Approximate Date of Proposed Public Offering: As soon as practicable after the registration statement becomes effective.

Title of securities being registered: variable portion of group flexible premium deferred fixed and variable annuity contracts.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

This Prospectus describes FutureFunds Select, a group flexible premium deferred fixed and variable annuity contract (“Contract”) designed for purchase by employers, associations and organizations to fund either tax-qualified retirement programs that qualify for special federal income tax treatment under various sections of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified plans. The Contract provides a variable annuity insurance contract that includes investment divisions (“Variable Accounts”) of FutureFunds Series Account (the “Series Account”), the value of which is based on the investment performance of the corresponding mutual funds (“Eligible Funds”) you select, as listed below. GWFS Equities, Inc. (“GWFS”) is the principal underwriter and distributor of the Contracts. Great-West Life & Annuity Insurance Company (“we,” “us” or “Great-West”) issues Contracts in connection with:

You may be eligible to participate in the Contract if you participate in one of the Plans described above. The owner of a Contract will be an employer, plan trustee, certain employer or employee associations, as applicable (“Contractholder”). Great-West will establish a Participant account (“Participant Account”) in your name. This Participant Account will reflect the dollar value of the Contributions made on your behalf.

Tax deferral under annuity contracts purchased in connection with tax-qualified plans arises under specific provisions of the Code governing the tax-qualified plan, so a Contract should be purchased only for the features and benefits other than tax deferral that are available under an annuity contract purchased in connection with tax-qualified plans, and not for the purpose of obtaining tax deferral.

The Contract offers you a variety of annuity payment options. You can select from options that provide for fixed payments. Depending on the terms of your Plan, other annuity payment options acceptable to Great-West may be available under your Contract, including options that provide for variable payments or a combination of fixed and variable payments. If you select a variable payment option, your payments will reflect the investment experience of the Variable Account(s) you select. Income can be guaranteed for your lifetime and/or your spouse’s lifetime or for a specified period of time, depending on (1) the options made available under the terms of your Plan and the Contract, and (2) your needs and circumstances.

You can allocate your Contributions among several Variable Accounts of the Series Account. Each Variable Account invests all of its assets in one of the corresponding Eligible Funds. Following is a list of each Eligible Fund:

You may also allocate your money to a “Fixed Account” option where you can earn a fixed rate of return on your investment set by Great-West in its sole discretion. Your interest in Fixed Account(s) is not considered a security and is not subject to review by the Securities and Exchange Commission (the “SEC”).

The Variable Account(s) and the Fixed Account(s) available to you will depend on the terms of the Contract. Please consult with the Contractholder and/or the Contract for more information. We offer other variable annuity contracts supported by the Series Account that have different charges and contract features.

This Prospectus presents important information you should read before participating in the Contract. Please read it carefully and retain it for future reference. You can find more detailed information pertaining to the Contract in the Statement of Additional Information (the “SAI”) dated August 14, 2009, which has been filed with the SEC. The SAI is incorporated by reference as a matter of law into this Prospectus, which means that it is legally a part of this Prospectus. Its table of contents may be found on the last page of this Prospectus. The SAI may be obtained without charge by contacting Great-West at its Administrative Offices or by calling (800) 701-8255. You may also obtain the Prospectus, material incorporated by reference, and other information regarding Great-West by visiting the SEC’s Web site at http://www.sec.gov.

This Prospectus does not constitute an offering in any jurisdiction in which such offering may not lawfully be made. No dealer, salesperson or other person is authorized to give any information or make any representations in connection with this offering other than those contained in this Prospectus, and, if given or made, such other information or representations must not be relied on.

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Accumulation Period: The period between the effective date of your participation in the Contract and the Annuity Commencement Date.

Accumulation Unit: The accounting measure described in the Contract and used by Great-West to determine your Variable Account Value during the Accumulation Period.

Administrative Offices: The Administrative Offices of Great-West are located at 8515 E. Orchard Rd., Greenwood Village, Colorado 80111.

Alternate Payee: Any spouse, former spouse, child or other dependent of a Participant who is recognized by a Qualified Domestic Relations Order as having a right to receive all or a portion of the benefit payable under a Plan with respect to such Participant.

Annuity Commencement Date: The date annuity payments begin under an annuity payment option.

Code: The Internal Revenue Code of 1986, as amended from time to time, or any future United States Internal Revenue law that replaces the Internal Revenue Code of 1986. References herein to specific section numbers shall be deemed to include Treasury regulations and Internal Revenue Service guidance thereunder, and to corresponding provisions of any future Internal Revenue law that replaces the Internal Revenue Code of 1986.

Contract: An agreement between Great-West and the Contractholder providing a fixed and/or variable deferred annuity issued in connection with certain retirement plans.

Contractholder: Depending on the type of Plan and the employer’s involvement, the Contractholder will be an employer, plan trustee, certain employer associations or employee associations.

Contribution(s): Purchase payments, eligible rollovers, transfers, payroll deductions and other amounts received by Great-West under the Contract on your behalf and allocated to a Participant Account.

Distribution(s): amounts paid out of the group annuity contract pursuant to the terms of the Plans.

Eligible Fund: A mutual fund, unit investment trust or other investment portfolio in which a Variable Account invests all of its assets.

Fixed Account(s): One or more accounts within the General Account that provides a rate of return into which Contributions may be allocated or the Participant Account Value may be Transferred. Please see your Contract for the available Fixed Accounts. Your interests in the Fixed Account(s) are not securities and are not subject to review by the SEC.

General Account: Great-West’s assets other than those held in any segregated investment account or the Series Account.

Participant: The person who is eligible to and elects to participate in the Contract; sometimes referred to as “you,” “your” or “yours” in this Prospectus.

Participant Account: A separate record in the name of each Participant which reflects his or her share in the Variable Accounts and Fixed Accounts.

Participant Account Value: The total value of your interest under the Contract. It is the total of your Fixed Account Values and Variable Account Values credited to the Participant Account.

Payee: A person entitled to receive all or a portion of the value of the Participant Account.

Plan: The underlying plan document of the Contractholder written in accordance with the applicable sections of the Code. For purposes of Code Section 403(b) annuity programs that do not have a plan document, Plan, when used herein, will mean the provisions and/or rules of the Contractholder’s 403(b) annuity program.

Premium Tax: The amount of tax, if any, charged by a state or other governmental authority.

Qualified Domestic Relations Order: A domestic relations order that creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to receive all or a portion of the benefits payable with respect to a Participant and that complies with the requirements of the Code and the Employee Retirement Income Security Act of 1972, as amended (“ERISA”), if applicable, and is approved by the Plan.

Request: An inquiry or instruction in a form satisfactory to Great-West. A valid Request must be: (1) received by Great-West at its Administrative Offices; (2) approved by the Contractholder, or the Contractholder’s designee; and (3) submitted in accordance with the provisions of the Contract, or as required by Great-West.

Restorations: A type of Start-Up Cost incurred by us when we agree to restore any back-end load charges, market value adjustments, or other investment charges deducted from Plan assets under a prior investment option.

Series Account: FutureFunds Series Account, a segregated investment account established by Great-West into which Contributions may be invested or the Participant Account Value may be Transferred. The Series Account is registered as a unit investment trust under the Investment Company Act of 1940 and consists of the individual Variable Accounts.

Start-Up Costs: The amounts incurred by Great-West in acquiring and implementing the Plan, which may include but are not limited to restorations, commissions or other costs.

Transfer: When you move all or a portion of your Participant Account Value from one Variable Account, Fixed Account or provider to another.

Valuation Date: The date on which the net asset value of each Variable Account is determined. This calculation is made as of the close of business of the New York Stock Exchange (generally 4:00 p.m. ET). It is also the date on which Great-West will process any Contribution or Request received. Contributions and Requests received after the close of trading on the New York Stock Exchange (generally 4:00 p.m. ET) will be deemed to have been received on the next Valuation Date. Your Participant Account Value will be determined on each day that the New York Stock Exchange is open for trading. On the day after Thanksgiving, however, you can only submit transaction Requests by automated voice response unit, via the Internet or by an automated computer link. The day after Thanksgiving is a Valuation Date.

Variable Account: Divisions of the Series Account, one for each Eligible Fund. Each Variable Account has its own Accumulation Unit value.

The following tables describe the fees and expenses that you, as a Participant, will pay under the Contract. The first table describes the fees and expenses that you will pay at the time you allocate Contributions, surrender or transfer cash value between investment options. State Premium Tax may also be deducted.

The next table describes the fees and expenses that you will pay periodically during the time that you are a Participant under the Contract, not including Eligible Fund fees and expenses.

SERIES ACCOUNT ANNUAL EXPENSES (as a percentage of average Variable Account Value)

The next item shows the minimum and maximum total operating expenses charged by the Eligible Funds that you may pay periodically during the time that you are a Participant under the Contract. More detail concerning each Eligible Fund's fees and expenses is contained in the prospectus for each Eligible Fund.

¹ In addition to the listed transaction expenses, each of which are described in more detail in this prospectus and the Contract, one or more of the Eligible Funds may impose special transaction fees, such as redemption fees, based on Participant activity. In the event an Eligible Fund imposes such a fee, that fee will be deducted from the Participant Account Value. The Eligible Funds’ prospectuses describe these fees and deductions.

² Upon termination of the Contract by the Contractholder, a Contract Termination Charge may apply, which is a percentage of the original Start-Up Costs based on a schedule that declines over a period of time and is mutually agreed upon by the Contractholder and Great-West. Depending on the terms of the Plan, the Contract Termination Charge may be paid for by the Contractholder or pro rated across Participant Accounts. For more information about the Contract Termination Charge, please see “Contract Termination Charge” on page __.

⁴ The VAC is deducted from each Variable Account’s Accumulation Unit value on each Valuation Date in accordance with the Net Investment Factor formula described in Appendix A. Please see “Charges and Deductions: Variable Asset Charge Deduction” on page __ for more information.

⁵ Ten of the Eligible Funds, the Maxim Profile Portfolios and the Maxim Lifetime Asset Allocation Portfolios, operate as "fund of funds" that invest substantially all of their assets in shares of other Maxim Series Fund Portfolios, portfolios in the same group of investment companies as the Maxim Series Fund and portfolios of unaffiliated investment companies (the “Underlying Portfolios”). Because of this, the Maxim Profile Portfolios and the Maxim Lifetime Asset Allocation Portfolios also bear their pro rata share of the operating expenses of the Underlying Portfolios. The above minimum and maximum expenses include fees and expenses incurred indirectly by the Maxim Profile Portfolios and the Maxim Lifetime Asset Allocation Portfolios as a result of their investment in shares of one or more Underlying Portfolios.

⁶ The expenses shown are based, in part, on estimated amounts for the current fiscal year, and do not reflect any fee waiver or expense reimbursement. The advisers and/or other service providers of certain Eligible Funds have agreed to reduce their fees and/or reimburse the Eligible Fund's expenses in order to keep the Eligible Fund's expenses below specified limits. The expenses of certain Eligible Funds are reduced by contractual fee reduction and expense reimbursement arrangements. Other Eligible Funds have voluntary fee reduction and/or expense reimbursement arrangements that may be terminated at any time. Each fee reduction and/or expense reimbursement arrangement is not reflected above, but is described in the relevant Eligible Fund's prospectus.

THE ABOVE EXPENSES FOR THE ELIGIBLE FUNDS WERE PROVIDED BY THE FUNDS. WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.

This Example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include a Participant’s transaction expenses, contract fees, variable account annual expenses, and Eligible Fund fees and expenses.

The Example assumes that you invest $10,000 under the Contract for the time periods indicated. The Example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Eligible Funds. In addition, this Example assumes no transfers were made and no premium taxes were deducted.¹ If these arrangements were considered, the expenses shown would be higher. This Example also does not take into consideration any fee waiver or expense reimbursement arrangements of the Eligible Funds. If these arrangements were taken into consideration, the expenses shown would be lower.

Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

(1) If you surrender your contract at the end of the applicable time period:

(2) If you annuitize your contract OR if you do not surrender your contract at the end of the applicable time period:

The examples do not show the effect of premium taxes. Premium taxes (ranging from 0% to 3.5%) are deducted upon full surrender, death or annuitization. The examples also do not include any of the taxes or penalties you may be required to pay if you withdraw all or part of your Participant Account Value.

The Fee Tables and Example should not be considered a representation of past or future expenses and charges of the Eligible Funds. Your actual expenses may be greater or less than those shown. Similarly, the 5% annual rate of return assumed in the Example is not an estimate or a guarantee of future investment performance.

¹ This Example does not assume application of a Contract Termination Charge, which, may or may not apply upon Termination depending on the terms of the Plan. If it applies, the Contract Termination Charge is as a percentage of the original Start-Up Costs based on a schedule that declines over a period of time and is mutually agreed upon by the Contractholder and Great-West. Depending on the terms of the Plan, the Contract Termination Charge may be paid for by the Contractholder or pro rated across Participant Accounts. For more information about the Contract Termination Charge, please see “Contract Termination Charge” on page __.

Because the class of Accumulation Units available in the Contract was not offered before the date of this Prospectus, we did not have and therefore could not include Accumulation Unit values as of December 31, 2008.

Great-West is a stock life insurance company originally organized under the laws of the State of Kansas as the National Interment Association. Its name was changed to Ranger National Life Insurance Company in 1963 and to Insuramerica Corporation prior to changing to its current name in February of 1982. In September of 1990, Great-West redomesticated and is now organized under the laws of the state of Colorado.

Great-West is authorized to engage in the sale of life insurance, accident and health insurance and annuities. It is qualified to do business in Puerto Rico, the District of Columbia, the U.S. Virgin Islands, Guam and 49 states in the United States.

Great-West is an indirect wholly owned subsidiary of Great-West Lifeco, Inc., a holding company. Great-West Lifeco, Inc. is in turn a subsidiary of Power Financial Corporation, a financial services company. Power Corporation of Canada, a holding and management company, has voting control of Power Financial Corporation. Mr. Paul Desmarais, through a group of private holding companies that he controls, has voting control of Power Corporation of Canada.

Great-West has primary responsibility for administration of the Contract and the Series Account. Its Administrative Offices are located at 8515 E. Orchard Road, Greenwood Village, Colorado 80111.

Great-West originally established the Series Account under Kansas law on November 15, 1983. The Series Account now exists and is governed pursuant to Colorado law as a result of our redomestication. The Series Account consists of Variable Accounts and is registered with the SEC under the Investment Company Act of 1940, as a unit investment trust. This registration does not involve supervision of the Series Account or Great-West by the SEC.

We do not guarantee the investment performance of the Variable Accounts. The portion of your Participant Account Value allocated to the Variable Accounts and the amount of periodic payments depend on the investment performance of the Eligible Funds. Thus, you bear the full investment risk for all Contributions allocated to the Variable Accounts.

The Series Account and its Variable Accounts are administered and accounted for as part of Great-West’s general business. However, the income, gains or losses of each Variable Account are credited to or charged against the assets held in that Variable Account, without regard to other income, gains or losses of any other Variable Account and without regard to any other business Great-West may conduct. Under Colorado law, the assets of the Series Account are not chargeable with liabilities arising out of any other business Great-West may conduct. Nevertheless, all obligations arising under the Contract and other contracts issued by us that are supported by the Series Account are generally corporate obligations of Great-West.

The Series Account currently has several Variable Accounts available for allocation of Contributions. Each Variable Account invests in shares of an Eligible Fund each having a specific investment objective. If Great-West decides to make additional Variable Accounts available to Contractholders, Great-West may or may not make them available to you based on our assessment of marketing needs and investment conditions.

Some Variable Accounts may not be available under your Contract because the Contractholder may decide to offer only a select number of Eligible Funds and the accompanying Variable Accounts under its Plan. Please consult with your Contractholder or employer, as the case may be, or a GWFS authorized representative for more information concerning the availability of Variable Accounts under your Contract.

Each Variable Account invests in an Eligible Fund, which is a separate mutual fund having its own investment objectives and policies and is registered with the SEC as an open-end management investment company or portfolio thereof. The SEC does not supervise the management or the investment practices and policies of any of the Eligible Funds.

Insurance-Dedicated Eligible Funds. Many of the Eligible Funds described in this Prospectus are available only to insurance companies for their variable contracts. These Eligible Funds are often referred to as “insurance dedicated funds,” and are used for “mixed” and “shared” funding. “Mixed funding” occurs when shares of an Eligible Fund, which the Variable Accounts buy for the Contract, are bought for variable life insurance policies issued by us or other insurance companies. “Shared funding” occurs when shares of an Eligible Fund, which the Variable Accounts buy for the Contract, are also bought by other insurance companies for their variable annuity contract.

Some of the Insurance-Dedicated Eligible Funds have been established by investment advisers which manage publicly traded mutual funds having similar names and investment objectives. While some of the Eligible Funds may be similar to, and may in fact be modeled after publicly traded mutual funds, you should understand that the Eligible Funds are not otherwise directly related to any publicly traded mutual fund. Consequently, the investment performance of publicly traded mutual funds and any corresponding Eligible Funds may differ substantially.

Public Eligible Funds. Twenty-one of the Eligible Funds, which the Variable Accounts buy for the Contract, are also available to the general public. Variable Accounts investing in the following public Eligible Funds are not available for non-qualified Plans sponsored by a taxable employer:

Payments We Receive. Some of the Eligible Funds’ investment advisers or administrators may compensate us for providing administrative services in connection with the Eligible Funds or cost savings experienced by the investment advisers or administrators of the Eligible Funds. Such compensation is typically based on an annual percentage of Series Account average net assets held in that Eligible Fund by us. The percentage paid may vary from one Eligible Fund company to another and generally may range up to 0.50% annually of net Series Account assets invested in the Eligible Fund. For certain Eligible Funds, some of this compensation may be paid out of Rule 12b-1 fees (ranging up to 0.50% annually of net Series Account assets in the Eligible Fund) that are deducted from Eligible Fund assets for providing distribution services related to shares of Eligible Funds offered in connection with a Rule 12b-1 plan. Any such fees deducted form Eligible Fund assets are disclosed in the Eligible Fund prospectuses. If GWFS receives 12b-1 fees, combined compensation to GWFS and us for administration related services generally ranges up to 0.75% annually of Series Account assets invested in an Eligible Fund.

The following sets forth the investment objective of each Eligible Fund and summarizes its principal investment strategy. There is no assurance that any of the Eligible Funds will achieve their respective objectives.

Maxim Money Market Portfolio seeks as high a level of current income as is consistent with the preservation of capital and liquidity. Investment in the Maxim Money Market Portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the portfolio seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in this portfolio.The portfolio seeks to meet this objective by investing in short-term securities that are issued or guaranteed by the U.S. Government or its agencies or instrumentalities, including U.S. Treasury obligations, backed by the full faith and credit of the U.S. Government, and securities of agencies of the U.S. Government including, but not limited to, the Federal Home Loan Mortgage Corporation, Federal National Mortgage Association and the Federal Home Loan Bank that carry no government guarantees. The portfolio also invests in high-quality, short term debt securities. These securities will have a rating in one of the two highest rating categories for short-term debt obligations by at least one nationally recognized statistical rating organization such as Moody’s Investor Services, Inc. or Standard & Poor’s Corporation (or unrated securities of comparable quality). The portfolio invests in securities which are only denominated in U.S. dollars and securities with a weighted average maturity of less than 90 days.

Maxim Bond Index Portfolio seeks investment results, before fees, that track the total return of the debt securities that comprise the Barclays Capital Aggregate Bond Index (the “Barclays Capital Index”). The portfolio uses a sampling technique designed to give the portfolio the relevant comparable attributes of the Barclays Capital Index. This may be accomplished through a combination of debt securities ownership and owning futures contracts on the Barclays Capital Index and options on futures contracts.

Maxim Loomis Sayles Bond Portfolio seeks high total investment return through a combination of current income and capital appreciation. Under normal circumstances, this portfolio will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in fixed income securities. The portfolio focuses on good relative value based on the credit outlook of the issuer, good structural fit within the objectives and constraints of the portfolio, and maximum total return potential. It may invest up to 20% in preferred stocks, convertible preferred stocks or foreign securities (however, securities of Canadian issuers and securities issued by supranational agencies (e.g., the World Bank) are not subject to this 20% limitation) and up to 35% in below investment grade quality (“high yield/high risk” or “junk”) bonds.

Maxim U.S. Government Mortgage Securities Portfolio seeks the highest level of return consistent with preservation of capital and substantial credit protection. Under normal circumstances, this portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in mortgage related securities that have been issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities. The portfolio may invest in private mortgage pass-through securities and collateralized mortgage obligations (CMOs). CMOs may be issued by private issuers and collateralized by securities issued or guaranteed by (i) the U.S. Government, (ii) agencies or instrumentalities of the U.S. Government, or (iii) private originators. The portfolio may also invest up to 20% of its net assets in a mortgage dollar rolls. In a mortgage dollar roll transaction, the portfolio sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar securities (the same type, issuer, term and coupon) on a specified future date from the same party. The portfolio may also invest in commercial mortgage-backed securities, asset-backed securities, and investment grade corporate bonds. The portfolio focuses on relative value of the security by analyzing the current and expected level of interest rates, and current and historical asset yields versus treasury yields.

Maxim Ariel Small-Cap Value Portfolio seeks long-term capital appreciation. Under normal circumstances, this portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in the securities of issuers classified in the small or medium/small capitalization quintiles of the Russell 3000^® Index at the time of initial purchase. This portfolio will emphasize small companies that are believed to be undervalued but demonstrate a strong potential for growth. The portfolio actively seeks investments in companies that achieve excellence in both financial return and environmental soundness, selecting issuers that take positive steps toward preserving our environment. The portfolio will not invest in issuers primarily engaged in the manufacture of tobacco, handguns, or the production of nuclear energy.

Maxim Loomis Sayles Small-Cap Value Portfolio seeks long-term capital growth. Under normal circumstances, this portfolio will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in equity securities of companies with market capitalizations that fall within the capitalization range of the Russell 2000^® Index, an index that tracks stocks of 2000 of the smallest U.S. companies in the Russell 3000^® Index. The portfolio seeks to build a core small-cap portfolio of common stocks of solid growth companies that the portfolio’s sub-adviser believes are under-valued in the market and opportunistically invests in companies that have experienced significant

business problems but which are believed to have favorable prospects for recovery. The portfolio invests the remainder of its available net assets in securities of companies with market capitalizations outside of the Russell 2000^® Index market capitalization range.

Maxim Index 600 Portfolio seeks investment results, before fees, that track the total return of the common stocks that comprise the following Benchmark Index: S&P SmallCap 600^® Stock Index.¹ The portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in common stocks of the Benchmark Index. The portfolio seeks to own the securities contained in the Benchmark Index in as close as possible a proportion as each stock’s weight in the Benchmark Index. This may be accomplished through ownership of all stocks in the Benchmark Index and/or through a combination of stock ownership and owning futures contracts on the Benchmark Index and options on futures contracts, and Exchange Traded Funds that seek to track the Benchmark IndexMaxim Stock Index Portfolio seeks investment results, before fees, that track the total return of the common stocks that comprise the following Benchmark Indexes: Standard & Poor’s (S&P) 500 Composite Stock Price Index and the S&P MidCap 400^® Index, weighted according to their respective pro-rata share of the market.¹ The portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in common stocks of the Benchmark Indexes. The portfolio seeks to own the securities contained in the Benchmark Indexes in as close as possible a proportion as each stock’s weight in the Benchmark Indexes. This may be accomplished through ownership of all stocks in the Benchmark Indexes and/or through a combination of stock ownership and owning futures contracts on the Benchmark Indexes and options on futures contracts, and Exchange Traded Funds that seek to track the Benchmark Indexes.

Maxim T. Rowe Price Equity/Income Portfolio seeks substantial dividend income and also long-term capital appreciation. Under normal circumstances, this portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in common stocks, with 65% in the common stocks of well-established companies paying above-average dividends. The portfolio emphasizes companies with favorable prospects for increasing dividend income and, secondarily, capital appreciation. The portfolio seeks to invest in companies which have one or more of the following characteristics: established operating histories; above-average current dividend yields relative to the S&P 500^® Index; sound balance sheets and other financial characteristics; low price/earnings ratio relative to the S&P 500^® Index; low stock price relative to a company’s underlying value as measured by assets, cash flow or business franchises. Under normal market conditions, substantial dividend income means that the yield on the portfolio’s securities generally exceeds the yield on the portfolios benchmark. In pursuing its investment objective, the portfolio’s sub-adviser has the discretion to purchase some securities that do not meet its normal criteria, as described above, when it perceives an unusual opportunity for gain. These special situations might arise when the portfolio’s sub-adviser believes a security could increase in value for a variety of reasons including a change in management, an extraordinary corporate event, or a temporary imbalance in the supply or demand for the securities. While most assets will be invested in U.S. common stock, other securities may also be purchased, including futures and options, in keeping with the portfolio’s objectives. The portfolio may invest up to 25% of its total assets in foreign securities. The portfolio may also invest in fixed income securities without regard to quality, maturity, or rating, including up to 10% in non-investment grade fixed income securities. The portfolio may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. Certain investment restrictions, such as required minimum or maximum investment in a particular type of security are measured at the time the portfolio purchases a security. The status, market value, maturity, credit quality, or other characteristics of the portfolio’s securities may change after they are purchased, and this may cause the amount of the portfolio’s assets invested in such securities to exceed the stated maximum restriction or fall below the stated minimum restriction. If any of these changes occur, it would not be considered a violation of the investment restriction. However, purchases by the portfolio during the time it is above or below the stated percentage restriction would be made in compliance with applicable restrictions.

Maxim Ariel MidCap Value Portfolio seeks long-term capital appreciation. Under normal circumstances, this portfolio will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in the securities of issuers classified in the medium/small, medium, or medium/large capitalization quintiles of the Russell 3000^® Index at the time of initial purchase. The portfolio will emphasize issuers that are believed to be undervalued but demonstrate a strong potential for growth. The portfolio actively seeks investments in companies that achieve excellence in both financial return and environmental soundness, and selecting issuers that take positive steps toward preserving our environment. The portfolio will not invest in issuers primarily engaged in the manufacture of tobacco, handguns, or the production of nuclear energy.

¹ Standard & Poor’s, S&P 500 Composite Index, S&P Mid-Cap Index, S&P Small-Cap 600 Stock Index, S&P/BARRA Value Index and S&P/BARRA Growth Index are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by Maxim Series Fund, Inc. and Great-West Life & Annuity Insurance Company. The Eligible Funds that track those indices are not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of using any index.

Maxim T. Rowe Price MidCap Growth Portfolio seeks long-term capital appreciation. Under normal circumstances, this portfolio will invest at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in the securities of issuers whose market capitalization fall within the range of companies included in either the S&P MidCap 400^® Index or the Russell Midcap^® Growth Index at the time of purchase. The market capitalization of the companies in the portfolio, the S&P MidCap 400^® Index, and the Russell Midcap^® Growth Index will change over time, and the portfolio will not automatically sell or cease to purchase a stock of a company it already owns just because the company’s market capitalization grows or falls outside of the index ranges. The portfolio selects stocks using a growth approach and will invest in companies that: offer proven products or services; have a historical record of above-average earnings growth; demonstrate potential for sustained earnings growth; operate in industries experiencing increasing demand; or have stock prices that appear to undervalue their growth prospects. In pursuing its investment objective, the portfolio’s sub-adviser has the discretion to purchase some securities that do not meet its normal criteria, as described above, when it perceives an unusual opportunity for gain. These special situations might arise when the portfolio’s sub-adviser believes a security could increase in value for a variety of reasons including a change in management, an extraordinary corporate event, or a temporary imbalance in the supply or demand for the securities. While most assets will be invested in U.S. common stock, other securities may also be purchased, including futures and options, in keeping with the portfolio’s objectives. The portfolio may invest up to 25% of its total assets in foreign securities. The portfolio may also invest in fixed-income securities without regard to quality, maturity, or rating, including up to 10% in non-investment grade fixed income securities. The portfolio may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. Certain investment restrictions, such as required minimum or maximum investment in a particular type of security are measured at the time the portfolio purchases a security. The status, market value, maturity, credit quality, or other characteristics of the portfolio’s securities may change after they are purchased, and this may cause the amount of the portfolio’s assets invested in such securities to exceed the stated maximum restriction or fall below the stated minimum restriction. If any of these changes occur, it would not be considered a violation of the investment restriction. However, purchases by the portfolio during the time it is above or below the stated percentage restriction would be made in compliance with applicable restrictions.

Maxim Invesco ADR Portfolio seeks a high total return through capital appreciation and current income, while reducing risk through diversification. Under normal circumstances, this portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in foreign securities that are issued in the form of American Depositary Receipts ("ADRs") or foreign stocks that are registered with the SEC and traded in the U.S. The portfolio can invest up to 20% of its net assets in companies located outside the U.S., including those in emerging markets. The portfolio will select stocks from approximately 2,200 large and medium-sized capitalization companies, with a minimum market capitalization of $1 billion. The portfolio analyzes potential investments through an investment model which compares stock price to measures such as book value, historical return on equity, company’s ability to reinvest capital, dividends, and dividend growth. The most attractive stocks identified by the model are then subjected to primary research on a global sector basis.

Maxim Bernstein International Equity Portfolio seeks long-term capital growth. Under normal circumstances, this portfolio invests at least 80% of its net assets (plus the amount of any borrowings for investment purposes) in equity securities of companies located outside the U.S., including those in emerging markets. The portfolio will focus on the market price of a company’s securities relative to the company’s potential long-term earnings, asset value and cash flow potential. The company’s historical value measures including price/earnings ratio, profit margins and liquidation value will also be considered, but are not limiting factors.

Each of the following five Profile Portfolios seeks to provide an asset allocation program designed to meet certain investment goals based on an investor’s risk tolerance, investment horizon and personal objectives.

Maxim Aggressive Profile I Portfolio seeks long-term capital appreciation primarily through investments in other mutual funds, including mutual funds that are not affiliated with Maxim Series Fund, that emphasize equity investments.

Maxim Moderately Aggressive Profile I Portfolio seeks long-term capital appreciation primarily through investments in other mutual funds, including mutual funds that are not affiliated with Maxim Series Fund, that emphasize equity investments, and, to a lesser degree, emphasize fixed income investments.

Maxim Moderate Profile I Portfolio seeks long-term capital appreciation primarily through investments in other mutual funds, including mutual funds that are not affiliated with Maxim Series Fund, with a relatively equal emphasis on equity and fixed income investments.

Maxim Moderately Conservative Profile I Portfolio seeks capital appreciation primarily through investments in other mutual funds, including mutual funds that are not affiliated with Maxim Series Fund, that emphasize fixed income investments, and to a lesser degree equity investments.

Maxim Conservative Profile I Portfolio seeks capital preservation primarily through investments in other mutual funds, including mutual funds that are not affiliated with Maxim Series Fund, that emphasize fixed income investments.

Each Portfolio seeks capital appreciation and income consistent with its current asset allocation. After the year designated in the name of each Portfolio (“transition year”), the investment objective is to seek income and secondarily, capital growth. Each Portfolio seeks to achieve its objective by investing in a professionally selected mix of other mutual funds and a fixed interest contract issued and guaranteed by Great-West (collectively, the “Underlying Portfolios”) that is tailored for investors planning to retire in (or otherwise begin using the invested funds on), or close to, the transition year. Depending on its risk profile and proximity to the transition year, each Portfolio employs a different combination of investments among different Underlying Portfolios in order to emphasize, as appropriate, growth, income and/or preservation of capital. Over time, each Portfolio’s asset allocation strategy will become more conservative, with greater emphasis on investments that provide for income and preservation of capital, and less on those offering the potential for growth.

The Maxim Lifetime Asset Allocation Portfolios available under the Contract are:

Alger American MidCap Growth Portfolio (Class O) seeks long-term capital appreciation. This portfolio focuses on midsize companies with promising growth potential. Under normal circumstances, the portfolio invests at least 80% of its net assets in the equity securities of companies that, at the time of purchase of the securities, have a market capitalization within the range of companies included in the Russell Midcap^® Growth Index or the S&P MidCap 400 Index, updated quarterly.

Columbia Asset Allocation Fund, Variable Series (Class A) seeks total return, consisting of current income and long-term capital appreciation. Under normal circumstances, the fund invests in a mix of equity and debt securities. The fund’s advisor uses asset allocation as its main investment approach and allocates the Fund’s assets among equity and debt securities based on the advisor’s assessment of the expected risks and returns of each asset class, including large-, middle- and small-capitalization growth and value equity securities, foreign securities, and investment grade, below investment grade and non-investment grade debt securities. With respect to its equity securities investments, the fund invests in companies that have market capitalizations of any size that the advisor believes are undervalued or have the potential for long-term growth. The advisor evaluates the relative attractiveness of each potential investment in constructing the fund’s portfolio by considering a wide variety of factors which may include, among other factors, valuation, fundamentals, quantitative analysis and economic and market expectations. With respect to its debt securities investments, the fund invests in securities that, at the time of purchase, are rated investment grade or are unrated but determined by the advisor to be of comparable quality. The fund also may invest up to 10% of net assets in debt securities that, at the time of purchase, are rated below investment grade or are unrated but determined by the advisor to be of comparable quality, which are commonly referred to as “junk bonds.” The fund invests at least 25% of total assets in debt securities, including preferred stocks, at all times. The fund may invest in derivatives, including futures, options, swap contracts and other derivative instruments. The fund may invest in derivatives for both hedging and non-hedging purposes, including, for example, to seek to enhance returns or as a substitute for a position in an underlying asset. The fund may invest in mortgage- and other asset-backed securities. The fund also may participate in mortgage dollar rolls up to the fund’s then current position in mortgage backed securities. The fund also may invest up to 25% of net assets in foreign securities. The advisor may sell a security when the fund’s asset allocation changes; the security’s price reaches a target set by the advisor; if the advisor believes that there is deterioration in the

issuer’s financial circumstances or fundamental prospects, or that other investments are more attractive; or for other reasons.

Fidelity VIP Contrafund^® Portfolio (Initial Class) seeks long-term capital appreciation by investing primarily in common stocks. The portfolio normally invests its assets in securities of companies whose value is believed to be not fully recognized by the public. The portfolio may invest in domestic and foreign issuers and may also invest in either “growth” or “value” stocks or both. The portfolio uses fundamental analysis of each issuer’s financial condition and industry position and market and economic conditions to select investments.

Fidelity VIP Growth Portfolio (Initial Class) seeks capital appreciation primarily by investing in common stocks. The portfolio normally invests its assets primarily in common stocks of companies that are believed to have above-average growth potential (stocks of these companies are often called ‘growth’ stocks). The portfolio may also invest in domestic and foreign issuers. The portfolio uses fundamental analysis of each issuer’s financial condition and industry position and market and economic conditions to select investments.

Janus Aspen Worldwide Portfolio (Institutional Shares) (formerly Janus Aspen Worldwide Growth Portfolio (Institutional Shares)) seeks long-term growth of capital in a manner consistent with the preservation of capital. The portfolio invests in common stocks of companies of any size throughout the world. The portfolio normally invests in issuers from several different countries, including the United States. The portfolio may, under certain circumstances, invest in a single country. The portfolio may have significant exposure to emerging markets. Within the parameters of its specific investment policies, the portfolio may invest in foreign equity and debt securities.

Pioneer Equity Income VCT Portfolio (Class II) seeks current income and long-term growth of capital by investing in a portfolio consisting of primarily income producing equity securities of U.S. corporations.

American Century Equity Income Fund (Investor Class) seeks to provide current income. Capital appreciation is a secondary objective. The portfolio managers look for equity securitieswith a favorable income-paying history that have prospects for dividend payments to continue or increase. The portfolio managers also look for equity securities of companies that they believe are undervalued and have the potential for an increase in price. The fund seeks to receive dividend payments that provide a yield that exceeds the yield of the stocks comprising the S&P 500^® Index.

American Century Income & Growth Fund (Investor Class) seeks long-term capital growth by investing in common stocks. Income is a secondary objective. The fund invests primarily in large capitalization publicly traded U.S. companies. The fund considers large capitalization companies to be those with a market capitalization greater than $2 billion. To select stocks for purchase, the portfolio managers use quantitative management techniques in a two-step process. In the first step, the portfolio managers rank stocks from most attractive to least attractive. This is determined by using a quantitative model that combines measures of a stock’s value, as well as measures of its growth potential. To measure value, the managers use ratios of stock price-to-book value and stock price-to-cash flow, among others. To measure growth, the managers use the rate of growth of a company’s earnings and changes in its earnings estimates, as well as measures of its growth potential. To measure value, the fund managers use ratios of stock price-to-book value and stock price-to-cash flow, among others. To measure growth, the fund managers use, among others, the rate of growth of a company’s earnings and changes in its earnings estimates, as well as other factors. In the second step, the managers use a technique called portfolio optimization. In portfolio optimization, the managers use a computer to build a portfolio of stocks from the ranking described above that they believe will provide the optimal balance between risk and expected return. The goal is to create a fund that provides better returns than its benchmark without taking on significant additional risk. In building the fund’s portfolio, the portfolio managers also attempt to create a dividend yield that will be greater than that of the S&P 500^® Index.

American Funds Growth Fund of America (Class R3) seeks to provide growth of capital. The fund invests primarily in common stocks. The basic investment philosophy of the investment adviser is to seek to invest in

attractively valued companies that, in its opinion, represent good long-term investment opportunities. The investment adviser believes that an important way to accomplish this is through fundamental analysis, which may include meeting with company executives and employees, suppliers, customers and competitors. Securities may be sold when the investment adviser believes that they no longer represent relatively attractive investment opportunities. The fund may invest up to 15% of its assets in securities of issuers domiciled outside the United States and Canada and not included in Standard & Poor's 500 Composite Index. Investments outside the United States may be subject to certain risks. The fund may invest up to 10% of its assets in lower quality nonconvertible debt securities (rated Ba or below by Moody’s Investors Service and BB or below by Standard & Poor’s Corporation or unrated but determined to be of equivalent quality). The values of debt securities may be affected by changing interest rates and by changes in effective maturities and credit ratings of these securities. The fund's investment adviser attempts to reduce these risks through diversification of the portfolio and with ongoing credit analysis of each issuer, as well as by monitoring economic and legislative developments.

