As filed with the Securities and Exchange Commission on May 1, 2000
Registration No. 333-42113
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
POST-EFFECTIVE AMENDMENT NO. 3
A. Exact name of trust: Pioneer Independence Plans
B. Name of depositor: Pioneer Funds Distributor, Inc.
C. Complete address of depositor's
principal executive offices: 60 State Street
Boston, MA 02109-1820
D. Name and complete address
of agent for service: Robert P. Nault, Esq.
The Pioneer Group, Inc.
60 State Street
Boston, MA
Copy to: Joseph P. Barri, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment
E. Title of securities being
registered: Pioneer Independence Plans
F. Approximate date of proposed
public offering: Not applicable
[ ] Check box if it is proposed that this filing will become effective on (date)
at (time) pursuant to Rule 487
<PAGE>
PIONEER INDEPENDENCE PLANS
Reconciliation and Tie of Information in Prospectus
with Items of Form N-8B-2 pursuant to
Instruction 4 of Form S-6
ITEM
NUMBER LOCATION IN PROSPECTUS OR PROSPECTUS CAPTION(S)
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Cover page; Employer identification numbers
1. (b) Cover page
2. Basic information about the plans; The sponsor; Employer
identification numbers
3. The custodian; Employer identification numbers
4. Basic information about the plans; The sponsor; Employer
identification numbers
5. The sponsor; The custodian
6. (a) Basic information about the plans; The custodian
6. (b) Basic information about the plans; The custodian
7. Not applicable
8. Omitted pursuant to Instruction 3(a) of Form S-6
9. Not applicable
II. GENERAL DESCRIPTION OF TRUST AND SECURITIES OF THE TRUST
10. (a) Basic information about the plans; The custodian;
Accompanying prospectus for Pioneer Independence Funds
10. (b) Dividends, capital gains and taxes
10. (c) General rules on withdrawals and terminations
10. (d) Partial withdrawals without terminating a plan; Terminating
your plan; Systematic withdrawal program; Transfer or
assignment of rights in a plan; Fund substitution
10. (e) Cancellation rights; Surrender rights; Replacement of
partial withdrawals without terminating a plan; Replacement
privilege on termination; Termination of a plan by Pioneer
or State Street Bank
10. (f) Basic information about the plans; Voting rights in fund
shares
10. (g) (1) Creation and sales charge; Fund substitution
10. (g) (2) Fund substitution
10. (g) (3) Basic information about the plans
10. (g) (4) Basic information about the plans
10. (h) (1) Fund substitution
10. (h) (2) Basic information about the plans
10. (h) (3) Basic information about the plans; The custodian
10. (h) (4) Basic information about the plans; The custodian
10. (i) Extended investment option; Creation and sales charges;
Qualifying for reduced sales charges; Purchasing Two or
more plans; Rights of accumulation; Making investments ahead
of schedule to complete a plan early; Changing the face
amount of you plan; Requesting a transaction; Retirement
plans; Voluntary tax withholding; Other policies
11. Basic information about the plans; Basic information
about the plans and fund
12. (a) Basic information about the plans
12. (b) Not applicable
12. (c) Accompanying prospectus for Pioneer Independence Fund
12. (d) Accompanying prospectus for Pioneer Independence Fund
12. (e) Not applicable
13. (a) Basic information about the plans and fund; Choosing a face
amount; Creation and sales charges; Service charges and
other fees; Accompanying prospectus for Pioneer Independence
Fund
13. (b)-(e) Creation and sales charge; Choosing a face amount; A typical
$100 monthly investment plan; Creation and sales charges;
Qualifying for reduced sales charges; Purchasing two or more
plans; Rights of accumulation; Changing the face amount of
your plan
13. (f) Omitted pursuant to Instruction 3 of Form S-6
13. (g) Omitted pursuant to Instruction 3 of Form S-6
14. Basic information about the plans; Investments, withdrawals
and terminations; General rules on withdrawals and
terminations; The custodian
15. Automatic investments; By check
16. Basic information about the plans; The custodian;
Accompanying prospectus for Pioneer Independence Fund
17. (a) General rules on withdrawals and terminations; Systematic
withdrawal program
17. (b) Basic information about the plans; The custodian;
Accompanying prospectus for Pioneer Independence Fund
17. (c) Investments, withdrawals and terminations; Termination
of a plan by Pioneer or State Street Bank
18. (a) Omitted pursuant to Instruction 3 of Form S-6
18. (b) Dividends, capital gains and taxes; Accompanying prospectus
for Pioneer Independence Fund
18. (c) Omitted pursuant to Instruction 3 of Form S-6
18. (d) Omitted pursuant to Instruction 3 of Form S-6
19. Statements, reports and notices; Dividends, capital gains
and taxes
20. (a) Omitted pursuant to Instruction 3 of Form S-6
20. (b) The custodian
20. (c) The custodian
20. (d) Omitted pursuant to Instruction 3 of Form S-6
20. (e) The sponsor
20. (f) Omitted pursuant to Instruction 3 of Form S-6
21. (a) Omitted pursuant to Instruction 3 of Form S-6
21. (b) Omitted pursuant to Instruction 3 of Form S-6
21. (c) Omitted pursuant to Instruction 3 of Form S-6
22. Custodian Agreement (exhibit)
23. Response set forth in Form N-8B-2 only
24. Omitted pursuant to Instruction 3 of Form S-6
VI. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. The sponsor
26. (a) Financial statements
26. (b) (1) Basic information about the plans and fund; Accompanying
prospectus for Pioneer Independence Fund
26. (b) (2) Basic information about the plans and fund; Accompanying
prospectus for Pioneer Independence Fund
26. (b) (3) Basic information about the plans and fund; Accompanying
prospectus for Pioneer Independence Fund
26. (b) (4) Accompanying prospectus for Pioneer Independence Fund
27. The sponsor; Accompanying prospectus for Pioneer
Independence Fund
28. (a) The sponsor
28. (b) Names, positions and offices
29. The sponsor
30. Omitted pursuant to Instruction 3 of Form S-6
31. Omitted pursuant to Instruction 3 of Form S-6
32. Omitted pursuant to Instruction 3 of Form S-6
33. Omitted pursuant to Instruction 3 of Form S-6
34. Omitted pursuant to Instruction 3 of Form S-6
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. (A) Pioneer Independence Plans
35. (B) Omitted pursuant to Instruction 3 of Form S-6
35. (C) Omitted pursuant to Instruction 3 of Form S-6
36. Omitted pursuant to Instruction 3 of Form S-6
37. Omitted pursuant to Instruction 3 of Form S-6
38. (a) Basic information about the plans
38. (b) The sponsor
38. (c) Face amount; The sponsor
39. (a) The sponsor
39. (b) The sponsor
40. Financial statements
41. (a) The sponsor; Accompanying prospectus for Pioneer
Independence Fund
41. (b) Omitted pursuant to Instruction 1 of Form S-6
41. (c) Omitted pursuant to Instruction 1 of Form S-6
42. Omitted pursuant to Instruction 3 of Form S-6
43. Omitted pursuant to Instruction 3 of Form S-6
44. (a) Accompanying prospectus for Pioneer Independence Fund
44. (b) Financial statements
44. (c) 15-Year Plan; 25-Year Plan Extended Investment Option;
Purchasing two or more plans; Rights of accumulation
45. Omitted pursuant to Instruction 3 of Form S-6
46. Omitted pursuant to Instruction 3 of Form S-6
47. Basic information about the plans and fund; Fund
substitution; The custodian
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. The custodian
49. Service charges and other fees
50. Omitted pursuant to Instruction 3 of Form S-6
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Omitted pursuant to Instruction 3 of Form S-6
VII. POLICY OF REGISTRANT/REGULATED INVESTMENT COMPANY
52. (a) Fund substitution
52. (b) Omitted pursuant to Instruction 3 of Form S-6
52. (c) (1) Fund substitution
52. (c) (2) Fund substitution
52. (c) (3) Omitted pursuant to Instruction 3 of Form S-6
52. (c) (4) Fund substitution
52. (c) (5) Fund substitution
52. (d) Omitted pursuant to Instruction 3 of Form S-6
53. Dividends, capital gains and taxes; Accompanying
prospectus for Pioneer Independence Fund
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Omitted pursuant to Instruction 3 of Form S-6
55. A typical $100 monthly investment plan
56. Omitted pursuant to Instruction 1 of Form S-6
57. Omitted pursuant to Instruction 1 of Form S-6
58. Omitted pursuant to Instruction 1 of Form S-6
59. (a)(1) Balance sheet, statement of operations, statement of
changes in net assets and notes to financial statements
at December 31, 1999 for Pioneer Independence Plans
59. (a)(2) Not applicable
59. (c)(1) Consolidated statement of financial condition at
December 31, 1999 for Pioneer Funds Distributor, Inc.
59. (c)(2) Consolidated statement of operations, consolidated statement
of changes in stockholder's equity, consolidated statement
of cash flows and notes to consolidated financial statements
at December 31, 1999 for Pioneer Funds Distributor, Inc.
<PAGE>
[PIONEER LOGO]
PIONEER
INDEPENDENCE PLANS
PROSPECTUS,
MAY 1, 2000
Contents
Basic information about the plans 1
Basic information about the plans and fund 2
Investments, withdrawals and terminations 3
Plan owner options and services 10
Plan rights and policies 11
Dividends, capital gains and taxes 14
Service charges and other fees 15
Additional information 15
Financial statements 17
The plan prospectus must be accompanied by the fund's current prospectus. You
should read both prospectuses and keep them for future reference.
Shares of the fund are offered to the general public only through the plans.
You have the right to a refund of the current value of your fund shares during
the 18 months after your plan purchase. You also have other limited refund
rights under the conditions described in more detail under "Plan rights and
policies."
An investment in the fund is not a bank deposit and is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.
Neither the Securities and Exchange Commission nor any state securities agency
has approved the plans or the fund's shares or determined whether these
prospectuses are accurate or complete. Any representation to the contrary is a
crime.
<PAGE>
BASIC INFORMATION ABOUT THE PLANS
Pioneer Funds Distributor, Inc., the plans' sponsor, designed PIONEER
INDEPENDENCE PLANS to help you create an investment fund for future capital or
income needs and build equity over a period of years by systematically investing
a modest sum each month in shares of Pioneer Independence Fund. Under a plan,
you make fixed monthly investments for 15 years (a total of 180 investments),
with the option to make additional monthly investments for 25 years (a total of
300 investments).
You should consider the following aspects of the plan before making an
investment:
o A plan represents an agreement among you, Pioneer, and State Street Bank
and Trust Company, the plan's custodian. Under this agreement, the
custodian applies your plan investments (after deduction of creation and
sales charges and other fees) to the purchase of shares of the fund at net
asset value. No agent or other person has the authority to modify, alter or
otherwise change the terms of the plan or to bind Pioneer, the custodian or
the issuer of fund shares by any statement, written or oral, not contained
in this prospectus.
[TEXT BOX]
CREATION AND SALES CHARGE
>The custodian will deduct a creation and sales charge, sometimes called a
front-end load, of up to 50% from each of your first 12 investments.
[END BOX]
o Pioneer receives a creation and sales charge as compensation for its
services and costs in creating the plans and arranging for their
administration, for making fund shares available to you at their net asset
value and for certain selling expenses and commissions with respect to the
plans. The custodian deducts this charge from each of your first 12 monthly
plan investments. There is no creation and sales charge on investments 13
through 180 (or on investments under the extended investment option).
o If you complete all scheduled payments under a 15-year plan, you will pay a
maximum creation and sales charge of 3.33% of the total plan investments.
If, however, you withdraw part of your investment or terminate your plan
before making the first 12 investments in your plan, you will probably lose
money because of the creation and sales charge. If you terminate your plan
after 18 months, the creation and sales charge may amount to as much as
31.6% of your plan investments. You should therefore consider a plan a
long-term investment.
o Your plan's value is based on the value of the fund shares in your plan.
