PIONEER MONEY MARKET TRUST
60 State Street
Boston, Massachusetts 02109
April 7, 1995
VIA ELECTRONIC TRANSMISSION
File Desk
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, DC 20549
Re: Pioneer Money Market Trust (the "Trust")
File Nos. 33-13179 and 811-5099
CIK No.0000812195`
Ladies and Gentlemen:
Pursuant to Rule 497(e) and Rule 101 of Regulation S-T under the Securities
Act of 1933, attached for electronic filing is a copy of the Trust's Prospectus
dated March 31, 1995, revised as of April 7, 1995 and tagged to reflect changes
in the text. The tags reflect changes made to the Trust's Prospectus since the
filing made pursuant to Rule 497(c) on April 7, 1995 .
If you have any questions concerning the foregoing or the attachments,
please call the undersigned or Elizabeth Watson collect at (617) 742-7825.
Very truly yours,
/s/Eunice R. Simmons
Eunice R. Simmons
EDGAR Compliance Associate
Attachment(s)
cc: Ms. Elizabeth Watson
Ms. Collette B. Rajotte
Joseph P. Barri, Esq.
Elaine M. Hartnett, Esq.
(all w/ copy of submission)
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[logo]PIONEER LOGO
Pioneer Cash Reserves Fund
Pioneer U.S. Government Money Fund
Pioneer Tax-Free Money Fund
Class A and Class B Shares
Prospectus March 31, 1995
Pioneer Cash Reserves Fund, Pioneer U.S. Government Money Fund and Pioneer
Tax-Free Money Fund (the "Funds") are money market funds. The Funds' Class A
shares are offered without a sales charge. The Funds' investment objective is
to provide high current income, preservation of capital and liquidity through
investments in high-quality short-term securities. Each Fund employs different
investment policies to achieve this investment objective.
Pioneer Cash Reserves Fund (Class A and B Shares)--a portfolio of money market
instruments, including: securities of the United States government and its
agencies and instrumentalities; certificates of deposit; corporate commercial
paper; and other debt instruments.
Pioneer U.S. Government Money Fund (Class A Shares Only)--a portfolio of
securities issued or guaranteed as to principal and interest by the United
States government, the interest on which is generally exempt from state income
tax.
Pioneer Tax-Free Money Fund (Class A Shares Only)--a portfolio of obligations
issued by states, territories and possessions of the United States ("U.S.") the
interest on which is exempt from federal income tax.
This Prospectus (Part A of the Registration Statement) provides information
about the Funds that you should know before investing. Please read and keep it
for your future reference. More information about the Funds is included in Part
B, the Statement of Additional Information, dated March 31, 1995, which is
incorporated into this Prospectus by reference. You may obtain a copy of the
Statement of Additional Information free of charge by calling Shareholder
Services at 1-800-225-6292 or by written request to the Funds at 60 State
Street, Boston, Massachusetts 02109. Other information about the Funds has been
filed with the Securities and Exchange Commission (the "SEC") and is available
upon request and without charge.
The yield for each Fund will fluctuate. Shares in the Funds are not deposits or
obligations of, or guaranteed or endorsed by, any bank, and the shares are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency. INVESTMENTS IN THE FUNDS ARE NEITHER INSURED
NOR GUARANTEED BY THE UNITED STATES GOVERNMENT. THERE CAN BE NO ASSURANCE THAT
THE FUNDS WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
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TABLE OF CONTENTS PAGE
<S> <C> <C>
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. THE TRUST 4
IV. THREE INVESTMENT PROGRAMS 4
Suitability 4
Investment Policies 4
Additional Information 6
V. FUND SHARE ALTERNATIVES 6
Class A Shares 6
Class B Shares 6
VI. SHARE PRICE 7
VII. HOW TO BUY FUND SHARES 7
VIII. HOW TO SELL FUND SHARES 9
IX. HOW TO EXCHANGE FUND SHARES 10
X. DISTRIBUTION PLANS 11
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 11
XII. MANAGEMENT OF THE TRUST 12
XIII. DESCRIPTION OF SHARES AND VOTING RIGHTS 13
XIV. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 14
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Dividend Options 14
Voluntary Tax Withholding 14
Retirement Plans 14
Yield Information 14
Telecommunications Device for the Deaf (TDD) 14
Systematic Withdrawal Plans 15
Telephone Transactions and Related Liabilities 15
XV. INVESTMENT RESULTS 15
XVI. APPENDIX 15
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in the
Funds. The table reflects annual operating expenses based upon actual expenses
of the Class A shares for the fiscal year ended December 31, 1994, expressed as
a percentage of the average net assets of each Fund.
<TABLE>
<CAPTION>
Pioneer Cash
Reserves Fund
Shareholder Transaction Expenses: Class A Class B
<S> <C> <C>
Maximum Initial Sales Charge on Purchases (as a
percentage of offering price) None None
Maximum Sales Charge on Reinvestment of
Dividends None None
Maximum Deferred Sales Charge (as a percentage
of original purchase price or redemption
price, as applicable) None 4.00%
Redemption Fee(1) None None
Exchange Fee None None
Annual Operating Expenses (as a percentage of
net assets):(3)
Management Fee (after Expense Limitation)(2) 0.25% 0.25%
12b-1 Fees 0.10% 1.00%
Other Expenses (including transfer agent fee,
custodian fees and accounting and printing
expenses) 0.50% 0.50%
Total Operating Expenses:
(after Expense Limitation)(2) 0.85% 1.75%
</TABLE>
<TABLE>
<CAPTION>
Pioneer Pioneer
U.S. Govern- Tax-Free
ment Money Money
Fund Fund
<S> <C> <C>
Shareholder Transaction Expenses:
Maximum Initial Sales Charge on Purchases (as a
percentage of offering price) None None
Maximum Sales Charge on Reinvestment of
Dividends None None
Redemption Fee(1) None None
Exchange Fee None None
Annual Operating Expenses
(as a percentage of net assets):
Management Fee (after Expense Limitation)(2) 0.00% 0.00%
12b-1 Fees 0.12% 0.09%
Other Expenses (including transfer agent fee,
custodian fees and accounting and printing
expenses)
(after Expense Limitation)(2) 0.73% 0.66%
Total Operating Expenses
(after Expense Limitation)(2) 0.85% 0.75%
</TABLE>
(1) Separate fees (currently $10 and $20, respectively) apply to domestic or
international bank wire transfers of redemption proceeds.
(2) Effective April 1, 1995, Pioneering Management Corporation ("PMC"), the
Funds' investment adviser, has agreed not to impose its management fee and
to make other arrangements, if necessary, to limit the operating expenses
of each Fund as listed below. This agreement is voluntary and temporary and
may be revised or terminated at any time.
<TABLE>
<CAPTION>
Pioneer
Pioneer U.S. Pioneer
Cash Government Tax-Free
Reserves Money Money
Fund Fund Fund Fund
<S> <C> <C> <C>
Management Fee 0.40% 0.40% 0.40%
Expense Limitation 0.85%* 0.85% 0.75%
Expenses Absent Limitation
Other Expenses
Class A n/a 0.78% 1.63%
Class B n/a n/a n/a
Total Operating Expenses
Class A 1.00% 1.30% 2.12%
Class B 1.90% n/a n/a
</TABLE>
*For Pioneer Cash Reserves Fund, the portion of fund-wide expenses attributable
to Class B shares will be reduced only to the extent such expenses are reduced
for the Class A shares of that Fund.
(3) For Class B shares, percentages are based on estimated expenses that would
have been incurred during the previous fiscal year had Class B shares been
outstanding.
Example:
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return and constant expenses, with or without redemption at the end of
each time period:
<TABLE>
<CAPTION>
Pioneer Cash Reserves Fund
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Class A Shares $ 9 $27 $ 47 $ 104
Class B Shares
--Assuming
complete
redemption at
end of period $58 $85 $ 115 $184*
--Assuming no
redemption $18 $55 $ 95 $184*
</TABLE>
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A expenses are used after year eight.
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Pioneer U.S. Government Money
Fund $9 $27 $47 $105
Pioneer Tax-Free Money Fund $8 $24 $42 $ 94
</TABLE>
The example above assumes reinvestment of all dividends and distributions and
that the percentage amounts listed under "Annual Operating Expenses" remain the
same each year.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return vary from year to year and may be higher or lower than
those shown.
A sales charge may be applied to exchanges of shares of the Funds for shares of
certain other Pioneer mutual funds. See "How to Exchange Fund Shares." The
payment of Rule 12b-1 fees by each fund may result in long-term shareholders of
a Fund indirectly paying more than the economic equivalent of the maximum sales
charge permitted under the National Association of Securities Dealers, Inc.
Rules of Fair Practice.
For further information regarding management fees, 12b-1 fees and other
expenses of the Trust, including information regarding the basis upon which
management fees and 12b-1 fees are paid, see "Management of the Trust,"
"Distribution Plans" and "How To Buy Fund Shares" in this Prospectus and
"Management of the Trust" and "Distribution Plans" in the Statement of
Additional Information.
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements of the
Funds which have been audited by Arthur Andersen LLP, independent public
accountants. Arthur Andersen LLP's report on the Trust's financial statements
as of December 31, 1994, appears in the Trust's Annual Report which is
incorporated by reference into the Statement of Additional Information. The
information listed below should be read in conjunction with the financial
statements contained in the Trust's Annual Report. Class B shares are a new
class of shares available only for Pioneer Cash Reserves Fund; no Financial
Highlights exist for Class B shares.