Artisan International Fund (Investor Class) seeks maximum long-term capital growth. Under normal market conditions, this fund invests no less than 65% of its net assets at market value in stocks of non-U.S. companies, including up to 20% of its net assets at market value at the time of purchase in emerging and less developed markets, in a portfolio that is broadly diversified by country, industry and company.

Columbia Mid Cap Value Fund (Class R) seeks long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of net assets in equity securities of U.S. companies that have market capitalizations in the range of the companies in the Russell Midcap^® Value Index at the time of purchase, that the fund’s advisor believes are undervalued and have the potential for long-term growth. The fund may invest up to 20% of its total assets in foreign securities. The fund may also invest in real estate investment trusts. The fund’s advisor combines fundamental and quantitative analysis with risk management in identifying value opportunities and constructing the fund’s portfolio. The fund’s advisor considers, among other factors: (1) businesses that are believed to be fundamentally sound and undervalued due to investor indifference, investor misperception of company prospects, or other factors; (2) various measures of valuation, including price-to-cash flow, price-to-earnings, price-to-sales, and price-to-book value (the funds advisor believes that companies with lower valuations are generally more likely to provide opportunities for capital appreciation); (3) a company’s current operating margins relative to its historic range and future potential; and (4) indicators of stock price appreciation, such as anticipated earnings growth, company restructuring, changes in management, business model changes, new product opportunities, or anticipated improvements in macroeconomic factors. The fund’s advisor may sell a security when the security’s price reaches a target set by the fund’s advisor; if the fund’s advisor believes that there is deterioration in the issuer’s financial circumstances or fundamental prospects, or that other investments are more attractive; or for other reasons.

Davis New York Venture Fund (Class R) seeks long-term growth of capital. The fund invests in equity securities issued by large companies with market capitalizations of at least $10 billion.

Federated Capital Appreciation Fund (Class A) seeks to provide capital appreciation. Under normal market conditions, the fund invests primarily in common stock of companies with large and medium market capitalizations that offer superior growth prospects or of companies whose stock is undervalued.

Franklin Small-Mid Cap Growth Fund (Class A) seeks long-term capital growth. Under normal market conditions, the fund invests at least 80% of its net assets in equity securities of U.S. small cap and mid cap companies. Shareholders will be given 60 days' advance notice of any change to this policy. The fund considers mid cap companies to be companies with market cap values not exceeding $8.5 billion and small cap companies to be companies with market cap values not exceeding: (i) $1.5 billion; or (ii) the highest market cap value in the Russell 2000^® Index; whichever is greater at the time of purchase. The Russell 2000^® Index consists of 2,000 small companies that have publicly traded securities. Market capitalization is defined as share price multiplied by the number of common stock shares outstanding. In most instances, the fund manager intends to continue to hold an investment for further capital growth opportunities even if, through market appreciation, the company's market cap value exceeds the small or mid cap measures described above.

Janus Fund seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund invests primarily in common stocks selected for their growth potential. Although the fund may invest in companies of any size, it generally invests in larger, more established companies. As of December 31, 2008, the fund’s weighted average market capitalization was $51.8 billion.

Janus Twenty Fund seeks long-term growth of capital. Under normal market conditions, it seeks to meet this objective by investing primarily in common stocks selected for their growth potential. The fund normally invests primarily in a core group of 20-30 common stocks selected for their growth potential.

Janus Worldwide Fund seeks long-term growth of capital in a manner consistent with the preservation of capital. The fund invests primarily in common stocks of companies of any size located throughout the world. The fund normally invests in issuers from several different countries, including the United States; however, the fund may, under unusual circumstances, invest in fewer than five countries or even a single country. The fund may have significant exposure to emerging markets. Within the parameters of its specific investment policies, the portfolio may invest in foreign equity and debt securities.

Lord Abbett Value Opportunities Fund (Class A) seeks long-term capital appreciation. To pursue this objective, the fund normally invests at least 65% of its net assets in equity securities of small and mid-sized companies. Small and mid-sized companies are defined as companies having a market capitalization at the time of purchase that falls within the market capitalization range of companies in the Russell 2500^® Index, a widely used benchmark for small and mid-sized stock performance. The market capitalization range for the Russell 2500^® Index as of June 30, 2008, following its annual reconstitution, was $56 million to $10.1 billion. This range varies daily. The fund may change this policy at any time. Equity securities in which the fund may invest include common stocks, convertible bonds, convertible preferred stocks, warrants and similar instruments. Common stocks, the most familiar type of equity security, represent and ownership interest in a company. In selecting investments, the fund attempts to invest in the securities of smaller, less well-known companies, and mid-sized companies, selling at reasonable prices in relation to the fund’s assessment of their potential value. The fund chooses stocks using:

The fund generally sells a stock when it thinks it is no longer undervalued, seems less likely to benefit from the current market and economic environment, shows deterioration fundamentals, or falls short of the fund’s expectations. The fund seeks to remain fully invested in accordance with its investment objective. However, in an attempt to respond to adverse economic, market, political or other conditions that are unfavorable for investors, the fund may invest its assets in a temporary defensive manner by holding all or a substantial portion of its assets in cash, cash equivalents or other high quality short-term investments, money market fund shares, and other money market instruments. The fund also may invest in these types of securities or hold cash while looking for suitable investment opportunities or to maintain liquidity. When investing in this manner, the fund may be unable to achieve its investment objective. The fund is intended for investors who are willing to withstand the risk of short-term price fluctuations in exchange for attractive potential long-term returns.

Oppenheimer Capital Appreciation Fund (Class A) seeks capital appreciation. Under normal market conditions, the fund invests mainly in common stocks of “growth companies.” These may be newer companies or established companies of any capitalization range that the investment adviser believes may appreciate in value over the long term.

Oppenheimer Global Fund (Class A) seeks capital appreciation. Under normal market conditions, the fund invests mainly in common stocks of U.S. and foreign companies. The fund can invest without limit in foreign securities and can invest in any country, including countries with developed or emerging markets. However, the fund currently emphasizes investments in developed markets such as the United States, Western Europe countries and Japan. The fund does not limit its investments to companies in a particular capitalization range, but currently focuses its investments in mid- and large-cap companies. The fund is not required to allocate its investments in any set

percentages in any particular countries. As a fundamental policy, the fund normally will invest in at least three countries (one of which may be the United States). Typically, the fund invests in a number of different countries.

PIMCO Total Return Fund (Administrative Class) seeks maximum total return, consistent with preservation of capital and prudent investment management. Under normal market conditions, the fund seeks to achieve its investment objective by investing at least 65% of its total assets in a diversified portfolio of fixed income instruments of varying maturities. The average fund duration normally varies within two years (plus or minus) of the duration of the Barclay’s Capital U.S. Aggregate Index.

Putnam High Yield Advantage Fund (Class R) seeks high current income. Capital growth is a secondary goal when consistent with achieving high current income. The fund invests mainly in bonds that: (1) are obligations of U.S. companies; (2) are below investment-grade in quality; and (3) have intermediate-to long-term maturities (three years or longer). Under normal circumstances, the fund invests at least 80% of the fund’s net assets in securities rated below investment grade.

Putnam International Capital Opportunities Fund (Class R) seeks long-term capital appreciation. The fund invests mainly in common stocks of companies outside of the United States that the fund believes have favorable investment potential. For example, the fund may purchase stocks of companies with stock prices that reflect a value lower than that which the fund places on the company. The fund also considers other factors it believes will cause the stock price to rise. The fund invests mainly in small and midsized companies, although the fund can invest in companies of any size. Although the fund emphasizes investments in developed countries, the fund may also invest in companies located in developing (also known as emerging) markets.

RidgeWorth Small Cap Growth Stock Fund (Class I) seeks to provide long-term capital appreciation. The fund generally invests at least 80% of its net assets in U.S. traded equity securities of small cap companies. U.S. traded equity securities may include American Depository Receipts (“ADRs”). The subadviser considers small cap companies to be companies with market capitalizations similar to those companies in the Russell 2000^® Value Index. As of July 1, 2008, the market capitalization range of companies in the Russell 2000^® Value Index was between approximately $36 million and $4 billion. In selecting investments for the Fund, the subadviser chooses companies that it believes are undervalued in the market relative to the industry sector and the company’s own valuation history.

Royce Total Return Fund (Class K) seeks both long-term growth of capital and current income. The fund invests its assets primarily in the dividend-paying securities of small- and micro-cap companies. Of the more than 7,100 small- and micro-cap companies, more than 1,900 currently pay dividends. Investing in such securities may tend to stabilize the volatility inherent in the prices of small- and micro-cap securities. Normally, the fund invests at least 65% of its net assets in equity securities. At least 90% of these securities will produce dividend or interest income to the fund, and at least 65% will be issued by companies with stock market capitalizations up to $2.5 billion at the time of investment. Although the fund normally focuses on the securities of U.S. companies, it may invest up to 25% of its net assets in foreign securities.

RS Small Cap Growth Fund seeks capital appreciation. The fund normally invests at least 80% of its net assets in equity securities of companies that RS Investments believes have the potential for more rapid growth than the overall economy. Although the fund may invest without limit in companies of any size, it is likely, under current market conditions, that a substantial amount of the fund’s investments will be in companies with market capitalizations (at the time of purchase) of up to 120% of the market capitalization of the largest company included in the Russell 2000^® Index on the last day of the most recent quarter (currently, approximately $10.2 billion, based on the size of the largest company on December 31, 2007). The fund may hold a substantial portion of its assets in cash and cash equivalents, although it will not necessarily do so.

Van Kampen American Value Fund (Class R) seeks to provide a high total return by investing in equity securities of small-to-medium-sized corporations. The fund’s investment adviser seeks to achieve the fund’s investment

objective by investing primarily in a portfolio of equity securities of small-medium-sized U.S. corporations. The fund’s investment adviser seeks attractively valued companies experiencing a change that could have a positive impact on a company’s outlook. The fund emphasizes a value style of investing, seeking securities of companies that the fund’s investment adviser believes are undervalued. Portfolio securities are typically sold when the fund’s investment adviser no longer believes such securities are undervalued. Under normal market conditions, the fund invests at least 65% of its total assets in equity securities of small-medium-sized companies. The fund invests in equity securities including common and preferred stocks; investment grade convertible securities and equity-linked securities; and rights and warrants to purchase common stocks and other equity interests, such as partnership trust interests. The fund may invest up to 20% of its total assets in real estate investment trusts. The fund may invest up to 20% of its total assets in foreign securities. The fund may purchase and sell certain derivative instruments, such as options, future contracts, options on futures contracts and forward contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks.

Van Kampen Comstock Fund (Class R) seeks to provide a high total return by investing in equity securities of small to medium sized corporations. The fund’s investment adviser seeks to achieve the fund’s investment objective by investing primarily in a portfolio of equity securities of small to medium sized U.S. corporations. The fund’s investment adviser seeks attractively valued companies experiencing a change that could have a positive impact on a company’s outlook. The fund emphasizes a value style of investing, seeking securities of companies that the fund’s investment adviser believes are undervalued. Portfolio securities are typically sold when the fund’s investment adviser no longer believes such securities are undervalued. Under normal market conditions, the fund invests at least 65% of its total assets in equity securities of small-medium-sized companies. The fund invests in equity securities including common and preferred stocks; investment grade convertible securities and equity-linked securities; and rights and warrants to purchase common stocks and other equity interests, such as partnership and trust interests. The fund may invest up to 20% of its total assets in real estate investment trusts. The fund may invest up to 20% of its total assets in foreign securities. The fund may purchase and sell certain derivative instruments, such as options, future contracts, options on futures contracts and forward contracts, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks.

Alger American Fund is advised by Fred Alger Management, Inc., 111 Fifth Avenue, New York, New York 10003.

American Century Investor Class Equity Income Fund and American Century Income & Growth Fund are advised by American Century Investment Management, Inc., 4500 Main Street, Kansas City, Missouri 64111.

American Funds Growth Fund of America is advised by Capital Research and Management Company, 333 South Hope Street, Los Angeles, California 90071.

Artisan International Fund is advised by Artisan Partners Limited Partnership, 875 East Wisconsin Avenue, Suite 800, Milwaukee, Wisconsin 53202.

Columbia Funds Variable Investment Trust is advised by Columbia Management Advisors, Inc., One Financial Center, Boston, MA 02111.

Columbia Mid Cap Value Fund is advised by Columbia Management Advisors, LLC, 100 Federal Street, Boston, MA 02110.

Davis New York Venture Fund is advised by Davis Selected Advisers, L.P., 2949 East Elvira Road, Suite 101, Tucson, Arizona 85706.

Federated Equity Funds are advised by Federated Equity Management Company of Pennsylvania, Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222.

Fidelity Variable Insurance Products Fund is advised by Fidelity Management & Research Company, 2 Devonshire Street, Boston Massachusetts 02109.

Franklin Small-Mid Cap Growth Fund is advised by Franklin Advisory, Inc., One Franklin Parkway, San Mateo, California 94403.

Janus Aspen Series is advised by Janus Capital Management LLC, 151 Detroit Street, Denver, Colorado 80206.

Janus Worldwide Fund, Janus Fund and Janus Twenty Fund are advised by Janus Capital Management LLC, 151 Detroit Street, Denver, Colorado 80206.

Lord Abbett Value Opportunities Fund is advised by Lord, Abbett & Co. LLC, 90 Hudson Street, Jersey City, New Jersey 07302-3973.

Maxim Series Fund, Inc. is advised by GW Capital Management, LLC (doing business as Maxim Capital Management, LLC (“MCM”)), 8515 E. Orchard Road, Greenwood Village, Colorado 80111, a wholly owned subsidiary of Great-West.

Oppenheimer Funds are advised by OppenheimerFunds, Inc., Two World Financial Center, 225 Liberty Street, 11^th Floor, New York, New York 10281.

PIMCO Funds are advised by Pacific Investment Management Company LLC, 840 Newport Center Drive, Newport Beach, California 92660.

Pioneer Variable Contracts Trust is advised by Pioneer Investment Management, Inc., 60 State Street, Boston, Massachusetts 02109.

Putnam High Yield Advantage Fund and Putnam International Capital Opportunities Fund are managed by Putnam Investment Management, LLC, One Post Office Square, Boston, MA 02109.

RidgeWorth Funds are managed by RidgeWorth Capital Management, Inc., 50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303.

Royce Total Return Fund is advised by Royce & Associates, LLC, 1414 Avenue of the Americas, New York, New York 10019.

RS Small Cap Growth Fund is advised by RS Investment Management Co. LLC, 388 Market Street, Suite 1700, San Francisco, California 94111.

Van Kampen American Value Fund is advised by Van Kampen Asset Management, 522 Fifth Avenue, New York, New York 10036.

Van Kampen Comstock Fund is advised by Van Kampen Asset Management, 1221 Avenue of the Americas, New York, New York 10020.

Maxim Series Fund currently operates under a manager-of-managers structure under an SEC order granting exemptions, which permits MCM, without shareholder approval, to hire sub-advisers to manage the investment and reinvestment of the assets of the Portfolios of Maxim Series Fund, Inc. These sub-advisers are subject to the review and supervision of MCM and the board of directors of Maxim Series Fund, Inc.

Ariel Capital Management, LLCserves as the sub-adviser to the Maxim Ariel Mid-Cap Value Portfolio and the Maxim Ariel Small-Cap Value Portfolio. Ariel is located at 200 E. Randolph Drive, Chicago, Illinois 60601.

BNY Investment Advisors serves as the sub-adviser of the Maxim Stock Index, Maxim Index 600, Maxim Growth Index and Maxim Value Index Portfolios. BNY is located at One Wall Street, New York, New York 10286.

Invesco Global Asset Management (N.A.), Inc.serves as the sub-adviser to the Maxim Invesco ADR Portfolio. Invesco Global Asset Management (N.A.), Inc. is located at 1360 Peachtree Street, Atlanta, Georgia 30309.

Loomis, Sayles & Company, LP ("Loomis Sayles") serves as the sub-adviser to the Maxim Loomis Sayles Bond Portfolio and the Maxim Loomis Sayles Small-Cap Value Portfolio. Loomis Sayles is located at One Financial Center, Boston, Massachusetts 02111.

Alliance Capital Management L.P. ("Alliance") serves as the sub-advisor for the Maxim Bernstein International Equity Portfolio. Alliance is located at 1345 Avenue of the Americas, New York, New York, 10105.

T. Rowe Price Associates, Inc. serves as the sub-adviser to the Maxim T. Rowe Price Equity/Income Portfolio and the Maxim T. Rowe Price MidCap Growth Portfolio. T. Rowe Price is located at 100 East Pratt Street, Baltimore, Maryland 21202. It is a wholly owned subsidiary of the T. Rowe Price Group, Inc.

All dividend distributions and capital gains made by an Eligible Fund will be automatically reinvested in shares of that Eligible Fund on the date of distribution. We will redeem Eligible Fund shares to the extent necessary to make annuity or other payments under the Contracts.

Meeting investment objectives depends on various factors, including, but not limited to, how well the Eligible Fund managers anticipate changing economic and market conditions. There is no guarantee that any of these Eligible Funds will achieve their stated objectives.

Additional information about the Eligible Funds can be found in the current prospectuses for the Eligible Funds, which can be obtained by calling Great-West at (800) 701-8255, or by writing to Great-West at D790 – Great-West Retirement Services^® Marketing, P.O. Box 1700, Denver, Colorado 80201-9952. The Eligible Funds' prospectuses should be read carefully before you make a decision to invest in a Variable Account.

The Contract is generally purchased by employers or certain associations or organizations to fund their retirement plans. We issue the Contract in connection with:

The Contract is generally owned by the employer, association or organization. For Contracts issued in connection with certain 403(b) Plans, the Contractholder has no right, title or interest in the amounts held under the Contract and the Participants make all elections under the Contract. For all other plans, Participants have only those rights that are specified in the Plan.

Eligible organizations may acquire a Contract by completing and sending to us the appropriate forms. Once we approve the forms, we issue a Contract to the Contractholder. If you are eligible to participate in the Plan, you may purchase an interest in a Contract by completing an enrollment form and giving it to your employer or Contractholder, as applicable or a GWFS representative. Your Participant enrollment form will be forwarded to us for processing. Please consult with your employer or the Contractholder, as the case may be, for information concerning your eligibility to participate in the Plan and the Contract.

Your employer will send us Contributions on your behalf. Except as limited by the Code or your Plan, there is no minimum amount or number of Contributions. You can make Contributions at any time before your Annuity Commencement Date. We will receive a report of the amount paid as Contributions and this report is conclusive and binding on the Contractholder and any person or entity claiming an interest under the Contract. When the Contractholder’s report does not coincide with the Contributions received and the inconsistency is not resolved within a period of time required under the law, Great-West will return the Contribution to the payor.

When we approve your Participant enrollment form we will establish a Participant Account in your name to reflect all of your transactions under the Contract. You will receive a statement of your Participant Account Value no less frequently than annually. You may also review your Participant Account Value through KeyTalk^® or via the Internet.

Subject to the terms of your Contract, in all instances where the Contractholder has elected to be billed for fees and charges under the Contract and any of the fees or charges remain unpaid for a specified period after the date billed, the Contractholder, in accordance with terms of the Plan, may instruct Great-West to debit Participant Accounts in the

amount of the invoice not paid. Great-West may continue to deduct charges and fees quarterly from Participant Accounts unless and until the Contractholder provides Great-West with written instructions to reinitiate billing.

In general, the interest of any Participant or Contractholder may not be transferred, sold, assigned, pledged, charged, encumbered or in any way alienated by any of them.

If your Participant Enrollment Form is complete, we will allocate your initial Contributions to the Variable Accounts or Fixed Account according to the instructions you provide on your Participant Enrollment Form within two business days of receipt of the Participant Enrollment Form at our Administrative Offices. If your enrollment form is incomplete, we will contact you or the Contractholder to obtain the missing information. If your Participant Enrollment Form remains incomplete for five business days, Great-West will immediately return your Contribution(s). If Great-West completes a Participant Enrollment Form within five business days of Great-West’s receipt of the incomplete enrollment form, Great-West will allocate your initial Contribution within two business days of the Participant Enrollment Form’s completion in accordance with your allocation instructions. However, if your Participant Enrollment Form is incomplete solely because you have not provided complete allocation instructions, Great-West will consider the Participant Enrollment Form to be complete if the Plan has made an election with respect to the selection of a default investment option to which such funds are to be allocated. Upon completion of your Participant Enrollment Form, the initial Contribution will be allocated to the Variable Account(s) or Fixed Account(s) as you instruct on your Participant Enrollment Form. In any event, if your Participant Enrollment Form remains incomplete after 105 days, Great-West will return your Contribution along with investment earnings, if any.

Where required by law, the Participant may have the ability to cancel his or her interest in the Contract for any reason by delivering or mailing a Request to cancel to our Administrative Offices or to an authorized agent of Great-West within 15 days or a period of time required by state law after Great-West receives the Participant’s completed application form. We must receive the Participant’s cancellation Request in person or postmarked prior to the expiration of the free look period. Upon cancellation, we will refund the greater of (1) Contributions, less partial withdrawals; or, (2) the Participant’s Participant Account Value.

Great-West will allocate subsequent Contributions according to the allocation instructions you provided in the Participant Enrollment Form. Great-West will allocate Contributions on the Valuation Date we receive them.

You may change your allocation instructions at any time by Request. Such change will be effective the later of (1) the date you specify in your Request or (2) the Valuation Date on which Great-West receives your Request at our Administrative Offices. Once you change your allocation instructions, those instructions will be effective for all subsequent Contributions until you elect to change them again.

Any Contribution that causes a Participant Account Value to exceed $1,000,000 may require Great-West’s prior approval.

All Requests, Contributions and Deposits received in good order with all required documentation at Great-West’s Administrative Offices prior to the close of business of the New York Stock Exchange (generally 4:00 p.m. Eastern Time) will be processed as of the date received, and if received after the close of business of the New York Stock Exchange will be processed on the next Business Day. However, Great-West shall not be liable for the results of any delay or interruption due to causes or conditions beyond its control, including, without limitation, labor disputes, riots, war and war-like operations including acts of terrorism, epidemics, explosions, sabotage, acts of God, failure of power, fire or other casualty, natural disaster or disruptions in orderly trading on any relevant exchange or market, including disruptions due to extraordinary market volume that results in substantial delay in receipt of correct data.

Before the Annuity Commencement Date, your Participant Account Value is the total value of your Variable Account Value and the Fixed Account Value credited to your Participant Account.

Before the Annuity Commencement Date, the Variable Account Value is the sum of your interest in the Variable Accounts. Your Variable Account Value reflects the value of the Accumulation Units credited to you in each Variable Account.

The value of a Participant’s interest in a Variable Account is the total dollar amount of all Accumulation Units credited to you. When you allocate Contributions or make Transfers to a Variable Account, Great-West credits you with Accumulation Units. Great-West determines the number of Accumulation Units credited to you by dividing your Contribution, less any applicable premium tax, or Transfer to a Variable Account by that Variable Account’s Accumulation Unit value. The number of Accumulation Units will decrease for charges deducted and Transfers, withdrawals or loans, if available, from the Variable Account.

Great-West determines the Accumulation Unit value on each Valuation Date. Great-West calculates each Variable Account’s Accumulation Unit value at the end of each Valuation Period by multiplying the value of that unit at the end of the prior Valuation Period by the Variable Account’s Net Investment Factor for the Valuation Period. The formula used to calculate the Net Investment Factor is set forth in Appendix A. Your Variable Account Value reflects the value of the Accumulation Units credited to you in each Variable Account.

The value of a Variable Account’s assets is determined at the end of each Valuation Date.

Your Variable Account Value will reflect the investment performance of the selected Variable Account(s) which in turn reflect the investment performance of the corresponding Eligible Fund(s), which we factor in by using the Net Investment Factor referred to above.

If the Contractholder has selected Fixed Account(s) under your Contract, please see your Contract for information regarding the Fixed Account Value.

Prior to your Annuity Commencement Date, you can Transfer your Participant Account Value among the Variable Accounts and Fixed Accounts subject to the limitations of your Contract.

Great-West reserves the right to require a minimum amount that may be transferred and to require the Transfer of the remaining amount held in an investment option if it would be less than the minimum amount we allow to be held in that investment option.

Currently, there is no limit on the number of Transfers you can make among the Variable Accounts each calendar year. However, Great-West reserves the right to limit, upon notice, the number of Transfers you can make.

Great-West will use reasonable procedures in monitoring and accepting telephonic and Internet Transfer Requests designed to ensure that those Requests are genuine such as requiring certain identifying information, tape recording telephone instructions, and providing written confirmation of a transaction. Great-West will not be liable for losses resulting from telephone or Internet Requests reasonably believed to be genuine.

Great-West reserves the right to suspend telephone or Internet transaction privileges at any time, for some or all Contracts, and for any reason.

A Transfer will take effect on the later of the date designated in the Request or the Valuation Date when Great-West receives the Transfer Request at our Administrative Offices. If Great-West receives a Transfer Request within 30 days of the Annuity Commencement Date, Great-West may delay the Annuity Commencement Date by not more than 30 days. Additional Transfer conditions apply to Transfers to or from the Fixed Accounts. Please see your Contract for more information.

We reserve the right without prior notice to modify, restrict, suspend or eliminate the Transfer privileges at any time. Transfer restrictions may be necessary to protect investors from the negative effect large and/or numerous Transfers

can have on portfolio management. Moving large amounts of money may also cause a substantial increase in Eligible Fund transaction costs that must be borne by you.

Although you are permitted to make Transfers by telephone or through the Internet, we reserve the right to require that each Transfer Request be made by a separate communication to us. We also reserve the right to require that each Transfer Request be submitted in writing and be signed by you. Transfer Requests by fax will not be accepted. Transfers among the Variable Accounts may also be subject to terms and conditions imposed by the Eligible Funds.

The Contracts are intended for long-term investment and not for the purpose of market timing or excessive trading activity. Market timing activity may dilute the interests of Participants in the underlying Eligible Funds. Market timing generally involves frequent or unusually large Transfers that are intended to take advantage of short-term fluctuations in the value of an Eligible Fund's portfolio securities and the reflection of that change in the Eligible Fund's share price. In addition, frequent or unusually large Transfers may harm performance by increasing Eligible Fund expenses and disrupting Eligible Fund management strategies. For example, excessive trading may result in forced liquidations of portfolio securities or cause the Eligible Fund to keep a relatively higher cash position, resulting in increased brokerage costs and lost investment opportunities.

We maintain procedures designed to prevent or minimize market timing and excessive trading (collectively, “prohibited trading”) by Participants. As part of those procedures, certain of the Eligible Funds have instructed us to perform standardized trade monitoring, while other Eligible Funds perform their own monitoring and request reports of the Participant's trading activity if prohibited trading is suspected. If a Participant’s trading activity is determined to constitute prohibited trading, as defined by the applicable Eligible Fund, Great-West will notify the Participant that a trading restriction will be implemented if the Participant does not cease the prohibited trading. Some Eligible Funds may require that trading restrictions be implemented immediately without warning, in which case we will notify the Participant and the Plan of the restriction imposed by the Eligible Fund(s), as applicable.

If an Eligible Fund determines, or we determine based on the applicable Eligible Fund’s definition of prohibited trading, that the Participant continues to engage in prohibited trading, we will restrict the Participant from making Transfers into the identified Eligible Fund(s) for the period of time specified by the Eligible Fund(s). Restricted Participants will be permitted to make Transfers out of the identified Eligible Fund(s) to other available Eligible Fund(s). When the Eligible Fund’s restriction period has been met, the Participant will automatically be allowed to resume Transfers into the identified Eligible Fund(s).

Additionally, if prohibited trading persists, the Eligible Fund may, pursuant to its prospectus and policies and procedures, reject all trades initiated by the Plan, including those trades of individuals who are not engaging in prohibited trading. Inherently subjective judgments will be involved if an Eligible Fund decides to reject all trades initiated by a Plan. The discretionary nature of our procedures creates a risk that we may treat some Plans or some Participants differently than others.

Please note that the Series Account's market timing procedures are such that, for Eligible Funds that perform their own monitoring, the Series Account does not impose trading restrictions unless or until an Eligible Fund first detects and notifies us of prohibited trading activity. Accordingly, we cannot prevent all prohibited trading activity before it occurs, as it may not be possible to identify it unless and until a trading pattern is established. To the extent such Eligible Funds do not detect and notify us of prohibited trading or the trading restrictions we impose fail to curtail it, it is possible that a market timer may be able to make prohibited trading transactions with the result that the management of the Eligible Funds may be disrupted and the Participants may suffer detrimental effects such as increased costs, reduced performance, and dilution of their interests in the affected Eligible Funds.

We endeavor to ensure that our procedures are uniformly and consistently applied to all Participants, and we do not exempt any persons from these procedures. A plan sponsor, however, may elect to implement Plan level restrictions to prevent or minimize prohibited trading by Participants. To the extent that such procedures are effective, we may not receive requests for information concerning trading activity from the Eligible Funds or requests to implement the trading restrictions above. In addition, we do not enter into agreements with Participants whereby we permit prohibited trading. Subject to applicable state law and the terms of each Contract, we reserve the right without prior notice to modify, restrict, suspend or eliminate the Transfer privileges (including telephone Transfers) at any time, to require that all Transfer Requests be made by you and not by your designee, and to require that each Transfer Request

be made by a separate communication to us. We also reserve the right to require that each Transfer Request be submitted in writing and be signed by you.

The Eligible Funds may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares. The prospectuses for the Eligible Funds should describe any policies and procedures relating to restricting prohibited trading. The frequent trading policies and procedures of an Eligible Fund may be different, and more or less restrictive, than the frequent trading policies and procedures of other Eligible Funds and the policies and procedures we have adopted to discourage prohibited trading. For example, an Eligible Fund may impose a redemption fee. Participants should also be aware that we are legally obligated to provide (at the Eligible Funds’ request) information about each amount you cause to be deposited into an Eligible Fund (including by way of premium payments and Transfers under your Contract) or removed from the Eligible Fund (including by way of withdrawals and Transfers under your Contract). If an Eligible Fund identifies you as having violated the Eligible Fund’s frequent trading policies and procedures, we are obligated, if the Eligible Fund requests, to restrict or prohibit any further deposits or exchanges by you in respect to that Eligible Fund. Under rules recently adopted by the SEC we are required to: (1) enter into a written agreement with each Eligible Fund or its principal underwriter that will obligate us to provide to the Eligible Fund promptly upon request certain information about the trading activity of individual Participants, and (2) execute instructions from the Eligible Fund to restrict or prohibit further purchases or Transfers by specific Participants who violate the frequent trading policies established by the Eligible Fund. Accordingly, if you do not comply with any Eligible Fund’s frequent trading policies and procedures, you may be prohibited from directing any additional amounts into that Eligible Fund or directing any Transfers or other exchanges involving that Eligible Fund. You should review and comply with each Eligible Fund’s frequent trading policies and procedures, which are disclosed in the Eligible Funds’ current prospectuses.

We may revise our market timing and excessive trading policy and related procedures at our sole discretion, at any time and without prior notice, as we deem necessary or appropriate to comply with state or federal regulatory requirements or to impose additional or alternative restrictions on Participants engaging in prohibited trading. In addition, our orders to purchase shares of the Eligible Funds are generally subject to acceptance by the Eligible Fund, and in some cases an Eligible Fund may reject or reverse our purchase order. Therefore, we reserve the right to reject any Participant's Transfer Request if our order to purchase shares of the Eligible Fund is not accepted by, or is reversed by, an applicable Eligible Fund.

You should note that other insurance companies and retirement plans may also invest in the Eligible Funds and that those companies or plans may or may not have their own policies and procedures on frequent Transfers. You should also know that the purchase and redemption orders received by the Eligible Funds generally are "omnibus" orders from intermediaries such as retirement plans or separate accounts funding variable insurance contracts. Omnibus orders reflect the aggregation and netting of multiple orders from individual retirement plan participants and/or individual owners of variable insurance contracts. The nature of such orders may limit the Eligible Funds' ability to apply their respective frequent trading policies and procedures. As a result, there is a risk that the Eligible Funds may not be able to detect potential prohibited trading activities in the omnibus orders they receive. We cannot guarantee that the Eligible Funds will not be harmed by Transfer activity relating to the retirement plans and/or other insurance companies that invest in the Eligible Funds. If the policies and procedures of other insurance companies or retirement plans fail to successfully discourage frequent Transfer activity, it may affect the value of your investments in the Eligible Funds. In addition, if an Eligible Fund believes that an omnibus order we submit may reflect one or more Transfer Requests from a Participant engaged in frequent Transfer activity, the Eligible Fund may reject the entire omnibus order and thereby interfere with our ability to satisfy your Request even if you have not made frequent Transfers. For Transfers into more than one investment option, we may reject or reverse the entire Transfer Request if any part of it is not accepted by or is reversed by an Eligible Fund.

You may arrange for systematic Transfers from any Variable Account to any other Variable Account. These systematic Transfers may be used to Transfer values from the Maxim Money Market Variable Account to other Variable Accounts as part of a dollar cost averaging strategy. Dollar cost averaging does not assure a greater profit, or any profit, and will not prevent or necessarily alleviate losses in a declining market. It does, however, allow you to buy more units when the price is low and fewer units when the price is high. Over time, your average cost per unit may be more or less than if you invested all your money at one time.

You can set up automatic dollar cost averaging on the following frequency periods: monthly, quarterly, semi-annually or annually. Your Transfer will be initiated on the Valuation Date you select one frequency period following the date of the Request. For example, if we receive a Request for quarterly Transfers on January 9, your first Transfer will be made on April 9 (or the following business day, as applicable) and every three months on the 9^th thereafter. Transfers will continue on that same day each interval unless terminated by you or for other reasons as set forth in the Contract. There will be no additional cost for using dollar cost averaging.

If there are insufficient funds in the applicable Variable Account on the date your Transfer is scheduled, your Transfer will not be made. However, your dollar cost averaging Transfers will resume once there are sufficient funds in the applicable Variable Account. Dollar cost averaging will terminate automatically when you start taking payments from a payment option.

Great-West reserves the right to modify, suspend or terminate dollar cost averaging at any time for any reason.

Please note that there may be Transfer restrictions that apply to the Fixed Account. Please consult with your Contractholder or employer, as the case may be, or a GWFS authorized representative for more information regarding transfer restrictions.

Because the value of your Variable Accounts will fluctuate with the investment performance of the Eligible Funds, your asset allocation plan percentages may become out of balance over time. Rebalancer allows you to automatically reallocate your Variable Account Value to maintain your desired asset allocation. Participation in Rebalancer does not assure a greater profit, nor will it prevent or necessarily alleviate losses in a declining market.

You can set up Rebalancer as a one-time Transfer or on a quarterly, semi-annual or annual basis. If you select to rebalance only once, the Transfer will take place on the Valuation Date specified in your Request.

If you select to rebalance one period in the future on a quarterly, semi-annual or annual basis, the first Transfer will be initiated on the Valuation Date one frequency period following the date of the Request. For example, if we receive a Request for quarterly Transfers on January 9, your first Transfer will be made on April 9 (or the following business day, as applicable) and every three months on the 9^th thereafter. Transfers will continue on that same day each interval unless terminated by you or for other reasons as set forth in the Contract. There will be no additional cost for using Rebalancer.

On a Rebalancing Valuation Date your money will be automatically reallocated among the Variable Accounts and Fixed Accounts based on your allocation instructions. You can change your allocation instructions at any time by Request. The Rebalancer option will terminate automatically when you start taking payments from an annuity payment option.

• You must specify the percentage of your Participant Account Value you would like allocated to each Variable Account or Fixed Account and the frequency of rebalancing. You may modify the allocations or stop the Rebalancer option at any time, by Request.

You may not participate in dollar cost averaging and Rebalancer at the same time.

There may be transfer restrictions that apply to the Fixed Account. Please contact your employer or Contractholder, as the case may be, or a GWFS authorized representative for information regarding transfer restrictions applicable to your Plan.

Great-West reserves the right to modify, suspend, or terminate the Rebalancer option at any time and for any reason.

You may be allowed to Request a total or partial withdrawal at any time subject to any limitations or restrictions contained in the Code or your Plan.

Payment Requests for a partial withdrawal 30 or fewer days prior to the Annuity Commencement Date, may delay the Annuity Commencement Date by up to 30 days.

Payment Requests for partial withdrawal must specify the Variable Account(s) or Fixed Account(s) from which the partial withdrawal is to be made.

The amount available for any withdrawal is your Participant Account Value as determined on the Valuation Date you Request the withdrawal to be made. Great-West will process your withdrawal Request on the later of the date selected in the Request or the Valuation Date on which Great-West receives the Request at our Administrative Offices.

We will process your withdrawal based on the accumulation unit values next determined after we receive your withdrawal Request. This means that if we receive your Request prior to 4:00 p.m. Eastern Time, we will process the withdrawal at the unit values calculated as of 4:00 p.m. Eastern Time that Business Day. If we receive your Request at or after 4:00 p.m. Eastern Time, we will process the withdrawal at the unit values calculated as of 4:00 p.m. Eastern Time on the following Business Day.

Withdrawal proceeds attributable to the Variable Accounts will generally be paid by Great-West within seven days of the Valuation Date on which Great-West processes your Request, though payment may be postponed for a period in excess of seven days as permitted by the Investment Company Act of 1940. You may apply the amount payable upon a total withdrawal to a payment option other than a lump-sum payment.

After a total withdrawal of your Participant Account Value or at any time such value is zero, all of your rights under the Contract will terminate.

Withdrawal Requests must be in writing. If your instructions are not clear, your Request will be denied and will not be processed.

Certain restrictions under the Code and the terms of the Plan apply to partial or total withdrawals under a Contract. (See “Federal Tax Consequences” on page __.) There are additional conditions that apply to a partial or total withdrawal of your Fixed Account Value.

Great-West reserves the right to require a minimum amount that may be transferred from a Fixed Account and to require the Transfer of the remaining amount held in an investment option if it would be less than the minimum amount we allow to be held in that investment option. In addition, there may be certain tax consequences to you when you make withdrawals. (See “Federal Tax Consequences” on page __.)

If allowed under your Contract and the Code, all or a portion of the Participant Account Value may be withdrawn and transferred to an account currently offered by another investment provider under the Plan. Transfers will generally be permitted as follows:

In addition, if the Transfer is to a 403(b) annuity contract or custodial account, the Transfer must also:

Please consult with your Contractholder or employer, as the case may be, or a GWFS authorized representative for more information about making Transfers to Other Companies under the Plan.

