File No. 33-26754 CIK #846015
Securities and Exchange CommissionWashington, D. C. 20549
Post-Effective
Amendment No. 8
to
Form S-6
For Registration under the Securities Act of 1933
of Securities of Unit Investment Trusts Registered
on Form N-8B-2
Kemper Government Securities Trust, GNMA Portfolio, Series 28 and
Series 29
Name and executive office address of Depositor:
EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
77 West Wacker - 29th Floor
Chicago, Illinois 60601
Name and complete address of agent for service:
Robert K. Burke
77 West Wacker - 29th Floor
Chicago, Illinois 60601
( X ) Check box if it is proposed that this filing will
become effective at 2:00 p.m. on April 29, 1996 pursuant to
paragraph (b) of Rule 485.
KEMPER GOVERNMENT SECURITIES TRUST
KEMPER DEFINED FUNDS GNMA PORTFOLIO
KEMPER DEFINED FUNDS U.S. TREASURY PORTFOLIOEVEREN UNIT
INVESTMENT TRUSTS U.S. TREASURY PORTFOLIO
PART ONE
Each Series of the Kemper Government Securities Trust, GNMA
Portfolio and Kemper Defined Funds, GNMA Portfolio (collectively,
the "GNMA Trust") was formed for the purpose of obtaining safety
of capital and current monthly distributions of interest and
principal through investment in a portfolio consisting of
mortgage-backed Securities of the modified pass-through type.
All payments of principal and interest on the mortgage-backed
Securities are fully guaranteed by the Government National
Mortgage Association ("GNMA"). The full faith and credit of the
United States is pledged to the payment of the Securities in the
GNMA Trust but the Units of such Series are not backed by such
full faith and credit.
Each Series of the Kemper Government Securities Trust, U.S.
Treasury Portfolio, Kemper Defined Funds U.S. Treasury Portfolio
and EVEREN Unit Investment Trusts U.S. Treasury Portfolio
(collectively, the "U.S. Treasury Portfolio Series") was formed
for the purpose of providing safety of capital and investment
flexibility through an investment in a portfolio of
interest-bearing (or in certain Series zero coupon) U.S. Treasury
obligations that are backed by the full faith and credit of the
United States Government. Interest income distributed by the
U.S. Treasury Portfolio Series is generally exempt from state
personal income taxes in all states. Certain Series of the U.S.
Treasury Portfolio are available to non-resident aliens and the
income from such Series, provided certain conditions are met,
will be exempt from withholding for U.S. Federal income tax for
such foreign investors. A foreign investor must provide a
completed W-8 form to his financial representative or the trustee
to avoid withholding on his account.
Units of the Trusts are not deposits or obligations of, or
guaranteed by, any bank, and are not Federally insured or
otherwise protected by the Federal Deposit Insurance Corporation
and involve investment risk including loss of principal.
SPONSOR: EVEREN UNIT INVESTMENT TRUSTS,a service of EVEREN
Securities, Inc.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The investor is advised to read and retain both parts of this
Prospectus for future reference.The date of this Part One is that
date set forth in Part Two of the Prospectus
TABLE OF CONTENTS
Page
SUMMARY _ GNMA PORTFOLIO 4
General 4
Monthly Distributions 4
Securities 5
Risk Factors 5
Estimated Current and Long-Term Returns 5
Market for Units 5
GNMA PORTFOLIO 6
The GNMA Trust 6
Risk Factors 6
Portfolios 7
Origination 8
Nature of Ginnie Maes and GNMA Guaranty 9
Life of the Securities and of the Series of the GNMA Trust 10
SUMMARY _ U.S. Treasury Portfolio 17
Monthly Distributions 12
Stripped Treasury Securities 13
Risk Factors 13
Estimated Current and Long-Term Returns 14
Market for Units 14
THE U.S. TREASURY PORTFOLIO SERIES 15
Risk Factors 15
General 16
PORTFOLIO SELECTION 16
THE UNITS 17
ESTIMATED LONG-TERM AND CURRENT RETURNS 17
PUBLIC OFFERING OF UNITS 18
Public Offering Price 18
Volume Discount 18
Public Distribution 22
Profits of Sponsor 23
TAX STATUS OF THE TRUSTS 23
Regulated Investment Companies 23
U.S. Treasury Portfolio Series 26
Kemper Government Securities Trust, GNMA Portfolio (Foreign
Investors Trust) and Kemper Defined Funds, GNMA Portfolio,
Series 1 31
Foreign Investors Trust 34
RETIREMENT PLANS 35
Individual Retirement Account _ IRA 36
Qualified Retirement Plans 36
Excess Distributions Tax 36
DISTRIBUTION REINVESTMENT 37
REDEMPTION 38
Right of Redemption 38
Computation of Redemption Value 39
Postponement of Redemption 40
RIGHTS OF UNITHOLDERS 40
Unitholders 40
Ownership of Units 41
Certain Limitations 41
EXPENSES AND CHARGES 41
Initial Expenses 41
Fees 42
Other Charges 42
ADMINISTRATION OF THE TRUST 43
Records and Accounts 43
DISTRIBUTIONS FROM THE INTEREST, PRINCIPAL AND CAPITAL GAINS
ACCOUNTS 43
GNMA Trust 43
U.S. Treasury Portfolio Series 44
General 45
Portfolio Supervision 45
Reports to Unitholders 46
Amendments 48
Termination 48
RESIGNATION, REMOVAL AND LIABILITY 49
Regarding the Trustee 49
Regarding the Sponsor 50
Regarding the Evaluator 50
MISCELLANEOUS 50
Sponsor 50
Trustee 51
Legal Opinions 51
INDEPENDENT AUDITORS 51
Essential Information*
Report of Independent Auditors*
Statement of Assets and Liabilities*
Statement of Operations*
Statement of Changes in Net Assets*
Schedule of Investments*
Notes to Schedule of Investments*
Notes to Financial Statements*
*Information on these items appears in Part Two
KEMPER GOVERNMENT SECURITIES TRUST
KEMPER DEFINED FUNDS, GNMA PORTFOLIO
KEMPER DEFINED FUNDS, U.S. TREASURY PORTFOLIO
SUMMARY _ GNMA PORTFOLIO
General. Each Series of the Kemper Government Securities Trust,
GNMA Portfolio and Kemper Defined Funds, GNMA Portfolio
(collectively, the "GNMA Trust"), is one of a series of unit
investment trusts whose objective is to obtain safety of capital
and to provide current monthly distributions of interest and
principal through investment in a fixed portfolio initially
consisting of contracts to purchase taxable mortgage-backed
securities of the modified pass-through type ("Ginnie Maes" or
"Securities"), including so-called "Ginnie Mae II's" (see "GNMA
Portfolios-Origination"), which involve larger pools of mortgages
and which have a central paying agent, fully guaranteed as to
principal and interest by the Government National Mortgage
Association ("GNMA"). Certain Series of the GNMA Trust contain
Ginnie Maes which consist of pools of long term (i.e., 30 year)
mortgages on 1- to 4-family dwellings. Other Series contain
Ginnie Maes consisting of pools of mortgages on 1- to 4-family
dwellings which have stated maturity of 15 years (so called
"Ginnie Mae Midgets"). See "GNMA Portfolios" and the "Schedule
of Investments" in Part Two. Under certain circumstances, the
Sponsor may direct the Trustee to reinvest certain surplus monies
in the principal account of a Series in additional Ginnie Maes.
See "Administration of the Trust _ Portfolio Supervision."
The guaranteed payment of principal and interest afforded by
Ginnie Maes may make an investment in a Series of the GNMA Trust
particularly well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. In addition, the ability to buy whole or
fractional Units (minimum purchase $1,000, $250 for IRA accounts)
enables such investors to tailor the dollar amount of their
purchases of Units to take maximum possible advantage of the
annual deductions available for contributions to such plans.
Investors should consult with their tax advisers before
investing. See "Retirement Plans."
Monthly Distributions. Monthly distributions of principal,
prepayments of principal, if any, and interest received by a
Series of the GNMA Trust will be paid in cash unless the
Unitholder elects to have them automatically reinvested in any
open-end mutual fund underwritten or advised by Kemper Financial
Services, Inc.(the "Kemper Funds"), other than those Kemper Funds
sold with a contingent deferred sales charge. Since the
portfolio securities and investment objectives of such Kemper
Funds may differ significantly from that of the GNMA Trusts,
Unitholders should carefully consider the consequences before
selecting such Kemper Funds for reinvestment. Any such
reinvestment is made at net asset value, that is, without a sales
charge. Investors have the ability to designate that only
principal payments (including prepayments) or only interest
payments or both are to be reinvested. Investors who intend to
participate in the Reinvestment Program should so indicate at the
time of their purchase. See "Distribution Reinvestment." It
should be noted by purchasers of Midget Foreign Investors Trusts
that distributions from the reinvestment fund chosen generally
will be subject to U.S. Federal income tax withholding.
Distributions will be made on or about the last day of each month
to Unitholders of record on the 1st day of such month.
Securities. One or more different issues of Ginnie Maes were
deposited in the GNMA Trust on the Initial Date of Deposit. The
current percentage relationship among the Ginnie Maes in a GNMA
Series is shown under "Essential Information" and "Schedule of
Investments" in Part Two.
Risk Factors. An investment in Units of a Series of the GNMA
Trust should be made with an understanding of the risks which an
investment in fixed rate long term debt obligations may entail,
including the risk that the value of the Portfolio and hence of
the Units will decline with increases in interest rates. Because
of the shorter average life of the Securities in certain Series
of the GNMA Trust and the lower coupon interest rates on such
Securities, the value of such Series should tend to fluctuate
less than longer term obligations. Some or all of the Securities
in a Series of the GNMA Trust may have been purchased at a market
discount.
Estimated Current and Long-Term Returns. The Estimated Current
Return shown under "Essential Information" in Part Two, shows the
return based on the Public Offering Price which includes a sales
charge and is computed by dividing the estimated net annual
interest income by the Public Offering Price. The net annual
interest rate will vary with changes in the fees and expenses of
the Trustee, Sponsor and Evaluator and with the exchange,
redemption, sale, scheduled payments, prepayments or maturity of
underlying Securities. The Public Offering Price will also vary
with fluctuations in the evaluation of the underlying Securities
and accrued interest, and, in the case of Kemper Defined Funds,
with changes in Purchased Interest and Daily Accrued Interest.
Therefore, it can be expected that the Estimated Current Return
will fluctuate in the future. The Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration,
and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization
of premiums and the accretion of discounts) and estimated average
life of all of the Securities in the Trusts and (2) takes into
account the expenses and sales charge associated with each Unit
of each Trust. Since the market values and estimated average
life of the Securities and the expenses of the Trusts will
change, it can be expected that the Estimated Long-Term Returns
will fluctuate in the future. The Estimated Current Return and
Estimated Long-Term Return are expected to differ because the
calculation of the Estimated Long-Term Return reflects the
estimated date and amount of principal returned while the
Estimated Current Return calculation includes only the net annual
interest rate and Public Offering Price. See "Estimated
Long-Term and Current Returns." The net annual income is, of
course, taxable to a Unitholder. The net annual income is not
taxable for Federal income tax purposes to qualified foreign
investors who have purchased Midget Foreign Investors Trusts.
See "Tax Status of the Trusts" and "Retirement Plans."
Market for Units. The Sponsor, though not obligated to do so,
intends to maintain a market for the Units of the Series of the
GNMA Trust based on the aggregate bid side evaluation of the
underlying Securities plus, in the case of Kemper Defined Funds,
Purchased Interest and Daily Accrued Interest. If such market is
not maintained, a Unitholder will, nevertheless, be able to
dispose of his Units through redemption at prices based on the
aggregate bid side evaluation of the underlying Securities in
each Series. See "Redemption." Market conditions may cause such
prices to be greater or less than the amount paid for Units.
GNMA PORTFOLIO
The GNMA Trust. Each Series of the GNMA Trust is a "unit
investment trust" created under Missouri law pursuant to a Trust
Indenture and Agreement (hereinafter collectively referred to as
the "Indenture").* EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc., acts as Sponsor and the Bank of New York
acts as Trustee.
The purpose and objective of the GNMA Trust is to provide
investors with an appropriate vehicle to obtain safety of capital
and monthly distributions of interest and principal through
investment in a fixed portfolio of securities (the "GNMA
Portfolio") consisting of taxable mortgage-backed securities of
the modified pass-through type ("Ginnie Maes") guaranteed by the
Government National Mortgage Association ("GNMA") and backed by
the full faith and credit of the United States. In addition, the
Midget Foreign Investors Trusts and GNMA Foreign Investors
Portfolio Series, which are available only to non-resident alien
investors, have an additional purpose of providing income which
is exempt from withholding for U.S. Federal income taxes for such
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* To the extent reference is made to the Indenture, any
statements herein are qualified in their entirety by the
provisions of said Indenture.
foreign investors. A foreign investor must provide a completed
W-8 Form to his financial representative or the Trustee to avoid
withholding on his account. See "Tax Status of the Trusts."
As used herein, the term "Securities" means the Ginnie Maes
described in Part Two under "Schedule of Investments."
On the date shown, each Unit represented the fractional undivided
interest in the Securities and estimated net income of the Series
of the GNMA Trust set forth in Part Two under "Essential
Information." Because regular payments of principal are to be
received and certain of the Securities from time to time may be
redeemed or will mature in accordance with their terms or may be
sold under certain circumstances described herein, the Series of
the GNMA Trust is not expected to retain its present size and
composition. Units will remain outstanding until redeemed upon
tender to the Trustee by any Unitholder (which may include the
Sponsor) or until the termination of a Series of the GNMA Trust
pursuant to the Indenture.
Risk Factors. An investment in Units of a Series of the GNMA
Trust should be made with an understanding of the risks which an
investment in fixed rate long term debt obligations may entail,
including the risk that the value of the GNMA Portfolio and hence
of the Units will decline with increases in interest rates.
Because of the shorter average life of the Ginnie Mae Midgets in
certain Series of the GNMA Trust, and the lower coupon interest
rate on such Securities, the value of the Units of such Series
should tend to fluctuate less than that of Series composed of
longer term obligations. The value of the underlying Securities
will fluctuate inversely with changes in interest rates. In
addition, the potential for appreciation of the underlying
Securities, which might otherwise be expected to occur as a
result of a decline in interest rates may be limited or negated
by increased principal prepayments on the underlying mortgages.
The high inflation of prior years, together with the fiscal
measures adopted to attempt to deal with it, have resulted in
wide fluctuations in interest rates and, thus, in the value of
fixed rate long term debt obligations generally. The Sponsor
cannot predict whether such fluctuations will continue in the
future.
The Securities in the Series of the GNMA Trust were chosen in
part
on the basis of their respective stated maturity dates. The
ranges of maturity dates of the Securities contained in a Series
of the Trust are shown in Part Two on the "Schedule of
Investments." See "Life of the Securities and of the Series of
the GNMA Trust."
A Series of the GNMA Trust may be an appropriate medium for
investors who desire to participate in a portfolio of taxable
fixed income securities offering the safety of capital provided
by securities backed by the full faith and credit of the United
States but who do not wish to invest the minimum $25,000 which is
required for a direct investment in GNMA guaranteed securities.
Portfolios. The GNMA Portfolios of the Series of the GNMA Trust
consist of Ginnie Maes, including so-called Ginnie Mae II's and,
in the case of certain designated Series, Ginnie Mae Midgets,
fully guaranteed as to payment of principal and interest by the
Government National Mortgage Association. In order for Ginnie
Maes to be eligible for inclusion in Midget Foreign Investors
Trusts or GNMA Foreign Investors Portfolio Series, evidence must
be received by the Sponsor that the underlying mortgages were
originated after July 18, 1984. Although the Sponsor believes
that all the underlying mortgages were originated after July 18,
1984, to the extent that this is not the case, a Foreign Investor
will be subject to withholding for U.S. Federal income taxes on
income derived from mortgages that were originated on or prior to
July 18, 1984. See "Tax Status of the Trusts." Each group of
Ginnie Maes described herein as having a specified range of
maturities includes individual mortgage-backed securities which
have varying ranges of maturities. Each such group of Ginnie
Maes is described as one category of securities because current
market conditions accord no difference in price among the
individual Ginnie Mae securities within such group on the basis
of the difference in the maturity dates of each Ginnie Mae. As
long as this market condition prevails, a purchase of Ginnie Maes
with the same coupon rate and a maturity date within the range
mentioned above will be considered an acquisition of the same
Security. In the future, however, the difference in maturity
ranges could affect the market value of the individual Ginnie
Maes. At such time, any additional purchases by a GNMA Portfolio
Series of the Trust will take into account the maturities of the
individual Securities.
A Series of the GNMA Trust may contain Securities which were
acquired at a market discount. Such Securities trade at less
than par value because the interest rates thereon are lower than
interest rates on comparable debt securities being issued at
currently prevailing interest rates. If interest rates for newly
issued and otherwise comparable securities increase, the market
discount of previously issued securities will increase and if
interest rates for newly issued comparable securities decline,
the market discount of previously issued securities will
decrease, other things being equal. Market discount attributable
to interest rate changes does not indicate a lack of market
confidence in the issue.
Holders of Units will be "at risk" with respect to such
Securities (i.e., may derive either gain or loss from
fluctuations
in the evaluation of the Securities) from the date
they commit for Units. See "Estimated Long _ Term and Current
Returns."
The mortgages underlying a Ginnie Mae may be prepaid at any time
without penalty. A lower or higher return on Units may occur
depending on whether the price at which the respective Ginnie
Maes were acquired by a Series of the Trust is lower or higher
than par (which represents the price at which such Ginnie Maes
will be redeemed upon prepayment). Redemption of premium Ginnie
Maes at par pursuant to prepayments of mortgages will operate to
lower the current return on Units outstanding at that time since
premium Ginnie Maes normally carry higher interest coupons than
par or discount Ginnie Maes. If mortgages rates decline in the
future, such prepayments may occur with increasing frequency
because, among other reasons, mortgagors may be able to refinance
their outstanding mortgages at lower interest rates. See "Life
of the Securities and of the Series of the GNMA Trust."
