This prospectus describes an individual variable annuity contract offered by Pruco Life Insurance Company (Pruco Life). Pruco Life is a wholly owned subsidiary of The Prudential Insurance Company of America.
The Funds
Strategic Partners Advisor offers a wide variety of investment choices, including 27 variable investment options that invest in mutual funds managed by these leading asset managers.
Please Read this Prospectus
Please read this prospectus before purchasing a Strategic Partners Advisor variable annuity contract and keep it for future reference. Current prospectuses for each of the underlying mutual funds accompany this prospectus. These prospectuses contain important information about the mutual funds. Please read these prospectuses and keep them for reference.
To Learn More About Strategic Partners Advisor
To learn more about the Strategic Partners Advisor variable annuity, you can request a copy of the Statement of Additional Information (SAI) dated May 1, 2002. The SAI has been filed with the Securities and Exchange Commission (SEC) and is legally a part of this prospectus. Pruco Life also files other reports with the SEC. All of these filings can be reviewed and copied at the SECs offices, and can be obtained from the SECs Public Reference Section, 450 5th Street N.W., Washington, D.C. 20549. The SEC also maintains a Web site (http://www.sec.gov) that contains the Strategic Partners Advisor SAI, material incorporated by reference, and other information regarding registrants that file electronically with the SEC. The Table of Contents of the SAI is on Page 34 of this prospectus.
For a Free Copy of the SAI call us at:
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The SEC has not determined that this contract is a good investment, nor has the SEC determined that this prospectus is complete or accurate. It is a criminal offense to state otherwise. Investment in a variable annuity contract is subject to risk, including the possible loss of your money. An investment in Strategic Partners Advisor is not a bank deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency.
ORD01008
We have tried to make this prospectus as easy to read and understand as possible. By the nature of the contract, however, certain technical words or terms are unavoidable. We have identified the following as some of these words or terms.
ACCUMULATION PHASE
ADJUSTED CONTRACT VALUE
ANNUITANT
ANNUITY DATE
BENEFICIARY
CO-ANNUITANT
CONTRACT DATE
CONTRACT OWNER, OWNER OR YOU
CONTRACT VALUE
DEATH BENEFIT
INCOME OPTIONS
JOINT OWNER
PRUDENTIAL ANNUITY SERVICE CENTER
PURCHASE PAYMENTS
SEPARATE ACCOUNT
TAX DEFERRAL
VARIABLE INVESTMENT OPTION
For a more complete discussion of the following topics, see the corresponding section in Part II of the prospectus.
SECTION 1
What Is The Strategic Partners Advisor Variable Annuity?
The variable investment options are designed to offer the opportunity for a favorable return. However, this is NOT guaranteed. It is possible, due to market changes, that your investments may decrease in value.
You can invest your money in any or all of the variable investment options. You are allowed 12 tax-free transfers each contract year among the variable investment options, without a charge.
The contract, like all deferred annuity contracts, has two phases: the accumulation phase; and the income phase. During the accumulation phase, any earnings grow on a tax-deferred basis and are generally only taxed as income when you make a withdrawal. The income phase starts when you begin receiving regular payments from your contract. The amount of money you are able to accumulate in your contract during the accumulation phase will help determine the amount of payments you will receive during the income phase. Other factors will affect the amount of your payments such as age, gender and the payout option you selected.
If you change your mind about owning Strategic Partners Advisor, you may cancel your contract within 10 days after receiving it (or whatever time period is required under the applicable state law). This time period is referred to as the Free Look period.
SECTION 2
What Investment Options Can I Choose?
The Prudential Series Fund, Inc.
Janus Aspen Series
Depending upon market conditions, you may earn or lose money in any of these options. The value of your contract will fluctuate depending upon the investment performance of the mutual funds used by the variable investment options that you choose. Performance information for the variable investment options is provided in the Statement of Additional Information (SAI). Past performance is not a guarantee of future results.
SECTION 3
What Kind Of Payments Will I Receive During The Income Phase?
(Annuitization)
SECTION 4
What Is The Death Benefit?
SECTION 5
How Can I Purchase A Strategic Partners Advisor Annuity
Contract?
SECTION 6
What Are The Expenses Associated With The Strategic Partners
Advisor Contract?
SECTION 7
How Can I Access My Money?
SECTION 8
What Are The Tax Considerations Associated With The Strategic
Partners Advisor Contract?
SECTION 9
Other Information
The purpose of this summary is to help you to understand the costs you will pay for Strategic Partners Advisor. This summary includes the expenses of the mutual funds used by the variable investment options but does not include any charge for premium taxes that might be applicable in your state.
For More Detailed Information: More detailed information can be found on page 24 under the section called, What Are The Expenses Associated With The Strategic Partners Advisor Contract? For more detailed expense information about the mutual funds, please refer to the individual fund prospectuses which you will find at the back of this prospectus.
TRANSACTION EXPENSES
Maximum Transfer Fee
first 12 transfers per year | $0.00 |
each transfer after 12 (see Note 1 below) | $30.00 |
Maximum Annual Contract Fee (see Note 2 below)
$60.00 |
ANNUAL ACCOUNT EXPENSES
AS A PERCENTAGE OF THE AVERAGE ACCOUNT VALUE | |||
Basic Death Benefit Option Insurance Charge: | 1.40% | ||
Enhanced Death Benefit Option Insurance Charge: | 1.65% |
Note 1: Currently, we charge $10 for each transfer after the twelfth in a contract year. As shown in the table, we can increase that charge up to a maximum of $30, but we have no current intention to do so. You will not be charged for transfers made in connection with Dollar Cost Averaging and Auto-Rebalancing.
Note 2: Currently, we waive this fee if your contract value is greater than or equal to $50,000. If your contract value is less than $50,000, we currently charge the lesser of $30 or 2% of your contract value. This is a single fee that we assess (a) annually or (b) upon a full withdrawal made on a date other than a contract anniversary. As shown in the table, we can increase this fee in the future up to a maximum of $60, but we have no current intention to do so.
Notes for Annual Mutual Fund Expenses
These expenses are based on the historical fund expenses
for the year ended December 31, 2001. Fund expenses are not
fixed or guaranteed by the Strategic Partners Advisor contract
and may vary from year to year.
The Prudential Series Fund, Inc.:
(1) Each SP Portfolio has expense reimbursements in effect, and the table shows total expenses both with and without these expense reimbursements. These expense reimbursements are voluntary and may be terminated at any time.
(2) Each Asset Allocation Portfolio of The Prudential Series Fund, Inc. invests in a combination of underlying portfolios of The Prudential Series Fund, Inc. The Total Expenses and Total Expenses After Expense Reimbursement for each Asset Allocation Portfolio are calculated as a blend of the fees of the underlying portfolios, plus a 0.05% advisory fee payable to the investment adviser, Prudential Investments LLC.
Janus Aspen Series Growth PortfolioService Shares:
(3) Table reflects expenses for the fiscal year ended December 31, 2001. All expenses are shown without the effect of any offset arrangements.
(4) Long-term shareholders may pay more than the economic equivalent of the maximum front-end sales charges permitted by the National Association of Securities Dealers, Inc.
