PILLAR FUNDS, 497, 1995-12-15

PILLAR FUNDS
497, 1995-12-15

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<PAGE>

THE PILLAR FUNDS

Fixed Income Fund
Class A Shares

Supplement dated December 15, 1995 to the Prospectus dated April 30, 1995

The Prospectus dated April 30, 1995 relating to the Short-Term Investment, Fixed
Income, New Jersey Municipal Securities, Pennsylvania Municipal Securities,
Intermediate-Term Government Securities and GNMA Funds of The Pillar Funds is
hereby amended and supplemented by the following:

The investment policies of the Fixed Income Fund (the "Fund") are hereby amended
as follows:

The Fund expects to maintain a dollar-weighted average maturity that will not
exceed fifteen years.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>

THE PILLAR FUNDS

Investment Advisor:
UNITED JERSEY BANK INVESTMENT MANAGEMENT DIVISION, A
DIVISION OF UNITED JERSEY BANK

THE PILLAR FUNDS (the "Trust") consist of mutual fund portfolios seeking to
provide a convenient and economical means of investing in one or more
professionally managed portfolios of securities. This Prospectus relates to the
following fixed income funds (collectively, the "Funds"; individually, a
"Fund"):

. SHORT-TERM INVESTMENT FUND
. FIXED INCOME FUND
. NEW JERSEY MUNICIPAL SECURITIES FUND
. PENNSYLVANIA MUNICIPAL SECURITIES FUND
. INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND
. GNMA FUND

CLASS A

The Trust's Class A Shares are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to any
individual or institution (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of funds held by such individual or
institution in a fiduciary, agency, custodial or other representative capacity
(but only if such individual or institution is able to provide complete
shareholder recordkeeping services with respect to shares purchased and held in
such capacity) (persons who own Class A Shares of a Fund are referred to herein
as "Shareholders").

CLASS A SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR INSURED,
ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK OR ITS
AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE FEDERAL
DEPOSIT INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY U.S.
GOVERNMENT AGENCY.

AMOUNTS INVESTED IN THE FUNDS ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

This Prospectus sets forth concisely the information about the Trust that a
prospective investor should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. A Statement of
Additional Information dated April 29, 1995, has been filed with the Securities
and Exchange Commission and is available without charge through the
Distributor, SEI Financial Services Company, 680 East Swedesford Road, Wayne,
PA 19087-1658 or by calling 1-800-932-7782. The Statement of Additional
Information is incorporated into this Prospectus by reference.

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.

APRIL 30, 1995
CLASS A
<PAGE>

SUMMARY

THE PILLAR FUNDS (THE "TRUST") CONSIST OF OPEN-END MANAGEMENT INVESTMENT
COMPANIES WHICH PROVIDE A CONVENIENT WAY TO INVEST IN PROFESSIONALLY MANAGED
PORTFOLIOS OF SECURITIES. THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE
CLASS A SHARES OF THE TRUST'S SHORT-TERM INVESTMENT, FIXED INCOME, NEW JERSEY
MUNICIPAL SECURITIES, PENNSYLVANIA MUNICIPAL SECURITIES, INTERMEDIATE-TERM
GOVERNMENT SECURITIES AND GNMA FUNDS (COLLECTIVELY, THE "FUNDS"; INDIVIDUALLY,
A "FUND").

What are the Investment Objectives? The investment objectives of the
respective Funds are as follows: The Short-Term Investment Fund--a high level
of total return, primarily through current income, consistent with preservation
of capital; the Fixed Income Fund--a high level of total return, primarily
through current income and capital appreciation, consistent with the
preservation of capital; the New Jersey Municipal Securities Fund--current
income exempt from both federal and New Jersey income tax consistent with
preservation of capital; the Pennsylvania Municipal Securities Fund--current
income exempt from both federal and Pennsylvania income tax consistent with
preservation of capital; the Intermediate-Term Government Securities Fund--
preservation of principal value and a high degree of liquidity while providing
current income; and the GNMA Fund--the highest level of current income
consistent with preservation of principal and a high degree of liquidity. There
is no assurance that a Fund will meet its investment objective. See "Investment
Objectives and Policies."

What are the Permitted Investments? The Short-Term Investment and Fixed
Income Funds invest at least 65% of their assets in (i) obligations issued or
guaranteed as to principal and interest by the U.S. Government and its agencies
and instrumentalities; (ii) corporate bonds and debentures; (iii) short-term
commercial paper; (iv) short-term bank obligations; (v) securities of the
government of Canada and its provincial and local governments; (vi) custodial
receipts; and (vii) repurchase agreements involving such securities. These
securities may include securities issued by foreign issuers which may subject
the Funds to risks associated with foreign investments. The remaining 35% of
their assets may be invested in non-governmental mortgage-backed and asset
backed securities.