Pioneer Cash Reserves Fund
Selected Data for each Class A Share Outstanding For the Periods Presented
<TABLE>
<CAPTION>
For the Year Ended December 31,
June 22,
1987 to
December 31,
1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income $ 0.03 $ 0.02 $ 0.03 $ 0.05 $ 0.07 $ 0.08 $ 0.07 $ 0.03
Distributions to
shareholders from:
Net investment income (0.03) (0.02) (0.03) (0.05) (0.07) (0.08) (0.07) (0.03)
Net increase in net asset
value $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net asset value, end of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 3.57% 2.47% 3.06% 5.29% 7.74% 8.80% 7.05% 3.48%
Ratio of net operating
expenses to average net
assets 0.50% 0.75% 0.81% 0.88% 0.75% 0.82% 0.78% 0.53%**
Ratio of net investment
income to average net
assets 2.59% 2.44% 3.03% 5.23% 7.53% 8.43% 6.91% 6.94%**
Net assets end of period
(in thousands) $173,195 $64,841 $59,097 $73,010 $101,120 $80,121 $59,592 $34,756
Ratios assuming no
reduction of fees or
expenses:
Net operating expenses 0.65% 1.10% 1.01% + + + 0.91% 1.01%**
Net investment income 2.44% 2.09% 2.82% + + + 6.77% 6.46%**
</TABLE>
Pioneer U.S. Government Money Fund
Selected Data for each Class A Share Outstanding For the Periods Presented
<TABLE>
<CAPTION>
For the Year Ended December 31,
April 11,
1988 to
December 31,
1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment
operations:
Net investment income $ 0.04 $ 0.03 $ 0.03 $ 0.05 $ 0.07 $ 0.08 $ 0.05
Distributions to shareholders
from:
Net investment income (0.04) (0.03) (0.03) (0.05) (0.07) (0.08) (0.05)
Net increase in net asset value $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 3.65% 2.63% 3.19% 5.41% 7.61% 8.80% 5.34%
Ratio of net operating expenses
to average net assets 0.63% 0.55% 0.59% 0.60% 0.60% 0.53% 0.50%**
Ratio of net investment income
to average net assets 3.64% 2.61% 3.15% 5.29% 7.37% 8.37% 7.52%**
Net assets end of period
(in thousands) $29,101 $23,875 $23,619 $28,373 $27,828 $20,508 $9,503
Ratios assuming no reduction of
fees or expenses:
Net operating expenses 1.08% 1.37% 1.24% 1.08% 0.80% 1.12% 1.13%**
Net investment income 3.19% 1.79% 2.50% 4.81% 7.17% 7.77% 6.88%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all dividends and distributions, and the complete
redemption of the investment at the net asset value at the end of each
period.
** Annualized.
+ No reduction of fees or expenses in this period.
3
<PAGE>
Pioneer Tax-Free Money Fund
Selected Data for each Class A Share Outstanding For the Periods Presented
<TABLE>
<CAPTION>
For the Year Ended December 31,
April 11,
1988 to
December 31,
1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income $ 0.02 $ 0.02 $ 0.02 $ 0.04 $ 0.05 $ 0.06 $ 0.04
Distributions to shareholders from:
Net investment income (0.02) (0.02) (0.02) (0.04) (0.05) (0.06) (0.04)
Net increase in net asset value $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Total return* 2.40% 1.92% 2.38% 4.00% 5.48% 6.06% 3.71%
Ratio of net operating expenses to
average net assets 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 4.98%**
Ratio of net investment income to
average net assets 2.34% 1.92% 2.33% 3.91% 5.37% 5.86% 5.13%**
Net assets end of period (in
thousands) $10,059 $8,114 $7,241 $7,539 $6,968 $5,351 $3,272
Ratios assuming no reduction of fees
or expenses:
Net operating expenses 1.87% 1.85% 2.07% 1.08% 1.91% 2.27% 1.50%
Net investment income 0.97% 0.57% 0.77% 4.81% 3.96% 4.09% 4.13%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all dividends and distributions, and the complete
redemption of the investment at the net asset value at the end of each
period.
** Annualized.
III. THE TRUST
Pioneer Cash Reserves Fund, Pioneer U.S. Government Money Fund and Pioneer
Tax-Free Money Fund are series of Pioneer Money Market Trust (the "Trust"), an
open-end, management investment company (commonly referred to as a mutual fund)
organized as a Massachusetts business trust on March 31, 1987 and reorganized
as a Delaware business trust on March 30, 1995. The Trust has authorized an
unlimited number of shares, which are currently organized into these three
series, and continuously offers its shares to the public. Under normal
conditions, each Trust must redeem shares upon the demand of any shareholder.
The Trustees have the authority, without shareholder approval, to classify and
reclassify the shares of the Funds or any new series of the Trust. As of the
date of this Prospectus, the Trustees have authorized the issuance of a single
class of shares for Pioneer U.S. Government Money Fund and Pioneer Tax- Exempt
Money Fund, designated Class A, and, for Pioneer Cash Reserves Fund only, two
classes of shares, designated Class A and Class B.
IV. THREE INVESTMENT PROGRAMS
The investment objective of Pioneer Cash Reserves Fund, Pioneer U.S. Government
Money Fund and Pioneer Tax-Free Money Fund is to provide high current income,
preservation of capital and liquidity through investments in high-quality
short-term securities.
Each of the three Funds seeks to maintain a constant net asset value of $1.00
per share by investing in a portfolio of money market instruments maturing
within 397 days and with a dollar-weighted average maturity of 90 days or less.
There can be no guarantee that the Funds will achieve their investment
objective or that they will be able to maintain constant $1.00 net asset values
per share.
Suitability
The Funds are designed to provide a convenient way for individual, corporate
and institutional investors to earn income on their cash reserves, with easy
access to their money and stable principal value.
Ownership of shares of the Funds also eliminates the bookkeeping and
administrative inconvenience of purchasing money market securities directly.
Investment Policies
Pioneer Cash Reserves Fund invests in the following types of high-quality,
money market instruments:
(1) U.S. Government Obligations: Marketable obligations issued or guaranteed by
the U.S. Government or any agency or instrumentality thereof.
(2) Bank Obligations: Obligations (including certificates of deposit and
bankers' acceptances) of U.S. banks (including their foreign branches) and
savings and loan associations which at the date of their latest public
reporting had total assets in excess of $1 billion, and obligations of certain
smaller banks and savings and loan institutions satisfying specified investment
criteria (see the Statement of Additional Information for further details).
(3) Commercial Paper: Commercial paper (short-term unsecured promissory notes
of corporations, including variable amount master demand notes) which at the
date of investment is rated A-1 by Standard & Poor's Ratings Group ("S&P") or
P-1 by Moody's Investors Service, Inc. ("Moody's"), or, if not rated, is issued
by companies having outstanding debt rated AAA or AA by S&P or Aaa or Aa by
Moody's. For further information concerning these fixed and variable rate
securities, see the description of Pioneer Tax-Free Money Fund's investment
policies below.
(4) Short-term Corporate Debt Securities: Corporate debt securities (bonds and
debentures) with no more than 397 days remaining to maturity at date of
settlement and rated AAA or AA by S&P or Aaa or Aa by Moody's.
Pioneer U.S. Government Money Fund invests exclusively in obligations issued by
or guaranteed as to principal and interest by the U.S. government or any of its
agencies or instrumen-
4
<PAGE>
talities and in repurchase agreements secured by these obligations. The
government securities in which the Fund invests may or may not be backed by the
full faith and credit of the U.S. government. U.S. Treasury notes, bills,
certificates of indebtedness and bonds, and certain obligations issued by
government-sponsored agencies and enterprises acting under the authority of
Congress, are backed by the full faith and credit of the U.S. government. Such
obligations include, but are not limited to, obligations issued by the
Government National Mortgage Association, the Farmers' Home Administration and
the Small Business Administration. The Fund may also invest in securities
issued by government agencies or instrumentalities (such as executive
departments of the government or independent federal organizations supervised
by Congress) which are supported by the right of the issuer to borrow from the
U.S. Treasury or by the credit of the agency, authority or instrumentality
itself. Such obligations include, but are not limited to, obligations issued by
the Tennessee Valley Authority, the Bank for Cooperatives, Federal Home Loan
Banks, Federal Intermediate Credit Banks and Federal Land Banks. The Fund may
also invest in obligations backed solely by the credit of the issuing agency
itself. There is no guarantee that the U.S. government would support such
securities and, accordingly, they may involve a risk of nonpayment of principal
and interest.
While the Fund may invest in any of the obligations described above, the Fund
generally intends, under normal circumstances and to the extent practicable, to
limit its investments to certain U.S. government obligations the interest on
which is generally exempt from state income taxes in order to increase the
percentage of the Fund's distributions attributable to such interest and
therefore exempt from such taxes in most states.
Pioneer Tax-Free Money Fund invests under normal conditions at least 80% of its
portfolio in debt securities issued by or on behalf of states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies or instrumentalities, the interest on which is
exempt from federal income tax (hereafter called "tax-exempt securities"). The
Fund's investments are limited to:
(1) Tax-exempt securities, including (i) municipal bonds which are rated AAA or
AA by S&P or Aaa or Aa by Moody's, (ii) tax anticipation notes, revenue
anticipation notes and bond anticipation notes, which are rated SP-1+ or SP-1
by S&P or MIG-1 or MIG-2 by Moody's and (iii) tax-exempt commercial paper rated
A-1 by S&P or P-1 by Moody's;
(2) Tax-exempt securities that are not rated but that, in the opinion of PMC,
are of at least comparable quality to the two highest grades of S&P or Moody's;
and
(3) Taxable obligations issued or guaranteed by the U.S. government or its
agencies or instrumentalities or taxable commercial paper rated A-1 or P-1.
