The Managers noted the Variable Account’s performance was in the 3rd quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 4th quintile for the three-year period and the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each above the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account, and determined that the waiver was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Total Return Variable Account

The Managers noted the Variable Account’s performance was in the 1st quintile relative to the other funds in the universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 2nd quintile for the three-year period and the 1st quintile for the five-year period ended December 31, 2006, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was satisfactory.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each above the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account. The Managers further concluded that the existing breakpoints were sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

A discussion regarding the Board’s most recent review and renewal of the accounts’ Investment Advisory Agreement with MFS is available by clicking on “Compass” in the “Products and Performance” section of the MFS Web site (mfs.com).

63

MFS^® Privacy Notice

Privacy is a concern for every investor today. At MFS Investment Management^® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.

Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include

• data from investment applications and other forms

• share balances and transactional history with us, our affiliates, or others

• facts from a consumer reporting agency

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.

Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.

If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day between 8 a.m. and 8 p.m. Eastern time.

Note: If you own MFS products or receive MFS services in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

64

Investment Adviser

Massachusetts Financial Services Company

500 Boylston Street, Boston, MA 02116-3741

Custodian and Dividend Disbursing Agent

State Street Bank and Trust Company

225 Franklin Street, Boston, MA 02110-2875

Proxy Voting Policies and Information

A general description of the accounts’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s website at http://www.sec.gov.

Information regarding how the accounts voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s website at http://www.sec.gov.

Quarterly Portfolio Disclosure

The accounts will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The accounts’ Form N-Q may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

Washington, D.C. 20549 0102

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The accounts’ Form N-Q is available on the EDGAR database on the Commission’s Internet website at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfor@sec.gov or by writing the Public Reference Section at the above address.

cous-ann-2/08

Sun Life Financial Distributors Inc.

ITEM 2. CODE OF ETHICS.

The Registrant has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant’s principal executive officer and principal financial and accounting officer. The Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR.

A copy of the Code of Ethics is filed as an exhibit to this Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Messrs. J. Kermit Birchfield, Robert C. Bishop, Ronald G. Steinhart and Haviland Wright, members of the Audit Committee, have been determined by the Board of Managers in their reasonable business judgment to meet the definition of “audit committee financial expert” as such term is defined in Form N-CSR. In addition, Messrs. J. Kermit Birchfield, Robert C. Bishop, Ronald G. Steinhart and Haviland Wright are “independent” members of the Audit Committee as defined in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Items 4(a) through 4(d) and 4(g):

The Board of Managers has appointed Deloitte & Touche LLP (“Deloitte”) to serve as independent accountants to the Account (the “Account”). The tables below set forth the audit fees billed to the Account as well as fees for non-audit services provided to the Account and/or to the Account’s investment adviser, Massachusetts Financial Services Company (“MFS”), and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Account (“MFS Related Entities”).

For the fiscal years ended December 31, 2007 and 2006, audit fees billed to the Account by Deloitte were as follows:

	Audit Fees
	2007	2006
Fees billed by Deloitte:
Money Market Variable Account	21,565	20,790

For the fiscal years ended December 31, 2007 and 2006, fees billed by Deloitte for audit-related, tax and other services provided to the Account and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:

	Audit-Related Fees1		Tax Fees2		All Other Fees4
	2007	2006	2007	2006	2007	2006
Fees billed by Deloitte:
To Money Market Variable Account	0	0	0	0	1,205	379
To MFS and MFS Related Entities of Money Market Variable Account*	1,189,135	981,825	0	0	366,217	418,092

Aggregate fees for non-audit services:

	2007	2006
To Money Market Variable Account, MFS and MFS Related Entities#	2,057,875	1,903,431

^* This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Account (portions of which services also related to the operations and financial reporting of other variable accounts and funds within the MFS Funds complex).

^# This amount reflects the aggregate fees billed by Deloitte for non-audit services rendered to the Account and for non-audit services rendered to MFS and the MFS Related Entities.

¹ The fees included under “Audit-Related Fees” are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under “Audit Fees,” including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews.

² The fees included under “Tax Fees” are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis.

³ The fees included under “All Other Fees” are fees for products and services provided by Deloitte other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees”, including fees for services related to sales tax refunds, consultation on internal cost allocations, consultation on allocation of monies pursuant to an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales, and analysis of certain portfolio holdings verses investment styles.

Item 4(e)(1):

Set forth below are the policies and procedures established by the Audit Committee of the Board of Managers relating to the pre-approval of audit and non-audit related services:

To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Registrant

and all permissible non-audit services rendered to MFS or MFS Related Entities if the services relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 in each period between regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.

Item 4(e)(2):

None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Account and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).

Item 4(f): Not applicable.

Item 4(h): The Registrant’s Audit Committee has considered whether the provision by a Registrant’s independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant’s principal auditors.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the Registrant.

ITEM 6. SCHEDULE OF INVESTMENTS

A schedule of investments of the Registrant is included as part of the report to shareholders of such series under Item 1 of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the Registrant.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (as required by Item 22(b)(15) of Schedule 14A), or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b) There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) File the exhibits listed below as part of this form. Letter or number the exhibits in the sequence indicated.

(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Code of Ethics attached hereto.

(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2): Attached hereto.

(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: Attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) MONEY MARKET VARIABLE ACCOUNT

By (Signature and Title)*	MARIA F. DWYER
	Maria F. Dwyer, President

Date: February 19, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*	MARIA F. DWYER
	Maria F. Dwyer, President (Principal Executive Officer)

Date: February 19, 2008

By (Signature and Title)*	TRACY ATKINSON
	Tracy Atkinson, Treasurer (Principal Financial Officer and Accounting Officer)

Date: February 19, 2008

* Print name and title of each signing officer under his or her signature.