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(c) and Rule 101 of Regulation S-T under the Securities
Act of 1933, attached for electronic filing are copies of the Trust's Prospectus
and Statement of Additional Information dated March 31, 1995. The tags mark
paragraphs changed in the Trust's Prospectus and Statement of Additional
Information since the filing of Post-Effective Amendment No. 12 on March 29,
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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<PAGE>
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>
[logo]PIONEER LOGO
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
(C)The Pioneer Group, Inc.
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
<PAGE>
Pioneer Cash Reserves Fund
Class A and Class B Shares
Pioneer U.S. Government Money Fund
Class A Shares
Pioneer Tax-Free Money Fund
Class A Shares
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
March 31, 1995
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus dated March 31, 1995 of Pioneer Money Market Trust (the "Trust"). A
copy of the Prospectus can be obtained free of charge by calling Shareholder
Services at 1-800-225-6292 or by written request to the Trust at 60 State
Street, Boston, Massachusetts 02109. The Trust's financial statements for the
most recent fiscal year ended December 31, 1994 are attached to this Statement
of Additional Information.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions.........................2
2. Management of the Trust......................................4
3. Investment Adviser...........................................9
4. Principal Underwriter........................................10
5. Distribution Plans...........................................11
6. Shareholder Servicing/Transfer Agent.........................13
7. Custodian....................................................14
8. Independent Public Accountants...............................14
9. Portfolio Transactions.......................................14
10. Tax Status...................................................16
11. Description of Shares........................................18
12. Certain Liabilities..........................................18
13. Determination of Net Asset Value.............................19
14. Systematic Withdrawal Plan...................................21
15. Investment Results...........................................22
16. Financial Statements.........................................
Appendix A...................................................A-1
Appendix B...................................................B-1
-------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus of the Trust (the "Prospectus") identifies the investment
objective of each series of the Trust: Pioneer Cash Reserves Fund, Pioneer U.S.
Government Money Fund and Pioneer Tax-Free Money Fund (collectively, the
"Funds"), and the principal investment policies of the Funds. Other investment
policies and a further description of some of the policies described in the
Prospectus are set forth below.
The following policies and limitations supplement those discussed in the
Prospectus. Whenever an investment policy or limitation states a maximum
percentage of a Fund's assets that may be invested in any security or sets forth
a policy regarding quality standards, such standard or other limitation shall be
determined immediately after and as a result of the Fund's investment.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with such Fund's investment objectives and policies. For
this purpose, the issuer of a tax-exempt security is deemed to be the entity
(public or private) primarily responsible for the payment of the principal of
and interest on the security.
Certificates of Deposit. Pioneer Cash Reserves Fund may invest in
certificates of deposit of large domestic banks and savings and loan
associations (i.e., banks which at the time of their most recent annual
financial statements show total assets in excess of $1 billion), including
foreign branches of such domestic banks, and of smaller banks as described
below. The Fund will not invest in certificates of deposit of foreign banks.
Investment in certificates of deposit issued by foreign branches of
domestic banks involves investment risks that are different in some respects
from those associated with investment in certificates of deposit issued by
domestic banks, including the possible imposition of withholding taxes on
interest income, the possible adoption of foreign governmental restrictions
which might adversely affect the payment of principal and interest on such
certificates of deposit, or other adverse political or economic developments. In
addition, it might be more difficult to obtain and enforce a judgment against a
foreign branch of a domestic bank.
Although the Fund's investment adviser recognizes that the size of a bank
is important, this fact alone is not necessarily indicative of its
creditworthiness. The Fund may invest in certificates of deposit issued by banks
and savings and loan institutions which had at the time of their most recent
annual financial statements total assets of less than $1 billion, provided that
(i) the principal amounts of such certificates of deposit are insured by an
2
<PAGE>
agency of the U.S. Government, (ii) at no time will the Fund hold more than
$100,000 principal amount of certificates of deposit of any one such bank and
(iii) at the time of acquisition, no more than 10% of the Fund's assets (taken
at current value) are invested in certificates of deposit of such banks having
total assets not in excess of $1 billion.
Investment Restrictions. The following numerical list sets forth all of the
fundamental investment restrictions applicable to the Funds. These restrictions
cannot be changed for a Fund unless a majority of the outstanding securities of
such Fund approves the change. As used in the Prospectus and this Statement of
Additional Information, such approval means the approval of the lesser of (i)
the holders of 67% or more of the shares represented at a meeting if the holders
of more than 50% of the outstanding shares are present in person or by proxy, or
(ii) the holders of more than 50% of the outstanding shares.
A Fund may not:
(1) except with respect to investments in obligations of (a) the U.S.
government, its agencies, authorities or instrumentalities and (b) domestic
banks, purchase any security if, as a result (i) more than 5% of the assets of
the Fund would be in the securities of any one issuer, or (ii) more than 25% of
its assets would be in a particular industry;
(2) borrow money, except from banks for extraordinary purposes or to meet
redemptions in amounts not exceeding 33 1/3% of its total assets (including the
amount borrowed). None of the Funds intends to borrow money during the coming
year;
(3) make short sales of securities;
(4) purchase securities on margin;
(5) write, purchase or otherwise invest in any put, call, straddle or
spread option or buy or sell real estate, commodities or commodity futures
contracts or invest in oil, gas or mineral exploration or development programs;
(6) make loans to any person, except by (a) the purchase of a debt
obligation in which the Fund is permitted to invest and (b) engaging in
repurchase agreements;
(7) purchase the securities of other investment companies or investment
trusts, unless they are acquired as part of a merger, consolidation or
acquisition of assets;
(8) act as an underwriter, except as it may be deemed to be an underwriter
in a sale of restricted securities;
3
<PAGE>
(9) invest in companies for the purpose of exercising control or
management; or
(10) issue senior securities, except that the issuance of multiple classes
of shares, in accordance with a statute, regulation or order of the Securities
and Exchange Commission, shall not constitute the issuance of a senior security.