Set forth below is a brief description of the current method of
origination of Ginnie Maes; the nature of such securities,
including the guaranty of GNMA; the basis of selection and
acquisition of the Ginnie Maes included in the GNMA Portfolios;
and the expected life of the Ginnie Maes in the Series of the
GNMA Trust. The "Schedule of Investments" in Part Two contains
information concerning the coupon rate and range of stated
maturities of the Ginnie Maes in such Series of the GNMA Trust.
Origination. The Ginnie Maes included in the GNMA Portfolios are
backed by the indebtedness secured by underlying mortgage pools
of long term mortgages on 1- to 4-family dwellings. In the case
of The Midget Foreign Investors Trusts or GNMA Foreign Investors
Portfolio Series, which may be acquired only by qualified foreign
investors, the Sponsor has acquired only pools containing
mortgages which it believes were originated after July 18, 1984.
The pool of mortgages which is to underlie a particular new issue
of Ginnie Maes is assembled by the proposed issuer of such Ginnie
Maes. The issuer is typically a mortgage banking firm, and in
every instance must be a mortgagee approved by and in good
standing with the Federal Housing Administration ("FHA"). In
addition, GNMA imposes its own criteria on the eligibility of
issuers, including a net worth requirement.
The mortgages which are to comprise a new Ginnie Mae pool may
have been originated by the issuer itself in its capacity as a
mortgage lender or may be acquired by the issuer from a third
party. Such third party may be another mortgage banker, a
banking institution, the Veterans Administration ("VA") (which in
certain instances acts as a direct lender and thus originates its
own mortgages) or one of several other governmental agencies.
All mortgages in any given pool will be insured under the
National Housing Act, as amended ("FHA-insured") or Title V of
the Housing Act of 1949 ("FMHA-insured") or guaranteed under the
Servicemen's Readjustment Act of 1944, as amended, or Chapter 37
of Title 38, U.S.C. ("VA-guaranteed"). Such mortgages will have
a date for the first scheduled monthly payment of principal that
is not more than one year prior to the date on which GNMA issues
its guaranty commitment as described below, will have comparable
interest rates and maturity dates, and will meet additional
criteria of GNMA. All mortgages in the pools backing the Ginnie
Maes contained in the Portfolios are mortgages on 1- to 4-family
dwellings (having a stated maturity of up to 30 years, except in
the case of certain Series containing Ginnie Mae Midgets, whose
stated maturity is 15 years). In general, the mortgages in these
pools provide for monthly payments over the life of the mortgage
(aside from prepayments) designed to repay the principal of the
mortgage over such period, together with interest at the fixed
rate of the unpaid balance.
To obtain GNMA approval of a new pool of mortgages, the issuer
will file with GNMA an application containing information
concerning itself, describing generally the pooled mortgages, and
requesting that GNMA approve the issue and issue its commitment
(subject to GNMA's satisfaction with the mortgage documents and
other relevant documentation) to guarantee the timely payment of
principal of and interest on the Ginnie Maes to be issued by the
issuer. If the application is in order, GNMA will issue its
commitment and will assign a GNMA pool number to the pool. Upon
completion of the required documentation (including detailed
information as to the underlying mortgages, a custodial agreement
with a Federal or state regulated financial institution
satisfactory to GNMA pursuant to which the underlying mortgages
will be held in safekeeping, and a detailed guaranty agreement
between GNMA and the issuer) the issuance of the Ginnie Maes is
permitted. When the Ginnie Maes are issued, GNMA will endorse
its guaranty thereon. The aggregate principal amount of Ginnie
Maes issued will be equal to the then unpaid aggregate principal
balances of the pooled mortgages. The interest rate borne by the
Ginnie Maes is currently fixed at 1/2 of 1% below the interest
rate of the pooled 1- to 4-family mortgages, the differential
being applied to the payment of servicing and custodial charges
as well as GNMA's guaranty fee.
Ginnie Mae II's consist of jumbo pools of mortgages consisting of
pools of mortgages from more than one issuer. The major
advantage of Ginnie Mae II's lies in the fact that a central
paying agent sends one check to the holder on the required
payment date. This greatly simplifies the current procedure of
collecting distributions from each issuer of a Ginnie Mae, since
such distributions are often received late.
Nature of Ginnie Maes and GNMA Guaranty. All of the Ginnie Maes
in the GNMA Portfolio, including the Ginnie Mae II's, are of the
"modified pass-through" type, i.e., they provide for timely
monthly payments to the registered holders thereof (including the
Series of the GNMA Trust) of a pro rata share of the scheduled
principal payments on the underlying mortgages, whether or not
collected by the issuers. Such monthly payments will also
include, on a pro rata basis, any prepayments of principal of
such mortgages received and interest (net of the servicing and
other charges described above) on the aggregate unpaid principal
balance of such Ginnie Maes, whether or not the interest on the
underlying mortgage has been collected by the issuers.
The Ginnie Maes in the GNMA Portfolios are guaranteed as to
timely payment of principal and interest by GNMA. Funds received
by the issuers on account of the mortgages backing the Ginnie
Maes in the GNMA Portfolios are intended to be sufficient to make
the required payments of principal of and interest on such Ginnie
Maes but, if such funds are insufficient for that purpose, the
guaranty agreements between the issuers and GNMA require the
issuers to make advances sufficient for such payments. If the
issuers fail to make such payments, GNMA will do so.
GNMA is authorized by Section 306(g) of Title III of the National
Housing Act to guarantee the timely payment of principal of and
interest on securities which are based on or backed by a trust or
pool composed of mortgages insured by FHA, the Farmers' Home
Administration ("FMHA") or guaranteed by the VA. Section 306(g)
provides further that the full faith and credit of the United
States is pledged to the payment of all amounts which may be
required to be paid under any guaranty under such subsection. An
opinion of an Assistant Attorney General of the United States,
dated December 9, 1969, states that such guaranties "constitute
general obligations of the United States backed by its full faith
and credit."* GNMA is empowered to borrow from the United States
Treasury to the extent necessary to make any payments of
principal and interest required under such guaranties.
Ginnie Maes are backed by the aggregate indebtedness secured by
the underlying FHA-insured, FMHA-insured or VA-guaranteed
mortgages and, except to the extent of funds received by the
issuers on account of such mortgages, Ginnie Maes do not
constitute a liability of nor evidence any recourse against such
issuers, but recourse thereon is solely against GNMA. Holders of
Ginnie Maes (such as the GNMA Trust) have no security interest in
or lien on the underlying mortgages.
The GNMA guaranties referred to herein relate only to payment of
principal of and interest on the Ginnie Maes in the GNMA
Portfolios and not to the Units offered hereby.
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* Any statement in this Prospectus that a particular Security
is backed by the full faith and credit of the United States is
based upon the opinion of an Assistant Attorney General of the
United States and should be so construed.
Life of the Securities and of the Series of the GNMA Trust.
Monthly payments of principal will be made, and additional
prepayments of principal may be made, to the Series of the GNMA
Trust in respect of the mortgages underlying the Ginnie Maes in
the GNMA Portfolios. All of the mortgages in the pools relating
to the Ginnie Maes in the GNMA Portfolios are subject to
prepayment without any significant premium or penalty at the
option of the mortgagors. While the mortgages on 1- to 4-family
dwellings underlying the Ginnie Maes have a stated maturity of up
to 30 years (15 years for Ginnie Mae Midgets), it has been the
experience of the mortgage industry that the average life of
comparable mortgages, owing to prepayments, refinancings and
payments from foreclosures is considerably less.
In the mid 1970s, published tables for Ginnie Maes utilized a
12-year average life assumption for Ginnie Mae pools of 26-30
year mortgages on 1- to 4-family dwellings. This assumption was
derived from the FHA experience relating to prepayments on such
mortgages during the period from the mid 1950s to the mid 1970s.
This 12-year average life assumption was calculated in respect of
a period during which mortgage lending rates were fairly stable.
That assumption is probably no longer an accurate measure of the
life of Ginnie Maes or their underlying single family mortgage
pools. However, current yield tables, published in 1981, still
utilize the 12-year average life assumption and Ginnie Maes
continue to be traded based on this assumption. Recently,
mortgages issued at high interest rates have experienced
accelerated prepayment rates which would indicate a shorter
average life than 12 years.
A number of factors, including homeowner's mobility, change in
family size and mortgage market interest rates will affect the
average life of the Ginnie Maes in the GNMA Portfolios. For
example, Ginnie Maes issued during a period of high interest
rates will be backed by a pool of mortgage loans bearing
similarly high rates. In general, during a period of declining
interest rates, new mortgage loans with interest rates lower than
those charged during periods of high rates will become available.
To the extent a homeowner has an outstanding mortgage with a high
rate, he may refinance his mortgage at a lower interest rate or
he may rapidly repay his old mortgage. Should this happen, a
Ginnie Mae issued with a high interest rate may experience a
rapid prepayment of principal as the underlying mortgage loans
prepay in whole or in part. Accordingly, there can be no
assurance that the prepayment levels which will be actually
realized will conform to the experience of the FHA, other
mortgage lenders or other Ginnie Mae investors.
It is not possible to meaningfully predict prepayment levels
regarding the Ginnie Maes in the GNMA Portfolios. Therefore, the
termination of a Series of the GNMA Trust might be accelerated as
a result of prepayments made as described herein.
In addition to prepayments as described above, sales of
Securities in the GNMA Portfolios under certain permitted
circumstances may result in an accelerated termination of a
Series of the GNMA Trust. Also, it is possible that, in the
absence of a secondary market for the Units or otherwise,
redemptions of Units may occur in sufficient numbers to reduce
the GNMA Portfolios to a size resulting in such termination.
Early termination of a Series of the GNMA Trust may have
important consequences to the Unitholder, e.g., to the extent
that Units were purchased with a view to an investment of longer
duration, the overall investment program of the investor may
require readjustment; or the overall return on investment may be
less or greater than anticipated, depending, in part, on whether
the purchase price paid for Units represented the payment of an
overall premium or a discount, respectively, above or below the
stated principal amounts of the underlying mortgages. In
addition, a capital gain or loss may result for tax purposes from
termination of the GNMA Portfolios.
SUMMARY _ U.S. TREASURY PORTFOLIO
Each Kemper Government Securities Trust, U.S. Treasury Portfolio,
Kemper Defined Funds, U.S. Treasury Portfolio and EVEREN Unit
Investment Trusts U.S. Treasury Portfolio (collectively, the
"U.S. Treasury Portfolio Series") is a unit investment trust
whose objective is to obtain safety of capital and investment
flexibility as well as current monthly distributions of interest
through investment in a fixed, laddered portfolio consisting of
interest-bearing U.S. Treasury obligations or, in certain U.S.
Treasury Portfolio Series, consisting of some or almost all zero
coupon U.S. Treasury obligations (the "U.S. Treasury
Obligations"). The U.S. Treasury Portfolio Series is formed for
the purpose of providing protection against changes in interest
rates and also passing through to Unitholders in all states the
exemption from state personal income taxes afforded to direct
owners of U.S. obligations. Each U.S. Treasury Portfolio Series
has an additional purpose of providing income which is exempt
from withholding for U.S. Federal income taxes for non-resident
alien investors. A foreign investor must provide a completed W-8
Form to his financial representative or the Trustee to avoid
withholding on his account. The Securities are direct
obligations of the United States and are backed by its full faith
and credit. The value of the Units, the estimated current return
and estimated long-term return to new purchasers will fluctuate
with the value of the portfolio which will generally decrease or
increase inversely with changes in interest rates.
The guaranteed payment of principal and interest afforded by U.S.
Treasury Obligations, and, with respect to those Series which own
zero coupon U.S. Treasury Obligations ("Stripped Treasury
Securities"), the additional fact that no interest distributions
will be made prior to maturity of the Stripped Treasury
Securities may make investment in U.S. Treasury Portfolio Series
particularly well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. In addition, the ability to buy Units (minimum
purchase $1,000 per Series, $250 for IRA accounts) at a Public
Offering Price of approximately $1.00 per Unit ($10.00 per Unit
for Kemper Defined Funds and EVEREN Unit Investment Trusts)
enables such investors to tailor the dollar amount of their
purchases of Units to take maximum possible advantage of the
annual deductions available for contributions to such plans.
Investors should consult with their tax advisers before
investing. See "Retirement Plans."
Monthly Distributions. Monthly distributions of interest
received by each U.S. Treasury Portfolio Series will be paid in
cash unless the Unitholder elects to have them automatically
reinvested in any mutual fund underwritten or advised by an
affiliate of the Sponsor, Kemper Financial Services, Inc. (the
"Kemper Funds"), other than those Kemper Funds sold with a
contingent deferred sales charge. Since the portfolio securities
and investment objectives of such Kemper Funds may differ
significantly from that of the U.S. Treasury Portfolio,
Unitholders should carefully consider the consequences before
selecting such Kemper Funds for reinvestment. Any such
reinvestment is made at net asset value (that is, without a sales
charge). Investors have the ability to designate that only
principal payments or only interest payments or both are to be
reinvested (see "Reinvestment Program"). Distributions of
principal will be made in accordance with the instructions of the
investor in any month the amount in the Principal Account equals
or exceeds $1.00 per 1,000 Units ($1.00 per 100 Units for Kemper
Defined Funds and EVEREN Unit Investment Trusts). Distributions
will be made as specified in Part Two for each Trust.
Stripped Treasury Securities. Stripped Treasury Securities are
sold at a deep discount because the buyer of those securities
obtains only the right to receive a future fixed payment on the
security and not any rights to periodic interest payments
thereon. Purchasers of these Securities acquire, in effect,
discount obligations that are economically identical to the
"zero-coupon bonds" that have been issued by corporations. Zero
coupon bonds are debt obligations which do not make any periodic
payments of interest prior to maturity and accordingly are issued
at a deep discount.
Stripped Treasury Securities held by any Series of the U.S.
Treasury Portfolio Series Trust shall consist solely of either of
the following types of the registered securities: (a) U.S.
Treasury debt obligations originally issued as bearer coupon
bonds which have been stripped of their unmatured interest
coupons and (b) coupons which have been stripped from U.S.
Treasury bearer bonds, either of which may be held through the
Federal Reserve Bank's book entry system called "Separate Trading
of Registered Interest and Principal of Securities" ("STRIPS").
The Stripped Treasury Securities are payable in full at maturity
at their stated maturity amount and are not subject to redemption
prior to maturity. In addition, the Stripped Treasury Securities
do not make any periodic payments of interest.
The Stripped Treasury Securities are sold at a substantial
discount from their face amounts payable at maturity. The holder
of Stripped Treasury Securities will be required to include
annually in gross income an allocable portion of the deemed
original issue discount, prior to receipt of cash attributable to
that income. Accordingly, any Series owning Stripped Treasury
Securities may not be a suitable investment unless these taxes
can be paid from other funds or unless such Series is purchased
by Individual Retirement Accounts, Keogh plans or other
tax-deferred retirement plans. Stripped Treasury Securities are
marketable in substantially the same manner as other discount
Treasury Securities.
Risk Factors. An investment in Units of the U.S. Treasury
Portfolio should be made with an understanding of the risks which
an investment in fixed-rate U.S. Treasury obligations may entail,
including the risk that the value of the portfolio and hence of
the Units will decline with increases in interest rates. Some or
all of the Securities in the Trust Fund have been purchased at a
market discount. The current returns (coupon interest rate) of
such Securities are lower than the current returns of similar,
comparably rated, Securities issued at currently prevailing
interest rates.
Additionally, an investment in a Series holding Stripped Treasury
Securities should be made with an understanding of the risks
which an investment in debt obligations, most of which were
purchased
at a deep discount, may entail, including the risk that
the value of the underlying debt obligations and hence of the
Units will decline with increases in interest rates. The market
value of Stripped Treasury Securities, and therefore the value of
the Units, may be subject to greater fluctuations in response to
changing interest rates than debt obligations of comparable
maturities which pay interest currently. This risk is greater
when the period to maturity is longer. No distributions of
income are anticipated until maturity of the Stripped Treasury
Securities. The price per Unit will vary in accordance with
fluctuations in the values of the Stripped Treasury Securities,
and the distributions could change if Stripped Treasury
Securities are paid or sold, or if the expenses of the Trust
change.
The Stripped Treasury Securities will mature at one year
intervals in consecutive years and do not make any periodic
payment of income prior to maturity. Accordingly, it is not
anticipated that there will be any periodic distributions of
income.
Because interest on "zero coupon" debt obligations is not
distributed on a current basis but in effect compounded, the
value of securities of this type, including the value of accreted
and reinvested interest (and of a trust comprised of these
obligations), is subject to greater fluctuations than of
obligations which distribute income regularly. Accordingly,
while the full faith and the credit of the U.S. government
provides a high level of protection against credit risks on the
Securities, sale of Units before maturity of the Securities at a
time when interest rates have increased would involve greater
risk than in a trust which is invested in debt obligations or
comparable maturity which pay interest currently. This risk is
greater when the period to maturity is longer.
Estimated Current and Long-Term Returns. The Estimated Current
Return is calculated by dividing the estimated net annual
interest rate per Unit by the Public Offering Price. The net
estimated annual interest rate per Unit will vary with changes in
the fees and expenses of the Trustee, Sponsor and Evaluator and
with the exchange, redemption, sales, scheduled payments,
prepayments or maturity of underlying Securities in the
portfolio. The Public Offering Price of a Trust will also vary
with fluctuations in the evaluation of the underlying Securities
and accrued interest, and in the case of certain Trusts with
changes in the Purchased Interest and Daily Accrued Interest;
therefore, there is no assurance that the present Estimated
Current Return will be realized in the future. The Estimated
Long-Term Return is calculated using a formula which (1) takes
into account the amortization of premiums and the accretion of
discounts, the estimated retirements of all the Securities in
such Series and (2) takes into account the expenses and sales
charge associated with each Unit of the Trust. Since the market
values and the estimated average lives or estimated retirements,
as the case may be, of the Securities and the expenses of a Trust
will change, it can be expected that the Estimated Long-Term
Returns will fluctuate in the future. Estimate Current Return
and
Estimated Long-Term Return are expected to differ because the
calculation of the Estimated Long-Term Return reflects the
estimated date and amount of principal returned while the
Estimated Current Return calculation includes only the net annual
interest rate and Public Offering Price.
