Filed On 4/22/05 2:25pm ET · SEC Files 333-91182, 811-09763 · Accession Number 1193125-5-82562
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
4/22/05 Lincoln NY Acct N for...Annuities 485BPOS 5/01/05 22:990 1193125
Lincoln New York Account N for Variable Annuities
Document/Exhibit Description Pages Size
1: 485BPOS Lincoln Financial Group 401± 1,750K
2: EX-99.4.N Contract Specifications for Account Value Death 5 29K
Benefit (Cdnycpan 6/05)
3: EX-99.4.O Form of Variable Annunity Rider for Gib 8 50K
(I4la-Nq-Pr-Ny 6/04)
4: EX-99.4.P Form of Variable Annunity Rider for Gib 8 47K
(I4la-Q-Pr-Ny 6/04)
5: EX-99.4.Q Form of Contract Data for Gib - Choiceplus Ii 3 18K
Bonus (Cbny-Cp2bo-Nq-Pr 06/04)
6: EX-99.4.R Form of Contract Data for Gib - Assurance 3 18K
(Cbny-Cpabo-Nq-Pr 06/04)
7: EX-99.4.S Form of Contract Data for Gib - Choiceplus Ii 3 18K
Bonus (Cbny-Cp2bo-Q-Pr 06/04)
8: EX-99.4.T Form of Contract Data for Gib - Assurance 3 17K
(Cbny-Cpabo-Q-Pr 06/04)
9: EX-99.10 Consent of Accounting Firm 1 9K
10: EX-99.8.B.I Miscellaneous Exhibit 58 219K
11: EX-99.8.B.II Miscellaneous Exhibit 19 78K
12: EX-99.8.B.III Miscellaneous Exhibit 36 105K
13: EX-99.8.B.IV Miscellaneous Exhibit 117 348K
14: EX-99.8.B.V Miscellaneous Exhibit 67 259K
15: EX-99.8.B.VI Miscellaneous Exhibit 27 110K
16: EX-99.8.B.VII Miscellaneous Exhibit 46 106K
17: EX-99.8.B.VIII Miscellaneous Exhibit 33 96K
18: EX-99.8.B.IX Miscellaneous Exhibit 23 86K
19: EX-99.8.B.X Miscellaneous Exhibit 31 99K
20: EX-99.8.B.XI Miscellaneous Exhibit 30 111K
21: EX-99.8.B.XII Miscellaneous Exhibit 28 93K
22: EX-99.8.B.XIII Miscellaneous Exhibit 40 117K
As filed with the Securities and Exchange Commission on April 22, 2005
1933 Act Registration No. 333-91182
1940 Act Registration No. 811-09763
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 7 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 44 /X/
Lincoln New York Account N for Variable Annuities
(Exact Name of Registrant)
Lincoln ChoicePlus II Bonus and Lincoln ChoicePlus Assurance (Bonus)
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(Name of Depositor)
100 Madison Street, Suite 1860
Syracuse, New York 13202
(Address of Depositor's Principal Executive Offices)
Depositor's Telephone Number, Including Area Code: (315) 428-8400
Robert O. Sheppard, Esquire
Lincoln Life & Annuity Company of New York
100 Madison Street, Suite 1860
Syracuse, New York 13202
(Name and Address of Agent for Service)
Copy to:
W. Thomas Conner, Esquire
Sutherland Asbill & Brennan LLP
1275 Pennsylvania Avenue NW
Washington, DC 20004
Approximate Date of Proposed Public Offering: Continuous
It is proposed that this filing will become effective:
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/x/ on May 1, 2005, pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on _____________________ pursuant to paragraph (a)(1) of Rule 485
Title of Securities being registered:
Interests in a separate account under individual flexible
payment deferred variable annuity contracts.
Lincoln ChoicePlus II Bonus
Lincoln New York Account N
for Variable Annuities
Individual Variable Annuity Contracts
Home Office:
Lincoln Life & Annuity Company of New York
100 Madison Street, Suite 1860
Syracuse, NY 13202
www.LincolnRetirement.com
Servicing Office:
Lincoln Life & Annuity Company of New York
PO Box 7866
Fort Wayne, IN 46802-7866
1-888-868-2583
This prospectus describes the individual flexible premium deferred variable
annuity contract that is issued by Lincoln Life & Annuity Company of New York.
It is primarily for use with nonqualified plans and qualified retirement plans
under Sections 408 (IRAs) and 408A (Roth IRAs) of the tax code. Generally, you
do not pay federal income tax on the contract's growth until it is paid out.
Qualified retirement plans already provide for tax deferral. Therefore, there
should be reasons other than tax deferral for acquiring the contract within a
qualified plan. The contract is designed to accumulate contract value and to
provide retirement income that you cannot outlive or for an agreed upon time.
These benefits may be a variable or fixed amount, if available, or a
combination of both. If you die before the annuity commencement date, we will
pay your beneficiary a death benefit. In the alternative, you generally may
choose to receive a death benefit upon the death of the annuitant.
The minimum initial purchase payment for the contract is $10,000 . Additional
purchase payments may be made to the contract and must be at least $100 per
payment ($25 if transmitted electronically), and at least $300 annually.
Except as noted below, you choose whether your contract value accumulates on a
variable or a fixed (guaranteed) basis or both. Your contract may not offer a
fixed account or if permitted by your contract, we may discontinue accepting
purchase payments or transfers into the fixed side of the contract at any time.
If your purchase payments, bonus credits and persistency credits are in the
fixed account, we guarantee your principal and a minimum interest rate. For the
life of your contract or during certain periods, we may impose restrictions on
the fixed account. For contracts issued after September 30, 2003, the only
fixed account available is for dollar cost averaging purposes.
We do offer variable annuity contracts that have lower fees. Expenses for
contracts offering a bonus or persistancy credit may be higher. Because of
this, the amount of the bonus or persistency credits may, over time, be offset
by additional fees and charges.
You should carefully consider whether or not this contract is the best product
for you.
All purchase payments, bonus credits and persistancy credits for benefits on a
variable basis will be placed in Lincoln New York Account N for Variable
Annuities (variable annuity account [VAA]). The VAA is a segregated investment
account of Lincoln New York. You take all the investment risk on the contract
value and the retirement income for amounts placed into one or more of the
contract's variable options. If the subaccounts you select make money, your
contract value goes up; if they lose money, it goes down. How much it goes up
or down depends on the performance of the subaccounts you select. We do not
guarantee how any of the variable options or their funds will perform. Also,
neither the U.S. Government nor any federal agency insures or guarantees your
investment in the contract. The contracts are not bank deposits and are not
endorsed by any bank or government agency.