ANNUAL MUTUAL FUND EXPENSES (AFTER REIMBURSEMENT, IF ANY) | |||||||||||||||||
AS A PERCENTAGE OF EACH PORTFOLIOS AVERAGE DAILY NET ASSETS: | |||||||||||||||||
TOTAL EXPENSES | |||||||||||||||||
INVESTMENT | OTHER | TOTAL | AFTER EXPENSE | ||||||||||||||
ADVISORY FEES | EXPENSES | EXPENSES | REIMBURSEMENTS* | ||||||||||||||
The Prudential Series Fund, Inc.1 | |||||||||||||||||
Jennison Portfolio
|
0.60% | 0.04% | 0.64% | 0.64% | |||||||||||||
Prudential Equity Portfolio
|
0.45% | 0.04% | 0.49% | 0.49% | |||||||||||||
Prudential Global Portfolio
|
0.75% | 0.09% | 0.84% | 0.84% | |||||||||||||
Prudential Money Market Portfolio
|
0.40% | 0.03% | 0.43% | 0.43% | |||||||||||||
Prudential Stock Index Portfolio
|
0.35% | 0.04% | 0.39% | 0.39% | |||||||||||||
Prudential Value Portfolio
|
0.40% | 0.04% | 0.44% | 0.44% | |||||||||||||
SP Aggressive Growth Asset Allocation
Portfolio2
|
0.84% | 0.90% | 1.74% | 1.04% | |||||||||||||
SP AIM Aggressive Growth Portfolio
|
0.95% | 2.50% | 3.45% | 1.07% | |||||||||||||
SP AIM Core Equity Portfolio
|
0.85% | 1.70% | 2.55% | 1.00% | |||||||||||||
SP Alliance Large Cap Growth Portfolio
|
0.90% | 0.67% | 1.57% | 1.10% | |||||||||||||
SP Alliance Technology Portfolio
|
1.15% | 2.01% | 3.16% | 1.30% | |||||||||||||
SP Balanced Asset Allocation Portfolio2
|
0.75% | 0.52% | 1.27% | 0.92% | |||||||||||||
SP Conservative Asset Allocation
Portfolio2
|
0.71% | 0.35% | 1.06% | 0.87% | |||||||||||||
SP Davis Value Portfolio
|
0.75% | 0.28% | 1.03% | 0.83% | |||||||||||||
SP Deutsche International Equity Portfolio
|
0.90% | 2.37% | 3.27% | 1.10% | |||||||||||||
SP Growth Asset Allocation Portfolio2
|
0.80% | 0.66% | 1.46% | 0.97% | |||||||||||||
SP INVESCO Small Company Growth Portfolio
|
0.95% | 1.89% | 2.84% | 1.15% | |||||||||||||
SP Jennison International Growth Portfolio
|
0.85% | 1.01% | 1.86% | 1.24% | |||||||||||||
SP Large Cap Value Portfolio
|
0.80% | 1.18% | 1.98% | 0.90% | |||||||||||||
SP MFS Capital Opportunities Portfolio
|
0.75% | 2.29% | 3.04% | 1.00% | |||||||||||||
SP MFS Mid-Cap Growth Portfolio
|
0.80% | 1.31% | 2.11% | 1.00% | |||||||||||||
SP PIMCO High Yield Portfolio
|
0.60% | 0.48% | 1.08% | 0.82% | |||||||||||||
SP PIMCO Total Return Portfolio
|
0.60% | 0.22% | 0.82% | 0.76% | |||||||||||||
SP Prudential U.S. Emerging Growth Portfolio
|
0.60% | 0.81% | 1.41% | 0.90% | |||||||||||||
SP Small/ Mid Cap Value Portfolio
|
0.90% | 0.66% | 1.56% | 1.05% | |||||||||||||
SP Strategic Partners Focused Growth Portfolio
|
0.90% | 1.71% | 2.61% | 1.01% |
INVESTMENT | |||||||||||||||||
ADVISORY | 12b-1 | OTHER | |||||||||||||||
FEES | FEE | EXPENSES | TOTAL EXPENSES | ||||||||||||||
Janus Aspen Series3,4 | |||||||||||||||||
Growth PortfolioService Shares
|
0.65% | 0.25% | 0.01% | 0.91% |
* | Reflects the effect of management fee waivers and reimbursement of expenses, if any. See notes on page 10. |
The Expense Examples on the following pages are calculated using the figures in the Total Expenses After Expense Reimbursement in the above table. The examples assume that expense waivers and reimbursements will be the same for each of the periods shown.
These examples will help you compare the fees and expenses of the different variable investment options offered by Strategic Partners Advisor. You can also use the example to compare the cost of Strategic Partners Advisor with other variable annuity contracts.
Example 1: Basic Death Benefit Option
| You invest$10,000 in Strategic Partners Advisor; |
| You elect the BASIC Death Benefit Option; |
| You allocate all of your assets to only one of the variable investment options; |
| Your investment has a 5% return each year; and |
| The mutual funds operating expenses remain the same each year. |
Example 2: Enhanced Death Benefit Option
| You invest $10,000 in Strategic Partners Advisor; |
| You elect the ENHANCED Death Benefit Option; |
| You allocate all of your assets to only one of the variable investment options; |
| Your investment has a 5% return each year; and |
| The mutual funds operating expenses remain the same each year. |
Notes for Expense Examples: |
These examples should not be considered a representation of past or future expenses. Actual expenses may be greater or less than those shown. |
If your contract value is less than $50,000, on your contract anniversary (and upon a full withdrawal), we deduct the lesser of $30.00 or 2% of the contract value. The examples use an average annual contract fee, which we calculated based on our estimate of the total contract fees we expect to collect in 2002. Based on these estimates, the annual contract fee is included as an annual charge of 0.05% of contract value. Your actual fees will vary based on the amount of your contract and your specific allocation(s). |
Premium taxes are not reflected in the examples. A charge for premium taxes may apply depending on the state where you live. |
EXAMPLE 1: | EXAMPLE 2: | ||||||||||||||||||||||||||||||||
WITH THE BASIC DEATH BENEFIT | WITH THE ENHANCED DEATH BENEFIT | ||||||||||||||||||||||||||||||||
1 YR | 3 YRS | 5 YRS | 10 YRS | 1 YR | 3 YRS | 5 YRS | 10 YRS | ||||||||||||||||||||||||||
The Prudential Series Fund, Inc. | |||||||||||||||||||||||||||||||||
Jennison Portfolio
|
$212 | $655 | $1,124 | $2,421 | $237 | $730 | $1,250 | $2,676 | |||||||||||||||||||||||||
Prudential Equity Portfolio
|
$197 | $609 | $1,047 | $2,264 | $222 | $685 | $1,175 | $2,524 | |||||||||||||||||||||||||
Prudential Global Portfolio
|
$232 | $715 | $1,225 | $2,626 | $257 | $791 | $1,350 | $2,875 | |||||||||||||||||||||||||
Prudential Money Market Portfolio
|
$191 | $591 | $1,016 | $2,201 | $216 | $667 | $1,144 | $2,462 | |||||||||||||||||||||||||
Prudential Stock Index Portfolio
|
$187 | $579 | $995 | $2,159 | $212 | $655 | $1,124 | $2,421 | |||||||||||||||||||||||||
Prudential Value Portfolio
|
$192 | $594 | $1,021 | $2,212 | $217 | $670 | $1,149 | $2,472 | |||||||||||||||||||||||||
SP Aggressive Growth Asset Allocation Portfolio
|
$252 | $776 | $1,326 | $2,826 | $277 | $850 | $1,450 | $3,070 | |||||||||||||||||||||||||
SP AIM Aggressive Growth Portfolio
|
$255 | $785 | $1,340 | $2,856 | $280 | $859 | $1,464 | $3,099 | |||||||||||||||||||||||||
SP AIM Core Equity Portfolio
|
$248 | $764 | $1,306 | $2,786 | $273 | $838 | $1,430 | $3,032 | |||||||||||||||||||||||||
SP Alliance Large Cap Growth Portfolio
|
$258 | $793 | $1,355 | $2,885 | $283 | $868 | $1,479 | $3,128 | |||||||||||||||||||||||||
SP Alliance Technology Portfolio
|
$278 | $853 | $1,454 | $3,080 | $303 | $927 | $1,577 | $3,318 | |||||||||||||||||||||||||
SP Balanced Asset Allocation Portfolio
|
$240 | $739 | $1,265 | $2,706 | $265 | $814 | $1,390 | $2,954 | |||||||||||||||||||||||||
SP Conservative Asset Allocation Portfolio
|
$235 | $724 | $1,240 | $2,656 | $260 | $799 | $1,365 | $2,905 | |||||||||||||||||||||||||
SP Davis Value Portfolio
|
$231 | $712 | $1,220 | $2,615 | $256 | $788 | $1,345 | $2,866 | |||||||||||||||||||||||||
SP Deutsche International Equity Portfolio
|
$258 | $793 | $1,355 | $2,885 | $283 | $868 | $1,479 | $3,128 | |||||||||||||||||||||||||
SP Growth Asset Allocation Portfolio
|
$245 | $755 | $1,291 | $2,756 | $270 | $829 | $1,415 | $3,003 | |||||||||||||||||||||||||
SP INVESCO Small Company Growth Portfolio
|
$263 | $808 | $1,380 | $2,934 | $288 | $883 | $1,504 | $3,176 | |||||||||||||||||||||||||
SP Jennison International Growth Portfolio
|
$272 | $835 | $1,425 | $3,022 | $297 | $910 | $1,548 | $3,261 | |||||||||||||||||||||||||
SP Large Cap Value Portfolio
|
$238 | $733 | $1,255 | $2,686 | $263 | $808 | $1,380 | $2,934 | |||||||||||||||||||||||||
SP MFS Capital Opportunities Portfolio
|
$248 | $764 | $1,306 | $2,786 | $273 | $838 | $1,430 | $3,032 | |||||||||||||||||||||||||
SP MFS Mid-Cap Growth Portfolio
|
$248 | $764 | $1,306 | $2,786 | $273 | $838 | $1,430 | $3,032 | |||||||||||||||||||||||||
SP PIMCO High Yield Portfolio
|
$230 | $709 | $1,215 | $2,605 | $255 | $785 | $1,340 | $2,856 | |||||||||||||||||||||||||
SP PIMCO Total Return Portfolio
|
$224 | $691 | $1,185 | $2,544 | $249 | $767 | $1,311 | $2,796 | |||||||||||||||||||||||||
SP Prudential U.S. Emerging Growth Portfolio
|
$238 | $733 | $1,255 | $2,686 | $263 | $808 | $1,380 | $2,934 | |||||||||||||||||||||||||
SP Small/ Mid Cap Value Portfolio
|
$253 | $779 | $1,331 | $2,836 | $278 | $853 | $1,454 | $3,080 | |||||||||||||||||||||||||
SP Strategic Partners Focused Growth Portfolio
|
$249 | $767 | $1,311 | $2,796 | $274 | $841 | $1,435 | $3,041 | |||||||||||||||||||||||||
Janus Aspen Series | |||||||||||||||||||||||||||||||||
Growth PortfolioService Shares
|
$239 | $736 | $1,260 | $2,696 | $264 | $811 | $1,385 | $2,944 |
These examples do not show past or future expenses. Actual expenses for a particular year may be more or less than those shown in the examples.