The value of the fund shares is, in turn, based on the value of the
securities in its portfolio. The fund's investment results will vary
depending on the composition of its portfolio, market conditions and the
fund's operating expenses. A plan calls for monthly investments at regular
intervals regardless of the price of fund shares. You should therefore
consider your financial ability to continue investments in a plan. You will
lose money if you terminate your plan at a time when the value of the fund
shares in your plan is less than your plan's cost.
o Your plan investments are not direct ownership of fund shares. Rather, your
plan represents an interest in a trust that has direct ownership of the
fund's shares on behalf of each plan owner. You have only a beneficial
interest in the underlying shares of the fund. You will, however, retain
full voting rights with respect to the underlying shares of the fund. The
custodian will vote the shares held for your account in accordance with
your instructions.
o The custodian or Pioneer may terminate your plan if you fail to make
investments under your plan for a period of 12 consecutive months or if
fund shares are not available and a substitution is not made. You will be
notified of any substitution of the plan's underlying investment.
o Your dealer firm of record has proprietary rights to all commissions,
including any service fees earned from Pioneer for the duration of your
plan. The dealer is not obligated to transfer your plan to another dealer
firm as long as its dealer agreement with Pioneer is still in effect. As a
result, if you engage a new dealer, the new dealer may have no direct
incentive to provide services with respect to your plan. If the dealer firm
of record chooses to release your plan to the new dealer firm, the new
dealer firm must first complete, sign and signature guarantee a release
form that can be obtained from Pioneer. The form must be returned to BFDS
and accepted by the custodian.
o Pioneer is not required to notify you or seek your approval prior to
replacing the custodian. The terms of the custodian agreement,
however, cannot be amended to adversely affect your rights and privileges
without obtaining your written consent.
1
<PAGE>
BASIC INFORMATION ABOUT THE PLANS AND FUND
You should read the attached prospectus for the fund before investing. The
following is only a summary of the information contained in the fund's
prospectus.
INVESTMENT OBJECTIVE OF THE FUND Growth of capital.
INVESTMENT STRATEGY
The fund invests at least 80% of its assets in common stocks and securities that
trade like common stocks. Pioneer Investment Management, Inc., the fund's
investment adviser, uses a value approach to select the fund's investments. Even
though the fund seeks capital growth, you could lose money on your investment.
FEES AND EXPENSES
These are the fees and expenses, based on plan creation and sales charges and
the fund's latest fiscal year, you may pay if you invest in a plan.
<TABLE>
<CAPTION>
PLAN OWNER FEES
paid directly from your investment
- ------------------------------------------------------------ ----------------------
<S> <C>
Maximum sales charge (load) when you buy
shares as a percentage of offering price 50.00%1
- ------------------------------------------------------------ ----------------------
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
PAID FROM THE ASSETS OF THE FUND
as a percentage of average daily net assets2
- ------------------------------------------------------------ ---------------------
Management Fee 0.75%
- ------------------------------------------------------------ ---------------------
Distribution and Service (12b-1) Fee 0.25%
- ------------------------------------------------------------ ---------------------
Other Expenses 5.41%
- ------------------------------------------------------------ ---------------------
Total Annual Fund Operating Expenses 6.41%
- ------------------------------------------------------------ ---------------------
1 A creation and sales charge of up to 50% may be deducted from your first
12 investments. There is no creation and sales charge on investments 13
through 180 (or on investments under the extended investment option). If
you complete scheduled payments over a 15-year plan, you will pay a
creation and sales charge of up to 3.33%.
2 Pioneer has agreed not to impose all or a portion of its management fee
and, if necessary, to limit other operating expenses of the fund to the
extent required to reduce expenses to 1.50% of the average daily net
assets of the fund. This agreement is voluntary and temporary and may be
revised or terminated at any time. Actual management fees, distribution
and service fees, other expenses and total fund operating expenses paid
by the fund for the fiscal year ended December 31, 1999 were:
Management Fee 0.00%
Distribution and Service (12b-1) Fee 0.02%
Other Expenses 1.48%
Total Annual Fund Operating Expenses 1.50%
</TABLE>
EXAMPLE
This example helps you compare the cost of investing in a plan with the cost of
investing in other mutual fund investments. It assumes that: a) you make a $75
monthly investment in the plan for the time periods shown (a total investment of
$13,500 after completing a 15-year plan), b) you reinvest all dividends and
distributions, c) your investment has a 5% return each year and d) the fund's
operating expenses remain the same.
<TABLE>
<CAPTION>
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
IF YOU SELL YOUR SHARES IF YOU DO NOT SELL YOUR SHARES
- ---------------------------------------------------------------- ---------------------------------------------------------------
NUMBER OF YEARS YOU OWN YOUR SHARES
- --------------------------------------------------------------------------------------------------------------------------------
1 3 5 10 1 3 5 10
- ----------------- -------------- -------------- ---------------- -------------- --------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
$83 $641 $1,039 $2,968 $466 $641 $1,039 $2,968
- ----------------- -------------- -------------- ---------------- -------------- --------------- -------------- -----------------
</TABLE>
2
<PAGE>
INVESTMENTS, WITHDRAWALS AND TERMINATIONS
CHOOSING A FACE AMOUNT
[TEXT BOX]
FACE AMOUNT
The face amount of your plan is the total value of the monthly plan investments
you have scheduled to make for your plan.
[END BOX]
Use the following tables to select among the range of available monthly plan
investment options. Each table shows the face amount of the plan, the creation
and sales charges that will be charged and the total charges as a percentage of
the total amount invested under a plan and as a percentage of the net amount
invested. This information is based solely on investments made under a plan and
does not reflect any investment performance, dividend or income from the fund
over the period of a plan, or expenses of the fund or any other charges.
The creation and sales charges shown are specified under the plans and may not
be increased. The fund also incurs expenses, which are not specified under the
terms of the plans and may vary from year to year.
<TABLE>
<CAPTION>
15-YEAR PLAN
Use this table to select your monthly plan investment for a 15-year plan.
CREATION AND SALES CHARGE
---------------------------------------------------------------------------------------
FACE AMOUNT PER PER TO NET
MONTHLY PLAN (TOTAL INVESTMENT INVESTMENT TOTAL SALES TO TOTAL INVESTMENT MONTHLY PLAN
INVESTMENT INVESTMENT) 1 THRU 12 13 THRU 180 CHARGE (A) INVESTMENT IN SHARES INVESTMENT
- ---------------- --------------- -------------- -------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$50.00 $9,000.00 $25.00 $0 $300.00 3.33% 3.45% $50.00
75.00 13,500.00 37.50 0 450.00 3.33% 3.45% 75.00
100.00 18,000.00 50.00 0 600.00 3.33% 3.45% 100.00
125.00 22,500.00 62.50 0 750.00 3.33% 3.45% 125.00
150.00 27,000.00 75.00 0 900.00 3.33% 3.45% 150.00
166.66 29,998.80 83.33 0 999.96 3.33% 3.45% 166.66
200.00 36,000.00 100.00 0 1,200.00 3.33% 3.45% 200.00
250.00 45,000.00 125.00 0 1,500.00 3.33% 3.45% 250.00
300.00 54,000.00 150.00 0 1,800.00 3.33% 3.45% 300.00
350.00 63,000.00 175.00 0 2,100.00 3.33% 3.45% 350.00
400.00 72,000.00 200.00 0 2,400.00 3.33% 3.45% 400.00
450.00 81,000.00 225.00 0 2,700.00 3.33% 3.45% 450.00
500.00 90,000.00 250.00 0 3,000.00 3.33% 3.45% 500.00
600.00 108,000.00 300.00 0 3,600.00 3.33% 3.45% 600.00
700.00 126,000.00 350.00 0 4,200.00 3.33% 3.45% 700.00
800.00 144,000.00 400.00 0 4,800.00 3.33% 3.45% 800.00
900.00 162,000.00 450.00 0 5,400.00 3.33% 3.45% 900.00
1,000.00 180,000.00 500.00 0 6,000.00 3.33% 3.45% 1,000.00
1,250.00 225,000.00 625.00 0 7,500.00 3.33% 3.45% 1,250.00
1,500.00 270,000.00 675.00 0 8,100.00 3.00% 3.09% 1,500.00
1,750.00 315,000.00 700.00 0 8,400.00 2.67% 2.74% 1,750.00
2,000.00 360,000.00 750.00 0 9,000.00 2.50% 2.56% 2,000.00
2,500.00 450,000.00 812.50 0 9,750.00 2.17% 2.21% 2,500.00
5,000.00 900,000.00 1,250.00 0 15,000.00 1.67% 1.69% 5,000.00
$10,000.00 $1,800,000.00 $1,500.00 $0 $18,000.00 1.00% 1.01% $10,000.00
(A) Does not include an annual distribution and service fee paid by the fund of
up to 0.25% based on the fund's average daily net assets. See the fund's
prospectus.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
25-YEAR PLAN EXTENDED INVESTMENT OPTION
Use this table to select your monthly plan investment for a 25-year plan under
the extended investment option.
CREATION AND SALES CHARGE
---------------------------------------------------------------------------------------
FACE PER PER TO NET
MONTHLY PLAN AMOUNT (TOTAL INVESTMENT INVESTMENT TOTAL SALES TO TOTAL INVESTMENT MONTHLY PLAN
INVESTMENT INVESTMENT) 1 THRU 12 13 THRU 300 CHARGE (A) INVESTMENT IN SHARES INVESTMENT
- ---------------- --------------- -------------- -------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$50.00 $15,000.00 $25.00 $0 $300.00 2.00% 2.04% $50.00
75.00 22,500.00 37.50 0 450.00 2.00% 2.04% 75.00
100.00 30,000.00 50.00 0 600.00 2.00% 2.04% 100.00
125.00 37,500.00 62.50 0 750.00 2.00% 2.04% 125.00
150.00 45,000.00 75.00 0 900.00 2.00% 2.04% 150.00
166.66 49,998.00 83.33 0 999.96 2.00% 2.04% 166.66
200.00 60,000.00 100.00 0 1,200.00 2.00% 2.04% 200.00
250.00 75,000.00 125.00 0 1,500.00 2.00% 2.04% 250.00
300.00 90,000.00 150.00 0 1,800.00 2.00% 2.04% 300.00
350.00 105,000.00 175.00 0 2,100.00 2.00% 2.04% 350.00
400.00 120,000.00 200.00 0 2,400.00 2.00% 2.04% 400.00
450.00 135,000.00 225.00 0 2,700.00 2.00% 2.04% 450.00
500.00 150,000.00 250.00 0 3,000.00 2.00% 2.04% 500.00
600.00 180,000.00 300.00 0 3,600.00 2.00% 2.04% 600.00
700.00 210,000.00 350.00 0 4,200.00 2.00% 2.04% 700.00
800.00 240,000.00 400.00 0 4,800.00 2.00% 2.04% 800.00
900.00 270,000.00 450.00 0 5,400.00 2.00% 2.04% 900.00
1,000.00 300,000.00 500.00 0 6,000.00 2.00% 2.04% 1,000.00
1,250.00 375,000.00 625.00 0 7,500.00 2.00% 2.04% 1,250.00
1,500.00 450,000.00 675.00 0 8,100.00 1.80% 1.83% 1,500.00
1,750.00 525,000.00 700.00 0 8,400.00 1.60% 1.63% 1,750.00
2,000.00 600,000.00 750.00 0 9,000.00 1.50% 1.52% 2,000.00
2,500.00 750,000.00 812.50 0 9,750.00 1.30% 1.32% 2,500.00
5,000.00 1,500,000.00 1,250.00 0 15,000.00 1.00% 1.01% 5,000.00
$10,000.00 $3,000,000.00 $1,500.00 $0 $18,000.00 0.60% 0.60% $10,000.00
(A) Does not include an annual distribution and service fee paid by the fund of
up to 0.25% based on the fund's average daily net assets. See the fund's
prospectus.
</TABLE>
4
<PAGE>
A TYPICAL $100 MONTHLY INVESTMENT PLAN
This table shows you the investments and deductions under a plan for a typical
$100 monthly investment plan. The 15-year schedule assumes that all investments
were made in accordance with the terms of Pioneer Independence Plans. The
25-year schedule reflects the charges applicable to a 15-year plan that is
continued under the extended investment option. The table does not reflect fund
performance, fund expenses or the payment of any dividends or distributions by
the fund.