The available funds are listed below:
AIM Variable Insurance Funds (Series II):
AIM V.I. Growth Fund**
AIM V.I. International Growth Fund**
AIM V.I. Premier Equity Fund**
AllianceBernstein Variable Products Series Fund (Class B):
AllianceBernstein Growth and Income Portfolio
AllianceBernstein Large Cap Growth Portfolio***
(formerly AllianceBernstein Premier Growth)
AllianceBernstein Small/Mid Cap Value Portfolio
(formerly AllianceBernstein Small Cap)
AllianceBernstein Global Technology Portfolio
(formerly AllianceBernstein Technology)
American Century Investments Variable Products (Class II):
American Century Investments VP Inflation Protection Fund
American Funds Insurance SeriesSM (Class 2):
American Funds Global Growth Fund
American Funds Global Small Capitalization Fund
American Funds Growth Fund
American Funds Growth-Income Fund
American Funds International Fund
1
Delaware VIP Trust (Service Class):
Delaware VIP Capital Reserves Series*
Delaware VIP Diversified Income Series
Delaware VIP Emerging Markets Series
Delaware VIP High Yield Series
Delaware VIP REIT Series
Delaware VIP Small Cap Value Series
Delaware VIP Trend Series
Delaware VIP U.S. Growth Series***
Delaware VIP Value Series
(formerly Delaware VIP Large Cap Value)
Fidelity (Reg. TM) Variable Insurance Products (Service Class 2):
Fidelity (Reg. TM) VIP Contrafund Portfolio
Fidelity (Reg. TM) VIP Equity-Income Portfolio***
Fidelity (Reg. TM) VIP Growth Portfolio
Fidelity (Reg. TM) VIP Mid Cap Portfolio*
Fidelity (Reg. TM) VIP Overseas Portfolio
Franklin Templeton Variable Insurance Products Trust (Class 2):
FTVIPT Franklin Small-Mid Cap Growth Securities Fund
(formerly FTVIPT Franklin Small Cap)
FTVIPT Templeton Global Income Securities Fund*
FTVIPT Templeton Growth Securities Fund
Janus Aspen Series (Service Class):
Janus Aspen Balanced Portfolio***
Janus Aspen Mid Cap Growth Portfolio***
Janus Aspen Worldwide Growth Portfolio**
Lincoln Variable Insurance Products Trust (Standard Class):
Lincoln VIP Aggressive Growth Fund
Lincoln VIP Bond Fund
Lincoln VIP Capital Appreciation Fund
Lincoln VIP Global Asset Allocation Fund
Lincoln VIP International Fund
Lincoln VIP Money Market Fund
Lincoln VIP Social Awareness Fund
Lincoln Variable Insurance Products Trust (Service Class):
Lincoln VIP Core Fund*
Lincoln VIP Equity-Income Fund****
Lincoln VIP Growth Fund*
Lincoln VIP Growth and Income Fund*
Lincoln VIP Growth Opportunities Fund*
Lincoln VIP Conservative Profile Fund*
Lincoln VIP Moderate Profile Fund*
Lincoln VIP Moderately Aggressive Profile Fund*
Lincoln VIP Aggressive Profile Fund*
MFS (Reg. TM) Variable Insurance TrustSM (Service Class):
MFS (Reg. TM) VIT Capital Opportunities Series***
MFS (Reg. TM) VIT Emerging Growth Series***
MFS (Reg. TM) VIT Total Return Series
MFS (Reg. TM) VIT Utilities Series
Neuberger Berman Advisers Management Trust:
Neuberger Berman AMT Mid-Cap Growth Portfolio
Neuberger Berman AMT Regency Portfolio
Putnam Variable Trust (Class IB):
Putnam VT Growth & Income Fund**
Putnam VT Health Sciences Fund**
Scudder Investment VIT Funds (Class A):
Scudder VIT EAFE Equity Index Fund***
Scudder VIT Equity 500 Index Fund
Scudder VIT Small Cap Index Fund
* These funds will be available for allocations of purchase payments or
contract value on or around June 6, 2005. Check with your investment
representative regarding availability.
** These funds are not offered in contracts issued on or after May 24, 2004.
*** These funds will not be offered in contracts issued on or after June 6,
2005.
**** This fund is only available for contracts issued on or after June 6, 2005.
This prospectus gives you information about the contracts that you should know
before you decide to buy a contract and make purchase payments. You should also
review the prospectuses for the funds that accompany this prospectus, and keep
all prospectuses for future reference.
Neither the SEC nor any state securities commission has approved this contract
or determined that this prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
More information about the contracts is in the current Statement of Additional
Information (SAI), dated the same date as this prospectus. The SAI is
incorporated by reference into this prospectus and is legally part of this
prospectus. For a free copy of the SAI, write: Lincoln Life & Annuity Company
of New York, PO Box 7866, Fort Wayne, IN 46802-7866, or call 1-888-868-2583.
The SAI and other information about Lincoln New York and the VAA are also
available on the SEC's website (http://www.sec.gov). There is a table of
contents for the SAI on the last page of this prospectus.
May 1, 2005
2
Table of Contents
· Download Table
Item Page
Special terms 4
Expense tables 5
Summary of common questions 9
Lincoln Life & Annuity Company of New York 11
Variable annuity account (VAA) 11
Investments of the variable annuity account 12
Charges and other deductions 18
The contracts 21
Purchase payments 22
Bonus credits 22
Persistency credits 22
Transfers on or before the annuity commencement date 23
Death benefit 25
Lincoln SmartSecuritySM Advantage 28
Surrenders and withdrawals 31
Distribution of the contracts 32
i4LIFE (Reg. TM) Advantage 33
Annuity payouts 36
Fixed side of the contract 37
Federal tax matters 38
Additional information 43
Voting rights 43
Return privilege 43
Other information 43
Legal proceedings 44
Statement of Additional Information
Table of Contents for Lincoln New York Account N for Variable Annuities 45
Appendix A - Condensed financial information A-1
3
Special terms
In this prospectus, the following terms have the indicated meanings:
Account or variable annuity account (VAA) - The segregated investment account,
Account N, into which we set aside and invest the assets for the variable side
of the contract offered in this prospectus.
Accumulation unit - A measure used to calculate contract value for the variable
side of the contract before the annuity commencement date.
Annuitant - The person upon whose life the annuity benefit payments are based,
and upon whose life a death benefit may be paid.
Annuity commencement date - The valuation date when funds are withdrawn or
converted into annuity units or fixed dollar payout for payment of retirement
income benefits under the annuity payout option you select.
Annuity payout - An amount paid at regular intervals after the annuity
commencement date under one of several options available to the annuitant
and/or any other payee. This amount may be paid on a variable or fixed basis,
or a combination of both.
Annuity unit - A measure used to calculate the amount of annuity payouts for
the variable side of the contract after the annuity commencement date. See
Annuity payouts.
Beneficiary - The person you choose to receive any death benefit paid if you
die before the annuity commencement date.
Bonus Credit - The additional amount credited to the contract for each purchase
payment.
Contractowner (you, your, owner) - The person who can exercise the rights
within the contract (decides on investment allocations, transfers, payout
option, designates the beneficiary, etc.). Usually, but not always, the
contractowner is the annuitant.
Contract value - At a given time before the annuity commencement date, the
total value of all accumulation units for a contract plus the value of the
fixed side of the contract, if any.
Contract year - Each one-year period starting with the effective date of the
contract and starting with each contract anniversary after that.
Death benefit - Before the annuity commencement date, the amount payable to
your designated beneficiary if the contractowner dies or, if selected, to the
contractowner if the annuitant dies. See The contracts - Death benefit for a
description of the various death benefit options.
i4LIFE (Reg. TM) Advantage - An income program which combines periodic variable
lifetime income payments with the ability to make withdrawals during a defined
period.
Lincoln New York (we, us, our) - Lincoln Life & Annuity Company of New York
(LNY)
Persistency credit - The additional amount credited to the contract after the
fourteenth contract anniversary.
Purchase payments - Amounts paid into the contract other than bonus credits and
persistency credits.
Subaccount - The portion of the VAA that reflects investments in accumulation
and annuity units of a class of a particular fund available under the
contracts. There is a separate subaccount which corresponds to each class of a
fund.
Valuation date - Each day the New York Stock Exchange (NYSE) is open for
trading.
Valuation period - The period starting at the close of trading (currently 4:00
p.m. New York time) on each day that the NYSE is open for trading (valuation
date) and ending at the close of such trading on the next valuation date.
4
Expense tables
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the contract.
The first table describes the fees and expenses that you will pay at the time
that you buy the contract, surrender the contract, or transfer contract value
between investment options and/or the fixed account. State premium taxes may
also be deducted.
Contractowner Transaction Expenses:
· Enlarge/Download Table
o Surrender charge (as a percentage of purchase payments surrendered/withdrawn): 8.5%*
o Transfer charge: $ 25**
* The surrender charge percentage is reduced over time. The later the
redemption occurs, the lower the surrender charge with respect to that
surrender or withdrawal. We may waive this charge in certain situations.
See Charges and other deductions-Surrender charge.
** The transfer charge will not be imposed on the first 12 transfers during a
contract year. We reserve the right to charge a $25 fee for the 13th and
each additional transfer during any contract year, excluding automatic
dollar cost averaging, portfolio rebalancing and cross reinvestment
transfers.
The next table describes the fees and expenses that you will pay periodically
during the time that you own the contract, not including fund fees and
expenses.
Annual Account Fee: $30*
Separate Account Annual Expenses (as a percentage of average daily net assets
in the subaccounts):
· Download Table
With Enhanced Guarantee of
Guaranteed Minimum Principal Death
Death Benefit (EGMDB) Benefit (GOP)
----------------------- ----------------
o Mortality and expense risk charge 1.45% 1.35%
o Administrative charge 0.15% 0.15%
---- ----
o Total annual charge for each
subaccount 1.60% 1.50%
* We do not assess the account fee on contracts issued prior to October 1,
2003. The account fee will be waived if your contract value is $50,000 or
more at the end of any particular year. The account fee will be waived
after the fifteenth contract year.