1: |
Variable Annuity? |
The Strategic Partners Advisor Variable Annuity is a contract between you, the owner, and us, the insurance company, Pruco Life Insurance Company (Pruco Life, We or Us).
Under our contract or agreement, in exchange for your payment to us, we promise to pay you a guaranteed income stream that can begin any time after the second contract anniversary. Your annuity is in the accumulation phase until you decide to begin receiving annuity payments. The date you begin receiving annuity payments is the annuity date. On the annuity date, your contract switches to the income phase.
This annuity contract benefits from tax deferral. Tax deferral means that you are not taxed on earnings or appreciation on the assets in your contract until you withdraw money from your contract.
Strategic Partners Advisor is a variable annuity contract. This means that during the accumulation phase, you can allocate your assets among 27 variable investment options. The amount of money you are able to accumulate in your contract during the accumulation phase depends upon the investment performance of the mutual fund associated with that variable investment option. Because the mutual funds portfolios fluctuate in value depending upon market conditions, your contract value can either increase or decrease. This is important, since the amount of the annuity payments you receive during the income phase depends upon the value of your contract at the time you begin receiving payments.
As the owner of the contract, you have all of the decision-making rights under the contract. You will also be the annuitant unless you designate someone else. The annuitant is the person who receives the annuity payments when the income phase begins. The annuitant is also the person whose life is used to determine the amount of these payments and often how long the payments will continue. On or after the annuity date, the annuitant may not be changed.
The beneficiary is the person(s) or entity designated to receive any death benefit if the owner(s) dies during the accumulation phase. You may change the beneficiary any time prior to the annuity date by making a written request to us. Your request becomes effective when we approve it. The beneficiary becomes the owner when a death benefit is payable.
Short Term Cancellation Right or Free Look
| Your full purchase payment; or |
| The amount your contract is worth as of the day we receive your request. This amount may be more or less than your original payment. |
2: |
Can I Choose? |
The contract gives you the choice of allocating your purchase payments to any one or more of 27 variable investment options.
The 27 variable investment options invest in mutual funds managed by leading investment advisors. Each of these mutual funds has a separate prospectus that is provided with this prospectus. You should read the mutual fund prospectus before you decide to allocate your assets to the variable investment option using that fund.
VARIABLE INVESTMENT OPTIONS
Listed below are the mutual funds in which the variable investment options invest. Each variable investment option has a different investment objective.
The Prudential Series Fund, Inc.
| Jennison Portfolio (domestic equity) |
| Prudential Equity Portfolio |
| Prudential Global Portfolio |
| Prudential Money Market Portfolio |
| Prudential Stock Index Portfolio |
| Prudential Value Portfolio (domestic equity) |
| SP Aggressive Growth Asset Allocation Portfolio |
| SP AIM Aggressive Growth Portfolio |
|
SP AIM Core Equity Portfolio (formerly SP AIM Growth and Income Portfolio) |
| SP Alliance Large Cap Growth Portfolio |
| SP Alliance Technology Portfolio |
| SP Balanced Asset Allocation Portfolio |
| SP Conservative Asset Allocation Portfolio |
| SP Davis Value Portfolio |
| SP Deutsche International Equity Portfolio |
| SP Growth Asset Allocation Portfolio |
| SP INVESCO Small Company Growth Portfolio |
| SP Jennison International Growth Portfolio |
| SP Large Cap Value Portfolio |
|
SP MFS Capital Opportunities Portfolio (domestic and foreign equity) |
| SP MFS Mid-Cap Growth Portfolio |
| SP PIMCO High Yield Portfolio |
| SP PIMCO Total Return Portfolio |
| SP Prudential U.S. Emerging Growth Portfolio |
| SP Small/ Mid Cap Value Portfolio |
| SP Strategic Partners Focused Growth Portfolio |
The Jennison Portfolio, Prudential Equity Portfolio, Prudential Global Portfolio, Prudential Money Market Portfolio, Prudential Stock Index Portfolio, Prudential Value Portfolio and each SP Portfolio of The Prudential Series Fund, Inc. are managed by an indirect wholly-owned subsidiary of Prudential Financial, Inc. called Prudential Investments LLC (PI). In addition, the portfolios listed below also have subadvisers, which are listed below and which have day-to-day responsibility for managing the portfolio, subject to the oversight of PI using a manager-of-managers approach.
Prudential Money Market Portfolio and Prudential Stock Index Portfolio: Prudential Investment Management, Inc. | |
Jennison Portfolio, Prudential Global Portfolio, SP Jennison International Growth Portfolio, and SP Prudential U.S. Emerging Growth Portfolio: Jennison Associates LLC | |
Prudential Equity Portfolio: GE Asset Management Incorporated, Jennison Associates LLC, and Salomon Brothers Asset Management Inc. | |
Prudential Value Portfolio: Deutsche Asset Management Inc., Jennison Associates LLC, and Victory Capital Management. | |
SP Strategic Partners Focused Growth Portfolio: Jennison Associates LLC and Alliance Capital Management L.P. | |
SP AIM Aggressive Growth Portfolio and SP AIM Core Equity Portfolio: A I M Capital Management, Inc. | |
SP Alliance Large Cap Growth Portfolio and SP Alliance Technology Portfolio: Alliance Capital Management L.P. | |
SP Davis Value Portfolio: Davis Selected Advisers, L.P. | |
SP Deutsche International Equity Portfolio: Deutsche Asset Management Inc., a wholly-owned subsidiary of Deutsche Bank AG | |
SP INVESCO Small Company Growth Portfolio: INVESCO Funds Group, Inc. | |
SP Large Cap Value Portfolio and SP Small/ Mid Cap Value Portfolio: Fidelity Management and Research Company | |
SP MFS Capital Opportunities Portfolio and SP MFS Mid-Cap Growth Portfolio: Massachusetts Financial Services Company | |
SP PIMCO High Yield Portfolio and SP PIMCO Total Return Portfolio: Pacific Investment Management Company | |
Janus Aspen Series | |
| Growth PortfolioService Shares |
Janus Capital Management LLC serves as investment adviser to the Growth PortfolioService Shares of Janus Aspen Series.