The Fund may purchase tax-exempt securities carrying fixed rates of return or
having floating or variable interest rates. Floating and variable rate
obligations are generally more stable than fixed-rate obligations because their
value is less affected by changes in interest rate levels. The Fund's
investments may include certificates of participation, which are a type of
floating or variable rate obligation representing interests in a pool of
tax-exempt securities held by a bank or other financial institution.
In order to enhance the liquidity, stability or quality of a tax-exempt
security or to shorten its maturity, the Fund may acquire a right to sell the
obligation to another party at a guaranteed price approximating par value,
either on demand or at specified intervals. The right to sell may form part of
the obligation or be acquired separately by the Fund. These rights may be
referred to as demand features or standby commitments, depending on their
characteristics, and may involve letters of credit or other credit support
arrangements supplied by domestic or foreign banks supporting the other party's
ability to purchase the obligation from the Fund. In considering whether an
obligation meets the Fund's quality standards, the Fund may look to the
creditworthiness of the party providing the right to sell or to the quality of
the obligation itself. Letters of credit issued by foreign banks (for which
there may be less public information available) may involve certain risks such
as future unfavorable political and economic developments, currency controls or
other governmental restrictions which might affect payment by the bank. See the
Statement of Additional Information for further description of these risks.
The Fund intends to minimize the distribution of taxable income to
shareholders. Thus, the Fund's investments in taxable obligations are limited
to 20% of its assets and are intended only to meet short-term liquidity needs
during periods of unusually adverse market conditions. For a description of how
to compare yields on tax-exempt securities with yields on taxable securities,
see the Appendix to this Prospectus. Dividends distributed to shareholders
attributable to income or net gains from the sale of taxable and tax-exempt
securities will generally be taxable to shareholders as ordinary income. See
"Dividends, Distributions and Tax Status." However, the Fund has no intention
of investing in "private activity bonds" or other tax-exempt securities whose
interest is treated as a tax preference item resulting in tax liability to
shareholders subject to the alternative minimum tax.
Pioneer Tax-Free Money Fund may also purchase some tax- exempt securities on a
"when-issued" basis, which means that up to 60 days may pass before they are
delivered and paid for. The commitment to purchase a security for which payment
will be made at a future date may be deemed a separate security. The purchase
price and interest rate of "when-issued" securities is fixed at the time the
commitment to purchase is made. Although the amount of tax-exempt securities
for which there may be purchase commitments on a "when-issued" basis is not
limited, it is expected that under normal circumstances not more than 10% of
the total assets of the Fund will be committed to such purchases. The Fund does
not start earning interest on "when-issued" securities until settlement is
made. In order to invest the assets of the Fund immediately while awaiting
delivery of securities purchased on a "when-issued" basis, short- term
obligations that offer same-day settlement and earnings will normally be
purchased. Although short-term investments will normally be in tax-exempt
securities, short-term taxable securities may be purchased if suitable
short-term tax-exempt securities are not available.
When a commitment to purchase a security on a "when- issued" basis is made,
procedures are established consistent with the General Statement of Policy of
the SEC concerning such purchases. Because that policy currently recommends
that an amount of the Fund's assets equal to the amount of the purchase be held
aside or segregated to be used
5
<PAGE>
to pay for the commitment, cash or high-quality debt securities sufficient to
cover any commitments are always expected to be available. However, although it
is not intended that such purchases would be made for speculative purposes, and
although the Fund intends to adhere to the provisions of the SEC policy,
purchases of securities on a "when-issued" basis may involve more risk than
other types of purchases. For example, when the time comes to pay for a
"when-issued" security, portfolio securities of the Fund may have to be sold in
order for the Fund to meet its payment obligations, and a sale of securities to
meet such obligations carries with it a greater potential for the realization
of capital gain, which is not tax-exempt. Also, if it is necessary to sell the
"when-issued" security before delivery, the Fund may incur a loss because of
market fluctuations since the time the commitment to purchase the "when-issued"
security was made. Moreover, any gain resulting from any such sale would not be
tax-exempt. Additionally, because of market fluctuations between the time of
commitment to purchase and the date of purchase, the "when-issued" security may
have a lesser (or greater) value at the time of purchase than the Fund's
payment obligations with respect to the security.
Additional Information
In addition to the foregoing policies each Fund is subject to certain
regulatory requirements. Each Fund may purchase only securities that PMC
believes present minimal credit risks and that are rated by the major rating
agencies, such as S&P and Moody's, within the two highest rating categories for
short-term debt obligations or, if unrated, are determined to be of equivalent
quality by PMC. If a security has been assigned different ratings by different
rating agencies, at least two rating agencies must have assigned the highest
rating in order for PMC to rely on that highest rating.
Pioneer Cash Reserves Fund may not invest more than 5% of its total assets
(taken at amortized cost) in securities issued by or subject to puts from any
one issuer (except U.S. Government Securities and repurchase agreements
collateralized by such securities). With respect to 75% of its total assets,
Pioneer Tax-Free Money Fund may not invest more than 5% of its assets in
securities subject to puts from the same institution. Pioneer Cash Reserves
Fund and Pioneer U.S. Government Money Fund will not invest more than 5% of
their respective total assets in securities that, although of high quality,
have not been rated in the highest short-term rating category by at least two
rating agencies (or if rated by only one rating agency, by that rating agency
or, if unrated, determined to be of equivalent quality by PMC), provided that
within this 5% limitation, neither Fund will invest more than the greater of 1%
or $1 million of its total assets in the securities (other than U.S. Government
securities) of any one issuer.
Each of the Funds may enter into repurchase agreements with approved banks and
broker-dealers for periods not to exceed seven days and only with respect to
U.S. government securities that throughout the period have a value at least
equal to the amount of the loan (including accrued interest). However, Pioneer
U.S. Government Money Fund does not intend to engage in repurchase agreements
as long as the income from such agreements continues to be generally subject to
state income taxes.
The Funds will not invest more than 25% of their assets in any one industry,
except that there is no percentage limitation on investments in bank
obligations or U.S. Government obligations.
The Funds intend to hold their investments until maturity, but may sell them
prior to maturity for a number of reasons, including: to shorten or lengthen
the average maturity; to increase the yield; to maintain the quality of the
portfolio; or to maintain a stable share value.
It is the policy of the Funds not to engage in trading for short-term profits.
The Funds will engage in portfolio trading if PMC believes that a transaction
net of costs (including custodian's fees) will contribute to the achievement of
the Trust's investment objective.
The Funds have no present plans to change their policies with regard to the
types or maturities of securities in which they invest. However, if the Funds
determine that their investment objective can best be achieved by a change in
investment policy or strategy, the Funds may make such changes without
shareholder approval by disclosing them in the Prospectus. The Funds'
investment objective may not be changed without shareholder approval.
The investment characteristics of U.S. government obligations, bank
obligations, commercial paper, repurchase agreements and tax-exempt securities
are described in greater detail in the Appendix to this Prospectus. The
Statement of Additional Information also provides more information on the above
investment strategies, as well as information on additional investment
restrictions, including those which may not be changed without shareholder
approval.
V. FUND SHARE ALTERNATIVES
Pioneer U.S. Government Money and Pioneer Tax-Free Money Fund offer only one
Class of shares, designated as Class A shares. Pioneer Cash Reserves Fund,
however, continuously offers two Classes of shares designated as Class A and
Class B shares. If you do not specify in your instructions to the Fund which
Class of shares you wish to purchase, exchange or redeem, the Fund will assume
that your instructions apply to Class A shares. See "How to Buy Fund Shares"
for more information on classes of shares.
Class A Shares. Class A shares are offered by each Fund. Class A shares may be
purchased at net asset value without a sales charge or commission and are
subject to distribution and service fees at a combined annual rate of up to
0.15% of the Fund's average daily net assets attributable to Class A shares.
Class B Shares. Class B shares are offered by Pioneer Cash Reserves Fund only.
If your investment in Pioneer Cash Reserves Fund is for the long-term, Class A
shares may be more appropriate than Class B shares. Purchases of the Class B
shares of Pioneer Cash Reserves Fund may be appropriate if you plan to exchange
these shares for the Class B shares of another Pioneer mutual fund (except
Pioneer Short-Term Income Trust or Pioneer Intermediate Tax-Free Fund, which
have lower CDSCs for their Class B shares). Please consult your investment
representative.
Class B shares are sold without an initial sales charge, but are subject to a
contingent deferred sales charge ("CDSC") of up to 4% if redeemed within six
years. Class B shares are
6
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subject to distribution and service fees at a combined annual rate of 1.00% of
the Fund's average daily net assets attributable to Class B shares. Your entire
investment in Class B shares is available to work for you from the time you
make your investment, but the higher distribution fee paid by Class B shares
will cause your Class B shares (until conversion) to have a higher expense
ratio and to pay lower dividends, to the extent dividends are paid, than Class
A shares. Class B shares will automatically convert to Class A shares, based on
relative net asset value, eight years after the initial purchase.
Investment dealers or their representatives may receive different compensation
depending on which Class of shares they sell. Shares may be exchanged only for
shares of the same Class of another Pioneer fund and shares acquired in the
exchange will continue to be subject to any CDSC applicable to the shares of
the Fund originally purchased. Shares sold outside the U.S. to persons who are
not U.S. citizens may be subject to different sales charges, CDSCs and dealer
compensation arrangements in accordance with local laws and business practices.
VI. SHARE PRICE
The purchase and redemption price of each Fund's shares is equal to the net
asset value ("NAV") per share. The NAV per share of a Class of a Fund is
determined by dividing the value of its assets, less liabilities (expenses and
fees are accrued daily) attributable to that Class, by the number of shares of
that Class outstanding. Each Fund's NAV is computed twice daily, on each day
the New York Stock Exchange (the "Exchange") is open, at 12:00 noon Eastern
Time and as of the close of regular trading on the Exchange.