Optional Rider Charges:
· Enlarge/Download Table
Lincoln SmartSecuritySM Lincoln SmartSecuritySM
Advantage - 5 Year Elective Advantage - 1 Year Automatic
Step-Up option Step-Up option
----------------------------- -----------------------------
Guaranteed maximum annual
percentage charge* 0.95% 1.50%
Current annual percentage charge* 0.45% 0.65%
*The annual percentage charge is assessed against the Guaranteed Amount as
adjusted for purchase payments, bonus credits, step-ups and withdrawals. See
Charges and other deductions for further information.
The next item shows the minimum and maximum total annual operating expenses
charged by the funds that you may pay periodically during the time that you own
the contract. The expenses are for the year ended December 31, 2004. More
detail concerning each fund's fees and expenses is contained in the prospectus
for each fund.
· Download Table
Minimum Maximum
--------- --------
Total Annual Fund Operating Expenses
(expenses that are deducted from fund assets,
including management fees, distribution and/or
service (12b-1) fees, and other expenses): 0.29% 4.13%
Net Total Annual Fund Operating Expenses
(after contractual waivers/reimbursements*): 0.29% 1.75%
* 21 of the funds have entered into contractual waiver or reimbursement
arrangements that may reduce fund management and other fees and/or expenses
during the period of the arrangement. These arrangements vary in length,
but no arrangement will terminate before April 30, 2006.
5
The following table shows the expenses charged by each fund for the year ended
December 31, 2004:
(as a percentage of each fund's average net assets):
· Enlarge/Download Table
Management
Fees (before
any waivers/
reimbursements) +
AIM V.I. Growth Fund (Series II) 0.63 %
AIM V.I. International Growth Fund (Series II) 0.74
AIM V.I. Premier Equity Fund (Series II) 0.61
AllianceBernstein Growth and Income Portfolio (class B) 0.55
AllianceBernstein Large Cap Growth Portfolio (class B) 0.75
AllianceBernstein Small/Mid Cap Value Portfolio (class B) 0.75
AllianceBernstein Global Technology Portfolio (class B) 0.75
American Century Investments VP II Inflation Protection (Class II) 0.50
American Funds Global Growth Fund (class 2) (1) 0.61
American Funds Global Small Capitalization Fund (class 2) (1) 0.77
American Funds Growth Fund (class 2) (1) 0.35
American Funds Growth-Income Fund (class 2) (1) 0.29
American Funds International Fund (class 2) (1) 0.54
Delaware VIP Capital Reserves Series (Service Class) (2) 0.50
Delaware VIP Diversified Income Series(Service Class) (3) 0.65
Delaware VIP Emerging Markets Series(Service Class) (4) 1.25
Delaware VIP High Yield Series (Service class) (2) 0.65
Delaware VIP Value Series (Service class) (5) 0.65
Delaware VIP REIT Series (Service class) (6) 0.74
Delaware VIP Small Cap Value Series (Service class) (6) 0.74
Delaware VIP Trend Series (Service class) (6) 0.74
Delaware VIP U.S. Growth Series (Service class) (2) 0.65
Fidelity (Reg. TM) VIP Contrafund Portfolio (Service class 2) (7) 0.57
Fidelity (Reg. TM) VIP Equity-Income Portfolio (Service class 2) (7) 0.47
Fidelity (Reg. TM) VIP Growth Portfolio (Service class 2) (7) 0.58
Fidelity (Reg. TM) VIP Mid Cap Portfolio (Service class 2) (7) 0.57
Fidelity (Reg. TM) VIP Overseas Portfolio (Service class 2) (7) 0.72
FTVIPT Franklin Small-Mid Cap Growth Securities Fund (class 2) (8) 0.48
FTVIPT Templeton Global Income Securities Fund (class 2) 0.62
FTVIPT Templeton Growth Securities Fund (class 2) 0.79
Janus Aspen Mid Cap Growth Portfolio (Service class) 0.64
Janus Aspen Balanced Portfolio (Service class) 0.55
Janus Aspen Worldwide Growth Portfolio (Service class) 0.60
Lincoln VIP Aggressive Growth Fund (Standard class) 0.74
Lincoln VIP Bond Fund (Standard class) 0.36
Lincoln VIP Capital Appreciation Fund (Standard class) (15) 0.74
Lincoln VIP Core Fund (Service class) (9) 0.69
Lincoln VIP Equity-Income Fund (Service class) (16) 0.73
Lincoln VIP Global Asset Allocation Fund (Standard class) 0.74
Lincoln VIP Growth Fund (Service class) (9) 0.74
Lincoln VIP Growth and Income Fund (Service class) 0.33
Lincoln VIP Growth Opportunities Fund (Service class) (9) 0.99
12b-1 Fees Other Expenses
(before any (before any
waivers/ waivers/
reimbursements) + reimbursements)
AIM V.I. Growth Fund (Series II) 0.25 % 0.28 %
AIM V.I. International Growth Fund (Series II) 0.25 0.40
AIM V.I. Premier Equity Fund (Series II) 0.25 0.30
AllianceBernstein Growth and Income Portfolio (class B) 0.25 0.05
AllianceBernstein Large Cap Growth Portfolio (class B) 0.25 0.06
AllianceBernstein Small/Mid Cap Value Portfolio (class B) 0.25 0.12
AllianceBernstein Global Technology Portfolio (class B) 0.25 0.13
American Century Investments VP II Inflation Protection (Class II) 0.25 0.00
American Funds Global Growth Fund (class 2) (1) 0.25 0.04
American Funds Global Small Capitalization Fund (class 2) (1) 0.25 0.04
American Funds Growth Fund (class 2) (1) 0.25 0.01
American Funds Growth-Income Fund (class 2) (1) 0.25 0.02
American Funds International Fund (class 2) (1) 0.25 0.05
Delaware VIP Capital Reserves Series (Service Class) (2) 0.30 0.12
Delaware VIP Diversified Income Series(Service Class) (3) 0.30 0.33
Delaware VIP Emerging Markets Series(Service Class) (4) 0.30 0.38
Delaware VIP High Yield Series (Service class) (2) 0.30 0.10
Delaware VIP Value Series (Service class) (5) 0.30 0.10
Delaware VIP REIT Series (Service class) (6) 0.30 0.10
Delaware VIP Small Cap Value Series (Service class) (6) 0.30 0.09
Delaware VIP Trend Series (Service class) (6) 0.30 0.10
Delaware VIP U.S. Growth Series (Service class) (2) 0.30 0.11
Fidelity (Reg. TM) VIP Contrafund Portfolio (Service class 2) (7) 0.25 0.11
Fidelity (Reg. TM) VIP Equity-Income Portfolio (Service class 2) (7) 0.25 0.11
Fidelity (Reg. TM) VIP Growth Portfolio (Service class 2) (7) 0.25 0.10
Fidelity (Reg. TM) VIP Mid Cap Portfolio (Service class 2) (7) 0.25 0.14
Fidelity (Reg. TM) VIP Overseas Portfolio (Service class 2) (7) 0.25 0.19
FTVIPT Franklin Small-Mid Cap Growth Securities Fund (class 2) (8) 0.25 0.29
FTVIPT Templeton Global Income Securities Fund (class 2) 0.25 0.16
FTVIPT Templeton Growth Securities Fund (class 2) 0.25 0.07
Janus Aspen Mid Cap Growth Portfolio (Service class) 0.25 0.01
Janus Aspen Balanced Portfolio (Service class) 0.25 0.01
Janus Aspen Worldwide Growth Portfolio (Service class) 0.25 0.03
Lincoln VIP Aggressive Growth Fund (Standard class) 0.00 0.17
Lincoln VIP Bond Fund (Standard class) 0.00 0.06
Lincoln VIP Capital Appreciation Fund (Standard class) (15) 0.00 0.07
Lincoln VIP Core Fund (Service class) (9) 0.25 2.90
Lincoln VIP Equity-Income Fund (Service class) (16) 0.25 0.07
Lincoln VIP Global Asset Allocation Fund (Standard class) 0.00 0.29
Lincoln VIP Growth Fund (Service class) (9) 0.25 2.89
Lincoln VIP Growth and Income Fund (Service class) 0.25 0.04
Lincoln VIP Growth Opportunities Fund (Service class) (9) 0.25 2.89
Total
Total Expenses Contractual
(before any waivers/
waivers/ reimbursements
= reimbursements) (if any)
AIM V.I. Growth Fund (Series II) 1.16 %