<TABLE>
<CAPTION>
AT THE END OF 6 MONTHS AT THE END OF 1 YEAR AT THE END OF 2 YEARS
AGGREGATE AMOUNT (6 INVESTMENTS) (12 INVESTMENTS) (24 INVESTMENTS)
-------------------------- -------------------------- ------------------------- -------------------------
% OF TOTAL % OF TOTAL % OF TOTAL % OF TOTAL
AMOUNT INVESTMENT AMOUNT INVESTMENT AMOUNT INVESTMENT AMOUNT INVESTMENT
- --------------------- ------------ ------------- ------------ ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
15 YEARS (180
INVESTMENTS)
Total Investments $18,000 100.00% $600 100% $1,200 100% $2,400 100%
Deduct:
Creation and
Sales Charge $600 3.33% $300 50% $600 50% $600 25%
Net Amount
Invested in a Plan $17,400 96.67% $300 50% $600 50% $1,800 75%
25 YEARS (300
INVESTMENTS)
Total Investments $30,000 100.00% $600 100% $1,200 100% $2,400 100%
Deduct:
Creation and
Sales Charge $600 2.00% $300 50% $600 50% $600 25%
Net Amount
Invested in a Plan $29,400 98.00% $300 50% $600 50% $1,800 75%
</TABLE>
MAKING YOUR MONTHLY INVESTMENTS
To start a plan, complete the plan application indicating your monthly plan
investment amount. You may make plan payments automatically or by check. The
minimum monthly investment is $50.00.
[TEXT BOX]
AUTOMATIC INVESTMENTS
Consider investing automatically through military or government allotments or
preauthorized check transactions (PACT). The plans are specifically designed for
regular monthly investing.
[END BOX]
AUTOMATIC INVESTMENTS To use an automatic investment option complete the
required forms and give them to your investment dealer for transfer to Boston
Financial Data Services (BFDS), the custodian's transfer agency subsidiary (the
plan transfer agent). Each plan for which you elect an automatic investment
option is funded automatically each month through your bank account, PACT or,
for U.S. military personnel, a government allotment. The plan transfer agent
must receive a request to terminate a PACT at least 15 days prior to the date of
the next scheduled monthly plan investment.
BY CHECK To invest by check, have your investment dealer send your check to the
plan transfer agent with your plan application. Write your check for the amount
of your initial monthly plan investment and make it payable to State Street Bank
and Trust Company.
After the custodian accepts your plan application and the plan transfer agent
receives your initial investment, you will receive a confirmation statement
showing the number of whole and fractional fund shares purchased for your plan.
After the initial investment, you should send regularly scheduled monthly plan
investments, made payable to State Street Bank and Trust Company, directly to
the plan transfer agent. If you do not make monthly plan investments for a
period of 12 consecutive months, Pioneer or the custodian may terminate your
plan.
Address all correspondence regarding your plan to your investment dealer or to
Boston Financial Data Services, P.O. Box 8300, Boston, Massachusetts 02266-8300.
5
<PAGE>
EXTENDED INVESTMENT OPTION
Under the extended investment option, you may continue making monthly
investments after you complete all scheduled investments under your 15-year
plan. When you complete 300 monthly plan investments, your extended investment
option will terminate. The custodian will not accept investments after that
date.
CREATION AND SALES CHARGES
Pioneer receives a creation and sales charge as compensation for its services
and costs in creating the plans and arranging for their administration, for
making fund shares available to you at their net asset value and for certain
selling expenses and commissions with respect to the plans. The custodian
deducts this charge from each of your first 12 monthly plan investments. For
example, on a $100 a month plan, the custodian deducts $50 from each of the
first 12 plan investments. After you make your twelfth investment, the custodian
will not deduct a creation and sales charges unless you increase your monthly
plan investment amount. Larger plans may be eligible for smaller the creation
and sales charges.
QUALIFYING FOR REDUCED SALES CHARGES
To qualify for reduced creation and sales charges, you must submit a written
request that the applicable creation and sales charge for the new plan(s) be
calculated by combining the face amounts of existing plans and/or the then
current net asset value of other Pioneer mutual fund accounts with the face
amounts indicated on any new plan applications.
PURCHASING TWO OR MORE PLANS The face amounts of two or more plans purchased at
one time by "any person" may be combined to take advantage of the lower creation
and sales charges available on larger sized plans. Creation and sales charges
will be determined by the face amounts of the plans selected and the current
value of other Pioneer mutual fund accounts.
[TEXT BOX]
ANY PERSON
The term "any person" includes:
o You, your spouse, your children under the age of 21 and your grandchildren
under age 21 who are beneficiaries of a Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act account in which you serve as custodian, or
o A trustee or other fiduciary of a single trust estate or single fiduciary
account (including a pension, profit-sharing or other employee benefit
trust created pursuant to a plan qualified under Section 401 of the
Internal Revenue Code of 1986, as amended).
[END BOX]
RIGHTS OF ACCUMULATION
You may have a right of accumulation when purchasing any new plan(s) or
increasing the face amount of any existing plan(s). If such plans are registered
in the name of "any person" (see above), the plans may qualify for a reduced
creation and sales charge on the new plan(s) by combining the face amount of the
new plan(s) with the face amount(s) of any existing plan(s) on which investments
due are current (see below) and/or with the current value of shares owned in
certain other Pioneer mutual funds for which Pioneer Investment Management, Inc.
or an affiliate is the investment manager.
To qualify for rights of accumulation, your plan must be current. Your
plan is current if:
o It has been completed and not redeemed;
o It has not been completed but has at least as many investments recorded
as there are months elapsed since the establishment date or since a plan
face amount increase date; or
o The plan is a tax-qualified plan or an individual retirement account
(IRA).
6
<PAGE>
MAKING INVESTMENTS AHEAD OF SCHEDULE TO COMPLETE A PLAN EARLY
You are normally expected to make 12 regularly scheduled investments each
calendar year. If you wish to complete your plan ahead of schedule, you may make
advance investments singly or in lump sum amounts at any time during the life of
your plan, but the amount of all your advance investments may not exceed 48
investments in total over the life of your plan. These prepayment rules may be
waived for a transfer or rollover of an IRA or tax-qualified retirement plan
into a Pioneer Independence tax-qualified retirement plan, or in the event of
your death to allow your plan to be completed at one time by your estate or
beneficiary. Monthly investments may also be paid in lump sum amounts to make a
plan that is in arrears current. You pay the same creation and sales charges
when you make advance investments.
CHANGING THE FACE AMOUNT OF YOUR PLAN
You may increase or decrease the face amount of your plan by writing to
BFDS and sending a new completed plan application. You may change the
face amount of a plan under the following circumstances. o You may increase the
face amount of your plan at any time, provided the new face amount is a face
amount offered by Pioneer. An increase in the face amount of a plan does not
create new cancellation and refund rights as to the new plan that is created. o
You may decrease the face amount of your plan by 50% within 12 investments of
the start of a plan. You may not request a decrease on an existing plan that
previously had been increased if the decrease will result in a new face amount
lower than that of the original plan.
Each time you change the face amount of a plan, the custodian will recompute the
creation and sales charge already paid on the existing plan to reflect the new
plan face amount. The creation and sales charges you have already paid on your
existing plan will be credited to the creation and sales charge applicable to
the new face amount. If you paid excess creation and sales charges, the
custodian will invest the excess directly in fund shares for your plan at the
net asset value calculated on the day the change is made. If you owe any
additional creation and sales charges due under a plan, the custodian will
deduct the amount due from the next 12 monthly plan investments.
GENERAL RULES ON WITHDRAWALS AND TERMINATIONS
Normally, when you sell some or all of the fund shares held in your plan, BFDS
will send you a check within seven days after it receives, in good order, your
request and any other required documents. However, BFDS will not mail redemption
proceeds to you until your checks or other orders for payment for fund shares
have cleared. This may take up to 15 calendar days from the date on which BFDS
receives the check or other order for payment. BFDS will mail your sale proceeds
to your address of record unless you provide other instructions.
GOOD ORDER Good order means that:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o Your request includes a signature guarantee if you:
-- Are withdrawing or selling over $100,000 worth of shares
-- Changed your account registration or address within the last 30 days
-- Instruct BFDS to mail the check to an address different from the one
on your account
-- Want the check paid to someone other than the plan owner(s)
-- Are transferring the sale proceeds to a Pioneer mutual fund account with a
different registration
[TEXT BOX]
Withdrawals and sales may be taxable transactions to plan owners.
[END BOX]
7
<PAGE>
SIGNATURE GUARANTEES AND OTHER REQUIREMENTS
You are required to obtain an acceptable signature guarantee when you are:
o Requesting certain types of transactions including transfers of plan ownership
and sales of fund shares
o Requesting certain types of changes for your existing plan
You can obtain a signature guarantee from most broker-dealers, banks, credit
unions (if authorized under state law) and federal savings and loan
associations. BFDS will not accept signature guarantees by facsimile. You cannot
obtain a signature guarantee from a notary public.
Pioneer reserves the right to require signature guarantees on all withdrawals or
sales of fund shares. Pioneer or the custodian may require a signature guarantee
if either believes that a signature guarantee is warranted. The custodian will
determine whether a guarantee is acceptable.
The custodian or Pioneer may require you to submit additional documentation for
a cash withdrawal (a sale of fund shares) or for requests made by fiduciaries or
corporations.
REQUESTING A TRANSACTION
You may withdraw or sell fund shares held by your plan by writing or calling
BFDS.
WRITTEN REQUESTS You must use a written request if you are withdrawing or
selling more than $100,000 and/or if you need to provide a signature guarantee.
Send your letter of instruction, signed by all plan owners, to BFDS. Include in
your request your name, your account number and the dollar amount or number of
fund shares to be sold.
TELEPHONE REQUESTS You are automatically authorized to make telephone
withdrawals and sales from your plan (except plans established as retirement
accounts) unless you indicate otherwise on your plan application. You may not
terminate your plan or exercise your cancellation or surrender rights by phone.
For personal assistance, call BFDS at 1-800-765-9565 weekdays between 8 a.m. and
6 p.m. Eastern time.
You may make a cash withdrawal by telephone only if:
o The proceeds are payable to the plan owner(s) of record and mailed to the
address of record;
o There has been no change in the address of record on the plan within the
preceding 30 days;
o The person requesting the withdrawal can provide proper identification
information; and
o The proceeds do not exceed $100,000 per plan per day.
BFDS will not accept telephone transaction requests that specify a particular
transaction date or any other special conditions.
Pioneer has made arrangements with certain dealers to accept telephone
transaction instructions from the dealer on behalf of plans for which the dealer
is the firm of record. Pioneer reserves the right to impose conditions on these
dealers, including the condition that they enter into agreements (which contain
additional conditions for telephone transactions) with Pioneer. The dealer will
bear any loss resulting from its failure to submit a telephone transaction
within the prescribed time frame.
To confirm that each transaction instruction received by telephone is genuine,
BFDS will record each telephone transaction, require the caller to provide
proper personal identification information and send the plan owner a written
confirmation of each telephone transaction. If reasonable procedures, such as
those described above, are followed, neither Pioneer Independence Plans, the
fund, the custodian nor Pioneer will be responsible for the authenticity of
instructions received by telephone. You, the plan owner, bear the risk of loss
from unauthorized or fraudulent telephone transactions. The custodian and/or
Pioneer may implement other procedures from time to time. During times of
economic turmoil or market volatility or as a result of severe weather or a
natural disaster, it may be difficult to contact BFDS by telephone. At such
times, you should communicate with BFDS by writing.
8
<PAGE>
PARTIAL WITHDRAWALS WITHOUT TERMINATING A PLAN
If you withdraw or sell all of the fund shares in your plan, your plan will
normally be terminated. You may also request a partial withdrawal or sale of
your fund shares without terminating your plan and keep your plan in effect, if
you have owned your plan for at least 45 days.
If you have owned your plan for at least 45 days and intend to keep your plan in
effect, you may elect to withdraw up to 90% of the underlying fund shares from
your plan (and hold fund shares directly). Or, you may direct BFDS, as your
agent, to withdraw and then sell up to 90% of your fund shares and pay the sale
proceeds to you. If you request a withdrawal of more than 90% of the net asset
value of the fund shares in your account, BFDS may sell all the fund shares in
your plan.
You may request a partial withdrawal or sale in writing or by telephone. While
there is currently no limit to the number of partial withdrawals or sales that
you can make, each partial withdrawal or redemption must be at least $100.
Shares are withdrawn or sold at the net asset value determined after BFDS
receives a request in good order (including signature guarantees and other
documentation, if applicable). If BFDS receives your request in good order prior
to the close of the New York Stock Exchange on any business day that the fund is
open, it will process it at the net asset value determined as of the close of
that day. No partial withdrawal or sale will affect the total number of monthly
plan investments to be made or the unpaid balance of monthly plan investments.
REPLACEMENTS OF PARTIAL WITHDRAWALS
After a partial cash withdrawal, you may, but are not required to, restore the
value of your plan by remitting to BFDS an amount equal to the amount redeemed.