Securities are valued at amortized cost. Under the amortized cost pricing
method, a portfolio investment is valued at its cost and, thereafter, any
discount or premium is amortized to maturity, regardless of the impact of
fluctuating interest rates on the market value of the investment. Amortized
cost pricing facilitates the maintenance of a $1.00 constant net asset value
per share, but, of course, this cannot be guaranteed. All assets of each Fund
for which there is no other readily available valuation method are valued at
their fair value as determined in good faith by the Trustees.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares through broker-dealers who have selling agreements with
the Trust's distributor, Pioneer Funds Distributor, Inc. (" PFD"). Class A
shares may also be purchased directly from PFD. Call Pioneering Services
Company ("PSC") at 1-800-225-6292 if you need assistance.
The minimum initial investment is $1,000 for Class A and Class B shares except
as specified below. The minimum initial investment is $50 for Class A accounts
being established to utilize monthly bank drafts, government allotments,
payroll deduction and other similar automatic investment plans. Separate
minimum investment requirements apply to retirement plans and to telephone and
wire orders placed by broker-dealers; no sales charges or minimum requirements
apply to the reinvestment of dividends or capital gains distributions.
The minimum subsequent investment is $100 for Class A shares and $500 for Class
B shares except that the subsequent minimum investment amount for Class B share
accounts may be as little as $100 if an automatic investment plan is
established (see "Automatic Investment Plans").
Dividends on Purchases. Each Fund seeks to be fully invested at all times in
order to accrue dividends to your account each day. To be eligible for each
day's dividend accrual, each direct purchase of shares in the Funds must be
converted to same day funds. Same day funds are monies credited to State Street
Bank and Trust Company's ("State Street Bank") account with the Federal Reserve
Bank of Boston.
If your purchase order is received in good order and accepted by the Fund by
12:00 noon Eastern Time, it will be executed at the net asset value next
determined after your purchase payment is converted into same day funds or
other immediately available funds and your shares will begin earning dividends
that day. If your purchase order is received in good order and accepted after
12:00 noon Eastern Time and prior to the close of the Exchange (usually, 4:00
p.m. Eastern Time), it will be executed at the net asset value next determined
after your purchase payment is converted into same day funds or other
immediately available funds and your shares will begin earning dividends on the
next business day. When you purchase shares by check, your shares will begin
earning dividends when the check is converted into same day funds, normally
within two business days.
On any day that State Street Bank, the Custodian or the Exchange closes early,
or, in the PMC's judgment closing early is in the best interest of the Trust's
shareholders, the Trust reserves the right to advance the time by which
transactions (purchases, sales or exchanges) must be received in order to be
eligible for that day's dividends.
Making Your Investment
All purchases of Class B shares, except exchanges from other Pioneer mutual
funds, can only be processed through broker-dealers who have selling agreements
with PFD.
By Mail. (Class A shares only) Send your check or negotiable bank draft, drawn
on a U.S. bank and payable in U.S. dollars to the Fund in which you would like
to purchase shares, to PSC at the above address. Cash will not be accepted.
Your payment should be accompanied by a completed new account application or
other instructions indicating your account number.
If you pay by check or draft, State Street Bank will normally make same day
funds available to the Trust, and the Trust will accept the order, on the first
business day after receipt. Checks drawn on some other banks may take more than
one day to be collected and share purchases will not be made until same day
funds are available to the Trust.
By Wire. (Class A shares only) When you wish to wire money to an existing
Pioneer account, call PSC at 1-800-255-6292 to obtain complete instructions.
You will be asked to instruct your bank to transmit same day funds by wire
through
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the Federal Reserve banking system. The wiring instructions must include the
following information:
<TABLE>
<CAPTION>
<S> <C>
Receiving Bank State Street Bank and Trust Company
Address 225 Franklin Street
Boston MA 02101
ABA Transit 011000028
For Further Credit To Shareholder Name
Existing Pioneer Account #
Name of Pioneer Fund
</TABLE>
Federal funds directed to the Custodian must be pre-approved by calling PSC at
1-800-255-6292. To be sure that a bank wire is accepted on the same day it is
sent, you should give the Trust notice of your intention to make such
investment as early in the day as possible since the process of making a wire
transfer may take several hours and may be affected by your bank's internal
procedures concerning wire transfers. Your bank may charge for sending same day
funds on your behalf. State Street Bank presently does not charge for receipt
of wired same day funds, but reserves the right to charge for this service in
the future.
Selecting a Class of Shares
Class A Shares. Each Fund offers Class A shares at net asset value without the
imposition of an initial sales charge by mail or by wire as described above.
Class B Shares. Class B shares are offered only by Pioneer Cash Reserves Fund.
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates shown in the table below. The
charge will be assessed on the amount equal to the lesser of the current market
value or the original purchase cost of the shares being redeemed. No CDSC will
be imposed on increases in account value above the initial purchase price,
including shares derived from the reinvestment of dividends or capital gains
distributions. The amount of the CDSC, if any, will vary depending on the
number of years from the time of purchase until the time of redemption of Class
B shares. For the purpose of determining the number of years from the time of
any purchase, all payments during a quarter will be aggregated and deemed to
have been made on the first day of that quarter. In processing redemptions of
Class B shares, the Fund will first redeem shares not subject to any CDSC, and
then shares held longest during the six-year period. As a result, you will pay
the lowest possible CDSC.
<TABLE>
<CAPTION>
CDSC as a Percentage of Dollar
Year Since Purchase Amount Subject to CDSC
<S> <C>
First. 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
</TABLE>
Class B shares will automatically convert into Class A shares at the end of the
calendar quarter that is eight years after the purchase date, except as noted
below. Class B shares acquired by exchange from Class B shares of another
Pioneer fund will convert into Class A shares based on the date of the initial
purchase and will be subject to the CDSC applicable to the shares of the fund
originally purchased. Class B shares acquired through reinvestment of
distributions will convert into Class A shares based on the date of the initial
purchase to which such shares relate. For this purpose, Class B shares acquired
through reinvestment of distributions will be attributed to particular
purchases of Class B shares in accordance with such procedures as the Trustees
may determine from time to time. The conversion of Class B shares to Class A
shares is subject to the continuing availability of a ruling from the Internal
Revenue Service, which the Fund has obtained, or an opinion of counsel that
such conversions will not constitute taxable events for federal tax purposes.
There can be no assurance that such ruling will continue to be in effect at the
time any particular conversion would occur. The conversion of Class B shares to
Class A shares will not occur if such ruling is no longer available and,
therefore, Class B shares would continue to be subject to higher expenses than
Class A shares for an indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares and on any Class A shares subject to a CDSC may be waived or reduced for
non-retirement account if: (a) the redemption results from the death of all
registered owners of an account (in the case of UGMAs, UTMAs and trust
accounts, waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed or
(b) the redemption is made in connection with limited automatic redemptions as
set forth in "Systematic Withdrawal Plans" (limited in any year to 10% of the
value of the account in the Fund at the time the withdrawal plan is
established).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may be
waived or reduced for retirement plan accounts if: (a) the redemption results
from the death or a total and permanent disability as defined in Section 72 of
the Internal Revenue Code of 1986, as amended (the "Code"), occurring after the
purchase of the shares being redeemed of a shareholder or participant in an
employer-sponsored retirement plan; (b) the distribution is to a participant in
an IRA, 403(b) or employer-sponsored retirement plan, is part of a series of
substantially equal payments made over the life expectancy of the participant
or the joint life expectancy of the participant and his or her beneficiary or
as scheduled periodic payments to a participant (limited in any year to 10% of
the value of the participant's account at the time the distribution amount is
established; a required minimum distribution due to the participant's
attainment of age 70-1/2 may exceed the 10% limit only if the distribution
amount is based on plan assets held by Pioneer); (c) the distribution is from a
401(a) or 401(k) retirement plan and is a return of excess employee deferrals
or employee contributions or a qualifying hardship distribution as defined by
the Code or results from a termination of employment (limited with respect to a
termination to 10% per year of the value of the plan's assets in the Fund as of
the later of the prior December 31 or the date the account was established
unless the plan's assets are being rolled over to or reinvested in the same
class of shares of a Pioneer mutual fund subject to the CDSC of the shares
originally held); (d) the distribution is from an IRA, 403(b) or
employer-sponsored retirement plan and is to be rolled over to or reinvested in
the same class of shares in a Pioneer mutual
8
<PAGE>
fund and which will be subject to the applicable CDSC upon redemption; (e) the
distribution is in the form of a loan to a participant in a plan which permits
loans (each repayment of the loan will constitute a new sale which will be
subject to the applicable CDSC upon redemption); or (f) the distribution is
from a qualified defined contribution plan and represents a participant's
directed transfer (provided that this privilege has been pre-authorized through
a prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may be
waived or reduced for either non- retirement or retirement plan accounts if:
(a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is prohibited
by applicable laws from paying a CDSC in connection with the acquisition of
shares of any registered investment company; or (b) the redemption is made
pursuant to each Fund's right to liquidate or involuntarily redeem shares in a
shareholder's account.
Broker-Dealers. Pioneer Cash Reserve Fund's Class B shares may only be
purchased through a securities broker or dealer. You may purchase Class A
shares of any Fund in the Trust through a securities broker or dealer or
directly from PFD. A broker or dealer may charge for this service. If you do
not have a securities broker or dealer, PSC can refer you to one.
An order for either Class of Fund shares received by PFD from a broker-dealer
prior to either 12:00 noon Eastern Time or the close of regular trading on the
Exchange is confirmed at the price appropriate for that Class next determined
after the order is received. It is the responsibility of broker-dealers to
transmit orders so that they will be received by PFD prior to either 12:00 noon
Eastern Time or its close of business (usually 5:30 p.m. Eastern Time).