AIM V.I. International Growth Fund (Series II) 1.39
AIM V.I. Premier Equity Fund (Series II) 1.16
AllianceBernstein Growth and Income Portfolio (class B) 0.85
AllianceBernstein Large Cap Growth Portfolio (class B) 1.06
AllianceBernstein Small/Mid Cap Value Portfolio (class B) 1.12
AllianceBernstein Global Technology Portfolio (class B) 1.13
American Century Investments VP II Inflation Protection (Class II) 0.75
American Funds Global Growth Fund (class 2) (1) 0.90
American Funds Global Small Capitalization Fund (class 2) (1) 1.06
American Funds Growth Fund (class 2) (1) 0.61
American Funds Growth-Income Fund (class 2) (1) 0.56
American Funds International Fund (class 2) (1) 0.84
Delaware VIP Capital Reserves Series (Service Class) (2) 0.92 -0.05 %
Delaware VIP Diversified Income Series(Service Class) (3) 1.28 -0.23
Delaware VIP Emerging Markets Series(Service Class) (4) 1.93 -0.18
Delaware VIP High Yield Series (Service class) (2) 1.05 -0.05
Delaware VIP Value Series (Service class) (5) 1.05 -0.05
Delaware VIP REIT Series (Service class) (6) 1.14 -0.05
Delaware VIP Small Cap Value Series (Service class) (6) 1.13 -0.05
Delaware VIP Trend Series (Service class) (6) 1.14 -0.05
Delaware VIP U.S. Growth Series (Service class) (2) 1.06 -0.05
Fidelity (Reg. TM) VIP Contrafund Portfolio (Service class 2) (7) 0.93
Fidelity (Reg. TM) VIP Equity-Income Portfolio (Service class 2) (7) 0.83
Fidelity (Reg. TM) VIP Growth Portfolio (Service class 2) (7) 0.93
Fidelity (Reg. TM) VIP Mid Cap Portfolio (Service class 2) (7) 0.96
Fidelity (Reg. TM) VIP Overseas Portfolio (Service class 2) (7) 1.16
FTVIPT Franklin Small-Mid Cap Growth Securities Fund (class 2) (8) 1.02 -0.03
FTVIPT Templeton Global Income Securities Fund (class 2) 1.03
FTVIPT Templeton Growth Securities Fund (class 2) 1.11
Janus Aspen Mid Cap Growth Portfolio (Service class) 0.90
Janus Aspen Balanced Portfolio (Service class) 0.81
Janus Aspen Worldwide Growth Portfolio (Service class) 0.88
Lincoln VIP Aggressive Growth Fund (Standard class) 0.91
Lincoln VIP Bond Fund (Standard class) 0.42
Lincoln VIP Capital Appreciation Fund (Standard class) (15) 0.81 -0.13
Lincoln VIP Core Fund (Service class) (9) 3.84 -2.75
Lincoln VIP Equity-Income Fund (Service class) (16) 1.05 -0.04
Lincoln VIP Global Asset Allocation Fund (Standard class) 1.03
Lincoln VIP Growth Fund (Service class) (9) 3.88 -2.77
Lincoln VIP Growth and Income Fund (Service class) 0.62
Lincoln VIP Growth Opportunities Fund (Service class) (9) 4.13 -2.70
Total Expenses
(after
Contractual
waivers/
reimbursements
s)
AIM V.I. Growth Fund (Series II)
AIM V.I. International Growth Fund (Series II)
AIM V.I. Premier Equity Fund (Series II)
AllianceBernstein Growth and Income Portfolio (class B)
AllianceBernstein Large Cap Growth Portfolio (class B)
AllianceBernstein Small/Mid Cap Value Portfolio (class B)
AllianceBernstein Global Technology Portfolio (class B)
American Century Investments VP II Inflation Protection (Class II)
American Funds Global Growth Fund (class 2) (1)
American Funds Global Small Capitalization Fund (class 2) (1)
American Funds Growth Fund (class 2) (1)
American Funds Growth-Income Fund (class 2) (1)
American Funds International Fund (class 2) (1)
Delaware VIP Capital Reserves Series (Service Class) (2) 0.87 %
Delaware VIP Diversified Income Series(Service Class) (3) 1.05
Delaware VIP Emerging Markets Series(Service Class) (4) 1.75
Delaware VIP High Yield Series (Service class) (2) 1.00
Delaware VIP Value Series (Service class) (5) 1.00
Delaware VIP REIT Series (Service class) (6) 1.09
Delaware VIP Small Cap Value Series (Service class) (6) 1.08
Delaware VIP Trend Series (Service class) (6) 1.09
Delaware VIP U.S. Growth Series (Service class) (2) 1.01
Fidelity (Reg. TM) VIP Contrafund Portfolio (Service class 2) (7)
Fidelity (Reg. TM) VIP Equity-Income Portfolio (Service class 2) (7)
Fidelity (Reg. TM) VIP Growth Portfolio (Service class 2) (7)
Fidelity (Reg. TM) VIP Mid Cap Portfolio (Service class 2) (7)
Fidelity (Reg. TM) VIP Overseas Portfolio (Service class 2) (7)
FTVIPT Franklin Small-Mid Cap Growth Securities Fund (class 2) (8) 0.99
FTVIPT Templeton Global Income Securities Fund (class 2)
FTVIPT Templeton Growth Securities Fund (class 2)
Janus Aspen Mid Cap Growth Portfolio (Service class)
Janus Aspen Balanced Portfolio (Service class)
Janus Aspen Worldwide Growth Portfolio (Service class)
Lincoln VIP Aggressive Growth Fund (Standard class)
Lincoln VIP Bond Fund (Standard class)
Lincoln VIP Capital Appreciation Fund (Standard class) (15) 0.68
Lincoln VIP Core Fund (Service class) (9) 1.09
Lincoln VIP Equity-Income Fund (Service class) (16) 1.01
Lincoln VIP Global Asset Allocation Fund (Standard class)
Lincoln VIP Growth Fund (Service class) (9) 1.11
Lincoln VIP Growth and Income Fund (Service class)
Lincoln VIP Growth Opportunities Fund (Service class) (9) 1.43
6
· Enlarge/Download Table
Management
Fees (before
any waivers/
reimbursements) +
Lincoln VIP International Fund (Standard class) 0.82 %
Lincoln VIP Money Market Fund (Standard class) 0.44
Lincoln VIP Social Awareness Fund (Standard class) 0.35
Lincoln VIP Conservative Profile Fund (Service class) (10) 0.25
Lincoln VIP Moderate Profile Fund (Service class) (10) 0.25
Lincoln VIP Moderately Aggressive Profile Fund (Service class) (10) 0.25
Lincoln VIP Aggressive Profile Fund (Service class) (10) 0.25
MFS (Reg. TM) VIT Capital Opportunities Series (Service class) (11) 12) 0.75
MFS (Reg. TM) VIT Trust Emerging Growth Series (Service class) (12) 0.75
MFS (Reg. TM) VIT Trust Total Return Series (Service class) (12) 0.75
MFS (Reg. TM) VIT Trust Utilities Series (Service class) (12) 0.75
Neuberger Berman AMT Mid-Cap Growth Portfolio 0.84
Neuberger Berman AMT Regency Portfolio 0.85
Putnam VT Growth & Income Fund (class 1B) 0.48
Putnam VT Health Sciences Fund (class 1B) 0.70
Scudder VIT EAFE Equity Index Fund (class A) (13) 0.45
Scudder VIT Equity 500 Index Fund (class A) 0.20
Scudder VIT Small Cap Index Fund (class A) (14) 0.35
12b-1 Fees Other Expenses
(before any (before any
waivers/ waivers/
reimbursements) + reimbursements)
Lincoln VIP International Fund (Standard class) 0.00 % 0.16 %
Lincoln VIP Money Market Fund (Standard class) 0.00 0.09
Lincoln VIP Social Awareness Fund (Standard class) 0.00 0.06
Lincoln VIP Conservative Profile Fund (Service class) (10) 0.25 2.27
Lincoln VIP Moderate Profile Fund (Service class) (10) 0.25 1.55
Lincoln VIP Moderately Aggressive Profile Fund (Service class) (10) 0.25 1.36
Lincoln VIP Aggressive Profile Fund (Service class) (10) 0.25 1.67
MFS (Reg. TM) VIT Capital Opportunities Series (Service class) (11) 12) 0.25 0.13
MFS (Reg. TM) VIT Trust Emerging Growth Series (Service class) (12) 0.25 0.12
MFS (Reg. TM) VIT Trust Total Return Series (Service class) (12) 0.25 0.08
MFS (Reg. TM) VIT Trust Utilities Series (Service class) (12) 0.25 0.14
Neuberger Berman AMT Mid-Cap Growth Portfolio 0.00 0.08
Neuberger Berman AMT Regency Portfolio 0.00 0.19
Putnam VT Growth & Income Fund (class 1B) 0.25 0.06
Putnam VT Health Sciences Fund (class 1B) 0.25 0.15