Market for Units. The Sponsor, though not obligated to do so,
after the initial offering period, intends to maintain a market
for the Units based on the aggregate bid side evaluation of the
underlying Securities plus, Purchased Interest, if any, and
accrued interest (or Daily Accrued Interest). If such market is
not maintained, a Unitholder will, nevertheless, be able to
dispose of his Units through redemption at prices based on the
aggregate bid side evaluation of the underlying Securities. See
"Redemption." Market conditions may cause such prices to be
greater or less than the amount paid for Units.
THE U.S. TREASURY PORTFOLIO SERIES
Each Kemper Government Securities Trust, U.S. Treasury Portfolio,
Kemper Defined Funds, U.S. Treasury Portfolio and EVEREN Unit
Investment Trusts U.S. Treasury Portfolio (collectively, the
"U.S. Treasury Portfolio Series") is a "unit investment trust"
created under Missouri law pursuant to a Trust Indenture and
Agreement (hereinafter collectively referred to as the
"Indenture").* EVEREN Unit Investment Trusts, a service of
EVEREN Securities, Inc. acts as Sponsor (the "Sponsor") and The
Bank of New York acts as Trustee (the "Trustee").
The objective of the U.S. Treasury Portfolio is to obtain safety
of capital and investment flexibility through investment in a
fixed, laddered portfolio consisting of interest-bearing (or in
some cases zero coupon) U.S. Treasury obligations. The U.S.
Treasury Portfolio Series is formed for the purpose of providing
protection against changes in interest rates and also passing
through to Unitholders in all states the exemption from state
personal income taxes afforded to direct owners of U.S.
obligations. The Securities are direct obligations of the United
States and are backed by its full faith and credit. The value of
the Units, the estimated current return and estimated long-term
return to new purchasers will fluctuate with the value of the
Securities included in the portfolio which will generally
decrease or increase inversely with changes in interest rates.
See "Tax Status of the Trusts."
Risk Factors. An investment in Units of the U.S. Treasury
Portfolio Series should be made with an understanding of the
risks which an investment in fixed rate debt obligations may
entail, including the risks that the value of the Portfolio and
hence of the Units will decline with increases in interest rates.
The value of the underlying Securities will fluctuate inversely
with changes in interest rates. The high inflation of prior
years, together with the fiscal measures adopted to attempt to
deal with it, have resulted in wide fluctuations in interest
rates and, thus, in the value of fixed rate long term debt
obligations generally. The Sponsor cannot predict whether such
fluctuations will continue in the future.
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* To the extent reference is made to the Indenture, any
statements herein are qualified in their entirety by the
provisions of said indenture.
In selecting Securities for deposit in the U.S. Treasury
Portfolio Series, the following factors, among others, were
considered by the Sponsor: (i) the prices of the Securities
relative to other comparable Securities; (ii) the maturities of
these Securities; and (iii) whether the Securities were issued
after July 18, 1984.
The U.S. Treasury Portfolio Series may be an appropriate medium
for investors who desire to participate in a portfolio of taxable
fixed income securities offering the safety of capital provided
by an investment backed by the full faith and credit of the
United States. In addition, many investors may benefit from the
exemption from state and local personal income taxes that will
pass through the U.S. Treasury Portfolio Series to Unitholders in
virtually all states.
Since Unitholders of a Series holding Stripped Treasury
Securities will be required for Federal income tax purposes to
include amounts in ordinary gross income in advance of the
receipt of the cash attributable to such income, such Series may
be appropriate only for an account which can pay taxes with other
funds in advance of the receipt of the cash attributable to such
income or for Individual Retirement Accounts, Keogh plans or
other tax-deferred retirement plans.
General. Each Unit in a Series represents the fractional
undivided interest in the U.S. Treasury Portfolio Series as set
forth under "Essential Information" in Part Two. Because certain
of the Securities from time to time may be redeemed or will
mature in accordance with their terms or may be sold under
certain circumstances described herein, the U.S. Treasury
Portfolio Series of the Trust is not expected to retain its
present size and composition. Units will remain outstanding
until redeemed upon tender to the Trustee by any Unitholder
(which may include the Sponsor) or until the termination of the
Trust pursuant to the Indenture.
PORTFOLIO SELECTION
In selecting Ginnie Maes and U.S. Treasury Obligations
(collectively referred to herein as the "Portfolio Obligations")
for deposit in a Series of the appropriate Trusts, the following
factors, among others, were considered by the Sponsor: (i) the
types of such obligations available; (ii) the prices and yields
of such obligations relative to other comparable obligations
including the extent to which such obligations are trading at a
premium or at a discount from par; and (iii) the maturities of
such obligations.
Each Series of the Trusts consists of the unamortized principal
amount of the Portfolio Obligations listed in Part Two under
"Schedule of Investments" as may continue to be held from time to
time in such Series together with accrued and undistributed
interest thereon and undistributed cash representing payments and
prepayments of principal and proceeds realized from the
disposition of Portfolio Obligations. Neither the sponsor nor
the Trustee shall be liable in any way for any default, failure
or
defect in any of the Securities.
Each series of the Trust may contain "zero coupon" U.S. Treasury
Obligations. See "Schedule of Investments" in Part Two of this
Prospectus. Zero coupon obligations are purchased at a deep
discount because the buyer receives only the right to receive a
final payment at the maturity of the obligations and does not
receive any periodic interest payments. The effect of owning
deep discount obligations which do not make current interest
payments (such as the zero coupon obligations) is that a fixed
yield is earned not only on the original investment but also, in
effect, on all discount earned during the life of such income on
such obligation at a rate as high as the implicit yield on the
discount obligation, but at the same time eliminates the holder's
ability to reinvest at higher rates in the future. For this
reason, zero coupon obligations are subject to substantially
greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality which
pay interest.
Because regular payments of principal are to be received and
certain of the Portfolio Obligations from time to time may be
redeemed or will mature in accordance with their terms or may be
sold under certain circumstances described herein, the Series of
the Trusts are not expected to retain their present size and
composition.
THE UNITS
Each Unit represents the fractional undivided interest in a
Series of the Trusts set forth in Part Two under "Essential
Information." If any Units are redeemed by the Trustee, the
principal amount of Portfolio Obligations in such Series of the
Trusts will be reduced by amounts allocable to redeemed Units,
and the fractional undivided interest represented by each Unit in
the balance will be increased. Units will remain outstanding
until redeemed upon tender to the Trustee by any Unitholder
(which may include the Sponsor) or until the termination of the
Series of the Trusts. See "Redemption" and "Administration of
the Trust _ Termination."
ESTIMATED LONG-TERM AND CURRENT RETURNS
The Estimated Current Return and Estimated Long-Term Return for
each trust are the amounts set forth in Part Two under "Essential
Information" as of the date shown on that page. Estimated
Current Return is calculated by dividing the estimated net annual
interest rate per Unit by the Public Offering Price. The
estimated net annual interest rate per Unit will vary with
changes in fees and expenses of the Trustee, the Sponsor and the
Evaluator and with the principal prepayment, redemption,
maturity, exchange or sale of Portfolio Obligations while the
Public Offering Price will vary with changes in the offering
price of the underlying Portfolio Obligations and accrued
interests, and in the case of certain Trusts, with changes in
Purchased Interest and Daily Accrued Interest; therefore, there
is no assurance that the present Estimated Current Return will be
realized in the future. The Estimated Long-Term Return is
calculated using a formula which (1) takes into consideration,
and determines and factors in the relative weightings of, the
market
values, yields (which takes into account the amortization
of premiums and the accretion of discounts) and, in the case of
GNMA Portfolio Series, the estimated average life of all the
Portfolio Obligations in such Series or, in the case of U.S.
Treasury Portfolio Series, the estimated retirements of all of
the Portfolio Obligations in such Series and (2) takes into
account the expenses and sales charge associated with each Trust
Unit. Since the market values and the estimated average lives or
estimated retirements, as the case may be, of the Portfolio
Obligations and the expenses of the Trust will change, there is
no assurance that the present Estimated Long-Term Return will be
realized in the future. The Estimated Current Return and
Estimated Long-Term Return are expected to differ because the
calculation of the Estimated Long-Term Return reflects the
estimated dates and amounts of principal returned while the
Estimated Current Return calculations include only net annual
interest rates and Public Offering Price. See "Summary _ GNMA
Portfolio _ Estimated Current and Long-Term Returns" and "Summary
_ U.S. Treasury Portfolio _ Estimated Current and Long-Term
Returns."
Payments received in respect of the mortgages underlying the
Ginnie Maes in the GNMA Trust Portfolios will consist of a
portion representing interest and a portion representing
principal. Although the aggregate monthly payment made by the
obligor on each mortgage remains constant (aside from optional
prepayments of principal), in the early years most of each such
payment will represent interest, while in later years, the
proportion representing interest will decline and the proportion
representing principal will increase. However, by reason of
optional prepayments, principal payments in the earlier years on
the mortgages underlying the Ginnie Maes may be substantially in
excess of those required by the amortization schedules of such
mortgages. Therefore, principal payments in later years may be
substantially less since the aggregate unpaid principal balances
of such underlying mortgages may have been greatly reduced. To
the extent that the underlying mortgages bearing higher interest
rates in the GNMA Trust Portfolios are pre-paid faster than the
other underlying mortgages, the net annual interest rate per Unit
and the Estimated Current Return on the Units can be expected to
decline. Monthly payments to the Unitholders will reflect all of
the foregoing factors.
In addition to the Public Offering Price, the price of a Unit
will include accrued interest on the Portfolio Obligations from
the last Record Date of that Series of the Trusts to the date of
settlement for any purchase. Therefore, accrued interest will
generally be added to the value of the Units. If a Unitholder
sells all or a portion of his Units, he will receive his
proportionate share of the accrued interest on such Series from
the purchaser of his Units. Similarly, if a Unitholder redeems
all or a portion of his Units, the Redemption Price per Unit will
include accrued interest on the Portfolio Obligations.
PUBLIC OFFERING OF UNITS
Public Offering Price. The Public Offering Price of Units is
computed by adding to the aggregate bid price of the Portfolio
Obligations in that Series of the Trusts as determined by the
Evaluator (see below) plus any money in the Principal Account of
such Series other than money required to redeem tendered Units,
plus Purchased Interest, if any, and accrued interest (or Daily
Accrued Interest), then dividing such sum by the number of Units
of such Series outstanding and then adding that sales charge
referred to below. Investors who purchase Units through brokers
or dealers pursuant to a current management agreement which by
contract or operation of law does not allow such broker or dealer
to earn an additional commission (other than any fee or
commission paid for maintenance of such investor's account under
the management agreement) on such transactions may purchase such
Units at the current Public Offering Price net of the applicable
broker or dealer concession. See "Public Distribution" below.
Volume Discount. Although under no obligation to do so, the
Sponsor intends to permit volume purchasers of Units to purchase
Units at a reduced sales charge. The Sponsor may at any time
change the amount by which the sales charge is reduced or may
discontinue the discount altogether.
The sales charge per Unit for the GNMA Portfolio Series will be
reduced pursuant to the following graduated scale:
GNMA MIDGET SERIES GNMA SERIES
PERCENT OF PERCENT OF PERCENT OF
PERCENT OF
OFFERING NET AMOUNT OFFERING NET AMOUNT
TICKET SIZE PRICE INVESTED PRICE
INVESTED
Less than $100,000 3.50% 3.627% 3.95%
4.112%
$100,000 to $249,999 3.25 3.359 3.70 3.842
$250,000 to $499,999 2.85 2.934 3.35 3.466
$500,000 to $999,999* 2.60 2.669 3.10 3.199
* For any transaction in excess of this amount, contact the
Sponsor for the applicable sales charge.
The sales charge per Unit for U.S. Treasury Portfolio Series will
be reduced pursuant to the following graduated scale:
DOLLAR WEIGHTED AVERAGE YEARS TO MATURITY
0-1.99 YEARS 2-2.99 YEARS 3-4.99 YEARS
TICKET SIZE SALES CHARGE (PERCENT OF PUBLIC OFFERING PRICE)
Less than $500,000 1.25% 1.50% 1.75%
$500,000 to $999,999 1.00 1.25 1.50
$1,000,000 to $1,499,999* 1.00 1.00 1.25
5-6.99 YEARS 7-9.99 YEARS
TICKET SIZE SALES CHARGE (PERCENT OF PUBLIC OFFERING PRICE)
Less than $500,000 2.25% 3.00%
$500,000 to $999,999 1.75 2.50
$1,000,000 to $1,499,999* 1.50 2.00
* For any transaction in excess of $1,499,999, please contact
the Sponsor for the applicable sales charge.
The reduced sales charges as shown on the tables above will apply
to all purchases of Units on any one day by the same person from
the same firm, and for this purpose, purchases of Units of one or
more Series of the Trusts will be aggregated with concurrent
purchases of Units of any other unit investment trust that may be
offered by the Sponsor.
Additionally, Units purchased in the name of a spouse or child
(under 21) of such purchaser will be deemed to be additional
purchases
by such purchaser. The reduced sales charge is also
applicable to a trustee or other fiduciary purchasing Units for a
single trust estate or single fiduciary account.
The Sponsor will also allow purchasers who commit to purchase $1
million or more of The Series units during a 12 month period to
do so at the applicable sales charge for such series pursuant to
a letter of intent, subject to certain restrictions.
The Sponsor intends to permit officers, directors and employees
of the Sponsor and Evaluator to purchase Units of any Series of
the Trusts without a sales charge, although a transaction
processing fee may be imposed on such trades. The Sponsor
reserves the right to reject, in whole or in part, any order for
the purchase of Units and the right to charge the amount of the
sales charge from time to time.
In addition to the Public Offering Price, the price of a Unit of
a Series of the Kemper Government Securities Trust will include
accrued interest on the Portfolio Obligations from the last
Record Date of that Series of such Trust to the date of
settlement for any purchase. Therefore, accrued interest will
generally be added to the value of the Units of such Trust. If a
Unitholder of the Kemper Government Securities Trust sells all or
a portion of his Units, he will receive his proportionate share
of the accrued interest for that Series of the Trusts from the
purchaser of his Units. Similarly, if a Unitholder of the Kemper
Government Securities Trust redeems all or a portion of his
Units, the Redemption Price per Unit will include accrued
interest on the Portfolio Obligations in such Series.
In the case of certain Series of Kemper Defined Funds, the Public
Offering Price includes accrued interest which consists of two
elements. The first element arises as a result of accrued
interest which is the accumulation of unpaid interest on a
security from the later of the last day on which interest thereon
was paid or the date of original issuance of the security.
Interest on the Portfolio Obligations in a Trust is paid monthly
or semi-annually to the Trust. The aggregate amount of such
accrued interest on the Portfolio Obligations in a Trust in
certain Series of Kemper Defined Funds to the First Settlement
Date of such Trust is referred to herein as "Purchased Interest."
Included in the Public Offering Price of the Trust Units is
Purchased Interest. The second element of accrued interest
arises because the estimated net interest on the Units in a Trust
is accounted for daily on an accrual basis (herein referred to as
"Daily Accrued Interest" for purposes of certain Kemper Defined
Funds Trusts). Because of this, the Units always have an amount
of interest earned but not yet paid or reserved for payment. For
this reason, the Public Offering Price of Units in certain Series
of Kemper Defined Funds will include the proportionate share of
Daily Accrued Interest to the date of settlement. If a
Unitholder in certain Series of Kemper Defined Funds sells or
redeems all or a portion of his Units or if the Portfolio
Obligations are sold or otherwise removed or if the Trust is
liquidated, he will receive at that time his proportionate share
of the Purchased Interest and Daily Accrued Interest computed to
the settlement date in the case of sale or liquidation and to the
date of tender in the case of redemption in the Trust.
In the case of certain other Series of Kemper Defined Funds and
all Series of EVEREN Unit Investment Trusts, the Public Offering
Price includes accrued interest as described in this paragraph.
Accrued interest is the accumulation of unpaid interest on a
security from the last day on which interest thereon was paid.
Interest on Securities generally is paid semi-annually (monthly
in the case of Ginnie Maes, if any) although a Trust accrues such
interest daily. Because of this, a Trust always has an amount of
interest earned but not yet collected by the Trustee. For this
reason, with respect to sales settling subsequent to the First
Settlement Date, the Public Offering Price of Units will have
added to it the proportionate share of accrued interest to the
date of settlement. Unitholders will receive on the next
distribution date of a Trust the amount, if any, of accrued
interest paid on their Units. In an effort to reduce the amount
of accrued interest which would otherwise have to be paid in
addition to the Public Offering Price in the sale of Units to the
public, the Trustee will advance the amount of accrued interest
as of the First Settlement Date and the same will be distributed
to the Sponsor as the Unitholder of record as of the First
Settlement Date. Consequently, the amount of accrued interest to
be added to the Public Offering Price of Units will include only
accrued interest from the First Settlement Date to the date of
settlement, less any distributions from the Interest Account
subsequent to the First Settlement Date. Because of the varying
interest payment dates of the Securities, accrued interest at any
point in time will be greater than the amount of interest
actually received by the Trusts and distributed to Unitholders.
Therefore, there will always remain an item of accrued interest
that is added to the value of the Units. If a Unitholder sells
or redeems all or a portion of his Units, he will be entitled to
receive his proportionate share of the accrued interest from the
purchaser of his Units. Since the Trustee has the use of the
funds held in the Interest Account for distributions to
Unitholders and since such Account is non-interest bearing to
Unitholders, the Trustee benefits thereby.
The Public Offering Price on any date will vary from the amount
stated under "Essential Information" in Part Two due to
fluctuations in the valuation of the underlying Portfolio
Obligations in such Series of the Trusts and accrued interest,
and, in the case of certain Trusts, the additions or deletions of
Purchased Interest and Daily Accrued Interest.