General. The Fund reserves the right in its sole discretion to withdraw all or
any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
Conditions of Purchase. The Trust reserves the right to reject any purchase or
exchange. If a purchase is canceled because your check is returned unpaid, you
are responsible for any loss the Trust incurs and a separate charge may be made
for any unpaid check. The Trust may redeem shares from your account(s) to cover
these costs and charges and you may be restricted from making future purchases
of shares of any of the Pioneer mutual funds.
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) Fund shares on any day the Exchange is open by
selling either some or all of your shares to the Fund by mail, by telephone, by
facsimile ("fax"). Class A share accounts may also sell by check when properly
authorized in advance.
You may sell your shares either through your broker-dealer or directly to the
Fund. Please note the following:
* If you are selling shares from a retirement account, you must make your
request in writing (except for exchanges to other Pioneer mutual funds which
can be requested by phone or in writing). Call 1-800-622-0176 for more
information.
* If you are selling shares from a non-retirement account, you may use any of
the methods described below.
Your shares will be sold at the share price next calculated (expected to be a
constant $1.00) after your order is received and accepted, less any applicable
CDSC. Subject to the limitation described above for shares purchased by check,
sale proceeds are normally mailed or wired the next business day but in any
event not later than seven days after your order is accepted. The Fund reserves
the right to withhold payment of the sale proceeds until checks received by the
Fund in payment for the shares being sold have cleared, which may take up to 15
calendar days from the purchase date.
By Check. (Class A Shares Only) If requested, each Fund will establish a
checking account for a Class A shareholder(s) with The First National Bank of
Omaha (the "First National Bank"). Please allow 1 to 2 weeks for receipt of
your supply of personalized checks. Checks may be drawn for not less than $500
nor more than $250,000, payable to anyone. When a check is presented to First
National Bank for payment, it will cause the Fund to redeem at the net asset
value next determined a sufficient number of the shareholder's shares to cover
the check. A shareholder receives the daily dividends declared on his or her
shares until the day the check clears.
The checking account will be subject to First National Bank's rules and
regulations governing checking accounts. If there is an insufficient number of
shares in a shareholder's account when a check is presented to First National
Bank for payment, the check will be returned. Since the aggregate value of a
shareholder's account in each Fund changes each day because of the daily
dividend, a shareholder should not attempt to withdraw the full amount in his
or her account by using a check. The checkwriting privilege is not available
for Class B share accounts. In addition, checkwriting is generally not
available for retirement plan accounts or accounts subject to backup
withholding (see "Dividends, Distributions and Tax Status" and "Voluntary Tax
Withholding").
In Writing. You may sell your shares by delivering a written request signed by
all registered owners and in good order to PSC, at P.O. Box 9014 Boston, MA
02205-9014, however, you must use a written request, including a signature
guarantee, to sell your shares if any of the following situations applies:
* you wish to sell over $50,000 worth of shares,
* your account registration or address has changed within the last 30 days,
* the check is not being mailed to the address on your account (address of
record),
* the check is not being made out to the account owners, or
* the sale proceeds are being transferred to a Pioneer account with a
different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed,
9
<PAGE>
the dollar amount or number of shares to be redeemed, and any other applicable
requirements as described below. Unless instructed otherwise, Pioneer will send
the proceeds of the sale to the address of record. Fiduciaries or corporations
are required to submit additional documents. For more information, contact PSC
at 1-800-225-6292.
Written requests will not be accepted until they are received in good order by
PSC. Good order means that there are no outstanding claims or requests to hold
redemptions on the account, certificates are endorsed by the record owner(s)
exactly as the shares are registered and the signature(s) are guaranteed by an
eligible guarantor. You should be able to obtain a signature guarantee from a
bank, broker, dealer, credit union (if authorized under state law), securities
exchange or association, clearing agency or savings association. A notary
public cannot provide a signature guarantee. Signature guarantees are not
accepted by facsimile (fax). The Trust may waive the signature guarantee
requirement for redemption requests of $50,000 or less provided that the
redemption proceeds are directed to the shareholder(s) of record at the address
of record.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to the Fund. You may redeem up to $50,000 of your
shares by telephone or fax and receive the proceeds by check or by wire. The
redemption proceeds must be made payable exactly as the account is registered.
To receive the proceeds by check: the check must be sent to the address of
record which must not have changed in the last 30 days. To receive the proceeds
by bank wire: the wire must be sent to your previously designated bank wire
address of record which must have been properly pre-designated either on your
Account Application or on an Account Options Form and which must not have
changed in the last 30 days. To redeem by fax send your redemption request to
1-800-225-4240. The telephone redemption option is not available to retirement
plan accounts. You may always elect to deliver redemption instructions to PSC
by mail. See "Telephone Transactions and Related Liabilities" below. Telephone
and fax redemptions will be priced as described above.
A redemption order received by telephone or fax in proper form by PMC before
12:00 noon Eastern Time on any business day becomes effective as of 12:00 noon
that day, and shares so redeemed will not receive that day's dividend. A
redemption order received by telephone or fax in proper form by PSC after 12:00
noon Eastern Time and prior to the close of the Exchange (usually, 4:00 p.m.
Eastern Time) on any business day becomes effective as of 4:00 p.m. that day,
and shares so redeemed will receive that day's dividend. In either case,
proceeds of such a redemption will normally be mailed or wired the next
business day. State Street Bank charges a fee for wiring funds; the fee will be
deducted from the amount redeemed.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to act
as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any time.
Your broker-dealer must receive your request and transmit it to PFD either by
12:00 noon Eastern Time or before PFD's close of business to receive the next
determined redemption price. Your broker-dealer is responsible for providing
all necessary documentation to PFD and may charge you for its services.
Redemption Through Compatible Computer Facilities. Certain broker-dealers or
other institutions may be able to redeem shares through compatible computer
facilities. Contact PSC at 1-800-225-6292 to determine whether your computer
facilities are compatible and to receive further instructions. The proceeds of
redemption requests received through compatible computer facilities before
12:00 noon Eastern Time will normally be transmitted in Federal Funds on the
same day and those shares will not receive the dividend declared on that
business day.
Small Accounts. The minimum account value is $500. If you hold shares of a Fund
in an account with a net asset value of less than the minimum required amount
due to redemptions or exchanges, the Fund may redeem the shares held in this
account at net asset value if you have not increased the net asset value of the
account to at least the minimum required amount within six months of notice by
the Fund to you of the Fund's intention to redeem the shares.
General. The Trust and First National Bank each reserve the right at any time
to terminate, suspend or change the terms of or impose fees on any redemption
method described in this Prospectus, except redemption by mail. Redemptions may
be suspended or payment postponed during any period in which any of the
following conditions exist: the Exchange is closed or trading on the Exchange
is restricted; an emergency exists as a result of which disposal by a Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for a Fund to fairly determine the value of the net assets of its
portfolio; or the SEC, by order, so permits.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the Fund
out of which you wish to exchange and the name of the Fund into which you wish
to exchange, your fund account number(s), the Class of shares to be exchanged
and the dollar amount or number of shares to be exchanged. Written exchange
requests must be signed by all record owner(s) exactly as the shares are
registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to the Fund. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. All telephone exchange requests will be recorded.
See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
account for shares of the same Class in another Pioneer account on a monthly or
quarterly basis. The accounts must have identical registrations and the
originating account must have a minimum balance of $5,000. The exchange will be
effective on the 18th day of the month.
General. Exchanges must be at least $1,000. Shares of any of the Funds in the
Trust acquired through an exchange
10
<PAGE>
from another Pioneer mutual fund or through reinvestment of dividends or
capital gains distributions, may be exchanged at net asset value for the same
class of shares in any other Pioneer mutual fund. Shares of any Fund of the
Trust acquired by direct purchase may be exchanged for the same class of any
other Pioneer mutual fund at net asset value plus any applicable sales charge.
Not all Pioneer funds offer more than one Class of shares. A new Pioneer
account opened through an exchange must have a registration identical to that
on the original account.
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of an exchange.
Shares acquired in an exchange will be subject to the CDSC of the shares
originally held. For purposes of determining the amount of any applicable CDSC,
the length of time you have owned the shares acquired by exchange will be
measured from the date you acquired the original shares and will not be
affected by any subsequent exchange.
Exchange requests received by PSC before 12:00 noon Eastern Time will be
effective at 12:00 noon if the requirements above have been met and they will
not be eligible for that day's dividend. Exchange requests received by PSC
after 12:00 noon and before 4:00 p.m. Eastern Time will be effective at 4:00
p.m. if the requirements above have been met and they will be eligible for that
day's dividend. PSC will process exchanges only after receiving an exchange
request in good order. There are currently no fees or sales charges, other than
those described above, imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Fund exchanged and a purchase of shares in another fund.
Therefore, an exchange could result in a gain or loss on the shares sold,
depending on the tax basis of these shares and the timing of the transaction,
and special tax rules may apply. Shareholders will be given 60 days notice
prior to any termination or change which materially limits the existing
exchange privilege.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making any
exchange. To prevent abuse of the exchange privilege to the detriment of other
Fund shareholders, the Trust and PFD reserve the right to limit the number
and/or frequency of exchanges and/or to charge a fee for exchanges. The
exchange privilege may be changed or discontinued and may be subject to
additional limitations, including certain restrictions on purchases by market
timer accounts.