BFDS will use the reinvested amount to purchase fund shares for your account at
the net asset value determined after your request is received in good order. You
may make a repayment of a partial cash withdrawal after a period of 90 days from
the date of redemption, except in the case of plan accounts that are IRAs, for
which a reinvestment may be made after a period of 45 days. If the amount
redeemed exceeds $500, you need not make a full reinstatement of your withdrawal
in one transaction. However, you must reinvest at least $500. You must clearly
identify replacements of partial cash withdrawals to distinguish them from
regular monthly plan investments.
TERMINATING YOUR PLAN
You may terminate your plan at any time. To terminate your plan, you must send a
written request to BFDS. You should instruct BFDS to:
1. Redeem the fund shares held in your account or
2. Transfer the fund shares held in your account to the fund and deliver to you
a confirmation statement for the transfer.
If you direct the sale of your fund shares, BFDS will withdraw the fund shares
from your plan account, redeem the fund shares and send the proceeds directly to
you.
If you direct BFDS to transfer the fund shares held under the plan to a fund
account, it will first sell sufficient shares of the fund to pay any authorized
deductions and/or transfer taxes and then instruct the fund's transfer agent to
register the remaining fund shares in your name. If you choose to receive fund
shares, you may then exchange your fund shares for shares of certain other
Pioneer mutual funds for which Pioneer Investment Management, Inc. or an
affiliate is the investment manager. The exchange privilege is more fully
described in the fund's prospectus. You will not be permitted to exchange these
shares back into the fund or to make additional direct investments in the fund.
9
<PAGE>
REPLACEMENT PRIVILEGE ON TERMINATION
If you have completely terminated a plan, the replacement privilege allows you
to reinvest an amount equal to not less than 10% of the net asset value of the
fund shares you redeemed from your plan, without any creation and sales charge
except as described below. Your new account registration must be identical to
your terminated account's registration. You reinvest at the net asset value per
fund share next determined after BFDS receives your replacement order and
payment. You must exercise the replacement privilege within 90 days following
the date you terminate your plan.
[TEXT BOX]
Replacements and reinvestments may be taxable to plan owners.
[END BOX]
The replacement privilege is available to plan owners who have not previously
exercised this privilege. The replacement privilege does not eliminate your
privilege of partial withdrawal or sale. If you have redeemed fund shares from a
plan under your cancellation or surrender rights, you will not be permitted to
replace the proceeds of the cancellation or surrender at net asset value until
all refunded creation and sales charges have been deducted from the amount
offered for the replacement.
Pioneer may in its sole discretion offer additional replacement options from
time to time.
PLAN OWNER OPTIONS AND SERVICES
RETIREMENT PLANS Tax-sheltered retirement plans, including IRAs and qualified
pension and profit-sharing plans, may purchase plans. Pioneer also offers the
Pioneer Individual Retirement Plan (the "Pioneer IRA"). Pioneer IRAs may be
established through contributions to a plan or through a lump sum investment in
a plan from the proceeds of a rollover of qualified assets or a direct
transfer of qualified assets from other fiduciary agencies. Such rollovers or
transfers may contain either or both employer-sponsored retirement assets and
owner contributions.
Pioneer offers detailed information concerning the Pioneer IRA. You should read
this information carefully and you should consult with an attorney or tax
adviser before establishing an IRA in connection with a plan. The information
sets forth the additional service fees charged for IRAs and describes the
federal income tax consequences of establishing an IRA. Under the Pioneer IRA,
dividends and distributions will be reinvested automatically in additional fund
shares for the plan. You pay a maintenance fee on Pioneer IRAs.
Premature termination of a plan can have adverse financial consequences and
therefore prospective investors should consider carefully whether the IRA or
other qualified retirement plan would have the financial resources to honor a
15-year commitment to making monthly plan investments.
SYSTEMATIC WITHDRAWAL PROGRAM You may elect a systematic withdrawal program
after you complete all regularly scheduled investments. You may also elect a
systematic withdrawal program from an incomplete plan if the withdrawal is to be
taken from a plan that is part of an IRA and you have reached age 59 1/2.
Under a systematic withdrawal program, BFDS, as your agent, will redeem
sufficient fund shares from the plan at the net asset value at the time of such
redemption to provide regular withdrawal payments of $50 or more on a monthly or
quarterly basis, as you have elected. Except for the $50 minimum, there is no
limitation on the size of withdrawals. All systematic withdrawal program
transactions will be made as of the end of the day you have specified for the
withdrawal (or, if not a business day, the first business day after that date).
You have the right to change the dollar amount of withdrawals paid to you under
the systematic withdrawal program or to discontinue a systematic withdrawal
program at any time. There are no charges imposed for any regular withdrawals
under a systematic withdrawal program.
Your plan will remain in full force and effect with all rights and privileges
until all fund shares have been withdrawn from your plan. While the systematic
withdrawal program is in effect, you must elect to reinvest all dividends and
distributions in fund shares to be held in your plan account. You should realize
that withdrawals in excess of dividends and distributions will be made from
principal and may eventually exhaust your plan account. Also, you may realize a
gain or loss for tax purposes on each withdrawal payment.
10
<PAGE>
Pioneer reserves the right to discontinue offering the systematic withdrawal
program at any time after 90 days' notification to all plan owners.
VOLUNTARY TAX WITHHOLDING You may request, in writing, that BFDS withhold 28% of
the dividends and capital gain distributions paid on any fund shares held in
your plan account (before any reinvestment) and forward the amount withheld to
the IRS as a credit against your federal income taxes. This option is not
available for plan accounts registered as retirement plan accounts or for plan
accounts subject to backup withholding.
STATEMENTS, REPORTS AND NOTICES For the first 18 months after the issuance of
your plan, BFDS will mail you a confirmation statement for each financial
transaction as it occurs. Beginning after the nineteenth month, BFDS may mail
statements to you quarterly rather than for each transaction. Each transaction
confirmation statement, quarterly statement or other statement, as required,
will state the price per share of the fund shares purchased after applicable
deductions and the total number of fund shares held in your account. The
custodian or Pioneer is required or may be authorized to provide you with
certain notices, reports or documents under the plans. When you are given or
sent these documents, the custodian or Pioneer will consider the mailing date to
be the date you received them.
PLAN RIGHTS AND POLICIES
CANCELLATION RIGHTS You have a right to cancel your plan subject to the
following conditions.
Within 60 days after your first investment under a plan (which, for this
purpose, is the date appearing on the confirmation statement following the
initial investment), BFDS will send a notice to you regarding your cancellation
rights. You may elect to cancel your plan within 45 days of the mailing date of
that notice by submitting a signed, written request for cancellation to BFDS. In
addition, if you are canceling a plan with current net assets valued at more
than $100,000, you must get a signature guarantee.
Upon cancellation, you will receive a payment equal to:
(1) The total current net asset value of the fund shares credited to your plan
account as of the end of the business day that BFDS receives your
cancellation request in good order and
(2) A refund of all the creation and sales charges you paid under the plan.
SURRENDER RIGHTS BFDS will send you a written notice of your 18-month right of
cancellation if either of the following occurs:
(1) If, during the first 15 months after the date of issuance of the plan, you
have missed three or more investments; or
(2) Following the first 15 months after the date of issuance of the
plan, but prior to the expiration of 18 months after such date, you
have missed one or more investments. (If BFDS has already sent a
notice at 15 months, a second notice will not be required even if
additional investments are missed.)
These notices will inform you of your rights and will also include the value of
your account at the time the notice is sent.
You have a right to surrender (terminate) your plan subject to the following
conditions.
11
<PAGE>
At any time within an 18-month period after you purchase a plan, you may
surrender your plan. To surrender a plan, you must send BFDS a signed, written
request. In addition, if you are surrendering a plan with current net assets
valued at more than $100,000, you must get a signature guarantee.
Upon surrender, you will receive a payment equal to:
(1) The total current net asset value of the fund shares credited to your plan
account as of the end of the business day that BFDS receives your
surrender request in good order and
(2) A refund equal to all creation and sales charges you paid up to the date
of surrender minus 15% of the gross amount you have paid as of that date.
You will not receive a refund of any service charges or other fees you may
have paid.
If you surrender your plan, you may not reinstate your plan at net asset value
until all creation and sales charges included in the sale amount are first
deducted from the reinstatement amount. This requirement is more fully explained
above in "Replacement privilege on termination." Exercise of cancellation rights
may be a taxable event for you. You should consult your tax adviser.
VOTING RIGHTS IN FUND SHARES Pioneer Independence Plans is a direct shareholder
of the fund and has certain voting rights in fund shares which are held on
behalf of the plans. You are permitted to exercise voting rights attributable to
the fund shares held in your account. The custodian will vote the fund shares
held in your account in accordance with your instructions. If you do not vote
your fund shares, the custodian will vote your shares in the same proportion as
it votes the shares for which it has received instructions from other plan
owners.
Plan owners may attend any shareholder meetings of the fund. If you wish to vote
the fund shares held in your plan account in person, you may submit a written
request for a proxy to BFDS prior to the meeting. The proxy will permit you to
vote the fund shares in person.
TRANSFER OR ASSIGNMENT OF RIGHTS IN A PLAN If you want to secure a loan, you may
assign your rights (other than for a tax-qualified retirement plan or an IRA) to
a bank or other lending institution. The bank or other lending institution,
however, will not be entitled to exercise the right of partial withdrawal or
sale. During the term of the assignment, you will be entitled to all dividends
and distributions on fund shares.
You may also transfer your rights to another person: for example, a relative,
charitable institution or trust. You may accomplish this two ways:
(1) You may transfer your right, title and interest to another person
whose only right shall be the privilege of complete and prompt
withdrawal from the plan; or
(2) You may transfer your entire right, title and interest to another
person, trustee or custodian acceptable to Pioneer, who has applied
to Pioneer for a similar plan.
BFDS will provide you with the appropriate assignment forms upon request.
Transfers may be subject to income and other taxes and may be restricted for
those plans held in connection with IRAs or qualified retirement plans.
TERMINATION OF A PLAN BY PIONEER OR STATE STREET BANK Although a plan calls for
regular monthly investments over a 15-year period or for an extended 25-year
period, neither Pioneer nor the custodian can elect to terminate a plan until
300 investments have been made unless:
o You have not made investments under your plan for more than 12 consecutive
months or
o Fund shares are not obtainable and a substitution is not made.
12
<PAGE>
If you have not made investments under your plan for more than 12 consecutive
months, BFDS will first count as monthly investments any advance monthly plan
investments you have made and then determine the beginning of the default
period.
After 300 investments, or if other events justify termination, Pioneer or the
custodian has the right to terminate your plan 60 days after mailing you a
written notice. The notice will request that you elect to have your plan
distributed either in cash or in fund shares after deduction of all authorized
charges, fees and expenses. Upon termination, BFDS (as your agent) may surrender
for liquidation all of the fund shares credited to your plan account, or
sufficient fund shares to pay all authorized deductions. BFDS will hold the
balance of fund shares and/or cash, after payment of all authorized deductions,
for delivery to you against the surrender of your plan.
The custodian will not pay interest on any cash balances. If you do not
surrender your plan within 60 days after the notice of termination, the
custodian may, at its discretion, fully discharge its obligations by mailing to
you:
o A confirmation statement for the fund shares or
o A check, drawn in accordance with the terms of the plan, to your address of
record.
You will then have no further rights under your plan except that if the
confirmation statement or check is returned to BFDS as undeliverable, the bank
will continue to hold these assets for your benefit, subject to any applicable
laws including the escheatment laws.
FUND SUBSTITUTION Pioneer may substitute the shares of another investment as the
underlying investment for the shares of the fund if it deems such action to be
in the best interests of plan owners. Substituted shares generally will be
comparable in character and quality to the fund's shares and will be registered
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. Before any substitution is made, Pioneer must:
(1) To the extent required, obtain an order from the Securities and
Exchange Commission approving such substitution under the provisions
of Section 26(b) of the Investment Company Act of 1940;
(2) Submit written notice of the proposed substitution to the custodian;
(3) Submit written notice of the proposed substitution to each plan
owner, giving a reasonable description of the substituted fund
shares, disclosing that unless the plan is surrendered within 30
days of the date of mailing such notice, the plan owner will be
considered to have consented to the substitution and to have agreed
to bear his or her pro rata share of expenses and taxes in
connection with the substitution; and
(4) Provide the custodian with a signed certificate stating that the
required notice has been given to plan owners.