The aggregate bid prices of the Portfolio Obligations in a Series
of the Trusts, are determined for each Series of the Trusts by
the Evaluator, in the following manner: (a) on the basis of
current bid prices for the Portfolio Obligations, (b) if bid
prices are not available for the Portfolio Obligations, on the
basis of current bid prices for comparable securities, (c) by
determining the value of the Portfolio Obligations on the bid
side of the market by appraisal, or (d) by any combination of the
above. The Evaluator may obtain current price information as to
the Portfolio Obligations from investment dealers or brokers,
including
the Sponsor. Such evaluations and computations will be
made as of the close of business on each business day and will be
effective for all sales of Units made during the preceding
24-hour period. Evaluations, for purposes of redemptions by the
Trustee, will be made each business day as of the Evaluation Time
stated under "Essential Information" in Part Two, effective for
all redemptions made subsequent to the last preceding
determination.
In connection with the Ginnie Maes deposited in the GNMA Trusts,
there is a period of time beginning on the first day of each
month, during which the total amount of payments (including
prepayments, if any) of principal for the preceding month on the
various mortgages underlying each of the Ginnie Maes in the
Portfolio of a Series will not yet have been reported by the
issuer to GNMA and made generally available to the public.
During this period, the precise principal amount of the
underlying mortgages remaining outstanding for each Ginnie Mae in
the Portfolios, and therefore the precise principal amount of
such Security, will not be known, although the principal amount
outstanding for the preceding month will be known. Therefore,
the exact amount of principal to be acquired by the Trustee as a
holder of such Securities which may be distributed to Unitholders
of such Series with the next monthly distribution will not be
known. The Sponsor does not expect that the amounts of such
prepayments and the differences in such principal amounts from
month to month will be material in relation to a Series of the
GNMA Trusts due to the number of mortgages underlying each Ginnie
Mae and the number of such Ginnie Maes in each Series of the GNMA
Trusts. However, there can be no assurance that they will not be
material. For purposes of the determination by the Evaluator of
the bid prices of the Ginnie Maes in the GNMA Portfolios and for
purposes of calculations of accrued interest on the Units, during
the period in each month prior to the time when the precise
amounts of principal of the Ginnie Maes for the month become
publicly available, the Evaluator will base its evaluations and
calculations, which are the basis for calculations of the Public
Offering Price, the Sponsor's Repurchase Price and the Redemption
Price per Unit, upon the principal amount of such Series
outstanding for the preceding month. The Sponsor expects that
the differences in such principal amounts from month to month
will not be material to each GNMA Portfolio Series of the Trusts.
Nevertheless, the Sponsor will adopt procedures as to pricing and
evaluation for the Units of each Series of the GNMA Trusts, with
such modifications, if any, deemed necessary by the Sponsor for
the protection of Unitholders, designed to minimize the impact of
such differences upon the calculation of the Public Offering
Price per Unit, the Sponsor's Repurchase Price per Unit and the
Redemption Price per Unit of such Series.
Public Distribution. The Sponsor has qualified Units for sale in
various states. Units will be sold through dealers who are
members of the National Association of Securities Dealers, Inc.
and through others. Such firms receive a discount from the
Public Offering Price as indicated in the tables under "Profit of
Sponsor" below. Certain commercial banks are making Units of the
Trust available to their customers on an agency basis. A portion
of the sales charge paid by their customers is retained by or
remitted to the banks in an amount as indicated in the tables
under "Profit of Sponsor" below. Under the Glass-Steagall Act,
banks are prohibited from underwriting Trust Units; however, the
Glass-Steagall Act does permit certain agency transactions and
the banking permitted regulators have indicated that these
particular agency transactions are permitted under such Act. In
addition, state securities laws on this issue may differ from the
interpretations of Federal law expressed herein and banks and
financial institutions may be required to register as dealers
pursuant to state law. The Sponsor reserves the right to reject,
in whole or in part, any order for the purchase of Units. The
Sponsor reserves the right to change the discounts from time to
time. The difference between the discounts and the sales charge
will be retained by the Sponsor.
The Sponsor also reserves the right to change the discounts set
forth above from time to time. In addition to such discounts,
the Sponsor may, from time to time, pay or allow an additional
discount, in the form of cash or other compensation, to dealers
employing registered representatives who sell, during a specified
time period, a minimum dollar amount of Units of the Series of
the Trusts and other unit investment trusts underwritten by the
Sponsor.
While not obligated to do so, the Sponsor intends, subject to
change at any time, to maintain a market for Units of the Series
of the Trusts offered hereby and to continuously offer to
purchase said Units at prices based on the aggregate bid prices
of the underlying Portfolio Obligations in such Series, together
with accrued interest to the expected date of settlement.
The Sponsor may suspend or discontinue purchases of Units at
prices based on the bid prices of Securities in any Series of the
Trusts if the supply of Units exceeds demand, or for other
business reasons.
Profits of Sponsor. Sales of Units may be made to or through
dealers or through others at prices which represent discounts
from the Public Offering Price as set forth below. Discounted
rates for the GNMA Portfolio Series are as follows:
GNMA GNMA
TICKET SIZE* MIDGET SERIES SERIES
Less than $100,000 2.10% 2.60%
$100,000 to $249,999 2.10 2.60
$250,000 to $499,999 1.80 2.30
$500,000 to $999,999** 1.55 2.05
* The breakpoint is applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $1.00 per Unit for $1
Units and $1000 per 100 Units for $10 Units.
** For transactions in excess of this amount, contact the
Sponsor for the applicable rates.
On the sale of Units, the Sponsor will retain the difference
between the discount and the sales charge. The Sponsor may also
realize profits or sustain losses while maintaining a market in
the Units, in the amount of any difference between the prices at
which it buys Units and the prices at which Units are resold
after
allowing for the discount.
Cash, if any, received by a dealer from Unitholders prior to the
settlement date for a purchase of Units of any Series may be used
in such dealer's business subject to the limitations of Rule
15c3-3 under the Securities Exchange Act of 1934 and may be of
benefit to the dealer.
TAX STATUS OF THE TRUSTS
Regulated Investment Companies. Each Series of the GNMA Trusts
(except for Kemper Government Securities Trust GNMA Portfolio
(Foreign Investors Trusts) and Kemper Defined Funds, GNMA
Portfolio, Series 1) is an association taxable as a corporation
under the Internal Revenue Code and intends to qualify on a
continuing basis for special Federal income tax treatment as a
"regulated investment company" under the Internal Revenue Code of
1986 (the "Code"). If the Trust so qualifies and timely
distributes to Unitholders 90% or more of its taxable income
(without regard to its net capital gain, i.e., the excess of its
long-term capital gain over its net short-term capital loss), it
will not be subject to Federal income tax on the portion of its
taxable income (including any net capital gain) that it
distributes to Unitholders. In addition, to the extent the Trust
distributes to Unitholders at least 98% of its taxable income
(including any net capital gain), it will not be subject to the
4% excise tax on certain undistributed income of "regulated
investment companies." Each Series of the GNMA Portfolio intends
to timely distribute its taxable income (including any net
capital gains) to avoid the imposition of Federal income tax or
the excise tax. Distributions of the entire net investment
income of each Series of such Trusts is required by the
Indenture.
In any taxable year of the Trusts, the distributions of its
income, other than distributions which are designated as capital
gain dividends, will, to the extent of the earnings and profits
of such Series, constitute dividends for Federal income tax
purposes which are taxable as ordinary income to Unitholders. To
the extent that the distributions to a Unitholder in any year
exceed the Trust's current and accumulated earnings and profits,
they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units, and to the extent that they
exceed his basis, will be treated as a gain from the sale of his
Units as discussed below. Distributions from each Series of the
GNMA Trusts will not be eligible for the 70% dividends received
deduction for corporations. Although distributions generally
will be treated as distributed when paid, distributions declared
in October, November or December, payable to Unitholders of
record on a specified date in one of those months and paid during
January of the following year will be treated as having been
distributed by each Series of such Trusts (and received by the
Unitholders) on December 31 of the year such distributions are
declared. Under the Code, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation
fees and employee business expenses, will be deductible by
individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this
limitation
under present law do not include expenses incurred by
the GNMA Trusts, as long as the Units of such Trusts are held by
or for 500 or more persons at all times during the taxable year
or another exception is met. In the event the Units of any
Series of a GNMA Trust are held by fewer than 500 persons,
additional taxable income will be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions
received from such Series.
Distributions of the Trusts' net capital gain which the Trusts
designate as capital gain dividends will be taxable to
Unitholders thereof as long-term capital gains, regardless of the
length of time the Units have been held by a Unitholder.
However, if a Unitholder receives a long-term capital gain
dividend (or is allocated a portion of the Trust's undistributed
long-term capital gain) and sells his Units at a loss prior to
holding them for 6 months, such loss will be recharacterized as
long-term capital loss to the extent of such long-term capital
gain received as a dividend or allocated to a Unitholder.
Distributions in partial liquidation, reflecting the proceeds of
prepayments, redemptions, maturities (including monthly mortgage
payments of principal in GNMA Series) or sales of Portfolio
Obligations from a Series of such Trusts (exclusive of net
capital gain) will not be taxable to Unitholders of such Series
to the extent that they represent a return of capital for tax
purposes. The portion of distributions which represents a return
of capital will, however, reduce a Unitholder's basis in his
Units, and to the extent they exceed the basis of his Units will
be taxable as a capital gain. A Unitholder may recognize a
taxable gain or loss when his Units are sold or redeemed. Such
gain or loss will generally constitute either a long-term or
short-term capital gain or loss depending upon the length of time
the Unitholder has held his Units. Any loss on Units held six
months or less will be treated as long-term capital loss to the
extent of any long-term capital gains dividends received (or
deemed to have been received) by the Unitholder with respect to
such Units. For taxpayers other than corporations, net capital
gains are presently subject to a maximum stated marginal tax rate
of 28%. However, it should be noted that legislative proposals
are introduced from time to time that affect tax rates and could
affect relative differences at which ordinary income and capital
gains are taxed. A capital loss is long-term if the asset is
held for more than one year and short-term if held for one year
or less.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than
corporations. Because some or all capital gains are taxed at a
comparatively lower rate under the Tax Act, the Tax Act includes
a provision that recharacterizes capital gains as ordinary income
in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors
should consult with their tax advisers regarding the potential
effect of this provision on their investment in Units.
If a Ginnie Mae or Fannie Mae has been purchased by a GNMA Trust
at a market discount (i.e., for a purchase price less than its
stated redemption price at maturity (or if issued with original
issue discount, its "revised issue price")) unless the amount of
market discount is "de minimis" as specified in the Code each
payment of principal on such security will generally constitute
ordinary income to such Series of the Trust to the extent of any
accrued market discount unless the Trust elects to include the
accrued market discount in taxable income as it accrues. In the
case of a Ginnie Mae, the amount of market discount that is
deemed to accrue each month shall generally be the amount of
discount that bears the same ratio to the total amount of
remaining market discount that the amount of interest paid during
the accrual period (each month) bears to the total amount of
interest remaining to be paid on the Ginnie Mae as of the
beginning of the accrual period.
Each Unitholder of each Series of the GNMA Trusts shall receive
an annual statement describing the tax status of the
distributions paid by such Series of such Trust.
Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that
the Unitholder has not been notified that payments to the
Unitholder are subject to back-up withholding. If the proper
taxpayer identification number and appropriate certification are
not provided when requested, distributions by the Trust to such
Unitholder (including amounts received upon the redemption of
Units) will be subject to back-up withholding.
The foregoing discussion relates only to the Federal income tax
status of the Trust and to the tax treatment of distributions by
the Trust to United States Unitholders.
A Unitholder who is a foreign investor (i.e., an investor other
than a United States citizen or resident or a United States
corporation, partnership, estate or trust) should be aware that,
generally, subject to applicable tax treaties, distributions from
the Trust which constitute dividends for Federal income tax
purposes (other than dividends which the Trust designates as
capital gain dividends) will be subject to United States income
taxes, including withholding taxes. However, distributions
received by a foreign investor from the Trust that are designated
by the Trust as capital gain dividends should not be subject to
United States Federal income taxes, including withholding taxes,
if all of the following conditions are met (i) the capital gain
dividend is not effectively connected with the conduct by the
foreign investor of a trade or business within the United States,
(ii) the foreign investor (if an individual) is not present in
the United States for 183 days or more during his or her taxable
year, and (iii) the foreign investor provides all certification
which may be required of his status (foreign investors may
contact the Sponsor to obtain a Form W-8 which must be filed with
the Trustee and refiled every three calendar years thereafter).
Foreign investors should consult their tax advisers with respect
to United States tax consequences of ownership of Units. Units
in the Trust and Trust distributions may also be subject to state
and local taxation and Unitholders should consult their tax
advisers
in this regard.
U.S. Treasury Portfolio Series. In the opinion of Chapman and
Cutler, counsel for the Sponsor:
(1) Each Series of the U.S. Treasury Portfolio is not an
association taxable as a corporation for Federal income tax
purposes; each Unitholder will be treated as the owner of a pro
rata portion of the U.S. Treasury Portfolio Series of the Trust
under the Code and income of such Series will be treated as the
income of the Unitholders under the Code.
(2) Each Unitholder will have a taxable event when the U.S.
Treasury Portfolio Series disposes of a U.S. Treasury Obligation,
or when the Unitholder redeems or sells his Units. The cost of
the Units to a Unitholder on the date such Units are purchased is
allocated among the U.S. Treasury Obligations held in the U.S.
Treasury Portfolio Series (in accordance with the proportion of
the fair market values of such U.S. Treasury Obligations) in
order to determine his tax basis for his pro rata portion in each
U.S. Treasury Obligation. Unitholders must reduce the tax basis
of their Units for their share of accrued interest received by
the U.S. Treasury Portfolio Series, if any, on U.S. Treasury
Obligations delivered after the Unitholder pay for their Units to
the extent that such interest accrued on such U.S. Treasury
Obligations during the period from the Unitholder's settlement
date to the date such U.S. Treasury Obligations are delivered to
the U.S. Treasury Portfolio Series and, consequently, such
Unitholders may have an increase in taxable gain or reduction in
capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of
the Units. If the Trustee disposes of U.S. Treasury Obligations
(whether by sale, payment on maturity, redemption or otherwise),
gain or loss is recognized to the Unitholder. The amount of any
such gain or loss is measured by comparing the Unitholder's pro
rata share of the total proceeds from such disposition with the
Unitholder's basis for his or her fractional interest in the
asset disposed of. In the case of a Unitholder who purchases
Units, such basis (before adjustment for earned original issue
discount, amortized bond premium and accrued market discount (if
the Unitholder has elected to include such market discount in
income as it accrues), if any) is determined by apportioning the
cost of the Units among each of the U.S. Treasury Portfolio
Series assets ratably according to value as of the date of
acquisition of the Units. The tax basis reduction requirements
of said Code relating to amortization of bond premium may, under
some circumstances, result in the Unitholder realizing a taxable
gain when his Units are sold or redeemed for an amount equal to
his original cost.
(3) Certain Series of the U.S. Treasury Portfolio Series
contain Stripped Treasury Securities. The basis of each Unit and
of each U.S. Treasury Obligation which was issued with original
issue discount must be increased by the amount of accrued
original issue discount and the basis of each Unit and of each
U.S. Treasury Obligation which was purchased by such Trust at a
premium must be reduced by the annual amortization of bond
premium
which the Unitholder has properly elected to amortize
under Section 171 of the Code. A Trust may contain certain "zero
coupon" Securities (the "Stripped Treasury Securities") that are
treated as bonds that were originally issued at an original issue
discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of
original issue discount determined under Section 1286 of the Code
is not less than a "de minimis" amount as determined thereunder.
Because the Stripped Treasury Securities represent interests in
"stripped" U.S. Treasury bonds, a Unitholder's initial cost for
his pro rata portion of each Stripped Treasury Securities held by
the Trust (determined at the time he acquires his Units, in the
manner described above) shall be treated as its "purchase price"
by the Unitholder. Original issue discount is effectively
treated as interest for Federal income tax purposes, and the
amount of original issue discount in this case is generally the
difference between the bond's purchase price and its stated
redemption price at maturity. A Unitholder will be required to
include in gross income for each taxable year the sum of his
daily portions of original issue discount attributable to the
Stripped Treasury Securities held by the U.S. Treasury Portfolio
Series as such original issue discount accrues and will, in
general, be subject to Federal income tax with respect to the
total amount of such original issue discount that accrues for
such year even though the income is not distributed to the
Unitholders during such year to the extent it is not less than a
"de minimis" amount as determined under the Regulation. To the
extent that the amount of such discount is less than the
respective "de minimis" amount, such discount shall be treated as
zero. In general, original issue discount accrues daily under a
constant interest rate method which takes into account the
semi-annual compounding of accrued interest. In the case of the
Stripped Treasury Securities, this method will generally result
in an increasing amount of income to the Unitholders each year.
Unitholders should consult their tax advisers regarding the
Federal income tax consequences and accretion of original issue
discount.
(4) The Unitholder's aliquot share of the total proceeds
received on the disposition of, or principal paid with respect
to, a U.S. Treasury Obligation held by the U.S. Treasury
Portfolio Series will constitute ordinary income (which will be
treated as interest income for most purposes) to the extent it
does not exceed the accrued market discount on such U.S. Treasury
Obligation issued that has not previously been included in
taxable income by such Unitholder. A Unitholder may generally
elect to include market discount in income as such discount
accrues. In general, market discount is the excess, if any, of
the Unitholder's pro rata portion of the outstanding principal
balance of a U.S. Treasury Obligation over the Unitholder's
initial tax cost for such pro rata portion, determined at the
time such Unitholder acquires his Units. However, market
discount with respect to any U.S. Treasury Obligation will
generally be considered zero if it amounts to less than 0.25% of
the obligation's stated redemption price at maturity times the
number
of years to maturity. The market discount rules do not
apply to Stripped Treasury Securities because they are stripped
debt instruments subject to special original issue discount rules
as discussed above. If a Unitholder sells his Units, gain, if
any, will constitute ordinary income to the extent of the
aggregate of the accrued market discount on the Unitholder's pro
rata portion of each U.S. Treasury Obligation that is held by the
U.S. Treasury Portfolio Series that has not previously been
included in taxable income by such Unitholder. In general, the
portion of any interest expense which is not currently deductible
would be ultimately deductible when the accrued market discount
is included in income. Unitholders should consult their tax
advisers regarding whether an election should be made to include
market discount in income as it accrues and as to the amount of
interest expense which may not be currently deductible.