Scudder VIT EAFE Equity Index Fund (class A) (13) 0.00 0.37
Scudder VIT Equity 500 Index Fund (class A) 0.00 0.09
Scudder VIT Small Cap Index Fund (class A) (14) 0.00 0.13
Total
Total Expenses Contractual
(before any waivers/
waivers/ reimbursements
= reimbursements) (if any)
Lincoln VIP International Fund (Standard class) 0.98 %
Lincoln VIP Money Market Fund (Standard class) 0.53
Lincoln VIP Social Awareness Fund (Standard class) 0.41
Lincoln VIP Conservative Profile Fund (Service class) (10) 2.77 -1.53 %
Lincoln VIP Moderate Profile Fund (Service class) (10) 2.05 -0.74
Lincoln VIP Moderately Aggressive Profile Fund (Service class) (10) 1.86 -0.47
Lincoln VIP Aggressive Profile Fund (Service class) (10) 2.17 -0.73
MFS (Reg. TM) VIT Capital Opportunities Series (Service class) (11) 12) 1.13
MFS (Reg. TM) VIT Trust Emerging Growth Series (Service class) (12) 1.12
MFS (Reg. TM) VIT Trust Total Return Series (Service class) (12) 1.08
MFS (Reg. TM) VIT Trust Utilities Series (Service class) (12) 1.14
Neuberger Berman AMT Mid-Cap Growth Portfolio 0.92
Neuberger Berman AMT Regency Portfolio 1.04
Putnam VT Growth & Income Fund (class 1B) 0.79
Putnam VT Health Sciences Fund (class 1B) 1.10
Scudder VIT EAFE Equity Index Fund (class A) (13) 0.82 -0.17
Scudder VIT Equity 500 Index Fund (class A) 0.29
Scudder VIT Small Cap Index Fund (class A) (14) 0.48 -0.03
Total Expenses
(after
Contractual
waivers/
reimbursements
s)
Lincoln VIP International Fund (Standard class)
Lincoln VIP Money Market Fund (Standard class)
Lincoln VIP Social Awareness Fund (Standard class)
Lincoln VIP Conservative Profile Fund (Service class) (10) 1.24 %
Lincoln VIP Moderate Profile Fund (Service class) (10) 1.31
Lincoln VIP Moderately Aggressive Profile Fund (Service class) (10) 1.39
Lincoln VIP Aggressive Profile Fund (Service class) (10) 1.44
MFS (Reg. TM) VIT Capital Opportunities Series (Service class) (11) 12)
MFS (Reg. TM) VIT Trust Emerging Growth Series (Service class) (12)
MFS (Reg. TM) VIT Trust Total Return Series (Service class) (12)
MFS (Reg. TM) VIT Trust Utilities Series (Service class) (12)
Neuberger Berman AMT Mid-Cap Growth Portfolio
Neuberger Berman AMT Regency Portfolio
Putnam VT Growth & Income Fund (class 1B)
Putnam VT Health Sciences Fund (class 1B)
Scudder VIT EAFE Equity Index Fund (class A) (13) 0.65
Scudder VIT Equity 500 Index Fund (class A)
Scudder VIT Small Cap Index Fund (class A) (14) 0.45
(1) The Series' investment adviser began voluntarily waiving 5% of its
management fees on September 1, 2004. Beginning April 1, 2005, this waiver
increased to 10% and will continue at this level until further review.
Total annual fund operating expenses do not reflect this waiver. The
effect of the waiver on total operating expenses can be found in the
Financial Highlights table in the Series' Prospectus and in the audited
financial statements in the Series' annual report.
(2) For the period May 1, 2002 through April 30, 2005, the adviser
contractually waived its management fee and/or reimbursed the Series for
expenses to the extent that total expenses (excluding any taxes, interest,
brokerage fees, extraordinary expenses and 12b-1 fees) would not exceed
0.80%. Effective May 1, 2005 through April 30, 2006, the adviser has
contractually agreed to waive its management fee and/or reimburse the
Series for expenses to the extent that total expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees)
will not exceed 0.80%. The Service Class shares are subject to an annual
12b-1 fee of not more than 0.30%. Effective May 1, 2005 through April 30,
2006, Delaware Distributors, L.P. has contracted to limit the Service
Class shares 12b-1 fee to no more than 0.25%.
(3) For the period May 1, 2002 through April 30, 2005, the adviser
contractually waived its management fee and/or reimbursed the Series for
expenses to the extent that total expenses (excluding any taxes, interest,
brokerage fees, extraordinary expenses and 12b-1 fees) would not exceed
0.98%. Effective May 1, 2005 through April 30, 2006, the adviser has
contractually agreed to waive its management fee and/or reimburse the
Series for expenses to the extent that total expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees)
will not exceed 0.80%. The Service Class shares are subject to an annual
12b-1 fee of not more than 0.30%. Effective May 1, 2005 through April 30,
2006, Delaware Distributors, L.P. has contracted to limit the Service
Class shares 12b-1 fee to no more than 0.25%.
(4) For the period May 1, 2002 through April 30, 2005, the adviser
contractually waived its management fee and/or reimbursed the Series for
expenses to the extent that total expenses (excluding any taxes, interest,
brokerage fees, extraordinary expenses and 12b-1 fees) would not exceed
1.50%. Effective May 1, 2005 through April 30, 2006, the adviser has
contractually agreed to waive its management fee and/or reimburse the
Series for expenses to the extent that total expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees)
will not exceed 1.50%. The Service Class shares are subject to an annual
12b-1 fee of not more than 0.30%. Effective May 1, 2005 through April 30,
2006, Delaware Distributors, L.P. has contracted to limit the Service
Class shares 12b-1 fee to no more than 0.25%.
(5) For the period May 1, 2002 through April 30, 2005, the adviser
contractually waived its management fee and/or reimbursed the Series for
expenses to the extent that total expenses (excluding any taxes, interest,
brokerage fees, extraordinary expenses and 12b-1 fees) would not exceed
0.80%. Without such an arrangement, the total operating expense for the
Series would have been 0.75% for the fiscal year 2004 (excluding 12b-1
fees). Effective May 1, 2005 through April 30, 2006, the adviser has
contractually agreed to waive its management fee and/or reimburse the
Series for expenses to the extent that total expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees)
will not exceed 0.80%. DMC has voluntarily elected to waive its management
fee for this Series to 0.60% indefinitely. The Service Class shares are
subject to an annual 12b-1 fee of not more than 0.30%. Effective May 1,
2005 through April 30, 2006, Delaware Distributors, L.P. has contracted to
limit the Service Class shares 12b-1 fee to no more than 0.25%.
(6) For the period May 1, 2002 through April 30, 2005, the adviser
contractually waived its management fee and/or reimbursed the Series for
expenses to the extent that total expenses (excluding any taxes, interest,
brokerage fees, extraordinary expenses and 12b-1 fees) would not exceed
0.95%. Effective May 1, 2005 through April 30, 2006, the adviser has
contractually agreed to waive its management fee and/or reimburse the
Series for expenses to the extent that total expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees)
will not exceed 0.95%. The Service Class shares are subject to an annual
12b-1 fee of not more than 0.30%. Effective May 1, 2005 through April 30,
2006, Delaware Distributors, L.P. has contracted to limit the Service
Class shares 12b-1 fee to no more than 0.25%.