The New Jersey and Pennsylvania Municipal Securities Funds invest at least
80% of assets in municipal obligations which produce interest that, in the
opinion of bond counsel for the issuer, is exempt from federal income tax, and
at least 65% of assets in obligations which produce interest that is exempt
from applicable state income taxes.

The Intermediate-Term Government Securities Fund invests in obligations
issued or guaranteed as to principal and interest by the U.S. Government or its
agencies or instrumentalities.

The GNMA Fund invests primarily in mortgage pass-through securities, with at
least 65% of its total assets generally being invested in instruments issued by
the Government National Mortgage Association ("GNMA").

The investments of the Funds are subject to market and interest rate
fluctuations which may affect the value of a Fund's shares. These fluctuations
may be greater for the Fixed Income and New Jersey and Pennsylvania Municipal
Securities Funds which expect to maintain dollar-weighted average maturities of
greater than five years than for the other Funds which expect to maintain
dollar-weighted average maturities of less than five years. In addition, the
mortgage-backed securities that each of the Funds except the New Jersey and
Pennsylvania Municipal Securities Funds may acquire are subject to the risk of
prepayment during periods of declining interest rates which may affect the
Funds' ability to lock-in longer term rates during such periods. See
"Investment Objectives and Policies" and "Description of Permitted
Investments."

Are There Additional Risk Factors for the New Jersey and Pennsylvania
Municipal Securities Funds? The concentration of the New Jersey and
Pennsylvania Municipal Securities Funds in municipal securities issued
primarily by or on behalf of the states of New Jersey and Pennsylvania,
respectively, subjects these Funds to special investment risks, such as the
possible adverse affects of changes in economic conditions and governmental
policies

2
<PAGE>

of the states or their underlying governmental units. These Funds will be more
susceptible to such factors than a fund which does not have as great a
concentration in municipal securities of a single state. See "Additional Risk
Factors for New Jersey Municipal Securities" and "Additional Risk Factors for
Pennsylvania Municipal Securities."

Who is the Advisor? United Jersey Bank Investment Management Division, a
division of United Jersey Bank, serves as the Advisor of the Trust. See "The
Advisor."

Who is the Administrator? SEI Financial Management serves as the
Administrator of the Trust. See "The Administrator."

Who is the Shareholder Servicing Agent? SEI Financial Management Corporation
acts as dividend disbursing agent and shareholder servicing agent for the Trust
and as transfer agent for the Trust under a separate agreement. See "The
Shareholder Servicing Agent."

Who is the Distributor? SEI Financial Services Company acts as distributor of
the Trust's shares. See "The Distributor."

How do I Purchase and Redeem Shares? Purchases and redemptions may be made
through the Distributor on a day on which both the New York Stock Exchange and
the Federal Reserve wire system are open for business ("Business Day"). A
purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives an order prior to 4:00 p.m., Eastern
time, provided the Custodian receives federal funds before 12:00 noon, Eastern
time, on the next Business Day. Redemption orders must be placed prior to 4:00
p.m., Eastern time, on any Business Day for the order to be effective that day.
The purchase and redemption price for shares is the net asset value per share
determined as of the end of the day the order is effective. See "Purchase of
Shares" and "Redemption of Shares."

How are Dividends Paid? Each Fund declares dividends of substantially all of
its net investment income (exclusive of capital gains) daily and distributes
such dividends on or about the first Business Day of the following month.
Shares purchased normally begin earning dividends within two Business Days
after an order is effective. Any capital gain is distributed at least annually.
Distributions are paid in additional shares unless the Shareholder elects to
take the payment in cash. See "Dividends."