If allowed under your Contract, all or a portion of the Participant Account Value may be withdrawn by a Participant, Alternate Payee or beneficiary and transferred in a single sum to a contract under another employer’s plan. The Transfer will generally be permitted provided:

Transfers from a Governmental Plan for the Purchase of Permissive Service Credits

If allowed under your Contract and the Plan, all or portion of the Participant Annuity Value may be withdrawn by a Participant, Alternate Payee or beneficiary and transferred in a single sum to a qualified defined benefit plan that is defined by Code section 414(d) as a governmental plan. The Transfer will generally be permitted provided:

Either Great-West or the Contractholder may terminate the Contract upon written Request to the other party. Should this occur, then Great-West or the Contractholder, as applicable, shall provide the other party with advance written notice in accordance with the terms of the Contract that the Contract will terminate on a specific date in the future (“Contract Termination Date”).

After the Contract Termination Date (a) no further Contributions will be made to the Group Annuity Contract; and (b) no new Participant Account will be established.

After the Contract Termination Date, Great-West will continue to administer all Participant Accounts in accordance with the provisions of the Contract until the Annuity Commencement Date or as described below.

If the Contractholder directs Great-West in a Request to pay the Participant Accounts, Great-West will pay the Variable Accounts to the designee of the Plan or to the Contractholder within 7 calendar days after the later of the Contract Termination Date or the date the Contractholder instructs Great-West to transfer assets out of the Contract. Great-West will pay the sum of the Fixed Account(s) in accordance with the specific requirements of the Contract in which you participate.

In the event that the Contractholder terminates its Plan (“Plan Termination”) with assets invested in the Contract, the Contractholder will provide Great-West written notice in accordance with the terms of the Contract that the Plan Termination has occurred and that all final Contributions have been remitted to Great-West. In addition to providing written notice of the Plan Termination, the Contractholder will provide any information or instructions Great-West may require to properly comply with such notice of Plan Termination.

Unless the Contractholder instructs Great-West that its Plan is subject to joint and survivor or other distribution rules, or that the Plan is an eligible governmental plan and the Contractholder instructs Great-West to make a plan-to-plan transfer of all of the plan assets to another eligible governmental plan within the same state, Great-West will make a lump sum distribution to each person with assets invested in the Contract (“Payee”). Depending on the Plan, Great-West will send distribution election forms to each Payee’s last known mailing address or will send distribution election forms to the Contractholder for delivery to each Payee. Upon receipt of a distribution election form from a Payee, Great-West will send a lump sum distribution to either the Payee or directly to an eligible retirement plan as elected by the Payee. In the absence of a Payee election, Great-West will automatically roll Payee lump sum distributions to the IRA provider designated by the Contractholder. In the alternative, the Contractholder may instruct Great-West to pay the lump sum distributions for non-responsive Payees pursuant to any other applicable regulatory guidance in effect on the date of distribution.

The Contractholder acknowledges that the amount distributed from the Contract upon Plan Termination will be equal to the balance of each Participant Account as reflected in Great-West’s records on the date of distribution, less any outstanding charges or fees, income tax withholding, Premium Taxes or other fees applicable under the terms of the Contract.

The charges and deductions we assess will vary by Contract according to various factors discussed below. Please contact your employer or the Contractholder, as the case may be, or your GWFS representative to determine the actual charges and deductions which are applicable to your Contract. Following is a description of charges and deductions under the Contract, the amount of which will vary upon the terms of your Contract.

• We may deduct a contract maintenance charge from your Participant Account of not more than $100 each calendar year. Depending on the terms of your Contract, we may deduct this charge monthly, quarterly, semi-annually or annually. The contract maintenance charge will be deducted at the beginning of the designated period applicable to your Contract.

We may deduct a VAC in the calculation of the Accumulation Unit Value, based on a percentage of assets to compensate us for bearing certain expense risks under the Contracts.

With respect to the VAC, Great-West assumes the risk that our actual expenses in administering the Contracts and the Series Account will be greater than anticipated.

In certain circumstances, the risk of adverse expense experience associated with a Contract may be reduced. In such event, the VAC applicable to that Contract may likewise be reduced. Whether such a reduction is available will be determined by Great-West based upon consideration of the following factors:

Great-West will notify a prospective purchaser of its eligibility for a reduction of the variable asset charge prior to the acceptance of an application for coverage.

If the VAC is insufficient to cover actual costs and risks assumed, the loss will fall on us. If this charge is more than sufficient, any excess will be profit to us. Currently, we expect a profit from this charge.

The level of this charge is guaranteed and will not increase above an annual effective rate of 1.25%. This charge is assessed as a daily deduction of one three hundred sixty-fifth of the per annum from the assets of each Variable Account in accordance with the Net Investment Factor formula described in Appendix A.

The amount of the VAC Deduction that you will pay depends on the terms of your Contract. It will be assessed at a rate between 0% and 1.25%. Only one rate will apply to your Contract.

Upon termination of the Contract by the Contractholder, a Contract Termination Charge, which is based upon a percentage of the original Start-Up Costs, may apply. If a Contract Termination Charge applies, the Contractholder shall reimburse Great-West for unrecovered Start-Up Costs pursuant to a Contract Termination Charge schedule mutually agreed upon by the Contractholder and Great-West at Contract issuance. For illustration purposes only, following is a sample Contract Termination Charge schedule:

For example, if a Contract is terminated after five years, and a Contractholder’s Plan had $25,000 in Start-Up Costs, the Contract Termination Charge would be:

The Contract Termination Charge will always be a percentage of Start-Up Costs based on a schedule that declines over a period of time. The mutually agreed upon Contract Termination Charge recovery schedule is developed at issuance using a variety of factors, including but not limited to the following:

The Contract Termination Charge may be paid for by the Contractholder or pro rated across Participant Accounts. Please consult with your Contractholder or employer, as the case may be, or a GWFS authorized representative for more information about the Contract Termination Charge.

The participant loan charges are fees we deduct, authorized by your Contractholder, in connection with certain retirement plans. These charges are deducted pro rata against your Participant Account Value to compensate Great-West for the expenses associated with processing and administering your loan over the life of the loan. Please contact your employer or Contractholder, as the case may be, or a GWFS authorized representative for information regarding participant loan charges applicable to your Plan. The participant loan charges range from $25 to $100.

Great-West presently intends to pay any Premium Tax levied by any governmental entity as a result of the existence of the Participant Account or the Series Account. Great-West reserves the right to deduct the Premium Tax from Participant Account Values instead of Great-West making the Premium Tax payments. Notice will be given to all Participants prior to the imposition of any such deductions from the Participant Account Values. The applicable Premium Tax rates that states and other governmental entities impose currently range from 0% to 3.5% and are subject to change by the respective state legislatures, by administrative interpretations or by judicial act. Such Premium Tax will depend, among other things, on the state of residence of a Participant and the insurance tax laws and status of Great-West in these states when the Premium Tax is incurred.

The net asset value of the Eligible Funds reflects the deduction of the Eligible Funds’ fees and deductions. You bear these costs indirectly when you allocate to a Variable Account. In addition, one or more of the Eligible Funds may impose special transaction fees, such as redemption fees, based on Participant activity. In the event an Eligible Fund imposes such a fee, that fee will be deducted from the Participant Account Value. The Eligible Funds’ prospectuses describe these fees and deductions.

You may Request that all or a portion of your Participant Account be applied to a lump sum payment option provided you are eligible to receive a distribution under the terms of the Plan and the Code. Subject to the provisions of the Fixed Account(s), the amount applied to a lump sum payment option is the amount requested as a lump sum, less any Premium Tax and applicable fees in the Contract. Please see your Contract for more information

You may Request that all or part of your Participant Account Value be applied to a periodic payment option provided you are eligible to receive a distribution under the terms of the Plan and Code. The amount applied to a periodic payment option is your Participant Account Value, less any Premium Tax, if any.

• The calendar day of the month and year on which payments will begin (payments shall not begin on the 29^th, 30^th or 31^st of the month); and

Once the Variable and/or Fixed Accounts have been depleted, we will automatically prorate the remaining payments against all remaining available Variable and/or Fixed Accounts unless you Request the selection of another Variable and/or Fixed Account.

You may change the withdrawal option and/or the frequency once each calendar year unless you are a participant in a non-governmental 457(b), 457(f), 415(m) or NQDC Plan in which case you may not elect to change the withdrawal option and/or the frequency of payments.

Under some forms of the Contract, if a distribution is owed under the applicable terms and provisions of the Plan and applicable provisions of the Code sections governing the Plan, as determined by the Contractholder, all or a portion of a Participant Account may be applied to a Periodic Payment Option selected by the Payee. Charges and fees, if any, as described in the Contract Schedule will continue to apply. Periodic Payment elections are subject to the administrative procedures of the Company in effect at the time of the election. If you choose to receive payments from the Contract through periodic payments, you may select from the following payment options.

Option 1 - Income for a specified period. You elect the length of time over which payments will be made. The amount paid will vary based on the duration you choose. The Contract will provide the available lengths of time from which you may elect. Certain Contracts may require that you elect a specified period of at least 36 months.

Option 2 - Income of a specified amount. You elect the dollar amount of the payments. Based on the amount elected, the duration may vary. The contract will provide the available dollar amounts from which you may elect.

Option 3 - Minimum Distribution. Minimum distributions are not available for 457(f) and NQDC Plan Participants. For all other Plans, you may Request to receive your minimum distribution from the Contract as specified under Code section 401(a)(9).

If you die while receiving periodic payments, any periodic payments remaining to be paid as of the Participant’s date of death will be paid to the Participant’s beneficiary. The beneficiary will receive payments remaining under the payment option in effect as of the date of the Participant’s death unless a lump sum is elected on the appropriate death claim Request form. If periodic payments stop, you may resume making Contributions. Great-West may limit the number of times you may restart a periodic payment program.

Periodic payments made for any purpose may be taxable, subject to withholding and the 10% penalty tax. Retirement plans are subject to complex rules with respect to restrictions on and taxation of distributions, including penalty taxes. A competent tax adviser should be consulted before a periodic payment option is Requested.

An Annuity Commencement Date and the form of annuity payments may be elected at any time during the Accumulation Period. If the Payee is entitled to a distribution under the applicable terms and provisions of the Plan and the Code sections governing the Plan as determined by the Contractholder, all or a portion of a Participant Account may be applied to an annuity payment option selected by the Payee.

Under 403(b), 401(a), 401(k) and 457(b) Plans, the Annuity Commencement Date elected generally must, to avoid the imposition of an excise tax, not be later than:

Under all of the above-noted retirement programs, it is your responsibility to file the necessary Request with Great-West.

Under 457(f), 415(m) and NQDC Plans, there is no required Annuity Commencement Date.

The Annuity Commencement Date may be postponed or accelerated, or the election of any of the annuity payment options changed, upon Request received by Great-West at its Administrative Offices up to 30 days prior to the existing Annuity Commencement Date. If any Annuity Commencement Date elected would be less than 30 days from the date that the Request is received, Great-West may delay the date elected by not more than 30 days.

You can choose from the annuity payment options described below, and to the extent available under the Plan, any other annuity payment options which Great-West may choose to make available in the future. Except as otherwise provided in your Contract, the annuity payment options are payable on a fixed basis. More than one annuity payment option may be elected. If no annuity payment option is elected, the Contracts automatically provide for a fixed life annuity (with respect to the Guaranteed portion of your Participant Account) with 120 monthly payments guaranteed. All or a portion of a Participant Account may be applied to an Annuity Payment Option selected by the Payee. The level of annuity payments under the following options is based upon the option selected and, depending on the option chosen, such factors as the age at which payments begin and the frequency and duration of payments.

The amount to be applied to an annuity payment option is: (i) the Participant Account Value; less (ii) Premium Tax, if any, as of the Annuity Commencement Date; less (ii) any fees described in your Contract.

This option provides an annuity payable during the lifetime of the Payee. The annuity payments will be paid in annual, semiannual, quarterly or monthly installments as elected. It would be possible under this option for the Payee to receive no annuity payment if he/she died prior to the date of the first annuity payment, one annuity payment if the Payee died before the second annuity payment, etc.

Option No. 2: Life Annuity with Payments Guaranteed for Designated Periods (available only as fixed-dollar payments)

This option provides an annuity payable throughout the lifetime of the Payee with the guarantee that if, at the death of the Payee, payments have been made for less than the designated period, the beneficiary will receive payments for the remainder of the period. The designated period may be 5, 10, 15, or 20 years. The period generally referred to as “Installment Refund” is available only on a fixed-dollar payment basis. The annuity payments will be paid in annual, semiannual, quarterly or monthly installments as elected.

This option provides an annuity payable during the lifetime of the Payee and a joint Payee. The annuity payments will be paid in annual, semiannual, quarterly or monthly installments as elected. After the death of the Payee, and while only the joint Payee is alive, the amount payable will be a percentage of the amount paid while both were living. It would be possible under this option for the Payee and the joint Payee to receive no annuity payment if both persons died prior to the date of the first annuity payment, one annuity payment if both persons died before the second annuity payment, etc.

Option No. 4: Joint Life Annuity with Payments Guaranteed for Designated Periods (available only as fixed-dollar payments)

This option provides an annuity payable throughout the lifetime of the Payee and a joint Payee with the guarantee that if, at the death of the Payee and joint Payee, payments have been made for less than the designated period, the beneficiary will receive payments for the remainder of the period. The designated period may be 5, 10, 15, or 20 years. The period generally referred to as “Installment Refund” is available only on a fixed-dollar payment basis. After the death of the Payee, and while only the joint Payee is alive, the amount payable will be a percentage of the

amount paid while both were living. The annuity payments will be paid in annual, semiannual, quarterly or monthly installments as elected.

Option No. 5: Income for Specified Period (available only as fixed-dollar payments)

Under this option, the duration of the periodic benefit is selected, and a resulting annuity payment amount will be paid to the Payee in equal annual, semiannual, quarterly, or monthly installments, as elected.

Other annuity payment options permitted under the Plan and acceptable to Great-West may be offered. Please contact your employer or the Contractholder, as the case may be, or your GWFS representative to determine the annuity payment options available under your Contract.

The guaranteed level of fixed annuity payments will be determined on the basis of: (i) the Fixed Account Value prior to the Annuity Commencement Date; and (ii) the type of annuity payment option(s) elected. The payment amount may be greater, however, if Great-West is using a more favorable table as of a Participant's Annuity Commencement Date.

Great-West may require proof of age or survival of any Payee upon whose age or survival payments depend. If the age of the Participant, or beneficiary, as applicable has been misstated, the payments established will be made on the basis of the correct age. If payments were too large because of misstatement, the difference with interest may be deducted by us from the next payment or payments. If payments were too small, the difference with interest may be added by us to the next payment. This interest is at an annual effective rate that will not be less than the interest rate guaranteed by the Contract.

Fixed Annuity payments will be paid annually, semiannually, quarterly or monthly, as Requested. However, if any payment to be made under any annuity payment option will be less than $50, Great-West may make the payments in the most frequent interval that produces a payment of at least $50. If the net amount available to apply under any annuity payment option is less than $5,000, Great-West may pay it in one lump sum.

The following discussion is a general description of the federal income tax considerations relating to the Contract and is not intended as tax advice. This discussion assumes that the Contract qualifies as an annuity contract for federal income tax purposes. This discussion is not intended to address the tax consequences resulting from all of the situations in which a person may be entitled to or may receive a distribution under the Contract. If you are concerned about these tax implications, you should consult a competent tax advisor before initiating any transaction.

This discussion is based upon Great-West’s understanding of the present federal income tax laws as currently interpreted by the Internal Revenue Service. No representation is made as to the likelihood of the continuation of the present federal income tax laws or of the current interpretation by the Internal Revenue Service. Moreover, no attempt has been made to consider any applicable state or other tax laws.

The Contracts are designed for use by groups under retirement programs which may qualify for special tax treatment under 401(a), 401(k), 403(b), 457(b), 457(f) or 415(m) of the Code or a NQDC Plan.

Section 72 of the Code governs the taxation of annuities in general and distributions from qualified plans. Tax deferral under annuity contracts purchased in connection with tax-qualified plans arises under specific provisions of the Code governing the tax-qualified plan, so a Contract should be purchased only for the features and benefits other than tax deferral that are available under an annuity contract purchased in connection with tax-qualified plans, and not for the purpose of obtaining tax deferral.

A Participant in a qualified plan is not generally taxed on increases (if any) in the value of a Participant Account until a distribution occurs. The taxable portion of a distribution is taxable as ordinary income.

Currently, none of the amounts contributed to a 457(b) or 457(f), 415(m) or NQDC Plan constitute cost basis in the Contract. Thus, all amounts distributed to Participants from a 457(b) or 457(f), 415(m) or NQDC Plan are taxable at

ordinary income rates. For qualified plans and 403(b) Plans, amounts contributed on an after-tax basis constitute cost basis at time of distribution. If a Contract will be held by a taxable employer (e.g., a sole proprietorship, partnership or corporation), the investment gain on the Contract is included in the entity's income each year. This rule does not apply where the Contract is held under a 401(a), 401(k), 403(b), or governmental 457(b) Plan. An employer maintaining a 457(b) or 457(f) or 415(m) Plan as either a state or local government or a tax-exempt organization, may not be subject to tax on the gain in the Contract. If this Contract is intended to be held by a taxable employer that entity may wish to discuss these matters with a competent tax adviser.

Section 401(a) of the Code provides special tax treatment for pension, profit-sharing and stock bonus plans established by employers or employee organizations for their employees. All types of employers, including for-profit organizations, tax-exempt organizations and state and local governments, are allowed to establish and maintain 401(a) Plans. Employer Contributions and any earnings thereon are currently excluded from the Participant's gross income. Generally, the total amount of employer and employee Contributions which can be contributed to all of an employer's defined contribution qualified plans is limited to the lesser of $49,000 or 100% of a Participant's compensation as defined in section 415 of the Code, as indexed from time to time. Distributions from the Plan are subject to the restrictions contained in the plan document and the Code. Participants should consult with their employer or employee organization as to the limitations and restrictions applicable to their Plan.

Section 401(k) of the Code allows non-governmental employers or employee organizations, rural cooperatives, Indian tribal governments and rural irrigation and water conservation entities to offer a cash or deferred arrangement to employees under a profit-sharing or stock bonus plan. Currently, state and local governments are not permitted to establish 401(k) Plans. However, under a grandfather rule, certain Plans adopted before certain dates in 1986 may continue to be offered by governmental entities. Pre-tax salary reduction Contributions and any income thereon are currently excluded from the Participant's gross income. Generally, the maximum elective deferral amount that an individual may defer on a pre-tax basis to one or more 401(k) Plans is limited to an applicable dollar amount, as indexed from time to time. Elective deferrals to a 401(k) Plan must also be aggregated with elective deferrals made by a Participant to a 403(b) Plan, to a simplified employee pension or to a SIMPLE retirement account. For 2009, the total amount of elective deferrals that can be contributed to all such Plans is $16,500, adjusted for cost-of-living increases in $500 increments.

The contribution limits in section 415 of the Code also apply. The amount a highly compensated employee may contribute may be further reduced to enable the Plan to meet the discrimination testing requirements. Amounts contributed to a 401(k) Plan are subject to FICA and FUTA tax when contributed.

If allowed by the Plan, all employees who are eligible to make elective deferrals under the Plan and who have attained age 50 before the close of the plan year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, section 414(v) of the Code.

Amounts contributed in excess of the above-described limits, and the earnings thereon, must be distributed from the Plan and included in the Participant's gross income. Excess amounts that are not properly corrected can have severe adverse consequences to the Plan and may result in additional taxes to the Participant.

Pre-tax amounts deferred into the Plan within the applicable limits, and the net investment gain, if any, reflected in the Participant Account Value are included in a Participant's gross income only for the taxable year when such amounts are paid to the Participant under the terms of the Plan. Elective deferrals and earnings thereon may not be distributed prior to age 59 1/2, unless the Participant dies, becomes disabled, severs employment or suffers a genuine financial hardship meeting the requirements of the Code. Restrictions apply to the amount that may be distributed for financial hardship. Participants should consult with their employer as to the availability of benefits under the Plan.

Tax-exempt organizations described in section 501(c)(3) of the Code and public educational organizations are permitted to purchase 403(b) Plans for employees. Amounts contributed toward the purchase of such annuities are excluded from the gross income of the Participant in the year contributed to the extent the Contributions do not exceed:

Elective deferrals to a 403(b) Plan must also be aggregated with elective deferrals made by the Participant to a 401(k) Plan, a simplified employee pension or a SIMPLE retirement account. For 2009, the total amount of elective deferrals that can be contributed to all such Plans is $16,500, adjusted for cost-of-living increases in $500 increments.

Amounts contributed to a 403(b) Plan are subject to FICA and FUTA tax when contributed.

The net investment gain, if any, reflected in a Participant Account Value is not taxable until received by the Participant or his beneficiary.

Amounts contributed in excess of the above-described limits, and the earnings thereon, must be distributed from the Plan and included in the Participant's gross income in accordance with IRS rules and federal Treasury regulations. Excess amounts that are not properly corrected can have severe adverse consequences to the Plan and may result in additional taxes to the Participant.

Pre-1989 salary reduction Contributions to a 403(b) Plan may be distributed to an employee at any time, subject to a 10% penalty on withdrawals prior to age 59 1/2, unless an exception applies under section 72(t) of the Code.

Post-1988 Salary Reduction Contributions and earnings, and the earnings on the December 31, 1988 account balance as well as all amounts transferred from a 403(b)(7) custodial account, may not be distributed prior to age 59 1/2, unless the Participant:

If allowed by the Plan, a Participant in a plan sponsored by a public educational organization may make an in-service transfer of an amount to a defined benefit governmental plan for purchase of permissive service credits.

IRS regulations under 403(b) of the Code establish new rules for 403(b) Plans that are generally applicable to plan sponsors for taxable years beginning after December 31, 2008.

Section 457(b) of the Code allows state and local governmental employers and certain tax-exempt organizations to establish and maintain an eligible deferred compensation plan for its employees and independent contractors.

Federal income tax is deferred on Contributions to a 457(b) Plan and the earnings thereon to the extent that the aggregate amount contributed per year for a Participant does not exceed the lesser of the applicable dollar amount (as adjusted for cost-of-living increases) or 100% of a Participant's includible compensation. For 2009, the maximum amount that may be contributed is $16,500, adjusted for cost-of-living increases in $500 increments.

Contributions and earnings may not be distributed prior to the calendar year in which the Participant severs employment with the employer, attains age 70 1/2 or incurs an approved unforeseeable emergency. A Participant may transfer an amount to a defined benefit governmental plan for the purchase of permissible service credits. Restrictions apply to the amount that may be distributed for an unforeseen emergency.

For governmental 457(b) Plans only, and if the plan document so allows, all employees who are eligible to make elective deferrals under the Plan and who have attained age 50 before the close of the plan year shall be eligible to make catch-up contributions in accordance with, and subject to the limitations of, section 414(v) of the Code. Additionally, a Participant may be eligible to defer up to twice the applicable dollar amount (but only to the extent of under-utilized amounts in prior years) during three (3) years prior to the Participant’s attainment of normal retirement age under the Plan’s standard or regular catch-up provision.

Section 457(f) of the Code allows state and local governmental employers and non-governmental tax-exempt employers to establish and maintain a nonqualified deferred compensation plan.

A Participant in a 457(f) Plan is not subject to federal income tax on Contributions to the nonqualified plan and the earnings thereon until the tax year in which the Contributions and earnings are no longer subject to a substantial risk of forfeiture as provided in the underlying plan document.

There are no Code restrictions on distributions from a 457(f) Plan. However, distributions from a 457(f) Plan are subject to the provisions of the underlying Plan.

Section 415(m) of the Code allows state and local governmental employers to establish and maintain an excess benefit plan for employees whose benefits are limited by the qualified plan contribution and benefit limits under section 415 of the Code.

A Participant in a 415(m) Plan is not subject to federal income tax on Contributions to the excess benefit plan and the earnings thereon until the tax year in which the Contributions are made available to the Participant or his beneficiary as provided in the underlying excess benefit plan document.

There are no Code restrictions on distributions from a 415(m) Plan. However, distributions from a 415(m) Plan are subject to the provisions of the underlying plan.

Any employer other than a governmental or tax-exempt employer may establish and maintain a NQDC Plan for a select group of management or highly compensated employees under a NQDC Plan.

A Participant in a NQDC Plan is not subject to federal income tax on Contributions to the NQDC Plan and earnings thereon until the tax year in which the Contributions are made available to the Participant or his beneficiary as provided in the underlying nonqualified deferred compensation plan document.

There are no tax restrictions on distributions from a NQDC Plan. However, distributions from the NQDC Plan are subject to the provisions of the underlying Plan.

An employer may not take a deduction for a Contribution to a NQDC Plan until the year in which the Contribution is included in the gross income of the employee.

When a Participant is eligible to take a distribution from a 401(a), 401(k), 403(b) or governmental 457(b) Plan, eligible rollover distributions may be directly rolled over to any eligible retirement plan as provided in the Code. Amounts properly rolled over will not be included in gross income until a subsequent distribution is made. An eligible rollover distribution will be paid directly to any other specified eligible retirement plan that accepts such rollovers or to an IRA. Forced de minimis distributions under the Plan will be sent to the IRA provider selected by the Contractholder. See the discussion under “Federal Income Tax Withholding” later in this Prospectus.

If allowed by the employer’s plan document or the annuity contract or custodial account agreement, Revenue Ruling 90-24 allows Participants and Beneficiaries in a 403(b) Plan to transfer funds from one 403(b) annuity or custodial account to another 403(b) annuity contract or custodial account with the same or more stringent restrictions without incurring current taxation. Recently issued IRS regulations under 403(b) of the Code establish new rules for plan to plan transfers that are applicable for taxable years beginning after December 31, 2008.

Amounts distributed from a NQDC Plan, a non-governmental 457(b) Plan, a 457 (f) Plan or a 415(m) Plan cannot be rolled over to an eligible retirement plan.

A Request submitted to Great-West in connection with a Qualified Domestic Relations Order must be approved by the Contractholder, except as otherwise agreed. Upon receipt of an approved Request, Great-West will make payment to the Alternate Payee and/or establish a Participant Account on behalf of the Alternate Payee named in such Qualified Domestic Relations Order. The Alternate Payee will be treated as a surviving spouse for purposes of Code section 401(a)(9) and shall be responsible for submitting a Request to begin Distributions in accordance with the Code.

Distributions from a 401(a), 401(k), 403(b) and 457(b) Plan must begin no later than April 1 of the calendar year following the later of:

All amounts in a 401(a), 401(k), 403(b) and 457(b) Plan must be distributed in compliance with the minimum distribution requirements of Code section 401(a)(9) and the regulations promulgated thereunder. Generally, the minimum distribution amount is determined by using the account balance at the end of the prior calendar year, the Participant’s age in the current year, and the applicable distribution period as set forth in the federal Treasury regulations. Participants whose sole beneficiary is their surviving spouse who is more than 10 years younger may elect a joint and survivor life expectancy calculation.

Currently, if the amount distributed does not meet the minimum requirements, a 50% penalty tax on the amount which was required to be, but was not, distributed may be imposed upon the employee by the IRS under section 4974 of the Code. These rules are extremely complex, and the Participant should seek the advice of a competent tax adviser.

The Worker, Retiree, and Employer Recovery Act (the “Act”) allows participants and beneficiaries in retirement plans, such as 401(k) Plans, 403(b) annuity Plans and certain 457(b) Plans to postpone receiving required minimum distributions (“RMDs”) for 2009. The 2009 waiver also applies to individuals who may be eligible to postpone taking their 2009 RMD until April 1, 2010 (e.g., retired employees who turned 70 ½ in 2009). However, the Act does not waive any 2008 RMD for individuals who were eligible and chose to delay taking their 2008 RMD until April 1, 2009. Any withdrawal in 2009 (that is not an RMD for 2008) may be eligible to be rolled over into another eligible retirement plan. Currently, this waiver is for the 2009 calendar year only after which the RMD requirements described above will again be applicable and must be followed beginning in 2010.

All payments received from a 401(a), 401(k), 403(b) or governmental 457(b) Plan are normally taxable in full as ordinary income to the Participant. Since Contributions received from salary reduction have not been previously taxed to the Participant, they are not treated as a cost basis for the Contract. The Participant will have a cost basis for the Contract only when after-tax Contributions have been made.

If the Participant takes the entire value in his Participant Account in a single sum cash payment, the full amount received will be ordinary income in the year of receipt unless after-tax Contributions were made. If the distribution includes after-tax Contributions, the amount in excess of the cost basis will be ordinary income.

A “10-year averaging” procedure may also be available for lump sum distributions from a 401(a) or 401(k) Plan to individuals who attained age 50 before January 1, 1986.

For further information regarding lump sum distributions, a competent tax adviser should be consulted.

Partial distributions received before the payment starting date by a Participant who has made after-tax Contributions are taxed under a rule that provides for pro rata recovery of cost, under section 72(e)(8) of the Code. If an employee who has a cost basis for his contract receives life annuity or installment payments, the cost basis will be recovered from the payments under the annuity rules of section 72 of the Code. Typically, however, there is no cost basis and the full amount received is taxed as ordinary income in the year distributed.

All amounts received from a non-governmental 457(b) Plan, a 457(f) Plan, a 415(m) Plan or a NQDC Plan, whether in the form of total or partial withdrawals or annuity payments are taxed in full as wages to the Participant in the year distributed.

Penalty taxes may apply to certain distributions from 401(a), 401(k) and 403(b) Plans. Distributions made before the Participant attains age 59 1/2 are premature distributions and subject to an additional tax equal to 10% of the amount of the distribution which is included in gross income in the tax year. However, under Code section 72(t), the penalty tax will not apply to distributions:

(2) attributable to the Participant’s being disabled within the meaning of Code section 72(m)(7);

(3) made as a part of a series of substantially equal periodic payments (at least annually) for the life or life expectancy of the Participant or the joint lives or joint life expectancies of the Participant and his designated beneficiary;

(4) made to a Participant on account of separation from service after attaining age 55;

(5) properly made to an alternate Payee under a Qualified Domestic Relations order which will be administered in accordance with the provisions of the Plan;

(6) made to a Participant for medical care, but not in excess of the amount allowable as a medical expense deduction to the Participant for amounts paid during the taxable year for medical care;

Exception (3) above (substantially equal payments) applies to distributions from 401(a) and 401(k) Plans and 403(b) annuities only if the series of payments begins after the participant separates from service. If exception (3) above was selected at the time of the distribution but the series of payments is later modified or discontinued (other than because of death or disability) before the later of:

then the Participant is liable for the 10% penalty plus interest on all payments received before age 59 ½. This penalty is imposed in the year the modification or discontinuance occurs. The premature distribution penalty tax does not apply to distributions from a 457(b), 457(f), 415(m) or NQDC Plan.

Distributions made to a beneficiary from a 401(a), 401(k), 457(b) or 403(b) Plan upon the Participant's death must be made pursuant to the rules contained in Code section 401(a)(9) and the regulations thereunder in effect at the time of distribution.

Certain distributions from 401(a), 401(k), 403(b) and governmental 457(b) Plans are defined as “eligible rollover distributions.”

Generally, any eligible rollover distribution is subject to mandatory income tax withholding at the rate of 20% unless the employee elects to have the distribution paid as a direct rollover to an IRA or to another eligible retirement plan as defined in the Code.

With respect to distributions other than eligible rollover distributions, amounts will be withheld from annuity (periodic) payments at the rates applicable to wage payments and from other distributions at a flat 10% rate, unless the Participant elects not to have federal income tax withheld.

Currently, distributions to a Participant from a non-governmental 457(b), a 457(f), a 415(m) or NQDC Plan retain their character as wages and are tax reported on IRS Form W-2. Federal income taxes must be withheld under the wage withholding rules. Participants cannot elect not to have federal income tax withheld. Payments to beneficiaries are not treated as wages and are tax reported on IRS Form 1099-R. Federal income tax on payments to beneficiaries will be withheld from annuity (periodic) payments at the rates applicable to wage withholding, and from other distributions at a flat 10% rate, unless the beneficiary elects not to have federal income tax withheld.

We are taxed as a life insurance company under the Code. The Series Account is not a separate entity from us. Therefore, it is not taxed separately as a “regulated investment company” but is taxed as part of Great-West.

In calculating our corporate income tax liability, we derive certain corporate income tax benefits associated with the investment of company assets, including Series Account assets that are treated as company assets under applicable income tax law. These benefits, which reduce our overall corporate income tax liability may include dividends received deductions and foreign tax credits which can be material. We do not pass these benefits through to the Series Account, principally because: (i) the great bulk of the benefits results from the dividends received deduction, which

involves no reduction in the dollar amount of dividends that the Series Account receives; and (ii) under applicable income tax law, Contractholders (and Participants) are not the owners of the assets generating the benefits.

The discussion above of the federal income tax consequences is only a brief summary and does not represent tax advice. The federal income tax consequences discussed here reflect our understanding of current law and the law may change. Federal estate tax consequences and state and local estate, inheritance, and other tax consequences of ownership or receipt of distributions under a Contract depend on your individual circumstances or the circumstances of the recipient of the distribution. A competent tax advisor should be consulted for further information.

To the extent required by applicable law, all Eligible Fund shares held in the Series Account will be voted by Great-West at regular and special shareholder meetings of the respective Eligible Funds in accordance with instructions received from persons having voting interests in the corresponding Variable Account. If, however, the 1940 Act or any regulation should be amended, or if the present interpretation thereof should change, or if Great-West determines that we are allowed to vote all Eligible Fund shares in our own right, we may elect to do so.

Before the Annuity Commencement Date, the Participant under a 403(b) Plan or the Contractholder under all other plans has the voting interest.

The number of votes that are available will be calculated separately for each Variable Account. That number will be determined by applying the Participant’s percentage interest, if any, in a particular Variable Account to the total number of votes attributable to that Variable Account. The Participant or Contractholder, as applicable, hold a voting interest in each Variable Account to which a Participant’s Variable Account Value is allocated. Voting instructions will be solicited by written communication prior to such meeting in accordance with procedures established by the respective Eligible Funds.

Shares for which we do not receive timely instructions and shares held by us as to which Participants and Contractholders have no beneficial interest will be voted in proportion to the voting instructions which are received with respect to all Contracts participating in the Variable Account. Voting instructions to abstain on any item to be voted upon will be applied on a pro rata basis to reduce the votes eligible to be cast.

GWFS is the principal underwriter and the distributor of the Contracts, and is a wholly-owned indirect subsidiary of Great-West. GWFS is registered with the SEC as a broker-dealer and is a member of the Financial Industry Regulatory Authority. Its principal offices are located at 8515 East Orchard Road, Greenwood Village, Colorado 80111, telephone (800) 701-8255.

The maximum commission as a percentage of the Contributions made under a Contract payable to GWFS agents, independent registered insurance brokers and other registered broker-dealers is 8.0%. An expense allowance that will not exceed 40% of the maximum commission paid may also be paid. Additionally, a maximum of 1% of Contributions may also be paid as a persistency bonus to qualifying brokers.

Compensation paid to GWFS agents, independent registered insurance brokers and other broker-dealers is not paid directly by Contractholders or the Series Account. Great-West and its affiliates intend to fund this compensation through fees and charges imposed under the Contract and from profits on payments received by Great-West and its affiliates for providing administrative, marketing, and other support and services to the Eligible Funds. (See “Payments We Receive” on page __.) Great-West and its affiliates pay a portion of the compensation received from Eligible Funds to GWFS agents, independent registered insurance brokers and other broker-dealers for distribution services.

In addition to the direct cash compensation described above for sales of the Contacts, Great-West and/or its affiliates may also pay GWFS agents additional cash and non-cash incentives to promote the sale of the Contract and other products distributed by GWFS, including Portfolios of Maxim Series Fund, which are Eligible Funds under the Contract. Great-West and/or its affiliates may sponsor various contests and promotions subject to applicable FINRA regulations in which GWFS agents may receive prizes such as travel awards, merchandise and cash. Subject to applicable FINRA regulations, Great-West and/or its affiliates may also pay for travel expenses, meals, lodging and entertainment of salespersons in connection with educational and sales promotional programs and sponsor speakers, educational seminars and charitable events.

Cash incentive payments may vary depending on the arrangement in place at any particular time. Cash incentives payable to GWFS agents may be based on certain performance measurements, including a percentage of the net amount invested in certain Eligible Funds through the Contract. These additional payments could be viewed as creating conflicts of interest. In some cases, the payment of incentive-based compensation may create a financial incentive for a GWFS agent to recommend or sell the Contract instead of other products or recommend certain Eligible Funds under the Contract over other Eligible Funds, which may not necessarily be to your benefit.

You should ask your GWFS agent, independent registered insurance broker or other broker-dealer representative for further information about what commissions or other compensation he or she may receive in connection with your purchase of a Contract.

As a life insurance company organized and operated under Colorado law, Great-West is subject to provisions governing such companies and to regulation by the Colorado Commissioner of Insurance. Great-West’s books and accounts are subject to review and examination by the Colorado Insurance Department at all times and a full examination of its operations is conducted by the National Association of Insurance Commissioners (“NAIC”) at least once every three years.

Section 36.105 of the Teacher Retirement System of Texas permits Participants in the Texas Optional Retirement Program (“ORP”) to redeem their interest in a variable annuity contract issued under the ORP only upon termination of employment in the Texas public institutions of higher education, retirement or death. Accordingly, if you are a Participant in the ORP you will be required to obtain a certificate of termination from your employer before you can redeem your Participant Account.

We will send all Participants, at least semi-annually, reports concerning the operations of the Series Account. In addition, all Participants will receive from us not less frequently than annually a statement of the Participant Account Value established in his/her name.

Great-West reserves the right to make certain changes if, in our judgment, they would best serve the interests of Contractholders or Participants or would be appropriate in carrying out the purposes of the Contracts. Any changes will be made only to the extent and in the manner permitted by applicable laws. Also, when required by law, Great-West will obtain the Participant’s or Contractholder’s, as applicable, approval of the changes and approval from any appropriate regulatory authority. Approval may not be required in all cases, however. Examples of the changes we may make include:

• To operate the Series Account in any form permitted under the Investment Company Act of 1940 or in any other form permitted by law.