(7) A portion of the brokerage commissions that the fund pays may be reimbursed
and used to reduce the fund's expenses. In addition, through
7
arrangements with a fund's custodian, credits realized as a result of
uninvested cash balances are used to reduce the fund's custodian expenses.
Including these reductions, the total class operating expenses would have
been 0.91% Contrafund, 0.82% for Equity-Income, 0.93% Mid Cap, and 1.12%
Overseas.
(8) The manager had agreed in advance to reduce its fee to reflect reduced
services resulting from the Fund's investment in a Franklin Templeton
money fund for cash management. This arrangement will continue for as long
as the Fund invests in the Money Fund.
(9) The "other expenses" are based on estimated expenses for the current fiscal
year. Lincoln Life has contractually agreed to reimburse the fund to the
extent that the Total Annual Operating Expenses exceed 1.09% Core, 1.11%
Growth and 1.43% Growth Opportunities. The Agreement will continue at
least through September 1, 2006 , and renew automatically for one-year
terms unless Lincoln Life provides written notice of termination to the
fund.
(10) The Other Expenses are based on estimates for the current fiscal year.
Other Expenses reflects the expenses of the underlying funds invested in
by the Lincoln Profile Funds (Conservative 0.69%; Moderate 0.76%;
Moderately Aggressive 0.84%; Aggressive 0.89%) as well as the expenses of
the particular Profile Fund (Conservative 1.58%; Moderate 0.79%;
Moderately Aggressive 0.52%; Aggressive 0.78%) Lincoln Life has
contractually agreed to reimburse each Profile Fund to the extent that
the Total Expenses (excluding underlying fund fees and expenses) exceed
0.55%. The Agreement will continue at least through September 1, 2006 and
renew automatically for one-year terms unless Lincoln Life provides
written notice of termination to the fund. Underlying fund fees and
expenses are incurred indirectly by each Profile fund as a result of
investment in shares of one or more underlying funds. These expenses are
estimated based on the target allocation among the underlying funds and
are provided to show you an estimate of the expenses attributable to each
Profile Fund. Each Profile Fund's expense ratio will vary based on the
actual allocation to the underlying funds.
(11) MFS has contractually agreed, subject to reimbursement to bear the series'
expenses such that "Other Expenses" (after taking into account the
expense offset and brokerage arrangements described in Footnote 12), do
not exceed 0.15% annually.This expense limitation arrangement excludes
management fees, taxes extraordinary expenses, brokerage and transaction
costs and expenses associated with the series' investing activities. This
contractual fee arrangement will continue until at least April 30, 2006,
unless the Board of Trustees which oversees the fund consents to any
earlier revision or termination of this arrangement.
(12) Each series has a voluntary expense offset arrangement that reduces the
series' custodian fee based upon the amount of cash maintained by the
series with its custodian and dividend disbursing agent. Each series may
enter into other such arrangements and directed brokerage arrangements,
which would also have the effect of reducing the series' expenses. This
arrangement can be discontinued at anytime. "Other Expenses" do not take
into account these fee reductions, and are therefore higher than the
actual expenses of the series. Had these fee reductions been taken into
account, "Total Expenses" would be lower for each series and would equal
1.11% Emerging Growth, 1.13% Utilities and 1.07% for Total Return. There
were no fee reductions for the Capital Opportunities Series.
(13) Pursuant to their respective agreements with Scudder VIT Funds, the
manager, the underwriter and the accounting agent have contractually
agreed for the one year period commencing on May 1, 2005 to limit their
respective fees and to reimburse other expenses to the extent necessary
to limit total expenses to 0.65%.
(14) Pursuant to their respective agreements with Scudder VIT Funds, the
manager, the underwriter and the accounting agent have contractually
agreed for the one year period commencing on May 1, 2005 to limit their
respective fees and to reimburse other expenses to the extent necessary
to limit total expenses to 0.45%.
(15) Effective May 1, 2005, the adviser has contractually agreed to waive the
following portion of its advisory fee for the Fund: 0.15% of the first
$100,000,000 of average daily net assets of the Fund; 0.10% of the next
$150,000,000 of average daily net assets of the Fund; 0.15% of the next
$250,000,000 of average daily net assets of the Fund; 0.10% of the next
$250,000,000 of average daily net assets of the Fund; 0.15% of the next
$750,000,000 of the average daily net assets of the Fund; and 0.20% of
the excess over $1,500,000,000 of average daily net assets of the Fund.
If the fee waiver had been in effect in 2004, it would have resulted in a
reduction of 0.13% of the management fee. The fee waiver will continue at
least through April 30, 2006, and renew automatically for one-year terms
unless the adviser provides written notice of termination to the Fund.
(16) Effective May 1, 2005, the adviser has contractually agreed to waive the
following portion of its advisory fee for the Fund: 0.0% on the first
$250,000,000 of average daily net assets of the Fund; 0.05% on the next
$500,000,000 of average daily net assets of the Fund; and 0.10% on the
excess over $750,000,000 of average daily net assets of the Fund. If the
fee waiver had been in effect in 2004, it would have resulted in a
reduction of 0.04% of the management fee. This waiver will continue at
least through April 30, 2006, and renew automatically for one-year terms
unless the adviser provides writtten notice of termination to the Fund.
For information concerning compensation paid for the sale of the contracts, see
Distribution of the contracts.
8
EXAMPLES
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 contractowner transaction expenses, contract fees, separate
account annual expenses, and fund fees and expenses.
The Example assumes that you invest $10,000 in the contract for the time
periods indicated. The Example also assumes that your investment has a 5%
return each year, the maximum fees and expenses of any of the funds and that
the EGMDB and the Lincoln SmartSecuritySM Advantage - 1 Year Step-up option are
in effect. 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:
· Download Table
1 year 3 years 5 years 10 years
----------- --------- --------- ---------
$1,448 $2,701 $3,747 $6,189
2) If you annuitize or do not surrender your contract at the end of the
applicable time period:
· Download Table
1 year 3 years 5 years 10 years
-------- --------- --------- ---------
$638 $1,901 $3,147 $6,189
For more information, see Charges and other deductions in this prospectus, and
the prospectuses for the funds. Premium taxes may also apply, although they do
not appear in the examples. The examples do not reflect bonus credits or
persistency credits. Different fees and expenses not reflected in the examples
may be imposed during a period in which regular income or annuity payouts are
made. See The contracts - i4LIFE (Reg. TM) Advantage and Annuity payouts. These
examples should not be considered a representation of past or future expenses.
Actual expenses may be more or less than those shown.
Summary of common questions
What kind of contract am I buying? It is an individual variable or fixed and/or
interest adjusted, if applicable, annuity contract between you and Lincoln New
York. This prospectus primarily describes the variable side of the contract.
See The contracts.
What is the variable annuity account (VAA)? It is a separate account we
established under New York insurance law, and registered with the SEC as a unit
investment trust. VAA assets are allocated to one or more subaccounts,
according to your investment choices. VAA assets are not chargeable with
liabilities arising out of any other business which we may conduct. See
Variable annuity account.
What are my investment choices? Based upon your instruction for purchase
payments, the VAA applies your purchase payments, bonus credits and persistancy
credits to buy shares in one or more of the investment options. See Investments
of the variable annuity account - Description of the funds.
Who invests my money? Several different investment advisers manage the
investment options. See Investments of the variable annuity account -
Description of the funds.
How does the contract work? If we approve your application, we will send you a
contract. When you make purchase payments during the accumulation phase, you
receive bonus credits and you buy accumulation units. If you decide to receive
an annuity payout, your accumulation units are converted to annuity units. Your
annuity payouts will be based on the number of annuity units you received and
the value of each annuity unit on payout days. See The contracts.
What charges do I pay under the contract? If you withdraw purchase payments,
you pay a surrender charge from 0% to 8.5% of the surrendered or withdrawn
purchase payment, depending upon how long those payments have been invested in
the contract. We may waive surrender charges in certain situations. See Charges
and other deductions-Surrender charge.