In addition, in order to comply with certain state statutes and
non-fundamental policies of the Funds, the Funds will not (i) pledge, mortgage
or hypothecate their portfolio securities if at the time of such action the
value of the securities so pledged, mortgaged or hypothecated would exceed 10%
of the value of a Fund, (ii) commit more than 10% of their assets to illiquid
investments, such as repurchase agreements that mature in more than seven days,
(iii) invest more than 5% of their assets in companies which, including
predecessors, have a record of less than three years continuous operation, (iv)
invest in warrants, (v) purchase or retain the securities of any issuer if any
officer or Trustee of the Fund or its investment adviser is an officer or
director of such issuer and beneficially owns more than 1/2 of 1% of the
securities of such issuer and all of the officers and the Trustees of the Fund
and the Fund's investment adviser together own more than 5% of the securities of
such issuer, (vi) buy or sell real estate, including real estate limited
partnerships, except that each Fund may acquire or lease office space for its
own use, invest in securities of issuers that invest in real estate or interests
therein, invest in securities that are secured by real estate or interests
therein, purchase and sell mortgage-related securities and hold and sell real
estate acquired by the Fund as a result of the ownership of securities or (vii)
invest in oil, gas or mineral exploration or development programs or leases. The
term "person" as used in fundamental investment restriction no. 6 includes
institutions as well as individuals. Policies in this paragraph may be changed
by the Trustees without shareholder approval or notification.
See the Prospectus for a discussion of certain additional regulatory
requirements applicable to the Funds.
2. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees provides broad supervision over the affairs
of the Trust. The officers of the Trust are responsible for the Trust's
operations. The Trustees and executive officers of the Trust are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are "interested persons" of the Trust
within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act").
4
<PAGE>
JOHN F. COGAN, JR.,* Chairman of the Board, President and Trustee
President and Director of The Pioneer Group, Inc. ("PGI"); Chairman and
Director of Pioneering Management Corporation ("PMC"); Chairman of the
Board and Chief Executive Officer of Pioneer Winthrop Advisers ("PWA");
Chairman of the Board and Director of Pioneer Funds Distributor, Inc.
("PFD"); Director of Pioneering Services Corporation ("PSC") and Pioneer
Capital Corporation ("PCC"); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer
International Corp. ("PIntl"), and Pioneer Metals & Technology, Inc.
("PMT"); Chairman of the Board and Director of Teberebie Goldfields Limited
("TGL"); Chairman, President and Director of Pioneer Goldfields Limited
("PGL"); Chairman of the Supervisory Board of Pioneer Fonds Marketing GmbH
("PFM"); and Chairman and Partner, Hale and Dorr (counsel to the Fund). 60
State Street, Boston, Massachusetts
RICHARD H. EGDAHL, M.D., Trustee
Professor of Management, Boston University School of Management, since
1988; Professor of Public Health, Boston University School of Public
Health; Professor of Surgery, Boston University School of Medicine and
Boston University Health Policy Institute; Director, Boston University
Medical Center; Executive Vice President and Vice Chairman of the Board,
University Hospital; Academic Vice President for Health Affairs, Boston
University; Director, Essex Investment Management Company, Inc. (investment
adviser), Health Payment Review, Inc. (health care containment software
firm), Mediplex Group, Inc. (nursing care facilities firm), Peer Review
Analysis, Inc. (health care utilization management firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Director, Franciscan
Children's Hospital. Boston University Health Policy Institute, 53 Bay
State Road, Boston, Massachusetts
MARGARET B. W. GRAHAM, Trustee
Manager of Research Operations, Xerox Palo Alto Research Center, since
September 1991; Professor of Operations Management and Management of
Technology, Boston University School of Management, since 1989; Associate
Dean, BUSM, 1988 to 1990 and previously, Associate Professor, Department of
Operations Management, Boston University School of Management.
The Keep, P. O. Box 110, Little Deer Isle, Maine 04650
JOHN W. KENDRICK, Trustee
Professor Emeritus of Economics, George Washington University and
Adjunct Scholar, American Enterprise Institute. Hyatt Residence, Apt.
1521, 8100 Connecticut Avenue, Chevy Chase, Maryland 20815
5
<PAGE>
MARGUERITE A. PIRET, Trustee
President, Newbury, Piret & Company, Inc.
(merchant banking firm).
One State Street, Suite 415, Boston, Massachusetts
DAVID D. TRIPPLE,* Trustee and Executive Vice President
Executive Vice President and Director of PGI; Director of PCC and Pioneer
SBIC Corporation ("PSBIC"); Executive Vice President, President, Chief
Investment Officer and a Director of PMC. 60 State Street, Boston,
Massachusetts
STEPHEN K. WEST, Trustee
Partner, Sullivan & Cromwell (law firm)
125 Broad Street, New York, New York
JOHN WINTHROP, Trustee
President, John Winthrop & Co., Inc. (a private investment firm) and
Director of NUI Corp., Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves. One North Adgers Wharf,
Charleston, South Carolina
SHERMAN B. RUSS, Vice President
Vice President of PMC, Pioneer Bond Fund and Pioneer America Income Trust.
WILLIAM H. KEOUGH, Treasurer
Treasurer of each of the Pioneer mutual funds; Senior Vice President, Chief
Financial Officer and Treasurer of PGI; Treasurer of PFD, PMC, PSC, PCC,
PIC, PIntl, PMT, PGL and SBIC and Treasurer and Director of PPC.
ERIC RECKARD, Assistant Treasurer
Assistant Treasurer to each of the Pioneer Funds since 1994; Manager of
Fund Accounting for PMC and Assistant to Chief Financial Officer prior to
1994.
JOSEPH P. BARRI, Secretary
Secretary of PCC, PGI and PMC; and Partner, Hale and Dorr (counsel to the
Fund).