3
<PAGE>

EXPENSE SUMMARY

ANNUAL OPERATING EXPENSES CLASS A
(As a percentage of average net assets)

<TABLE>
<CAPTION>
NEW JERSEY PENNSYLVANIA INTERMEDIATE-TERM
SHORT-TERM FIXED MUNICIPAL MUNICIPAL GOVERNMENT
INVESTMENT INCOME SECURITIES SECURITIES SECURITIES GNMA
FUND FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers)(1)............ .46% .50% .15% .00% .45% .43%
Other Expenses.......... .34% .30% .32% .80% .35% .37%
- ------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(2). .80% .80% .47% .80% .80% .80%
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor and Administrator have agreed to voluntarily waive a portion
of their fees in an amount that operates to limit total operating expenses
of Class A of each Fund to not more than .80% of average daily net assets.
The Advisor and the Administrator each reserves the right to terminate its
fee waiver at any time in its sole discretion.
(2) Absent fee waivers, Advisory Fees would be .60%, Administration Fees for
each Fund would be .20% and Total Operating Expenses would be as follows:
Short-Term Investment Fund .94%, Fixed Income Fund .90%, New Jersey
Municipal Securities Fund .97%, Pennsylvania Municipal Securities Fund
1.60%, Intermediate-Term Government Securities Fund .95% and GNMA Fund
.97%. Additional Information may be found under "The Advisor," "The
Administrator" and "The Distributor."

EXAMPLE

- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1 YR. 3 YRS. 5 YRS. 10 YRS.
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment in a Fund assuming (1) 5% annual return and (2)
redemption at the end of each time period
New Jersey Municipal Securities Fund.......................... $ 5 $15 $26 $59
Other Funds................................................... $ 8 $26 $44 $99
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of the expense table and example is to assist the investor in
understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Funds. The information set forth in the
foregoing table and example relates only to Class A shares. The Trust also
offers Class B shares of each Fund which are subject to the same expenses
except for a sales load and certain distribution costs. Financial institutions
that are the record owner of shares for the account of their customers may
impose separate fees for account services to their customers. Additional
information may be found under "The Advisor," "The Administrator" and "The
Distributor."

4
<PAGE>

FINANCIAL HIGHLIGHTS THE PILLAR FUNDS

The following information has been audited by Arthur Andersen LLP, the Trust's
independent public accountants, as indicated in their report dated February
10, 1995 on the Trust's financial statements as of December 31, 1994 included
in the Trust's Statement of Additional Information under "Financial
Information." Additional performance information is contained in the 1994
Annual Report to Shareholders and is available upon request and without charge
by calling 1-800-932-7782. This table should be read in conjunction with the
Trust's financial statements and notes thereto.

For a Class A Share Outstanding Throughout the Period.
<TABLE>
<CAPTION>
NEW JERSEY
SHORT-TERM INVESTMENT FIXED INCOME MUNICIPAL SECURITIES
FUND--CLASS A FUND--CLASS A FUND--CLASS A
------------------------------- -------------------------------- --------------------------------
01/01/94 01/01/93 04/01/92 01/01/94 01/01/93 04/01/92 01/01/94 01/01/93 05/04/92
TO TO TO TO TO TO TO TO TO
12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 12/31/92 (2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.01 $ 10.01 $ 10.00 $10.68 $ 10.38 $ 10.00 $10.85 $ 10.29 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net Investment Income.. 0.35 0.29 0.27 0.59 0.61 0.49 0.48 0.50 0.30
Net Realized and
Unrealized Gains
(Loss) on Securities . (0.04) -- 0.03 (1.18) 0.52 0.44 (0.92) 0.56 0.29
- ------------------------------------------------------------------------------------------------------------------------------
Total Income from
Investment Operations. 0.31 0.29 0.30 (0.59) 1.13 0.93 (0.44) 1.06 0.59
- ------------------------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends from Net
Investment Income..... (0.35) (0.29) (0.27) (0.59) (0.61) (0.49) (0.48) (0.50) (0.30)
Distributions from
Realized Capital Gain. -- -- (0.02) (0.06) (0.22) (0.06) -- 0.00 --
- ------------------------------------------------------------------------------------------------------------------------------
Total Distributions.... (0.35) (0.29) (0.29) (0.65) (0.83) (0.55) (0.48) (0.50) (0.30)
- ------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period................. $ 9.97 $ 10.01 $ 10.01 $ 9.44 $ 10.68 $ 10.38 $ 9.93 $ 10.85 $ 10.29
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Return............ 3.21% 2.96% 3.47%* (5.66)% 11.05% 11.60%* (4.12)% 10.48% 9.01%*
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (000)........... $29,187 $31,337 $30,998 $96,558 $113,892 $89,701 $19,977 $27,064 $9,395
Ratio of Expenses to
Average Net Assets..... 0.80% 0.80% 0.80%* 0.80% 0.80% 0.80%* 0.27% 0.20% 0.46%*
Ratio of Expenses to
Average Net Assets
(Excluding Waivers).... 0.94% 0.95% 1.01%* 0.90% 0.91% 0.94%* 0.93% 1.00% 1.22%*
Ratio of Net Income to
Average Net Assets..... 3.51% 2.94% 3.50%* 5.91% 5.59% 6.24%* 4.65% 4.57% 4.56%*
Ratio of Net Income to
Average Net Assets
(Excluding Waivers).... 3.37% 2.79% 3.29%* 5.81% 5.48% 6.10%* 3.99% 3.77% 3.80%*
Portfolio Turnover Rate. 68.39% 81.92% 68.15% 15.24% 49.49% 23.86% 16.81% 23.83% 2.23%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) The Short-Term Investment and the Fixed Income Funds commenced operations
on April 1, 1992. Ratios for this period have been annualized.
(2) The New Jersey Municipal Securities Fund commenced operations on May 4,
1992. Ratios for this period have been annualized.