An affiliate of each of the Funds may compensate Pruco based upon an annual percentage of the average assets held in the Fund by Pruco under the contracts. These percentages may vary by Fund and/or Portfolio, and reflect administrative and other services we provide.
TRANSFERS AMONG OPTIONS
During the contract accumulation phase, you can make 12 transfers each contract year, among the investment options, without charge. If you make more than 12 transfers in one contract year, you may be charged up to $30 for each additional transfer. Currently we charge only $10 for additional transfers. (Dollar Cost Averaging and Auto-Rebalancing transfers are always free, and do not count toward the 12 free transfers per year.)
MARKET TIMING
DOLLAR COST AVERAGING
Each transfer from your DCA account must be at least $100. Transfers will be made automatically on the schedule you elect until the entire amount in your DCA account has been transferred or until you tell us to discontinue the transfers. If your DCA account balance drops below $100, the entire remaining balance of the account will be transferred on the next transfer date. You can allocate subsequent purchase payments to re-open the DCA account at any time.
Your transfers will be made on the last calendar day of each transfer period you have selected, provided that the New York Stock Exchange is open on that date. If the New York Stock Exchange is not open on a particular transfer date, the transfer will take effect on the next business day.
Any transfers you make because of Dollar Cost Averaging are not counted toward the 12 free transfers you are allowed each contract year. The DCA feature is available only during the contract accumulation phase, and is offered without charge.
ASSET ALLOCATION PROGRAM
AUTO-REBALANCING
Your rebalancing will be done monthly, quarterly, semiannually or annually based on your choice. The rebalancing will be done on the last calendar day of the period you have chosen, provided that the New York Stock Exchange is open on that date. If the New York Stock Exchange is not open on that date, the rebalancing will take effect on the next business day.
Any transfers you make because of Auto-Rebalancing are not counted toward the 12 free transfers you are allowed per year. This feature is available only during the contract accumulation phase, and is offered without charge. If you choose auto-rebalancing and dollar cost averaging, auto-rebalancing will take place after the transfers from your DCA account.
VOTING RIGHTS
SUBSTITUTION
EXCHANGES INTO STRATEGIC PARTNERS ADVISOR
3 : |
Income Phase? (Annuitization) |
PAYMENT PROVISIONS
We make the income plans described below available at any time before the annuity date. These plans are called annuity options or settlement options. During the income phase, all of the annuity options under this contract are fixed annuity options. This means that your participation in the variable investment options ends on the annuity date. If an annuity option is not selected by the annuity date, the Life Income Annuity Option (Option 2, described below) will automatically be selected unless prohibited by applicable law. Generally, once the annuity payments begin, the annuity option cannot be changed and you cannot make withdrawals.
If an annuity option is not selected by the annuity date, this is the option we will automatically select for you, unless prohibited by applicable law.
Tax Considerations
For certain contracts held in connection with qualified retirement plans (such as a Section 401(k) plan), please note that if you are married at the time your payments commence, you may be required by federal law to choose an income option that provides at least a 50 percent joint and survivor annuity to your spouse, unless your spouse waives that right. Similarly, if you are married at the time of your death, federal law may require all or a portion of the death benefit to be paid to your spouse, even if you designated someone else as your beneficiary. For more information, consult the terms of your retirement arrangement.
4 : |
Death Benefit? |
The death benefit feature protects the value of the contract for the beneficiary.
BENEFICIARY
CALCULATION OF THE DEATH BENEFIT
BASIC DEATH BENEFIT
| the contract value as of the date we receive due proof of death; or |
| the total of all purchase payments made, proportionally reduced by the effect of withdrawals. |
We require proof of death to be submitted promptly.
ENHANCED DEATH BENEFIT
| the contract value as of the date we receive due proof of death; or |
| the guaranteed minimum death benefit (GMDB). |
We require proof of death to be submitted promptly.
The GMDB is calculated daily and is equal to the greater of:
1) | the total purchase payments compounded daily at an effective annual interest rate of 5%, subject to a 200% cap. This is called the roll-up value. The roll-up may not be available in all states. Both the roll-up value and the cap are proportionally reduced by the effect of withdrawals. Once the cap is reached, the roll-up value will be increased by subsequent purchase payments and proportionally reduced by the effect of withdrawals; and |
2) | the highest value of the contract on any contract anniversary. This is called the step-up value. Before the first contract anniversary, the step-up value is the initial purchase payment increased by subsequent purchase payments and proportionally reduced by the effect of withdrawals. Between anniversary dates, the step-up value is only increased by additional invested purchase payments and reduced proportionally by withdrawals. |
After the contract anniversary on or next following the 80th birthday of the sole owner or older of the owner or joint owner after we receive due proof of death, the beneficiary will receive the greater of:
1) | the contract value as of the date we receive due proof of death; or |
2) | the GMDB as of the contract anniversary on or next following the sole or older of the owner or joint owners 80th birthday increased by subsequent purchase payments since such contract anniversary and proportionally reduced by the effect of withdrawals since such contract anniversary. |
Here is an example of a proportional reduction:
If an owner withdrew 50% of a contract valued at $100,000 and if the step-up value at that time was $80,000, the new step-up value following the withdrawal would be $40,000, or 50% of what it had been prior to the withdrawal.
PAYOUT OPTIONS
The death benefit payout options are:
Choice 1. Lump sum payment of the death benefit. If the beneficiary does not choose a payout option within sixty days, the beneficiary will receive this payout option. | |
Choice 2. The payment of the entire death benefit within 5 years of the date of death of the last to survive of the owner or joint owner. | |
Choice 3. Payment of the death benefit under an annuity or annuity settlement option over the lifetime of the beneficiary or over a period not extending beyond the life expectancy of the beneficiary with distribution beginning within one year of the date of death of the last to survive of the owner or joint owner. |
The tax consequences to the beneficiary vary among the three death benefit options. See What are the Tax Considerations Associated with the Strategic Partners Advisor Contract? section beginning on page 26.
If the contract has an owner and a joint owner:
| If the owner and joint owner are spouses at the death of the first to die of the two, any portion of the death benefit not applied under Choice 3 within one year of the survivors date of death must be distributed within five years of the survivors date of death. |
| If the owner and joint owner are not spouses at the death of the first to die of the two, any portion of the death benefit (which is equal to the contract value) not applied under Choice 3 within one year of the date of death of the first to die must be distributed within five years of that date of death. |
5 : |
Advisor Contract? |
| the owner; |
| joint owners; |
| the annuitant. |
We have established an aggregate maximum purchase payment limit of $20 million, and we limit the maximum total purchase payments per contract in any contract year, other than the first, to $2 million. You must obtain our approval prior to submitting a purchase payment of $5 million or greater within the first contract year, or greater than $2 million for subsequent purchase payments. Depending on the applicable state law, other limits may apply.
ALLOCATION OF PURCHASE PAYMENTS
You may submit an allocation change request at any time. Contact the Prudential Annuity Service Center for details.
We generally will credit the initial purchase payments to your contract within two business days from the day on which we receive your payment at the Prudential Annuity Service Center.
If, however, your first payment is made without enough information for us to set up your contract, we may need to contact you to obtain the required information. If we are not able to obtain this information within five business days, we will within that five business day period either return your purchase payment or obtain your consent to continue holding it until we receive the necessary information. We will generally credit each subsequent purchase payment as of the business day we receive it in good order at the Prudential Annuity Service Center. Our business day generally closes at 4:00 p.m. Eastern time. We will generally credit subsequent purchase payments received in good order after the close of a business day on the following business day.
CALCULATING CONTRACT VALUE
Every day we determine the value of an accumulation unit for each of the variable investment options. We do this by:
1) | adding up the total amount of money allocated to a specific investment option; |
2) | subtracting from that amount insurance charges and any other applicable charges such as for taxes; and |
3) | dividing this amount by the number of outstanding accumulation units. |
When you make a purchase payment, we credit your contract with accumulation units of the subaccount or subaccounts selected. The number of accumulation units credited to your contract is determined by dividing the amount of the purchase payment allocated to an investment option by the unit price of the accumulation unit for that investment option. We calculate the unit price for each investment option after the New York Stock Exchange closes each day and then credit your contract. The value of the accumulation units can increase, decrease, or remain the same from day to day.