ROBERT NAULT, Assistant Secretary
General Counsel of PGI since 1995; formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as a junior partner.
Each of the above, with the exception of Mr. Russ, is an officer and/or
trustee or director of the Pioneer Funds listed below. The Trust's Declaration
of Trust provides that the holders of two-thirds of its outstanding shares may
6
<PAGE>
vote to remove a Trustee of the Trust at any special meeting of shareholders.
The business address of all officers is 60 State Street, Boston, Massachusetts
02109.
To the knowledge of the Trust, no officer or Trustee of the Trust owned 5%
or more of the issued and outstanding shares of PGI on February 28, 1995, except
Mr. Cogan who then owned approximately 15% of such shares.
At February 28, 1995, the Trustees and officers of the Trust owned in the
aggregate less than 1% of the outstanding securities of the Trust. As of
February 28, 1995, PGI-Rollover IRA Custodian for George E. Siek, Sr. owned
approximately 6.95% of Pioneer U.S. Government Money Fund's total assets and
Kirpet Co. owned approximately 9.95% of Pioneer Cash Reserves Fund's total
assets. To the knowledge of the Trust, as of February 28, 1995, no person other
than mentioned above owned of record or beneficially more than 5% of the
outstanding shares of any series of the Trust.
PGI, a publicly-owned Delaware corporation, owns all of the outstanding
capital stock of PMC and PSC. PMC owns all of the outstanding capital stock of
PFD. The table below lists all the Pioneer Funds currently offered to the public
and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Winthrop Real Estate Investment Fund * PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
7
<PAGE>
Pioneer Cash Reserves Fund PMC PFD
Pioneer U.S. Government Money Market Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC **
* Pioneer Winthrop Advisers is the investment adviser of this fund.
** This fund is a closed-end investment company.
PMC, the Fund's investment adviser, also manages the investments of certain
institutional private accounts.
Compensation of Officers and Trustees. The Trust pays no salaries or
compensation to any of its officers. The Trust pays an annual trustees' fee of
$100, and a payment of $1,000 plus expenses per meeting attended, to each
Trustee who is not affiliated with PMC, PFD or PSC and pays an annual trustees'
fee of $500 plus expenses to each Trustee affiliated with PMC, PFD or PSC. Any
such fees and expenses paid to affiliates or interested persons of PMC, PFD or
PSC are reimbursed to the Trust under its Management Contract. The following
table sets forth certain information with respect to the compensation of each
Trustee of the Trust:
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from Trust and
Compensation Part of Pioneer Family
Name of Trustee from the Trust* Trust's Expenses of Funds**
<S> <C> <C> <C>
John F. Cogan, Jr.*** $ 500 $0 $ 9,000
Richard H. Egdahl, M.D. 3,400 0 $55,650
Margaret B.W. Graham 3,400 0 $55,650
John W. Kendrick 3,400 0 $55,650
Marguerite A. Piret 4,300 0 $66,650
David D. Tripple*** 500 0 $ 9,000
Stephen K. West 4,000 0 $63,650
John Winthrop 4,000 0 $63,650
<FN>
* As of Trust's fiscal year end.
** As of December 31, 1994 (calendar year end for all Pioneer Funds listed above).
*** All fees paid by the Trust to "interested" Trustees are reimbursed to the Trust by PMC.
</FN>
</TABLE>
8
<PAGE>
3. INVESTMENT ADVISER
The Trust has contracted with PMC, 60 State Street, Boston, Massachusetts,
to act as its investment adviser. The term of the contract is one year and it is
renewable annually by the vote of a majority of the Board of Trustees of the
Trust (including a majority of the Board of Trustees who are not parties to the
contract or interested persons of any such parties). The vote must be cast in
person at a meeting called for the purpose of voting on such renewal. This
contract terminates if assigned and may be terminated without penalty by either
party by vote of its Board of Directors or Trustees or a majority of its
outstanding voting securities and the giving of sixty days' written notice. As
compensation for its management services and expenses incurred, PMC is entitled
to a management fee at the rate of 0.40% per annum of each Fund's average daily
net assets. The fee is normally computed daily and paid monthly. PMC has agreed
not to impose management fees for the Funds and if necessary to limit or
otherwise reduce other operating expenses to the extent needed to limit the
expenses of each Fund in accordance with the schedule set forth in the
Prospectus under Note 2 to "Expense Information." The management fee
attributable to Class B Shares will only be imposed to the extent it is imposed
for Class A Shares. PMC's agreement is voluntary and temporary and may be
revised or terminated at any time. The purpose of this policy is to enhance a
Fund's dividend yield during the period when, because of its smaller size, fixed
expenses have a more significant impact on yield.
During the fiscal year ended December 31, 1994, pursuant to the expense
limitation discussed above, the management fees of Pioneer Cash Reserves Fund,
Pioneer U.S. Government Money Fund and Pioneer Tax Free Money Fund were reduced
by $250,479, $117,274 and $36,209, respectively, resulting in actual management
fees paid during such period of $214,043, $0 and $0, respectively. During the
fiscal year ended December 31, 1993, the management fees of Pioneer Cash
Reserves Fund, Pioneer U.S. Government Money Fund and Pioneer Tax-Free Money
Fund were reduced by $201,232, $92,361 and $29,957, respectively, resulting in
actual management fees paid during such period of $28,991, $0 and $0,
respectively. During the fiscal year ended December 31, 1992, the management
fees of Pioneer Cash Reserves Fund, Pioneer U.S. Government Money Fund and
Pioneer Tax-Free Money Fund were reduced by $136,097, $104,034 and $30,942,
respectively, resulting in actual management fees paid during such period to PMC
of $125,487, $0 and $0, respectively.
9
<PAGE>
4. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Trust in connection with
the continuous offering of the Trust's Class A shares and Pioneer Cash Reserves
Fund Class B shares. During the Trust's two most recently completed fiscal
years, no underwriting commissions were paid to PFD. PFD commenced service as
the Trust's principal underwriter as of March 31, 1995.