(5) The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they exceed two
percent of an individual taxpayer's adjusted gross income.
Miscellaneous itemized deductions subject to this limitation
under present law include a Unitholder's pro rata share of
expenses paid by the applicable Series of the U.S. Treasury
Portfolio Series, including fees of the Trustee, and the
Evaluator, but does not include amortizable bond premium on U.S.
Treasury Obligations held by the U.S. Treasury Portfolio Series.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than
corporations. Because some or all capital gains are taxed at a
comparatively lower rate under the Tax Act, the Tax Act includes
a provision that recharacterizes capital gains as ordinary income
in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors
should consult with their tax advisers regarding the potential
effect of this provision on their investment in Units.
The tax basis of a Unitholder with respect to his interest in a
U.S. Treasury Obligation is increased by the amount of original
issue discount (and market discount, if the Unitholder elects to
include market discount, if any, on the U.S. Treasury Obligations
held by the Trust in income as it accrues) thereon properly
included in the Unitholder's gross income as determined for
Federal income tax purposes and reduced by the amount of any
amortized acquisition premium which the Unitholder has properly
elected to amortize under Section 171 of the Code. A
Unitholder's tax basis in his Units will equal his tax basis in
is pro rata portion of all of the asset of the Trust.
A Unitholder will recognize taxable capital gain (or loss) when
all or part of his pro rata interest in a U.S. Treasury
Obligation is disposed of in a taxable transaction for an amount
greater (or less) than his tax basis therefor. Any gain
recognized on a sale or exchange and not constituting a
realization of accrued "market discount," and any loss will,
under current law, generally be capital gain or loss except in
the case of a dealer or financial institution. As previously
discussed,
gain realized on the disposition of the interest of a
Unitholder in any U.S. Treasury Obligation deemed to have been
acquired with market discount will be treated as ordinary income
to the extent the gain does not exceed the amount of accrued
market discount not previously taken into income. Any capital
gain or loss arising from the disposition of a U.S. Treasury
Obligation by the Trust or the disposition of Units by a
Unitholder will be short-term capital gain or loss unless the
Unitholder has held his Units for more than one year in which
case such capital gain or loss will be long-term. The tax basis
reduction requirements of the Code relating to amortization of
bond premium may under some circumstances, result in the
Unitholder realizing taxable gain when his Units are sold or
redeemed for an amount equal to or less than his original cost.
If the Unitholder disposes of a Unit, he is deemed thereby to
have disposed of his entire pro rata interest in all Trust assets
including his pro rata portion of the U.S. Treasury Obligations
represented by the Unit. This may result in a portion of the
gain, if any, on such sale being taxable as ordinary income under
the market discount rules (assuming no election was made by the
Unitholder to include market discount in income as it accrues) as
previously discussed.
The Sponsor believes that Unitholders who are individuals will
not be subject to any state personal income taxes on the interest
received by a U.S. Treasury Portfolio Series and distributed to
them. However, Unitholders (including individuals) may be
subject to state and local taxes on any capital gains (or market
discount treated as ordinary income) derived from a U.S. Treasury
Portfolio Series and to other state and local taxes (including
corporate income or franchise taxes, personal property or
intangibles taxes, and estate or inheritance taxes) on their
Units or the income derived therefrom. In addition, individual
Unitholders (and any other Unitholders which are not subject to
state and local taxes on the interest income derived from U.S.
Treasury Portfolio Series) will probably not be entitled to a
deduction for state and local tax purposes for their share of the
fees and expenses paid by a U.S. Treasury Portfolio Series, for
any amortized bond premium or for any interest on indebtedness
incurred to purchase or carry their Units. Therefore, even
though the Sponsor believes that interest income from a U.S.
Treasury Portfolio Series is exempt from state personal income
taxes in all states, Unitholders should consult their own tax
advisers with respect to state and local taxation.
A Unitholder of a U.S. Treasury Portfolio Series who is not a
citizen or resident of the United States or a United States
domestic corporation (a "Foreign Investor") will not be subject
to U.S. Federal income taxes, including withholding taxes on
amounts distributed from the U.S. Treasury Portfolio Series
(including any original issue discount) on, or any gain from the
sale or other disposition of, his Units or the sale or
disposition of any U.S. Treasury Obligations by the Trustee,
provided that (i) the interest income or gain is not effectively
connected with the conduct by the Foreign Investor of a trade or
business within the United States, (ii) with respect to any gain,
the Foreign Investor (if an individual) is not present in the
United States for 183 days or more during the taxable year, and
(iii) the Foreign Investor provides the required certification of
his status and of the matters contained in clauses (i) and (ii)
above, and further provided that the exemption from withholding
for U.S. Federal income taxes for interest on any U.S. Treasury
Obligation shall only apply to the extent the U.S. Treasury
Obligation was issued after July 18, 1984.
Unless an applicable treaty exemption applies and proper
certification is made, amounts otherwise distributable by the
U.S. Treasury Portfolio Series to a Foreign Investor will
generally be subject to withholding taxes under Section 1441 of
the Code unless the Unitholder timely provides his financial
representative or the Trustee with a statement that (i) is signed
by the Unitholder under penalties of perjury, (ii) certifies that
such Unitholder is not a United States person, or in the case of
an individual, that he is neither a citizen nor a resident of the
United States, and (iii) provides the name and address of the
Unitholder. The statement may be made, at the option of the
person otherwise required to withhold, on Form W-8 or on a
substitute form that is substantially similar to Form W-8. If
the information provided on the statement changes, the beneficial
owner must so inform the person otherwise required to withhold
within 30 days of such change. On December 7, 1995, the U.S.
Treasury Department released proposed legislation that, if
adopted, could affect the United States Federal income taxation
of such non-United States Unitholders and the portion of the U.S.
Treasury Portfolio Series income allocable to non-United States
Unitholders.
Foreign Unitholders should consult their own tax advisers with
respect to the foreign and United States tax consequences on
ownership of Units.
It should be remembered that even if distributions are reinvested
they are still treated as distributions for income tax purposes.
It should also be remembered that Unitholders of Series holding
Stripped Treasury Securities will be required for Federal income
tax purposes to include amounts in ordinary gross income in
advance of the receipt of the cash attributable to such income.
Each Unitholder (other than a foreign investor who has properly
provided the certifications described above will be requested to
provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified
by the Internal Revenue Service that payments to the Unitholder
are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not
provided when requested, distributions by a Trust to such
Unitholder will be subject to back-up withholding.
Kemper Government Securities Trust, GNMA Portfolio (Foreign
Investors Trust) and Kemper Defined Funds, GNMA Portfolio, Series
1. In the opinion of Chapman and Cutler, counsel for the
Sponsor:
(1) Each GNMA Portfolio Series is not an associate taxable
as a corporation for Federal income tax purposes; each Unitholder
will be treated as the owner of a pro rata portion of the GNMA
Portfolio Series of the respective Trust under the Code and
income of such Series will be treated as the income of the
Unitholders under the Code.
(2) Each Unitholder will have a taxable event when a GNMA
Portfolio Series disposes of a Security, or when the Unitholder
redeems or sells his Units. Unitholders must reduce the tax
basis of their Units for their share of accrued interest received
by a GNMA Portfolio Series, if any, on Securities delivered after
the Unitholders pay for their Units to the extent that such
interest accrued on such Securities during the period from the
Unitholder's settlement date to the date such Securities are
delivered to such GNMA Portfolio Series and, consequently, such
Unitholders may have an increase in taxable gain or reduction in
capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of
the Units. If the Trustee disposes of Securities (whether by
sale, payment on maturity, redemption or otherwise), gain or loss
is recognized to the Unitholder. The amount of any such gain or
loss is measured by comparing the Unitholder's pro rata share of
the total proceeds for such disposition with the Unitholder's
basis for his or her fractional interest in the asset disposed
of. In the case of a Unitholder who purchases Units, such basis
(before adjustment for earned original issue discount, amortized
bond premium and accrued market discount (if the Unitholder has
elected to include such market discount in income as it accrues),
if any) is determined by apportioning the cost of the Units among
each of a GNMA Portfolio Series assets ratably according to value
as of the valuation date nearest the date of acquisition of the
Units. The tax basis reduction requirements of said Code
relating to amortization of bond premium may, under some
circumstances, result in the Unitholder realizing a taxable gain
when his Units are sold or redeemed for an amount equal to his
original cost.
(3) Each GNMA Portfolio Series contains Stripped Treasury
Securities. The basis of each Unit and of each Security which
was issued with original issue discount (including the U.S.
Treasury obligations) must be increased by the amount of accrued
original issue discount and the basis of each Unit and of each
Security which was purchased by the Trusts at a premium which the
Unitholder has property elected to amortize under Section 171 of
the Code. The Stripped Treasury Securities held by the Trusts
are treated as bonds that were originally issued at an original
issue discount provided, pursuant to a Treasury Regulation (the
"Regulation") issued on December 28, 1992, that the amount of
original issue discount determined under Section 1286 of the Code
is not less than a "de minimis" amount as determined thereunder.
Because the Stripped Treasury Securities represent interests in
"stripped" U.S. Treasury bonds, a Unitholder's initial cost for
his pro rata portion of each Stripped Treasury Security held by a
Trust (determined at the time he acquires his Units, in the
manner described above) shall be treated as its "purchase price"
by the Unitholder. Original issue discount is effectively
treated as interest for Federal income tax purposes, and the
amount
of original issue discount in this case is generally the
difference between the bond's purchase price and its stated
redemption price at maturity. A Unitholder will be required to
include in gross income for each taxable year the sum of his
daily portions of original issue discount attributable to the
Stripped Treasury Securities held by a Trust as such original
discount accrues and will, in general, be subject to Federal
income tax with respect to the total amount of such original
issue discount that accrues for such year even though the income
is not distributed to the Unitholders during such year to the
extent it is not less than a "de minimis" amount as determined
under the Regulation. In general, original issue discount
accrues daily under a constant interest rate method which takes
into account the semi-annual compounding of accrued interest. In
the case of the Stripped Treasury Securities this method will
generally result in an increasing amount of income to the
Unitholders each year. Unitholders should consult their tax
advisers regarding the Federal income tax consequences and
accretion of original issue discount.
(4) The Unitholder's aliquot share of the total proceeds
received on the disposition of, or principal paid with respect
to, a Security held by a Trust will constitute ordinary income
(which will be treated as interest income for most purposes) to
the extent it does not exceed the accrued market discount on such
Security that has not previously been included in taxable income
by such Unitholder. A Unitholder may generally elect to include
market discount in income as such discount accrues. In general,
market discount is the excess, if any, of the Unitholder's pro
rata portion of the outstanding principal balance of a Security
over the Unitholder's initial tax cost for such pro rata portion,
determined at the time such Unitholder acquires his Units.
However, market discount with respect to any Security will
generally be considered zero if it amounts to less than 0.25% of
the obligation's stated redemption price at maturity times the
number of years to maturity. The market discount rules do not
apply to Stripped Treasury Securities because they are stripped
debt instruments subject to special original issue discount rules
as discussed above. If a Unitholder sells his Units, gain, if
any, will constitute ordinary income to the extent of the
aggregate of the accrued market discount on the Unitholder's pro
rata portion of each Security issued that is held by a Trust that
has not previously been included in taxable income by such
Unitholder. In general, market discount accrues on a ratable
basis unless the Unitholder elects to accrue such discount on a
constant interest rate basis. However, a Unitholder should
consult his own tax adviser regarding the accrual of market
discount. The deduction by a Unitholder for any interest expense
incurred to purchase or carry Units will be reduced by the amount
of any accrued market discount that has not yet been included in
taxable income by such Unitholder. In general, the portion of
any interest expense which is not currently deductible would be
ultimately deductible when the accrued market discount is
included in income. Unitholders should consult their tax
advisers regarding whether an election should be made to include
market
discount in income as it accrues and as to the amount of
interest expense which may not be currently deductible.
(5) The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they exceed two
percent of an individual taxpayer's adjusted gross income.
Miscellaneous itemized deductions subject to this limitation
under present law include a Unitholder's pro rata share paid by
the Trust, including fees of the Trustee and the Evaluator but
does not include amortizable bond premium on Securities held by
the Trusts.
"The Revenue Reconciliation Act of 1993" (the "Tax Act") raised
tax rates on ordinary income while capital gains remain subject
to a 28% maximum stated rate for taxpayers other than
corporation's. Because some or all capital gains are taxed at a
comparatively lower rate under the Tax Act, the Tax Act included
a provision that recharacterizes capital gains as ordinary income
in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors
should consult with their tax advisers regarding the potential
effect of this provision on their investment in Units.
A Unitholder of a GNMA Portfolio Series who is not a citizen or
resident of the United States or a United States domestic
corporation (a "Foreign Investor") will not be subject to U.S.
Federal income taxes, including withholding taxes on amounts
distributed from the Trusts (including any original issue
discount) on, or any gain from the sale or other disposition of,
his Units or the sale or disposition of any Securities by the
Trustee, provided that (i) the interest income or gain is not
effectively connected with the conduct by the Foreign Investor of
a trade or business within the United States, (ii) with respect
to any gain, the Foreign Investor (if an individual) is not
present in the United States for 183 days or more during the
taxable year, and (iii) the Foreign Investor provides the
required certification of his status and of the matters contained
in clauses (i) and (ii) above, and further provided that the
exemption from withholding for U.S. Federal income taxes for
interest on any Stripped Treasury Security shall only apply to
the extent the Stripped Treasury Security was issued after July
18, 1984 and for interest on any Ginnie Mae to the extent the
mortgages underlying such Ginnie Mae were originated after July
18, 1984.
Unless an applicable treaty exemption applies and proper
certification is made, amounts otherwise distributable by the
Trusts to a Foreign Investor will generally be subject to
withholding taxes under Section 1441 of the Code unless the
Unitholder timely provides his financial representative or the
Trustee with a statement that (i) is signed by the Unitholder
under penalties of perjury, (ii) certifies that such Unitholder
is not a United States person, or in the case of an individual,
that he is neither a citizen nor a resident of the United States,
and (iii) provides the name and address of the Unitholder. The
statement may be made, at the option of the person otherwise
required to withhold, on Form W-8 or on a substitute form that is
substantially similar to Form W-8. If the information provided
on the statement changes, the beneficial owner must so inform the
person otherwise required to withhold within 30 days of such
change. On December 7, 1995 the U.S. Treasury Department
released proposed legislation that, if adopted, could affect the
United States Federal income taxation of such non-United States
Unitholders and the portion of a Trust's income allocable to
non-United States Unitholders.
The foregoing discussions relate only to Federal income taxes on
distributions by the Trusts; such distributions may also be
subject to state and local taxation. Unitholders should consult
their own tax advisers regarding questions of state and local
taxation applicable to the Units.
Foreign Unitholders should consult their own tax advisers with
respect to the foreign and United States tax consequences or
ownership of Units.
It should be remembered that even if distributions are
reinvested, they are still treated as distributions for income
tax purposes.
It should also be remembered that Unitholders may be required for
Federal income tax purposes to include amounts in ordinary gross
income in advance of the receipt of the cash attributable to such
income.
Each Unitholder (other than a foreign investor who has properly
provided the certifications described above) will be requested to
provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified
that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested,
distributions by a Trust to such Unitholder will be subject to
back-up withholding.
Foreign Investors Trust _ Each Kemper Government Securities
Trust, GNMA Portfolio Series of Midget Foreign Investors Trust,
which is available only to non-resident alien investors, is not
an association taxable as a corporation for Federal income tax
purposes and income received by such Series will be treated as
the income of the Unitholders.
A Unitholder of a Series of a Midget Foreign Investors Trust who
is not a citizen or resident of the United States or a United
States domestic corporation (a "Foreign Investor") will not be
subject to U.S. Federal income taxes, including withholding taxes
on amounts distributed from a Trust (including any original issue
discount) on, or any gain from the sale or other disposition of,
his Units or the sale or disposition of any Ginnie Mae by the
trustee, provided that (i) the interest income or gain is not
effectively connected with the conduct by the Foreign Investor of
a trade or business within the United States, (ii) with respect
to any gain, the Foreign Investor (if an individual) is not
present in the United States for 183 days or more during the
taxable year, and (iii) the Foreign Investor provides the
required certification of his status and of the matters contained
in clauses (i) and (ii) above, and further provided that the
exemption from withholding for U.S. Federal income taxes for
interest
on any Ginnie Mae shall only apply to the extent the
mortgages underlying the Ginnie Mae were originated after July
18, 1984.
Interest income received by the Trust is subject to withholding
taxes under Section 1441 of the Code prior to distribution of
such interest income to each Unitholder unless the Unitholder
provides his financial representative or the Trustee with a
statement that (i) is signed by the Unitholder under penalties of
perjury, (ii) certifies that such Unitholder is not a United
States person, or in the case of an individual, that he is
neither a citizen nor a resident of the United States, and (iii)
provides the name and address of the Unitholder. The statement
may be made, at the option of the person otherwise required to
withhold, on Form W-8 or on a substitute form that is
substantially similar to Form W-8. If the information provided
on the statement changes, the beneficial owner must so inform the
person otherwise required to withhold within 30 days of such
change.
The foregoing discussions relate only to Federal income taxes on
distributions by each Series of a Trust; such distributions may
also be subject to state and local taxation. Unitholders should
consult their own tax advisers regarding questions of state and
local taxation applicable to the Units. Foreign Unitholders
should consult their own tax advisers with respect to United
States Federal income tax consequences or ownership of Units.
It should be remembered that even if distributions are
reinvested, they are still treated as distributions for income
tax purposes.
RETIREMENT PLANS
As indicated under "Tax Status of the Trusts" above, Unitholders
of a U.S. Treasury Portfolio Series will be required for Federal
income tax purposes to include amounts in ordinary gross income
in advance of the receipt of the cash attributable to such
income. Therefore, purchase of Units may be appropriate only for
an account which can pay taxes with other funds in advance of the
receipt of the cash attributable to such income or for Individual
Retirement Accounts, Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly
described below.