• To make any other necessary technical changes in the Contract in order to conform with any action the above provisions permit us to take, including to change the way we assess charges, but without increasing as to any then outstanding Contract the aggregate amount of the types of charges Great-West has guaranteed.

Great-West will provide notice of these changes to the Contractholder at the Contractholder’s last known address on file with Great-West.

Because some of the Eligible Funds are available to registered separate accounts of other insurance companies offering variable annuity and variable life products, there is a possibility that a material conflict may arise between the interests of the Series Account and one or more other separate accounts investing in the Eligible Funds. If a material conflict arises, Great-West and other affected insurance companies are required to take any necessary steps to resolve the matter, including stopping our respective separate accounts from investing in the Eligible Funds.

We may offer new or cease offering existing Eligible Funds, or make other changes to the investment options as we deem necessary and subject to the approval of the state insurance department. If Eligible Funds are added or eliminated, or other changes are made to the investment options, notice will be given to the Contractholder. The absence of an objection by the Contractholder to such notice will be considered consent to the change(s). If we do not receive an objection from the Contractholder, transfers between account options as disclosed in the notice will be completed by Great-West as of the effective date of the change. Such allocation will be in effect until such time as the Company receives a written Request in good order for a different allocation.

When Great-West informs you that we are discontinuing a Variable Account or Fixed Account to which you are allocating money, we will ask that you promptly submit alternative allocation instructions. If Great-West does not receive your changed allocation instructions, we may return all affected Contributions or allocate those Contributions as indicated in the written notice provided to you. Contributions and Transfers you make to a discontinued Variable Account or Fixed Account before the effective date of the notice may be kept in the discontinued Variable Account or Fixed Accounts.

In addition, we may discontinue all investment options under the Contracts and refuse to accept any new Contributions. Should this occur, we will follow the procedures as set forth under the heading, “Contract Termination.”

If Great-West makes new Variable Accounts or Fixed Accounts available under the Contracts, in our sole discretion, we may or may not make those new Variable Accounts or Fixed Accounts available to you.

When we determine to discontinue a Variable Account, in our sole discretion, we may substitute shares of another mutual fund for the shares of the corresponding Eligible Fund. No substitution may take place without prior notice to you and the Contractholders.

GWL&A may agree to restore under the Contract all or a portion of the back-end load charges, market value adjustments or other investment charges from Plan assets under a prior investment option. The restoration amount will be based on the dollar amounts transferred to the Contract from the prior investment option.

Advice regarding certain legal matters concerning the federal securities laws applicable to the issue and sale of the Contract has been provided by Jorden Burt LLP.

The financial statements of each of the investment divisions of the FutureFunds Series Account of Great-West Life & Annuity Insurance Company and the consolidated financial statements of Great-West Life & Annuity Insurance Company and subsidiaries included in this Prospectus and Statement of Additional Information and the related financial statement schedule included elsewhere in the Registration Statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports appearing herein and elsewhere in the Registration Statement which reports express an unqualified opinion on the financial statements of each of the investment divisions of the FutureFunds Series Account of Great-West Life & Annuity Insurance Company and of the consolidated financial statements and financial statement schedule of Great-West Life & Annuity Insurance Company and subsidiaries and includes an explanatory paragraph referring to the change in method of accounting for income taxes, as required by accounting guidance adopted on January 1, 2007, and change in method of accounting for defined benefit and other post retirement plans as required by accounting guidance which was adopted on December 31, 2006, and have been so included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

We have filed a registration statement (“Registration Statement”) with the SEC under the 1933 Act relating to the Contracts offered by this Prospectus. This Prospectus has been filed as a part of the Registration Statement and does not contain all of the information set forth in the Registration Statement and exhibits thereto. Reference is made to the Registration Statement and exhibits for further information relating to Great-West and the Contracts. Statements contained in this Prospectus, regarding the content of the Contracts and other legal instruments, are summaries. For a complete statement of the terms thereof, reference is made to the instruments as filed as exhibits to the Registration Statement.

The SEC maintains an Internet Web site (http://www.sec.gov) that contains the SAI and other information filed electronically by Great-West concerning the Contract and the Series Account.

You can also review and copy any materials filed with the SEC at its Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference room by calling the SEC at (800) SEC-0330.

The SAI contains more specific information and financial statements relating to the Series Account and Great-West. The Table of Contents of the SAI is set forth below:

The Net Investment Factor for each Variable Account for any Valuation Period is determined by dividing (a) by (b), and subtracting (c) from the result where:

(b) is the net asset value per share of the Eligible Fund shares determined as of the end of the immediately preceding Valuation Period, and

(c) is an amount representing the VAC deducted from each Variable Account on a daily basis. Such amount is equal to a percentage that ranges from 0.00% to 1.25% depending upon the Contractholder’s Contract.

The Net Investment Factor may be greater than, less than, or equal to one. Therefore, the Accumulation Unit value may increase, decrease or remain unchanged.

The net asset value per share referred to in paragraphs (a) (i) and (b) above, reflect the investment performance of the Eligible Fund as well as the payment of Eligible Fund expenses.

This Statement of Additional Information is not a prospectus and should be read in conjunction with the Prospectus, dated August 14, 2009, which is available without charge by contacting Great-West Life & Annuity Insurance Company at the above address or at the above telephone number.

The assets of FutureFunds Series Account (the "Series Account") are held by Great-West Life & Annuity Insurance Company ("Great-West"). The assets of the Series Account are kept physically segregated and held separate and apart from the general account of Great-West. Great-West maintains records of all purchases and redemptions of shares of the Eligible Funds. Additional protection for the assets of the Series Account is afforded by a financial institution bond issued to Great-West Lifeco Inc. in the amount of $50 million (Canadian) per occurrence, which covers all officers and employees of Great-West.

Deloitte & Touche LLP, 555 Seventeenth Street, Suite 3600, Denver, Colorado 80202, serves as Great-West's and the Series Account's independent registered public accounting firm. Deloitte & Touche LLP examines financial statements for Great-West and the Series Account and provides other audit, tax, and related services.

The offering of the Contracts is made on a continuous basis by GWFS Equities, Inc. (“GWFS”), a wholly owned subsidiary of Great-West. GWFS is registered with the Securities Exchange Commission as a broker-dealer and is a member of the Financial Industry Regulatory Authority. GWFS has received no underwriting commissions in connection with this offering.

The consolidated financial statements of Great-West as contained herein should be considered only as bearing upon Great-West's ability to meet its obligations under the Contracts, and they should not be considered as bearing on the investment performance of the Series Account. The variable interest of Participants under the Contracts are affected solely by the investment results of the Series Account.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Consolidated Statements of Cash Flows
Years Ended December 31, 2008, 2007 and 2006
(In Thousands)


	Year Ended December 31,

	2008			2007			2006

Cash flows from operating activities:
Net income	$	1,098,295		$	418,728		$	337,202
Adjustments to reconcile net income to net cash provided by operating activities:
Earnings allocated to participating policyholders		(206,415	)		20,296			9,061
Amortization of premiums/(accretion) of discounts on investments, net		(55,161	)		(58,067	)		(55,218	)
Net realized (gains) losses on investments		24,205			(2,155	)		12,076
Net purchases of trading securities		(18,869	)		(20,825	)		—
Interest credited to contractholders		510,996			493,049			465,052
Depreciation and amortization		75,220			176,560			77,256
Deferral of acquisition costs		(65,108	)		(73,062	)		(60,187	)
Deferred income taxes		5,525			(5,239	)		32,807
Gain on sale of discontinued operations		(681,528	)		—			—
Changes in assets and liabilities, net of effects of acquisitions:
Policy benefit liabilities		(325,306	)		(407,250	)		(267,587	)
Reinsurance receivable		(158,532	)		(106,382	)		40,279
Accrued interest and other receivables		(8,388	)		26,695			(16,501	)
Other, net		138,089			46,513			(25,994	)

Net cash provided by operating activities		333,023			508,861			548,246


Cash flows from investing activities:
Proceeds from sales, maturities and redemptions of investments:
Fixed maturities available-for-sale		4,056,869			4,052,791			7,486,226
Mortgage loans on real estate		112,760			159,959			325,291
Equity investments and other limited partnership interests		46,860			51,596			209,453
Purchases of investments:
Fixed maturities available-for-sale		(3,742,716	)		(4,015,650	)		(9,146,358	)
Mortgage loans on real estate		(297,715	)		(228,746	)		(209,079	)
Equity investments and other limited partnership interests		(13,421	)		(35,372	)		(56,350	)
Acquisitions, net of cash acquired		—			(15,208	)		1,301,372
Net change in short-term investments		81,143			1,132,840			3,459
Net change in repurchase agreements		63,542			(625,242	)		7,874
Other, net		(98,662	)		(36,643	)		(33,629	)
Proceeds from the disposition of Healthcare segment, net of cash disposed, direct expenses and income taxes		846,759			—			—

Net cash provided by (used in) investing activities		1,055,419			440,325			(111,741	)


See notes to consolidated financial statements.	(Continued)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Consolidated Statements of Cash Flows
Years Ended December 31, 2008, 2007 and 2006
(In Thousands)


	Year Ended December 31,

	2008			2007			2006

Cash flows from financing activities:
Contract deposits	$	1,921,238		$	1,228,154		$	1,065,805
Contract withdrawals		(1,465,420	)		(1,491,994	)		(1,603,285	)
Change in due to parent and affiliates		(6,389	)		(31,483	)		323,018
Dividends paid		(1,772,293	)		(604,983	)		(249,395	)
Net commercial paper borrowings (repayments)		1,500			647			(44	)
Change in bank overdrafts		(108,418	)		(23,523	)		(1,566	)
Income tax benefit of stock option exercises		4,256			5,860			4,631

Net cash used in financing activities		(1,425,526	)		(917,322	)		(460,836	)


Net increase (decrease) in cash		(37,084	)		31,864			(24,331	)
Cash, continuing and discontinued operations, beginning of year		65,436			33,572			57,903

Cash, continuing and discontinued operations, end of year		28,352			65,436			33,572
Less cash, discontinued operations, end of year		—			(10,622	)		(983	)

Cash, end of year	$	28,352		$	54,814		$	32,589

Supplemental disclosures of cash flow information:
Net cash paid during the year for:
Income taxes	$	390,897		$	121,847		$	63,619
Interest		39,804			41,713			30,959

Non-cash investing and financing transactions during the years:
Assets transferred from The Canada Life Assurance Company (See Note 6)	$	—		$	—		$	87,622
Share-based compensation expense		5,123			3,816			4,525
Return of invested reinsurance assets to The Canada Life Assurance Company (See Note 6)		—			1,608,909			—
Fair value of assets acquired in settlement of fixed maturity investments		6,388			—			—


See notes to consolidated financial statements.	(Concluded)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

1. Organization, Basis of Presentation and Significant Accounting Policies

Organization - Great-West Life & Annuity Insurance Company (“GWLA”) and its subsidiaries (collectively, the “Company”) is a direct wholly-owned subsidiary of GWL&A Financial Inc. (“GWL&A Financial”), a holding company formed in 1998. GWL&A Financial is an indirect wholly-owned subsidiary of Great-West Lifeco Inc. (“Lifeco”). The Company offers a wide range of life insurance, retirement and investment products to individuals, businesses and other private and public organizations throughout the United States. The Company is an insurance company domiciled in the State of Colorado, and is subject to regulation by the Colorado Division of Insurance.

Basis of presentation - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates are required to account for allowances for credit losses on mortgage loans on real estate, derivative instruments, valuation of privately placed and non-actively traded public investments, goodwill and other intangible assets, deferred acquisition costs and value of business acquired, policy reserves, employee benefits plans and taxes on income. Actual results could differ from those estimates.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

A $7,193 reclassification was made to the December 31, 2007 consolidated balance sheet to reflect the reclassification of certain real estate investments from mortgage loans on real estate to other investments. Reclassifications in the amounts of $493,049 and $465,052 were made to the consolidated statement of cash flows for the year ended December 31, 2007 and 2006, respectively, to separately reflect interest credited to contractholders. Formerly, they were included in policy benefit liabilities. The reclassifications had no effect on previously reported net income, total assets or total stockholder’s equity and were made in order to further enhance the readers’ understanding of the Company’s consolidated financial statements.

Restatement of January 1, 2006 retained earnings and December 31, 2007 deferred income taxes - The accompanying 2007 consolidated balance sheet and 2006 and 2007 consolidated statements of stockholder’s equity have been restated as a result of a previous misstatement of deferred income taxes. As a result of the completion of the Company’s analysis of its deferred tax accounts, an increase of $43,914 was recorded to retained earnings as of January 1, 2006, December 31, 2006, and December 31, 2007 from amounts previously reported of $1,342,796, $1,430,603, and $1,238,150, respectively, on the consolidated statements of stockholder’s equity and to deferred income taxes as of December 31, 2007 from $155,548 as previously reported on the consolidated balance sheet. See Note 18 for further discussion.

Significant Accounting Policies

Investments - Investments are reported as follows:

The Company classifies the majority of its fixed maturity and all of its equity investments as available-for-sale and records them at fair value with the related net unrealized gain or loss, net of policyholder related amounts and deferred taxes, in accumulated other comprehensive income in the stockholder’s equity section of the consolidated balance sheets. Net unrealized gains and losses related to participating contract policies that cannot be distributed are recorded as undistributed earnings on participating business in the Company’s consolidated balance sheets.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	Premiums and discounts are recognized as a component of net investment income using the scientific interest method. Realized gains and losses and declines in value determined to be other-than-temporary are included in net realized gains (losses) on investments.

	The Company purchases fixed maturity securities which are classified as held for trading. Assets in the held for trading category are carried at fair value with changes in fair value reported in net investment income.

	The recognition of income on certain investments (e.g. loan-backed securities, including mortgage-backed and asset-backed securities) is dependent upon market conditions, which may result in prepayments and changes in amounts to be earned.

2.	Mortgage loans on real estate are commercial loans and are carried at their unpaid balances adjusted for any unamortized premiums or discounts and allowances for credit losses. Interest income is accrued on the unpaid principal balance. Discounts and premiums are amortized to net investment income using the scientific interest method. Accrual of interest is discontinued on any impaired loans where collection of interest is doubtful.

	The Company maintains an allowance for credit losses at a level that, in management’s opinion, is sufficient to absorb credit losses on its impaired loans. Management’s judgment is based upon situational analysis of each individual loan and may consider past loss experience and current and projected economic conditions. The measurement of impaired loans is based upon the fair value of the underlying collateral.

3.	Equity investments classified as available-for-sale are carried at fair value with net unrealized gains and losses, net of deferred taxes, reported as accumulated other comprehensive income (loss) in the stockholder’s equity section of the Company’s consolidated balance sheets. The Company uses the equity method of accounting for investments in which it has more than a minority interest and has influence in the entity’s operating and financial policies, but does not have a controlling interest. Realized gains and losses and declines in value, determined to be other-than-temporary, are included in net realized gains (losses) on investments.

4.	Limited partnership interests are accounted for using the cost method of accounting. The Company uses this method since it has a minority equity interest and virtually no influence over the entity’s operations. Also included in limited partnership interests are limited partnerships established for the purpose of investing in low-income housing that qualify for federal and state tax credits. These securities are carried at amortized cost as determined using the effective yield method.

5.	Policy loans are carried at their unpaid balances.

6.	Short-term investments include securities purchased with initial maturities of one year or less and are carried at amortized cost, which approximates fair value. The Company classifies its short-term investments as available-for-sale.

7.	Gains and losses realized on disposal of investments are determined on a specific identification basis.

8.	The Company may employ a trading strategy that involves the sale of securities with a simultaneous agreement to repurchase similar securities at a future date at an agreed-upon price. Proceeds of the sale are reinvested in other securities and may enhance the current yield and total return. The difference between the sales price and the future repurchase price is recorded as an adjustment to net investment income. During the period between the sale and repurchase, the Company will not be entitled to receive interest and principal payments on the securities sold. Losses may arise from changes in the value of the securities or if the counterparty enters bankruptcy proceedings or

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	becomes insolvent. In such cases, the Company’s right to repurchase the security may be restricted. Amounts owed to brokers under these arrangements are included in repurchase agreements in the accompanying consolidated balance sheets. The liability is collateralized by securities with approximately the same fair value.

9.	The Company receives collateral for lending securities that are held as part of its investment portfolio. The Company requires collateral in an amount greater than or equal to 102% of the market value of domestic securities loaned and 105% of foreign securities loaned. Such collateral is used to replace the securities loaned in event of default by the borrower. The Company’s securities lending transactions are accounted for as collateralized borrowings. Collateral is defined as government securities, letters of credit and/or cash collateral. The borrower can return and the Company can request the loaned securities at any time. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest or dividends received on such securities during the loan term.

10.	One of the significant estimates inherent in the valuation of investments is the evaluation of investments for other-than-temporary impairments. The evaluation of impairments is a quantitative and qualitative process, which is subject to risks and uncertainties and is intended to determine whether declines in the fair value of investments should be recognized in current period earnings. The risks and uncertainties include changes in general economic conditions, the issuer’s financial condition or near term recovery prospects, the effects of changes in interest rates or credit spreads and the recovery period. The Company’s accounting policy requires that a decline in the value of a security below its cost or amortized cost basis be assessed to determine if the decline is other-than-temporary. If the security is deemed to be other-than-temporarily impaired, a charge is recorded in net realized losses on investments equal to the difference between the fair value and cost or amortized cost basis of the security.

Derivative financial instruments - All derivatives, whether designated in hedging relationships or not, are recorded on the consolidated balance sheets in other assets and other liabilities at fair value. Accounting for the ongoing changes in the fair value of a derivative depends upon the intended use of the derivative and its designation as determined when the derivative contract is entered into. If the derivative is designated as a fair value hedge, the changes in its fair value and of the fair value of the hedged item attributable to the hedged risk are recognized in earnings in net investment income. If the derivative is designated as a cash flow hedge, the effective portions of the changes in the fair value of the derivative are recorded in accumulated other comprehensive income in the Company’s consolidated balance sheets and are recognized in the consolidated income statements when the hedged item affects earnings. Changes in the fair value of derivatives not qualifying for hedge accounting and the over effective portion of cash flow hedges are recognized in net investment income in the period of the change.

Cash - Cash includes only amounts in demand deposit accounts.

Bank overdrafts - The Company’s cash management system provides for the reimbursement of all major bank disbursement accounts on a daily basis. Checks issued but not yet presented to banks for payment can result in overdraft balances for accounting purposes and are included in other liabilities in the accompanying consolidated balance sheets. At December 31, 2008 and 2007, these liabilities were $8,817 and $48,449, respectively.

Internal use software - Capitalized internal use software development costs, net of accumulated amortization, in the amounts of $14,944 and $38,537, are included in other assets at December 31, 2008 and 2007, respectively. The Company capitalized $2,324, $3,504 and $9,329 of internal use software development costs during the years ended December 31, 2008, 2007 and 2006, respectively.

Deferred acquisition costs (“DAC”) and value of business acquired (“VOBA”) - DAC, which primarily consists of sales commissions and costs associated with the Company’s sales representatives related to

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

the production of new business or through the acquisition of insurance or annuity contracts through indemnity reinsurance transactions, have been deferred to the extent recoverable. VOBA represents the estimated fair value of insurance or annuity contracts acquired either directly through the acquisition of another insurance company or through the acquisition of insurance or annuity contracts through assumption reinsurance transactions. The recoverability of such costs is dependent upon the future profitability of the related business. DAC and VOBA associated with the annuity products and flexible premium universal life insurance products are being amortized over the life of the contracts in proportion to the emergence of gross profits. Retrospective adjustments of these amounts are made when the Company revises its estimates of current or future gross profits. DAC and VOBA associated with traditional life insurance are amortized over the premium-paying period of the related policies in proportion to premium revenues recognized. See Note 10 for additional information regarding deferred acquisition costs and the value of business acquired.

Goodwill and other intangible assets - Goodwill is the excess of cost over the fair value of assets acquired and liabilities assumed in connection with an acquisition and is considered an indefinite lived asset and therefore is not amortized. The Company tests goodwill for impairment annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. If the carrying value of goodwill exceeds its fair value, the excess is recognized as an impairment and recorded as a charge against net income in the period in which the impairment is identified. There were no impairments of goodwill recognized during the years ended December 31, 2008, 2007 or 2006.

Other intangible assets represent the estimated fair value of the portion of the purchase price that was allocated to the value of customer relationships and preferred provider relationships in various acquisitions. These intangible assets have been assigned values using various methodologies, including present value of projected future cash flows, analysis of similar transactions that have occurred or could be expected to occur in the market, and replacement or reproduction cost. The initial valuations of these intangible assets were supported by an independent valuation study that was commissioned by the Company and executed by qualified valuation experts. Other identified intangible assets with finite lives are amortized over their estimated useful lives, which initially ranged from 4 to 14 years (weighted average 13 years), primarily based upon the cash flows generated by these assets.

Separate accounts - Separate account assets and related liabilities are carried at fair value in the accompanying consolidated balance sheets. The Company’s separate accounts invest in shares of Maxim Series Fund, Inc., an open-end management investment company, and Putnam Funds, which are affiliates of the Company, and shares of other non-affiliated mutual funds and government and corporate bonds. Investment income and realized capital gains and losses of the separate accounts accrue directly to the contractholders and, therefore, are not included in the Company’s consolidated statements of income. Revenues to the Company from the separate accounts consist of contract maintenance fees, administrative fees and mortality and expense risk charges. The Company’s separate accounts include mutual funds or other investment options that purchase guaranteed interest annuity contracts issued by the Company. During the years ended December 31, 2008 and 2007, these purchases totaled $64,723 and $74,855, respectively. As the general account investment contracts are also included in the separate account balances in the accompanying consolidated balance sheets, the Company has reduced the separate account assets and liabilities by $265,299 and $383,319 at December 31, 2008 and 2007, respectively, to eliminate these amounts in its consolidated balance sheets at those dates.

Life insurance and annuity reserves - Life insurance and annuity reserves with life contingencies in the amounts of $11,322,866 and $11,330,656 at December 31, 2008 and 2007, respectively, are computed on the basis of estimated mortality, investment yield, withdrawals, future maintenance and settlement expenses and retrospective experience rating premium refunds. Annuity contract reserves without life contingencies in the amounts of $6,736,101 and $5,998,749 at December 31, 2008 and 2007, respectively, are established at the contractholder’s account value.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Reinsurance - Policy reserves and policy and contract claims ceded to other insurance companies are carried as a reinsurance receivable in the accompanying consolidated balance sheets. The cost of reinsurance related to long duration contracts is accounted for over the life of the underlying reinsured policies using assumptions consistent with those used to account for the underlying policies.

Policy and contract claims - Policy and contract claims include provisions for claims incurred but not reported and claims in the process of settlement. The provision for claims incurred but not reported is valued based primarily on the Company’s prior experience. The claims in the process of settlement are valued in accordance with the terms of the related policies and contracts.

Participating business - The Company has participating policies in which the policyholder shares in the Company’s earnings through policyholder dividends that reflect the difference between the assumptions used in the premium charged and the actual experience on those policies. The amount of dividends to be paid is determined annually by the Board of Directors.

Participating life and annuity policy reserves are $6,155,890 and $6,019,015 at December 31, 2008 and 2007, respectively. Participating business approximates 8.6% and 8.3% of the Company’s individual life insurance in-force at December 31, 2008 and 2007, respectively, and 24.4%, 32.4% and 58.0% of individual life insurance premium income for the years ended December 31, 2008, 2007 and 2006, respectively. The policyholder’s share of net income on participating policies that cannot be distributed is excluded from stockholder’s equity by a charge to operations and a credit to a liability.

The Company had established a Participating Policyholder Experience Account (“PPEA”) for the benefit of all participating policyholders, which was included in the accompanying consolidated balance sheets at December 31, 2007. The Company had also established a Participation Fund Account (“PFA”) for the benefit of the participating policyholders previously assumed from The Great-West Life Assurance Company (“GWL”) under an assumption reinsurance transaction. The PFA was part of the PPEA. As discussed in Note 4, on January 1, 2008, the Company was no longer required to maintain the PPEA.

Recognition of premium and fee income and benefits and expenses - Life insurance premiums are recognized when due. Annuity contract premiums with life contingencies are recognized as received. Revenues for annuity and other contracts without significant life contingencies consist of contract charges for the cost of insurance and contract administration and surrender fees that have been assessed against the contract account balance during the period and are recognized when earned. Fees from assets under management, which consist of contract maintenance fees, administration fees and mortality and expense risk charges, are recognized when due. Benefits and expenses on policies with life contingencies are associated with earned premiums so as to result in recognition of profits over the life of the contracts. Premiums and policyholder benefit and expenses are presented net of reinsurance.

Net investment income - Interest and dividend income from fixed maturities and mortgage loans on real estate is recognized when earned. Net investment income on equity securities available-for-sale is primarily comprised of dividend income and is recognized when declared.

Net realized gains and losses on investments - Net realized gains and losses from investment sales are reported as a component of revenues and are determined on a specific identification basis. Net realized gains and losses also result from fair value changes in derivatives contracts that do not qualify, or are not designated, as a hedge for accounting purposes and the change in value of derivatives in certain fair-value hedge relationships. Impairments are recognized as net realized losses when investment losses in value are deemed other-than-temporary.

Income taxes - Income taxes are recorded using the asset and liability method in which deferred tax assets and liabilities are recorded for expected future tax consequences of events that have been recognized in either the Company’s consolidated financial statements or consolidated tax returns. In estimating future tax consequences, all expected future events, other than the enactments or changes in

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

the tax laws or rules, are considered. Although realization is not assured, management believes it is more likely than not that the deferred tax asset will be realized.

The Company adopted Financial Accounting Standards Board (the “FASB”) Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109” (“FIN 48”) effective January 1, 2007. Among other things, under FIN 48, the Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the consolidated financial statements.

Share-based compensation - Lifeco maintains the Great-West Lifeco Inc. Stock Option Plan (the “Lifeco plan”) that provides for the granting of options on its common shares to certain of its officers and employees and those of its subsidiaries, including the Company. On January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123R “Share-Based Payment” (“SFAS No. 123R”) which requires it to use the fair value method to recognize the cost of share-based employee compensation. Previously, the Company elected only to disclose the proforma impact of recording the fair value of stock options under the provisions of Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation” in the notes to its consolidated financial statements (See Note 20).

Regulatory requirements - In accordance with the requirements of the Colorado Division of Insurance, GWLA must demonstrate that it maintains adequate capital. At December 31, 2008 and 2007, GWLA was in compliance with the requirement (See Note 13).

In accordance with the requirements of the regulatory authorities in the states in which the Company conducts its business, it is required to maintain deposits with those authorities for the purpose of security for policy and contractholders. The Company fulfills this requirement generally with the deposit of United States government obligations.

2. Discontinued Operations

On April 1, 2008, the Company and certain of its subsidiaries completed the sale of substantially all of their healthcare insurance business to a subsidiary of CIGNA Corporation (“CIGNA”) for $1.5 billion (the “Purchase Price”) in cash. The Company recognized a gain in the amount of $681,528, net of income taxes, upon completion of the transaction. Income from discontinued operations for the second quarter of 2008 includes charges in the amount of $63,739, net of income taxes, related to costs associated with the sale. The business that was sold, formerly reported as the Company’s Healthcare segment, was the vehicle through which it marketed and administered group life and health insurance to small, mid-sized and national employers. CIGNA acquired from the Company the stop loss, group life, group disability, group medical, group dental, group vision, group prescription drug coverage and group accidental death and dismemberment insurance business in the United States and the Company’s supporting information technology infrastructure through a combination of 100% indemnity reinsurance agreements, renewal rights, related administrative service agreements and the acquisition of certain of the Company’s subsidiaries. The Company retained a small portion of its Healthcare business and reports it within its Individual Markets segment. As discussed in Note 19, the Company’s business is now comprised of its Individual Markets, Retirement Services and Other segments. As required by Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the statements of income and balance sheets of the disposed business activities are presented as discontinued operations for all periods presented in the consolidated financial statements.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

In addition, the Company and CIGNA entered into a Transition Services Agreement (the “Transition Agreement”) whereby the Company will provide certain information technology and administrative and legal services on behalf of CIGNA for a period of up to twenty-four months. CIGNA will pay the Company predetermined monthly fees for these services and will reimburse it for other expenditures it makes under the terms of the Transition Agreement.

The following table summarizes the major classifications of assets and liabilities of discontinued operations at December 31, 2008 and 2007:


	December 31,

Assets	2008		2007

Fixed maturities, available-for-sale	$	—	$	181,051
Short-term investments, available-for-sale		—		70,044
Receivables related to uninsured accident and health plan claims, net		—		134,397
Reinsurance receivable		124,089		46,772
Goodwill and other intangible assets		—		58,238
Premiums in course of collection		—		91,162
Deferred income taxes		—		(9,673	)
Other		—		152,775

Total assets	$	124,089	$	724,766


Liabilities

Policy reserves	$	39,776	$	103,219
Policy and contract claims		84,313		84,662
Policyholders’ funds		—		106,563
Other		—		174,052

Total liabilities	$	124,089	$	468,496

The following table summarizes selected financial information included in income from discontinued operations in the consolidated statements of income for the years ended December 31, 2008, 2007, and 2006:

	Year Ended December 31,
		2008			2007		2006
Revenues from discontinued operations		$	317,658		$	1,343,961	$	1,609,654
Benefits and expenses from discontinued operations			346,398			1,165,108		1,456,494
Income (loss) from discontinued operations, net of income tax expense (benefit) of $(19,258), $85,707 and $79,291			(28,740	)		178,853		153,160
Gain on sale of discontinued operations, net of income taxes of $408,094, $-, and $-			681,528			—		—
Income from discontinued operations		$	652,788		$	178,853	$	153,160

The Company adopted a restructuring plan in connection with the sale of its Healthcare segment. The restructuring plan consisted of a structural reorganization which will enable the Company to operate effectively in its present business environment. The liability is included in other liabilities in the consolidated balance sheet. The amounts incurred during the period and adjustments to original estimates during the period have been charged (credited) to income from discontinued operations in the consolidated statement of income.

The following is a reconciliation of the liability that the Company recorded related to the restructuring plan:


	Severance, retention and other employee related costs

Balance, April 1, 2008		$	—
Amount incurred during the period			49,202
Adjustments to original estimates during the period, net			(6,268	)
Cash payments and other settlements during the period			(30,222	)

Balance, December 31, 2008		$	12,712

The Company incurred net expenses in the amount of $42,934 during the year ended December 31, 2008 related to the restructuring plan and does not anticipate incurring significant additional costs in the future. It is estimated that the restructuring plan will be substantially complete during 2009.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

3. Acquisitions

Metropolitan Life Insurance Company’s 401(k) and defined benefit business

On October 2, 2006, the Company purchased several parts of the full service small and midsized 401(k) as well as certain defined benefit plan business from Metropolitan Life Insurance Company and its affiliates (“MetLife”). The assets acquired and liabilities assumed and the results of operations have been included in the Company’s consolidated financial statements since that date. The acquisition included the associated dedicated distribution group, including wholesalers, relationship managers and sales associates. As a result of the acquisition, the Company added approximately 280,000 participants in the 401(k) full service segment and increased its distribution capacity.

The purchase included a 100% coinsurance agreement reinsuring the acquired general account business and a 100% modified-coinsurance agreement reinsuring the acquired separate account business. The Company will replace the acquired MetLife policies with its policies over a three year period. As these policies are replaced, they will no longer be subject to the reinsurance agreements. Under the coinsurance agreement, the Company acquired all of the insurance liabilities associated with these contracts and received from MetLife cash to support these liabilities, net of the purchase price. Under the modified-coinsurance agreement, MetLife retained the approximate $2.3 billion of separate account assets and liabilities but cedes to the Company all of the net profits and losses and related net cash flows. In addition, the Company acquired the rights to provide administrative services and recordkeeping functions for approximately $3.2 billion of participant account values.

The purchase price has been allocated to the assets acquired and liabilities assumed using management’s best estimate of their fair values as of the acquisition date and the use of a third-party business valuation expert to estimate the value of business acquired (“VOBA”) and goodwill. The following table presents an allocation of the purchase price to assets acquired and liabilities assumed as adjusted for revisions to the original purchase price allocation at October 2, 2006:


Assets

Cash acquired, net of cash consideration	$	1,384,117
Value of business acquired		46,033
Goodwill		56,981
Other intangible assets		6,337
Other assets		650

Total assets	$	1,494,118


Liabilities and Stockholder’s Equity

Policy reserves	$	1,486,147
Other liabilities		7,971


Total liabilities	$	1,494,118

VOBA reflects the estimated fair value of in-force contracts acquired and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the contracts in force at the acquisition date. VOBA is based on actuarially determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns and other factors. Actual experience of the purchased business may vary from these projections. If estimated gross profits or premiums differ from expectations, the amortization of VOBA for these annuity products is adjusted to reflect actual experience. The VOBA has an expected amortization period of 14 years.

The value of the identifiable intangible assets reflects the estimated fair value of customer relationships for the recordkeeping business acquired and amounted to $6,337 as a result of this acquisition. This intangible will be amortized in relation to the expected economic benefits of the agreement. If actual experience with customer relationships differs from expectations, the amortization will be adjusted to reflect actual experience. The customer relationship intangible asset has an expected weighted average amortization period of 14 years.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to assets acquired and liabilities assumed. Goodwill resulting from the acquisition amounted to $56,981, all of which has been allocated to the Retirement Services segment. For income tax purposes, all of this goodwill will be deductible over 15 years.

U.S. Bank’s defined contribution business

On December 31, 2006, the Company purchased the full service defined contribution business from U.S. Bank. The results of operations of this business have been included in the Company’s consolidated financial statements since that date. The acquired business primarily relates to the administration of approximately 1,900 401(k) plans which represent approximately 195,000 members and more than $9.0 billion in retirement plan assets. The acquisition includes the retention of relationship managers and sales and client service specialists. An adjustment to the purchase price of $685 was received from U.S. Bank in 2008. In addition, the Company accrued $3,600 due to U.S. Bank at December 31, 2008 as an additional adjustment to the purchase price. The adjustments were contingent upon the attainment of certain revenue and contract retention targets. The adjustment received from and paid to U.S. Bank was recorded as an adjustment to the purchase price allocation. The $685 was adjusted through intangible assets while the $3,600 was an adjustment to goodwill.

The purchase price has been allocated to the assets acquired and liabilities assumed using management’s best estimate of their fair values as of the acquisition date and the use of a third-party business valuation expert to estimate the value of goodwill and other intangible assets acquired. The following table presents an allocation of the purchase price to assets acquired and liabilities assumed as adjusted for revisions to the original purchase price allocation:


Assets

Cash consideration	($	71,315	)
Goodwill		42,590
Other intangible assets		34,325

Total assets	$	5,600

Liabilities and Stockholder’s Equity

Other liabilities	$	5,600


Total liabilities	$	5,600

Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to assets acquired and liabilities assumed. Goodwill resulting from the acquisition amounted to $42,590, all of which has been allocated to the Retirement Services segment. For income tax purposes, all of this goodwill will be deductible over 15 years.

The value of the identifiable intangible assets reflects the estimated fair value of customer relationships acquired of $26,355 and the estimated fair value of the preferred provider relatioinship of $7,970. These intangibles will be amortized in relation to the expected economic benefits of the agreement. If actual experience differs from expectations, the amortization will be adjusted to reflect actual experience. The intangibles have an expected weighted average amortization period of 14 years.

4. Undistributed Earnings on Participating Business

During the first quarter of 2008, the liability for undistributed earnings on participating business decreased by $207,785 in connection with a long-standing assumption reinsurance agreement under which the Company had reinsured a block of participating policies. In addition, the agreement also required the Company to perform an analysis as of March 31, 2008, to determine whether the policyholders were eligible for a special dividend. Based on the Company’s analysis, it was determined that a special dividend was not required and, accordingly, the liability was released. An income tax provision was recorded on the

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

undistributed earnings when those earnings occurred. Accordingly, there was no income tax provision recorded at the time of the liability release. On January 1, 2008, the Company began recognizing the net earnings on these policies in its net income. A liability for undistributed earnings on participating business remains for those participating policies that are not subject to this reinsurance agreement.

5. Application of Recent Accounting Pronouncements

Recently adopted accounting pronouncements

In September 2005, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position No. 05-1, “Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection With Modifications or Exchanges of Insurance Contracts” (“SOP 05-1”). SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in FASB Statement of Financial Accounting Standards No. 97, “Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses From the Sale of Investments.” SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement or rider to a contract, or by the election of a feature or coverage within a contract. SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The Company adopted SOP 05-1 on January 1, 2007. The adoption of SOP 05-1 did not have a material impact on the Company’s consolidated financial position or the results of its operations.

In February 2006, the FASB issued Statement of Financial Accounting Standards No. 155, “Accounting for Certain Hybrid Financial Instruments” (“SFAS No. 155”). SFAS No. 155 permits any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation under Statement of Financial Accounting Standards No. 133 “Accounting for Derivative Instruments and Hedging Activities” to be carried at fair value in its entirety, with changes in fair value recognized in earnings. In addition, SFAS No. 155 requires that beneficial interests in securitized financial assets be analyzed to determine whether they are freestanding derivatives or contain an embedded derivative. SFAS No. 155 is applicable to new or modified financial instruments in fiscal years beginning after September 15, 2006, however it may be applied to instruments that an entity holds at the date of adoption on an instrument-by-instrument basis. The Company adopted SFAS No. 155 on January 1, 2007. The adoption of SFAS No. 155 increased stockholder’s equity by $115.

