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Lincoln New York Account N for Variable Annuities, et al. · 485BPOS · On 4/22/05

Filed On 4/22/05 2:25pm ET   ·   SEC Files 333-91182, 811-09763   ·   Accession Number 1193125-5-82562

  in   Show  and 
  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

Post-Effective Amendment
Filing Table of Contents

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 


485BPOS   ·   Lincoln Financial Group
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page
2Table of Contents
"Total Expenses
"Market timing
"Withdrawals
"Guaranteed periods
20Annuity Reserves
69Net Unrealized Gain on Securities Available-for-Sale
71Property and Equipment
75Accounting for Costs Associated with Exit or Disposal Activities
83Gmdb
86Accounting for Derivative Instruments and Hedging Activities
87Investment Type Insurance Contracts
92Item 24. Financial Statements and Exhibits
"Item 25. Directors and Officers of the Depositor
"Item 26. Persons Controlled by or Under Common Control with the Depositor or Registrant
"Item 27. Number of Contractowners
"Item 28. Indemnification
"Item 29. Principal Underwriter
"Item 30. Location of Accounts and Records
"Item 31. Management Services
"Item 32. Undertakings
485BPOS1st "Page" of 92TOCTopPreviousNextBottomJust 1st
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.
485BPOS2nd "Page" of 92TOC1stPreviousNextBottomJust 2nd
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. 11 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 12 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 13 · 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 14