The various Series of the Trusts which are not Foreign Investors
Trusts, may be well suited for purchase by Individual Retirement
Accounts, Keogh Plans, pension funds and other qualified
retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the
foregoing plans are deferred from Federal taxation. All
distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special income
averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific
tax laws related thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance of
any such plan. Such plans are offered by brokerage firms and
other financial institutions. Each Series of the Trusts will
waive the $1,000 minimum investment requirement for IRA accounts.
The minimum investment is $250 for tax-deferred plans such as IRA
accounts. Fees and charges with respect to such plans may vary.
Individual Retirement Account _ IRA. Any individual under age
70-1/2 may contribute the lesser of $2,000 or 100% of
compensation to an IRA annually. Such contributions are fully
deductible if the individual (and spouse if filing jointly) are
not covered by a retirement plan at work. The deductible amount
an individual may contribute to an IRA will be reduced $10 for
each $50 of adjusted gross income over $25,000 ($40,000 if
married, filing jointly or $0 if married, filing separately), if
either an individual or their spouse (if married, filing jointly)
is an active participant in an employer maintained retirement
plan. Thus, if an individual has adjusted gross income over
$35,000 ($50,000 if married, filing jointly or $0 if married,
filing separately) and if an individual or their spouse is an
active participant in an employer maintained retirement plan, no
IRA deduction is permitted. Under the Code, an individual may
make nondeductible contributions to the extent deductible
contributions are not allowed. All distributions from an IRA
(other than the return of certain excess contributions) are
treated as ordinary income for Federal income taxation purposes
provided that under the Code an individual need not pay tax on
the return of nondeductible contributions, the amount includable
in income for the taxable year is the portion of the amount
withdrawn for the taxable year as the individual's aggregate
nondeductible IRA contributions bear to the aggregate balance of
all IRAs of the individual.
A participant's interest in an IRA must be, or commence to be,
distributed to the participant not later than April 1 of the
calendar year following the year during which the participant
attains at 70-1/2. Distributions made before attainment of age
59-1/2, except in the case of the participant's death or
disability, or where the amount distributed is to be rolled over
to another IRA, or where the distributions are taken as a series
of substantially equal periodic payments over the participant's
life or life expectancy (or the joint lives or life expectancies
of the participant and the designated beneficiary) are generally
subject to a surtax in an amount equal to 10% of the
distribution. The amount of such periodic payments may not be
modified before the later of five years or attainment of age
59-1/2. Excess contributions are subject to an annual 6% excise
tax.
IRA applications, disclosure statement and trust agreements are
available from the Sponsor upon request.
Qualified Retirement Plans. Units of a Series of the Trust which
are not Foreign Investors Trusts may be purchased by qualified
pension or profit sharing plans maintained by corporations,
partnerships or sole proprietors. The maximum annual
contribution for a participant in a money purchase pension plan
or to paired profit sharing and pension plans is the lesser of
25% of compensation or $30,000. Prototype plan documents for
establishing qualified retirement plans are available from the
Sponsor upon request.
Excess Distributions Tax. In addition to the other taxes due by
reason of a plan distribution, a tax of 15% may apply to certain
aggregate distributions from IRAs, Keogh plans, and corporate
retirement plans to the extent such aggregate taxable
distributions exceed specified amounts (generally $150,000, as
adjusted) during a tax year. This 15% tax will not apply to
distributions on account of death, qualified domestic relations
orders or amounts eligible for tax-deferred rollover treatment.
In general, for lump sum distributions the excess distribution
over $750,000 (as adjusted) will be subject to the 15% tax.
The Trustee has agreed to act as custodian for certain retirement
plan accounts. An annual fee of $12.00 per account, if not paid
separately, will be assessed by the Trustee and paid through the
liquidation of shares of the retirement account. An individual
wishing the Trustee to act as custodian must complete an EVEREN
UIT/IRA application and forward it along with a check made
payable to the Trustee. Certificates for Individual Retirement
Accounts can not be issued.
DISTRIBUTION REINVESTMENT
Each Unitholder of the Trust may elect, at the time of purchase,
to have distributions of principal (including capital gains, if
any) or interest or both automatically invested without charge in
shares of any mutual fund registered in such Unitholder's state
of residence which is underwritten or advised by Kemper Financial
Services, Inc. (the "Kemper Funds"), other than those Kemper
Funds sold with a contingent deferred sales charge. Since the
portfolio securities and investment objectives of such Kemper
Funds may differ significantly from that of the Trusts,
Unitholders should carefully consider the consequences before
selecting such Kemper Funds for reinvestment.
Detailed information with respect to the investment objectives
and management of these Kemper Funds is contained in their
respective prospectuses, which can be obtained from the Sponsor
or an investor's financial representative upon request. An
investor should read the appropriate prospectus prior to making
the election to reinvest. Unitholders who desire to have their
distributions automatically reinvested should inform their
financial representative at the time of purchase or should file
with the Program Agent referred to below a written notice of such
election.
Unitholders who initially elect to receive distributions in cash
may elect to participate in the reinvestment program by filing
with the Program Agent an election to have such distributions
reinvested without charge. The election must be received by the
Program Agent at least ten days prior to the Record Date
applicable to any distribution in order to be in effect for such
distribution. The election to participate in the reinvestment
program shall remain in effect until a subsequent notice is
received in writing by the Program Agent. See "Administration of
the Trust-Distributions from the Interest, Principal and Capital
Gains Accounts."
The Program Agent is the Trustee. All inquiries concerning
participation in the Reinvestment Plan should be directed to the
Program Agent at its unit investment trust office.
Unitholders participating in IRA's, Keogh Plans and other tax
deferred
retirement plans, may find it highly advantageous to
participate in the Reinvestment Program in order to keep the
monies in the account fully invested at all times. Should
reinvestment be selected, an account with an identical
registration to that established at the time the Trust Units are
purchased will be set up in the reinvestment Fund selected by the
investor. Investors should consult with their plan custodian as
to the appropriate disposition of distributions. If participants
in IRA's, Keogh Plans and other tax deferred retirement plans do
not elect a reinvestment option, cash distributions will be sent
to the custodian of the retirement plan and will not be sent to
the investor, since payments to the investor would constitute a
distribution from the plan which would result in tax penalties
for premature withdrawals from such programs. See "Retirement
Plans."
REDEMPTION
Right of Redemption. It may be possible, in some cases, for
Units to be sold in the over-the-counter market for a higher
price than the Redemption Value for such Units. Therefore, a
Unitholder who wishes to dispose of his Units is advised to
inquire through his financial representative as to current market
prices for Units in order to determine if there is an
over-the-counter price in excess of Redemption Value per Unit or
the Sponsor's Repurchase Price for such Series of the Trust.
A Unitholder who does not dispose of Units in the secondary
market described above may cause Units to be redeemed by the
Trustee by making a written request to the Trustee, The Bank of
New York, 101 Barclay Street, New York, New York 10286 and, in
the case of Units evidenced by a certificate, by tendering such
certificate to the Trustee, properly endorsed or accompanied by a
written instrument or instruments of transfer in form
satisfactory to the Trustee. Unitholders must sign the request,
and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate
representing the Units to be redeemed. If the amount of the
redemption is $25,000 or less and the proceeds are payable to the
Unitholder(s) of record at the address of record, no signature
guarantee is necessary for redemption by individual account
owners (including joint owners) or fiduciary accounts where the
fiduciary is named in the account registration. Additional
documentation may be requested, and a signature guarantee is
always required, from corporations, executors, administrators,
trustees, guardians or associations. If required, the signatures
must be guaranteed by a participant in the Securities Transfer
Agents Medallion Program ("STAMP") or such other signature
guarantee program in addition to or in substitution for STAMP as
may be accepted by the Trustee. A certificate should only be
sent by registered or certified mail for the protection of the
Unitholder. Since tender of the certificate is required for
redemption when one has been issued, Units represented by a
certificate cannot be redeemed until the certificate representing
such Units has been received by the purchaser.
Redemption shall be made by the Trustee on the third business day
following the day on which a tender for redemption is received
(the "Redemption Date") by payment of cash equivalent to the
Redemption Value of such Series, determined as set forth below
under "Computation of Redemption Value," next following such
tender, multiplied by the number of Units of such Series being
redeemed. Any Units redeemed shall be cancelled and any
undivided fractional interest in such Series of the Trusts
extinguished. The price received upon redemption might be more
or less than the amount paid by the Unitholder depending on the
value of the Portfolio Obligations in the Portfolio of the Series
at the time of redemption.
During the period in which the Sponsor maintains a market for
Units, the Sponsor has the right to repurchase any Unit presented
for tender to the Trustee for redemption no later than the close
of business on the second business day following such
presentation.
The Trustee is irrevocably authorized in its discretion, if the
Sponsor does not elect to repurchase any Unit tendered for
redemption or if the Sponsor itself tenders Units for redemption,
in lieu of redeeming Units presented for tender at the Redemption
Value, to sell such Units in the over-the-counter market for the
account of a tendering Unitholder at prices which will return to
the Unitholder monies, net after brokerage commissions, transfer
taxes and other charges, equal to or in excess of the Redemption
Value for such Units. In the event of any such sale, the Trustee
will pay the net proceeds thereof to the Unitholder on the day he
would otherwise be entitled to receive payment of the Redemption
Value.
Any amounts to be paid on redemption representing interest shall
be withdrawn from the Interest Account of such Series to the
extent funds are available. All other amounts paid on redemption
shall be withdrawn from the Principal Account of such Series.
The Trustee is authorized by the Indenture to sell Portfolio
Obligations from a Series in order to provide funds for
redemption. To the extent Portfolio Obligations are sold, the
size of that Series of the Trusts will be reduced. Portfolio
Obligations will be sold by the Trustee so as to maintain, as
closely as practicable, the original percentage relationship
between the principal amounts of the Portfolio Obligations in
such Series. The Portfolio Obligations to be sold for purposes
of redeeming Units will be selected from a list supplied by the
Sponsor. The Portfolio Obligations will be chosen for this list
by the Sponsor on the basis of such market and credit factors as
it may determine are in the best interests of such Series of the
Trust. Provision is made under the Indenture for the Sponsor to
specify minimum face amounts in which blocks of Portfolio
Obligations are to be sold in order to obtain the best price
available. While such minimum amounts may vary from time to time
in accordance with market conditions, it is anticipated that the
minimum face amounts which would be specified would range from
$25,000 to $100,000. Sales may be required at a time when the
Portfolio Obligations would not otherwise be sold and might
result in lower prices than might otherwise be realized.
Moreover, due to the minimum principal amount in which Portfolio
Obligations may be required to be sold, the proceeds of such
sales
may exceed the amount necessary for payment of Units
redeemed. To the extent not used to meet other redemption
requests in such Series, such excess proceeds will be distributed
pro rata to all remaining Unitholders of record of such Series,
unless reinvested in substitute Portfolio Obligations. See
"Administration of the Trust _ Portfolio Supervision."
Computation of Redemption Value. The value of a Unit of a Series
of the Trust is determined as of the Evaluation Time stated under
"Essential Information" in Part Two (a) semiannually, on June 30
and December 31 of each year (or the last business day prior
thereto), (b) on any business day as of the Evaluation Time next
following the tender of any Unit and (c) on any other business
day desired by the Sponsor or the Trustee,
(1) by adding:
a. The aggregate bid side evaluation of the Portfolio
Obligations in a Series of the Trust, as determined by the
Evaluator;
b. Cash on hand in such Series of the Trusts, other than
money deposited to purchase contract obligations or money
credited to the Reserve Account; and
c. Accrued but unpaid interest on the Portfolio
Obligations in such Series to the redemption date.
(2) and then deducting from the resulting figure: amounts
representing any applicable taxes or governmental charges payable
by such Series of the Trusts for the purpose of making an
addition to the reserve account (as defined in the Indenture),
amounts representing estimated accrued expenses (including audit
fees) of the Series, amounts representing unpaid fees and
expenses of the Trustee, the Sponsor (if applicable), counsel and
the Evaluator and monies held for distribution to Unitholders of
record of such Series as of the business day prior to the
evaluation being made on the days or dates set forth above;
(3) and then dividing the result of the above computation
by the total number of Units of such Series outstanding on the
date of evaluation. The resulting figure equals the Redemption
Value for each Unit of such Series. The Evaluator will determine
the aggregate current bid price evaluation of the Portfolio
Obligations in each Series of the Trusts as set forth under
"Public Offering of Units _ Public Offering Price."
Postponement of Redemption. The right of redemption of any
Series may be suspended and payment of the Redemption Value per
Unit postponed for more than seven calendar days following a
tender of Units for redemption for any period (as determined by
the Securities and Exchange Commission) during which the New York
Stock Exchange is closed, other than for customary weekend and
holiday closings, or during which trading on that Exchange is
restricted or an emergency exists as a result of which disposal
or evaluation of the Portfolio Obligations is not reasonably
practicable, or for such other periods as the Securities and
Exchange Commission may by order permit. The Trustee is not
liable to any person in any way for any loss or damage which may
result from any such suspension or postponement.
RIGHTS OF UNITHOLDERS
Unitholders. A Unitholder is deemed to be a beneficiary of the
Series of the Trusts which he purchased and is vested with all
right, title and interest in the appropriate Series of the
Trusts, each of which was created by the Indenture. A Unitholder
may at any time tender his Units to the Trustee for redemption.
Ownership of Units. Ownership of Units of a Series of the Trusts
will not be evidenced by Certificates unless a Unitholder or the
Unitholder's registered broker/dealer makes a written request to
the Trustee. Units are transferable by making a written request
to the Trustee and, in the case of Units evidenced by a
certificate, by presenting and surrendering such certificate to
the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent
registered or certified mail for the protection of the
Unitholder. Unitholders must sign such written request, and such
certificate or transfer instrument, exactly as their names appear
on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed
by a participant in the Securities Transfer Agents Medallion
Program ("STAMP") or such other signature guarantee program in
addition to or in substitution for STAMP as may be accepted by
the Trustee.
Certificates will be issued in denominations of 1,000 Units (100
Units for Kemper Defined Funds and EVEREN Unit Investment Trusts)
or any whole number of Units in excess thereof. The Trustee may
require a Unitholder to pay a reasonable fee, to be determined in
the sole discretion of the Trustee, for each certificate reissued
or transferred and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. The
Trustee at the present time does not intend to charge for the
normal transfer or exchange of certificates. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to
the Trustee of satisfactory indemnity (generally amounting to 3%
of the market value of the Units), affidavit of loss, if
appropriate, evidence of ownership and payment of expenses
incurred. Any mutilated certificate must be presented to the
Trustee before a substitute certificate will be issued.
Certain Limitations. The death or incapacity of any Unitholder
(or the dissolution of the Sponsor) will not operate to terminate
the Trusts or any Series thereof nor entitle the legal
representatives or heirs of such Unitholder to claim an
accounting or to take any other action or proceeding in any court
for a partition or winding up of the Trusts or any Series
thereof.
No Unitholder shall have the right to vote except with respect to
removal of the Trustee or amendment and termination of the Trust
or of the Series of which they are a Unitholder. See
"Administration of the Trust _ Amendment" and "Administration of
the Trust _ Termination." Unitholders shall have no right to
control the operation or administration of the Trust or any
Series thereof in any manner, except upon the vote of Unitholders
representing 66-2/3% of the Units of a Series outstanding for
purposes of amendment, termination or discharge of the Trustee,
all as provided in the Indenture; however, no Unitholder shall
ever be under any liability to any third party for any action
taken
by the Trustee, Evaluator or Sponsor.
EXPENSES AND CHARGES
Initial Expenses. All expenses and charges incurred prior to or
in establishment of the Series of the Trusts, including the cost
of the initial preparation, printing and execution of the
Indenture and the certificate, the initial fees of the Trustee
and the Evaluator, initial legal and auditing expenses, the cost
of the preparation and printing of the Prospectus and all other
advertising and selling expenses were paid by the Sponsor.
Fees. The Sponsor will receive no fee from the Trusts or any
Series thereof for its services as such. However, the Sponsor
does receive a portfolio surveillance fee, which is earned for
portfolio supervisory services, at the rate set forth under
"Essential Information" in Part Two for the appropriate Series
per $1,000 principal amount of Portfolio Obligations in such
Series of the Trusts, computed monthly on the basis of the
largest principal amount of Portfolio Obligations in such Series
of the Trusts at any time during the preceding month. The
portfolio surveillance fee, which may not exceed the amount set
forth under "Essential Information" in Part Two, may exceed the
actual costs of providing portfolio supervisory services for
these Series of the Trusts, but at no time will the total amount
the Sponsor receives for supervisory services rendered to all
unit investment trusts sponsored by the Sponsor in any calendar
year exceed the aggregate cost of providing such services in that
year.
The Trustee will receive for its services under the Indenture the
fee set forth in Part Two under "Essential Information" per
$1,000 principal amount of Portfolio Obligations in each Series
of the Trusts, computed monthly on the basis of the largest
principal amount of Portfolio Obligations in such Series at any
time during the preceding month. In no event will the Trustee be
paid less than $2,000 per Series in any one year.
For evaluation of Portfolio Obligations in a Series of the
Trusts, the Evaluator shall receive the fee set forth in Part Two
under "Essential Information" per $1,000 principal amount of
Portfolio Obligations in such Series, computed monthly on the
basis of the largest aggregate principal amount of Portfolio
Obligations in such Series at any time during the preceding
month.
The Trustee's fees, Sponsor's portfolio surveillance fees and the
Evaluator's fees are payable monthly on or before each
Distribution Date from the Interest Account of each Series to the
extent funds are available and thereafter from the Principal
Account of such Series. Any of such fees may be increased
without approval of the Unitholders in proportion to increases
under the category "All Services Less Rent of Shelter" in the
Consumer Price Index published by the United States Department of
Labor or if such category is no longer published, in a comparable
category. The Trustee also receives benefits to the extent that
it holds funds on deposits in various non-interest bearing
accounts created under the Indenture.