In June 2006, the FASB issued Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 on January 1, 2007. The adoption of FIN 48 decreased stockholder’s equity by $6,195.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 provides enhanced guidance for using fair value to measure assets and liabilities. SFAS No. 157 also provides expanded information about the extent to which a company measures assets and liabilities at fair value, the information used to measure fair value and the effect of fair value measurements on earnings. SFAS No. 157 is applicable whenever other authoritative pronouncements require or permit assets or liabilities to be measured at fair value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Company adopted the provisions of SFAS No. 157 on January 1, 2008. The adoption of SFAS No. 157 did not have a material impact on the Company’s consolidated financial position or results of its operations.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

In October 2008, the FASB issued Staff Position No. 157-3, “Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active” (“FSP No. 157-3”). FSP No 157-3 applies to financial assets within the scope of accounting pronouncements that require or permit fair value measurements in accordance with FASB No. 157. FSP No. 157-3 clarifies the application of FASB No. 157 in a market that is not active and provides an example to illustrate key conditions in determining the fair value of a financial asset when the market for that financial asset is not active. FSP No. 157-3 became effective upon issuance including prior periods for which financial statements have not been issued. The Company adopted the provisions of FSP No. 157-3 effective September 30, 2008. The adoption of FSP No. 157-3 did not have a material impact on the Company’s consolidated financial position or results of its operations.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS No. 158”). For fiscal years ending after December 15, 2006, SFAS No. 158 requires a company to recognize in its balance sheet an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status and recognize changes in the funded status of a defined benefit postretirement plan in the other comprehensive income section of stockholder’s equity in the year in which the changes occur, and provide additional disclosures. The Company adopted the recognition and disclosure provisions of SFAS No. 158 as of December 31, 2006, decreasing accumulated other comprehensive income (loss) by $6,734. For fiscal years ended after December 15, 2008, SFAS No. 158 requires a company to measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of the end of its fiscal year. The Company adopted the measurement provisions of SFAS No. 158 for its fiscal year ended December 31, 2008, decreasing stockholder’s equity by $206. The adoption of SFAS No. 158 did not affect the results of operations for the years ended December 31, 2008, 2007, or 2006.

In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an Amendment of FASB Statement No. 115” (“SFAS No.159”). SFAS No. 159 permits an entity to measure financial instruments and certain other items at estimated fair value. Most of the provisions of SFAS No. 159 are elective; however, the amendment to FASB No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, applies to all entities that own trading and available-for-sale securities. The fair value option established by SFAS No. 159 permits an entity to measure eligible items at fair value as of specified election dates. The fair value option (a) may generally be applied instrument by instrument, (b) is irrevocable unless a new election date occurs and (c) must be applied to the entire instrument and not to only a portion of the instrument. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The Company adopted the provisions of SFAS No. 159 on January 1, 2008. The adoption of SFAS No. 159 did not have an impact on the Company’s consolidated financial position or results of its operations.

In January 2009, the FASB issued EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20” (“EITF 99-20-1”). EITF 99-20-1 is an interpretative amendment to the impairment guidance of Emerging Issues Task Force Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets” and aligns its impairment guidance to that of Statement of Financial Accounting Standards No. 115 “Accounting for Certain Investments in Debt and Equity Securities. EITF 99-20-1 is effective for reporting periods ending after December 15, 2008. The Company adopted EITF 99-20-1 for its year ended December 31, 2008. The adoption of EITF 99-20-1 did not have an impact on the Company’s consolidated financial position or results of its operations.

Future adoption of new accounting pronouncements

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141(R), “Business Combinations” (“SFAS No. 141(R)”) and Statement of Financial Accounting Standards No. 160,

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

“Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS No. 160”). These statements change the accounting for and reporting of business combination transactions and noncontrolling (minority) interests in consolidated financial statements. Some of the significant changes include the recognition of one hundred percent of the fair value of assets acquired, liabilities assumed and non-controlling interest of acquired businesses; recognition of contingent consideration arrangements at their acquisition date fair values, with subsequent changes in fair value reflected in net income; recognition of acquisition related transaction costs as expense when incurred; and recognition of acquisition related restructuring cost accruals in acquisition accounting only if certain criteria are met as of the acquisition date. SFAS No. 141(R) and SFAS No. 160 are required to be adopted simultaneously and are effective for fiscal years beginning after December 15, 2008. The Company adopted the provisions of these statements for its fiscal year beginning January 1, 2009. The adoption of SFAS No. 141(R) and SFAS No. 160 did not have an impact on the Company’s consolidated financial position or results of its operations.

In February 2008, the FASB issued Staff Position No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP No. 157-2”), which defers the effective date of SFAS 157 for all nonrecurring fair value measurements of non-financial assets and non-financial liabilities until fiscal years beginning after November 15, 2008. Non-financial assets include assets associated with business acquisitions and impairment testing of tangible and intangible assets. The Company adopted the provisions of FSP No. 157-2 on January 1, 2009. The adoption of FSP No. 157-2 did not have a material impact on the Company’s consolidated financial position or results of its operations.

In March 2008, the FASB issued Statement of Financial Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (“SFAS No. 161”). SFAS No. 161 applies to all derivative instruments and related hedged items accounted for under Statement of Financial Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”). SFAS No. 161 requires entities to provide enhanced disclosures regarding (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations and (c) how derivative instruments and related hedged items affect an entity’s financial position, results of operations and cash flows. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008. The Company adopted the provisions of SFAS No. 161 for its fiscal year beginning January 1, 2009. The adoption of SFAS No. 161 did not have an impact on the Company’s consolidated financial position or the results of its operations.

In April 2008, the FASB issued Staff Position No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FAS No. 142-3”). FAS No. 142-3 amends the factors that must be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets.” In determining the useful life of an intangible asset for amortization purposes, an entity shall consider, among other things, the periods of expected cash flows, adjusted for certain entity-specific factors. FAS No. 142-3 is effective for fiscal years beginning after December 15, 2008. The Company adopted the provisions of FAS No. 142-3 for its fiscal year beginning January 1, 2009. The Company is evaluating the adoption of FAS No. 142-3.

In December 2008, the FASB issued Staff Position No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP No. FAS 132(R)-1”). FSP No. FAS 132(R)-1 requires additional disclosures about assets held in an employer’s defined benefit pension plan including disclosures regarding investment policies and strategies, categories of plan assets, fair value measurements of plan assets and significant concentrations of risk. The disclosure requirements of FSP No. FAS 132(R)-1 are effective for fiscal years ending after December 15, 2009. The Company adopted the provisions of FSP No. FAS 132(R)-1 for its fiscal year beginning January 1, 2009. The Company is evaluating the impact of adoption of FSP No. FAS 132(R)-1.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

6. Related Party Transactions

Included in the consolidated balance sheets at December 31, 2008 and 2007 are the following related party amounts:


	December 31,

	2008		2007

Reinsurance receivable	$	425,369	$	381,931
Policy reserves		2,393,013		2,493,511

Included in the consolidated statements of income for the years ended December 31, 2008, 2007 and 2006 are the following related party amounts:


	Year Ended December 31,

	2008			2007			2006

Premium income, net of premiums ceded of $3,662, $1,391,518 and $4,827	$	155,752			($ 1,146,908	)	$	275,169
Life and other policy benefits, net of reinsurance recoveries of $7,356, $737 and $3,325		120,999			103,765			100,575
Increase (decrease) in policy reserves		(42,180	)		(1,539,777	)		29,245

The Company provides administrative and operational services for the United States operations of The Great-West Life Assurance Company (“GWL”) and the United States operations of The Canada Life Assurance Company (“CLAC”), wholly-owned subsidiaries of Lifeco. The Company also provides investment services for London Reinsurance Group, an indirect subsidiary of GWL. The following table presents revenue and expense reimbursement from related parties for services provided pursuant to these service agreements for the years ended December 31, 2008, 2007 and 2006. These amounts, in accordance with the terms of the various contracts, are based upon estimated costs incurred, including a profit charge, and resources expended based upon the number of policies, certificates in-force and/or administered assets.

	Year Ended December 31,

	2008		2007		2006

Investment management revenue included in net investment income	$	7,856	$	7,959	$	6,772
Administrative and underwriting expense reimbursements included as a reduction to general insurance expenses		1,092		1,255		1,399

Total	$	8,948	$	9,214	$	8,171

The following table summarizes amounts due from parent and affiliates at December 31, 2008 and 2007:


			December 31,

Related party	Indebtedness	Due Date	2008		2007

GWL&A Financial Inc.	On account	On demand	$	37,097	$	25,932
Great-West Life & Annuity Insurance Capital (Nova Scotia) Co.	On account	On demand		716		521
Great-West Life & Annuity Insurance Capital (Nova Scotia) Co. II	On account	On demand		2,079		1,370
Putnam Investments LLC	On account	On demand		207		1,315
The Great-West Life Assurance Company	On account	On demand		1,694		—

Total			$	41,793	$	29,138

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table summarizes amounts due to parent and affiliates at December 31, 2008 and 2007:


			December 31,

Related party	Indebtedness	Due Date	2008		2007

GWL&A Financial Inc. ¹	Surplus note	November 2034	$	194,206	$	194,194
GWL&A Financial Inc. ²	Surplus note	May 2046		333,400		333,400
GWL&A Financial Inc.	Note interest	May 2009		4,701		5,095
Great-West Lifeco Finance LP	On account	On demand		—		582
The Great-West Life Assurance Company	On account	On demand		—		1,046
The Canada Life Assurance Company	On account	On demand		1,563		639

Total			$	533,870	$	534,956

¹ A note payable to GWL&A Financial was issued as a surplus note on November 15, 2004, with a face amount of $195,000 and carrying amounts of $194,206 and $194,194 at December 31, 2008 and 2007, respectively. The surplus note bears interest at the rate of 6.675% per annum, payable in arrears on each May 14 and November 14. The note matures on November 14, 2034.

² A note payable to GWL&A Financial was issued as a surplus note on May 19, 2006, with a face amount and carrying amount of $333,400. The surplus note bears interest initially at the rate of 7.203% per annum, payable in arrears on each May 16 and November 16 until May 16, 2016. After May 16, 2016, the surplus note bears an interest rate of 2.588% plus the then current three-month London Interbank Offering Rate. The surplus note is redeemable by the Company at the principal amount plus any accrued and unpaid interest after May 16, 2016. The note matures on May 16, 2046.

Payments of principal and interest under the surplus notes shall be made only out of surplus funds of the Company and only with prior written approval of the Commissioner of Insurance of the State of Colorado when the Commissioner of Insurance is satisfied that the financial condition of the Company warrants such action pursuant to applicable Colorado law. Payments of principal and interest on the surplus notes are payable only if at the time of such payment and after giving effect to the making thereof, the Company’s surplus would not fall below two and one half times the authorized control level as required by the most recent risk-based capital calculations.

Interest expense attributable to these related party debt obligations was $37,042, $37,042 and $28,848 for the years ended December 31, 2008, 2007 and 2006, respectively.

On June 1, 2007, the Company’s Individual Markets segment terminated its reinsurance agreement with an affiliate, CLAC, pursuant to which it had assumed 80% of certain United States life, health and annuity business on a coinsurance and coinsurance with funds withheld basis. The Company recorded, at fair value, the following in its consolidated balance sheet in connection with the termination of the reinsurance agreement:

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


Assets

Fixed maturities	(	$1,177,180	)
Mortgage loans on real estate		(196,743	)
Policy loans		(219,149	)
Reinsurance receivable		(310,865	)
Deferred policy acquisition costs and value of business acquired		(68,809	)
Investment income due and accrued		(15,837	)
Premiums in course of collection		(3,540	)
Deferred income taxes		(18,274	)

Total assets	(	$2,010,397	)


Liabilities and Stockholder’s Equity

Policy reserves	(	$1,976,028	)
Policy and contract claims		(20,256	)
Policyholders’ funds		(20,464	)
Provision for policyholder dividends		(31,841	)
Undistributed earnings on participating business		8,161
Other liabilities		103

Total liabilities		(2,040,325	)


Accumulated other comprehensive income		7,684
Retained earnings		22,244

Total stockholder’s equity		29,928

Total liabilities and stockholder’s equity	(	$2,010,397	)

The Company recorded the following in its consolidated statement of income in connection with the termination of the reinsurance agreement:


Premium income	(	$1,387,179	)
Net investment income		58,569
Net realized losses on investments		(14,797	)

Total revenues		(1,343,407	)

Decrease in reserves		(1,453,145	)
Provision for policyholders’ share of earnings on participating business		8,161
Amortization of deferred acquisition costs and value of business acquired		62,961

Total benefits and expenses		(1,382,023	)

Income before income taxes		38,616
Income taxes		16,372

Net income	$	22,244

On July 3, 2007, Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”), a wholly-owned subsidiary of the Company, and CLAC amended their reinsurance agreement pursuant to which the Company assumed additional term life insurance from CLAC. As a result of this amendment, the Company recorded $33,677 in both premium income and increase in reserves in the consolidated statement of income. GWL&A Financial obtained two letters of credit for the benefit of the Company during December 2005 as collateral under the GWSC and CLAC reinsurance agreement for on-balance sheet policy liabilities and capital support. The first letter of credit is for $919,100 and renews automatically until it expires on December 31, 2025. The second letter of credit is for $70,000 and renews automatically. At December 31, 2008 and 2007, there were no outstanding amounts related to these letters of credit.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

As a result of this amendment, the Company also recorded the following in its consolidated balance sheet:

Assets		Liabilities and Stockholder’s Equity
Reinsurance receivable	$33,677	Policy reserves	$33,677
	$33,677		$33,677

Included within reinsurance receivable in the consolidated balance sheets are $376,378 and $334,169 of funds withheld assets as of December 31, 2008 and 2007, respectively. CLAC pays the Company interest on the funds withheld balance at a rate of 4.55% per annum.

The Company’s separate accounts invest in shares of Maxim Series Fund, Inc., an open-end management investment company, and Putnam Funds which are affiliates of the Company, and shares of other non-affiliated mutual funds and government and corporate bonds. The Company’s separate accounts include mutual funds or other investment options that purchase guaranteed interest annuity contracts issued by the Company. During the years ended December 31, 2008 and 2007, these purchases totaled $64,723 and $74,855 respectively. As the general account investment contracts are also included in the separate account balances in the accompanying consolidated balance sheets, the Company has reduced the separate account assets and liabilities by $265,299 and $383,319 at December 31, 2008 and 2007, respectively, to eliminate these amounts in its consolidated balance sheets at those dates.

7. Summary of Investments

The following table summarizes fixed maturity investments and equity securities classified as available-for-sale at December 31, 2008:


	December 31, 2008

Fixed Maturities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Carrying Value

U.S. government direct obligations and U.S. agencies	$	2,356,143	$	81,084	$	6,601	$	2,430,626	$	2,430,626
Obligations of U.S. states and their subdivisions		1,173,185		10,026		34,443		1,148,768		1,148,768
Foreign governments		1,140		12		—		1,152		1,152
Corporate debt securities		5,589,524		51,728		615,647		5,025,605		5,025,605
Mortgage-backed and asset-backed securities		4,274,683		6,183		913,481		3,367,385		3,367,385

Total fixed maturities	$	13,394,675	$	149,033	$	1,570,172	$	11,973,536	$	11,973,536


Total equity investments	$	16,330	$	2,424	$	964	$	17,790	$	17,790

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table summarizes fixed maturity investments and equity securities classified as available-for-sale at December 31, 2007:


	December 31, 2007

Fixed Maturities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Carrying Value

U.S. government direct obligations and U.S. agencies	$	2,701,076	$	40,661	$	7,287	$	2,734,450	$	2,734,450
Obligations of U.S. states and their subdivisions		1,213,378		61,168		1,129		1,273,417		1,273,417
Foreign governments		1,801		—		31		1,770		1,770
Corporate debt securities		5,327,480		90,847		94,403		5,323,924		5,323,924
Mortgage-backed and asset-backed securities		4,348,268		26,109		156,705		4,217,672		4,217,672

Total fixed maturities	$	13,592,003	$	218,785	$	259,555	$	13,551,233	$	13,551,233


Total equity investments	$	19,749	$	10,414	$	587	$	29,576	$	29,576

See Note 8 for additional information on policies regarding estimated fair value of fixed maturity and equity investments.

The amortized cost and estimated fair value of fixed maturity investments classified as available-for-sale at December 31, 2008, by contractual maturity date, are shown in the table below. Actual maturities will likely differ from these projections because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	December 31, 2008

	Amortized Cost		Estimated Fair Value

Maturing in one year or less	$	1,000,913	$	888,813
Maturing after one year through five years		2,673,517		2,568,925
Maturing after five years through ten years		1,783,396		1,675,416
Maturing after ten years		1,446,732		1,190,987
Mortgage-backed and asset-backed securities		6,490,117		5,649,395

	$	13,394,675	$	11,973,536

Mortgage-backed and asset-backed securities include collateralized mortgage obligations that consist primarily of sequential and planned amortization classes with final stated maturities of two to thirty years and expected average lives of less than one to fifteen years. Prepayments on all mortgage-backed securities are monitored monthly and amortization of the premium and/or the accretion of the discount associated with the purchase of such securities are adjusted by such prepayments.

The following table summarizes information regarding the sales of fixed maturity investments classified as available-for-sale for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Proceeds from sales	$	2,696,635		$	2,488,042		$	5,944,439
Gross realized gains from sales		50,173			30,834			47,746
Gross realized losses from sales		(1,456	)		(4,309	)		(54,221	)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Gross realized gains and losses from sales were primarily attributable to changes in interest rates, sales of securities acquired in the current year and gains on repurchase agreement transactions.

The Company has fixed maturity securities with fair values in the amounts of $0 and $11,156 that have been non-income producing for the twelve months preceding December 31, 2008 and 2007, respectively. These securities were written down to their fair value in the period they were deemed to be other-than-temporarily impaired.

Derivative financial instruments - The Company makes limited use of derivative financial instruments to manage interest rate and foreign exchange risk associated with its invested assets. Derivatives are not used for speculative purposes.

The Company controls the credit risk of its derivative contracts through credit approvals, limits and monitoring procedures. Risk of loss is generally limited to the fair value of derivative instruments and not to the notional or contractual amounts of the derivatives. Counterparty credit risk was evaluated and considered immaterial to the valuation of derivatives at December 31, 2008. As the Company enters into derivative transactions only with high quality institutions, no losses associated with non-performance of derivative financial instruments have occurred.

Fair value hedges - Written call options are used in conjunction with interest rate swap agreements to effectively convert fixed rate bonds to variable rate bonds as part of the Company’s overall asset/liability matching program. Interest rate futures are used to hedge the risk of the change in the fair value of certain fixed rate maturity investments. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one party to the other at the expiration or termination of the agreement.

The Company’s use of derivatives treated as fair value hedges has been nominal during the last three years. Hedge ineffectiveness in the amounts of $0, $0 and $224 were recorded as an increase to net investment income during the years ended December 31, 2008, 2007 and 2006, respectively.

Cash flow hedges - Interest rate swap agreements are used to convert the interest rate on certain debt securities from a floating rate to a fixed rate. Foreign currency exchange contracts are used to hedge the foreign exchange rate risk associated with bonds denominated in other than U.S. dollars. Interest rate futures are used to hedge the interest rate risks of forecasted acquisitions of fixed rate maturity investments. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one party to the agreement at each due date.

Hedge ineffectiveness in the amount of $1,510 and $606 was recorded as an increase to net investment income during the years ended December 31, 2008 and 2007, respectively. Hedge ineffectiveness in the amount of $89 was recorded as a decrease to net investment income during the year ended December 31, 2006.

Unrealized derivative gains and losses included in accumulated other comprehensive income are reclassified into earnings at the time interest income is recognized. A derivative net gain in the amount of $4,732 was reclassified to net investment income during the year ended December 31, 2008 while a derivative net loss in the amount of $1,275 and a derivative net gain in the amount of $1,709 were reclassified to net investment income during the years ended December 31, 2007 and 2006, respectively. As of December 31, 2008, the Company estimates that $11,475 of net derivative gains included in accumulated other comprehensive income will be reclassified into net income within the next twelve months.

Derivatives not designated as hedging instruments - The Company attempts to match the timing of when interest rates are committed on insurance products with other new investments. However, timing differences may occur and can expose the Company to fluctuating interest rates. To offset this risk, the

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Company uses U.S. Treasury futures contracts. The Company also utilizes U.S. Treasury futures as a method of adjusting the duration of the overall portfolio. Although management believes the above-mentioned derivatives are effective hedges from an economic standpoint, they do not meet the requirements for hedge accounting treatment under SFAS No. 133.

The Company occasionally purchases a financial instrument that contains a derivative instrument that is “embedded” in the financial instrument. Upon purchasing the instrument, the Company assesses whether the economic characteristics of the embedded derivative are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e. the host contract) and whether a separate instrument with the same terms as the embedded instrument could meet the definition of a derivative instrument. The Company determines if (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument. If both of these are true, the Company has the option of separating the embedded derivative from the host contract and carrying it at its fair value or under SFAS No. 155, the Company may carry the entire hybrid instrument at fair value with gains and losses recognized in earnings.

During the years ended December 31, 2008, 2007 and 2006, decreases in the amounts of $0, $75 and $264, respectively, were recognized in net income from market value changes of derivatives not receiving hedge accounting treatment.

The following tables summarize derivative financial instruments at December 31, 2008 and 2007:


	December 31, 2008

	Notional Amount			Strike/Swap Rate	Maturity

Interest rate swaps		$	325,966	0.44%-1.75%	March 2009- February 2045

Foreign currency exchange contracts			52,001	N/A	March 2014- December 2016
Futures:
Thirty year U.S Treasury:
Short position			40,500	N/A	March 2009


	December 31, 2007

	Notional Amount			Strike/Swap Rate	Maturity

Interest rate swaps		$	338,075	3.94%-4.70%	November 2008- February 2045

Foreign currency exchange contracts			52,001	N/A	March 2014- December 2016
Futures:
Ten year U.S. Treasury:
Long position			30,900	N/A	March 2008

Mortgage loans – There were no impaired mortgage loans at December 31, 2008. The average balance of impaired loans during 2007 was $6,213 and the related allowance for credit losses was $6,213, leaving an impaired loan balance of $0 at December 31, 2007.

As part of its active loan management policy and in the interest of maximizing the future return of each individual loan, the Company may from time to time modify the original terms of certain loans. These restructured loans, all performing in accordance with their modified terms, aggregated $0 and $6,223 at December 31, 2008 and 2007, respectively.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table summarizes activity in the allowance for mortgage loan credit losses for the years 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Balance, January 1	$	9,448		$	15,661		$	15,661
Release of provision		(614	)		(6,213	)		—

Balance, December 31	$	8,834		$	9,448		$	15,661

The changes to the allowance for mortgage loan credit losses are recorded in net realized gains (losses) on investments.

Equity investments - The carrying value of the Company’s equity investments was $17,790 and $29,576 at December 31, 2008 and 2007, respectively.

Limited partnership interests and limited liability corporation interests - At December 31, 2008 and 2007, the Company had $293,956 and $326,971, respectively, invested in limited partnerships and limited liability corporations. The Company makes commitments to fund partnership interests in the normal course of its business. The amounts of unfunded commitments at December 31, 2008 and 2007 were $33,289 and $18,849, respectively.

Securities pledged, restricted assets and special deposits - The Company pledges investment securities it owns to unaffiliated parties through certain transactions, including securities sold under agreements to repurchase, futures contracts and state regulatory deposits.

The Company had securities on deposit with governmental authorities as required by certain insurance laws with fair values in the amounts of $37,220 and $35,539 at December 31, 2008 and 2007, respectively.

The Company participates in a securities lending program whereby securities, which are included in invested assets in the accompanying consolidated balance sheets, are loaned to third parties. Securities with a cost or amortized cost in the amounts of $32,788 and $84,851 and estimated fair values in the amounts of $41,321 and $90,087 were on loan under the program at December 31, 2008 and 2007, respectively. The Company was liable for collateral under its control in the amounts of $43,205 and $93,472 at December 31, 2008 and 2007, respectively.

Additionally, the fair value of margin deposits related to futures contracts was approximately $1,600 and $496 at December 31, 2008 and 2007, respectively.

Impairment of fixed maturity and equity investments classified as available-for-sale - The Company classifies the majority of its fixed maturity investments and all of its equity investments as available-for-sale and records them at fair value with the related net unrealized gain or loss, net of policyholder related amounts and deferred taxes, in accumulated other comprehensive income in the stockholder’s equity section in the accompanying consolidated balance sheets. All available-for-sale securities with gross unrealized losses at the balance sheet date are subjected to the Company’s process for the identification and evaluation of other-than-temporary impairments.

The Company writes down to fair value securities that it deems to be other-than-temporarily impaired in the period the securities are deemed to be so impaired. The Company records write-downs as realized losses and adjusts the cost basis of the securities accordingly. The Company does not adjust the revised cost basis for subsequent recoveries in value.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The assessment of whether an other-than-temporary impairment has occurred is based upon management’s case-by-case evaluation of the underlying reasons for the decline in fair value. Management considers a wide range of factors, as described below, regarding the security issuer and uses its best judgment in evaluating the cause of the decline in its estimated fair value and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations and future earnings potential of the issuer.

Considerations used by the Company in the impairment evaluation process include, but are not limited to, the following:


•	Fair value is significantly below cost.

•	The decline in fair value is attributable to specific adverse conditions affecting a particular instrument, its issuer, an industry or geographic area.

•	The decline in fair value has existed for an extended period of time.

•	A debt security has been downgraded by a credit rating agency.

•	The financial condition of the issuer has deteriorated.

•	Dividends have been reduced or eliminated or scheduled interest payments have not been made.

While all available information is taken into account, it is difficult to predict the ultimate recoverable amount from a distressed or impaired security.

Unrealized losses on fixed maturity and equity investments classified as available-for-sale

The following tables summarize unrealized investment losses by class of investment at December 31, 2008 and 2007. The Company considers these investments to be only temporarily impaired:


	December 31, 2008

	Less than twelve months						Twelve months or longer						Total

Fixed Maturities	Estimated Fair Value			Unrealized Loss			Estimated Fair Value			Unrealized Loss			Estimated Fair Value			Unrealized Loss

U.S. government direct obligations and U.S. agencies		$	41,965		$	2,042		$	157,062		$	4,559		$	199,027		$	6,601
Obligations of U.S. states and their subdivisions			662,723			28,728			65,697			5,715			728,420			34,443
Corporate debt securities			2,271,214			213,400			1,556,161			402,247			3,827,375			615,647
Mortgage-backed and asset-backed securities			1,143,410			205,615			2,038,847			707,866			3,182,257			913,481

Total fixed maturities		$	4,119,312		$	449,785		$	3,817,767		$	1,120,387		$	7,937,079		$	1,570,172


Equity investments		$	2,451		$	964		$	—		$	—		$	2,451		$	964


Total number of securities in an unrealized loss position			1,956						571						2,524

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	December 31, 2007

	Less than twelve months						Twelve months or longer						Total

Fixed Maturities	Estimated Fair Value			Unrealized Loss			Estimated Fair Value			Unrealized Loss			Estimated Fair Value			Unrealized Loss

U.S. government direct obligations and U.S. agencies		$	93,564		$	1,035		$	584,237		$	6,252		$	677,801		$	7,287
Obligations of U.S. states and their subdivisions			18,748			427			83,482			702			102,230			1,129
Foreign governments			—			—			1,770			31			1,770			31
Corporate debt securities			483,359			19,290			1,907,778			75,113			2,391,137			94,403
Mortgage-backed and asset-backed securities			873,956			74,461			2,097,427			82,244			2,971,383			156,705

Total fixed maturities		$	1,469,627		$	95,213		$	4,674,694		$	164,342		$	6,144,321		$	259,555


Equity investments		$	3,615		$	587		$	—		$	—		$	3,615		$	587


Total number of securities in an unrealized loss position			133						667						800

Fixed maturity investments - Total unrealized losses increased by $1,310,617 from December 31, 2007 to 2008. This increase in unrealized losses is primarily due to the corporate debt securities and mortgage-backed and asset-backed securities classes and reflects market illiquidity and economic uncertainty in these markets during the past year.

Unrealized losses on mortgage-backed and asset-backed securities comprise $756,776 of this increase and are attributable to widening of credit spreads resulting from a lack of market liquidity. The market disruption has influenced valuations at December 31, 2008; however, the underlying collateral on the securities within the portfolio along with credit enhancement and/or guarantees is sufficient to expect full repayment of the principal. See Note 8 for additional discussion regarding fair valuation processes.

Unrealized losses on corporate debt securities increased $521,244 from December 31, 2007 to 2008. The valuation of these securities has also been significantly influenced by market conditions. Management has classified these securities by sector, calculated as a percentage of total unrealized losses as follows:


	December 31,

Corporate sector	2008			2007

Finance		51	%		53	%
Utility		20	%		19	%
Natural resources		9	%		8	%
Consumer		8	%		10	%
Transportation		4	%		5	%
Other		8	%		5	%

		100	%		100	%

Approximately $259,915 of the increase in unrealized losses was related to the finance industry. These unrealized losses were primarily related to securities in the insurance industry, and perpetual floating-interest-rate securities issued by Canadian and other foreign banks. Less than 5% (approximately $30,067 of the $615,647) of total unrealized losses on corporate debt securities was related to securities in the finance industry on which there has been a ratings downgrade since December 31, 2007. All of these securities, except one, representing $8,483 of the unrealized losses, are rated BBB or above.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Approximately $106,579 of the increase in unrealized losses since December 2007 was related to the utility industry. Less than 4% (approximately $21,371 of the $615,647) of the total unrealized losses on corporate debt securities was related to securities in the utility industry on which there has been a ratings downgrade since December 31, 2007. All of these securities are rated BBB or above.

Future changes in the fair value of these securities will be dependent upon the return of market liquidity and changes in general market conditions including interest rates and credit spread movements. While the decline in fair value has been increasing and many unrealized losses have existed for longer than twelve months, the Company believes this is attributable to general market conditions and not reflective of the financial condition of the issuer or collateral backing the securities and has little bearing on whether the investment will be ultimately recoverable. Current liquidity conditions in the market place contribute to the uncertainty in the financial condition of the many issuers; however, the Company continually monitors its credit risk exposure to identify potential losses. The Company has the ability and intent to hold the securities with unrealized losses until a recovery of the fair value, which may be maturity; therefore, the Company does not consider these investments to be other-than-temporarily impaired at December 31, 2008.

Equity investments - The increase in unrealized losses of $377 from December 31, 2007 to 2008 is primarily related to issues in the financial services industry. At December 31, 2008, the Company is continuing to monitor conditions impacting the industry, as noted above, and has determined that these securities are not other-than-temporarily impaired.

Other-than-temporary impairment recognition - The Company recorded other-than-temporary impairments on fixed maturity investments of $87,886, $34,485 and $6,094 during 2008, 2007 and 2006, respectively. Of the $87,886, $35,657 was related to the write-down of a security in the financial services industry backed by Lehman Brothers Holdings Inc. Additionally, $24,888 of the $87,886 was related to the write-down of securities in the automobile industry backed by General Motors Corporation. Of the $87,886 recorded during 2008, $4,372 was related to discontinued operations and $83,514 was related to continuing operations.

The Company recorded other-than-temporary impairment on equity securities of $3,512 during 2008. This was related to airline securities and a Washington Mutual, Inc. holding within a limited partnership investment. During 2007 and 2006, the Company recorded other-than-temporary impairments on equity securities in the amounts of $389 and $469, respectively.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

8. Fair Value Measurements

The following table summarizes the carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2008 and 2007:


	December 31, 2008				December 31, 2007

Assets	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value

Fixed maturities and short-term investments	$	12,378,740	$	12,378,740	$	14,046,926	$	14,046,926
Mortgage loans on real estate		1,380,101		1,373,015		1,199,976		1,212,221
Equity investments		17,790		17,790		29,576		29,576
Policy loans		3,979,094		3,979,094		3,767,872		3,767,872
Other investments		31,992		58,600		11,362		12,134
Derivative instruments		92,713		92,713		8,734		8,734
Collateral under securities lending agreements		43,205		43,205		93,472		93,472
Reinsurance receivable		8,144		8,144		4,856		4,856
Separate account assets		15,121,943		15,121,943		18,089,984		18,089,984


	December 31, 2008				December 31, 2007

Liabilities	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value

Annuity contract reserves without life contingencies	$	6,736,101	$	6,176,405	$	5,998,749	$	6,041,886
Policyholders’ funds		320,320		320,320		302,957		302,957
Repurchase agreements		202,079		202,079		138,537		138,537
Commercial paper		97,167		97,167		95,667		95,667
Payable under securities lending agreements		43,205		43,205		93,472		93,472
Derivative instruments		—		—		3,634		3,634
Notes payable		532,307		532,307		532,689		532,689
Separate account liabilities		15,121,943		15,121,943		18,089,984		18,089,984

Fixed maturity and equity securities

The fair values for public fixed maturity and equity securities are based upon quoted market prices or estimates from independent pricing services. However, in cases where quoted market prices are not readily available, such as for private fixed maturity investments, fair values are estimated. To determine estimated fair value for these instruments, the Company generally utilizes discounted cash flow calculated at current market rates on investments of similar quality and term. Fair value estimates are made at a specific point in time, based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and the credit standing of the issuer or counterparty. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts of the Company’s financial instruments.

Short-term investments, securities lending agreements, repurchase agreements and commercial paper

The carrying value of short-term investments, collateral and payable under securities lending agreements, repurchase agreements and commercial paper is a reasonable estimate of fair value due to their short-term nature.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Mortgage loans on real estate

Mortgage loan fair value estimates are generally based on discounted cash flows. A discount rate matrix is incorporated whereby the discount rate used in valuing a specific mortgage generally corresponds to that mortgage’s remaining term and credit quality. The rates selected for inclusion in the discount rate matrix reflect rates that the Company would quote if placing loans representative in size and quality to those currently in its portfolio.

Policy loans

Policy loans accrue interest at variable rates with no fixed maturity dates; therefore, estimated fair values approximate carrying values.

Other investments

Other investments consist of the Company’s percentage ownership of a foreclosed lease interest in an aircraft. The estimated fair value is based on the present value of anticipated lease payments plus the residual value. Also included in other investments is real estate held for investment. The estimated fair value is based on appraised value.

Derivative instruments

Included in other assets at December 31, 2008 and 2007 are derivative financial instruments in the amounts of $92,713 and $8,734, respectively. Included in other liabilities at December 31, 2008 and 2007 are derivative financial instruments in the amounts of $0 and $3,634, respectively. The estimated fair values of over-the-counter derivatives, primarily consisting of interest rate swaps, which are held for other than trading purposes, are the estimated amounts the Company would receive or pay to terminate the agreements at each year-end, taking into consideration current interest rates, counterparty credit risk and other relevant factors. Counterparty credit risk considerations were immaterial to the valuation of the derivatives as of December 31, 2008.

Reinsurance receivable

The carrying value of the reinsurance receivable is a reasonable estimate of fair value due to their short-term nature.

Annuity contract reserves without life contingencies

The estimated fair values of annuity contract reserves without life contingencies are estimated by discounting the projected expected cash flows to the maturity of the contracts utilizing risk-free spot interest rates plus a provision for credit risk.

Policyholders’ funds

The estimated fair values of policyholders’ funds are the same as the carrying amounts since the Company can change the interest crediting rates with 30 days notice.

Notes payable

The estimated fair values of the notes payable to GWL&A Financial are based upon discounted cash flows at current market rates on high quality investments.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Separate account assets and liabilities

Separate account assets and liabilities are adjusted to net asset value on a daily basis, which approximates fair value.

Fair value disclosures

The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with SFAS No. 157. The levels of the fair value hierarchy are described below.

• Level 1 inputs utilize observable, quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Financial assets and liabilities utilizing Level 1 inputs include actively exchange-traded equity securities.

• Level 2 inputs utilize other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. The fair values for some Level 2 securities were obtained from a pricing service. The list of inputs used by the pricing service is reviewed on a quarterly basis. The pricing service inputs include, but are not limited to, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, offers and reference data. Level 2 securities include those priced using a matrix which is based on credit quality and average life, U.S. government and agency securities, restricted stock, some private equities, certain fixed maturity investments and some over-the-counter derivatives.

• Level 3 inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The prices of the majority of Level 3 securities were obtained from single broker quotes and internal pricing models. Financial assets and liabilities utilizing Level 3 inputs include certain private equity, fixed maturity and over-the-counter derivative investments.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2008 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:


	Assets and Liabilities Measured at Fair Value on a Recurring Basis December 31, 2008

Assets	Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)			Total

Fixed maturities, available-for-sale		$	—	$	11,177,965		$	795,571	$	11,973,536
Fixed maturities, held for trading			—		38,834			—		38,834
Equity investments, available-for-sale			17,790		—			—		17,790
Short-term investments, available-for-sale			66,958		299,412			—		366,370
Collateral under securities lending agreements			43,205		—			—		43,205
Other assets ¹			—		89,489			3,224		92,713
Separate account assets ²			9,080,928		5,355,100			532		14,436,560

Total assets		$	9,208,881	$	16,960,800		$	799,327	$	26,969,008


Liabilities

Total liabilities		$	—	$	—		$	—	$	—


¹	Includes derivative financial instruments.

²	Includes only separate account investments which are carried at the fair value of the underlying invested assets owned by the separate accounts.

Total assets and liabilities in Level 3 increased by $280,849 from January 1 to December 31, 2008. The increase is primarily due to a change in pricing source for asset-backed securities backed by prime home improvement loans. The Company determined that the use of internal models was a better measurement of fair value for these securities.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:


	Recurring Level 3 Financial Assets and Liabilities Year Ended December 31, 2008

	Fixed maturities available- for-sale				Equity investments available- for-sale				Collateral under securities lending agreements				Other assets and liabilities ¹				Separate accounts

Balance, January 1, 2008		$	404,119			$	244			$	21,155			($	2,265	)	$	95,225
Realized and unrealized gains and losses:
Gains (losses) included in net income			3,052				—				—				5			—
(Gains) losses included in other comprehensive income			(71,360	)			—				—				5,484			(1,015	)
Purchases, issuances and settlements			(19,337	)			(244	)			(21,155	)			—			(5,574	)
Transfers in (out) of Level 3			479,097				—				—				—			(88,104	)

Balance, December 31, 2008		$	795,571			$	—			$	—			$	3,224		$	532


Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets held at December 31, 2008		$	—			$	—			$	—			$	5		$	—

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Realized and unrealized gains and losses included in net income for the year ended December 31, 2008 are reported in net realized gains (losses) on investments and net investment income as follows:


	Year Ended December 31, 2008

	Net realized gains (losses) on investments			Net investment income

Realized and unrealized gains and losses included in net income for the period		$	3,052		$	5

Non-recurring Level 3 assets and liabilities - At December 31, 2008, the Company held $16,097 of cost basis limited partnership interests which were impaired during the year based on underlying limited partnership financial statements. These limited partnership interests were recorded at estimated fair value and represent a non-recurring fair value measurement. The estimated fair value was categorized as Level 3. Included within net realized gains (losses) on investments are impairments of $1,122 for the year ended December 31, 2008. The Company has no liabilities measured at fair value on a non-recurring basis at December 31, 2008.