We reserve the right to charge a $25 fee for the 13th and each additional
transfer during any contract year, excluding automatic dollar cost averaging,
portfolio rebalancing and cross-reinvestment transfers. The transfer charge
will not be imposed on the first 12 transfers during the contract year.
We will deduct any applicable premium tax from purchase payments or contract
value at the time the tax is incurred or at another time we choose.
We charge an account fee of $30 on any contract anniversary if the contract
value is less than $50,000. This account fee will be waived after the fifteenth
contract year. See Charges and other deductions.
9
We apply a charge to the daily net asset value of the VAA and those charges
are:
· Download Table
With Enhanced Guarantee of
Guaranteed Minimum Principal Death
Death Benefit (EGMDB) Benefit (GOP)
----------------------- ----------------
o Mortality and expense risk charge 1.45% 1.35%
o Administrative charge 0.15% 0.15%
---- ----
o Total annual charge for each
subaccount 1.60% 1.50%
Additional optional rider:
· Enlarge/Download Table
Lincoln SmartSecuritySM Lincoln SmartSecuritySM
Advantage - 5 Year Elective Advantage - 1 Year Automatic
Step-up Option Step-up Option
----------------------------- -----------------------------
o Guaranteed maximum annual
percentage charge 0.95% 1.50%
o Current annual percentage charge 0.45% 0.65%
See Charges and other deductions.
The funds' investment management fees, expenses and expense limitations, if
applicable, are more fully described in the prospectuses for the funds.
The surrender, withdrawal or transfer of value from a fixed account guaranteed
period may be subject to the interest adjustment, if applicable. See Fixed side
of the contract.
Charges may also be imposed during the regular income or annuity payout period,
including i4LIFE (Reg. TM) Advantage, if elected. See The contracts and Annuity
payouts.
For information about the compensation we pay for sales of contracts, see The
contracts - Distribution of the contracts.
What purchase payments do I make, and how often? Subject to the minimum and
maximum payment amounts, your payments are completely flexible. See The
contracts - Purchase payments.
What is a bonus credit and a persistency credit? When purchase payments are
made, we will credit an additional amount to the contract, known as a bonus
credit. The amount of the bonus credit is calculated as a percentage of the
purchase payments. The bonus credit percentage will vary based on the owner's
cumulative purchase payments, as defined in this prospectus. All bonus credits
become part of the contract value at the same time as the corresponding
purchase payments. Bonus credits are not considered to be purchase payments.
See The contracts - Bonus credits.
A persistency credit of 0.05% of contract value less purchase payments that
have been in the contract less than fourteen years will be credited on a
quarterly basis after the fourteenth anniversary. See The contracts -
Persistency credits.
We offer a variety of variable annuity contracts. Other annuity contracts that
we offer have no provision for bonus credits but may have lower mortality and
expense risk charges and/or lower surrender charges. During the surrender
charge period, the amount of bonus credit may be more than offset by higher
surrender charges associated with the bonus credit. After the fourteenth
contract anniversary, the persistency credits are designed to fully or
partially offset these additional bonus charges. We encourage you to talk with
your financial adviser and determine which annuity contract is most appropriate
for you.
How will my annuity payouts be calculated? If you decide to annuitize, you may
select an annuity option and start receiving annuity payouts from your contract
as a fixed option or variable option or a combination of both. See Annuity
payouts - Annuity options. Remember that participants in the VAA benefit from
any gain, and take a risk of any loss, in the value of the securities in the
funds' portfolios.
What is i4LIFE (Reg. TM) Advantage? i4LIFE (Reg. TM) Advantage is an income
program that provides periodic variable lifetime income payments, a death
benefit, and the ability to make purchase payments (IRA contracts only) and
withdrawals during a defined period of time. We assess a charge, imposed only
during the i4LIFE (Reg. TM) Advantage payout phase, based on the i4LIFE (Reg.
TM) Advantage death benefit you choose and whether or not the Guaranteed Income
Benefit is in effect.
What happens if I die before I annuitize? Your beneficiary will receive death
benefit proceeds based upon the death benefit you select. Your beneficiary has
options as to how the death benefit is paid. In the alternative, you may choose
to receive a death benefit on the death of the annuitant. See The contracts -
Death benefit.
May I transfer contract value between variable options and between the variable
and fixed sides of the contract? Yes, subject to currently effective
restrictions. For example, transfers made before the annuity commencement date
are generally restricted to no more than twelve (12) per contract year. If
permitted by your contract, we may discontinue accepting transfers into the
fixed side of
10
the contract at any time. See The contracts - Transfers on or before the
annuity commencement date and Transfers after the annuity commencement date.
What is the Lincoln SmartSecuritySM Advantage? This benefit, which may be
available for purchase at an additional charge, provides a Guaranteed Amount
equal to the initial purchase payment and its corresponding bonus credits (or
contract value at the time of election) as adjusted. You may access this
benefit through periodic withdrawals. There are two options available to reset
the Guaranteed Amount to the current contract value. See The contracts -
Lincoln SmartSecuritySM Advantage.
May I surrender the contract or make a withdrawal? Yes, subject to contract
requirements and to the restrictions of any qualified retirement plan for which
the contract was purchased. See The contracts - Surrenders and withdrawals. If
you surrender the contract or make a withdrawal, certain charges may apply. See
Charges and other deductions. A portion of surrender or withdrawal proceeds may
be taxable. In addition, if you decide to take a distribution before age 591/2,
a 10% Internal Revenue Service (IRS) tax penalty may apply. A surrender or a
withdrawal also may be subject to 20% withholding. See Federal tax matters.
Do I get a free look at this contract? Yes. You can cancel the contract within
ten days of the date you first receive the contract. You need to return the
contract, postage prepaid, to our Servicing office. You assume the risk of any
market drop on purchase payments you allocate to the variable side of the
contract. We will not refund any bonus credits credited to your contract value
if you elect to cancel your contract; however, we will assume the risk of
investment loss on the bonus credits. See Return privilege.
Where may I find more information about accumulation unit values? The Appendix
to this prospectus provides more information about accumulation unit values.
Investment results
At times, the VAA may compare its investment results to various unmanaged
indices or other variable annuities in reports to shareholders, sales
literature and advertisements. The results will be calculated on a total return
basis for various periods, with or without contingent deferred sales charges.
Results calculated without contingent deferred sales charges will be higher..
Total returns include the reinvestment of all distributions, which are
reflected in changes in unit value. The money market subaccount's yield is
based upon investment performance over a 7-day period, which is then
annualized.
During extended periods of low interest rates, the yields of any subaccount
investing in a money market fund may also become extremely low and possibly
negative.
The money market yield figure and annual performance of the subaccounts are
based on past performance and do not indicate or represent future performance.
Financial statements
The financial statements of the VAA and for us are located in the SAI. If you
would like a free copy of the SAI, complete and mail the request on the last
page of this prospectus, or call 1-888-868-2583.
Lincoln Life & Annuity Company of New York
Lincoln New York is a New York-domiciled life insurance company founded on June
6, 1996. Lincoln New York is a subsidiary of The Lincoln National Life
Insurance Company (Lincoln Life). Lincoln Life is an Indiana-domiciled
insurance company, engaged primarily in the direct issuance of life insurance
contracts and annuities. Lincoln Life is wholly owned by Lincoln National
Corporation (LNC), a publicly held insurance and financial services holding
company incorporated in Indiana. Lincoln New York is obligated to pay all
amounts promised to policy owners under the policies.
Variable annuity account (VAA)
On March 11, 1999, the VAA was established as an insurance company separate
account under New York law. It is registered with the SEC as a unit investment
trust under the provisions of the Investment Company Act of 1940 (1940 Act).
The SEC does not supervise the VAA or Lincoln New York. The VAA is a segregated
investment account, meaning that its assets may not be charged with liabilities
resulting from any other business that we may conduct. Income, gains and
losses, whether realized or not, from assets allocated to the VAA are, in
accordance with the applicable annuity contracts, credited to or charged
against the VAA. They are credited or charged without regard to any other
income, gains or losses of Lincoln New York. We are the issuer of the contracts
and the obligations set forth in the contract, other than those of the
contractowner, are ours. The VAA satisfies the definition of a separate account
under the federal securities laws. We do not guarantee the investment
performance of the VAA. Any investment gain or loss depends on the investment
performance of the funds. You assume the full investment risk for all amounts
placed in the VAA.