Other Charges. The following additional charges are or may be
incurred by a Series of the Trusts as more fully described in the
Indenture: (a) fees of the Trustee for extraordinary services,
(b) expenses of the Trustee (including legal and auditing
expenses, but not including any fees and expenses charged by any
agent for custody and safeguarding the Portfolio Obligations) and
of counsel designated by the Sponsor, (c) various governmental
charges, (d) expenses and costs of any action taken by the
Trustee to protect the Series of the Trusts and the rights and
interests of the Unitholders thereof, (e) indemnification of the
Trustee for any loss, liability or expense incurred by it in the
administration of the Series of the Trusts without gross
negligence, bad faith, willful malfeasance or willful misconduct
on its part or reckless disregard of its obligations and duties,
(f) indemnification of the Sponsor for any losses, liabilities
and expenses incurred in acting as Sponsor under the Indenture
without gross negligence, bad faith, willful malfeasance or
willful misconduct or reckless disregard of its obligations and
duties, and (g) expenditures incurred in contacting Unitholders
upon termination of such Series of the Trusts.
The fees and expenses set forth herein are payable out of a
Series of the Trusts and when so paid by or owing to the Trustee
are secured by a lien on such Series. If the balances in the
Interest and Principal Accounts are insufficient to provide for
amounts payable by any Series of the Trusts, the Trustee has the
power to sell Portfolio Obligations from such Series to pay such
amounts. To the extent Portfolio Obligations are sold, the size
of that Series of the Trusts will be reduced and the proportions
of the types of Portfolio Obligations will change. Such sales
might be required at a time when Portfolio Obligations would not
otherwise be sold and might result in lower prices than might
otherwise be realized. Moreover, due to the minimum principal
amount in which Portfolio Obligations may be required to be sold,
the proceeds of such sales may exceed the amount necessary for
the payment of such fees and expenses.
ADMINISTRATION OF THE TRUST
Records and Accounts. In accordance with the Indenture, the
Trustee shall keep records of all transactions at its office.
Such records shall include the name and address of, and the
number of Units held by, each Unitholder of each Series of the
Trusts. Such books and records shall be open to inspection by
any Unitholder of such Series at all reasonable times during the
usual business hours. The Trustee shall make such annual or
other reports as may from time to time be required under any
applicable state or Federal statute, rule or regulation. The
Trustee shall keep a certified copy or duplicate original of the
Indenture on file in its office available for inspection at all
reasonable time during usual business hours by any Unitholder of
such Series, together with a current list of the Portfolio
Obligations held in each Series of the Trusts. Pursuant to the
Indenture, the Trustee may employ one or more agents for the
purpose of custody and safeguarding of the Portfolio Obligations
comprising the Portfolios.
DISTRIBUTIONS FROM THE INTEREST, PRINCIPAL AND CAPITAL GAINS
ACCOUNTS.
GNMA Trust. The terms of the Ginnie Maes provide for payment to
the
holders thereof (including the Series of the GNMA Trust) on
the fifteenth day of each month (the 25th day in the case of
Ginnie Mae II's) of amounts collected by or due to the issuers
thereof with respect to the underlying mortgages during the
preceding month. The Trustee will collect the interest due each
Series on the Securities therein as it becomes payable and credit
such interest to a separate Interest Account created by the
Indenture for such Series.
Distributions will be made to each Unitholder of record of each
Series of the GNMA Trust on the appropriate Distribution Date and
will consist of an amount substantially equal to such
Unitholder's pro rata share of the cash balances in the Interest
Account, the Principal Account and the Capital Gains Account, if
any, of such Series computed as of the close of business on the
preceding Record Date.
U.S. Treasury Portfolio Series. The terms of the U.S. Treasury
Obligations (other than Stripped Treasury Securities) provide for
semi-annual payments of interest on or about the 15th day of the
designated months. Interest received by a U.S. Treasury
Portfolio Series, including any portion of the proceeds from a
disposition of the U.S. Treasury Obligations which represents
accrued interest, is credited by the Trustee to the Interest
Account for such Trust Fund. All other receipts are credited by
the Trustee to a separate Principal Account for such Trust Fund.
Since interest on the U.S. Treasury Obligations (other than
Stripped Treasury Securities) in U.S. Treasury Portfolio Series
is payable in semi-annual installments, and distributions of
income are made to Unitholders at different intervals from
receipt of interest, the interest accruing to Unitholders in the
U.S. Treasury Portfolio Series may not be equal to the amount of
money received and available for distribution from the Interest
Account. Therefore, on each Distribution Date the amount of
interest actually deposited in the Interest Account of a U.S.
Treasury Portfolio Series and available for distribution may be
slightly more or less than the interest distribution made. In
order to eliminate fluctuations in interest distributions
resulting from such variances, the Trustee is authorized by the
Indenture to advance such amounts as may be necessary to provide
interest distributions of approximately equal amounts. The
Trustee will be reimbursed, without interest, for any such
advances from funds available in the Interest Account for such
U.S. Treasury Portfolio Series.
Stripped Treasury Securities are sold at a deep discount because
the buyer of those securities obtains only the right to receive a
future fixed payment on the security and not any rights to
periodic interest payments thereon. Purchasers of these
Securities acquire, in effect, discount obligations that are
economically identical to the "zero-coupon bonds" that have been
issued by corporations. Zero coupon bonds are debt obligations
which do not make any periodic payments of interest prior to
maturity and accordingly are issued at a deep discount.
Under generally accepted accounting principles, a holder of a
security purchased at a discount normally must report as an item
of income for financial accounting purposes the portion of the
discount
attributable to the applicable reporting period. The
calculation of this attributable income would be made on the
"interest" method which generally will result in a lesser amount
of includable income in earlier periods and a correspondingly
larger amount in later periods. For Federal income tax purposes,
the inclusion will be on a basis that reflects the effective
compounding of accrued but unpaid interest effectively
represented by the discount. Although this treatment is similar
to the "interest" method described above, the "interest" method
may differ to the extent that generally accepted accounting
principles permit or require the inclusion of interest on the
basis of a compounding period other than the semi-annual period.
See "Tax Status of the Trusts."
The Trustee will distribute on each Distribution Date or shortly
thereafter, to each Unitholder of record of U.S. Treasury
Portfolio Series on the preceding Record Date, an amount
substantially equal to such holder's pro rata share of the cash
balance, if any, in the Principal Account of U.S. Treasury
Portfolio Series computed as of the close of business on the
preceding Record Date. However, no distribution will be required
if the balance in the Principal Account is less than $1.00 per
1,000 Units (or in the case of Kemper Defined Funds, less than
$1.00 per 100 Units). Notwithstanding the foregoing, the Trustee
will make a distribution to Unitholders of all principal relating
to maturing Treasury Obligations within seven business days of
the date of each such maturity.
General. Distributions for an IRA, Keogh or other tax-deferred
retirement plan will not be sent to the individual Unitholder.
These distributions will go directly to the custodian of the plan
to avoid the penalties associated with premature withdrawals from
such accounts. See "Retirement Plans."
All funds collected or received will be held by the Trustee in
trust, without interest to Unitholders, as part of the
appropriate Series of the Trusts or the Reserve Account for such
Series referred to below until required to be disbursed in
accordance with the provisions of the Indenture. Such funds will
be segregated on the trust ledger of the Trustee so long as such
practice preserves a valid preference of Unitholders of such
Series under the bankruptcy laws of the United States, or if such
preference is not preserved, the Trustee shall handle such funds
in such other manner as shall constitute the segregation and
holding thereof in trust within the meaning of the Investment
Company Act of 1940, as the same may from time to time be
amended. To the extent permitted by the Indenture and applicable
banking regulations, such funds are available for use by the
Trustee pursuant to normal banking procedures.
The first distribution for persons who purchase Units between a
Record Date and a Distribution Date will be made on the second
Distribution Date following their purchase of Units.
The Trustee is authorized by the Indenture to withdraw from the
Principal and/or Interest Accounts of each Series such amounts as
it deems necessary to establish a reserve for any taxes or other
governmental charges that may be payable out of such Series of
the Trust, which amounts will be deposited in a separate Reserve
Account.
If the Trustee determines that the amount in the
Reserve Account is greater than the amount necessary for payment
of any taxes or other governmental charges, it will promptly
deposit the excess back in the Account from which it was
withdrawn.
Portfolio Supervision. The Indenture permits the Sponsor to
direct the Trustee to dispose of any Portfolio Obligation in a
Series of the Trusts upon the happening of any of the following
events:
(1) Default in the payment of principal or interest on any
of the Portfolio Obligations when due and payable,
(2) Institution of legal proceedings seeking to restrain or
enjoin the payment of any of the Portfolio Obligations or
attacking their validity,
(3) A breach of covenant or warranty which could adversely
affect the payment of debt service on the Portfolio Obligations,
(4) Default in the payment of principal or interest on any
other outstanding obligation guaranteed or backed by the full
faith and credit of the United States of America,
(5) A decline in market price to such an extent or such
other market credit or other factors exist, as in the opinion of
the Sponsor would make retention of any of the Portfolio
Obligations detrimental to the Trusts or any Series thereof and
to the interests of the Unitholders,
(6) An offer is made to refund or refinance any of the
Portfolio Obligations, or
(7) Termination of the Trusts or any Series thereof.
The Trustee shall also sell any Portfolio Obligation in a Series
of the Trusts if there is a default in the payment of principal
and interest on such Portfolio Obligation and no provision for
payment is made therefor and the Sponsor fails to instruct the
Trustee to sell or hold such Portfolio Obligation within thirty
days after notice to the Sponsor from the Trustee of such
default. The Trustee shall not be liable for any depreciation or
loss by reason of any sale of Portfolio Obligations or by reason
of the failure of the Sponsor to give directions to the Trustee.
Amounts received by a Series of the Trusts upon the sale of any
Portfolio Obligation under the conditions set forth above will be
deposited in the Principal Account, Interest Account or Capital
Gains Account for such Series, as appropriate, when received and
pursuant to the Sponsor's instructions will be either distributed
by the Trustee on the next Distribution Date to Unitholders of
record of such Series on the Record Date prior to such
Distribution Date.
Reports to Unitholders. With each distribution, the Trustee will
furnish or cause to be furnished to the Unitholders of each
Series a statement of the amount of interest and other receipts,
if any, distributed, expressed in each case as a dollar amount
per Unit of such Series.
The accounts of each Series of the Trusts are required to be
audited annually, at such Series' expense, by independent
certified public accountants designated by the Sponsor, unless
the Trustee determines that such an audit would not be in the
best interest of the Unitholders of that Series of the Trust.
The accountants' report will be furnished by the Trustee to any
Unitholder of such Series upon written request.
Within a reasonable period of time after the end of each calendar
year, the Trustee will furnish to each person who at any time
during such calendar year was a Unitholder of record of a Series
of the Trusts a statement setting forth for the applicable
Series:
(1) As to the Interest Account for such Series:
(a) the amount of interest received on the Portfolio
Obligations, including amounts received as a portion of the
proceeds of any disposition of Portfolio Obligations;
(b) the amount paid from the Interest Account representing
accrued interest for any Units redeemed and amounts paid or
reserved for purchases of substitute Portfolio Obligations;
(c) the deductions from the Interest Account for applicable
taxes or other governmental charges, if any, and fees and
expenses of the Trustee (including auditing fees), the Sponsor,
the Evaluator and counsel;
(d) the deductions from the Interest Account for payment
into the Reserve Account; and
(e) the net amount remaining after such payments and
deductions expressed both as a total dollar amount and as a
dollar amount per Unit or appropriate multiple thereof
outstanding on the last business day of such calendar year.
(2) As to the Principal Account for such Series:
(a) the dates of the sale, maturity, liquidation or
redemption of any of the Portfolio Obligations and the net
proceeds received therefrom, excluding any portion credited to
the Interest Account;
(b) the amount paid from the Principal Account representing
the principal of any Units redeemed and amounts paid or reserved
for purchases of substitute Portfolio Obligations;
(c) the deductions from the Principal Account, if any, for
payment of applicable taxes or other governmental charges, fees
and expenses of the Trustee (including auditing fees), the
Sponsor, the Evaluator and counsel;
(d) the deductions from the Principal Account for payment
into the Reserve Account; and
(e) the net amounts remaining after such payments and
deductions expressed both as a total dollar amount and as a
dollar amount per Unit or appropriate multiple thereof
outstanding on the last business day of such calendar year.
(3) The following information with respect to such Series:
(a) a list of the Portfolio Obligations, as appropriate, as
of the last business day of such calendar year grouped by coupon
and maturity range;
(b) the number of Units outstanding on the last business
day of such calendar year;
(c) the Unit Value (as defined in the Indenture) based on
the last Trust evaluation made during such calendar year; and
(d) the amounts actually distributed during such calendar
year from the Interest and Principal Accounts, separately stated,
expressed both as total dollar amounts and as dollar amounts per
Unit or appropriate multiple thereof outstanding on the Record
Dates
for such distributions.
Amendments. The Indenture and the Agreement with respect to each
Series may be amended by the Trustee and the Sponsor without the
consent of Unitholders (a) to cure any ambiguity or to correct or
supplement any provision thereof which may be defective or
inconsistent, (b) to change any provision thereof as may be
required by the Securities and Exchange Commission or any
successor governmental agency, (c) for those Trusts that have
qualified as "regulated investment companies," to add or change
any provision thereof which may be necessary or advisable for the
continuing qualification as a regulated investment company under
the Internal Revenue Code of 1986 and (d) to make such other
provisions as shall not adversely affect the interest of the
Unitholders (as determined in good faith by the Sponsor and the
Trustee); provided, however, that the Indenture may also be
amended with respect to any Series by the Sponsor and the Trustee
(or the performance of any of the provisions of the Indenture may
be waived) with the consent of holders of Units representing
66-2/3% of the Units then outstanding of such Series for the
purposes of adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture of such Series
or of modifying in any manner the rights of Unitholders thereof.
However, the Indenture may not be amended, without the consent of
the holders of all Units of a Series then outstanding, so as (1)
to permit, except in accordance with the terms and conditions of
the Indenture, the acquisition of any Portfolio Obligations other
than those specified in the Indenture, or (2) to reduce the
aforesaid percentage of Units of a Series the holders of which
are required to consent to certain of such amendments and may not
be amended so as to reduce the interest in such Series
represented by Units without the consent of the holder of such
Units. The Trustee shall promptly notify Unitholders of the
substance of any such amendment.
Termination. The Indenture provides that a Series of the Trusts
will terminate after the maturity, redemption, sale or other
disposition of the last of the Portfolio Obligations held in such
Series. If the value of a Series of the Trusts, as shown by an
evaluation, is less than forty percent (40%) of the par value of
the Portfolio Obligations deposited in such Series of the Trust,
the Trustee shall, if directed by the Sponsor in writing,
terminate such Series. A Series of the Trust may also be
terminated at any time by the written consent of holders of
66-2/3% of the Units of such Series outstanding.
Upon termination, the Trustee will sell the Portfolio Obligations
then held in the appropriate Series of the Trust and credit the
moneys derived from such sale to the Principal Capital Gains and
Interest Accounts thereof. The Trustee will then, after
deduction of any fees and expenses of such Series and payment
into the Reserve Account of any amount required for taxes or
other governmental charges that may be payable by such Series,
distribute to each Unitholder of such Series, only upon surrender
for cancellation of his certificate, if issued, after due notice
of such termination, such Unitholder's pro rata share in the
Interest, Capital Gains and Principal Accounts for such Series.
The sale of Portfolio Obligations in a Series of the Trusts upon
termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. For this
reason, among others, the amount realized by a Unitholder upon
termination may be less than the principal amount of Portfolio
Obligations represented by the Units held by such Unitholder.
RESIGNATION, REMOVAL AND LIABILITY
Regarding the Trustee. The Trustee shall be under no liability
for any action taken in good faith in reliance on prima facie
properly executed documents or for the disposition of moneys or
Portfolio Obligations from any Series of the Trust, nor shall the
Trustee be liable or responsible in any way for depreciation or
loss incurred by reason of the disposition of any Portfolio
Obligations by the Trustee. However, the Trustee shall be liable
for willful malfeasance, willful misconduct, bad faith or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under the
Indenture. In the event of a failure of the Sponsor to act, the
Trustee may act under the Indenture and shall not be liable for
any action taken by it in good faith. The Trustee shall not be
personally liable for any taxes or other governmental charges
imposed upon a Series of the Trust or in respect of the Portfolio
Obligations or the interest thereon. The Indenture also contains
other customary provisions limiting the liability of the Trustee
and providing for the indemnification of the Trustee for any loss
or claim accruing to it without gross negligence, bad faith,
willful misconduct, willful malfeasance or reckless disregard of
its duties and obligations under the Indenture on its part.
The Trustee or any successor may resign by executing an
instrument in writing, filing the same with the Sponsor and
mailing a copy of such notice or resignation to all Unitholders
then of record. Upon receiving such notice the Sponsor will use
its best efforts to appoint a successor Trustee promptly. The
Sponsor may at any time remove the Trustee with or without cause
and appoint a successor as provided in the Indenture. If within
30 days of the resignation of a Trustee no successor has been
appointed or, if appointed, has not accepted the appointment, the
retiring Trustee may apply to a court of competent jurisdiction
for the appointment of a successor. The resignation or removal
of a Trustee becomes effective only when the successor Trustee
accepts its appointment as such or when a court of competent
jurisdiction appoints a successor Trustee.
Regarding the Sponsor. The Sponsor shall be under no liability
to the Series of the Trust or to Unitholders for taking any
action or for refraining from any action in good faith or for
errors in judgment, nor shall the Sponsor be liable or
responsible in any way for depreciation or loss incurred by
reason of the disposition of any Portfolio Obligation. The
Sponsor will, however, be liable for its own willful malfeasance,
willful misconduct, bad faith, gross negligence or reckless
disregard of its duties and obligations under the Indenture.
If at any time the Sponsor shall resign under the Indenture or
shall fail or be incapable of performing its duties thereunder or
shall become bankrupt or its affairs are taken over by public
authorities, the Indenture directs the Trustee to either (1)
appoint a successor sponsor or sponsors at rates of compensation
deemed reasonable by the Trustee and not exceeding amounts
prescribed by the Securities and Exchange Commission or (2)
continue to act as sponsor itself without terminating the
Indenture.