9. Reinsurance

The Company enters into reinsurance transactions as both a provider and purchaser of reinsurance. In the normal course of business, the Company seeks to limit its exposure to loss on any single insured and to recover a portion of benefits paid by ceding risks to other insurance enterprises under excess coverage and coinsurance contracts. The Company retains a maximum liability in the amount of $3,500 of coverage per individual life.

Ceded reinsurance contracts do not relieve the Company from its obligations to policyholders. The failure of reinsurers to honor their obligations could result in losses to the Company. The Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities or economic characteristics of the reinsurers to minimize its exposure to significant losses from reinsurer insolvencies. At December 31, 2008 and 2007, the reinsurance receivables had carrying values in the amounts of $546,491 and $505,107, respectively. Included in these amounts are $425,369 and $381,931 at December 31, 2008 and 2007, respectively, associated with reinsurance agreements with related parties. There were no allowances for potential uncollectible reinsurance receivables at either December 31, 2008 or 2007.

The following tables summarize life insurance in-force and total premium income at, and for the year ended, December 31, 2008:


	Life Insurance In-Force

	Individual			Group			Total

Written direct	$	51,109,750		$	32,332,557		$	83,442,307
Reinsurance ceded		(11,655,940	)		—			(11,655,940	)
Reinsurance assumed		91,066,830			—			91,066,830

Net	$	130,520,640		$	32,332,557		$	162,853,197


Percentage of amount assumed to net		69.8	%		0.0	%		55.9	%

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	Premium Income


	Life Insurance			Annuities				Total

Written direct	$	371,952			($	1,153	)	$	370,799
Reinsurance ceded		(37,035	)			(141	)		(37,176	)
Reinsurance assumed		189,908				1,605			191,513

Net	$	524,825			$	311		$	525,136

The following tables summarize life insurance in-force and total premium income at, and for the year ended, December 31, 2007:


	Life Insurance In-Force

	Individual			Group			Total

Written direct	$	52,406,664		$	31,359,824		$	83,766,488
Reinsurance ceded		(12,229,471	)		—			(12,229,471	)
Reinsurance assumed		93,804,317			—			93,804,317

Net	$	133,981,510		$	31,359,824		$	165,341,334


Percentage of amount assumed to net		70.0	%		0.0	%		56.7	%


	Premium Income


	Life Insurance			Annuities				Total

Written direct	$	317,339			$	5,058		$	322,397
Reinsurance ceded		(1,406,752	)			(25,608	)		(1,432,360	)
Reinsurance assumed		252,645				51			252,696

Net	($	836,768	)		($	20,499	)	($	857,267	)

The following table summarizes total premium income for the year ended, December 31, 2006:


	Premium Income


	Life Insurance			Annuities				Total

Written direct	$	316,689			$	11,087		$	327,776
Reinsurance ceded		(51,777	)			(172	)		(51,949	)
Reinsurance assumed		306,572				53			306,625

Net	$	571,484			$	10,968		$	582,452

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

10. Deferred Acquisition Costs (“DAC”) and Value of Business Acquired (“VOBA”)

The following table summarizes activity in deferred acquisition costs and value of business acquired for the years ended December 31, 2008, 2007 and 2006:


	DAC			VOBA			Total

Balance, January 1, 2006	$	416,815		$	9,627		$	426,442
Capitalized additions		60,187			46,032			106,219
Amortization and writedowns		(44,527	)		(1,664	)		(46,191	)
Unrealized investment gains (losses)		18,740			(76	)		18,664

Balance, December 31, 2006		451,215			53,919			505,134
Capitalized additions		73,062			—			73,062
Amortization and writedowns		(128,575	)		(6,995	)		(135,570	)
Unrealized investment gains		1,121			118			1,239
Purchase accounting adjustment		—			(563	)		(563	)

Balance, December 31, 2007		396,823			46,479			443,302
Capitalized additions		65,108			—			65,108
Amortization and writedowns		(55,551	)		2,852			(52,699	)
Unrealized investment gains		251,940			6,380			258,320

Balance, December 31, 2008	$	658,320		$	55,711		$	714,031

The estimated future amortization of VOBA for the years ended December 31, 2009 through December 31, 2013 is as follows:


Year Ended December 31,	Amount

2009		$	1,894
2010			2,296
2011			2,628
2012			2,902
2013			3,129

11. Goodwill and Other Intangible Assets

The balances of and changes in goodwill, all of which is within the Retirement Services segment, for the years ended December 31, 2008 and 2007 are as follows:


	Amount

Balance, January 1, 2007	$	102,374
Purchase price accounting adjustment		(719	)

Balance, December 31, 2007		101,655
Purchase price accounting adjustment		3,600

Balance, December 31, 2008	$	105,255

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following tables summarize other intangible assets, all of which are within the Retirement Services segment, as of December 31, 2008 and 2007:


	December 31, 2008

	Gross Carrying Amount			Accumulated Amortization				Net Book Value

Customer relationships		$	36,314		($	7,249	)			29,065
Preferred provider agreements			7,970			(3,211	)			4,759

Total		$	44,284		($	10,460	)		$	33,824


	December 31, 2007

	Gross Carrying Amount			Accumulated Amortization				Net Book Value

Customer relationships		$	36,999		($	4,154	)		$	32,845
Preferred provider agreements			7,970		($	1,581	)			6,389

Total		$	44,969		($	5,735	)		$	39,234

Amortization expense for other intangible assets included in general insurance expenses was $4,725, $4,699 and $497 for the years ended December 31, 2008, 2007 and 2006, respectively. Except for goodwill, the Company has no intangible assets with indefinite lives.

The estimated future amortization of other intangible assets using current assumptions, which are subject to change, for the years ended December 31, 2009 through December 31, 2013 is as follows:


Year Ended December 31,	Amount

2009		$	4,492
2010			4,004
2011			3,801
2012			3,597
2013			3,418

12. Commercial Paper

The Company maintains a commercial paper program that is partially supported by a $50,000 corporate credit facility (See Note 22).

The following table provides information regarding the Company’s commercial paper program at December 31, 2008 and 2007:


	December 31,

	2008			2007

Commercial paper outstanding	$	97,167		$	95,667
Maturity range (days)		6 - 28			7 - 88
Interest rate range		0.6% - 2.4	%		4.80% - 5.48	%

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

13. Stockholder’s Equity and Dividend Restrictions

At December 31, 2008 and 2007, the Company had 50,000,000 shares of $1 par value preferred stock authorized, none of which were issued or outstanding at either date. In addition, the Company has 50,000,000 shares of $1 par value common stock authorized, 7,032,000 of which were issued and outstanding at both December 31, 2008 and 2007.

GWLA’s net income and capital and surplus, as determined in accordance with statutory accounting principles and practices as prescribed by the National Association of Insurance Commissioners, for the years ended December 31, 2008, 2007 and 2006 are as follows:


	Year Ended December 31,

	2008		2007		2006

	(Unaudited)
Net income	$	271,436	$	562,309	$	280,874
Capital and surplus		904,376		1,846,170		1,862,338

Dividends are paid as determined by the Board of Directors, subject to restrictions as discussed below. During the year ended December 31, 2008, the Company paid dividends in the amount of $1,772,293 to its parent company, GWL&A Financial, in part using the proceeds received from the sale of its Healthcare business as discussed in Note 2. During the years ended December 31, 2007 and 2006, the Company paid dividends in the amounts of $604,983 and $249,395, respectively.

The maximum amount of dividends that can be paid to stockholders by insurance companies domiciled in the State of Colorado, without prior approval of the Insurance Commissioner, is subject to restrictions relating to statutory capital and surplus and statutory net gain from operations. Unaudited statutory capital and surplus and net gain from operations at and for the year ended December 31, 2008 were $904,376 and $750,998, respectively. GWLA may pay up to $750,998 (unaudited) of dividends during the year ended December 31, 2009 without the prior approval of the Colorado insurance commissioner. Prior to any payments of dividends, the Company seeks approval from the Colorado Insurance Commissioner.

14. Other Comprehensive Income

The following table presents the composition of other comprehensive income (loss) for the year ended December 31, 2008:


	Year Ended December 31, 2008

	Before-tax Amount			Tax (Expense) Benefit			Net-of-tax Amount

Unrealized gains (losses) on available-for-sale securities:
Net changes during the year related to cash flow hedges	$	85,494		($	29,923	)	$	55,571
Unrealized holding gains (losses) arising during the year		(1,431,239	)		496,555			(934,684	)
Less: reclassification adjustment for (gains) losses realized in net income		38,978			(10,989	)		27,989

Net unrealized gains (losses)		(1,306,767	)		455,643			(851,124	)
Reserve, DAC and VOBA adjustments		254,180			(88,963	)		165,217

Net unrealized gains (losses)		(1,052,587	)		366,680			(685,907	)
Employee benefit plan adjustment		(115,766	)		40,518			(75,248	)

Other comprehensive income (loss)	($	1,168,353	)	$	407,198		($	761,155	)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table presents the composition of other comprehensive income (loss) for the year ended December 31, 2007:


	Year Ended December 31, 2007

	Before-tax Amount			Tax (Expense) Benefit			Net-of-tax Amount

Unrealized gains (losses) on available-for-sale securities:
Net changes during the year related to cash flow hedges	$	12,317		($	4,311	)	$	8,006
Unrealized holding gains (losses) arising during the year		3,833			(1,342	)		2,491
Less: reclassification adjustment for (gains) losses realized in net income		3,098			(1,084	)		2,014

Net unrealized gains (losses)		19,248			(6,737	)		12,511
Reserve, DAC and VOBA adjustments		(4,013	)		1,405			(2,608	)

Net unrealized gains (losses)		15,235			(5,332	)		9,903
Employee benefit plan adjustment		53,843			(18,845	)		34,998

Other comprehensive income (loss)	$	69,078		($	24,177	)	$	44,901

The following table presents the composition of other comprehensive income (loss) for the year ended December 31, 2006:


	Year Ended December 31, 2006

	Before-tax Amount			Tax (Expense) Benefit			Net-of-tax Amount

Unrealized gains (losses) on available-for-sale securities:
Net changes during the year related to cash flow hedges	($	7,805	)	$	2,732		($	5,073	)
Unrealized holding gains (losses) arising during the year		(52,398	)		18,339			(34,059	)
Less: reclassification adjustment for gains (losses) realized in net income		3,535			(1,237	)		2,298

Net unrealized gains (losses)		(56,668	)		19,834			(36,834	)
Reserve, DAC and VOBA adjustments		19,785			(6,925	)		12,860

Net unrealized gains (losses)		(36,883	)		12,909			(23,974	)
Employee benefit plan adjustment		1,521			(532	)		989

Other comprehensive income (loss)	($	35,362	)	$	12,377		($	22,985	)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

15. Net Investment Income and Realized Gains (Losses) on Investments

The following table summarizes net investment income for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Investment income:
Fixed maturity and short-term investments	$	766,625		$	782,013		$	780,272
Equity investments		1,240			2,260			5,794
Mortgage loans on real estate		73,838			66,994			79,316
Policy loans		218,687			205,772			208,511
Limited partnership interests		2,601			10,887			13,818
Interest on funds withheld balances under reinsurance agreements		14,413			21,199			49,952
Change in fair value of an embedded derivative contained in a reinsurance agreement		—			(5,521	)		(18,986	)
Other, including interest income (expense) from related parties of ($444), $5,240 and $22,505		14,331			71,734			6,986

		1,091,735			1,155,338			1,125,663
Investment expenses		(13,266	)		(15,797	)		(15,527	)

Net investment income	$	1,078,469		$	1,139,541		$	1,110,136

The following table summarizes net realized gains (losses) on investments for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Net realized gains (losses):
Fixed maturity and short-term investments	($	30,797	)	($	9,570	)	($	8,978	)
Equity investments		(4,162	)		(48	)		(2,768	)
Mortgage loans on real estate		2,568			3,202			2,725
Limited partnership interests		1,112			(38	)		(835	)
Other		9,583			590			(123	)
Provision for mortgage impairments, net of recoveries		—			3,836			514

Net realized gains (losses) on investments	($	21,696	)	($	2,028	)	($	9,465	)

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

16. General Insurance Expenses

The following table summarizes the components of general insurance expenses for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Compensation	$	282,502		$	281,670		$	251,345
Commissions		118,978			128,003			103,488
Premium and other taxes		25,704			21,366			19,209
Capitalization of DAC		(65,108	)		(73,062	)		(60,186	)
Rent, net of sublease income		3,875			5,752			7,873
Other		63,744			68,697			45,586

Total general insurance expenses	$	429,695		$	432,426		$	367,315

17. Employee Benefit Plans

On December 31, 2006, the Company adopted the recognition and disclosure provisions of SFAS No. 158. SFAS No. 158 required the Company to recognize the funded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations for the Defined Benefit Pension Plan or the accumulated post retirement benefit obligation for the Post-Retirement Medical Plan) of its pension plan and post retirement medical plan beginning in its December 31, 2006 statement of financial position, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The adjustment to accumulated other comprehensive income at adoption represents the net unrecognized actuarial losses, unrecognized prior service costs and unrecognized transition obligation remaining from the initial adoption of Statement of Financial Accounting Standards No. 87, “Employer’s Accounting for Pensions” (“SFAS No. 87”) all of which were previously netted against the plan’s funded status in the Company’s statement of financial position pursuant to the provisions of SFAS No. 87. These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income at the time of adoption of SFAS No. 158.

Defined Benefit Pension and Post-Retirement Medical Plans - The Company has a noncontributory Defined Benefit Pension Plan covering substantially all of its employees that were hired before January 1, 1999. Pension benefits are based principally on an employee’s years of service and compensation levels near retirement. The Company’s policy for funding the defined benefit pension plans is to make annual contributions, which equal or exceed regulatory requirements.

The Company sponsors an unfunded Post-Retirement Medical Plan (the “Medical Plan”) that provides health benefits to retired employees who are not Medicare eligible. The medical plan is contributory and contains other cost sharing features, which may be adjusted annually for the expected general inflation rate. The Company’s policy is to fund the cost of the medical plan benefits in amounts determined at the discretion of management.

During December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was signed into law. Under the Act, which took effect on January 1, 2006, employers who sponsor post-retirement plans that provide for a prescription drug benefit under Medicare Part D may be entitled to

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

a subsidy payment. In conjunction with the effect of this legislation, the Company amended its post-retirement medical plan, whereby it eliminated the provision of medical benefits for retired employees once they become Medicare eligible.

Prior to the adoption of the measurement provisions of SFAS No. 158 for its year ended December 31, 2008, the Company utilized a November 30 measurement date for the Defined Benefit Pension and Post-Retirement Medical plans. Upon adoption of the measurement provision of SFAS No. 158, the Company changed the measurement date to correspond to the end of its fiscal year, December 31. The impact of adopting the measurement date provisions of SFAS No. 158 was a decrease to stockholder’s equity of $206. Prepaid benefit costs and intangible assets are included in other assets and accrued benefit costs and unfunded status amounts are included in other liabilities in the accompanying consolidated balance sheets.

The following tables provide a reconciliation of the changes in the benefit obligations, fair value of plan assets and the under funded status for the Company’s Defined Benefit Pension and Post-Retirement Medical plans as of the years ended December 31, 2008 and 2007:


	Defined benefit pension plan						Post-retirement medical plan

	2008			2007			2008			2007

Change in projected benefit obligation:
Benefit obligation, January 1	$	278,246		$	300,773		$	26,207		$	25,647
Service cost		5,743			9,685			1,263			2,050
Interest cost		18,356			17,293			1,254			1,489
Actuarial (gain) loss		23,200			(41,275	)		(2,327	)		(2,007	)
Benefits paid		(10,217	)		(8,230	)		(1,344	)		(971	)
Curtailments		(14,165	)		—			(8,855	)		—
Other		2,220			—			285			—

Benefit obligation, December 31	$	303,383		$	278,246		$	16,483		$	26,208


	Defined benefit pension plan						Post-retirement medical plan

	2008			2007			2008			2007

Change in plan assets:
Value of plan assets, January 1	$	274,452		$	256,533		$	—		$	—
Actual return (loss) on plan assets		(73,765	)		22,849			—			—
Employer contributions		11,500			3,300			1,344			971
Benefits paid		(10,217	)		(8,230	)		(1,344	)		(971	)

Value of plan assets, December 31	$	201,970		$	274,452		$	—		$	—


	Defined benefit pension plan						Post-retirement medical plan

	2008			2007			2008			2007

Funded (under funded) status at December 31	($	101,413	)	($	3,794	)	($	16,483	)	($	26,208	)

	Defined benefit pension plan						Post-retirement medical plan

	2008			2007			2008			2007

Amounts recognized in consolidated balance sheets:
Prepaid benefit cost (accrued benefit liability)	$	15,507		$	7,880		($	31,408	)	($	51,663	)
Accumulated other comprehensive income		(116,920	)		(11,674	)		14,925			25,455

The accumulated benefit obligation for the Defined Benefit Pension Plan was $289,525 and $260,147 at December 31, 2008 and 2007, respectively.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table provides information regarding amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit costs at December 31, 2008:


	Defined benefit pension plan						Post-retirement medical plan

	Gross			Net of tax			Gross		Net of tax

Net gain (loss)	($	120,948	)	($	78,616	)	$	1,834	$	1,192
Net prior service (cost) credit		(388	)		(252	)		13,091		8,509
Net transition asset (obligation)		4,416			2,870			—		—

	($	116,920	)	($	75,998	)	$	14,925	$	9,701

The following table provides information regarding amounts in accumulated other comprehensive income that are expected to be recognized as components of net periodic benefit costs during the year ended December 31, 2009:


	Defined benefit pension plan						Post-retirement medical plan

	Gross			Net of tax			Gross		Net of tax

Net gain (loss)	($	10,655	)	($	6,926	)	$	—	$	—
Net prior service (cost) credit		(88	)		(57	)		1,650		1,072
Net transition asset (obligation)		1,514			984			—		—

	($	9,229	)	($	5,999	)	$	1,650	$	1,072

The expected benefit payments for the Company’s Defined Benefit Pension and Post-Retirement Medical Plans for the years indicated are as follows:


	Defined benefit pension plan			Post-retirement medical plan

2009		$	12,235		$	1,634
2010			12,127			1,703
2011			12,496			1,767
2012			13,231			1,776
2013			13,800			1,710
2014 through 2018			80,769			7,581

Net periodic (benefit) cost of the Defined Benefit Pension Plan and the Post-Retirement Medical Plan included in general insurance expenses in the accompanying consolidated statements of income for the years ended December 31, 2008, 2007 and 2006 includes the following components:

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	Defined benefit pension plan

	2008			2007			2006

Components of net periodic (benefit) cost:
Service cost	$	5,743		$	9,685		$	9,406
Interest cost		18,356			17,293			15,970
Expected return on plan assets		(20,499	)		(20,166	)		(16,835	)
Amortization of transition obligation		(1,514	)		(1,514	)		(1,514	)
Amortization of unrecognized prior service cost		120			218			462
Amortization of loss from earlier periods		679			4,877			5,447

Net periodic cost	$	2,885		$	10,393		$	12,936


	Post-retirement medical plan

	2008			2007			2006

Components of net periodic (benefit) cost:
Service cost	$	1,263		$	2,050		$	1,851
Interest cost		1,254			1,489			1,309
Amortization of unrecognized prior service cost		(2,169	)		(3,727	)		(3,727	)
Amortization of loss from earlier periods		85			651			633

Net periodic cost	$	433		$	463		$	66

The following tables present the assumptions used in determining benefit obligations of the Defined Benefit Pension Plan and the Post-Retirement Medical Plan for the years ended December 31, 2008, 2007 and 2006:


	Defined benefit pension plan

	2008			2007			2006

Discount rate		6.40	%		6.75	%		5.75	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%
Rate of compensation increase		4.94	%		3.19	%		3.19	%

	Post-retirement medical plan

	2008			2007			2005

Discount rate		6.40	%		6.75	%		5.75	%

The discount rate has been set based upon the rates of return on high-quality fixed-income investments currently available and expected to be available during the period the benefits will be paid. In particular, the yields on bonds rated AA or better on the measurement date have been used to set the discount rate.

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the Post- Retirement Medical Plan. For measurement purposes, an 8.5% annual rate of increase in the per capita cost of covered healthcare benefits was assumed and that the rate would gradually decrease to a level of 5.25% by 2016.

The following table presents what a one-percentage-point change would have on assumed healthcare cost trend rates:

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)


	One percentage point increase			One percentage point decrease

Increase (decrease) on total service and interest cost on components		$	2,863		($	2,221	)
Increase (decrease) on post-retirement benefit obligation			345			(296	)

The following table presents how the Company’s Defined Benefit Pension Plan assets are invested at December 31, 2008 and 2007:


	December 31,

	2008			2007

Equity securities		62	%		73	%
Debt securities		30	%		25	%
Other		8	%		2	%

Total		100	%		100	%

The following table presents the ranges the Company targets for the allocation of invested Defined Benefit Pension Plan assets at December 31, 2009:


		December 31, 2009

Equity securities		25% - 75%
Debt securities		25% - 75%
Other		0% - 15%

Management estimates the value of these investments will be recoverable. The Company does not expect any plan assets to be returned to it during the year ended December 31, 2009. The Company made a contribution in the amount of $11,500 to its Defined Benefit Pension Plan during the year ended December 31, 2008. The Company expects to contribute approximately $1,634 to its Post-Retirement Medical Plan during the year ended December 31, 2009. The Company will make a contribution at least equal to the minimum contribution of $8,625 to its Defined Benefit Pension Plan during the year ended December 31, 2009.

During the second quarter of 2008, the Company recorded defined benefit pension plan costs of $672 and post-retirement medical plan benefits of $19,346 as adjustments to income from discontinued operations due to plan curtailments related to the sale of the Healthcare segment.

The investment objective of the Defined Benefit Pension Plan is to provide a risk-adjusted return that will ensure the payment of benefits while protecting against the risk of substantial investment losses. Correlations among the asset classes are used to identify an asset mix that the Company believes will provide the most attractive returns. Long-term return forecasts for each asset class using historical data and other qualitative considerations to adjust for projected economic forecasts are used to set the expected rate of return for the entire portfolio.

Supplemental executive retirement plans - The Company also provides supplemental executive retirement plans to certain key executives. These plans provide key executives with certain benefits upon retirement, disability or death based upon total compensation. The Company has purchased individual life insurance policies with respect to each employee covered by this plan. The Company is the owner and beneficiary of the insurance contracts. The Company’s expense for these plans was $4,214, $4,869 and $4,942 for the years ended December 31, 2008, 2007 and 2006, respectively. The liability associated with these plans was $45,765 and $41,676 at December 31, 2008 and 2007, respectively, and is included in other liabilities in the accompanying consolidated balance sheets.

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following tables summarize changes in the benefit obligations, plan assets and funded status for the Company’s Supplemental Executive Retirement Plans for the years ended December 31, 2008 and 2007:


	2008			2007

Change in projected benefit obligation:
Benefit obligation, January 1	$	41,676		$	46,085
Service cost		665			1,044
Interest cost		2,735			2,589
Actuarial (gain) loss		3,578			(6,136	)
Regular benefits paid		(1,761	)		(1,906	)
Special termination benefits		2,053			—
Curtailments		(3,181	)		—

Benefit obligation, December 31	$	45,765		$	41,676


	December 31,

	2008			2007

Change in plan assets:
Fair value of plan assets, January 1	$	—		$	—
Employer contributions		1,761			1,906
Benefits paid		(1,761	)		(1,906	)

Fair value of plan assets, December 31	$	—		$	—


	December 31,

	2008			2007

Underfunded status	($	45,765	)	($	41,676	)
Accumulated other comprehensive expense (income)		(7,676	)		(7,368	)


	Gross			Net of tax

Net prior service (cost) credit	($	2,755	)	($	1,790	)
Net gain (loss)		(4,921	)		(3,199	)

	($	7,676	)	($	4,989	)


	Gross		Net of tax

Net prior service (cost) credit	$	675	$	439
Net gain (loss)		—		—

	$	675	$	439

The expected benefit payments for the Company’s Supplemental Executive Retirement Plans for the years indicated are estimated as follows:


2009	$	2,100
2010		2,273
2011		2,518
2012		2,514
2013		2,509
2014 through 2018		17,944

100

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Net periodic cost of the Supplemental Executive Retirement Plans included in general insurance expenses in the accompanying consolidated statements of income for the years ended December 31, 2008, 2007 and 2006 includes the following components:


	Year Ended December 31,

	2008		2007		2006

Components of net periodic (benefit) cost:
Service cost	$	665	$	1,044	$	964
Interest cost		2,735		2,589		2,564
Amortization of unrecognized prior service cost		814		986		1,024
Amortization of loss from earlier periods		—		250		390

Net periodic cost	$	4,214	$	4,869	$	4,942

The following table presents the assumptions used in determining benefit obligations for the Supplemental Executive Retirement Plans for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Discount rate		6.40	%		6.75	%		5.75	%
Rate of compensation increase		6.00	%		6.00	%		6.00	%

During the second quarter of 2008, the Company recorded supplemental executive retirement plan costs of $1,833 as adjustments to income from discontinued operations due to plan curtailments related to the sale of the Healthcare segment.

Other employee benefit plans - The Company sponsors a defined contribution 401(k) retirement plan, which provides eligible participants with the opportunity to defer up to 50% of base compensation. The Company matches 50% of the first 5% of participant pre-tax contributions for employees hired before January 1, 1999. For all other employees, the Company matches 50% of the first 8% of participant pre-tax contributions. Company contributions for the years ended December 31, 2008, 2007 and 2006 were $7,384, $9,573 and $8,825, respectively.

The Company has an executive deferred compensation plan providing key executives with the opportunity to participate in an unfunded deferred compensation program. Under the program, participants may defer base compensation and bonuses and earn interest on the amounts deferred. The program is not qualified under Section 401 of the Internal Revenue Code. Participant balances, which are reflected in other liabilities in the accompanying consolidated balance sheets, are $16,752 and $17,934 at December 31, 2008 and 2007, respectively. The participant deferrals earned interest at the average rates of 7.06% and 6.50% during the years ended December 31, 2008 and 2007, respectively. The interest rate is based on the Moody’s Average Annual Corporate Bond Index rate plus 0.45% for actively employed participants and fixed rates ranging from 6.41% to 8.30% for retired participants. Interest expense related to this plan was $1,224, $1,261 and $1,295 for the years ended December 31, 2008, 2007 and 2006, respectively, and is included in general insurance expenses in the consolidated statements of income.

The Company has a deferred compensation plan for select sales personnel with the opportunity to participate in an unfunded deferred compensation program. Under this program, participants may defer compensation and earn interest on the amounts deferred. The program is not qualified under Section 401 of the Internal Revenue Code. Effective January 1, 2005, this program no longer accepted participant deferrals. Participant balances, which are included in other liabilities in the accompanying consolidated balance sheets, are $4,369 and $5,257 at December 31, 2008 and 2007, respectively. The participant deferrals earned interest at the average rate of 4.5% and 4.6% during the years ended December 31, 2008

101

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

and 2007, respectively. The interest rate is based on an annual rate determined by the Company. The interest expense related to this plan was $233, $258 and $269 for the years ended December 31, 2008, 2007 and 2006, respectively, and is included in general insurance expense in the consolidated statements of income.

The Company offers an unfunded, non-qualified deferred compensation plan to a select group of management and highly compensated individuals. Participants defer a portion of their compensation and realize potential market gains or losses on the invested contributions. The program is not qualified under Section 401 of the Internal Revenue Code. Participant balances, which are included in other liabilities in the accompanying consolidated balance sheets, are $9,238 and $14,533 at December 31, 2008 and 2007, respectively. Unrealized (losses) gains on invested participant deferrals were ($3,709), $997 and $1,556 for the years ended December 31, 2008, 2007 and 2006, respectively.

18. Federal Income Taxes

The provision for income taxes from continuing operations is comprised of the following:


	Year Ended December 31,

	2008		2007		2006

Current	$	14,828	$	60,813	$	35,892
Deferred		81,010		57,978		36,711

Total income tax provision from continuing operations	$	95,838	$	118,791	$	72,603

The following table presents reconciliation between the statutory federal income tax rate and the Company’s effective federal income tax rate from continuing operations for the years ended December 31, 2008, 2007 and 2006:


	Year Ended December 31,

	2008			2007			2006

Statutory federal income tax rate		35.0	%		35.0	%		35.0	%
Income tax effect of:
Investment income not subject to federal tax		(1.4	%)		(1.6	%)		(2.5	%)
Tax credits		(2.5	%)		(2.8	%)		(4.8	%)
State income taxes net of federal benefit		1.1	%		0.5	%		0.7	%
Provision for policyholders’ share of earnings on participating business		(13.2	%)		2.0	%		1.2	%
Prior period adjustment		(0.3	%)		1.4	%		(1.8	%)
Other, net		(1.0	%)		(1.4	%)		0.4	%

Effective federal income tax rate from continuing operations		17.7	%		33.1	%		28.2	%

Included above in the provision for policyholder’s share of earnings on participating business is the $207,785 decrease in undistributed earnings on participating business as discussed in Note 4.

The Company adopted the provisions of Financial Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”) on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized an $87,427 increase in the liability for unrecognized tax benefits, of which $6,195 was accounted for as a reduction to the January 1, 2007 balance of retained earnings, $4,505 was accounted for as a reduction to a liability previously accounted for under Statement of Financial Accounting

102

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Standards No. 5 “Accounting for Contingencies”, and $76,727 was accounted for as an increase related to temporary items. During the year ended December 31, 2008, the Company recognized $6,600 in unrecognized tax benefits relating to FIN 48. The Company does not expect any material changes relating to unrecognized tax benefits within the next twelve months.

A reconciliation of unrecognized tax benefits for the years ended December 31, 2008 and 2007 is as follows:


Balance, January 1, 2007	$	87,427
Additions for tax positions in the current year		3,957
Additions for tax positions in prior years		21,749
Reductions for tax positions in prior years		(51,847	)

Balance, December 31, 2007		61,286
Additions for tax positions in the current year		6,600
Reductions for tax positions in current year		(1,935	)
Additions for tax positions in prior years		17,349
Reductions for tax positions in prior years		(23,221	)

Balance, December 31, 2008	$	60,079

Included in the unrecognized tax benefits of $60,079 at December 31, 2008 was $5,126 of tax benefits that, if recognized, would increase the annual effective tax rate. Also included in the balance at December 31, 2008 is $54,953 of tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance of the shorter deductibility period would not affect the annual effective rate but would accelerate the payment of cash to the taxing authority to an earlier period.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in current income tax expense. The Company recognized approximately $6,916 and $1,300 in interest and penalties related to the uncertain tax positions during the years ended December 31, 2008 and 2007, respectively. The Company had approximately $12,548 and $5,632 accrued for the payment of interest and penalties at December 31, 2008 and 2007, respectively.

The Company files income tax returns in the U.S federal jurisdiction and various states. With few exceptions, the Company is no longer subject to U.S federal, state and local income tax examinations by tax authorities for years 2004 and prior. The Company has been notified by the IRS that they will soon begin an examination; however the specific companies and tax years to be audited have not been determined. The Company does not expect significant increases or decreases to the unrecognized tax benefits in 2009. Also, the Company does not expect significant increases or decreases relating to state and local audits.

103

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities. The tax effect of temporary differences, which give rise to the deferred tax assets and liabilities as of December 31, 2008 and 2007, are as follows:


	December 31,

	2008					2007

	Deferred Tax Asset		Deferred Tax Liability			Deferred Tax Asset		Deferred Tax Liability

Policyholder reserves	$	—		$	105,049	$	—		$	13,443
Deferred acquisition costs		—			144,069		—			55,081
Investment assets		542,104			—		—			37,360
Policyholder dividends		20,298			—		30,750			—
Net operating loss carryforward		267,074			—		220,032			—
Pension plan accrued benefit liability		39,571			—		—			—
Goodwill		—			19,833		—			—
Other		—			22,297		54,564			—

Total deferred taxes	$	869,047		$	291,248	$	305,346		$	105,884

Amounts presented for investment assets above include $400,339 and ($3,082) related to the net unrealized losses (gains) on the Company’s fixed maturity and equity investments, which are classified as available-for-sale at December 31, 2008 and 2007, respectively.

As discussed in Note 1, the Company completed an in depth analysis of its deferred tax balances during 2008 and identified deferred tax balances aggregating $43,914 that required correction. The prior period adjustment represents the correction of deferred tax balances related to previous years. The adjustment was not considered to be material to beginning retained earnings or to any individual prior period.

The Company, together with certain of its subsidiaries, and GWL&A Financial have entered into an income tax allocation agreement whereby GWL&A Financial files a consolidated federal income tax return. Under the agreement, these companies are responsible for and will receive the benefits of any income tax liability or benefit computed on a separate tax return basis. Certain other subsidiaries file their federal income tax returns separately.

The Company has federal net operating loss carry forwards generated by a subsidiary that files an income tax return separate from the GWL&A Financial consolidated federal income tax return. As of December 31, 2008, the subsidiary had net operating loss carry forwards expiring as follows:


Year	Amount

2025	$	371,058
2026		113,002
2027		136,443
2028		102,249

Total	$	722,752

Included in due from parent and affiliates at December 31, 2008 and 2007 is $37,097 and $31,376, respectively, of income taxes receivable from GWL&A Financial related to the consolidated income tax return filed by the Company and certain subsidiaries. Included in the consolidated balance sheets at December 31, 2008 and 2007 is $31,205 and $135 of income taxes receivable in other assets related to the separate federal income tax returns filed by certain subsidiaries, state income tax returns and unrecognized tax benefits.

104

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

19. Segment Information

The Company has three business segments: Individual Markets, Retirement Services and Other. The Individual Markets segment distributes life insurance and individual annuity products to both individuals and businesses through various distribution channels. Life insurance products in-force include participating and non-participating term life, whole life, universal life and variable universal life. The Retirement Services segment provides retirement plan enrollment services, communication materials, various retirement plan investment options and educational services to employer-sponsored defined contribution/defined benefit plans and 401(k) and 403(b) plans, as well as comprehensive administrative and record-keeping services for financial institutions and employers.

The Company’s Other segment includes corporate items not directly allocated to any of its other business segments, interest expense on long-term debt and the activities of a wholly owned subsidiary whose sole business is the assumption of a certain block of term life insurance from an affiliated company. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately as each segment has its own unique distribution channels.

As discussed in Note 2, substantially all of the Company’s former Healthcare segment has been sold and reclassified as discontinued operations and, accordingly, is no longer reported as a separate business segment. The Company retained a small portion of its Healthcare business and reports it within its Individual Markets segment. The segment reporting for prior periods has been restated to reflect these changes in business segments.

The accounting policies of each of the business segments are the same as those described in Note 1. The Company evaluates performance of its reportable segments based on their profitability from operations after income taxes. All material inter-segment transactions and balances have been eliminated in consolidation. The Company’s operations are not materially dependent on one or a few customers, brokers or agents.

The following tables summarize segment financial information for the year ended and as of December 31, 2008:


	Year Ended December 31, 2008

	Individual Markets			Retirement Services			Other			Total

Revenue:
Premium income	$	377,525		$	2,291		$	145,321		$	525,137
Fee income		55,852			368,536			4,833			429,221
Net investment income		692,193			351,585			34,691			1,078,469
Net realized gains (losses) on investments		(11,500	)		(10,165	)		(31	)		(21,696	)

Total revenues		1,114,070			712,247			184,814			2,011,131

Benefits and expenses:
Policyholder benefits		889,967			229,948			(172,327	)		947,588
Operating expenses		108,702			324,500			88,996			522,198

Total benefits and expenses		998,669			554,448			(83,331	)		1,469,786

Income from continuing operations before income taxes		115,401			157,799			268,145			541,345
Income tax expense		35,846			41,023			18,969			95,838

Income from continuing operations	$	79,555		$	116,776		$	249,176		$	445,507

105

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

	December 31, 2008

	Individual Markets		Retirement Services		Other		Total

Assets:
Investments	$	10,653,738	$	5,935,760	$	1,492,175	$	18,081,673
Other assets		1,678,000		934,902		235,023		2,847,925
Separate account assets		4,718,758		10,403,185		—		15,121,943

Assets from continuing operations		17,050,496		17,273,847		1,727,198		36,051,541
Assets from discontinued operations								124,089

Total assets	$	17,050,496	$	17,273,847	$	1,727,198	$	36,175,630

The following tables summarize segment financial information for the year ended and as of December 31, 2007:


	Year Ended December 31, 2007

	Individual Markets			Retirement Services		Other			Total

Revenue:
Premium income	($	1,027,417	)	$	4,729	$	165,421		($	857,267	)
Fee income		69,535			388,959		4,771			463,265
Net investment income		759,037			350,382		30,122			1,139,541
Net realized gains (losses) on investments		(8,081	)		4,885		1,168			(2,028	)

Total revenues		(206,926	)		748,955		201,482			743,511

Benefits and expenses:
Policyholder benefits		(577,592	)		224,413		128,315			(224,864	)
Operating expenses		190,721			338,677		80,311			609,709

Total benefits and expenses		(386,871	)		563,090		208,626			384,845

Income (loss) from continuing operations before income taxes		179,945			185,865		(7,144	)		358,666
Income tax expense		59,863			58,474		454			118,791

Income (loss) from continuing operations	$	120,082		$	127,391	($	7,598	)	$	239,875


	December 31, 2007

	Individual Markets		Retirement Services		Other		Total

Assets:
Investments	$	11,157,282	$	5,899,077	$	2,326,324	$	19,382,683
Other assets		1,230,189		650,426		256,498		2,137,113
Separate account assets		4,607,371		13,482,613		—		18,089,984

Assets from continuing operations		16,994,842		20,032,116		2,582,822		39,609,780
Assets from discontinued operations								724,766

Total assets	$	16,994,842	$	20,032,116	$	2,582,822	$	40,334,546

106

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The following table summarizes segment financial information for the year ended December 31, 2006:


	Year Ended December 31, 2006

	Individual Markets			Retirement Services			Other			Total

Revenue:
Premium income	$	446,662		$	10,661		$	125,129		$	582,452
Fee income		42,780			293,784			4,808			341,372
Net investment income		766,350			304,139			39,647			1,110,136
Net realized losses on investments		(3,561	)		(5,105	)		(799	)		(9,465	)

Total revenues		1,252,231			603,479			168,785			2,024,495

Benefits and expenses:
Policyholder benefits		1,010,613			194,928			115,180			1,320,721
Operating expenses		100,845			274,223			72,061			447,129

Total benefits and expenses		1,111,458			469,151			187,241			1,767,850

Income (loss) from continuing operations before income taxes		140,773			134,328			(18,456	)		256,645
Income tax expense		48,648			30,181			(6,226	)		72,603

Income (loss) from continuing operations	$	92,125		$	104,147		($	12,230	)	$	184,042

20. Share-Based Compensation

Lifeco, of which the Company is an indirect wholly-owned subsidiary, has a stock option plan (the “Lifeco plan”) that provides for the granting of options on its common shares to certain of its officers and employees and those of its subsidiaries, including the Company. Options are granted with exercise prices not less than the average market price of the shares on the five days preceding the date of the grant. Termination of employment prior to the vesting of the options results in the forfeiture of the unvested options. The Lifeco plan provides for the granting of options with varying terms and vesting requirements, with vesting commencing on the first anniversary of the grant and expiring ten years from the date of grant.