If you do not surrender your plan within 30 days from the date of the
substitution notice, the custodian shall purchase the shares of the substituted
fund for the plan with the proceeds of any plan investments received from you
and any dividends or distributions which may be reinvested for the plan. If
shares of the substituted fund are also to be substituted for the fund shares
already held, Pioneer must arrange for the custodian to be furnished, without
payment of a sales charge or fees of any kind, with shares of the substituted
fund having an aggregate value equal to the value of the fund shares for which
they are to be exchanged. A substitution may be a taxable event for plan owners.
If fund shares are not available for purchase for a period of 120 days or
longer, and Pioneer fails to substitute other shares, the custodian may, but is
not required to, select a substitute investment or terminate Pioneer
Independence Plans. If the custodian selects a substitute investment, it will,
to the extent required, first obtain an order from the Securities and Exchange
Commission approving such substitution as specified above and then notify you.
If, within 30 days after mailing such notice, you give written approval of the
substitution and agree to bear your pro rata share of actual expenses, including
tax liability sustained by the bank, the custodian may thereafter purchase such
substituted shares. Pioneer will have authority to terminate the plan if you
fail to give such written approval within the 30-day period.
13
<PAGE>
If shares of the fund are not available for purchase for a period of 120 days or
longer, and neither Pioneer nor the custodian substitutes other shares, the bank
will have authority, without further action on its part, to terminate the plans.
The underlying investment could change under certain other circumstances. For
instance, the fund could be reorganized with, or acquired by or merge with
another entity, which would result in a plan investing in the successor to any
such transaction.
OTHER POLICIES Transactions in fund shares may be suspended and payments of sale
proceeds may be postponed during any period in which any of the following
conditions exist:
o The New York Stock Exchange is closed, other than for customary weekends and
holidays;
o Trading on the New York Stock Exchange is restricted;
o An emergency exists as a result of which disposal by the fund of securities
owned by it is not reasonably practicable or it is not reasonably practicable
for the fund to fairly determine the value of the net assets of its portfolio;
or
o The Securities and Exchange Commission, by order, so permits.
DIVIDENDS, CAPITAL GAINS AND TAXES
All fund dividends and capital gain distributions, after any applicable
deductions, are reinvested automatically in additional shares of the fund as of
the payment date, at the net asset value determined on the ex-dividend date of
the dividend or distribution, unless you elect to receive the dividends or
distributions by check. No creation and sales charge is deducted from any
reinvestments. If you wish to receive the dividends and other distributions by
check, rather than in additional shares of the fund, you must notify BFDS in
writing. BFDS must receive these instructions at least seven days prior to the
fund's record date for a dividend or distribution. You may change these
instructions at any time.
Dividends and other distributions by the fund are made on a per share basis.
After every distribution, the value of a fund share drops by the amount of the
distribution. If a plan investment is made shortly before the ex-dividend date
of the dividend or distribution, you will pay the full price for the shares
including the amount that is soon to be paid as a dividend.
Under the tax code, you are deemed, for federal income tax purposes, to directly
own the fund shares accumulated in your plan account. Designated long-term
capital gain distributions, which are automatically reinvested in additional
fund shares, are treated as long-term capital gains. The tax cost of the fund
shares acquired is the amount paid for those shares, including the creation and
sales charge.
As more fully described in the fund's prospectus, dividends and distributions
paid by the fund are reportable for federal income tax purposes by plan owners
who are otherwise subject to federal income tax. Dividends and distributions are
reportable by plan owners regardless of whether the amounts are invested in
additional shares of the fund or are received in cash.
Gains realized on cash withdrawals (sales) generally also will be subject to
taxes, and the ability to deduct losses from such redemptions may be limited.
There may also be limitations on the amount of loss you may recognize in the
event of cancellation and refund or a replacement and reinvestment. In general,
the tax code restricts loss recognition when securities are sold and reacquired
in a short period of time; these restrictions may in certain circumstances apply
to plan owners.
Each year the custodian will send you an appropriate notice regarding taxes.
You, and not the custodian or Pioneer, pay taxes levied, assessed or imposed on:
o Any of the profits realized on sales or transfers of fund shares by the
custodian or Pioneer or
o Other property credited to your account in accordance with the provisions of
the plan or
o Income on fund shares.
The foregoing is a brief summary of certain U.S. federal income tax consequences
of investing in the fund through Pioneer Independence Plans. You should consult
the fund prospectus and your tax adviser for additional information.
14
<PAGE>
SERVICE CHARGES AND OTHER FEES
There are currently no deductions against plan owners' accounts or against fund
dividends and/or distributions to compensate Pioneer or the custodian for its
services except the fees and charges described below.
If your plan is not current and you have not made any plan investments for a
12-month period, BFDS will deduct from your account a fee of $12 per year for
its services. If you send a plan investment by check or other order for the
payment of money which is not honored by the bank on which it is drawn, BFDS
will deduct $5.00 from your account for each monthly plan investment. BFDS will
charge you $2.50 for terminating a plan on which investments have not been
completed.
If you established your plan as an IRA, BFDS will deduct an annual IRA custodial
fee of $10 from your account, a portion of which is paid to The Pioneer Group,
Inc.. You may pay this annual fee by sending a separate check clearly identified
as an IRA custodial fee payment to BFDS.
The fund and Pioneer reserve the right to impose a processing fee of $1.50 for
each monthly plan investment received by check (up to a maximum of $5 per
event). You do not pay a fee for your initial investment to establish a plan.
There is no processing fee on monthly plan investments made through an automatic
investment option. The check processing fee is not currently in effect.
All other custodian fees that would otherwise be charged to you or your plan, or
deducted from fund dividends and/or distributions, may be paid by the fund.
Although there is no current intention to do so, the fund reserves the right to
cease paying such fees, and Pioneer reserves the right to make deductions from
the plans, the plan owners, and fund dividends and/or distributions to
compensate the custodian for its services.
ADDITIONAL INFORMATION
THE SPONSOR Pioneer Funds Distributor, Inc., 60 State Street, Boston,
Massachusetts 02109-1820, is a Massachusetts corporation organized on March 2,
1989. It is a broker-dealer registered under the Securities Exchange Act of 1934
and a member of the National Association of Securities Dealers, Inc. (NASD).
Pioneer is an indirect wholly owned subsidiary of The Pioneer Group, Inc. In
order to establish the plans, Pioneer invested a lump sum in a plan on which the
creation and sales charges were waived and which is exempt from the terms of the
plans. Pioneer's directors and executive officers are listed below.
NAME, POSITIONS AND OFFICES
JOHN F. COGAN, JR., CHAIRMAN AND DIRECTOR
President, Chief Executive Officer and a Director of The Pioneer Group, Inc.
(PGI); Chairman and a Director of Pioneer Investment Management, Inc. (Pioneer
Investments), Pioneer Goldfields Limited, Teberebie Goldfields Limited, Closed
Joint-Stock Company "Amgun-Forest," Closed Joint-Stock Company "Udinskoye" and
Closed Joint-Stock Company "Tas-Yurjah" Mining Company; Director of Pioneer Real
Estate Advisors, Inc. (PREA), Pioneer Forest, Inc., Pioneer Management (Ireland)
Ltd. (PMIL), Pioneer First Investment Fund and Closed Joint-Stock Company
"Forest-Starma"; President and Director of Pioneer International Corp. (PIntl),
Pioneer First Russia, Inc. and Pioneer Omega, Inc. (Pioneer Omega); Member of
the Supervisory Board of Pioneer Fonds Marketing, GmbH (PFM), Pioneer First
Polish Investment Fund Joint Stock Company, S.A. (Pioneer First Polish), Pioneer
Czech Investment Company, A.S. (Pioneer Czech) and Pioneer Universal Pension
Fund Company; Chairman, President and Trustee of all of the Pioneer mutual
funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond Fund Plc,
Pioneer Euro Reserve Fund Plc, Pioneer European Equity Fund Plc, Pioneer
Emerging Europe Fund Plc, Pioneer US Real Estate Fund Plc, Pioneer U.S. Growth
Fund Plc, Pioneer Diversified Income Fund Plc and Pioneer America Fund Plc (the
Pioneer Irish Funds); and Of Counsel, Hale and Dorr LLP (counsel to PGI and
Pioneer Independence Fund).
DAVID D. TRIPPLE, DIRECTOR AND PRESIDENT
Executive Vice President and a Director of PGI; President and a Director of
Pioneer Investments; Director of Pioneering Services Corporation (PSC), PIntl,
PREA, Pioneer Omega, PMIL, Pioneer First Investment Fund and the Pioneer Irish
Funds; Member of the Supervisory Board of Pioneer First Polish and Pioneer
Czech; and Executive Vice President and Trustee of all of the Pioneer mutual
funds.
15
<PAGE>
ERIC W. RECKARD, TREASURER
Executive Vice President, Chief Financial Officer and Treasurer of PGI since
June 1999; Treasurer of Pioneer Investments, PSC, PIntl, PREA, Pioneer Omega and
of all of the Pioneer mutual funds since June 1999 (Assistant Treasurer of the
funds prior to June 1999); Vice President-Corporate Finance of PGI from February
1999 to June 1999; and Manager of Business Planning and Internal Audit of PGI
since September 1996.
JOSEPH P. BARRI, CLERK
Corporate Secretary of PGI and most of its subsidiaries; Secretary of all of the
Pioneer mutual funds; and Partner, Hale and Dorr LLP.
STEPHEN M. GRAZIANO, DIRECTOR AND EXECUTIVE VICE PRESIDENT
Executive Vice President - Domestic Distribution of Pioneer Investments.
SENIOR VICE PRESIDENTS: Mark R. Kiniry, William A. Misata, William H. Spencer,
Constance D. Spiros and Marcy L. Supovitz.
VICE PRESIDENTS: Barry G. Knight and Elizabeth A. Watson.
Pioneer pays commissions ranging from 80% to 95% of the total creation and sales
charges to authorized investment broker-dealer firms that are members of the
NASD and have executed a sales agreement with Pioneer.
Pioneer may terminate its obligations under the plans under certain
circumstances including, but not limited to, circumstances where: the underlying
fund ceases operations or is subject to a merger or acquisition; or the
shareholders of the underlying fund have approved the cessation of operations or
merger or acquisition; or the obligations of Pioneer as described in this
prospectus and the custodian agreement will be assumed by another entity that
Pioneer believes at the time of assignment is capable of fulfilling its
obligations as described in this prospectus and under terms of the custodian
agreement.
THE CUSTODIAN
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, acts as custodian for Pioneer Independence Plans pursuant to a custodian
agreement with Pioneer, dated February 17, 1998. State Street Bank is a trust
company organized under the laws of Massachusetts.
Investments under a plan should be payable to State Street Bank and Trust
Company and sent to the plan transfer agent. After authorized deductions, the
remaining balance of the investment purchases fund shares for a plan. The
custodian holds these shares in its custody, receiving dividends and
distributions that are automatically reinvested in additional fund shares for
the plan accounts, unless you elect to receive such dividends and distributions
by check.
The duties of State Street Bank under the custodian agreement include the
receipt of all investments from plan owners and income dividends and capital
gain distributions on fund shares, the processing of all authorized deductions
from plan investments and fund distributions and the purchase and retention of
fund shares for plan owner accounts. The custodian also effects partial or
complete liquidations of plans in connection with withdrawals or terminations
and the various other functions discussed above.
The custodian has assumed only those obligations specifically imposed on it
under the custodian agreement. The custodian has no responsibility for the
choice of the underlying investment, for the investment policies and practices
of the fund or for the acts or omissions of Pioneer or the investment manager of
the fund.
16
<PAGE>
The custodian agreement cannot be amended to adversely affect the rights and
privileges of the plan owners without their written consent. The custodian may
not resign unless an eligible successor has been designated and has accepted the
custodianship. Such successor must be a bank or trust company having capital,
surplus and undivided profits totaling at least $2,000,000. The custodian may be
changed without notice to, or the approval of, the plan owners. The custodian
may terminate its obligation to accept new plans for custodianship if Pioneer
fails to perform certain activities it is required to perform under the
custodian agreement or if the bank terminates the custodian agreement upon 90
days' notice to Pioneer.
PIONEER INDEPENDENCE PLANS Pioneer Independence Plans is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940. This registration does not imply supervision of
management or investment practices or policies by the Commission.
Pioneer Independence Plans is currently registered in all states. The Plans may
be offered in all states where it is lawful to do so.