We cannot guarantee that your contract value will increase or that it will not fall below the amount of your total purchase payments.
6 : |
Partners Advisor Contract? |
There are charges and other expenses associated with the contract that reduce the return on your investment. These charges and expenses are described below.
INSURANCE CHARGES
The insurance charge is equal, on an annual basis, to 1.40% (Basic Death Benefit) or 1.65% (Enhanced Death Benefit) of the daily value of the contract after expenses have been deducted.
If the charges under the contract are not sufficient, then we will bear the loss. We do, however, expect to profit from this charge. The insurance risk charge for your contract cannot be increased. Any profits made from this charge may be used by us to pay for the costs of distributing the contracts.
CONTRACT MAINTENANCE CHARGE
TAXES ATTRIBUTABLE TO PREMIUM
TRANSFER FEE
COMPANY TAXES
7 : |
Access My Money? |
You can access your money by:
| Making a withdrawal (either partial or complete); or |
| Electing to receive annuity payments during the income phase. |
WITHDRAWALS DURING THE ACCUMULATION PHASE
Unless you tell us otherwise, any partial withdrawal will be made proportionately from all of the variable investment options you have selected. The minimum amount which may be withdrawn is $250. If you request a withdrawal that would reduce your total contract fund below the minimum $2,000, we will withdraw the maximum amount that will not reduce the total contract fund below that amount.
We will generally pay the withdrawal amount, less any required tax withholding, within seven days after we receive a withdrawal request in good order.
Income taxes, tax penalties and certain restrictions may apply to any withdrawal. For a more complete explanation, see Section 8 of this prospectus.
If you surrender your contract, and later change your mind, we currently allow you to reinstate your contract during a limited period of time after the surrender.
AUTOMATED WITHDRAWALS
Income taxes, tax penalties and certain restrictions may apply to automated withdrawals. For a more complete explanation, see Section 8 of this prospectus.
SUSPENSION OF PAYMENTS OR TRANSFERS
| The New York Stock Exchange is closed (other than customary weekend and holiday closings); |
| Trading on the New York Stock Exchange is restricted; |
| An emergency exists, as determined by the SEC, during which sales and redemptions of shares of the mutual funds are not feasible or we cannot reasonably value the accumulation units; or |
| The SEC, by order, permits suspension or postponement of payments for the protection of owners. |
8 : |
Partners Advisor Contract? |
The tax considerations associated with the Strategic Partners Advisor contract vary depending on whether the contract is (i) owned by an individual and not associated with a tax-favored retirement plan, or (ii) held under a tax-favored retirement plan. We discuss the tax considerations for these categories of contracts below. The discussion is general in nature and describes only federal income tax law (not state or other tax laws). It is based on current law and interpretations, which may change. It is not intended as tax advice. A qualified tax adviser should be consulted for complete information and advice.
CONTRACTS OWNED BY INDIVIDUALS (NOT ASSOCIATED WITH TAX-FAVORED RETIREMENT PLANS)
Taxes Payable by You
Generally, annuity contracts issued by the same company (and affiliates) to you during the same calendar year must be treated as one annuity contract for purposes of determining the amount subject to tax under the rules described below.
Although, we believe that the basic death benefit and the GMDB features are an investment protection feature that should have no adverse tax consequences, it is possible that the Internal Revenue Service would assert that some or all of the charges for the basic death benefit and GMDB features should be treated for federal income tax purposes as a partial withdrawal from the contract. If this were the case, the charge for these benefits could be deemed a withdrawal and treated as taxable to the extent there are earnings in the contract. Additionally, for owners under age 59 1/2, the taxable income attributable to the charge for the benefit could be subject to a tax penalty.
Taxes on Withdrawals and Surrender
If you assign or pledge all or part of your contract as collateral for a loan, the part assigned will be treated as a withdrawal. Also, if you elect the interest payment option, that election will be treated, for tax purposes, as surrendering your contract.
If you transfer your contract for less than full consideration, such as by gift, you will trigger tax on the gain in the contract. This rule does not apply if you transfer the contract to your spouse or under most circumstances if you transfer the contract incident to divorce.
It is our position that the enhanced death benefit option and other contract benefits are an integral part of the annuity contract and accordingly that the charges made against the annuity contracts cash value for the option should not be treated as distributions subject to income tax. It is possible, however, that the Internal Revenue Service could take the position that such charges should be treated as distributions.
Taxes on Annuity Payments
After the full amount of your purchase payments have been recovered tax-free, the full amount of the annuity payments will be taxable. If annuity payments stop due to the death of the annuitant before the full amount of your purchase payments have been recovered, a tax deduction may be allowed for the unrecovered amount.
Tax Penalty on Withdrawals and Annuity Payments
| the amount is paid on or after you reach age 59 1/2 or die; |
| the amount received is attributable to your becoming disabled; |
| the amount paid or received is in the form of level annuity payments paid or received not less frequently than annually under a lifetime annuity; and |
| the amount received is paid under an immediate annuity contract (in which annuity payments begin within one year of purchase). |
If you modify the lifetime annuity payment stream (other than as a result of death or disability) before you reach age 59 1/2 (or before the end of the five year period beginning with the first payment and ending after you reach age 59 1/2), your tax for the year of modification will be increased by the penalty tax that would have been imposed without the exception, plus interest for the deferral.
Taxes Payable by Beneficiaries
Generally, the same tax rules apply to amounts received by your beneficiary as those set forth above with respect to you. The election of an annuity payment option instead of a lump sum death benefit may defer taxes. Certain minimum distribution requirements apply upon your death, as discussed further below.
Reporting and Withholding on Distributions
State income tax withholding rules vary and we will withhold based on the rules of your State of residence. Special tax rules apply to withholding for nonresident aliens, and we generally withhold income tax for nonresident aliens at a 30% rate. A different withholding rate may be applicable to a nonresident aliens country. [Please refer to the Contracts Held by Tax Favored Plans section for withholding rules for tax favored plans (for example, an IRA)]
Regardless of the amount withheld by us, you are liable for payment of federal and state income tax on the taxable portion of annuity distributions. You should consult with your tax advisor regarding the payment of the correct amount of these income taxes and potential liability if you fail to pay such taxes.
Annuity Qualification
Required Distributions Upon Your Death Upon your death (or the death of a joint owner, if earlier), certain distributions must be made under the contract. The required distributions depend on whether you die before you start taking annuity payments under the contract or after you start taking annuity payments under the contract.
If you die on or after the annuity date, the remaining portion of the interest in the contract must be distributed at least as rapidly as under the method of distribution being used as of the date of death.
If you die before the annuity date, the entire interest in the contract must be distributed within 5 years after the date of death. However, if an annuity payment option is selected by your designated beneficiary and if annuity payments begin within 1 year of your death, the value of the contract may be distributed over the beneficiarys life or a period not exceeding the beneficiarys life expectancy. Your designated beneficiary is the person to whom benefit rights under the contract pass by reason of death, and must be a natural person in order to elect an annuity payment option based on life expectancy or a period exceeding five years.
If any portion of the contract is payable to (or for the benefit of) your surviving spouse, that portion of the contract may be continued with your spouse as the owner.
Changes in the Contract We reserve the right to make any changes we deem necessary to assure that the contract qualifies as an annuity contract for tax purposes. Any such changes will apply to all contract owners and you will be given notice to the extent feasible under the circumstances.
Additional Information
| The contract is held by a corporation or other entity instead of by an individual or as agent for an individual. |
| Your contract was issued in exchange for a contract containing purchase payments made before August 14, 1982. |
| You transfer your contract to, or designate, a beneficiary who is either 37 1/2 years younger than you or a grandchild. |
CONTRACTS HELD BY TAX FAVORED PLANS
Currently, the contract may be purchased for use in connection with individual retirement accounts and annuities (IRAs) which are subject to Sections 408(a), 408(b) and 408A of the Internal Revenue Code of 1986, as amended (Code). At some future time we may allow the contract to be purchased in connection with other retirement arrangements which are also entitled to favorable federal income tax treatment (tax favored plans). These other tax favored plans include:
Simplified employee pension plans (SEPs) under Section 408(k) of the Code; Saving incentive match plans for employees-IRAs (SIMPLE-IRAs) under Section 408(p) of the Code; and Tax-deferred annuities (TDAs) under Section 403(b) of the Code. This description assumes that (i) we will be offering this to both IRA and non-IRA tax favored plans, and (ii) you have satisfied the requirements for eligibility for these products.