X. DISTRIBUTION PLANS
The Trust, on behalf of the Funds, has adopted a Plan of Distribution for Class
A shares ("Class A Plan") and, on behalf of Pioneer Cash Reserves Fund, for
Class B shares ("Class B Plan") in accordance with Rule 12b-1 under the
Investment Company Act of 1940, as amended (the "1940 Act"), pursuant to which
certain distribution and service fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD its actual expenditures
to finance any activity primarily intended to result in the sale of Class A
shares or to provide services to holders of Class A shares, provided the
categories of expenses for which reimbursement is made are approved by the
Fund's Board of Trustees. As of the date of this Prospectus, the Board of
Trustees has approved the following categories of expenses for Class A shares
of the Fund: (i) a service fee to be paid to qualified broker-dealers in an
amount not to exceed 0.15% per annum of the Fund's daily net assets
attributable to Class A shares and (ii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing any
of the described services, management would consider what action, if any, would
be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and may
not exceed 0.15% of the Fund's average daily net assets attributable to Class A
shares. Distribution expenses of PFD are expected to substantially exceed the
distribution fees paid by the Fund in a given year. The Class A Plan may not be
amended to increase materially the annual percentage limitation of average net
assets which may be spent for the services described therein without approval
of the shareholders of the Fund.
The Class B Plan provides that the Fund will pay a distribution fee at the
annual rate of 0.75% of the Fund's average daily net assets attributable to
Class B shares and will pay PFD a service fee at the annual rate of 0.25% of
the Fund's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its distribution services to
the Fund. The service fee is intended to be additional compensation for
personal services and/or account maintenance services with respect to Class B
shares. PFD also receives the proceeds of any CDSC imposed on the redemption of
Class B shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase price
of such shares and, as compensation therefore, PFD may retain the service fee
paid by the Fund with respect to such shares for the first year after purchase.
Dealers will become eligible for additional service fees with respect to such
shares commencing in the 13th month following the purchase. Dealers may from
time to time be required to meet certain criteria in order to receive service
fees. PFD or its affiliates are entitled to retain all service fees payable
under the Class B Plan for which there is no dealer of record or for which
qualification standards have not been met as partial consideration for personal
services and/or account maintenance services performed by PFD or its affiliates
for shareholder accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
Each Fund of the Trust has elected to be treated, has qualified and intends to
qualify each year as a "regulated investment company" under Subchapter M of the
Code so that it will not pay
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federal income taxes on income and capital gains distributed to shareholders at
least annually. Under the Code, a Fund will be subject to a nondeductible 4%
federal excise tax on a portion of its undistributed ordinary income and
capital gains if it fails to meet certain distribution requirements with
respect to each calendar year. Each Fund intends to make distributions in a
timely manner and accordingly does not expect to be subject to the excise tax.
At 4:00 p.m. Eastern Time each business day, each Fund will declare
substantially all of its net investment income (consisting of earned interest
income less expenses) as a dividend to its shareholders of record as of 12:00
noon Eastern Time. Shareholders begin earning dividends on the first business
day after a Fund is credited with same day funds. However, investors whose
payments are wired to and received by the Trust's Custodian in federal funds by
12:00 noon, Eastern Time, will receive the dividend declared that day. Unless
you specify otherwise on your Account Application, all distributions will be
automatically reinvested in additional full and fractional shares of the same
class of the Fund in which you hold shares.
Each month's distributions from net investment income will be paid on the last
business day of the month. Short-term capital gains distributions, if any, may
be paid with the daily dividend. For federal income tax purposes, all
distributions will normally be taxable to shareholders of Pioneer Cash Reserves
Fund and Pioneer U.S. Government Money Fund as ordinary income, whether taken
in cash or reinvested in shares. Dividends and capital gains distributions may
also be made at such times as may be necessary to avoid federal income or
excise tax under the Code.
The Code permits tax-exempt interest received by Pioneer Tax-Free Money Fund to
flow through as tax-exempt "exempt interest dividends" to the Fund's
shareholders, provided that at least 50% of the value of the total assets of
the Fund at the close of each quarter of its taxable year consists of
tax-exempt obligations. Although Pioneer Tax-Free Money Fund does not intend to
invest in private activity bonds or other tax-exempt securities generating
interest that is treated as a tax preference item for individuals subject to
the federal alternative minimum tax, all tax-exempt distributions of the Fund
may affect a corporate shareholder's liability for such tax. Distributions of
income from certain investment activities of Pioneer Tax-Free Money Fund, such
as repurchase agreements, may be taxable.
Interest on indebtedness incurred by a shareholder of Pioneer Tax-Free Money
Fund to purchase or carry shares of the Fund will generally not be deductible
for federal income tax purposes. The Fund may also not be an appropriate
investment for persons who are "substantial users" of facilities financed by
private activity bonds or persons related to substantial users. Shareholders
receiving social security or certain railroad retirement benefits may be
subject to federal income tax on a portion of such benefits as a result of
receiving investment income, including exempt-interest dividends and other
distributions paid by the Fund.
While Pioneer Tax-Free Money Fund seeks to maximize the percentage of income
distributed which is not subject to federal income taxes, it is possible that
under certain circumstances (see "Investment Policies") a small portion of the
income dividends paid by the Fund will be subject to federal income tax.
Taxable dividends and other taxable distributions which are paid to individuals
and other non-exempt payees will be subject to a 31% backup withholding of
federal income tax if a Fund is not provided with the shareholder's correct
taxpayer identification number and certification that the number is correct and
that the shareholder is not subject to backup withholding or the Fund receives
notice from the IRS or a broker that withholding applies. Please refer to the
Account Application for additional information.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents, or U.S.
corporations, partnerships, estates and trusts and who are subject to U.S.
federal income tax. In many states, the portion of the dividends paid by
Pioneer U.S. Government Money Fund or Pioneer Cash Reserves Fund that is
attributable to the interest received from certain U.S. Government obligations
will be exempt from state income taxation. Further, in some states, exempt-
interest dividends received from Pioneer Tax-Free Money Fund may be exempt from
state income taxation to the extent such dividends are attributable to interest
on obligations issued by the particular state or its political subdivisions,
agencies of instrumentalities. In some cases, state income tax rules that apply
to such distributions may condition either of these exemptions on certain
concentration, designation, reporting or other requirements, and these Funds
will not necessarily satisfy all such requirements in all states. Non-U.S.
shareholders and tax-exempt shareholders are subject to different tax treatment
that is not described above. You should consult your own tax adviser regarding
applicable state, local and other tax laws. Information as to the federal tax
status of distributions will be provided to shareholders annually.
XII. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for management and
supervision of the Funds. There are currently eight Trustees, six of whom are
not "interested persons" of the Trust as defined in the 1940 Act. The Board
meets at least quarterly. By virtue of the functions performed by PMC, the
Trust requires no employees other than its executive officers, all of whom
receive their compensation from PMC or other sources. The Statement of
Additional Information contains the names and general background of each
Trustee and executive officer of the Trust.
The Trust is managed under a contract with PMC. PMC serves as investment
adviser to the Trust and is responsible for the overall management of the
Trust's business affairs, subject to the authority of the Board of Trustees.
PMC is a wholly-owned subsidiary of The Pioneer Group, Inc. ("PGI"), a Delaware
corporation.
In addition to the three Funds that make up the Trust, PMC also manages and
serves as the investment adviser for other mutual funds and is an investment
adviser to certain other institutional accounts. PMC's and PGI's executive
offices are located at 60 State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Trust, PMC assists in the management
of the Trust and is authorized in its discretion to buy and sell securities for
the account of each Fund
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in the Trust. PMC pays all the expenses, including executive salaries and the
rental of certain office space, related to its services for the Trust, with the
exception of the following which are paid by the Trust: (a) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
PMC or its affiliates, office space and facilities and personnel compensation,
training and benefits; (b) the charges and expenses of auditors; (c) the
charges and expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by the Trust with respect to a Fund;
(d) issue and transfer taxes, chargeable to a Fund in connection with
securities transactions to which the Fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations, and all
taxes and corporate fees payable by a Fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of each Fund and/or its shares with the SEC,
individual states or blue sky securities agencies, territories and foreign
countries, including the preparation of Prospectuses and Statements of
Additional Information for filing with the SEC; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and the Trustees; (i) distribution fees paid by the Fund in
accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940 Act; (j)
compensation of those Trustees of the Trust who are not affiliated with or
interested persons of PMC, the Trust (other than as Trustees), PGI or PFD; (k)
the cost of preparing and printing share certificates; and (l) interest on
borrowed money, if any. In addition to the expenses described above, the Trust
shall pay all brokers' and underwriting commissions chargeable to the Trust in
connection with securities transactions to which a Fund is a party.
Orders for each Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of the Trust or other Pioneer funds. See the Statement of Additional
Information for a further description of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.40% per annum of each
Fund's average daily net assets. The fee is normally computed daily and paid
monthly. PMC has voluntarily and temporarily agreed to reduce its management
fees for each Fund and to make other arrangements as may be necessary to keep
such expenses below specified levels. See "Expense Information."
During the fiscal year ended December 31, 1994, Pioneer Cash Reserves Fund,
Pioneer U.S. Government Money Fund and Pioneer Tax-Free Money Fund incurred
actual expenses of $1,117,021, $324,626 and $167,214, respectively, before
management fees, paid or payable to PMC, and other expenses were reduced
pursuant to PMC's voluntary expense limitation agreement in effect through
December 31, 1994, as described further in the Statement of Additional
Information.
John F. Cogan, Jr., Chairman of the Board and President of the Trust and
President and a Director of PGI and of PMC, owned approximately 15% of the
outstanding capital stock of PGI as of January 31, 1995. PMC is a wholly-owned
subsidiary of PGI.