EMPLOYER IDENTIFICATION NUMBERS
Pioneer Independence Plans: 04-3401100
Pioneer Funds Distributor, Inc.: 04-3042318
State Street Bank and Trust Company: 04-1867445
FINANCIAL STATEMENTS
PIONEER INDEPENDENCE PLANS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO PIONEER FUNDS DISTRIBUTOR, INC. AND THE PLANHOLDERS OF PIONEER INDEPENDENCE
PLANS:
We have audited the accompanying balance sheet of Pioneer Independence Plans
(the Plans) as of December 31, 1999, and the related statement of operations and
the statements of changes in net assets for the periods presented. These
financial statements are the responsibility of the Plans' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of December 31, 1999, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pioneer Independence Plans as
of December 31, 1999, the results of its operations and the change in its net
assets for the periods presented, in conformity with accounting principles
generally accepted in the United States.
ARTHUR ANDERSEN LLP
/s/ Arthur Andersen LLP
Boston, Massachusetts
April 27, 2000
17
<PAGE>
<TABLE>
<CAPTION>
PIONEER INDEPENDENCE PLANS
BALANCE SHEET
DECEMBER 31, 1999
<S> <C>
ASSETS:
Investment in Pioneer Independence Fund, at value
(cost $9,810,395) ................................................. $ 10,999,465
Cash .............................................................. 6,789
Receivable for shares of Pioneer Independence Fund sold ........... 31,829
Other receivables ................................................. 48,048
--------------
Total assets .................................................. $ 11,086,131
--------------
LIABILITIES:
Payable for shares of Pioneer Independence Fund
purchased ......................................................... $ 3,889
Payable to custodian .............................................. 52,280
Payable for creation and sales charges ............................ 30,497
--------------
Total liabilities ............................................. $ 86,666
==============
NET ASSETS:
Total net assets (equivalent to $11.36 per share
based on 968,263 shares of beneficial interest held
for outstanding plans) ........................................ $ 10,999,465
==============
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INVESTMENT INCOME:
Income dividends received from Pioneer Independence
Fund ............................................................. $ 10,075
Capital gain distributions received from Pioneer
Independence Fund ................................................ 379,472
-------------
Total investment income .................................... $ 389,547
-------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on plan liquidations ........................... $ 67,964
Change in unrealized appreciation on investments ................. 1,017,287
-------------
Net gain on investments .................................... $ 1,085,251
-------------
Net increase in net assets resulting from operations ....... $ 1,474,798
=============
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999 AND THE PERIOD ENDED DECEMBER 31, 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM: YEAR ENDED 3/16/98 THRU
Operations: 12/31/99 12/31/98
Net investment income ....................................... $ 389,547 $ 24,486
Net realized gain (loss) on plan liquidations ............... 67,964 (1,642)
Change in unrealized appreciation on investments ............ 1,017,287 171,783
------------- --------------
Net increase in assets from operations .................. $ 1,474,798 $ 194,627
Distributions to planholders from net investment income - net ...... $ (271) $ (12)
Capital share transactions - net ................................... 6,790,952 2,439,371
------------- --------------
Net increase in net assets .............................. $ 8,265,479 $ 2,633,986
NET ASSETS:
Beginning of period ......................................... 2,733,986 100,000
------------- --------------
End of period ............................................... $ 10,999,465 $ 2,733,986
============= ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
PIONEER INDEPENDENCE PLANS
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. ORGANIZATION
Pioneer Independence Plans (the Plans) is a unit investment trust registered
under the Investment Company Act of 1940. The Plans accumulate assets through
fixed periodic investments which are in turn invested in shares of Pioneer
Independence Fund (the Fund). The initial investment into the Plans was made on
February 20, 1998 by Pioneer Funds Distributor, Inc. (PFD), the sponsor for the
Plans. The Plans commenced operations on March 16, 1998. Prior to March 16,
1998, the Plans' activities were limited to organizational matters with no
operating activities.
The following is a summary of significant accounting policies consistently
followed by the Plans, which are in conformity with those generally accepted for
unit investment trusts:
A. SECURITY VALUATION
Investments are valued at the net asset value of shares held in Pioneer
Independence Fund.
B. TRANSACTION DATES
Share transactions are recorded as of trade date. Dividend income and
capital gain distributions are recorded on the ex-dividend date.
C. INCOME TAXES
No provision has been made for federal income taxes. All distributions of
net investment income and capital gains received by planholders are treated
as if received directly from the underlying Fund. A planholder realizes a
gain or loss on liquidation for cash but not on withdrawal of the
underlying Fund shares.
2. CAPITAL SHARE TRANSACTIONS
At December 31, 1999, the Plan held 968,263 shares of Pioneer Independence Fund.
Transactions in Fund shares for the year ended December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
DOLLARS SHARES
<S> <C> <C>
Planholder payments ........................................ $ 11,722,365
Less sales charges ......................................... (3,663,991)
------------------
Balance invested in fund shares ............................ $ 8,058,374 771,292
Distributions reinvested in fund shares .................... 389,276 35,629
Redemptions and withdrawals in fund shares ................. (1,267,422) (122,561)
------------------ --------------
$ 7,180,228 684,360
================== ==============
</TABLE>
3. PLANHOLDER'S COST OF PIONEER INDEPENDENCE FUND SHARES
The investment in Pioneer Independence Fund shares is carried at fair market
value, which represents the amount available for investment (including
reinvested distributions of net investment income and realized gains) in such
shares after deduction of sales charges, if applicable. The total investment as
of December 31, 1999 is detailed below:
<TABLE>
<CAPTION>
<S> <C>
Total payments made by planholders on Plans
outstanding (net of liquidations) ............................. $ 13,685,207
Reinvested distributions from net investment income ................ 29,764
Reinvested distributions from realized gains ....................... 362,799
-----------------
Total .............................................................. $ 14,077,770
Less deduction for creation and sales charges ...................... (4,267,375)
-----------------
Net cost of Pioneer Independence Fund shares ....................... $ 9,810,395
Unrealized appreciation ............................................ 1,189,070
-----------------
Net amount applicable to planholders ............................... $ 10,999,465
=================
</TABLE>
4. RELATED PARTY TRANSACTIONS
PFD earned $334,965 in creation and sales charges on the sale of contractual
Plans during the year ended December 31, 1999.
19
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Pioneer Funds Distributor, Inc.:
We have audited the accompanying consolidated statement of financial condition
of Pioneer Funds Distributor, Inc. (a Massachusetts corporation and wholly owned
subsidiary of Pioneer Investment Management, Inc.) as of December 31, 1999, and
the related consolidated statements of operations, changes in stockholder's
equity and cash flows for the year then ended that you are filing pursuant to
Rule 17a-5 under the Securities Exchange Act of 1934. These consolidated
financial statements and the schedules referred to below are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements and the schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Pioneer
Funds Distributor, Inc. as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. The information contained in
Schedules I and II is presented for the purposes of additional analysis and is
not a required part of the consolidated financial statements, but is
supplementary information required by Rule 17a-5 under the Securities Exchange
Act of 1934. Such information has been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic
consolidated financial statements taken as a whole.
/s/ Arthur Andersen LLP
Boston, Massachusetts
February 4, 2000
20
<PAGE>
<TABLE>
<CAPTION>
PIONEER FUNDS DISTRIBUTOR, INC.
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1999
(IN THOUSANDS)
ASSETS
<S> <C>
CASH AND TEMPORARY INVESTMENTS, AT COST, WHICH
APPROXIMATES VALUE ............................................... $ 14,112
INVESTMENTS IN MARKETABLE SECURITIES, AT VALUE ................... 2,049
RECEIVABLES:
From securities brokers and dealers for sales of
mutual fund shares ............................................ 9,429
From the Pioneer Family of Mutual Funds ....................... 3,381
From the sale of Class B share rights ......................... 1,570
Due from affiliates, net ...................................... 29,739
Other ......................................................... 309
DEALER ADVANCES (NET OF ACCUMULATED AMORTIZATION OF $1,216) ...... 691
PREPAID SERVICE FEES ............................................. 4,008
OTHER ASSETS ..................................................... 1,697
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, AT COST (NET
OF ACCUMULATED DEPRECIATION AND AMORTIZATION OF $1,178) .......... 1,797
DEFERRED TAX ASSET, NET .......................................... 45
DEFERRED COST OF RESTRICTED STOCK PLAN ........................... 946
---------
Total assets ............................................ $ 69,773
=========
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C>
LIABILITIES:
Payable to funds for shares sold .............................. $ 9,420
Accrued expenses and accounts payable ......................... 5,232
Distribution and service fees due to brokers and dealers ...... 9,043
---------
Total liabilities ....................................... 23,695
COMMITMENTS AND CONTINGENCIES (Note 8)
STOCKHOLDER'S EQUITY:
Common stock, $0.10 par value-
Authorized--100,000 shares
Issued and outstanding--100 shares .......................... -
Paid-in capital ............................................... 165,581
Accumulated deficit ........................................... (119,170)
Cumulative translation adjustment ............................. (333)
---------
Total stockholder's equity .............................. 46,078
---------
Total liabilities and stockholder's equity .............. $ 69,773
=========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
21
<PAGE>
<TABLE>
<CAPTION>
PIONEER FUNDS DISTRIBUTOR, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
<S> <C>
REVENUES AND OTHER INCOME:
Commissions-
Mutual funds ................................................ $ 7,484
Variable annuities .......................................... 2,067
Distribution revenues ......................................... 5,209
Other income .................................................. 1,700
Unrealized and realized gains and losses on
marketable securities, net .................................... 171
---------
16,631
---------
DISTRIBUTION AND ADMINISTRATIVE EXPENSES:
Sales and marketing ........................................... 28,237
Salaries and related benefits ................................. 12,639
Amortization of dealer advances ............................... 2,143
Other ......................................................... 15,033
---------
58,052
---------
Loss before benefit for income taxes .................... (41,421)
---------
BENEFIT (PROVISION) FOR INCOME TAXES:
State ......................................................... 11
Federal ....................................................... 14,342
Foreign ....................................................... (114)
---------
14,239
---------
Net loss ................................................ $ (27,182)
=========
<CAPTION>
PIONEER FUNDS DISTRIBUTOR, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
----COMMON STOCK---- CUMULATIVE TOTAL
NUMBER PAID-IN ACCUMULATED TRANSLATION STOCKHOLDER'S COMPREHENSIVE
OF SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT EQUITY LOSS
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1998 100 $ - $ 165,581 $ (91,988) $ (184) $ 73,409
Net loss ............... - - - (27,182) - (27,182) (27,182)
Cumulative translation
adjustment ............. - - - - (149) (149) (149)
------------
Comprehensive loss ..... - - - - - - $ (27,331)
--------- -------- ----------- ---------- ----------- ---------- ===========
DECEMBER 31, 1999 100 $ - $ 165,581 $ (119,170) $ (333) $ 46,078
========= ======== =========== ========== =========== ==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
22
<PAGE>
<TABLE>
<CAPTION>
PIONEER FUNDS DISTRIBUTOR, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
(IN THOUSANDS)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ....................................................... $ (27,182)
Adjustments to reconcile net loss to net cash provided by
operating activities-
Deferred income taxes ........................................ 97
Depreciation and amortization ................................ 2,766
Unrealized and realized gains and losses on marketable
securities, net .............................................. (171)
Restricted stock plan expense ................................ 318
Changes in operating assets and liabilities-
Investments in marketable securities ....................... (1,361)
Proceeds from sale of marketable securities ................ 1,353
Receivable from securities brokers and dealers for
sale of mutual fund shares ................................. 4,643
Receivable from Pioneer Family of Mutual Funds ............. (441)
Receivable from the sale of Class B share rights ........... 1,313
Other assets ............................................... 739
Prepaid service fees ....................................... (24)
Dealer advances ............................................ (1,907)
Payable to funds for shares sold ........................... (4,633)
Accrued expenses and accounts payable ...................... 286
Distribution and service fees due to brokers and
dealers .................................................... 1,594
Accrued foreign income taxes ............................... (5)
Deferred cost of restricted stock plan ..................... 611
----------
Total adjustments ................................... 5,178
----------
Net cash used in operating activities ............... (22,004)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to furniture, equipment and leasehold
improvements ................................................... (1,272)
----------
Net cash used in investing activities .................... (1,272)
CASH FLOWS FROM FINANCING ACTIVITIES:
Due to affiliates, net ......................................... 24,186
----------
Net cash provided by financing activities ................ 24,186
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS ......................................... (98)
----------
NET INCREASE IN CASH AND TEMPORARY INVESTMENTS .................... 812
CASH AND TEMPORARY INVESTMENTS, BEGINNING OF YEAR ................. 13,300
----------
CASH AND TEMPORARY INVESTMENTS, END OF YEAR ....................... $ 14,112
==========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
FINANCIAL STATEMENTS.