The Trust, on behalf of each Fund, entered into an Underwriting Agreement
with PFD. The Underwriting Agreement will continue from year to year if annually
approved by the Trustees. The Underwriting Agreement provides that PFD will bear
expenses for the distribution of the Trust's shares, except for expenses
incurred by PFD for which it is reimbursed by the Trust under the Rule 12b-1
distribution plans applicable to the Class A and Class B shares.
PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Trust. PFD also pays certain expenses in connection with the
distribution of the Trust's shares, including the cost of preparing, printing
and distributing advertising or promotional materials, and the cost of printing
and distributing prospectuses and supplements to prospective shareholders. The
Trust bears the cost of registering its shares under federal and state
securities law and the laws of certain foreign countries.
The Trust and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Trust.
The Trust will not generally issue shares for consideration other than
cash. At the Trust's sole discretion, however, it may issue shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger, or other acquisition of portfolio securities (other than
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities) provided (i) the securities meet the investment
objectives and policies of the Trust; (ii) the securities are acquired by the
Trust for investment and not for resale; (iii) the securities are not restricted
as to transfer either by law or liquidity of market; and (iv) the securities
have a value which is readily ascertainable. An exchange of securities for Trust
shares may be a taxable transaction to the shareholder.
10
<PAGE>
The redemption price of shares of beneficial interest of the Trust may, at
the Manager's discretion, be paid in cash or portfolio securities. The Trust
has, however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant
to which the Trust is obligated to redeem shares solely in cash up to the lesser
of $250,000 or 1% of the Trust's net asset value during any 90-day period for
any one shareholder. Should the amount of redemptions by any shareholder exceed
such limitation, the Trust will have the option of redeeming the excess in cash
or portfolio securities. In the latter case, the securities are taken at the
value employed in determining the Trust's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board deems fair and reasonable.
5. DISTRIBUTION PLANS
The Trust, on behalf of each Fund, has adopted a plan of distribution
pursuant to Rule 12b-1 promulgated by the Commission under the 1940 Act with
respect to Class A shares (the "Class A Plan") and a plan of distribution with
respect to Class B shares of Pioneer Cash Reserves Fund only (the "Class B
Plan") (together, the "Plans").
Class A Plan. Pursuant to the Class A Plan a Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of the Class A Plan shares. Certain categories of such expenditures have been
approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of each Fund pursuant to
the Class A Plan are accrued daily at a rate which may not exceed the annual
rate of 0.15% of a Fund's average daily net assets attributable to Class A
shares.
Class B Plan. The Class B Plan provides that Pioneer Cash Reserves Fund
shall pay PFD, as the Fund's distributor for its Class B shares, a daily
distribution fee equal on an annual basis to 0.75% of the Fund's average daily
net assets attributable to Class B shares and will pay PFD a service fee equal
to 0.25% of the Fund's average daily net assets attributable to Class B shares
(which PFD will in turn pay to securities dealers which enter into a sales
agreement with PFD at a rate of up to 0.25% of the Fund's average daily net
assets attributable to Class B shares owned by investors for whom that
securities dealer is the holder or dealer of record). This service fee is
intended to be consideration for personal services and/or account maintenance
services rendered by the dealer with respect to Class B shares. PFD will advance
to dealers the first-year service fee at a rate equal to 0.25% of the amount
invested. As compensation therefor, PFD may retain the service fee paid by the
Fund with respect to such shares for the first year after purchase. Dealers will
11
<PAGE>
become eligible for additional service fees with respect to such shares
commencing in the thirteenth month following purchase. Dealers may from time to
time be required to meet certain other 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.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to Pioneer Cash Reserves Fund. PFD
pays commissions to dealers as well as expenses of printing prospectuses and
reports used for sales purposes, expenses with respect to the preparation and
printing of sales literature and other distribution related expenses, including,
without limitation, the cost necessary to provide distribution-related services
or personnel, travel, office expenses and equipment. The Class B Plan also
provides that PFD will receive all CDSCs attributable to Class B shares. (See
"Distribution Plans" in the Prospectus.)
General. In accordance with the terms of the Plans, PFD provides to the
Trust for review by the Trustees a quarterly written report of the amounts
expended under the respective Plan and the purpose for which such expenditures
were made. In the Trustees' quarterly review of the Plans, they will consider
the continued appropriateness and the level of reimbursement or compensation the
Plans provide.
No interested person of the Trust, nor any Trustee of the Trust who is not
an interested person of the Fund, has any direct or indirect financial interest
in the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by each of the Funds and except
to the extent certain officers may have an interest in PFD's ultimate parent,
PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Trust, as defined in the 1940 Act (none of whom has or
have any direct or indirect financial interest in the operation of the Plans)
(the "Qualified Trustees"), cast in person at a meeting called for the purpose
of voting on the Plans. In approving the Plans, the Trustees identified and
considered a number of potential benefits which the Plans may provide. The Board
of Trustees believes that there is a reasonable likelihood that the Plans will
benefit each Fund and its current and future shareholders. Under their terms,
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<PAGE>
the Plans remain in effect from year to year provided such continuance is
approved annually by vote of the Trustees in the manner described above. The
Plans 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 Class or Classes affected thereby,
and material amendments of the Plans must also be approved by the Trustees in
the manner described above. On March 10, 1995, the Board of Trustees approved an
amendment to the Trust's Class A Plan, on behalf of each Fund, authorizing PFD,
in its capacity as principal underwriter of the Trust's shares, to receive
compensation from the Trust pursuant to the Class A Plan. Under the original
Class A Plan, PFD served as servicing agent for the Trust with respect to the
Plan. The Board of Trustees determined that this amendment would not result in
an increase of the annual percentage limitation of average net assets which may
be spent by the Trust, on behalf of each Fund, for the services described with
respect to each Fund's Class A shares in the Class A Plan. A Plan may be
terminated at any time, without payment of any penalty, by vote of the majority
of the Trustees who are not interested persons of the Trust and have no direct
or indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the respective Class of a Fund
(as defined in the 1940 Act). A Plan will automatically terminate in the event
of its assignment (as defined in the 1940 Act). In the Trustees' quarterly
review of the Plans, they will consider the Plans' continued appropriateness and
the level of compensation they provide.