XIII. DESCRIPTION OF SHARES AND VOTING RIGHTS
The shares of the Trust are divided into three series. Each share represents an
equal proportionate interest in a Fund with each other share. The Trust
reserves the right to create and issue additional series of shares in addition
to the three Funds currently available. The shares of a series participate
equally in the earnings, dividends and assets of the particular series, except
to the extent the rights of a particular class of shares may differ from those
of another class or classes. As of the date of this Prospectus, the Trustees
have authorized the issuance of a single class of shares, designated Class A
shares, for Pioneer U.S. Government Money and Pioneer Tax- Exempt Money Fund
and two classes of shares, designated Class A and Class B, for Pioneer Cash
Reserves Fund. The shares of each class represent an interest in the same
portfolio of investments of the Fund. Each class has equal rights as to voting,
redemption, dividends and liquidation, except that each class bears different
distribution and transfer agent fees and may bear other expenses properly
attributable to the particular class. Class A and Class B shareholders have
exclusive voting rights with respect to the Rule 12b-1 distribution plans
adopted by holders of those shares in connection with the distribution of
shares.
The Trust is not required, and does not intend, to hold annual shareholder
meetings although special meetings may be called for the purpose of electing or
removing Trustees, changing fundamental investment restrictions or approving a
management contract.
Generally, shares of each Fund will vote as a single series on matters that
affect all Funds in substantially the same manner. As to matters affecting each
Fund (e.g., changes in a Fund's investment restrictions), shares of each Fund
will vote as a separate series. Shares have no preemptive, subscription, or
conversion rights and are freely transferable. Shareholders are entitled to one
vote for each share held and may vote in the election of Trustees and on other
matters submitted to shareholders. Shares are fully-paid and, except as set
forth in the Statement of Additional Information, non-assessable.
Upon liquidation of the Trust, each Fund's shareholders will receive pro rata,
subject to the rights of creditors, (a) the proceeds of the sale of the assets
held in the respective series to which the shares of the Fund relate, less (b)
the liabilities of the Trust attributable to the respective series. Shares will
remain on deposit with the Trust's transfer agent and certificates will not be
issued.
XIV. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Trust.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109. Inquiries
to PSC should be mailed to Shareholder Services, Pioneering Services
Corporation, P.O.
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Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the
"Custodian") serves as the custodian of the Trust's portfolio securities. The
principal address of the Mutual Fund division of the Custodian is 40 Water
Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains accounts for shareholders and all transactions are recorded in
these accounts. Confirmation statements showing the details of transactions are
sent to shareholders monthly. The Pioneer Combined Account Statement, mailed
quarterly, is available to all shareholders who have more than one Pioneer
account. The bottom portion of the confirmation statement should be used as a
remittance slip to make additional investments or to indicate a change of
address on your account.
Shareholders whose shares are held in the name of an investment broker-dealer
or other party will not normally have an account with the Fund and might not be
able to utilize some of the services available to shareholders of record.
Examples of services which might not be available are investment or redemption
of shares by mail, automatic reinvestment of dividends and capital gains
distributions, withdrawal plans, Letters of Intention, Rights of Accumulation,
telephone exchanges and redemptions, and newsletters.
Additional Investments. You may add to your account by sending a check (minimum
of $100 for Class A shares and $500 for Class B shares) to PSC (account number
and Class of shares should be clearly indicated). The bottom portion of a
confirmation statement may be used as a remittance slip to make additional
investments. Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of the Exchange on the
day of receipt.
Automatic Investment Plans. You may arrange for regular automatic investments
of $100 or more through government/military allotments, payroll deduction or
through a Pioneer Investomatic Plan. A Pioneer Investomatic Plan provides for a
monthly or quarterly investment by means of a pre-authorized draft drawn on a
checking account. Pioneer Investomatic Plan investments are voluntary, and you
may discontinue the plan at any time without penalty upon 30 days' written
notice to PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD
in maintaining these plans.
Financial Reports and Tax Information
Shareholders will receive financial reports semi-annually. Each annual report
will be audited by the Trust's independent public accountants. In January of
each year, each Fund will mail to shareholders information about the tax status
of dividends and distributions.
Dividend Options
Regular Reinvestment. Dividends are automatically reinvested in additional
shares of the same class of each Fund in which you maintain an investment
unless you instruct otherwise.
Check. You may elect (in writing) to receive monthly dividend checks. You may
also direct that dividend checks be paid to another person or sent to another
address (other than the one on file for your account), although if you make
either designation after you have opened your account, a signature guarantee
signed by all registered account owners must accompany your instructions.
Directed Dividends. You may elect (in writing) to have the dividends paid by
one Pioneer fund account invested in a second Pioneer fund account of the same
class. The value of this second account must be at least $1,000 ($500 for
Pioneer Fund or Pioneer II). Invested dividends may be in any amount, and there
are no fees or charges for this service. Retirement plan shareholders may only
direct dividends to accounts with identical registrations, i.e., "PGI IRA Cust
for John Smith" may only go into another account registered "PGI IRA Cust for
John Smith."
Direct Deposit. If you have elected to take distributions, whether dividends
or dividends and capital gains, in cash, or have established a Systematic
Withdrawal Plan, you may choose to have those cash payments deposited directly
into your savings, checking or NOW bank account. You may establish this service
by completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and capital
gains distributions paid from your account (before any reinvestment) and
forward the amount withheld to the Internal Revenue Service as a credit against
your federal income taxes. This option is not available for retirement plan
accounts or for accounts subject to backup withholding.
Retirement Plans
Interested persons should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to Pioneer's retirement plans for
businesses, Simplified Employee Pension Plans, Individual Retirement Accounts
(IRA's), Section 401(k) salary reduction plans and Section 403(b) retirement
plans for employees of associations, public school systems and charities, all
of which are available in conjunction with investments in Pioneer Cash Reserves
Fund and Pioneer U.S. Government Money Fund. The Account Application contained
in this Prospectus should not be used to establish such plans. Separate
applications are required.
Yield Information
Yield information may be obtained by telephone 1-800-225-4321. Yield
information is updated each weekday and is based on the annualized yield over
the immediately preceding seven days, determined with a formula established by
the SEC. See "Investment Results" below. Yields are not fixed and will vary
with changes in the income and expenses of the Funds.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own TDD keyboard equipment, you can
call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern Time, to contact our telephone representatives with questions
about your account.
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Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan providing for fixed payments at regular intervals.
Withdrawals from Class B share accounts are limited to 10% of the value of the
account at the time the plan is implemented. See "Waiver or Reduction of
Contingent Deferred Sales Charge" for more information. Periodic checks of $50
or more will be sent to you monthly or quarterly. You may also direct that
withdrawal checks be paid to another person, although if you make this
designation after you have opened your account, a signature guarantee must
accompany your instructions.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may sell or exchange your Fund shares by telephone by
calling 1-800-225-6292 between 8:00 a.m. and 8:00 p.m. Eastern Time on
weekdays. See "Share Price," "How to Sell Fund Shares" and "How to Exchange
Fund Shares" for more information. To confirm that each transaction instruction
received by telephone is genuine, each Fund will record each telephone
transaction, require the caller to provide the personal identification number
(PIN) for the account and send you a written confirmation of each telephone
transaction. Different procedures may apply to accounts that are registered to
non-U.S. citizens or that are held in the name of an institution or in the name
of an investment broker-dealer or other third-party. If reasonable procedures,
such as those described above, are not followed, a Fund may be liable for any
loss due to unauthorized or fraudulent instructions. Each Fund may implement
other procedures from time to time. In all other cases, neither a Fund, PSC or
PFD will be responsible for the authenticity of instructions received by
telephone, therefore, you bear the risk of loss for unauthorized or fraudulent
telephone transactions.
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 a Fund by
telephone to institute a redemption or exchange. You should communicate with a
Fund in writing if you are unable to reach the Fund by telephone.
XV. INVESTMENT RESULTS
From time to time, each of the Funds may include in advertisements or other
communications to existing or proposed shareholders its respective "yield" and
"effective yield." The "yield" is computed by dividing a Fund's net investment
income per share attributable to the appropriate class during a base period of
seven days (which period will be stated in the communication) by the net asset
value per share for the appropriate class of the Fund on the last day of such
seven- day period. The Fund's net investment income per share is determined by
dividing net investment income during the base period by the average number of
shares for the appropriate class of the Fund entitled to receive dividends
during the base period. The Fund's seven-day yield for the appropriate class is
then annualized by a computation that assumes that the Fund's net investment
income is earned for a one-year period at the same rate as during the seven-day
base period. The "effective yield" is calculated similarly, except that income
is assumed to be reinvested. The "effective yield" will be slightly higher than
the "yield" because of the compounding effect of the assumed reinvestment.
Pioneer Tax-Free Money Fund may also from time to time advertise its taxable
equivalent yield and taxable equivalent effective yield. The Fund's taxable
equivalent yield is determined by dividing that portion of the Fund's yield
(calculated as described above) that is tax exempt by one minus a stated
marginal federal income tax rate. The Fund's taxable equivalent effective yield
is determined in a similar manner. For further information on the computation
of taxable equivalent yield, see the Appendix to this Prospectus.
The yields of the Funds will vary from time to time depending on market
conditions, the composition of the Funds' portfolios and operating expenses of
the Funds. The temporary policy of the Funds' investment adviser to reduce
management fees and limit expenses will, so long as such policy is in effect,
have the effect of increasing yield. These factors and possible differences in
the methods used in calculating yields should be considered when comparing
performance information published for other investment companies and other
investment vehicles. Yield quotations should also be considered relative to the
risks associated with the Funds' investment objective and policies. At any time
in the future, yield quotations may be higher or lower than past return or
yield quotations, and there can be no assurance that any historical yield
quotation will continue in the future.
The Funds may also include comparative performance information in advertising
or marketing their shares. This performance information may include data from
Lipper Analytical Services, Inc., Donoghue's Money Fund Report or other
industry publications.