23
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(1) NATURE OF OPERATIONS AND ORGANIZATION
NATURE OF OPERATIONS
Pioneer Funds Distributor, Inc. (the Company) serves as the principal
underwriter and distributor of shares of the Pioneer Family of Mutual
Funds (the Funds), utilizing a large network of independent
broker-dealers. In addition, the Company serves as the exclusive
distributor of the Pioneer Variable Contracts Trust.
ORGANIZATION
The Company is a wholly owned subsidiary of Pioneer Investment
Management, Inc. (PIM), which is a wholly owned subsidiary of Pioneer
Group, Inc. (PGI). Pioneer Fonds Marketing GmbH (PFM) and Pioneer Global
Funds Distributor, Ltd. (PGFDL) are wholly owned subsidiaries of the
Company. PFM performs marketing and sales activities with respect to
sales of shares of certain of the Pioneer Family of Mutual Funds,
primarily in Germany, Austria and Switzerland. PGFDL was established
during 1998 and serves as the exclusive worldwide distributor of
Pioneer's Ireland-based mutual funds.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles. Consolidated
financial statements prepared in accordance with generally accepted
accounting principles require the use of management estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. All intercompany
balances and transactions between the Company and its subsidiaries have
been eliminated in consolidation.
RECOGNITION OF REVENUE
Mutual fund commissions consist of underwriting commissions earned from
the distribution of Class A mutual fund shares and are recorded as income
on the trade (execution) date. Variable annuity commissions are earned on
the distribution of variable annuity contracts. The Company has a Plan of
Distribution (Distribution Plan) with the Funds in accordance with Rule
12b-1 of the Investment Company Act of 1940. Pursuant to the Distribution
Plan, the Company earns distribution fees based on
0.75% of certain mutual fund net assets. Distribution revenues include
distribution fees and the gains on sales of Class B share rights sold
pursuant to the B Share Rights Program (see Note 9). Other income
primarily consists of intercompany revenue, commissions as dealer and
interest and dividend income.
PREPAID SERVICE FEES
Pursuant to the Distribution Plan, a service fee based on 0.25% of
certain mutual fund net assets is collected by the Company as
reimbursement for service fees prepaid to brokers and dealers in the
initial year that an account is established. In subsequent years, these
fees are collected by the Company and remitted to third-party brokers and
dealers.
INVESTMENTS IN MARKETABLE SECURITIES
Investments in marketable securities represent investments in mutual
funds for which the Company acts as the distributor. Net realized and
unrealized gains and losses are reported as such in the accompanying
consolidated statement of operations.
VALUATION OF FINANCIAL INSTRUMENTS
The Company considers the liquid nature and ready availability of market
quotations when estimating the fair value of financial instruments.
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash and temporary investments consist primarily of cash on deposit in
banks, commercial paper, a resale agreement and amounts invested in
Pioneer Cash Reserves Fund and Pioneer DM Cash Funds PLC.
Resale agreements involve the overnight purchase of securities under
agreements to resell. It is the policy of the Company to obtain
possession of collateral with a market value equal to or in excess of the
principal amount loaned under resale agreements.
The Company's net benefit for state and federal income taxes of
approximately $14,353,000 in 1999 is reflected as an increase to amounts
due from affiliates.
FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Depreciation and amortization are provided for financial reporting
purposes on a straight-line basis over the following estimated useful
lives: furniture and equipment--three to five years; and leasehold
improvements--over the term of the lease, not exceeding 10 years. In the
event of retirement or other disposition of fixed assets, the cost of the
assets and the related accumulated depreciation and amortization amounts
are removed from the accounts and any resulting gains or losses are
reflected in earnings.
FOREIGN CURRENCY TRANSLATION
Net assets of the Company's operations outside of the United States are
translated into U.S. dollars using current exchange rates, with the
effects of translation adjustments deferred and included as a separate
component of stockholder's equity. Revenues and expenses are translated
at the average rates of exchange during the period.
24
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 130, REPORTING COMPREHENSIVE INCOME, during 1998. SFAS No. 130
establishes standards for the reporting of comprehensive income or loss
and its components. Comprehensive income or loss, as defined, includes
all changes in equity during a period from non-owner sources. The
Company's foreign currency translation adjustments, which are excluded
from net loss, are included in comprehensive loss, as reported in the
accompanying consolidated statement of changes in stockholder's equity.
LONG-LIVED ASSETS
The Company periodically reviews its long-lived assets which it continues
to hold and use for potential impairment, primarily furniture, equipment
and leasehold improvements. The Company assesses the future useful life
of these assets whenever events or changes in circumstances indicate that
the current useful life has diminished.
CONCENTRATIONS OF CREDIT RISK
The Company is primarily engaged in the selling of mutual fund shares of
the Pioneer Family of Mutual Funds. The Company is exposed to risk of
loss if shareholders purchasing mutual fund shares, for which the Company
acts as distributor, do not fulfill their obligations.
(3) NET CAPITAL AND RESERVE REQUIREMENTS
As a broker-dealer, the Company is subject to the Securities and Exchange
Commission's regulations and operating guidelines, which require the
Company to maintain a specified amount of net capital, as defined. Net
capital may fluctuate on a daily basis. The Company's net capital, as
computed under Rule 15c3-1 under the Alternative Standard Method, was
$1,488,455 at December 31, 1999, which exceeded required net capital of
$250,000 by $1,238,455.
The Company is exempt from the reserve requirements of Rule 15c3-3 since
its broker-dealer transactions are limited to the purchase, sale and
redemption of redeemable securities of registered investment companies.
The Company promptly transmits all customer funds and delivers all
securities received in connection with activities as a broker-dealer and
does not otherwise hold funds or securities for, or owe money or
securities to, customers.
(4) INCOME TAXES
PGI files a consolidated federal income tax return with its direct and
indirect subsidiaries, including the Company. Consolidated income tax
benefits (provisions) are allocated among the companies based on the
income taxes that would have been benefited (accrued) had separate
returns been filed for each entity or when subsidiary losses are utilized
in consolidation.
The benefit for income taxes, as stated as a percentage of loss before
income taxes, consists of the following:
Federal statutory rate ............................ (35.0)%
(Increases) decreases in tax rate resulting from-
Foreign income taxes ............................ (0.1)%
Permanent differences ........................... 0.7%
------
Effective tax rate ................................ (34.4)%
======
The components of deferred income taxes recognized in the accompanying
consolidated statement of financial condition are comprised of deferred
tax assets of approximately $295,000 and deferred tax liabilities of
approximately $250,000. The approximate income tax effect of each type of
temporary difference is as follows:
Dealer advances .............................. $ (243,000)
Restricted stock ............................. 159,000
Other, net ................................... 129,000
------------
Net deferred tax asset ............. $ 45,000
============
(5) STOCK PLANS
PGI has a Stock Incentive Plan (the 1997 Plan) to provide incentives to
certain employees who have contributed and are expected to contributed
materially to the success of PGI and its subsidiaries. In 1999, an
amendment to the 1997 Plan was approved to increase the number of shares
of PGI's common stock that may be awarded to participants from 1,500,000
to 3,000,000.
Under the 1997 Plan, PGI may grant restricted stock, stock options and
other stock-based awards. The 1997 Plan is administered by the
Compensation Committee of PGI's Board of Directors (the Committee). The
1997 Plan expires in February 2007. PGI's 1995 Restricted Stock Plan (the
1995 Plan) and 1988 Stock Option Plan (the 1988 Option Plan) were
terminated upon the approval of the 1997 Plan by the stockholders of PGI
on May 20, 1997. PGI's 1990 Restricted Stock Plan (the 1990 Plan) expired
in January 1995. The 1997 Plan, 1995 Plan and the 1990 Plan are
collectively referred to as the Plans.
Restricted stock is granted at a price to be determined by the Board of
Directors, generally $0.10 per share. In 1999, certain employees of PFD
were awarded 30,468 of PGI common stock under the 1997 Plan, with a fair
market value on the award date of approximately $584,000. At December 31,
1999, cumulative shares awarded to certain employees of the Company, net
of forfeitures, under the 1997 Plan, the 1995 Plan and the 1990 Plan were
69,406, 23,900 and 120,048, respectively.
The participant's right to sell the awarded stock under the Plans is
generally restricted as to 100% of the shares awarded during the first
year following the award, 75% during the second year and 25% less each
year thereafter. PGI may repurchase unvested restricted shares at $0.10
per share upon termination of employment. Awards under the Plans are
compensatory and, accordingly, the difference between the award price and
the market value of the shares under the
25
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
Plans at the date of grant is being amortized on a straight-line basis
over a four-year period. The Company expensed $318,000 in connection with
these plans, which is included in salaries and related benefits expense
in the accompanying consolidated statement of operations.
Options issuable under the 1997 Plan become exercisable, as determined by
the Committee, not to exceed ten years from the date of grant. Options
granted to date vest over five years at an annual rate of 20% on each
anniversary date of the date of grant. Prior to the adoption of the 1997
Plan, options were granted under the 1988 Option Plan. As of December 31,
1999, 1,297,080 shares of PGI's common stock remain available for grant
under the 1997 Plan.
During 1999, 18,834 incentive stock options and 31,166 nonstatutory
options were granted under the 1997 Plan at an exercise price of $14.94.
At December 31, 1999, cumulative incentive stock options and nonstatutory
options to purchase 70,569 and 31,931 shares, respectively, of PGI common
stock at exercise prices ranging from $14.94 to $29.88, equal to fair
market value at the dates of the grants, were granted to certain
employees of the Company under the 1997 Plan. Of such options, none were
exercised or forfeited as of December 31, 1999.
Prior to the adoption of the 1997 Plan, options were granted under the
1988 Option Plan. As of December 31, 1999, nonstatutory options to
purchase 367,500 shares of PGI common stock at exercise prices ranging
from $4.19 to $27.50, equal to fair market value at the dates of the
grants, were granted to certain employees of the Company under the 1988
Option Plan. Of such options, 152,000 shares were exercised at prices
ranging from $4.19 to $18.25 and 18,000 shares were forfeited as of
December 31, 1999.
In May 1995, PGI adopted the 1995 Employee Stock Purchase Plan (the 1995
Purchase Plan), which qualifies as an "Employee Stock Purchase Plan"
within the meaning of Section 423 of the Internal Revenue Code of 1986.
An aggregate total of 500,000 shares of common stock have been authorized
for issuance under the 1995 Purchase Plan, to be implemented through one
or more offerings, each approximately six months in length, beginning on
the first business day of each January and July. The price at which
shares may be purchased during each offering will be the lower of (i) 85%
of the closing price of the common stock as reported on the NASDAQ
National Market (the closing price) on the date that the offering
commences or (ii) 85% of the closing price of the common stock on the
date the offering terminates. In 1999, employees of the Company purchased
11,375 shares under the 1995 Purchase Plan.
The Company has determined, based on the analysis and assumptions
prepared by management, that the disclosure requirements pursuant to SFAS
No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION, are immaterial to these
financial statements taken as a whole.
(6) BENEFIT PLANS
PGI and its subsidiaries have two defined contribution benefit plans for
eligible employees: a retirement benefit plan and a savings and
investment plan (collectively, the Plans) qualified under section 401(k)
of the Internal Revenue Code. PGI makes contributions to a trustee, on
behalf of eligible employees, to fund both plans. The Company's expenses
under the Plans amounted to approximately $656,000 in 1999.
Both of the Plans cover all full-time employees who have met certain age
and length-of-service requirements. Regarding the retirement benefit
plan, the Company contributes an amount that would purchase a certain
targeted monthly pension benefit at the participant's normal retirement
date. In connection with the savings and investment plan, participants
may voluntarily contribute up to 12% of their compensation and the
Company will match this contribution up to 2%.
(7) RELATED PARTY TRANSACTIONS
Certain officers and/or directors of the Company and its subsidiaries are
officers and/or trustees of the Pioneer Family of Mutual Funds.
Underwriting commissions and distribution fees earned from the sales of
mutual fund shares were approximately $14,760,000 in 1999. Within the
Pioneer Family of Mutual Funds, total revenues from Pioneer II, Pioneer
Fund, Pioneer Growth Shares Fund and Pioneer Variable Contracts Trust
were approximately $1,303,000, $3,741,000, $2,834,000 and $2,067,000,
respectively, in 1999.
Certain officers and/or directors of the Company are partners of Hale and
Dorr LLP, the Company's legal counsel. Amounts paid by the Company for
legal services of Hale and Dorr LLP amounted to approximately $56,000 in
1999.