During the fiscal year ended December 31, 1994, the Funds incurred total
distribution fees pursuant to the Class A Distribution Plan as follows:
Pioneer Cash Pioneer U.S. Government Pioneer Tax-Free
Reserves Fund Money Fund Money Fund
$165,050 $36,283 $8,147
Distribution fees were paid by the Fund to PFD in reimbursement of expenses
related to servicing of shareholder accounts and to compensating dealers and
sales personnel. There were no Class B Shares outstanding on December 31, 1994.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The Trust has contracted with PSC, 60 State Street, Boston, Massachusetts,
to act as shareholder services and transfer agent for the Trust. This contract
terminates if assigned and may be terminated without penalty by either party by
vote of its Board of Directors or Trustees or a majority of its outstanding
voting securities and the giving of ninety days' written notice.
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<PAGE>
Under the terms of its contract with the Trust, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Trust; (ii) distributing dividends and capital gains
associated with Trust portfolio accounts; and (iii) maintaining account records
and responding to shareholder inquiries. PSC handles all routine communications
with shareholders but obtains data processing and operational services from
Advanced Information Service Company of Boston, Massachusetts.
PSC receives an annual fee of $27.45 per shareholder account from the Trust
as compensation for the services described above. This fee is set at an amount
determined by vote of a majority of the Trustees (including a majority of the
Trustees who are not parties to the contract with PSC or interested persons of
any such parties) to be comparable to fees for such services being paid by other
investment companies.
7. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian"), 40 Water Street, Boston,
Massachusetts 02109, is the custodian of the Trust's assets. The Custodian's
responsibilities include safekeeping and controlling each Fund's cash and
securities, handling the receipt and delivery of securities and collecting
interest and dividends on the Funds' investments. The Custodian does not
determine the investment policies of the Funds or decide which securities the
Funds will buy or sell. The Funds may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
Pursuant to a separate agreement with the Custodian, the Custodian also
provides certain accounting services to the Trust, including the calculation of
yield for the Funds.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, One International Place, Boston, Massachusetts 02110,
are the Trust's independent public accountants, providing audit services, tax
return review and assistance and consultation with respect to the preparation of
filings with the SEC.
9. PORTFOLIO TRANSACTIONS
The Funds intend to fully manage their portfolios by buying and selling
securities, as well as holding securities to maturity. In managing their
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<PAGE>
portfolios, the Funds seek to take advantage of market developments and yield
disparities, which may include use of the following strategies:
(1) shortening the average maturity of their portfolios in
anticipation of a rise in interest rates so as to minimize depreciation of
principal;
(2) lengthening the average maturity of their portfolios in
anticipation of a decline in interest rates so as to maximize yield;
(3) selling one type of debt security and buying another when
disparities arise in the relative values of each; and
(4) changing from one debt security to an essentially similar debt
security when their respective yields appear distorted due to market
factors.
The Funds engage in portfolio trading if they believe a transaction net of
costs (including taxes and custodian charges) will help in achieving the Trust's
investment objective.
Decisions relating to the purchase and sale of securities for the Funds,
the allocation of portfolio transactions and, where applicable, the negotiation
of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in and broker-dealers through which it seeks this result. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. The cost of
securities purchased from underwriters includes an underwriter's commission or
concession, and the prices at which securities are purchased and sold from and
to dealers include a dealer's mark-up or mark-down. PMC attempts to negotiate
with underwriters to decrease the commission or concession for the benefit of
the Funds. PMC normally seeks to deal directly with the primary market makers
unless, in its opinion, better prices are available elsewhere. Subject to the
requirement of seeking execution at the best available price, securities may, as
authorized by PMC's management contract, be bought from or sold to dealers who
have furnished statistical research and other information or services to PMC and
the Funds. Management believes that no exact dollar value can be calculated for
such services.
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<PAGE>
During the fiscal years ended December 31, 1994, 1993 and 1992,
respectively, the Funds paid no brokerage or underwriting commissions.
10. TAX STATUS
Federal Taxes. Each series of the Trust is treated as a separate entity for
federal income tax purposes. It is each Fund's policy to meet the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
for qualification as a regulated investment company. These requirements relate
to the sources of its income, diversification of its assets and the distribution
of its income to shareholders. If a Fund meets all such requirements and
distributes to its shareholders at least annually all investment company taxable
income and net capital gain, if any, which it receives, the Fund will be
relieved of the necessity of paying federal income tax. Because none of each
Fund's income is expected to arise from dividends, no part of the distributions
to its corporate shareholders will qualify for the dividends-received deduction
for corporations.
Any dividend declared by a Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
For federal income tax purposes, a Fund is permitted to carry forward a net
realized capital loss in any year to offset its realized capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
net realized capital gains are offset by such losses, they would not result in
federal income tax liability to the Fund and are not expected to be distributed
as such to shareholders.