Regarding the Evaluator. The Trustee, Sponsor and Unitholders
may rely on any evaluation furnished by the Evaluator and shall
have no responsibility for the accuracy thereof. Determinations
by the Evaluator under the Indenture shall be made in good faith
upon the basis of the best information available to it, provided,
however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. The
Evaluator shall, however, be liable for its own willful
malfeasance, bad faith, gross negligence or reckless disregard of
its obligations and duties under the Indenture.
The Evaluator may resign or may be removed by the Sponsor and the
Trustee, and the Sponsor and the Trustee are to use their best
efforts to appoint a satisfactory successor. Such resignation or
removal shall become effective upon the acceptance of appointment
by the successor Evaluator. If upon resignation of the Evaluator
no successor accepts appointment within thirty days after notice
of resignation, the Evaluator may apply to a court of competent
jurisdiction for the appointment of a successor.
MISCELLANEOUS
Sponsor. The Sponsor, EVEREN Unit Investment Trusts, with an
office at 77 West Wacker Drive, 29th Floor, Chicago, Illinois
60601, (800) 621-5024, is a service of EVEREN Securities, Inc.,
which is a wholly-owned subsidiary of EVEREN Capital Corporation.
The Sponsor will act as underwriter of any other unit investment
trust products developed by the Sponsor in the future. As of
December 31, 1995, the total stockholder's equity of EVEREN
Securities, Inc. was $261,286,862.
The foregoing information with regard to the Sponsor relates to
the Sponsor only and not to any Series of the Trust. Such
information is included in this Prospectus only for the purpose
of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations
shown herein. More comprehensive financial information can be
obtained from the Sponsor upon request.
Trustee. The Trustee is The Bank of New York, a trust company
organized under the laws of New York. The Bank of New York has
its offices at 101 Barclay Street, New York, New York 10286,
telephone 1-800-701-8178. The Bank of New York is subject to
supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal
Reserve System, and its deposits are insured by the Federal
Deposit Insurance Corporation to the extent permitted by law.
The Trustee, whose duties are ministerial in nature, has not
participated in selecting the Portfolio Obligations. For
information relating to the responsibilities of the Trustee under
the Indenture, reference is made to the material set forth under
"Administration of the Trust."
Legal Opinions. The legality of the Units offered hereby and
certain matters relating to Federal tax law were originally
passed upon by Chapman and Cutler, 111 West Monroe Street,
Chicago, Illinois 60603, as counsel for the Sponsor.
INDEPENDENT AUDITORS
The financial statements appearing in Part Two of this Prospectus
and Registration Statement, with information pertaining to the
specific Series of the Trusts to which such statements relate,
have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report appearing in Part Two and are included
in reliance upon such report given upon the authority of such
firm as experts in auditing and accounting.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Part Two
Dated April 29, 1996
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
NOTE: Part Two of this Prospectus May Not Be Distributed unless Accompanied by
Part One.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Essential Information
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts(3)
Trustee: Investors Fiduciary Trust Company(4)
<TABLE>
<CAPTION>
General Information
<S> <C>
Principal Amount of Securities $3,377,903
Number of Units 18,434,889
Fractional Undivided Interest in the Trust per Unit 1/18,434,889
Principal Amount of Securities per 1,000 Units $183
Calculation of Public Offering Price:
Aggregate Value of Securities in the Trust $3,636,738
Aggregate Value of Securities per 1,000 Units $197
Principal Cash per 1,000 Units (1) $-
Sales Charge of 3.95% of Public Offering Price
(4.112% of net amount invested) per 1,000 Units $8
Public Offering Price per 1,000 Units $205
Accrued Interest per 1,000 Units through settlement
date of January 4, 1996 $-
Total Price per 1,000 Units $205
Redemption Price per 1,000 Units $197
Calculation of Estimated Net Annual Interest Income
per 1,000 Units:
Estimated Annual Interest Income $18.40
Less: Estimated Annual Expense $.52
Estimated Net Annual Interest Income $17.88
Daily Rate at which Estimated Net Annual Interest Income
Accrues per 1,000 Units $.0497
Estimated Current Return Based on Public Offering Price (2) 8.72%
Estimated Long-Term Return (2) 5.83%
</TABLE>
[FN]
1. This amount, if any, represents principal cash or overdraft which is an
asset or liability of the Trust and is included in the Public Offering Price.
2. The Estimated Current Return and Estimated Long-Term Return will vary with
changes in the Public Offering Price and there is no assurance that such
returns on the date hereof will be applicable on a subsequent date of
purchase. These estimated returns are increased for transactions entitled to
a reduced sales charge (see "Public Offering of Units - Public Offering Price"
- - Part One).
3. See Note 1 to the accompanying financial statements of the Trust regarding
a change in ownership of Kemper Unit Investment Trusts and Kemper Securities,
Inc.
4. See Note 6 to the accompanying financial statements of the Trust regarding
the change in Trustee.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Essential Information (continued)
As of December 31, 1995
Sponsor and Evaluator: EVEREN Unit Investment Trusts
Trustee: Investors Fiduciary Trust Company
Record and Distribution Date Record Date is the first of each
month and distributions to
Unitholders on such record dates
will be made on the last day of the
month.
Distribution Dates No distribution (other than capital
gains distributions) need be made
from the Principal Account if the
balance therein, excluding capital
gains, is less than $1.00 per 1,000
Units.
Trustee's Annual Fee (including
estimated expenses) $.452 per 1,000 Units (includes
$1.178 of Trustee's annual fee per
$1,000 principal amount of
underlying Securities and $.15 of
out-of-pocket expenses per 1,000
Units).
Evaluator's Annual Fee $.175 per $1,000 principal amount of
underlying Securities.
Surveillance Fee $.25 per $1,000 principal amount of
underlying Securities.
Date of Trust Agreement and
Initial Deposit February 14, 1989
Mandatory Termination Date December 31, 2019
Discretionary Liquidation Amount The Trust may be terminated if the
value thereof is less than
$8,049,648 (40% of the par value of
the Securities deposited in the
Trust).
<PAGE>
Report of Independent Auditors
Unitholders
Kemper Government Securities Trust
GNMA Portfolio Series 29
We have audited the accompanying statement of assets and liabilities of Kemper
Government Securities Trust GNMA Portfolio Series 29, including the schedule
of investments, as of December 31, 1995, and the related statements of
operations and changes in net assets for each of the three years in the period
then ended. These financial statements are the responsibility of the Trust's
sponsor. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of investments owned as of December 31, 1995,
by correspondence with the custodial bank. An audit also includes assessing
the accounting principles used and significant estimates made by the sponsor,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Kemper Government Securities
Trust GNMA Portfolio Series 29 at December 31, 1995, and the results of its
operations and the changes in its net assets for the periods indicated above
in conformity with generally accepted accounting principles.
Ernst & Young LLP
Kansas City, Missouri
April 15, 1996
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
GNMA Securities, at value (cost $3,409,092) $3,636,738
Cash 75,445
Interest receivable 28,274
----------
Total assets 3,740,457
Liabilities and net assets
Accrued liabilities 2,000
Net assets, applicable to 18,434,889 Units
outstanding:
Cost of Trust assets, exclusive of interest $3,409,092
Unrealized appreciation 227,646
Distributable funds 101,719
---------- ----------
Net assets $3,738,457
==========
Net asset value per 1,000 Units $202.79
==========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Statements of Operations
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
<S> <C> <C> <C>
-------- --------- ---------
Investment income - interest $373,252 $491,693 $864,085
Expenses:
Trustee's fees and related expenses 9,216 10,750 17,804
Evaluator's and portfolio surveillance
fees 1,613 2,210 3,874
-------- --------- ---------
Total expenses 10,829 12,960 21,678
-------- --------- ---------
Net investment income 362,423 478,733 842,407
Realized and unrealized gain (loss)
on investments:
Net realized gain 3,065 9,694 -
Unrealized appreciation
(depreciation) during the year 53,481 (420,855) (466,151)
-------- --------- ---------
Net gain (loss) on investments 56,546 (411,161) (466,151)
-------- --------- ---------
Net increase in net assets resulting
from operations $418,969 $67,572 $376,256
======== ========= =========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year ended December 31
1995 1994 1993
<S> <C> <C> <C>
---------- ----------- -----------
Operations:
Net investment income $362,423 $478,733 $842,407
Net realized gain on investments 3,065 9,694 -
Unrealized appreciation
(depreciation) on investments
during the year 53,481 (420,855) (466,151)
---------- ----------- -----------
Net increase in net assets resulting
from operations 418,969 67,572 376,256
Distributions to Unitholders:
Net investment income (369,067) (505,692) (881,401)
Tax return of capital (626,100) (2,360,498) (4,911,076)
---------- ----------- -----------
Total distributions to Unitholders (995,167) (2,866,190) (5,792,477)
Capital transactions:
Redemption of 456,399 Units - (131,500) -
Redemption of 273,348 Units (57,059) - -
---------- ----------- -----------
Total decrease in net assets (633,257) (2,930,118) (5,416,221)
Net assets:
Beginning of the year 4,371,714 7,301,832 12,718,053
---------- ----------- -----------
End of the year (including
distributable funds applicable
to Trust Units of $101,719,
$137,182 and $307,241 at
December 31, 1995, 1994 and
1993, respectively) $3,738,457 $4,371,714 $7,301,832
========== =========== ===========
Trust Units outstanding at the end
of the year 18,434,889 18,708,237 19,164,836
========== =========== ===========
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Schedule of Investments
December 31, 1995
Government National Mortgage Association
Modified Pass-Through Mortgage-Backed Securities
<TABLE>
<CAPTION>
Principal Range of Stated
Amount Coupon Maturities (1) Value
<S> <C> <C> <C> <C>
---------- ------ ------------------- ----------
$1,539,394 9.5% 7/15/2016-6/15/2019 $1,634,167
1,838,509 10.5% 9/15/2015-7/15/2019 2,002,571
---------- ----------
$3,377,903 $3,636,738
========== ==========
</TABLE>
Note to Schedule of Investments
1. The principal amount of Securities listed as having the range of
maturities shown is an aggregate of individual Securities having varying
stated maturities within that shown. They are listed as one category of
Securities with a single range of maturities because current market conditions
do not accord a significant difference in price among the Securities grouped
together on the basis of the differences in their stated maturities. At some
time in the future, however, the differences in stated maturities could affect
the market value of the individual Securities.
[FN]
See accompanying notes to financial statements.
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Notes to Financial Statements
1. Significant Accounting Policies
Trust Sponsor and Evaluator
From the Trust's date of deposit through September 14, 1995, the Trust's
sponsor and evaluator was Kemper Unit Investment Trusts, a division of Kemper
Securities, Inc. At that date, the members of certain Kemper Corporation
operating units acquired ownership of certain Kemper units, which included
Kemper Securities, Inc. In connection with the acquisition, Kemper
Securities, Inc. changed its name to EVEREN Securities, Inc., and Kemper Unit
Investment Trusts became EVEREN Unit Investment Trusts, which now serves as
the "Evaluator" and sponsor of the Trust. Subsequent to the date of
acquisition, neither EVEREN Securities, Inc. nor EVEREN Unit Investment Trusts
is affiliated with Kemper Financial Services, Inc. or Kemper Corporation.
Valuation of Securities
GNMA Securities are stated at bid prices as determined by EVEREN Unit
Investment Trusts. The aggregate bid prices of the Securities are determined
based on (a) current bid prices of the Securities, (b) current bid prices for
comparable securities, (c) appraisal, or (d) any combination of the above.
Cost of Securities
Cost of the Trust's Securities is based on the offering prices of the
Securities on the dates of deposit of such Securities acquired during the
primary sales period. The premium or discount, if any, is recognized as an
adjustment of investment income on a pro rata basis as principal repayments
are received. Realized gain (loss) from Security transactions is reported on
an identified cost basis.
2. Unrealized Appreciation and Depreciation
Following is an analysis of net unrealized appreciation at December 31, 1995:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation $227,646
Gross unrealized depreciation -
--------
Net unrealized appreciation $227,646
========
</TABLE>
<PAGE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Notes to Financial Statements (continued)
3. Transactions with Affiliates
Investors Fiduciary Trust Company (IFTC), who served as Trustee through
February 29, 1996, was 50% owned by Kemper Financial Services, Inc., an
affiliate of Kemper Unit Investment Trusts until January 31, 1995, at which
time State Street Boston Corporation acquired IFTC. Payments to the Trustee
included $1.178, $.944 and $.944 of the Trustee's annual fee per $1,000
principal amount of underlying Securities in the Trust at December 31, 1995,
1994 and 1993, respectively, calculated monthly, based on the largest
aggregate principal amount of Securities in the Trust at any time during the
previous month and reimbursement of out-of-pocket expenses of $.15 per 1,000
Units through December 31, 1995, calculated monthly, based on the largest
number of Trust Units outstanding at any time during the previous month.
The annual Evaluator's fee and portfolio surveillance fee, calculated monthly,
are $.175 and $.25, respectively, per $1,000 principal amount of Securities in
the Trust based on the largest aggregate principal amount of Securities in the
Trust at any time during the previous month.
4. Federal Income Taxes
The Trust is organized as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"). It is the Trust's
policy to comply with the special provisions of the Code available to
regulated investment companies. Such provisions were complied with and,
therefore, no federal income tax provision is required.
5. Other Information
Cost to Investors
The cost to initial investors of Units of the Trust was based on the aggregate
offering price of the Securities on the date of an investor's purchase, plus
or minus a pro rata share of cash or overdraft in the Principal Account and
accrued interest, plus a sales charge of 3.75% of the Public Offering Price
(equivalent to 3.896% of the net amount invested). The Public Offering Price
for secondary market transactions is based on the aggregate bid prices of the
Securities plus or minus a pro rata share of cash or overdraft in the
Principal Account and accrued interest on the date of an investor's purchase,
plus a sales charge of 3.95% of the Public Offering Price (equivalent to
4.112% of the net amount invested).
<PAGE>
<TABLE>
Kemper Government Securities Trust
GNMA Portfolio Series 29
Notes to Financial Statements (continued)
5. Other Information (continued)
Selected data per 1,000 Units of the Trust outstanding during each year -
<CAPTION>
Year ended December 31
1995 1994 1993
<S> <C> <C> <C>
------- -------- --------
Investment income - interest $20.03 $26.05 $45.09
Expenses .58 .69 1.13
------- -------- --------
Net investment income 19.45 25.36 43.96
Distributions to Unitholders:
Net investment income (19.64) (25.81) (44.22)
Tax return of capital (33.80) (125.14) (258.03)
------- -------- --------
Total distributions to Unitholders (53.44) (150.95) (302.25)
Net gain (loss) on investments 3.10 (21.73) (24.32)
------- -------- --------
Decrease in net asset value (30.89) (147.32) (282.61)
Net asset value:
Beginning of the year 233.68 381.00 663.61
------- -------- --------
End of the year, including
distributable funds $202.79 $233.68 $381.00
======= ======== ========
</TABLE>
6. Change of Trustee
On March 1, 1996, The Bank of New York assumed all trustee responsibilities
from IFTC.
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our report dated April 15, 1996, in this Post-
Effective Amendment to the Registration Statement (Form S-6) and related
Prospectus of Kemper Government Securities Trust GNMA Portfolio Series 29
dated April 29, 1996.
Ernst & Young LLP
Kansas City, Missouri
April 29, 1996
<PAGE>
Contents of Post-Effective AmendmentTo Registration Statement
This Post-Effective amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933, The
Registrant, Kemper Government Securities Trust, GNMA Portfolio,
Series 28 and Series 29, certifies that it meets all of the
requirements for effectiveness of this registration statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chicago, and State of Illinois, on the
28th day of April, 1996.
Kemper Government Securities Trust, GNMA Portfolio, Series 28 and Series 29
Registrant
By: EVEREN Unit Investment Trusts
(a division of EVEREN Securities, Inc.)
Depositor
By: Michael J. Thoms
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on
April 28, 1996 by the following persons, who constitute a
majority of the Board of Directors of EVEREN Securities, Inc.
Signature Title
James R. Boris Chairman and Chief Executive Officer
James R. Boris
Daniel D. Williams Senior Executive Vice President, Chief
Daniel D. Williams Financial Officer and Treasurer
Frank V. Geremia Senior Executive Vice President
Frank V. Geremia
Stephen G. McConahey President and Chief Operating Officer
Stephen G. McConahey
Stanley R. Fallis Senior Executive Vice President and Chief
Stanley R. Fallis Administrative Officer
David M. Greene Senior Executive Vice President and
David M. Greene Director of Client Services
Thomas R. Reedy Senior Executive Vice President and
Thomas R. Reedy Director of Capital Markets
Janet L. Reali Executive Vice President, Corporate Counsel
Janet L. Reali and Corporate Secretary
Michael J. Thoms
Michael J. Thoms signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with
Amendment No. 1 to the Registration Statement on Form S-6 for
Kemper Defined Funds Series 28 (Registration No. 33-56779).
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from
Post-effective Amendment Number 8 to Form S-6 and is qualified in
its entirety by reference to such Post-effective Amendment to Form S-6.
</LEGEND>
<SERIES>
<NUMBER> 29
<NAME> KEMPER GOVERNMENT SECURITIES TRUST GNMA PORTFOLIO
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 3,409,092
<INVESTMENTS-AT-VALUE> 3,636,738
<RECEIVABLES> 28,274
<ASSETS-OTHER> 75,445
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,740,457
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,000
<TOTAL-LIABILITIES> 2,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3,409,092
<SHARES-COMMON-STOCK> 18,434,889
<SHARES-COMMON-PRIOR> 18,708,237
<ACCUMULATED-NII-CURRENT> 101,719
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 227,646
<NET-ASSETS> 3,738,457
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 373,252
<OTHER-INCOME> 0
<EXPENSES-NET> 10,829
<NET-INVESTMENT-INCOME> 362,423
<REALIZED-GAINS-CURRENT> 3,065
<APPREC-INCREASE-CURRENT> 53,481
<NET-CHANGE-FROM-OPS> 418,969
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (369,067)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (626,100)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 273,348
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (633,257)
<ACCUMULATED-NII-PRIOR> 137,182
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