For more information regarding the computation of yield, see the Statement of
Additional Information.
XVI. APPENDIX
Some of the terms used in this Prospectus are described below.
"Bank Obligations" include certificates of deposit which are negotiable
certificates evidencing the indebtedness of a commercial bank to repay funds
deposited with it for a definite period of time (usually from 14 days to one
year) at a stated interest rate. Bankers' acceptances are credit instruments
evidencing the obligation of a bank to pay a draft which has been drawn on it
by a customer. These instruments reflect the obligation both of the bank and of
the drawer to pay the face amount of the instrument upon maturity. Time
deposits are non- negotiable deposits maintained in a banking institution for a
specified period of time. The Funds generally purchase time deposits with a
maturity of the following business day. Time deposits with a maturity of two
business days or more will be considered to be illiquid for purposes of the
Funds' investment restrictions.
"Commercial Paper" consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by corporations in order to finance their
current operations. The Funds may
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invest only in commercial paper rated A-1 by S&P or P-1 by Moody's. The ratings
A-1 and P-1 are the highest commercial paper ratings assigned by S&P and
Moody's. Commercial paper which is not rated is not necessarily of lower
quality than that which is rated, but may be less marketable and therefore
provide a higher yield.
"Money Market" refers to the marketplace composed of the financial institutions
which handle the purchase and sale of liquid, short-term, high-grade debt
instruments. The money market is not a single entity, but consists of numerous
separate markets, each of which deals in a different type of short-term debt
instrument. These include U.S. Government obligations, commercial paper, bank
obligations, municipal securities, and other debt instruments, generally
referred to as money market instruments.
"Repurchase Agreements" are transactions by which a Fund purchases a security
and simultaneously commits to resell that security to the seller at an agreed
upon price on an agreed upon date within a number of days (usually not more
than seven) from the date of purchase. The resale price reflects the purchase
price plus an agreed upon market rate of interest which is unrelated to the
coupon rate or maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value (at least equal to the amount of
the agreed upon resale price and marked to market daily) of the underlying
security. Whether a repurchase agreement is the purchase and sale of a security
or a collateralized loan has not been definitely established for purposes other
than the application of the federal statutory provisions exempting U.S.
government obligations from state taxation (for which purpose a repurchase
agreement is treated as a collateralized loan). This might become an issue in
the event of the bankruptcy of the other party to the transaction. While it is
not possible to eliminate all risk from these transactions (particularly the
possibility of a decline in the market value of the underlying securities, as
well as delay and costs to a Fund in connection with bankruptcy proceedings),
it is the policy of the Trust to enter into repurchase agreements only with
banks and broker dealers approved by the Board of Trustees of the Trust and
only with respect to U.S. Government securities which throughout the period
have a value at least equal to the amount of the loan (including accrued
interest). It is also the policy of the Board of Trustees to evaluate on a
periodic basis the creditworthiness of the parties with which the Funds engage
in repurchase agreements.
"Tax-Exempt Securities" are debt obligations issued to obtain funds for various
public purposes, including the construction of a wide range of public
facilities such as bridges, highways, housing, mass transportation, schools,
streets and water and sewer works. Other public purposes for which tax-exempt
municipal securities may be issued include refunding outstanding obligations,
obtaining funds for general operating expenses, and obtaining funds to loan to
other public institutions. Such obligations are included within the category of
tax-exempt securities only if the interest paid thereon is both exempt from
regular federal income tax and not an item of tax preference under the federal
alternative minimum tax. There are a variety of short-term tax-exempt
securities in which Pioneer Tax-Free Money Fund may invest, including: (i) tax
anticipation notes, which finance working capital needs of municipalities and
are issued in anticipation of the receipt of tax revenue; (ii) revenue
anticipation notes, which are issued in expectation of the receipt of other
kinds of revenue, such as federal revenues available under the federal revenue
sharing program; (iii) bond anticipation notes, which are normally issued to
provide interim financing until long-term financing can be arranged; and (iv)
tax-exempt commercial paper, which includes short-term promissory notes issued
by municipalities to supplement their cash flow. The two principal
classifications of medium and long-term tax-exempt municipal securities are
"general obligation" and "revenue" bonds. General obligation bonds are secured
by the issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. The payment of such bonds may be dependent upon an
appropriation by the issuer's legislative body. The characteristics and
enforcement of general obligation bonds vary according to the law applicable to
the particular issuer. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. There are, of
course, variations in the security of all tax-exempt municipal securities, both
within a particular classification and between classifications, depending on
numerous factors. The yields on such securities are also dependent on a variety
of factors, including general money market conditions, supply and demand and
general conditions of the municipal securities markets, size of a particular
offering, the maturity of the obligation and rating of the issue. The ratings
of Moody's and S&P represent their opinions as to the quality of various
tax-exempt municipal securities. It should be emphasized, however, that ratings
are not absolute standards of quality. Consequently, securities with the same
maturity, coupon and rating may have different yields while securities of the
same maturity and coupon with different ratings may have the same yield.
"U.S. Government Obligations" are debt securities (including bills, notes, and
bonds) issued by the U.S. Treasury or issued by an agency or instrumentality of
the U.S. Government which is established under the authority of an Act of
Congress. Such agencies or instrumentalities include, but are not limited to,
the Federal National Mortgage Association, the Small Business Administration,
the Government National Mortgage Association, and the Federal Home Loan Banks.
Although all obligations of agencies and instrumentalities are not direct
obligations of the U.S. Treasury, payment of the interest and principal on
these obligations is generally backed directly or indirectly by the U.S.
government. This support can range from the backing of the full faith and
credit of the United States (U.S. Treasury securities and, for example,
securities issued by the Small Business Administration and the Government
National Mortgage Association) to the backing solely of the issuing
instrumentality itself (securities issued by the Federal National Mortgage
Association and the Federal Home Loan Banks). In the case of obligations not
backed by the full faith and credit of the United States, the Trust must look
principally to the agency issuing or guaranteeing the obligation for ultimate
repayment and may not be able to assert a claim against the United States
itself in the event the agency or instrumentality does not meet its
commitments.
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Taxable Equivalent Yields*
The tables below show the approximate taxable yields which are equivalent to
hypothetical tax-exempt yields from 3% to 7% under Federal income tax laws
applicable to individuals during 1994.
<TABLE>
<CAPTION>
Taxable Yield Required
Single Return Joint Return Tax To Equal A Tax Free Yield Of:
(Taxable Income)* Rate 3% 4% 5% 6% 7%
<S> <C> <C> <C> <C> <C> <C> <C>
Up to $22,750 Up to $38,000 15.0% 3.53 4.71 5.88 7.06 8.24
$22,751-$55,100 $38,001-$91,850 28.0% 4.17 5.56 6.94 8.33 9.72
$55,101-$115,000 $91,851-$140,000 31.0% 4.35 5.80 7.25 8.70 10.12
$115,001-$250,000 $140,001-$250,000 36.0% 4.69 6.25 7.81 9.38 10.94
Over $250,000 Over $250,000 39.6% 4.97 6.62 8.78 9.93 11.95
</TABLE>
*Net amount subject to Federal income tax after deductions and exemptions.
Table does not reflect the effect of Deduction Limitation and Exemption
Phaseout described below** or of the alternative minimum tax, if any. Table
assumes person filing Single Return is not a married individual filing a
separate return, a surviving spouse, or a head of household.
**Deduction Limitation: Each $100 of adjusted gross income ("AGI") in excess of
$111,800 ($55,900 for marrieds filing separately) causes the loss of $3 of
itemized deductions. This limitation affects all itemized deductions other
than medical expenses, investment interest, and casualty, theft and wagering
losses. However, not more than 80% of a taxpayer's itemized deductions can be
eliminated. The threshold amounts will be adjusted for inflation from year to
year.
Exemption Phaseout: Each $2,500 or fraction thereof of AGI in excess of
$167,700 for joint filers ($111,800 for single taxpayers) causes taxpayers to
lose 2% of their personal exemptions. The threshold amounts will be adjusted
for inflation from year to year.
Some tax brackets and the threshold amounts will be adjusted for inflation in
1994.
The following formula can be used to calculate a taxable yield
which is equivalent to the corresponding tax-free yield:
Tax Free Yield = Taxable Equivalent Yield
1 - Your Tax Bracket
For example, if you are in the 28% tax bracket and earn a tax-free
yield of 5%, the taxable equivalent yield would be 6.94%.
5% = .05 = 6.94%
1 - 28% .72
There can be no assurance that the Pioneer Tax-Free Money Fund will achieve any
specific tax-exempt yield. While it is expected that a substantial portion of
the interest income distributed to investors in the Tax-Free Fund will be
exempt from regular federal income taxes, portions of such distributions may be
subject to regular federal income tax or federal alternative minimum tax. In
addition, all or a substantial portion of such distributions may be subject to
state and local taxes. Subsequent tax law changes could result in prospective
or retroactive changes in the tax brackets, tax rates and tax equivalent yields
set forth above.
17
<PAGE>
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Pioneer Cash Reserves Fund
Pioneer U.S. Government Money Fund
Pioneer Tax-Free Money Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
SHERMAN B. RUSS, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call . . .
Existing and new accounts, prospectuses,
applications, service forms and
telephone transactions ..................................1-800-225-6292
Automated fund yields, prices and
account information ......................................1-800-225-4321
Retirement plans ..........................................1-800-622-0176
Toll-free fax .............................................1-800-225-4240
Telecommunications Device for the Deaf (TDD) ..............1-800-225-1997
0395-2371
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Pioneer
Cash Reserves
Fund
Pioneer
U.S. Government
Money Fund
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