Shareholders of the Pioneer Tax Free Money Fund should be aware that
tax-exempt interest (including "exempt-interest dividends" paid by the Fund) is
reportable for federal income tax purposes and that shareholders receiving
social security or certain railroad retirement benefits may be subject to
federal income tax on up to 85% of these benefits as a result of receiving
investment income, including exempt-interest dividends and other distributions
paid by the Fund. This Fund may realize some taxable income from the taxable
investments described in the prospectus, any recognized market discount income,
or a portion of discount from certain stripped tax-exempt securities. To the
extent that taxable income, if any, is distributed to shareholders of the Fund,
the distribution of such taxable income will be accounted for on an "average
annualized" as opposed to an "actual earned" basis. Although applicable tax law
is not entirely clear under all circumstances, the Fund intends to take the
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<PAGE>
position that it is the tax owner of a municipal obligation acquired subject to
a put option or standby commitment or acquired or held with certain other types
of put rights.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
Provided that each Fund qualifies as a regulated investment company ("RIC")
under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes. Provided that each Fund qualifies as an RIC
and meets certain income source requirements under Delaware Law, each Fund
should also not be required to pay Delaware corporation income tax.
The exemption of exempt-interest dividends for federal income tax purposes
does not necessarily result in exemption under the tax laws of any state or
local taxing authority, which vary with respect to the taxation of such dividend
income. It is possible that some states will exempt from tax that portion of an
exempt-interest dividend which represents interest received by Pioneer Tax-Free
Money Fund on that state's securities or that portion of an ordinary dividend
which represents interest received by Pioneer U.S. Government Money Fund or
Pioneer Cash Reserves Fund on direct obligations of the U.S. Government.
Therefore, such Funds will report annually to their shareholders the percentage
of interest income received during the preceding year, indicating the source of
such income. Each shareholder is advised to consult his own tax adviser
regarding the tax status of distributions from and an investment in a Fund under
applicable state or local tax law, including, in those states or localities that
impose taxes on intangible personal property, whether the portion of the value
of a Fund's shares attributable to direct obligations of the U.S. Government
and/or obligations issued by such state or its political subdivisions, agencies
and instrumentalities may be exempt from such taxes.
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, trusts or estates and who are subject to U.S.
federal income tax. Investors other than U.S. persons may be subject to
different U.S. tax treatment, including a 30% U.S. withholding tax (or
withholding tax at a lower treaty rate) on certain dividends treated as ordinary
income. The description above also does not address the special tax rules
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<PAGE>
applicable to certain classes of investors, such as banks, insurance companies
or tax-exempt entities. Shareholders should consult their own tax advisers on
these matters and on state, local and other applicable tax laws.
11. DESCRIPTION OF SHARES
The Trust's Agreement and Declaration of Trust permits the Board of
Trustees to authorize the issuance of an unlimited number of full and fractional
shares of beneficial interest (without par value) which may be divided into such
separate series as the Trustees may establish. Currently, the Trust consists of
the three series named herein. The Trustees may establish additional series of
shares in the future, and may divide or combine the shares into a greater or
lesser number of shares without thereby changing the proportionate beneficial
interests in the Trust. The Agreement and Declaration of Trust further
authorizes the Trustees to classify or reclassify any series of the shares into
one or more classes. Pursuant thereto, the Trustees have authorized the issuance
of two classes of shares of Pioneer Cash Reserves Fund, Class A shares and Class
B shares. Each share of a class of the Pioneer Cash Reserves Fund represents an
equal proportionate interest in the assets of that Fund allocable to that class.
Upon liquidation of the Pioneer Cash Reserves Fund, shareholders of each class
of the Fund are entitled to share pro rata in the Fund's net assets allocable to
such class available for distribution to shareholders. The Trust reserves the
right to create and issue additional series or classes of shares, in which case
the shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
Shareholders are entitled to one vote for each share held and may vote in
the election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. No amendment adversely affecting certain rights of shareholders may be
made to the Trust's Agreement and Declaration of Trust without the affirmative
vote of a majority of its shares. Shares have no preemptive or conversion
rights. Shares are fully paid and nonassessable by the Trust, except as stated
below.
12. CERTAIN LIABILITIES
As a Delaware business trust, the Trust's operations are governed by its
Agreement and Declaration of Trust dated March 7, 1995. A copy of the Trust's
Certificate of Trust, also dated March 7, 1995, is on file with the Office of
the Secretary of State of the State of Delaware. Generally, Delaware business
trust shareholders are not personally liable for obligations of the Delaware
business trust under Delaware law. The Delaware Business Trust Act (the
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<PAGE>
"Delaware Act") provides that a shareholder of a Delaware business trust shall
be entitled to the same limitation of liability extended to shareholders of
private for-profit corporations. The Trust's Agreement and Declaration of Trust
expressly provides that the Trust has been organized under the Delaware Act and
that the Agreement and Declaration of Trust is to be governed by Delaware law.
It is nevertheless possible that a Delaware business trust, such as the Trust,
might become a party to an action in another state whose courts refused to apply
Delaware law, in which case the trust's shareholders could be subject to
personal liability.
To guard against this risk, the Agreement and Declaration of Trust (i)
contains an express disclaimer of shareholder liability for acts or obligations
of the Trust and provides that notice of such disclaimer may be given in each
agreement, obligation and instrument entered into or executed by the Trust or
its Trustees, (ii) provides for the indemnification out of Trust property of any
shareholders held personally liable for any obligations of the Trust or any
series of the Trust and (iii) provides that the Trust shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the Trust and satisfy any judgment thereon. Thus, the risk of a
Trust shareholder incurring financial loss beyond his or her investment because
of shareholder liability is limited to circumstances in which all of the
following factors are present: (1) a court refused to apply Delaware law; (2)
the liability arose under tort law or, if not, no contractual limitation of
liability was in effect; and (3) the Trust itself would be unable to meet its
obligations. In the light of Delaware law, the nature of the Trust's business
and the nature of its assets, the risk of personal liability to a Fund
shareholder is remote.
