FOR IMMEDIATE RELEASE                                    2000-74

    SEC Helps Investors Weigh Benefits And Costs Of Variable
                            Annuities
           New Online Brochure Also Includes Cautions

     Washington, DC, June 5, 2000 -- The U.S. Securities and
Exchange Commission today unveiled a new online brochure to help
investors better understand the benefits, risks, and costs of
variable annuities.  Variable annuities are insurance contracts
whose value depends on underlying investments, typically mutual
funds, but they differ from mutual funds in several important
ways.

     SEC Chairman Arthur Levitt said, "Variable annuities are an
increasingly popular vehicle for the long-term retirement
planning of many Americans.  We hope this brochure will create a
better understanding of these often complex investments,
including their risks and costs."

     The brochure, "Variable Annuities:  What You Should Know,"
explains that variable annuities can offer attractive benefits to
some long-term investors, including periodic payments for life,
guaranteed death benefits, and tax deferral.  But the brochure
also includes several cautions:
     
  *  IRAs.  If an investor buys a variable annuity through a tax-
     advantaged retirement plan, such as an IRA, he or she will get no
     additional tax advantage from the variable annuity.  Under these
     circumstances, an investor should consider buying a variable
     annuity only if it makes sense because of the annuity's other
     features, such as lifetime income payments and death benefit
     protection.

  *  Charges.  Investors should make sure they understand the
     charges associated with a variable annuity before they invest.
     Charges include sales charges payable on surrender and annual
     charges, including mortality and expense risk charges,
     administrative fees, and the expenses of the mutual fund
     investment options.
  
  *  Exchanges.  Investors who already own a variable annuity and
     are considering exchanging it for another variable annuity should
     weigh the decision carefully.  Although the exchange is tax-free
     and there may be no charges imposed at the time of the exchange,
     a new surrender charge period generally begins when a contract is
     exchanged.  This means that an investor who makes an exchange
     often forfeits the ability to withdraw money without paying
     substantial surrender charges.

  *  Bonuses.  Some insurance companies have recently introduced
     variable annuity contracts with "bonus credit" features.  These
     contracts typically add a bonus credit of 1% or more to an
     annuity owner's purchase payments.  Variable annuities with bonus
     credits may carry a downside, however - higher expenses that can
     outweigh the benefit of the bonus credit.

     Paul Roye, Director of the SEC's Division of Investment
Management, said, "The variable annuity brochure provides helpful
information on this important issue for the first time.  It also
highlights several areas where investors need to exercise caution
and ask hard questions of their financial professional - the use
of a variable annuity in an IRA or other tax-deferred vehicle,
fees and charges, tax-free exchanges, and bonus payments."

     "Variable Annuities: What You Should Know" is available on
the "Investor Assistance" section of the SEC's website, at
<www.sec.gov>.  The SEC's website also features "Invest Wisely:
An Introduction to Mutual Funds," "Mutual Fund Investing: Look at
More Than a Fund's Past Performance," and the SEC's Mutual Fund
Cost Calculator, which helps investors compare the long-term
impact of fund sales charges, fees, and expenses.

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