The Company adopted the provisions of Statement of Financial Accounting Standards No. 123R, “Share-Based Payment” (“SFAS No. 123R”) on January 1, 2006, applying the modified prospective transition method of adoption.

The following table presents information regarding the share-based compensation expense the Company recognized during the years ended December 31, 2008, 2007 and 2006. Share-based compensation expense of continuing operations is included in general insurance expenses in the consolidated statements of income. Share-based compensation expense of discontinued operations is included in income from discontinued operations in the consolidated statements of income.


	Year ended December 31,

	2008		2007		2006

Continuing operations	$	3,143	$	3,816	$	4,525
Discontinued operations		1,980		—		—

	$	5,123	$	3,816	$	4,525

Under the modified prospective transition method, share-based compensation cost related to the unvested portion of awards outstanding at the time of adoption of SFAS No. 123R is recognized in earnings rateably over the future vesting periods of the awards. For share-based compensation awards that are granted or modified after the adoption of SFAS No. 123R, compensation cost is recognized in earnings using the accelerated attribution method permitted under SFAS No. 123R.

107

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The Lifeco plan contains a provision that permits a retiring option holder with unvested stock options on the date of retirement to continue to vest in them after retirement for a period of up to five years. Upon the retirement of an option holder with unvested options, the Company accelerates the recognition period to the date of retirement for any unrecognized share-based compensation cost related thereto and recognizes it in its earnings at that time. At December 31, 2008, the Company had $4,348, net of estimated forfeitures, of unrecognized share-based compensation costs, which will be recognized in its earnings through 2015. The weighted average period over which these costs will be recognized in earnings is 2.3 years.

The following table summarizes the status of, and changes in, the Lifeco plan options granted to Company employees which are outstanding at December 31, 2008. The options granted relate to underlining stock traded in Canadian dollars on the Toronto Stock Exchange, therefore, the amounts, which are presented in United States dollars, will fluctuate as a result of exchange rate fluctuations.


			Weighted Average

	Shares Under Option		Exercise Price (Whole Dollars)			Remaining Contractual Term (Years)		Aggregate Intrinsic Value ¹

Outstanding, January 1, 2008	4,548,111			$	21.85
Granted	535,000				25.18
Exercised	(669,370	)			10.81
Cancelled/expired	(96,200	)			29.21

Outstanding, December 31, 2008	4,317,541				19.47		5.3	$	8,444


Vested and expected to vest, December 31, 2008	4,292,598			$	19.44		5.3	$	8,444

Exercisable, December 31, 2008	3,162,141			$	16.84		4.1	$	8,444

¹ The aggregate intrinsic value is calculated as the difference between the market price of Lifeco common shares on December 31, 2008 and the exercise price of the option (only if the result is positive) multiplied by the number of options.

The following table presents other information regarding stock options under the Lifeco plan during the year ended December 31, 2008:

¹ The intrinsic value of options exercised is calculated as the difference between the market price of Lifeco common shares on the date of exercise and the exercise price of the option multiplied by the number of options exercised.

108

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Notes to Consolidated Financial Statements
Years Ended December 31, 2008, 2007 and 2006
(Dollars in Thousands)

The fair value of each option granted during the year ended December 31, 2008 was estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:


Dividend yield			3.76%
Expected volitility			14.81%
Risk free interest rate			3.36%
Expected duration (years)			8.0

21. Obligations Relating to Debt and Leases

The Company enters into operating leases primarily for the rental of office space. The following table shows, as of December 31, 2008, scheduled related party debt principal repayments and minimum annual rental commitments for operating leases having initial or remaining non-cancelable lease terms in excess of one year during the years ended December 31, 2009 through 2013 and thereafter:


Year Ended December 31,	Related Party Notes			Operating Leases			Total Debt and Lease Obligations

2009		$	—		$	16,402		$	16,402
2010			—			8,899			8,899
2011			—			1,322			1,322
2012			—			831			831
2013			—			166			166
Thereafter			528,400			4			528,404

22. Commitments and Contingencies

The Company is involved in various legal proceedings that arise in the ordinary course of its business. In the opinion of management, after consultation with counsel, the resolution of these proceedings are not expected to have a material adverse effect on the Company’s consolidated financial position or the results of its operations.

The Company has entered into a corporate credit facility agreement in the amount of $50,000 for general corporate purposes. The credit facility matures on May 26, 2010. Interest accrues at a rate dependent upon various conditions and terms of borrowings. The agreement requires the Company to maintain a minimum adjusted statutory net worth of $900,000 plus 50% of its statutory net income, if positive, for each quarter ending after June 30, 2008. The Company had no borrowings under the credit facility at either December 31, 2008 or 2007 and was in compliance with all covenants.

The Company makes commitments to fund partnership interests and other investments in the normal course of its business. The amounts of these unfunded commitments at December 31, 2008 and 2007 were $49,334 and $97,201, respectively, all of which is due within one year from the dates indicated.

23. Subsequent Event

On February 9, 2009, the Company’s Board of Directors declared a dividend in the amount of $24,682 to be paid during the first quarter of 2009.

109

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
Schedule III
Supplemental Insurance Information
(In Thousands)


	As of and for the year ended December 31, 2008

Operations:	Individual Markets			Retirement Services		Other			Total

Deferred acquisition costs	$	255,148		$	403,172	$	—		$	658,320
Future policy benefits, losses, claims and expenses		11,151,558			6,568,078		320,641			18,040,277
Unearned premium reserves		65,371			—		—			65,371
Other policy claims and benefits payable		657,352			306		25,264			682,922
Premium income		377,525			2,291		145,321			525,137
Net investment income		692,193			351,585		34,691			1,078,469
Benefits, claims, losses and settlement expenses		889,967			229,948		(172,327	)		947,588
Amortization of deferred acquisition costs		21,081			34,470		—			55,551
Other operating expenses		87,621			290,030		88,996			466,647

	As of and for the year ended December 31, 2007

Operations:	Individual Markets			Retirement Services		Other			Total

Deferred acquisition costs	$	143,839		$	252,984	$	—		$	396,823
Future policy benefits, losses, claims and expenses		11,044,711			5,990,779		277,220			17,312,710
Unearned premium reserves		63,985			—		—			63,985
Other policy claims and benefits payable		852,505			267		—			852,772
Premium income		(1,027,417	)		4,729		165,421			(857,267	)
Net investment income		759,037			350,382		30,122			1,139,541
Benefits, claims, losses and settlement expenses		(577,592	)		224,413		128,315			(224,864	)
Amortization of deferred acquisition costs		104,345			24,230		—			128,575
Other operating expenses		86,376			314,447		80,311			481,134


	For the year ended December 31, 2006

Operations:	Individual Markets			Retirement Services		Other			Total

Premium income	$	446,662		$	10,661	$	125,129		$	582,452
Net investment income		766,350			304,139		39,647			1,110,136
Benefits, claims, losses and settlement expenses		1,010,613			194,928		115,180			1,320,721
Amortization of deferred acquisition costs		23,785			20,739		—			44,524
Other operating expenses		77,060			253,484		72,061			402,605

110

We have audited the accompanying statements of assets and liabilities of FutureFunds Series Account of Great-West Life & Annuity Insurance Company (the "Series Account") comprising the investment divisions as disclosed in Appendix A as of December 31, 2008, and the related statements of operations for the period presented in Appendix A, the statements of changes in net assets for the periods presented in Appendix A, and the financial highlights included in Note 5 for each of the periods presented. These financial statements and financial highlights are the responsibility of the Series Account's 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 Series Account is not required to have, nor were we engaged to perform, an audit of its 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 Series Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the investment divisions constituting the FutureFunds Series Account of Great-West Life & Annuity Insurance Company as of December 31, 2008, the results of their operations for the periods presented, the changes in their net assets for each of the periods presented, and the financial highlights for the periods presented in conformity with accounting principles generally accepted in the United States of America.

The FutureFunds Series Account (the Series Account), a separate account of Great-West Life & Annuity Insurance Company (the Company), was established under Kansas law. In 1990, the Series Account was conformed to comply with Colorado law in connection with the Company's redomestication to the State of Colorado. The Series Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended. The Series Account is a funding vehicle for both group and individual variable annuity contracts. The Series Account consists of numerous investment divisions with each investment division being treated as an individual separate account and investing all of its investible assets in the named underlying mutual fund.

Under applicable insurance law, the assets and liabilities of the Series Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Series Account's assets applicable to the reserves and other contract liabilities with respect to the Series Account is not chargeable with liabilities arising out of any other business the Company may conduct.

The preparation of financial statements and financial highlights of each of the investment divisions in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and financial highlights and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133" ("FAS 161"). FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity's results of operations and financial position. Furthermore, in September 2008, FASB Staff Position No. 133-1 and FASB Interpretation No. 45-4, "Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161" ("FSP") was issued and is effective for fiscal years and interim periods ending after November 15, 2008. The FSP clarifies the effective date of FAS 161, whereby disclosures required by FAS 161 are effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Each of the investment divisions of the Series Account has determined that FAS 161 will have no impact on its financial statements and related disclosures.

On January 1, 2008, each of the investment divisions of the Series Account adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.

The valuation hierarchy is based upon the transparency of inputs to the valuation of the Series Account's investments. The three levels are defined as follows:

Level 1- Valuations based on quoted prices for identical securities in active markets.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the fair value measurement.

During 2008, the only investments of each of the investment divisions of the Series Account were in underlying registered investment companies that are actively traded, therefore 100% of the investments are valued using Level 1 inputs.

Investments made in the underlying mutual funds are valued at the reported net asset values of such underlying mutual funds, which value their investment securities at fair value. Transactions are recorded on a trade date basis. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date.

Realized gains and losses on the sales of investments are computed on the basis of the identified cost of the investment sold.

One or more of the underlying investment divisions may invest in securities of governmental agencies, foreign issuers and high yield bonds.

Investments in securities of governmental agencies may only be guaranteed by the respective agency's limited authority to borrow from the U.S. Government and may not be guaranteed by the full faith and credit of the U.S. Government.

Certain investment divisions may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the underlying investment divisions to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions.

Certain investment divisions invest in high yield bonds, some of which may be rated below investment grade. These high yield bonds may be more susceptible than higher grade bonds to real or perceived adverse economic or industry conditions. The secondary market, on which high yield bonds are traded, may also be less liquid than the market for higher grade bonds.

Net assets allocated to contracts in the payout phase are computed according to the 2000 Individual Annuitant Mortality Table. The assumed investment return is 5 percent. The mortality risk is fully borne by the Company and may result in additional amounts being transferred into the variable annuity account by the Company to cover greater longevity of annuitants than expected. Conversely, if amounts allocated exceed amounts required, transfers may be made to the Company and recorded as surrenders reflected in the Statement of Changes in Net Assets of which there were none for the years ended December 31, 2008 and 2007. These excess amounts are represented as either a Due to or Due from Great West Life & Annuity Insurance Company on the Statement of Assets and Liabilities.

The operations of the Series Account are included in the federal income tax return of the Company, which is taxed as a life insurance company under the provisions of the Internal Revenue Code (IRC). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Series Account to the extent the earnings are credited under the contracts. Based on this, no charge is being made currently to the Series Account for federal income taxes. The Company will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts.

Net transfers include transfers between investment divisions of the Series Account as well as transfers between other investment options of the Company, not included in the Series Account.

The Investment Income Ratio represents the dividends, excluding distributions of capital gains, received by the investment division from the underlying mutual fund divided by average net assets during the year. The ratio excludes those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying fund in which the investment division invests.

The cost of purchases and proceeds from sales of investments for the year ended December 31, 2008 were as follows:

The Company deducts from each participant's account, a $30 annual maintenance charge on the first day of each calendar year. If the account is established after the beginning of the year, the charge is deducted on the first day of the next calendar quarter and is prorated for the portion of the year remaining and is recorded as contract maintenance charges on the Statement of Changes in Net Assets.

The Company deducts charges for total or partial surrenders of a contract in excess of the "free amount" before the retirement date by a deduction from a participant's account. The "free amount" is an amount equal to 10% of the participant account value at December 31 of the calendar year prior to the partial or total surrender.

The Company may deduct from each participant's account an amount to pay any premium tax levied by any governmental entity as a result of the existence of the policy owners' accounts or of the Account.

The Company deducts an amount, computed and accrued daily, from the unit value of each investment division of the Series Account equal to an annual rate from 0.00% to 1.25% depending on the size of the contract. This charge compensates the Company for its assumption of certain mortality, death benefit and expense risks. The level of this charge is guaranteed and will not change. The accrued amount is represented as Due from Great West Life & Annuity Insurance Company on the Statement of Assets and Liabilities.

The Maxim Series Funds and Putnam Funds, which are underlying investment divisions, are registered investment companies affiliated with the Company.

GW Capital Management, LLC, (doing business as Maxim Capital Management, LLC ("MCM")) a wholly owned subsidiary of the Company, serves as investment adviser to Maxim Series Fund, Inc. Fees are assessed against the average daily net assets of the affiliated funds to compensate MCM for investment advisory services.

A summary of accumulation units outstanding for variable annuity contracts, the range of the lowest to highest expense ratio, excluding expenses of the underlying funds, the related total return and the related accumulation unit fair values for the five years ended December 31, 2008 is included on the following pages. In certain instances the lowest unit fair value and total return exceed the highest due to the impact of contracts which were not inforce for the full year.

The Expense Ratios represent the annualized contract expenses of the Series Account, consisting of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund have been excluded.

The Total Return amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period shown and, accordingly, is not annualized for periods less than one year. As the total return for each of the periods in the five years ended December 31, 2008 is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual contract total returns are not within the ranges presented.

The consolidated financial statements of Great-West Life & Annuity Insurance Company (“GWL&A”) as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, as well as the financial statements of each of the investment divisions of the FutureFunds Series Account of Great-West Life & Annuity Insurance Company for the years ended December 31, 2008 and 2007, are filed herewith in the Statement of Additional Information.

(1) Copy of resolution of the Board of Directors is incorporated by reference to Registrant’s Post Effective Amendment No. 32 to Form N-4 registration statement filed on April 25, 2002 (File No. 2-89550).

(3)Underwriting Agreement between Depositor and GWFS Equities, Inc. (formerly BenefitsCorp Equities, Inc.) is incorporated by reference to Registrant’s Post Effective Amendment No. 23 to Form N-4 registration statement filed on May 1, 1997 (File No. 2–89550).

(4) Form of Group Fixed and Variable Deferred Annuity Contract is incorporated by reference to Registrant’s initial registration statement on Form N-4 filed on April 13, 2009 (File No. 333-158546).

(5) Form of Application is incorporated by reference to Registrant’s initial registration statement on Form N-4 filed on April 13, 2009 (File No. 333-158546).

(6) Copies of Articles of Incorporation of Depositor are incorporated by reference to Pre-Effective Amendment No. 2 to the registration statement filed by Variable Annuity-1 Series Account on Form N-4 on October 30, 1996 (File No. 811-07549). Amended and Restated Bylaws of the Depositor are incorporated by reference to Registrant’s Post-Effective Amendment No. 38 to Form N-4 registration statement filed on April 24, 2006 (File No. 2-89550).

(8)(a) Form of Participation Agreement between Registrant and Maxim Series Fund; Form of Fund Participation Agreement for Unaffiliated Insurance Products Funds; and, Form of Fund Participation Agreement for Retail Funds are incorporated by reference to Registrant’s Post-Effective Amendment No. 30 to Form N-4 registration statement filed on October 30, 2000 (File No. 2-89550).

(8)(b) Fund Participation Agreement, dated June 6, 2000, with American Century Investment Management, Inc. and American Century Investment Services, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(c) Fund Participation Agreement, dated March 12, 2004, with Davis New York Venture Fund, Davis Select Advisers, L.P. and Davis Distributors, LLC is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(d) Participation Agreement, dated September 13, 1999, with The Alger American Fund, Fred Alger Management Inc. and Fred Alger & Company, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(e) Participation Agreement, dated October 26, 2006, with Variable Insurance Products Funds and Fidelity Distributors Corporation is incorporated by reference to Post-Effective Amendment No. 14 to the Registration Statement filed by COLI VUL-2 Series Account on Form N-6 on April 30, 2007 (File No. 333-70963).

(8)(f) Participation Agreement, dated June 1, 1998, with Janus Aspen Series and Janus Capital Management LLC (formerly, Janus Capital Corporation) is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(g) Participation Agreement, dated May 1, 2008, with MFS Variable Insurance Trust and MFS Fund Distributors is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(h) Participation Agreement, dated April 30, 2008, with Putnam Variable Trust and Putnam Retail Management Limited Partnership is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(i) Fund Participation Agreement, dated July 26, 2004, with RidgeWorth Funds (formerly, STI Classic Funds), RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management Inc.) and BISYS Fund Services Limited Partnership, Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(j) Fund Participation Agreement, dated October 1, 2003, with Van Kampen Investor Services, Inc., Van Kampen Asset Management and Van Kampen Funds Inc. is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on May 27, 2008 (File No. 2-89550).

(8)(k) Fund Participation Agreement, dated April 30, 2009, with Columbia Funds Variable Insurance Trust, Columbia Management Advisors, LLC and Columbia Management Distributors, Inc. is filed herewith.

(8)(l) Form of Shareholder Information Agreement with Eligible Funds is incorporated by reference to Registrant's Post-Effective Amendment No. 42 to Form N-4 registration statement filed on April 30, 2007 (File No. 2-89550).

(13) Powers of Attorney for Messrs. Balog, A. Desmarais, P. Desmarais, Jr., Louvel, McFeetors, Nickerson, Orr, Plessis-Bélair, Ryan and Walsh are incorporated by reference to Registrant’s initial registration statement on Form N-4 filed on April 13, 2009 (File No. 333-158546).

The following sets out the ownership, based on votes attached to the outstanding voting shares, of Power Corporation of Canada:

The total voting rights of Power Corporation of Canada (PCC) controlled directly and indirectly by Mr. Paul G. Desmarais is as follows. There are issued and outstanding as of March 31, 2009 407,479,265 Subordinate Voting Shares (SVS) of PCC carrying one vote per share and 48,854,772 Participating Preferred Shares (PPS) carrying 10 votes per share; hence the total voting rights are 896,026,985.

Pansolo Holding Inc. owns directly 23,216,033 SVS and 367,692 PPS, entitling Pansolo Holding Inc. directly to an aggregate percentage of voting rights of 26,892,953 or 3.00 % of the total voting rights attached to the shares of PCC. Pansolo Holding Inc. wholly owns 3876357 Canada Inc., 3439496 Canada Inc. and Capucines Investments Corporation which respectively own 40,686,080 SVS, 3,236,279 SVS, 3,125,000 SVS of PCC, representing respectively 4.54 %, 0.36%, 0.35 % of the aggregate voting rights of PCC.

Gelco Entreprises Ltd owns directly 48,235,700 PPS, representing 53.83 % of the aggregate voting rights of PCC (PPS (10 votes) and SVS (1 vote)). Hence the total voting rights of PCC under the direct and indirect control of Mr. Paul G. Desmarais is approximately 62.24%; note that this is not the equity percentage.

Power Corporation of Canada has a 10% or greater voting interest in the following entities:

100.0% - First Great-West Life & Annuity Insurance Company (Fed ID # 13-2690792 - NAIC # 79359, NY)

99.0% - Putnam Retail Management Limited Partnership (1% owned by Putnam Retail Management GP, Inc.)

99.0% - Putnam Advisory Company, Limited Partnership (1% owned by Putnam Advisory Company GP, Inc.)

100.0% - RMA (U.S.) Realty LLC (Delaware) [(special shares held by each of 1218023 Alberta Ltd. (50%) and 1214931 Alberta Ltd. (50%)]

1% - RMA American Realty Limited Partnership [(99% owned by RMA (U.S.) Realty LLC (Delaware)]

99.0% - RMA American Realty Limited Partnership (1% owned by RMA American Realty Corp.)

100.0% - London Life Insurance Company (Fed ID # 52-1548741 – NAIC # 83550, MI)

100.0% - RMA Property Management Ltd. (Formerly TGS REIT Property Management Ltd.)

100.0% - RMAProperty Management 2004 Ltd. (Formerly TGS REIT Property Management 2004 Ltd.)

100.0% - RMA Realty Holdings Corporation Ltd. (Formerly TGS Realty Holdings Corporation Ltd.)

100.0% - RMA (U.S.) Realty LLC (Delaware) [(special shares held by each of 1218023 Alberta Ltd. (50%) and 1214931 Alberta Ltd. 50%)]

1% - RMA American Realty Limited Partnership [(99% owned by RMA (U.S.) Realty LLC (Delaware)]

99.0% - RMA American Realty Limited Partnership (1% owned by RMA American Realty Corp.)

100.0% - RMA Properties (Valley Centre) Ltd. (Formerly TGS REIT Properties (Valley Centre) Ltd.

100.0% - London Life & General Reinsurance Co. Ltd. (1 share held by London Life & Casualty Reinsurance Corporation and 20,099,999 shares held by London Reinsurance Group Inc.)

100.0% - London Life Reinsurance Company (Fed ID # 23-2044256 – NAIC # 76694, PA)

100.0% - CLH International Capital Management Hungary, Limited Liability Company

As of the date this Registration Statement was filed, there were no owners of Contracts offered by means of the prospectus contained herein. The Depositor, through the Registrant, issues other contracts by means of other prospectuses. As of June 30, 2009, there were 2 owners of non-qualified group contracts and 1,289 owners of qualified group contracts offered by Registrant.

Provisions exist under the Colorado General Corporation Code and the Bylaws of GWL&A whereby GWL&A may indemnify a director, officer, or controlling person of GWL&A against liabilities arising under the Securities Act of 1933. The following excerpts contain the substance of these provisions:

otherwise involve services by, the director to the plan or to participants in or beneficiaries of the plan. “Director” includes, unless the context requires otherwise, the estate or personal representative of a director.

Unless limited by the articles of incorporation, a corporation shall indemnify a person who was wholly successful, on the merits or otherwise, in defense of any proceeding to which the person was a party because the person is or was a director, against reasonable expenses incurred by him or her in connection with the proceeding.

the circumstances described in Section 7-109-102 (4), the court may order such indemnification as the court deems proper; except that the indemnification with respect to any proceeding in which liability shall have been adjudged in the circumstances described Section 7-109-102 (4) is limited to reasonable expenses incurred in connection with the proceeding and reasonable expenses incurred to obtain court-ordered indemnification.

A corporation may purchase and maintain insurance on behalf of a person who is or was a director, officer, employee, fiduciary, or agent of the corporation and who, while a director, officer, employee, fiduciary, or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, fiduciary, or agent of any other domestic or entity or of an employee benefit plan against any liability asserted against or incurred by the person in that capacity or arising out of his or her status as a director, officer, employee, fiduciary, or agent whether or not the corporation would have the power to indemnify the person against such liability under the Section 7-109-102, 7-109-103 or 7-109-107. Any such insurance may be procured from any insurance company designated by the board of directors, whether such insurance company is formed under the law of this state or any other jurisdiction of the United States or elsewhere, including any insurance company in which the corporation has an equity or any other interest through stock ownership or otherwise.

If a corporation indemnifies or advances expenses to a director under this article in connection with a proceeding by or in the right of the corporation, the corporation shall give written notice of the indemnification or advance to the shareholders with or before the notice of the next shareholders' meeting. If the next shareholder action is taken without a meeting at the instigation of the board of directors, such notice shall be given to the shareholders at or before the time the first shareholder signs a writing consenting to such action.

SECTION 2. Subject to applicable law, if any person who is or was a director, officer or employee of the corporation is made a party to a proceeding because the person is or was a director, officer or employee of the corporation, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if, with respect to the matter(s) giving rise to the proceeding:

SECTION 3. Subject to applicable law, if any person who is or was serving as a director, officer, trustee or employee of another company or entity at the request of the corporation is made a party to a proceeding because the person is or was serving as a director, officer, trustee or employee of the other company or entity, the corporation shall indemnify the person, or the estate or personal representative of the person, from and against all liability and expenses incurred by the person in the proceeding (and advance to the person expenses incurred in the proceeding) if:

if the person is or was an employee of the other company or entity, the person acted in the ordinary course of the person’s employment with the other company or entity.

Annuity Company (“First Great-West), COLI VUL-2 Series Account of First Great-West and COLI VUL-4 Series Account of First Great-West in addition to those of the Registrant.

(c) Commissions and other compensation received from the Registrant by Principal Underwriter during Registrant's last fiscal year:

All accounts, books, or other documents required to be maintained by Section 31(a) of the 1940 Act and the rules promulgated thereunder are maintained by the Registrant through GWL&A, 8515 E. Orchard Road, Greenwood Village, Colorado 80111.

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4 to be signed on its behalf, in the City of Greenwood Village, and State of Colorado, on this 7th day of August, 2009.

As required by the Securities Act of 1933, this Pre-Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities with Great-West Life & Annuity Insurance Company and on the duties indicated.

PRE-EFFECTIVE AMENDMENT NO. 1	(X)
POST-EFFECTIVE AMENDMENT NO.	( )


	December 31,

	2008			2007

Liabilities and stockholder’s equity
Policy benefit liabilities:
Policy reserves	$	18,105,648		$	17,376,694
Policy and contract claims		290,288			262,503
Policyholders’ funds		320,320			302,957
Provision for policyholders’ dividends		70,700			78,276
Undistributed earnings on participating business		1,614			209,036

Total policy benefit liabilities		18,788,570			18,229,466

General liabilities:
Due to parent and affiliates		533,870			534,956
Repurchase agreements		202,079			138,537
Commercial paper		97,167			95,667
Payable under securities lending agreements		43,205			93,472
Other liabilities		655,576			648,857
Liabilities of discontinued operations		124,089			468,496
Separate account liabilities		15,121,943			18,089,984

Total liabilities		35,566,499			38,299,435


Commitments and contingencies (Note 22)

Stockholder’s equity:
Preferred stock, $1 par value, 50,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $1 par value, 50,000,000 shares authorized; 7,032,000 shares issued and outstanding		7,032			7,032
Additional paid-in capital		756,912			747,533
Accumulated other comprehensive loss		(762,673	)		(1,518	)
Retained earnings		607,860			1,282,064

Total stockholder’s equity		609,131			2,035,111

Total liabilities and stockholder’s equity	$	36,175,630		$	40,334,546


							Accumulated Other Comprehensive Income (Loss)

	Common Stock			Additional Paid-in Capital			Unrealized Gains (Losses) on Securities				Employee Benefit Plan Adjustments				Retained Earnings				Total

Balances, January 1, 2006, as restated, see Note 1		$	7,032		$	728,701		$	8,266			($	25,084	)		$	1,386,710		$	2,105,625
Net income																	337,202			337,202
Other comprehensive income (loss):
Net change in unrealized gains									(23,974	)										(23,974	)
Employee benefit plan adjustment													989							989

Total comprehensive income																				314,217
Impact of adopting SFAS No. 158, net of tax													(6,734	)						(6,734	)
Dividends																	(249,395	)		(249,395	)
Capital contribution - stock-based compensation						4,525														4,525
Income tax benefit on stock-based compensation						4,631														4,631

Balances, December 31, 2006			7,032			737,857			(15,708	)			(30,829	)			1,474,517			2,172,869
Net income																	418,728			418,728
Other comprehensive income (loss):
Net change in unrealized gains									9,903											9,903
Employee benefit plan adjustment													34,998							34,998

Total comprehensive income																				463,629
Impact of adopting SFAS No. 155									118								(3	)		115
Impact of adopting FIN No. 48																	(6,195	)		(6,195	)
Dividends																	(604,983	)		(604,983	)
Capital contribution - stock-based compensation						3,816														3,816
Income tax benefit on stock-based compensation						5,860														5,860

Balances, December 31, 2007			7,032			747,533			(5,687	)			4,169				1,282,064			2,035,111
Net income																	1,098,295			1,098,295
Other comprehensive income (loss):
Net change in unrealized gains (losses)									(685,907	)										(685,907	)
Employee benefit plan adjustment													(75,248	)						(75,248	)

Total comprehensive income																				337,140
Impact of adopting SFAS No. 158 measurement date provisions, net of tax																	(206	)		(206	)
Dividends																	(1,772,293	)		(1,772,293	)
Capital contribution - stock-based compensation						5,123														5,123
Income tax benefit on stock-based compensation						4,256														4,256

Balances, December 31, 2008		$	7,032		$	756,912		($	691,594	)		($	71,079	)		$	607,860		$	609,131

Investment Division	Statements of Assets and Liabilities As Of	Statements of Operations Period	Statements of Changes in Net Assets Periods
AIM Dynamics Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
AIM Large Cap Growth Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
AIM Small Cap Growth Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Alger American Balanced Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Alger American Midcap Growth Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
American Century Equity Income Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
American Century Income & Growth Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
American Funds Growth Fund of America R-3 Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Artisan International Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Columbia Asset Allocation Fund Variable Series	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Columbia Mid Cap Value Fund	December 31, 2008	Period from May 27, 2008 to December 31, 2008	Period from May 27, 2008 to December 31, 2008
Davis New York Venture Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Federated Capital Appreciation Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Fidelity VIP Contrafund Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Fidelity VIP Growth Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Franklin Small-Mid Cap Growth Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Janus Aspen Worldwide Growth Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Janus Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008


Investment Division	Statements of Assets and Liabilities As Of	Statements of Operations Period	Statements of Changes in Net Assets Periods
Janus Twenty Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Janus Worldwide Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Jensen Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Legg Mason Value Trust	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Mainstay Small Cap Opportunity Fund	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Aggressive Profile I Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Ariel Midcap Value Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Ariel Small-Cap Value Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Bernstein International Equity Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Bond Index Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Conservative Profile I Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Index 600 Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim INVESCO ADR Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Loomis Sayles Bond Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Loomis Sayles Small-Cap Value Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Moderate Profile I Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Moderately Aggressive Profile I Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Moderately Conservative Profile I Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Money Market Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008
Maxim Small-Cap Growth Portfolio	December 31, 2008	Year Ended December 31, 2008	Two Years Ended December 31, 2008

FUTUREFUNDS SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2008

			AIM DYNAMICS FUND		AIM LARGE CAP GROWTH FUND		AIM SMALL CAP GROWTH FUND		ALGER AMERICAN BALANCED PORTFOLIO		ALGER AMERICAN MIDCAP GROWTH PORTFOLIO		AMERICAN CENTURY EQUITY INCOME FUND


ASSETS:
	Investments at market value (1)	$	1,082,392	$	481,977	$	609,576	$	1,856,217	$	9,287,084	$	10,035,037
	Investment income due and accrued												25,338
	Purchase payments receivable				67						9,717
	Due from Great West Life & Annuity Insurance Company

	Total assets		1,082,392		482,044		609,576		1,856,217		9,296,801		10,060,375

LIABILITIES:
	Redemptions payable						1,001						4,048
	Due to Great West Life & Annuity Insurance Company		146		62		83		246		1,179		1,104

	Total liabilities		146		62		1,084		246		1,179		5,152

NET ASSETS		$	1,082,246	$	481,982	$	608,492	$	1,855,971	$	9,295,622	$	10,055,223

NET ASSETS REPRESENTED BY:
	Accumulation units	$	1,082,246	$	481,982	$	608,492	$	1,855,971	$	9,295,622	$	10,055,223
	Contracts in payout phase

NET ASSETS		$	1,082,246	$	481,982	$	608,492	$	1,855,971	$	9,295,622	$	10,055,223

ACCUMULATION UNITS OUTSTANDING			254,030		101,497		69,094		197,788		1,051,198		639,287

UNIT VALUE (ACCUMULATION)		$	4.26	$	4.75	$	8.81	$	9.38	$	8.84	$	15.73

(1)	Cost of investments:	$	1,154,350	$	655,707	$	996,412	$	2,825,602	$	23,970,618	$	13,592,793
	Shares of investments:		85,768		58,635		36,220		214,840		1,319,188		1,666,950


The accompanying notes are an integral part of these financial statements.													(Continued)

FUTUREFUNDS SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2008

			AIM DYNAMICS FUND		AIM LARGE CAP GROWTH FUND		AIM SMALL CAP GROWTH FUND		ALGER AMERICAN BALANCED PORTFOLIO		ALGER AMERICAN MIDCAP GROWTH PORTFOLIO		AMERICAN CENTURY EQUITY INCOME FUND


INVESTMENT INCOME:
	Dividends	$	0	$	0	$	0	$	67,485	$	28,786	$	392,198

EXPENSES:
	Mortality and expense risk		18,483		6,517		10,072		26,108		170,336		98,260

NET INVESTMENT INCOME (LOSS)			(18,483)		(6,517)		(10,072)		41,377		(141,550)		293,938

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
	Realized gain (loss) on sale of fund shares		141,526		(1,695)		(52,091)		(61,245)		(1,214,322)		(269,369)
	Realized gain distributions		0		0		31,091		321,371		5,978,453		0

	Net realized gain (loss)		141,526		(1,695)		(21,000)		260,126		4,764,131		(269,369)

	Change in net unrealized depreciation
	on investments		(1,192,373)		(305,529)		(433,431)		(1,276,818)		(18,730,755)		(2,744,762)

NET DECREASE IN NET ASSETS
	RESULTING FROM OPERATIONS	$	(1,069,330)	$	(313,741)	$	(464,503)	$	(975,315)	$	(14,108,174)	$	(2,720,193)


INVESTMENT INCOME RATIO (2008)									2.59%		0.17%		3.37%

INVESTMENT INCOME RATIO (2007)									2.09%				2.43%

INVESTMENT INCOME RATIO (2006)									1.57%				2.49%

INVESTMENT INCOME RATIO (2005)					0.03%				1.68%				2.12%

INVESTMENT INCOME RATIO (2004)									1.52%				2.48%

The accompanying notes are an integral part of these financial statements.													(Continued)

FUTUREFUNDS SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED DECEMBER 31, 2008 AND 2007

			AIM DYNAMICS FUND				AIM LARGE CAP GROWTH FUND				AIM SMALL CAP GROWTH FUND
			2008		2007		2008		2007		2008		2007


INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
	Net investment loss	$	(18,483)	$	(26,676)	$	(6,517)	$	(9,159)	$	(10,072)	$	(15,019)
	Net realized gain (loss)		141,526		160,372		(1,695)		22,541		(21,000)		215,693
	Change in net unrealized appreciation (depreciation)
	on investments		(1,192,373)		128,749		(305,529)		108,432		(433,431)		(52,673)

	Increase (decrease) in net assets resulting
	from operations		(1,069,330)		262,445		(313,741)		121,814		(464,503)		148,001

CONTRACT TRANSACTIONS:
	Purchase payments		18,600		9,047		6,832		3,984		5,608		0
	Redemptions		(140,257)		(185,932)		(59,770)		(164,787)		(110,738)		(208,445)
	Transfers, net		(222,907)		(47,494)		(23,454)		(33,386)		(122,851)		(116,982)
	Contract maintenance charges		(1,053)		(1,462)		(248)		(290)		(395)		(496)
	Adjustments to net assets allocated to contracts
	in payout phase

	Decrease in net assets resulting from
	contract transactions		(345,617)		(225,841)		(76,640)		(194,479)		(228,376)		(325,923)

	Total increase (decrease) in net assets		(1,414,947)		36,604		(390,381)		(72,665)		(692,879)		(177,922)

NET ASSETS:
	Beginning of period		2,497,193		2,460,589		872,363		945,028		1,301,371		1,479,293

	End of period	$	1,082,246	$	2,497,193	$	481,982	$	872,363	$	608,492	$	1,301,371

CHANGES IN UNITS OUTSTANDING:
	Units issued		26,472		27,138		13,439		11,223		2,213		13,894
	Units redeemed		(85,795)		(54,242)		(24,647)		(38,288)		(22,414)		(36,528)

	Net decrease		(59,323)		(27,104)		(11,208)		(27,065)		(20,201)		(22,634)

The accompanying notes are an integral part of these financial statements.													(Continued)

Investment Division		Purchases		Sales

Aim Dynamics Fund	$	31,448	$	395,136
Aim Large Cap Growth Fund		61,238		144,774
Aim Small Cap Growth Fund		36,874		243,332
Alger American Balanced Portfolio		471,048		602,590
Alger American Midcap Growth Portfolio		7,457,754		3,998,588
American Century Equity Income Fund		1,380,327		2,119,106
American Century Income & Growth Fund		74,548		100,973
American Funds Growth Fund of America R-3 Portfolio		5,043,730		444,100
Artisan International Fund		5,962,334		3,228,832
Columbia Asset Allocation Fund Variable Series		34,611		27,329
Columbia Mid Cap Value Fund		864,605		28,327
Davis New York Venture Fund		3,558,326		585,578
Federated Capital Appreciation Fund		2,591,718		1,139,010