The Agreement and Declaration of Trust further provides that the Trust
shall indemnify each of its Trustees and officers against liabilities and
expenses reasonably incurred by them, in connection with, or arising out of, any
action, suit or proceeding, threatened against or otherwise involving such
Trustee or officer, directly or indirectly, by reason of being or having been a
Trustee or officer of the Trust. The Agreement and Declaration of Trust does not
authorize the Trust to indemnify any Trustee or officer against any liability to
which he or she would otherwise be subject by reason of or for willful
misfeasance, bad faith, gross negligence or reckless disregard of such person's
duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of each Fund in the Trust is
determined 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
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the Exchange. As of the date of this Statement of Additional Information, these
institutions are open for business every weekday except for the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of each class of each Fund is also determined twice daily, at
12:00 noon Eastern Time and as of the close of regular trading on the Exchange,
if the Exchange was open, on any other day in which the level of trading in its
portfolio securities is sufficiently high that the current net asset value per
share might be materially affected by changes in the value of its portfolio
securities. On any day in which no purchase orders for the shares of a Fund
become effective and no shares are tendered for redemption, such Fund's net
asset value per share may not be determined.
The net asset value per share of each class of each Fund is computed by
taking the amount of the value of all of a Fund's assets attributable to a
class, less its liabilities attributable to a class, and dividing it by the
number of outstanding shares of that class. For purposes of determining net
asset value, expenses of each class of each Fund are accrued twice daily, at
12:00 noon Eastern Time and as of the close of regular trading on the Exchange,
and taken into account.
Except as set forth in the following paragraph, each Fund's portfolio
investments are valued on each business day on the basis of amortized cost, if
the Board of Trustees determines in good faith that such method approximates
fair value. This technique involves valuing an instrument at its cost and,
thereafter, assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price such Fund would receive if it sold the
investment. During periods of declining interest rates, the yield on shares of
the Funds computed as described below may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of its
portfolio investments. Thus, if the use of amortized cost by the Funds resulted
in a lower aggregate portfolio value on a particular day, a prospective investor
in a Fund would be able to obtain a somewhat higher yield than would result from
investment in a fund utilizing solely market values. The converse would apply in
a period of rising interest rates.
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Standby commitments will be valued at zero in determining net asset value.
"When-issued" securities will be valued at the value of the security at the time
the commitment to purchase is entered into.
The valuation of the Funds' portfolio investments based upon their
amortized cost and the concomitant expectation to maintain the Funds' per share
net asset value of $1.00 is permitted in accordance with Rule 2a-7 under the
1940 Act pursuant to which the Funds must adhere to certain conditions which are
described in detail in the Prospectus. The Funds must maintain a dollar-weighted
average portfolio maturity of 90 days or less. The maturities of variable rate
demand instruments held in the Funds' portfolios will be deemed to be the longer
of the demand period or the period remaining until the next interest rate
adjustment, although stated maturities may be in excess of one year. The
Trustees have established procedures designed to stabilize, to the extent
reasonably possible, the price per share of each class of each Fund for the
purpose of maintaining sales and redemptions at a single value. It is the
intention of each Fund to maintain each class' per-share net asset value of
$1.00 but there can be no assurance of this. Such procedures will include review
of the Funds' portfolio holdings by the Trustees, at such intervals as they may
deem appropriate, to determine whether the Funds' net asset value per class
calculated by using available market quotations deviates from $1.00 per share
and, if so, whether such deviation may result in material dilution or is
otherwise unfair to existing shareholders. In the event the Trustees determine
that such a deviation exists, they have agreed to take such corrective action as
they regard as necessary and appropriate, including: (i) the sale of portfolio
instruments prior to maturity to realize capital gains or losses or to shorten
average portfolio maturity; (ii) withholding dividends; (iii) redeeming shares
in kind; or (iv) establishing a net asset value per share by using available
market quotations.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan is designed to provide a convenient method
of receiving fixed payments at regular intervals from shares of any Fund in the
Trust deposited by the applicant under this Plan. Withdrawals from Class B share
accounts are limited to 10% of the value of the account at the time the plan is
implemented (see the Prospectus). You must deposit or purchase for deposit with
PSC shares of any Fund having a total value of not less than $10,000. Periodic
payments of $50 or more will be deposited monthly or quarterly directly into a
bank account designated by you, or will be sent to you, or any person designated
by you.
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Any income dividends or capital gains distributions on shares under the
Systematic Withdrawal Plan will be credited to the Plan account on the payment
date in full and fractional shares at the net asset value per share in effect on
the record date.
Systematic Withdrawal Plan payments are made from the proceeds of the
redemption of shares deposited under the Plan in a Plan account. To the extent
that such redemptions for periodic withdrawals exceed dividend income reinvested
in the Plan account, such redemptions will reduce and may ultimately exhaust the
number of shares deposited in the Plan account. In addition, the amounts
received by a shareholder cannot be considered as an actual yield or income on
his or her investment because part of such payments may be a return of his or
her capital.
The Systematic Withdrawal Plan may be terminated at any time (1) by written
notice to PSC or from PSC to the shareholder; (2) upon receipt by PSC of
appropriate evidence of the shareholder's death; or (3) when all shares under
the Plan have been redeemed. The fees of PSC for maintaining Systematic
Withdrawal Plans are paid by the Trust.
15. INVESTMENT RESULTS
From time to time, the Funds will provide yield quotations for Class A and
Class B shares. These quotations are calculated by standard methods prescribed
by the SEC and may from time to time be used in the Funds' Prospectus, Statement
of Additional Information, advertisements, shareholder reports or other
communications to shareholders. However, these yield quotations should not be
considered as representative of the performance of the Funds in the future
since, unlike some bank deposits or other investments which pay a fixed yield
for a stated period of time, the yields of the Funds will vary based on the
type, quality and maturities of the securities held in their portfolios,
fluctuations in short-term interest rates and changes in their expenses.