You should be aware that tax favored plans such as IRAs generally provide tax deferral regardless whether they invest in annuity contracts. This means that when a tax favored plan invests in an annuity contract, it generally does not result in any additional tax deferral benefits.
Types of Tax Favored Plans
Contributions Limits/ Rollovers: Because of the way the contract is designed, you may only purchase a contract for an IRA in connection with a rollover of amounts from a qualified retirement plan or transfer from another IRA. You must make a minimum initial payment of $10,000 to purchase a contract. This minimum is greater than the maximum amount of any annual contribution allowed by law that you may make to an IRA. For 2002 to 2004 the limit is $3,000; increasing in 2005 to 2007 to $4,000; and $5,000 for 2008. After 2008 the contribution amount will be indexed for inflation. The tax law also provides for a catch-up provision for individuals who are age 50 and above. These taxpayers will be permitted to contribute an additional $500 in years 2002 to 2005 and an additional $1,000 in 2006 and years thereafter. The rollover rules under the Code are fairly technical; however, an individual (or his or her surviving spouse) may generally roll over certain distributions from tax favored retirement plans (either directly or within 60 days from the date of these distributions) if he or she meets the requirements for distribution. Once you buy the contract, you can make regular IRA contributions under the contract (to the extent permitted by law). However, if you make such regular IRA contributions, you should note that you will not be able to treat the contract as a conduit IRA, which means that you will not retain possible favorable tax treatment if you subsequently roll over the contract funds originally derived from a qualified retirement plan or TDA into another Section 401(a) Plan or TDA.
| You, as owner of the contract, must be the annuitant under the contract (except in certain cases involving the division of property under a decree of divorce); |
| Your rights as owner are non-forfeitable; |
| You cannot sell, assign or pledge the contract, other than to Pruco Life; |
| The annual premium you pay cannot be greater than the maximum amount allowed by law, including catch-up contributions if applicable (which does not include any rollover amounts); |
| The date on which annuity payments must begin cannot be later than the April 1st of the calendar year after the calendar year you turn age 70 1/2; and |
| Death and annuity payments must meet minimum distribution requirements (described on page 31). |
| A 10% early distribution penalty (described on page 31); |
| Liability for prohibited transactions if you, for example, borrow against the value of an IRA; or |
| Failure to take a minimum distribution (also generally described on page 31). |
| If you participate in a SEP, you generally do not include in income any employer contributions made to the SEP on your behalf up to the lesser of (a) $40,000 in 2002 or (b) 25% of the employees earned income (not including the employer contribution amount as earned income for these purposes). However, for these purposes, compensation in excess of certain limits established by the IRS will not be considered. In 2002, this limit is $200,000; |
| SEPs must satisfy certain participation and nondiscrimination requirements not generally applicable to IRAs; and |
| Some SEPs for small employers permit salary deferrals (up to $11,000 in 2002) with the employer making these contributions to the SEP. However, no new salary reduction or SAR-SEPs can be established after 1996. Individuals participating in a SARSEP who are age 50 or above by the end of the year will be permitted to contribute an additional $1,000 in 2002, increasing in $1,000 increments per year until reaching $5,000 in 2006. Thereafter the amount is indexed for inflation. |
You will also be provided the same information, and have the same free look period, as you would have if you were purchasing the contract for a standard IRA.
| Participants in a SIMPLE-IRA may contribute up to $7,000 in 2002, as opposed to the usual IRA contribution limit, and employer contributions may also be provided as a match (up to 3% of your compensation); and |
| Beginning in 2002, individuals age 50 or above by the end of the year will be permitted to contribute an additional $500 in 2002, increasing in $500 increments per year until reaching $2,500 in 2006. Thereafter the amount is indexed for inflation. |
| SIMPLE-IRAs are not subject to the SEP nondiscrimination rules. |
| Contributions to a Roth IRA cannot be deducted from your gross income; |
| Qualified distributions (generally, held for 5 tax years and payable on account of death, disability, attainment of age 59 1/2, or first time-homebuyer) from Roth IRAs are excludable from your gross income; and |
| If eligible, you may make contributions to a Roth IRA after attaining age 70 1/2, and distributions are not required to begin upon attaining such age or at any time thereafter. |
Because the contracts minimum initial payment of $10,000 is greater than the maximum annual contribution permitted to be made to a Roth IRA (generally, the annual contribution allowed by law less any contributions to a traditional IRA. The annual contribution allowed by law for Roth IRAs increases in the same manner as the increases for additional IRAs as described on page 28), you may purchase a contract as a Roth IRA only in connection with a rollover or conversion of the proceeds of another traditional IRA, conduit IRA, SEP, SIMPLE-IRA, or Roth IRA. The Code permits persons who meet certain income limitations (generally, adjusted gross income under $100,000), and who receive certain qualifying distributions from such non-Roth IRAs, to directly rollover or make, within 60 days, a rollover of all or any part of the amount of such distribution to a Roth IRA which they establish. This conversion triggers current taxation (but is not subject to a 10% early distribution penalty). Once the contract has been purchased, regular Roth IRA contributions will be accepted to the extent permitted by law.
TDAs You may own a TDA generally if you are either an employer or employee of a tax-exempt organization (as defined under Code Section 501(c)(3)) or a public educational organization, and you may make contributions to a TDA so long as the employees rights to the annuity are nonforfeitable. Contributions to a TDA, and any earnings, are not taxable until distribution. You may also make contributions to a TDA under a salary reduction agreement, generally up to a maximum of $11,000 in 2002. Individuals participating in a TDA who are age 50 or above by the end of the year will be permitted to contribute an additional $1,000 in 2002, increasing in $1,000 increments per year until reaching $5,000 in 2006. Thereafter the amount is indexed for inflation. Beginning in 2002, TDA amounts may also be rolled over to a qualified retirement plan, a SEP and a 457 government plan.
A contract may only qualify as a TDA if distributions (other than grandfathered amounts held as of December 31, 1988) may be made only on account of:
| Your attainment of age 59 1/2; |
| Your severance of employment; |
| Your death; |
| Your total and permanent disability; or |
| Hardship (under limited circumstances, and only related to salary deferrals and any earnings attributable to these amounts). |
In any event, you must begin receiving distributions from your TDA by April 1st of the calendar year after the calendar year you turn age 70 1/2 or retire, whichever is later.
These distribution limits do not apply either to transfers or exchanges of investments under the contract, or to any direct transfer of your interest in the contract to another TDA or to a mutual fund custodial account described under Code Section 403(b)(7).
Employer contributions to TDAs are subject to the same general contribution, nondiscrimination, and minimum participation rules applicable to qualified retirement plans.
Minimum Distribution Requirements and Payment Option
You can use the Minimum Distribution option to satisfy the IRS minimum distribution requirements for this contract without either beginning annuity payments or surrendering the contract. We will send you a check for this minimum distribution amount, less any other partial withdrawals that you made during the year. Please note that the Minimum Distribution option may need to be modified to satisfy recently announced changes in IRS rules.
Penalty for Early Withdrawals
Withholding
| For any annuity payments not subject to mandatory withholding, you will have taxes withheld by us as if you are a married individual, with 3 exemptions; and |
| For all other distributions, we will withhold at a 10% rate. |
We will provide you with forms and instructions concerning the right to elect that no amount be withheld from payments in the ordinary course. However, you should know that, in any event, you are liable for payment of federal income taxes on the taxable portion of the distributions, and you should consult with your tax advisor to find out more information on your potential liability if you fail to pay such taxes.
ERISA Disclosure/ Requirements
Information about any applicable fees, charges, discounts, penalties or adjustments may be found under What Are the Expenses Associated with the Strategic Partners Advisor Contract starting on page 24.
Information about sales representatives and commissions may be found under Other Information and Sale and Distribution of the Contract on page 33.
In addition, other relevant information required by the exemptions is contained in the contract and accompanying documentation. Please consult your tax advisor if you have any additional questions.