Included in other income is approximately $1,203,000, which the Company
earned from an affiliate, Pioneer Management (Ireland) Limited, for
underwriting fees on mutual funds.
During 1999, the Company was charged by PGI and affiliates for office
rental, equipment expense, salaries, dealer-related services and other
operating expenses. These charges represent expenses directly
attributable to the Company's operations or an allocation of its
proportionate share of these expenses using formulas that management
believes are reasonable. Included in the accompanying consolidated
statement of operations in other expenses is $6,913,000 related to these
charges.
(8) COMMITMENTS AND CONTINGENCIES
Rental expense amounted to approximately $920,000 in 1999, which is
included in the charges from PGI. Future minimum payments under the lease
agreements, which are expected to be allocated to the Company, amount to
$986,000 in 2000, $965,000 in 2001 and $319,000 in 2002. These future
minimum rental payments include estimated annual operating expenses of
approximately $483,000 in 2000 and 2001 and $121,000 in 2002 and 2003.
(9) DEALER ADVANCES
Certain of the Pioneer Family of Mutual Funds maintain a multi-class
share structure whereby the participating funds
26
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Continued)
offer both the traditional front-end load shares (Class A shares) and
back-end load shares (Class B and Class C shares). Back-end load shares
do not require the investor to pay any sales charge unless there is a
redemption before the expiration of the minimum holding period, which
ranges from three to six years in the case of Class B shares and equals
one year in the case of Class C shares. However, the Company pays upfront
sales commissions (dealer advances) to broker-dealers, ranging from 2% to
4% of the sales transaction amount on Class B shares and 1% on Class C
shares. The participating funds pay the Company distribution fees of
0.75% and service fees of 0.25% per annum of their net assets invested in
Class B and Class C shares, subject to annual renewal by the
participating fund's Board of Trustees. In addition, the Company is paid
a contingent deferred sales charge (CDSC) on Class B and C shares
redeemed within the minimum holding period. The CDSC is paid based on
declining rates ranging from 2% to 4% on the purchases of Class B shares
and equal to 1% for Class C shares.
In September 1998, the Company entered into an agreement (B Share Rights
Program) to sell to a third party, at a premium, its rights to receive
future distribution fees and contingent deferred sales charges from Class
B shares of the Pioneer Family of Mutual Funds on a monthly basis through
September 2001.
The Company capitalizes and amortizes Class C share dealer advances for
financial statement purposes over a 12-month period. The Company deducts
the dealer advances in full for tax purposes in the year such advances
are paid. CDSC received by the Company from redeeming C shares
shareholders reduce unamortized dealer advances directly.
27
<PAGE>
<TABLE>
<CAPTION>
PIONEER FUNDS DISTRIBUTOR, INC.
SCHEDULE I
COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1
OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 31,
1999
<S> <C>
COMPUTATION OF NET CAPITAL:
Consolidated stockholder's equity .......................... $ 46,078,328
Less--Retained earnings of subsidiaries .................... 231,654
------------
Unconsolidated stockholder's equity .................. 45,846,674
Deductions--Nonallowable assets before consolidation-
Receivables and other assets ............................. 2,501,955
Prepaid service fees and dealers' advances ............... 4,698,530
Furniture, equipment and leasehold improvements .......... 1,492,154
Investments in and receivables from affiliates ........... 35,693,085
Haircuts on securities and outstanding wire trades ....... 215,969
Additions--Deferred income taxes, associated with
dealer advances ............................................ 243,474
-------------
Net capital .......................................... $ 1,488,455
=============
COMPUTATION OF BASIC NET CAPITAL REQUIREMENT:
Minimum net capital required (greater of $250,000
or 2% of aggregate debits) ................................. $ 250,000
Net capital in excess of requirement ....................... $ 1,238,455
<CAPTION>
Reconciliation with Company's
Computation (included in Part IIA of Form X-17A-5 as
of December 31, 1999)
<S> <C>
NET CAPITAL, AS REPORTED IN COMPANY'S PART II A
UNAUDITED) FOCUS REPORT ....................................... $ 1,226,886
Net decrease in other receivables-Nonallowable asset ....... 272,536
Net decrease resulting from deferred tax adjustments ....... (10,967)
-------------
Net capital, as adjusted $ 1,488,455
=============
</TABLE>
SCHEDULE II
COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS
FOR BROKER-DEALERS UNDER RULE 15C3-3
OF THE SECURITIES EXCHANGE ACT OF 1934
Pioneer Funds Distributor, Inc. is exempt from the reserve requirements of Rule
15c3-3, as its transactions are limited to the purchase, sale and redemption of
redeemable securities of registered investment companies. The Company promptly
transmits all customer funds and delivers all securities received in connection
with activities as a broker-dealer and does not otherwise hold funds or
securities for, or owe money or securities to, customers; accordingly, the
computation for determination of reserve requirements pursuant to Rule 15c3-3
and information relating to the possession or control requirements pursuant to
Rule 15c3-3 are not applicable. In the opinion of management, the Company has
complied with the exemptive provisions of Rule 15c3-3 throughout the year ended
December 31, 1999.
28
<PAGE>
SUPPLEMENTARY REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Pioneer Funds Distributor, Inc.:
In planning and performing our audit of the consolidated financial statements
and supplemental schedules of Pioneer Funds Distributor, Inc. (the Company) for
the year ended December 31, 1999, we considered its internal control, including
control activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the
consolidated financial statements and not to provide assurance on internal
control.
Also, as required by Rule 17a-5(g)(1) of the Securities and Exchange Commission
(SEC), we have made a study of the practices and procedures followed by the
Company, including tests of such practices and procedures that we considered
relevant to the objectives stated in Rule 17a-5(g), in making the periodic
computations of aggregate debits and net capital under Rule 17a-3(a)(11) and for
determining compliance with the exemptive provisions of Rule 15c3-3. Because the
Company does not carry securities accounts for customers or perform custodial
functions relating to customer securities, we did not review the practices and
procedures followed by the Company in any of the following:
1. Making quarterly securities examinations, counts, verifications and
comparisons
2. Recordation of differences required by Rule 17a-13
3. Complying with the requirements for prompt payment for securities
under Section 8 of Federal Reserve Regulation T of the Board of
Governors of the Federal Reserve System
The management of the Company is responsible for establishing and maintaining
internal control and the practices and procedures referred to in the preceding
paragraph. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls and the practices and procedures referred to in the preceding
paragraph, and to assess whether those practices and procedures can be expected
to achieve the SEC's above-mentioned objectives. Two of the objectives of
internal control and the practices and procedures are to provide management with
reasonable but not absolute assurance that assets for which the Company has
responsibility are safeguarded against loss from unauthorized use or disposition
and that transactions are executed in accordance with management's authorization
and recorded properly to permit the preparation of financial statements in
accordance with generally accepted accounting principles. Rule 17a-5(g) lists
additional objectives of the practices and procedures listed in the preceding
paragraph.
Because of inherent limitations in internal control or the practices and
procedures referred to above, errors or fraud may occur and not be detected.
Also, projection of any evaluation of them to future periods is subject to the
risk that they may become inadequate because of changes in conditions or that
the effectiveness of their design and operation may deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of the
specific internal control components does not reduce to a relatively low level
the risk that error or fraud, in amounts that would be material in relation to
the financial statements being audited, may occur and not be detected within a
timely period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving internal control, including
control activities for safeguarding securities, that we consider to be material
weaknesses as defined above.
We understand that practices and procedures that accomplish the objectives
referred to in the second paragraph of this report are considered by the SEC to
be adequate for its purposes in accordance with the Securities Exchange Act of
1934 and related regulations and that practices and procedures that do not
accomplish such objectives in all material respects indicate a material
inadequacy for such purposes. Based on this understanding and on our study, we
believe that the Company's practices and procedures were adequate at December
31, 1999 to meet the SEC's objectives.
This report is intended solely for the use of the Board of Directors,
management, the SEC, the National Association of Securities Dealers and other
regulatory agencies that rely on Rule 17a-5(g) under the Securities Exchange Act
of 1934 in their regulation of registered brokers and dealers and should not be
used for any other purpose.
Boston, Massachusetts
February 4, 2000
29
<PAGE>
The prospectus for Pioneer Independence Fund contained in Post-Effective
Amendment No. 3 to its registration statement on Form N-1A, filed with the
Securities and Exchange Commission on May 1, 2000 (Accession No. 0001016964-99-
000103), is incorporated herein.
<PAGE>
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
CONTENTS OF REGISTRATION STATEMENT
This registration statement comprises the following papers and
documents:
The facing sheet
Reconciliation and tie of information in Prospectus with items of
Form N-8B-2
The prospectus consisting of 30 pages
The prospectus for Pioneer Independence Fund (underlying security)
The undertaking to file reports
Signatures
Written consents of the following person: Arthur Andersen LLP (see
Exhibit 1(B))
The following exhibits:
EXHIBIT NO. DESCRIPTION
1. (A)(1) Custodian Agreement between Pioneer Funds
Distributor, Inc. and State Street Bank and Trust
Company (depositor and custodian, respectively) 2
1. (A)(2) Not applicable
1. (A)(3)(a) Not applicable
1. (A)(3)(b) Form of Sales Agreement between Pioneer Funds
Distributor, Inc. and other broker-dealers 2
1. (A)(3)(c) Schedules of sales commissions 2
1. (A)(4) Not applicable
1. (A)(5) Not applicable
1. (A)(6) Certificate of incorporation and by-laws of Pioneer
Funds Distributor, Inc. 1
1. (A)(7) Not applicable
1. (A)(8) Form of Underwriting Agreement between Pioneer Funds
Distributor, Inc. and Pioneer Independence Fund 1
1. (A)(9) Not applicable
<PAGE>
EXHIBIT NO. DESCRIPTION
1. (A)(10) Forms of investment application 2
1. (B) Written consents of Arthur Andersen LLP 3
2. Opinion of counsel as to the legality of the
securities being registered 2
3. (1)(b) Not applicable
3. (1)(c) Not applicable
4. Not applicable
___________________________
1 Previously filed. Incorporated herein by reference
from the exhibits filed with Registrant's initial
registration statement (File No. 333-42113) as
filed with the Securities and Exchange Commission
(the "SEC") on December 12, 1997 (Accession No.
0001016964-97-000166).
2 Previously filed. Incorporated herein by reference
from the exhibits filed in Pre-Effective Amendment
No. 1 to the registration statement as filed with
the SEC on March 13, 1998 (Accession No.
0001016964-98-000018).
3 Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant,
Pioneer Independence Plans, certifies that it meets all of the requirements for
effectiveness of this registration statement under Rule 485(b) under the
Securities Act of 1933 and has duly caused this registration statement to be
signed on its behalf by the undersigned, duly authorized, in the City of Boston
and The Commonwealth of Massachusetts on the 28th day of April 2000.
PIONEER INDEPENDENCE PLANS
(Name of Registrant)
By: PIONEER FUNDS DISTRIBUTOR, INC.
By: /s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman
Pursuant to the requirements of the Securities Act of 1933, the
registrant's sponsor has duly caused this registration statement to be signed on
the registrant's behalf by following persons in the capacities indicated on
April 28, 2000:
Signature Title
/s/ John F. Cogan, Jr. Chairman (Chief Executive )
John F. Cogan, Jr. Officer) and Director, Pioneer )
Funds Distributor, Inc. )
)
)
/s/ Steven M. Graziano Director, Pioneer Funds )
Steven M. Graziano Distributor, Inc. )
)
)
/s/ David D. Tripple Director, Pioneer Funds )
David D. Tripple Distributor, Inc. )
)
)
/s/ Eric W. Reckard Treasurer (Principal Financial )
Eric W. Reckard and Accounting Officer), Pioneer )
Funds Distributor, Inc. )
[logo]
ARTHUR ANDERSEN
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
on Pioneer Funds Distributor, Inc. dated February 4, 2000 (and to all
references to our firm) included in or made a part of Pioneer Independence
Plans' Post-Effective Amendment No. 3 and to Registration Statement No. 333-
42113.
/s/ Arthur Andersen LLP
Boston, Massachusetts
April 27, 2000
<PAGE>
[logo]
ARTHUR ANDERSEN
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our report
on Pioneer Independence Plans dated April 7, 2000 (and to all references to
our firm) included in or made a part of Pioneer Independence Plans' Post-
Effective Amendment No. 3 to Registration Statement No. 333-42113.
/s/ Arthur Andersen LLP
Boston, Massachusetts
April 27, 2000