The Funds' yield quotations are computed using the appropriate figures for
a particular class as follows: the net change, exclusive of capital changes
(i.e., realized gains and losses from the sale of securities and unrealized
appreciation and depreciation), in the value of a hypothetical pre-existing
Class A or B share account having a balance of one share at the beginning of the
seven-day base period is determined by subtracting a hypothetical charge
reflecting expense deductions from the hypothetical account, and dividing the
net change in value by the value of the share at the beginning of the base
period. This base period return is then multiplied by 365/7 with the resulting
yield figure carried to the nearest 100th of 1%. The determination of net change
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in account value reflects the value of additional shares purchased with
dividends from the original share, dividends declared on both the original share
and any such additional shares, and all fees that are charged to the Fund, in
proportion to the length of the base period and the Fund's average account size
(with respect to any fees that vary with the size of an account).
The Funds may also advertise quotations of effective yield. Effective yield
is computed by compounding the unannualized base period return determined as in
the preceding paragraph by adding 1 to the base period return, raising the sum
to a power equal to 365 divided by 7, and subtracting one from the result,
according to the following formula:
Effective Yield = (base period return + 1) 365/7 - 1
The yield and effective yield of the Funds for the seven-day period ended
December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Before Expense Limitation After Expense Limitation
Effective Effective
Class A Shares Yield Yield Yield Yield
<S> <C> <C> <C> <C>
Pioneer Cash
Reserves Fund 4.64% 4.75% 4.91% 5.03%
Pioneer U.S.
Government Money
Fund 4.24% 4.34% 5.03% 5.15%
Pioneer Tax-Free
Money Fund 1.56% 1.59% 4.63% 4.73%
</TABLE>
Class B shares are a new class of shares first offered on the date hereof for
Pioneer Cash Reserves Fund only.
Pioneer Tax-Free Money 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 by dividing that portion of the
Fund's effective yield (calculated as described above) that is tax exempt by one
minus a stated marginal federal income tax rate. The Fund's taxable equivalent
yield and taxable equivalent effective yield assume that the proportion of
income of the Fund that is tax exempt over the seven-day period used in
determining the yield and effective yield quotations will be constant over the
52-week period over which such yield quotations are annualized. Pioneer Tax-Free
Money Fund's taxable equivalent yield and taxable equivalent effective yield for
the 7-day period ended December 31, 1994, for an investor in the 39.6% federal
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income tax bracket were 7.67% and 7.83%, respectively, except that absent
expense limitations, the Fund's taxable equivalent yield and taxable equivalent
effective yield would have been 2.58% and 2.63%, respectively.
Automated Information Line (FactFone). FactFone, Pioneer's 24-hour
automated information line, allows shareholders to dial toll-free 1-800-225-4321
and hear recorded fund information, including:
o net asset value prices for all Pioneer Funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market funds; and
o dividends and capital gains distributions on all funds.
Yields are calculated in accordance with SEC mandated standard formulas.
In addition, by using a personal identification number (PIN), shareholders
may access their account balance and last three transactions and may order a
duplicate statement.
All performance numbers communicated through FactFone represent past
performance, and figures for all quoted bond funds include the maximum
applicable sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of shares (except for Pioneer money
market funds, which seek a stable $1.00 share price) will also vary and may be
worth more or less at redemption than their original cost.
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APPENDIX A
Description of Municipal Bond, Short-Term
Note and Commercial Paper Ratings1
Moody's Investors Service, Inc.2
Municipal Bonds
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or the fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat bigger than in Aaa
securities.
Municipal Short-Term Notes
MIG-1: Notes which are rated MIG-1 are judged to be of the best quality,
enjoying strong protection from established cash flows for their servicing or
from established and broad-based access to the market for refinancing, or both.
MIG-2: Notes which are rated MIG-2 are judged to be of high quality, with
margins of protection ample though not so large as in the MIG-1 group.
- --------
1The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of a Fund's fiscal year-end.
2Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
A-1
<PAGE>
Commercial Paper
P-1: P-1 is the highest commercial paper rating assigned by Moody's. Among
the factors considered by Moody's in assigning ratings are the following: (i)
evaluation of the management of the issuer; (ii) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (iii) evaluation of the issuer's products in
relation to competition and customer acceptance; (iv) liquidity; (v) amount and
quality of long-term debt; (vi) trend of earnings over a period of ten years;
(vii) financial strength of any parent company and the relationships which exist
with the issuer; and (viii) recognition by management of the issuer of
obligations which may be present or may arise as a result of public interest
questions and preparations to meet such obligations.
Standard & Poor's Ratings Group3
Municipal Bonds
AAA: Bonds rated AAA are highest grade obligations. This rating indicates
an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
Municipal Short-Term Notes
SP-1+: Notes which are rated SP-1+ are judged to be of the best quality,
enjoying overwhelming safety characteristics.
SP-1: Notes which are rated SP-1 have a very strong or strong capacity to
pay principal and interest.
Commercial Paper
A-1: Commercial paper rated A-1 or better has the following
characteristics: (i) the liquidity ratio of its issuer is adequate to meet cash
requirements; (ii) its issuer has outstanding debt rated AA or better; (iii) the
issuer has access to at least two additional sources of borrowing; and (iv) the
issuer's basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances. Typically, the issuer's industry is judged to be well
established and the issuer has a strong position within the industry.
3Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
A-2
<PAGE>
APPENDIX B
Other Pioneer Information
The Pioneer group of mutual funds was established in 1928 with the creation
of Pioneer Fund. Pioneer is one of the oldest, most respected and successful
money managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff of
46, with a combined average of 14 years' experience in the financial services
industry.
Total assets for all Pioneer funds at December 31, 1994 were approximately
$10,037,952,211 representing 583,478 non-retirement accounts and 337,050
retirement accounts. At December 31, 1994, there were 12,908, 921 and 391
non-retirement shareholder accounts in Pioneer Cash Reserves Fund, Pioneer U.S.
Government Money Fund and Pioneer Tax-Free Money Fund, respectively, and there
were 1,965, 815 and 7 retirement accounts for Pioneer Cash Reserves Fund and
Pioneer U.S. Government Money Fund and Pioneer Tax-Free Money Fund,
respectively.
B-1