Spousal Consent Rules for Retirement Plans Qualified Contracts
Defined Benefit Plans, Money Purchase Pension Plans, and ERISA 403(b) Annuities. If you are married at the time your payments commence, federal law requires that benefits be paid to you in the form of a qualified joint and survivor annuity (QJSA), unless you and your spouse waive that right, in writing. Generally, this means that you will receive a reduced payment during your life and, upon your death, your spouse will receive at least one-half of what you were receiving for life. You may elect to receive another income option if your spouse consents to the election and waives his or her right to receive the QJSA. If your spouse consents to the alternative form of payment, your spouse may not receive any benefits from the plan upon your death. Federal law also requires that the plan pay a death benefit to your spouse if you are married and die before you begin receiving your benefit. This benefit must be available in the form of an annuity for your spouses lifetime and is called a qualified pre-retirement survivor annuity (QPSA). If the plan pays death benefits to other beneficiaries, you may elect to have a beneficiary other than your spouse receive the death benefit, but only if your spouse consents to the election and waives his or her right to receive the QPSA. If your spouse consents to the alternate beneficiary, your spouse will receive no benefits from the plan upon your death. Any QPSA waiver prior to your attaining age 35 will become null and void on the first day of the calendar year in which you attain age 35, if still employed.
Defined Contribution Plans (including 401(k) Plans). Spousal consent to a distribution is generally not required. Upon your death, your spouse will receive the entire death benefit, even if you designated someone else as your beneficiary, unless your spouse consents in writing to waive this right. Also, if you are married and elect an annuity as a periodic income option, federal law requires that you receive a QJSA (as described above), unless you and your spouse consent to waive this right.
IRAs, non-ERISA 403(b) Annuities, and 457 Plans. Spousal consent to a distribution is not required. Upon your death, any death benefit will be paid to your designated beneficiary.
Additional Information
9 : |
Information |
Pruco Life is a wholly owned subsidiary of The Prudential Insurance Company of America (Prudential), a New Jersey stock life insurance company that has been doing business since 1875. Prudential is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (Prudential Financial), a New Jersey insurance holding company. As Pruco Lifes ultimate parent, Prudential Financial exercises significant influence over the operations and capital structure of Pruco Life and Prudential. However, neither Prudential Financial, Prudential, nor any other related company has any legal responsibility to pay amounts that Pruco Life may owe under the contract.
THE SEPARATE ACCOUNT
SALE AND DISTRIBUTION OF THE CONTRACT
| a commission of up to 2.0% of your Purchase Payments; or |
| a combination of a commission on Purchase Payments and a trail commission which is a commission determined as a percentage of your Contract Value that is paid periodically over the life of your contract. |
The commission amount quoted above is the maximum amount which is paid. In most circumstances, the registered representative who sold the contract will receive significantly less.
From time to time, Prudential or its affiliates may offer and pay non-cash compensation to registered representatives who sell the Contract. For example, Prudential or an affiliate may pay for a training and education meeting that is attended by registered representatives of both Prudential-affiliated broker-dealers and independent broker-dealers. Prudential and its affiliates retain discretion as to which broker-dealers to offer non-cash (and cash) compensation arrangements, and will comply with NASD rules and other pertinent laws in making such offers and payments. Our payment of cash or non-cash compensation in connection with sales of the Contract does not result directly in any additional charge to you. >
ASSIGNMENT
If the contract is issued under a qualified plan, there may be limitations on your ability to assign the contract. For further information please speak to your representative.
FINANCIAL STATEMENTS
STATEMENT OF ADDITIONAL INFORMATION
Contents: | |
| Company |
| Experts |
| Litigation |
| Legal Opinions |
| Principal Underwriter |
| Determination of Accumulation Unit Values |
| Performance Information |
| Comparative Performance Information |
| Federal Tax Status |
| Directors and Officers |
| Financial Information |
HOUSEHOLDING
________________________________________________________________________________
This statement is designed to help you understand the requirements of federal tax law which apply to your individual retirement annuity (IRA), your Roth IRA, your simplified employee pension IRA (SEP) for employer contributions, your Savings Incentive Match Plan for Employees (SIMPLE) IRA, or to one you purchase for your spouse. You can obtain more information regarding your IRA either from your sales representative or from any district office of the Internal Revenue Service. Those are federal tax law rules; state tax laws may vary.
FREE LOOK PERIOD
ELIGIBILITY REQUIREMENTS
CONTRIBUTIONS AND DEDUCTIONS
Contributions made by your employer to your SEP are excludable from your gross income for tax purposes in the calendar year for which the amount is contributed. Certain employees who participate in a SEP will be entitled to elect to have their employer make contributions to their SEP on their behalf or to receive the contributions in cash. If the employee elects to have contributions made on the employees behalf to the SEP, those funds are not treated as current taxable income to the employee. Elective deferrals under a SEP are limited to $11,000 in 2002, with a permitted catch-up contribution of $1,000 for individuals age 50 and above. Contribution limits and catch-up contribution limits are scheduled to increase through 2006 and are indexed for inflation thereafter. Salary-reduction SEPs (also called SARSEPs) are available only if at least 50% of the employees elect to have amounts contributed to the SARSEP and if the employer has 25 or fewer employees at all times during the preceding year. New SARSEPs may not be established after 1996.
The IRA maximum annual contribution is limited to the lesser of: (1) the maximum amount allowed by law, including catch-up contributions if applicable, or (2) 100% of your earned compensation. Contributions in excess of these limits may be subject to penalty. See below.
Under a SEP agreement, the maximum annual contribution which your employer may make on your behalf to a SEP contract that is excludable from your income is the lesser of 25% of your salary or $40,000 in 2002. An employee who is a participant in a SEP agreement may make after-tax contributions to the SEP contract, subject to the contribution limits applicable to IRAs in general. Those employee contributions will be deductible subject to the deductibility rules described above.
The maximum tax deductible annual contribution that a divorced spouse with no other income may make to an IRA is the lesser of (1) the maximum amount allowed by law, including catch-up contributions if applicable or (2) 100% of taxable alimony.
If you or your employer should contribute more than the maximum contribution amount to your IRA or SEP, the excess amount will be considered an excess contribution. You are permitted to withdraw an excess contribution from your IRA or SEP before your tax filing date without adverse tax consequences. If, however, you fail to withdraw any such excess contribution before your tax filing date, a 6% excise tax will be imposed on the excess for the tax year of contribution.
Once the 6% excise tax has been imposed, an additional 6% penalty for the following tax year can be avoided if the excess is (1) withdrawn before the end of the following year, or (2) treated as a current contribution for the following year. (See Premature Distributions below for penalties imposed on withdrawal when the contribution exceeds the maximum amount allowed by law, including catch-up contributions if applicable.)
IRA FOR NON-WORKING SPOUSE
Contributions in excess of the contribution limits may be subject to penalty. See above under Contributions and Deductions on page 35. If you contribute more than the allowable amount, the excess portion will be considered an excess contribution. The rules for correcting it are the same as discussed above for regular IRAs.
Other than the items mentioned in this section, all of the requirements generally applicable to IRAs are also applicable to IRAs established for non-working spouses.
ROLLOVER CONTRIBUTION
A similar type of rollover to an IRA can be made with the proceeds of a qualified distribution from a qualified retirement plan or tax-sheltered annuity. Properly made, such a distribution will not be taxable until you receive payments from the IRA created with it. Unless you were a self-employed participant in the distributing plan, you may later roll over such a contribution to another qualified retirement plan as long as you have not mixed it with IRA (or SEP) contributions you have deducted from your income. (You may roll less than all of a qualified distribution into an IRA, but any part of it not rolled over will be currently includable in your income without any capital gains treatment.) Beginning in 2002, the rollover options increase. Funds can be rolled over from an IRA or SEP to another IRA or SEP or to another qualified retirement plan or government 457 plan even if additional contributions have been made to the account.
DISTRIBUTIONS
(a) Premature Distributions
You may surrender any portion of the value of your IRA (or SEP). In the case of a partial surrender which does not qualify as a rollover, the amount withdrawn will be includable in your income and subject to the 10% penalty if you are not at least age 59 1/2 or totally disabled unless you comply with special rules requiring distributions to be made at least annually over your life expectancy.