Fidelity VIP Contrafund Portfolio		4,124,064		3,708,994
Fidelity VIP Growth Portfolio		2,342,127		11,105,402
Franklin Small-Mid Cap Growth Fund		1,245		6,103
Janus Aspen Worldwide Growth Portfolio		169,564		442,112
Janus Fund		9,302		5,748
Janus Twenty Fund		14,009		914,378
Janus Worldwide Fund		25,531		378,133
Jensen Portfolio		486,945		692,401
Legg Mason Value Trust		591,204		2,057,698
Mainstay Small Cap Opportunity Fund		1,227,241		1,310,946
Maxim Aggressive Profile I Portfolio		23,539,858		8,691,341
Maxim Ariel Midcap Value Portfolio		35,533,142		7,385,319
Maxim Ariel Small-Cap Value Portfolio		11,238,935		7,565,971
Maxim Bernstein International Equity Portfolio		4,113,521		10,745,942
Maxim Bond Index Portfolio		5,233,274		2,539,883
Maxim Conservative Profile I Portfolio		11,807,797		4,681,212
Maxim Index 600 Portfolio		4,473,504		3,386,073
Maxim Invesco ADR Portfolio		4,317,856		2,147,105
Maxim Loomis Sayles Bond Portfolio		13,202,892		8,896,365
Maxim Loomis Sayles Small-Cap Value Portfolio		3,124,130		1,656,499
Maxim Moderate Profile I Portfolio		45,751,863		16,814,123
Maxim Moderately Aggressive Profile I Portfolio		46,651,885		17,008,014
Maxim Moderately Conservative Profile I Portfolio		14,690,643		6,082,317
Maxim Money Market Portfolio		13,117,241		16,814,875
Maxim Small-Cap Growth Portfolio		19,405		3,382,494
Maxim Stock Index Portfolio		11,944,498		33,819,848
Maxim T. Rowe Price Equity/Income Portfolio		8,540,588		14,425,662
Maxim T. Rowe Price Midcap Growth Portfolio		11,455,863		9,007,543
Maxim U.S. Government Securities Portfolio		6,365,237		4,130,166
MFS Core Growth Fund		16,108		19,758
Oppenheimer Capital Appreciation Fund		857,750		1,232,187
Oppenheimer Global Fund		3,055,014		1,389,692
Pimco Total Return Fund		7,699,396		3,786,208
Pioneer Equity Income VCT Portfolio		609,506		844,308
Putnam High Yield Advantage Fund		232,401		10,159
Putnam International Capital Opportunities Fund		253,151		59,296
RidgeWorth Small Cap Growth Stock Fund		3,532,069		2,496,738
Royce Total Return Fund		415,438		69,828
RS Emerging Growth Fund		10,742		301,361
RS Select Growth Fund		694		61,249
Van Kampen American Value Fund		522,032		316,069
Van Kampen Comstock Fund		867,297		368,409

Total	$	329,753,523	$	223,815,604

FUTUREFUNDS SERIES ACCOUNT OF
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
	At December 31								For the year or period ended December 31
	Units	Unit Fair Value						Net Assets	Expense Ratio					Total Return
	(000s)	lowest to highest						(000s)	lowest to highest					lowest to highest
AIM DYNAMICS FUND
2008	254	$	4.07	to	$	4.53	$	1,082	0.00	%	to	1.25	%	(47.69)	%	to	(47.02)	%
2007	313	$	7.78	to	$	8.55	$	2,497	0.00	%	to	1.25	%	10.98	%	to	12.35	%
2006	340	$	7.01	to	$	7.61	$	2,461	0.00	%	to	1.25	%	15.11	%	to	16.54	%
2005	389	$	6.09	to	$	6.53	$	2,428	0.00	%	to	1.25	%	8.94	%	to	10.30	%
2004	479	$	5.59	to	$	13.09	$	2,694	0.00	%	to	1.25	%	10.56	%	to	13.39	%
AIM LARGE CAP GROWTH FUND
2008	101	$	4.53	to	$	5.04	$	482	0.00	%	to	1.25	%	(38.78)	%	to	(38.01)	%
2007	113	$	7.40	to	$	8.13	$	872	0.00	%	to	1.25	%	14.02	%	to	15.48	%
2006	140	$	6.49	to	$	7.04	$	945	0.00	%	to	1.25	%	5.70	%	to	7.15	%
2005	173	$	6.14	to	$	6.57	$	1,098	0.00	%	to	1.25	%	1.82	%	to	2.98	%
2004	240	$	6.03	to	$	11.42	$	1,465	0.00	%	to	1.25	%	3.00	%	to	7.92	%
AIM SMALL CAP GROWTH FUND
2008	69	$	8.64	to	$	9.38	$	608	0.00	%	to	1.25	%	(39.54)	%	to	(38.81)	%
2007	89	$	14.29	to	$	15.33	$	1,301	0.00	%	to	1.25	%	10.01	%	to	11.41	%
2006	112	$	12.99	to	$	13.76	$	1,479	0.00	%	to	1.25	%	12.86	%	to	14.29	%
2005	158	$	11.51	to	$	12.04	$	1,841	0.00	%	to	1.25	%	6.97	%	to	8.37	%
2004	211	$	10.76	to	$	12.78	$	2,276	0.00	%	to	1.25	%	5.49	%	to	12.94	%
ALGER AMERICAN BALANCED PORTFOLIO
2008	198	$	9.20	to	$	10.33	$	1,856	0.00	%	to	1.25	%	(32.60)	%	to	(31.77)	%
2007	240	$	13.65	to	$	15.14	$	3,328	0.00	%	to	1.25	%	10.98	%	to	12.40	%
2006	286	$	12.30	to	$	13.47	$	3,537	0.00	%	to	1.25	%	3.45	%	to	4.66	%
2005	383	$	11.89	to	$	12.87	$	4,572	0.00	%	to	1.25	%	7.12	%	to	8.42	%
2004	471	$	9.85	to	$	11.87	$	5,252	0.00	%	to	1.25	%	3.27	%	to	6.47	%
ALGER AMERICAN MIDCAP GROWTH PORTFOLIO
2008	1,051	$	8.67	to	$	9.74	$	9,296	0.00	%	to	1.25	%	(58.89)	%	to	(58.36)	%
2007	1,203	$	21.09	to	$	23.39	$	25,815	0.00	%	to	1.25	%	29.94	%	to	31.55	%
2006	1,175	$	16.23	to	$	17.78	$	19,185	0.00	%	to	1.25	%	8.78	%	to	10.16	%
2005	1,316	$	14.92	to	$	16.14	$	19,717	0.00	%	to	1.25	%	8.43	%	to	9.80	%
2004	1,402	$	10.53	to	$	14.70	$	19,383	0.00	%	to	1.25	%	11.65	%	to	15.63	%
AMERICAN CENTURY EQUITY INCOME FUND
2008	639	$	15.76	to	$	17.53	$	10,055	0.00	%	to	1.25	%	(21.04)	%	to	(20.06)	%
2007	684	$	19.96	to	$	21.93	$	13,770	0.00	%	to	1.25	%	0.50	%	to	1.81	%
2006	749	$	19.86	to	$	21.54	$	14,501	0.00	%	to	1.25	%	18.00	%	to	19.40	%
2005	608	$	16.83	to	$	18.04	$	9,993	0.00	%	to	1.25	%	1.14	%	to	2.50	%
2004	508	$	10.68	to	$	17.60	$	8,488	0.00	%	to	1.25	%	6.80	%	to	12.53	%

AMERICAN CENTURY INCOME & GROWTH FUND
2008	21	$	7.70	to	$	12.16	$	159	0.00	%	to	0.75	%	(35.13)	%	to	(34.66)	%
2007	24	$	11.87	to	$	18.61	$	280	0.00	%	to	0.75	%	(1.08)	%	to	(0.27)	%
2006	51	$	12.00	to	$	18.66	$	615	0.00	%	to	0.75	%	16.28	%	to	17.14	%
2005	45	$	10.32	to	$	15.93	$	468	0.00	%	to	0.75	%	4.03	%	to	4.80	%
2004	66	$	9.92	to	$	15.20	$	657	0.00	%	to	0.75	%	12.14	%	to	12.98	%
AMERICAN FUNDS GROWTH FUND OF AMERICA R-3 PORTFOLIO
2008	750	$	7.15	to	$	7.36	$	5,440	0.00	%	to	1.25	%	(39.97)	%	to	(39.27)	%
2007	304	$	11.91	to	$	12.12	$	3,641	0.00	%	to	1.25	%	9.27	%	to	10.58	%
2006	203	$	10.90	to	$	10.96	$	2,215	0.00	%	to	1.25	%	9.00	%	to	9.60	%
ARTISAN INTERNATIONAL FUND
2008	1,575	$	7.38	to	$	8.22	$	12,538	0.00	%	to	1.25	%	(47.62)	%	to	(46.93)	%
2007	1,415	$	14.09	to	$	15.49	$	20,834	0.00	%	to	1.25	%	18.20	%	to	19.71	%
2006	1,127	$	11.92	to	$	12.94	$	14,063	0.00	%	to	1.25	%	24.04	%	to	25.63	%
2005	879	$	9.61	to	$	10.30	$	8,764	0.00	%	to	1.25	%	14.81	%	to	16.25	%
2004	796	$	8.37	to	$	13.89	$	6,710	0.00	%	to	1.25	%	14.96	%	to	17.77	%
COLUMBIA ASSET ALLOCATION FUND VARIABLE SERIES
2008	13	$	10.96	to	$	12.70	$	138	0.00	%	to	0.75	%	(28.83)	%	to	(28.29)	%
2007	14	$	15.40	to	$	17.71	$	210	0.00	%	to	0.75	%	8.37	%	to	9.12	%
2006	25	$	14.21	to	$	16.23	$	359	0.00	%	to	0.75	%	10.93	%	to	11.85	%
2005	24	$	12.81	to	$	14.51	$	313	0.00	%	to	0.75	%	5.78	%	to	6.46	%
2004	19	$	12.11	to	$	13.63	$	224	0.00	%	to	0.75	%	9.17	%	to	9.99	%
COLUMBIA MID CAP VALUE FUND
2008	104	$	6.03	to	$	6.07	$	631	0.00	%	to	1.25	%	(39.70)	%	to	(39.30)	%
DAVIS NEW YORK VENTURE FUND
2008	574	$	6.77	to	$	6.98	$	3,957	0.00	%	to	1.25	%	(41.03)	%	to	(40.24)	%
2007	267	$	11.48	to	$	11.68	$	3,078	0.00	%	to	1.25	%	3.33	%	to	4.66	%
2006	183	$	11.11	to	$	11.16	$	2,031	0.00	%	to	1.25	%	11.10	%	to	11.60	%
FEDERATED CAPITAL APPRECIATION FUND
2008	586	$	9.29	to	$	10.09	$	5,703	0.00	%	to	1.25	%	(29.83)	%	to	(28.99)	%
2007	482	$	13.24	to	$	14.21	$	6,561	0.00	%	to	1.25	%	9.24	%	to	10.58	%
2006	452	$	12.12	to	$	12.85	$	5,602	0.00	%	to	1.25	%	14.56	%	to	16.08	%
2005	471	$	10.58	to	$	11.07	$	5,048	0.00	%	to	1.25	%	0.67	%	to	1.84	%
2004	425	$	10.51	to	$	11.86	$	4,493	0.00	%	to	1.25	%	5.87	%	to	8.38	%
FIDELITY VIP CONTRAFUND PORTFOLIO
2008	1,811	$	12.47	to	$	14.16	$	22,951	0.00	%	to	1.25	%	(43.24)	%	to	(42.51)	%
2007	1,844	$	21.97	to	$	24.63	$	41,133	0.00	%	to	1.25	%	16.12	%	to	17.57	%
2006	1,858	$	18.92	to	$	20.95	$	35,129	0.00	%	to	1.25	%	10.32	%	to	11.73	%
2005	1,827	$	17.15	to	$	18.75	$	31,238	0.00	%	to	1.25	%	15.49	%	to	16.97	%
2004	1,565	$	10.90	to	$	16.03	$	23,369	0.00	%	to	1.25	%	8.96	%	to	15.48	%

																		(Continued)

FIDELITY VIP GROWTH PORTFOLIO
2008	3,951	$	15.84	to	$	8.93	$	50,818	0.00	%	to	1.25	%	(47.83)	%	to	(47.19)	%
2007	4,346	$	30.36	to	$	16.91	$	107,982	0.00	%	to	1.25	%	25.35	%	to	27.05	%
2006	4,817	$	24.22	to	$	13.31	$	96,538	0.00	%	to	1.25	%	5.53	%	to	6.82	%
2005	5,429	$	22.95	to	$	12.46	$	103,737	0.00	%	to	1.25	%	4.51	%	to	5.77	%
2004	5,955	$	6.86	to	$	21.96	$	113,457	0.00	%	to	1.25	%	2.10	%	to	8.24	%
FRANKLIN SMALL-MID CAP GROWTH FUND
2008	13	$	5.32	to	$	12.17	$	70	0.00	%	to	0.75	%	(42.92)	%	to	(42.51)	%
2007	14	$	9.32	to	$	21.17	$	126	0.00	%	to	0.75	%	10.82	%	to	11.66	%
2006	14	$	8.41	to	$	18.96	$	115	0.00	%	to	0.75	%	6.73	%	to	7.54	%
2005	20	$	7.88	to	$	17.63	$	157	0.00	%	to	0.75	%	9.75	%	to	10.53	%
2004	15	$	7.18	to	$	15.95	$	106	0.00	%	to	0.75	%	12.20	%	to	13.04	%
JANUS ASPEN WORLDWIDE GROWTH PORTFOLIO
2008	128	$	9.06	to	$	10.74	$	1,103	0.00	%	to	0.95	%	(45.19)	%	to	(44.67)	%
2007	149	$	16.53	to	$	19.41	$	2,345	0.00	%	to	0.95	%	8.61	%	to	9.66	%
2006	141	$	15.22	to	$	17.70	$	2,036	0.00	%	to	0.95	%	17.08	%	to	18.16	%
2005	178	$	13.00	to	$	14.98	$	2,181	0.00	%	to	0.95	%	4.84	%	to	5.87	%
2004	282	$	10.55	to	$	14.15	$	3,280	0.00	%	to	0.95	%	3.79	%	to	4.78	%
JANUS FUND
2008	10	$	4.75	to	$	11.20	$	50	0.00	%	to	0.75	%	(40.25)	%	to	(39.82)	%
2007	10	$	7.95	to	$	18.61	$	76	0.00	%	to	0.75	%	14.39	%	to	15.23	%
2006	14	$	6.95	to	$	16.15	$	95	0.00	%	to	0.75	%	9.79	%	to	10.54	%
2005	18	$	6.33	to	$	14.61	$	114	0.00	%	to	0.75	%	3.09	%	to	3.99	%
2004	23	$	6.14	to	$	14.05	$	141	0.00	%	to	0.75	%	3.91	%	to	4.69	%
JANUS TWENTY FUND
2008	700	$	5.13	to	$	5.71	$	3,690	0.00	%	to	1.25	%	(42.68)	%	to	(42.03)	%
2007	805	$	8.95	to	$	9.85	$	7,366	0.00	%	to	1.25	%	34.18	%	to	36.05	%
2006	918	$	6.67	to	$	7.24	$	6,380	0.00	%	to	1.25	%	10.98	%	to	12.25	%
2005	1,105	$	6.01	to	$	6.45	$	6,919	0.00	%	to	1.25	%	8.09	%	to	9.32	%
2004	1,396	$	5.56	to	$	13.62	$	7,831	0.00	%	to	1.25	%	12.69	%	to	23.89	%
JANUS WORLDWIDE FUND
2008	293	$	4.04	to	$	4.49	$	1,244	0.00	%	to	1.25	%	(45.70)	%	to	(45.04)	%
2007	351	$	7.44	to	$	8.17	$	2,719	0.00	%	to	1.25	%	7.98	%	to	9.22	%
2006	419	$	6.89	to	$	7.48	$	3,014	0.00	%	to	1.25	%	16.39	%	to	17.80	%
2005	559	$	5.92	to	$	6.35	$	3,417	0.00	%	to	1.25	%	4.59	%	to	5.83	%
2004	740	$	5.66	to	$	12.07	$	4,227	0.00	%	to	1.25	%	4.23	%	to	11.28	%

																		(Continued)

JENSEN PORTFOLIO
2008	149	$	8.58	to	$	9.07	$	1,300	0.00	%	to	1.25	%	(30.02)	%	to	(29.14)	%
2007	173	$	12.26	to	$	12.80	$	2,145	0.00	%	to	1.25	%	5.69	%	to	7.02	%
2006	169	$	11.60	to	$	11.96	$	1,979	0.00	%	to	1.25	%	12.29	%	to	13.69	%
2005	140	$	10.33	to	$	10.52	$	1,450	0.00	%	to	1.25	%	(2.82)	%	to	(1.59)	%
2004	91	$	10.63	to	$	10.82	$	968	0.00	%	to	1.25	%	6.34	%	to	8.20	%
LEGG MASON VALUE TRUST
2008	384	$	6.11	to	$	6.63	$	2,375	0.00	%	to	1.25	%	(55.30)	%	to	(54.77)	%
2007	555	$	13.67	to	$	14.66	$	7,666	0.00	%	to	1.25	%	(7.20)	%	to	(6.09)	%
2006	652	$	14.73	to	$	15.61	$	9,624	0.00	%	to	1.25	%	5.21	%	to	6.55	%
2005	743	$	14.00	to	$	14.65	$	10,413	0.00	%	to	1.25	%	4.71	%	to	6.01	%
2004	708	$	11.50	to	$	13.82	$	9,488	0.00	%	to	1.25	%	11.31	%	to	15.00	%
MAINSTAY SMALL CAP OPPORTUNITY FUND
2008	52	$	5.73	to	$	5.90	$	303	0.00	%	to	1.25	%	(37.65)	%	to	(36.90)	%
2007	65	$	9.19	to	$	9.35	$	601	0.00	%	to	1.25	%	(18.46)	%	to	(17.40)	%
2006	24	$	11.27	to	$	11.32	$	273	0.00	%	to	1.25	%	12.70	%	to	13.20	%
MAXIM AGGRESSIVE PROFILE I PORTFOLIO
2008	6,701	$	11.19	to	$	12.49	$	82,281	0.00	%	to	1.25	%	(40.76)	%	to	(40.01)	%
2007	6,384	$	18.89	to	$	20.82	$	131,080	0.00	%	to	1.25	%	5.77	%	to	7.10	%
2006	5,952	$	17.86	to	$	19.44	$	114,056	0.00	%	to	1.25	%	14.12	%	to	15.51	%
2005	5,227	$	15.65	to	$	16.83	$	86,846	0.00	%	to	1.25	%	7.41	%	to	8.79	%
2004	5,312	$	11.19	to	$	15.47	$	81,359	0.00	%	to	1.25	%	11.88	%	to	16.89	%
MAXIM ARIEL MIDCAP VALUE PORTFOLIO
2008	1,576	$	23.01	to	$	14.89	$	29,743	0.00	%	to	1.25	%	(41.29)	%	to	(40.54)	%
2007	1,769	$	39.19	to	$	25.04	$	57,526	0.00	%	to	1.25	%	(2.44)	%	to	(1.22)	%
2006	2,049	$	40.17	to	$	25.35	$	66,688	0.00	%	to	1.25	%	9.93	%	to	11.33	%
2005	2,308	$	36.54	to	$	22.77	$	68,930	0.00	%	to	1.25	%	2.12	%	to	3.41	%
2004	2,407	$	10.94	to	$	35.78	$	75,029	0.00	%	to	1.25	%	9.42	%	to	12.28	%
MAXIM ARIEL SMALL-CAP VALUE PORTFOLIO
2008	2,112	$	19.38	to	$	13.11	$	28,956	0.00	%	to	1.25	%	(46.61)	%	to	(45.94)	%
2007	2,336	$	36.30	to	$	24.25	$	59,814	0.00	%	to	1.25	%	(3.69)	%	to	(2.49)	%
2006	2,541	$	37.69	to	$	24.87	$	66,695	0.00	%	to	1.25	%	11.15	%	to	12.53	%
2005	2,697	$	33.91	to	$	22.10	$	63,650	0.00	%	to	1.25	%	(1.71)	%	to	(0.50)	%
2004	2,471	$	10.94	to	$	34.50	$	60,866	0.00	%	to	1.25	%	9.43	%	to	22.17	%
MAXIM BERNSTEIN INTERNATIONAL EQUITY PORTFOLIO
2008	1,779	$	13.50	to	$	10.61	$	22,245	0.00	%	to	1.25	%	(54.35)	%	to	(53.77)	%
2007	2,192	$	29.57	to	$	22.95	$	59,894	0.00	%	to	1.25	%	4.93	%	to	6.25	%
2006	2,301	$	28.18	to	$	21.60	$	60,200	0.00	%	to	1.25	%	34.19	%	to	35.85	%
2005	2,196	$	21.00	to	$	15.90	$	43,133	0.00	%	to	1.25	%	15.26	%	to	16.74	%
2004	2,307	$	11.41	to	$	18.22	$	39,804	0.00	%	to	1.25	%	14.12	%	to	18.86	%

																		(Continued)

MAXIM BOND INDEX PORTFOLIO
2008	1,157	$	15.01	to	$	16.86	$	17,661	0.00	%	to	1.25	%	5.04	%	to	6.44	%
2007	1,002	$	14.29	to	$	15.84	$	14,654	0.00	%	to	1.25	%	5.46	%	to	6.74	%
2006	912	$	13.55	to	$	14.84	$	11,943	0.00	%	to	1.25	%	2.50	%	to	3.78	%
2005	899	$	13.22	to	$	14.30	$	11,588	0.00	%	to	1.25	%	0.84	%	to	2.07	%
2004	825	$	10.06	to	$	14.01	$	10,908	0.00	%	to	1.25	%	0.58	%	to	3.28	%
MAXIM CONSERVATIVE PROFILE I PORTFOLIO
2008	2,905	$	13.43	to	$	14.91	$	42,653	0.00	%	to	1.25	%	(14.84)	%	to	(13.77)	%
2007	2,645	$	15.77	to	$	17.29	$	45,064	0.00	%	to	1.25	%	4.23	%	to	5.56	%
2006	2,521	$	15.13	to	$	16.38	$	40,634	0.00	%	to	1.25	%	6.40	%	to	7.76	%
2005	2,395	$	14.22	to	$	15.20	$	35,848	0.00	%	to	1.25	%	2.97	%	to	4.25	%
2004	2,510	$	10.41	to	$	14.58	$	36,199	0.00	%	to	1.25	%	4.10	%	to	6.92	%
MAXIM INDEX 600 PORTFOLIO
2008	878	$	21.43	to	$	14.73	$	15,318	0.00	%	to	1.25	%	(32.20)	%	to	(31.36)	%
2007	875	$	31.61	to	$	21.46	$	22,911	0.00	%	to	1.25	%	(2.05)	%	to	(0.83)	%
2006	934	$	32.27	to	$	21.64	$	24,779	0.00	%	to	1.25	%	13.15	%	to	14.56	%
2005	968	$	28.52	to	$	18.89	$	22,973	0.00	%	to	1.25	%	5.71	%	to	7.09	%
2004	916	$	11.27	to	$	26.98	$	22,261	0.00	%	to	1.25	%	12.67	%	to	21.78	%
MAXIM INVESCO ADR PORTFOLIO
2008	703	$	15.96	to	$	10.83	$	8,935	0.00	%	to	1.25	%	(40.95)	%	to	(40.20)	%
2007	597	$	27.03	to	$	18.11	$	13,407	0.00	%	to	1.25	%	6.08	%	to	7.41	%
2006	692	$	25.48	to	$	16.86	$	14,563	0.00	%	to	1.25	%	22.32	%	to	23.88	%
2005	739	$	20.83	to	$	13.61	$	12,465	0.00	%	to	1.25	%	9.92	%	to	11.28	%
2004	765	$	10.75	to	$	18.95	$	12,160	0.00	%	to	1.25	%	13.93	%	to	19.64	%
MAXIM LOOMIS SAYLES BOND PORTFOLIO
2008	2,965	$	23.92	to	$	18.09	$	55,894	0.00	%	to	1.25	%	(22.71)	%	to	(21.76)	%
2007	3,027	$	30.95	to	$	23.12	$	73,825	0.00	%	to	1.25	%	6.76	%	to	8.09	%
2006	2,741	$	28.99	to	$	21.39	$	62,512	0.00	%	to	1.25	%	9.69	%	to	11.12	%
2005	2,490	$	26.43	to	$	19.25	$	51,935	0.00	%	to	1.25	%	2.44	%	to	3.72	%
2004	1,759	$	10.56	to	$	25.80	$	38,199	0.00	%	to	1.25	%	5.58	%	to	10.98	%
MAXIM LOOMIS SAYLES SMALL-CAP VALUE PORTFOLIO
2008	646	$	14.65	to	$	16.47	$	9,552	0.00	%	to	1.25	%	(33.47)	%	to	(32.64)	%
2007	569	$	22.02	to	$	24.45	$	12,742	0.00	%	to	1.25	%	1.90	%	to	3.21	%
2006	573	$	21.61	to	$	23.69	$	12,377	0.00	%	to	1.25	%	16.56	%	to	18.04	%
2005	567	$	18.54	to	$	20.07	$	10,521	0.00	%	to	1.25	%	4.75	%	to	6.08	%
2004	544	$	11.22	to	$	18.92	$	9,771	0.00	%	to	1.25	%	12.15	%	to	22.16	%

																		(Continued)

MAXIM MODERATE PROFILE I PORTFOLIO
2008	16,297	$	13.26	to	$	14.88	$	237,499	0.00	%	to	1.25	%	(24.27)	%	to	(23.30)	%
2007	15,921	$	17.51	to	$	19.40	$	302,883	0.00	%	to	1.25	%	5.80	%	to	7.12	%
2006	15,164	$	16.55	to	$	18.11	$	267,691	0.00	%	to	1.25	%	10.63	%	to	12.00	%
2005	13,814	$	14.96	to	$	16.17	$	218,323	0.00	%	to	1.25	%	4.91	%	to	6.24	%
2004	13,270	$	10.77	to	$	15.22	$	198,853	0.00	%	to	1.25	%	7.65	%	to	11.34	%
MAXIM MODERATELY AGGRESSIVE PROFILE I PORTFOLIO
2008	15,180	$	12.78	to	$	14.20	$	212,037	0.00	%	to	1.25	%	(31.11)	%	to	(30.22)	%
2007	14,645	$	18.55	to	$	20.35	$	294,036	0.00	%	to	1.25	%	5.94	%	to	7.27	%
2006	13,730	$	17.51	to	$	18.97	$	256,008	0.00	%	to	1.25	%	12.39	%	to	13.80	%
2005	12,050	$	15.58	to	$	16.67	$	198,094	0.00	%	to	1.25	%	6.28	%	to	7.62	%
2004	12,116	$	10.95	to	$	15.49	$	185,976	0.00	%	to	1.25	%	9.49	%	to	13.38	%
MAXIM MODERATELY CONSERVATIVE PROFILE I PORTFOLIO
2008	4,023	$	12.85	to	$	14.44	$	57,036	0.00	%	to	1.25	%	(19.13)	%	to	(18.14)	%
2007	3,769	$	15.89	to	$	17.64	$	65,434	0.00	%	to	1.25	%	5.02	%	to	6.39	%
2006	3,523	$	15.13	to	$	16.58	$	57,203	0.00	%	to	1.25	%	8.54	%	to	9.95	%
2005	3,246	$	13.94	to	$	15.08	$	48,071	0.00	%	to	1.25	%	4.65	%	to	5.90	%
2004	3,341	$	10.61	to	$	14.24	$	46,926	0.00	%	to	1.25	%	6.14	%	to	9.66	%
MAXIM MONEY MARKET PORTFOLIO
2008	5,728	$	22.87	to	$	14.02	$	103,561	0.00	%	to	1.25	%	0.62	%	to	1.96	%
2007	6,022	$	22.73	to	$	13.75	$	107,677	0.00	%	to	1.25	%	3.41	%	to	4.72	%
2006	6,686	$	21.98	to	$	13.13	$	116,111	0.00	%	to	1.25	%	3.29	%	to	4.54	%
2005	5,882	$	21.28	to	$	12.56	$	99,336	0.00	%	to	1.25	%	1.48	%	to	2.70	%
2004	6,878	$	10.01	to	$	20.97	$	116,003	0.00	%	to	1.25	%	(0.31)	%	to	0.94	%
MAXIM SMALL-CAP GROWTH PORTFOLIO
2008	990	$	16.31	to	$	9.15	$	13,112	0.00	%	to	1.25	%	(42.00)	%	to	(41.31)	%
2007	1,154	$	28.12	to	$	15.59	$	26,416	0.00	%	to	1.25	%	10.88	%	to	12.32	%
2006	1,406	$	25.36	to	$	13.88	$	29,284	0.00	%	to	1.25	%	1.40	%	to	2.66	%
2005	1,763	$	25.01	to	$	13.52	$	36,506	0.00	%	to	1.25	%	3.30	%	to	4.56	%
2004	2,066	$	6.83	to	$	24.21	$	42,617	0.00	%	to	1.25	%	4.68	%	to	13.94	%
MAXIM STOCK INDEX PORTFOLIO
2008	7,332	$	54.50	to	$	9.53	$	178,058	0.00	%	to	1.25	%	(38.06)	%	to	(37.26)	%
2007	7,810	$	87.99	to	$	15.19	$	322,200	0.00	%	to	1.25	%	3.84	%	to	5.19	%
2006	8,626	$	84.74	to	$	14.44	$	354,697	0.00	%	to	1.25	%	13.26	%	to	14.60	%
2005	9,817	$	74.82	to	$	12.60	$	358,832	0.00	%	to	1.25	%	3.73	%	to	5.09	%
2004	10,706	$	8.78	to	$	72.13	$	397,135	0.00	%	to	1.25	%	9.09	%	to	10.74	%

																		(Continued)

MAXIM T. ROWE PRICE EQUITY/INCOME PORTFOLIO
2008	2,670	$	22.52	to	$	12.39	$	50,886	0.00	%	to	1.25	%	(36.97)	%	to	(36.17)	%
2007	3,174	$	35.73	to	$	19.41	$	95,275	0.00	%	to	1.25	%	1.97	%	to	3.24	%
2006	3,486	$	35.04	to	$	18.80	$	102,640	0.00	%	to	1.25	%	17.62	%	to	19.14	%
2005	3,770	$	29.79	to	$	15.78	$	96,131	0.00	%	to	1.25	%	2.83	%	to	4.09	%
2004	3,874	$	10.90	to	$	28.97	$	99,412	0.00	%	to	1.25	%	9.02	%	to	15.03	%
MAXIM T. ROWE PRICE MIDCAP GROWTH PORTFOLIO
2008	3,672	$	15.66	to	$	17.51	$	62,255	0.00	%	to	1.25	%	(41.11)	%	to	(40.36)	%
2007	3,806	$	26.59	to	$	29.36	$	108,690	0.00	%	to	1.25	%	15.41	%	to	16.88	%
2006	3,946	$	23.04	to	$	25.12	$	95,265	0.00	%	to	1.25	%	5.40	%	to	6.71	%
2005	3,795	$	21.86	to	$	23.54	$	86,404	0.00	%	to	1.25	%	12.74	%	to	14.16	%
2004	3,560	$	11.20	to	$	20.62	$	72,018	0.00	%	to	1.25	%	12.05	%	to	18.09	%
MAXIM U.S. GOVERNMENT SECURITIES PORTFOLIO
2008	2,128	$	21.22	to	$	17.52	$	41,211	0.00	%	to	1.25	%	5.15	%	to	6.44	%
2007	2,062	$	20.18	to	$	16.46	$	38,174	0.00	%	to	1.25	%	5.16	%	to	6.47	%
2006	2,231	$	19.19	to	$	15.46	$	38,913	0.00	%	to	1.25	%	3.06	%	to	4.39	%
2005	2,434	$	18.62	to	$	14.81	$	41,573	0.00	%	to	1.25	%	0.92	%	to	2.14	%
2004	2,579	$	10.06	to	$	18.45	$	44,939	0.00	%	to	1.25	%	0.61	%	to	3.90	%
MFS CORE GROWTH FUND
2008	22	$	7.80	to	$	8.48	$	177	0.00	%	to	1.25	%	(37.40)	%	to	(36.57)	%
2007	24	$	12.46	to	$	13.37	$	299	0.00	%	to	1.25	%	13.17	%	to	14.57	%
2006	26	$	11.01	to	$	11.67	$	287	0.00	%	to	1.25	%	4.86	%	to	6.28	%
2005	34	$	10.50	to	$	10.98	$	362	0.00	%	to	1.25	%	0.10	%	to	1.29	%
2004	43	$	10.49	to	$	11.66	$	458	0.00	%	to	1.25	%	5.22	%	to	11.33	%
OPPENHEIMER CAPITAL APPRECIATION FUND
2008	317	$	6.96	to	$	7.56	$	2,265	0.00	%	to	1.25	%	(46.54)	%	to	(45.92)	%
2007	346	$	13.02	to	$	13.98	$	4,630	0.00	%	to	1.25	%	12.34	%	to	13.75	%
2006	271	$	11.59	to	$	12.29	$	3,190	0.00	%	to	1.25	%	6.23	%	to	7.52	%
2005	293	$	10.91	to	$	11.43	$	3,225	0.00	%	to	1.25	%	3.31	%	to	4.67	%
2004	274	$	10.56	to	$	12.01	$	2,906	0.00	%	to	1.25	%	5.14	%	to	8.17	%
OPPENHEIMER GLOBAL FUND
2008	804	$	9.55	to	$	10.09	$	7,804	0.00	%	to	1.25	%	(41.73)	%	to	(41.06)	%
2007	721	$	16.39	to	$	17.12	$	11,971	0.00	%	to	1.25	%	4.59	%	to	6.01	%
2006	637	$	15.67	to	$	16.15	$	10,022	0.00	%	to	1.25	%	15.99	%	to	17.37	%
2005	498	$	13.51	to	$	13.76	$	6,725	0.00	%	to	1.25	%	12.40	%	to	13.81	%
2004	207	$	11.59	to	$	12.09	$	2,493	0.00	%	to	1.25	%	15.86	%	to	20.88	%

																		(Continued)

		Positions and Offices
Name	Principal Business Address	with Depositor

J. Balog	785 Saint Anne’s Lane	Director
	Vero Beach, Florida 32967

J. L. Bernbach	32 East 57^th Street, 10^th Floor	Director
	New York, New York 10022

A. Desmarais	(4)	Director

P. Desmarais, Jr.	(4)	Director

M. T. G. Graye	(3)	Director, President and Chief
		Executive Officer

A. Louvel	930 Fifth Avenue, Apt. 17D	Director
	New York, New York 10021

R. L. McFeetors	(1)	Chairman of the Board

J. E. A. Nickerson	H.B. Nickerson & Sons Limited	Director
	P.O. Box 130
	255 Commercial Street
	North Sydney, Nova Scotia B2A 3M2

R. J. Orr	(4)	Director

M. Plessis-Bélair, F.C.A.	(4)	Director

H. Rousseau	(4)	Director

R. Royer	(4)	Director

P. K. Ryan	(4)	Director

T. T. Ryan, Jr.	SIFMA	Director
	120 Broadway, 35^th Floor
	New York, New York 10271-0080

B. E. Walsh	QVan Capital, LLC	Director
	1 Dock Street, 4^th Floor
	Stamford, Connecticut 06902

J. L. McCallen	(3)	Senior Vice President and Chief
		Financial Officer

C. P. Nelson	(3)	President, Great-West
		Retirement Services

S. M. Corbett	(3)	Executive Vice President and
		Chief Investment Officer

R. D. Saull	(1)	Executive Vice President and
		Chief Information Officer


R. K. Shaw	(3)	Executive Vice President,
		Individual Markets

C. H. Cumming	(3)	Senior Vice President,
		Defined Contributions Markets

G. R. Derback	(3)	Senior Vice President
		and Controller

M. R. Edwards	(3)	Senior Vice President,
		FASCore Operations

E.P. Friesen	(3)	Senior Vice President,
		Investments

R. J. Laeyendecker	(3)	Senior Vice President,
		Executive Benefits Markets

G. R. McDonald	(3)	Senior Vice President,
		Corporate Resources

S. A. Miller	(6)	Senior Vice President,
		Financial Services Systems

R. G. Schultz	(6)	Senior Vice President, General
		Counsel and Secretary

G. E. Seller	(3)	Senior Vice President,
		Government Markets

C. Tocher	(3)	Senior Vice President,
		Investments

		FUTUREFUNDS SERIES ACCOUNT
		(Registrant)


		By:	/s/ M.T.G. Graye
			M. T. G. Graye, President
			and Chief Executive Officer of
			Great-West Life & Annuity
			Insurance Company


		GREAT-WEST LIFE & ANNUITY
		INSURANCE COMPANY
		(Depositor)


		By:	/s/ M.T.G. Graye
			M. T. G. Graye, President
			and Chief Executive Officer

Signature and Title		Date

/s/ R. L. McFeetors		August 7, 2009
Director, Chairman of the Board
(R. L. McFeetors*)

/s/ M. T. G. Graye		August 7, 2009
Director, President and Chief Executive
Officer (M. T. G. Graye)

/s/ J. L. McCallen		August 7, 2009
Senior Vice President and Chief Financial
Officer (J. L. McCallen)

/s/ J. Balog		August 7, 2009
Director, (J. Balog*)


Director, (J. L. Bernbach)

/s/ A. Desmarais		August 7, 2009
Director (A. Desmarais*)

/s/ P. Desmarais, Jr.		August 7, 2009
Director (P. Desmarais, Jr*.)

/s/ A. Louvel		August 7, 2009
Director (A. Louvel*)

/s/ R. J. Orr		August 7, 2009
Director (R. J. Orr*)

/s/ M. Plessis-Bélair		August 7, 2009
Director (M. Plessis-Bélair*)


Director, (H. Rousseau)


Director, (R. Royer)

/s/ P. K. Ryan		August 7, 2009
Director (P. K. Ryan*)


Director, (T. T. Ryan, Jr.)

/s/ B. E. Walsh		August 7, 2009
Director (B. E. Walsh*)

By:	/s/ R. G. Schultz	August 7, 2009
	R. G. Schultz
	*Attorney-in-fact pursuant to Powers of Attorney.

Year Ended
December 31, 2008

Weighted average fair value of options granted

Intrinsic value of options exercised ¹

Fair value of options vested