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The VAA is used to support other annuity contracts offered by us in addition to
the contracts described in this prospectus. The other annuity contracts
supported by the VAA generally invest in the same funds as the contracts
described in this prospectus. These other annuity contracts may have different
charges that could affect the performance of their subaccounts, and they offer
different benefits.
Investments of the variable annuity account
You decide the subaccount(s) to which you allocate purchase payments. Bonus
credits are allocated to the subaccounts at the same time and at the same
percentage as the purchase payments being made. There is a separate subaccount
which corresponds to each class of each fund. You may change your allocation
without penalty or charges. Shares of the funds will be sold at net asset value
with no initial sales charge to the VAA in order to fund the contracts. The
funds are required to redeem fund shares at net asset value upon our request.
Investment Advisers
As compensation for its services to the fund, the investment adviser receives a
fee from the fund which is accrued daily and paid monthly. This fee is based on
the net assets of each fund, as defined in the prospectus for the fund.
Administrative, Marketing and Support Service Fees
With respect to a fund, including affiliated funds, the adviser and/or
distributor, or an affiliate thereof, may compensate us (or an affiliate) for
administrative, distribution, or other services. It is anticipated that such
compensation will be based on a percentage of assets of the particular fund
attributable to the contracts along with certain other variable contracts
issued or administered by us (or an affiliate). These percentages are
negotiated and vary with each fund. Some funds may compensate us significantly
more than other funds and the amount we receive may be substantial. These
percentages currently range up to 0.36%, and as of the date of this prospectus,
we were receiving compensation from each fund family. We (or our affiliates)
may profit from these fees or use these fees to defray the costs of
distributing the contract. Additionally, a fund's adviser and/or distributor or
its affiliates may provide us with certain services that assist us in the
distribution of the contracts and may pay us and/or certain affilitiates
amounts to participate in sales meetings.
The AIM, AllianceBernstein, American Century, American Funds, Delaware,
Fidelity, Franklin Templeton, Janus, Lincoln, MFS, and Putnam Funds offered as
part of this contract make payments to us under their distribution plans (12b-1
plans) in consideration of services provided and expenses incurred by us in
distributing Fund shares. The payment rates range from 0% to 0.30% based on the
amount of assets invested in those Funds. Payments made out of the assets of
the fund will reduce the amount of assets that otherwise would be available for
investment, and will reduce the return on your investment. The dollar amount of
future asset-based fees is not predictable because these fees are a percentage
of the fund's average net assets, which can fluctuate over time. If, however,
the value of the fund goes up, then so would the payment to us (or our
affiliates). Conversely, if the value of the funds goes down, payments to us or
our affiliates would decrease.
Description of the funds
Each of the subaccounts of the VAA is invested solely in shares of one of the
funds available under the contract. Each fund may be subject to certain
investment policies and restrictions which may not be changed without a
majority vote of shareholders of that fund.
We select the funds offered through the contract based on several factors,
including, without limitation, asset class coverage, the strength of the
manager's reputation and tenure, brand recognition, performance, and the
capability and qualification of each sponsoring investment firm. Another factor
we consider during the initial selection process is whether the fund or an
affiliate of the fund will compensate us for providing administrative,
marketing, and/or support services that would otherwise be provided by the
fund, the fund's investment advisor, or its distributor. We review each fund
periodically after it is selected. Upon review, we may remove a fund or
restrict allocation of additional purchase payments to a fund if we determine
the fund no longer meets one or more of the factors and/or if the fund has not
attracted significant contractowner assets. Finally, when we develop a variable
annuity product in cooperation with a fund family or distributor (e.g., a
"private label" product), we generally will include funds based on
recommendations made by the fund family or distributor, whose selection
criteria may differ from our selection criteria.
The Scudder VIT EAFE Index Fund (Scudder Fund) will be closing in July, 2005.
Between now and July 19,2005, you may transfer your contract value from the
Scudder Fund to any of the other available subaccounts in your contract. If you
have not transferred your contract value to a different subaccount by July 19,
2005, we will transfer any remaining contract value in the Scudder Fund
Subaccount to the Lincoln VIP Money Market Subaccount. After that time, you may
transfer your contract value from the Lincoln VIP Money Market Subaccount to
any of the other available investment options. There is no charge for a
transfer made pursuant to the closing of the Scudder Fund and this transfer
will not count against the number of transfers you are allowed under your
contract, if the transfer is made within 30 days after the closing of the
Scudder Fund.
Certain funds offered as part of this contract have similar investment
objectives and policies to other portfolios managed by the adviser. The
investment results of the funds, however, may be higher or lower than the other
portfolios that are managed by the
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adviser or sub-adviser. There can be no assurance, and no representation is
made, that the investment results of any of the funds will be comparable to the
investment results of any other portfolio managed by the adviser or
sub-adviser, if applicable.
Following are brief summaries of the fund description. More detailed
information may be obtained from the current prospectus for the fund which
accompanies this booklet. You should read each fund prospectus carefully before
investing. Please be advised that there is no assurance that any of the funds
will achieve their stated objectives.
· Download Table
FUND NAME FUND DESCRIPTION MANAGER
AIM V.I. Growth Fund Capital appreciation AIM Advisors, Inc.
AIM V.I. International Long-term growth AIM Advisors, Inc.
Growth Fund
AIM V.I. Premier Equity Long-term growth AIM Advisors, Inc.
Fund
AllianceBernstein Growth and income Alliance Capital
Growth and Income Management, L.P.
Portfolio
AllianceBernstein Large Capital appreciation Alliance Capital
Cap Growth Portfolio Management, L.P.
AllianceBernstein Long-term growth Alliance Capital
Small/Mid Cap Value Management, L.P.
Portfolio
AllianceBernstein Global Maximum capital appreciation Alliance Capital
Technology Portfolio Management, L.P.
American Century Inflation protection American Century
Investments VP
Inflation Protection
Fund
American Funds Global Long-term growth Capital Research and
Growth Fund Management Company
American Funds Global Long-term growth Capital Research and
Small Capitalization Management Company
Fund
American Funds Growth Long-term growth Capital Research and
Fund Management Company
American Funds Growth and income Capital Research and
Growth-Income Fund Management Company
American Funds Long-term growth Capital Research and
International Fund Management Company
Delaware VIP Capital Current income Delaware Management
Reserves Series Company
Delaware VIP Total return Delaware Management
Diversified Income Company
Series
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· Enlarge/Download Table
FUND NAME FUND DESCRIPTION MANAGER
Delaware VIP Emerging Capital appreciation Delaware Management
Markets Series Company Sub-advised
by Mondrian
Investment Partners
Limited
Delaware VIP High Yield Capital appreciation Delaware Management
Series Company
Delaware VIP REIT Total return Delaware Management
Series Company
Delaware VIP Small Cap Capital appreciation Delaware Management
Value Series Company
Delaware VIP Trend Capital appreciation Delaware Management
Series Company
Delaware VIP U.S. Capital appreciation Delaware Management
Growth Series Company
Delaware VIP Value Long-term capital appreciation Delaware Management
Series Company
Fidelity (Reg. TM) VIP Long-term capital appreciation Fidelity Management
Contrafund (Reg. TM) Portfolio and Research Company
Fidelity (Reg. TM) VIP Reasonable income Fidelity Management
Equity-Income Portfolio and Research Company
Fidelity (Reg. TM) VIP Growth Capital appreciation Fidelity Management
Portfolio and Research Company
Fidelity (Reg. TM) VIP Mid Cap Long-term growth Fidelity Management
Portfolio and Research Company
Fidelity (Reg. TM) VIP Overseas Long-term growth Fidelity Management
Portfolio and Research Company
FTVIPT Templeton Total return Templeton Global
Global Income Advisors Limited
Securities Fund
FTVIPT Franklin Long-term growth Franklin Advisers, Inc.
Small-Mid Cap Growth
Securities Fund
FTVIPT Templeton Long-term growth Templeton Global
Growth Securities Fund Advisors Limited
Janus Aspen Balanced Long-term growth and current income Janus Capital
Portfolio Management LLC
Janus Aspen Mid Cap Long-term growth Janus Capital
Growth Portfolio Management LLC
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