The 10% tax penalty does not apply to the withdrawal of an excess contribution as long as the excess is withdrawn before the due date of your tax return. Withdrawals of excess contributions after the due date of your tax return will generally be subject to the 10% penalty unless the excess contribution results from erroneous information from a plan trustee making an excess rollover contribution or unless you are over age 59 1/2 or are disabled.
(b) Distribution After age 59 1/2
(c) Inadequate Distributions50% Tax
(d) Death Benefits
ROTH IRAS
For taxpayers with adjusted gross income of $100,000 or less, all or part of amounts in a traditional IRA may be converted, transferred or rolled over to a Roth IRA. Some or all of the IRA value will typically be includable in the taxpayers gross income. If such a rollover, transfer or conversion occurred before January 1, 1999, the portion of the amount includable in gross income must be included in income ratably over the next four years beginning with the year in which the transaction occurred. Provided a rollover contribution meets the requirements of IRAs under Section 408(d)(3) of the Code, a rollover may be made from a Roth IRA to another Roth IRA.
Under some circumstances, it may not be advisable to roll over, transfer or convert all or part of a traditional IRA to a Roth IRA. Persons considering a rollover, transfer or conversion should consult their own tax advisor.
Qualified distributions from a Roth IRA are excludable from gross income. A qualified distribution is a distribution that satisfies two requirements: (1) the distribution must be made (a) after the owner of the IRA attains age 59 1/2; (b) after the owners death; (c) due to the owners disability; or (d) for a qualified first time homebuyer distribution within the meaning of Section 72(t)(2)(F) of the Code; and (2) the distribution must be made in the year that is at least five tax years after the first year for which a contribution was made to any Roth IRA established for the owner or five years after a rollover, transfer, or conversion was made from a traditional IRA to a Roth IRA. Distributions from a Roth IRA that are not qualified distributions will be treated as made first from contributions and then from earnings, and taxed generally in the same manner as distributions from a traditional IRA.
Distributions from a Roth IRA need not commence at age 70 1/2. However, if the owner dies before the entire interest in a Roth IRA is distributed, any remaining interest in the contract must be distributed under the same rules applied to traditional IRAs where death occurs before the required beginning date.
REPORTING TO THE IRS
Accumulation Unit Values
As we have indicated throughout this prospectus, Strategic Partners Advisor is a contract that allows you to choose one of two death benefit options. We maintain a unique unit value corresponding to each such Contract feature. Here, we depict the unit values corresponding to each of those options.
ACCUMULATION UNIT VALUES: AS A PERCENTAGE OF EACH FUNDS AVERAGE DAILY NET ASSETS (BASIC DEATH BENEFIT 1.40) | |||||||||||||
ACCUMULATION UNIT | ACCUMULATION UNIT | NUMBER OF ACCUMULATION | |||||||||||
VALUE | VALUE | UNITS | |||||||||||
AT BEGINNING OF PERIOD | AT END OF PERIOD | OUTSTANDING AT END OF PERIOD | |||||||||||
Prudential Global Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 0.83992 | 271,275 | ||||||||
Jennison Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99430 | $ | 0.86988 | 664,878 | ||||||||
Prudential Money Market Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00009 | $ | 1.01253 | 5,147,338 | ||||||||
Prudential Stock Index Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99726 | $ | 0.90493 | 399,192 | ||||||||
SP Aggressive Growth Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99881 | $ | 0.87109 | 3,400 | ||||||||
SP AIM Aggressive Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99724 | $ | 0.87500 | 60,701 | ||||||||
SP AIM Core Equity Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99084 | $ | 0.84109 | 114,134 | ||||||||
SP Alliance Large Cap Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99509 | $ | 0.88230 | 230,390 | ||||||||
SP Alliance Technology Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.98559 | $ | 0.81297 | 21,517 | ||||||||
SP Balanced Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99892 | $ | 0.94964 | 2,619,436 | ||||||||
SP Conservative Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99796 | $ | 0.98458 | 2,356,117 | ||||||||
SP Davis Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99791 | $ | 0.92029 | 1,273,097 | ||||||||
SP Deutsche International Equity Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00228 | $ | 0.84741 | 393,875 | ||||||||
SP Growth Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99886 | $ | 0.90967 | 1,147,344 | ||||||||
SP INVESCO Small Company Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99727 | $ | 0.92677 | 182,392 | ||||||||
SP Jennison International Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00272 | $ | 0.74788 | 262,777 | ||||||||
SP Large Cap Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99702 | $ | 0.92388 | 380,291 | ||||||||
SP MFS Capital Opportunities Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99530 | $ | 0.81060 | 226,894 | ||||||||
SP MFS Mid-Cap Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99348 | $ | 0.81540 | 195,919 | ||||||||
SP PIMCO High Yield Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 1.01397 | 1,404,388 | ||||||||
SP PIMCO Total Return Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 1.04110 | 2,850,259 | ||||||||
SP Prudential US Emerging Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99484 | $ | 0.87416 | 271,736 | ||||||||
SP Small/Mid Cap Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00085 | $ | 1.00289 | 545,270 | ||||||||
SP Strategic Partners Focused Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99482 | $ | 0.85719 | 21,060 | ||||||||
Janus Aspen SeriesGrowth Portfolio Service Shares | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99357 | $ | 0.78373 | 184,350 |
ACCUMULATION UNIT VALUES: AS A PERCENTAGE OF EACH FUNDS AVERAGE DAILY NET ASSETS (ENHANCED DEATH BENEFIT 1.65) | |||||||||||||
ACCUMULATION UNIT | ACCUMULATION UNIT | NUMBER OF ACCUMULATION | |||||||||||
VALUE | VALUE | UNITS | |||||||||||
AT BEGINNING OF PERIOD | AT END OF PERIOD | OUTSTANDING AT END OF PERIOD | |||||||||||
Prudential Global Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 0.83860 | 135,596 | ||||||||
Jennison Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99429 | $ | 0.86842 | 2,179,345 | ||||||||
Prudential Money Market Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00008 | $ | 1.01101 | 1,404,450 | ||||||||
Prudential Stock Index Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99725 | $ | 0.90345 | 1,109,143 | ||||||||
SP Aggressive Growth Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99880 | $ | 0.86959 | 144,636 | ||||||||
SP AIM Aggressive Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99723 | $ | 0.87360 | 221,050 | ||||||||
SP AIM Core Equity Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99083 | $ | 0.83966 | 236,117 | ||||||||
SP Alliance Large Cap Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99508 | $ | 0.88091 | 373,265 | ||||||||
SP Alliance Technology Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.98559 | $ | 0.81164 | 40,052 | ||||||||
SP Balanced Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99891 | $ | 0.94799 | 2,645,800 | ||||||||
SP Conservative Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99796 | $ | 0.98298 | 1,814,270 | ||||||||
SP Davis Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99791 | $ | 0.91877 | 2,550,809 | ||||||||
SP Deutsche International Equity Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00227 | $ | 0.84603 | 277,247 | ||||||||
SP Growth Asset Allocation Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99886 | $ | 0.90824 | 2,307,222 | ||||||||
SP INVESCO Small Company Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99726 | $ | 0.92532 | 98,282 | ||||||||
SP Jennison International Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00272 | $ | 0.74666 | 332,766 | ||||||||
SP Large Cap Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99701 | $ | 0.92241 | 582,083 | ||||||||
SP MFS Capital Opportunities Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99529 | $ | 0.80924 | 108,344 | ||||||||
SP MFS Mid-Cap Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99348 | $ | 0.81412 | 1,058,251 | ||||||||
SP PIMCO High Yield Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 1.01231 | 478,598 | ||||||||
SP PIMCO Total Return Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99996 | $ | 1.03942 | 3,666,015 | ||||||||
SP Prudential US Emerging Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99483 | $ | 0.87279 | 297,995 | ||||||||
SP Small/Mid Cap Value Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 1.00084 | $ | 1.00124 | 1,377,521 | ||||||||
SP Strategic Partners Focused Growth Portfolio | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99481 | $ | 0.85576 | 124,371 | ||||||||
Janus Aspen SeriesGrowth Portfolio Service Shares | |||||||||||||
5/7/2001* to 12/31/2001
|
$ | 0.99356 | $ | 0.78253 | 207,262 |