5
<PAGE>

FINANCIAL HIGHLIGHTS (CONTINUED)

For a Class A Share Outstanding Throughout the Period.

<TABLE>
<CAPTION>
INTERMEDIATE-TERM PENNSYLVANIA
GOVERNMENT SECURITIES MUNICIPAL SECURITIES GNMA
FUND--CLASS A FUND--CLASS A FUND--CLASS A
--------------------------------- ---------------------- ----------------------
01/01/94 01/01/93 04/01/92 01/01/94 05/03/93 01/01/94 05/03/93
TO TO TO TO TO TO TO
12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 (2) 12/31/94 12/31/93 (2)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.53 $ 10.23 $ 10.00 $10.17 $ 10.00 $ 9.85 $ 10.00
- ---------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net Investment Income.. 0.51 0.52 0.41 0.36 0.23 0.54 0.34
Net Realized and
Unrealized Gains
(Loss) on Securities.. (1.01) 0.32 0.24 (0.62) 0.17 (1.00) (0.15)
- ---------------------------------------------------------------------------------------------------------
Total Income from
Investment Operations. (0.50) 0.84 0.65 (0.26) 0.40 (0.46) 0.19
- ---------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends from Net
Investment Income..... (0.51) (0.52) (0.41) (0.36) (0.23) (0.53) (0.34)
Distributions from
Realized Capital Gain. (0.01) (0.02) (0.01) -- -- (0.01) --
- ---------------------------------------------------------------------------------------------------------
Total Distributions.... (0.52) (0.54) (0.42) (0.36) (0.23) (0.54) (0.34)
- ---------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period................. $ 9.51 $ 10.53 $ 10.23 $ 9.55 $ 10.17 $ 8.85 $ 9.85
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Total Return............ (4.85)% 8.32% 7.95%* (2.58)% 6.01%* (4.71)% 2.80%*
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
Ratios and Supplemental
Data
Net Assets, End of
Period (000)........... $26,277 $34,075 $16,327 $2,734 $2,922 $6,983 $10,900
Ratio of Expenses to
Average Net Assets..... 0.80% 0.80% 0.80%* 0.80% 0.80%* 0.80% 0.80%*
Ratio of Expenses to
Average Net Assets
(Excluding Waivers).... 0.95% 1.00% 1.11%* 1.61% 1.48%* 0.97% 1.08%*
Ratio of Net Income to
Average Net Assets..... 5.13% 4.87% 5.30%* 3.67% 3.35%* 5.72% 4.48%*
Ratio of Net Income to
Average Net Assets
(Excluding Waivers).... 4.98% 4.67% 4.99%* 2.86% 2.67%* 5.55% 4.20%*
Portfolio Turnover Rate. 40.27% 31.69% 12.38% 38.20% 16.51% 102.77% 252.73%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
(1) The Intermediate-Term Government Securities Fund commenced operations on
April 1, 1992. Ratios for this period have been annualized.
(2) The Pennsylvania Municipal--Class A Fund and the GNMA--Class A Fund
commenced operations on May 3, 1993. Ratios for this period have been
annualized.

6
<PAGE>

THE TRUST

THE PILLAR FUNDS (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust
offers units of beneficial interest ("shares") in one of fifteen separate
investment portfolios. Shareholders may purchase shares in each portfolio
(except for the U.S. Treasury Securities Plus Money Market Fund) through two
separate classes (Class A and Class B) which provide for variations in
distribution costs, voting rights and dividends. Except for these differences
between classes, each share of each portfolio represents an undivided,
proportionate interest in that portfolio. This Prospectus relates to the Class
A shares of the Trust's Short-Term Investment, Fixed Income, New Jersey
Municipal Securities, Pennsylvania Municipal Securities, Intermediate-Term
Government Securities and GNMA Funds (each of these, a "Fund"). Each of the
Funds is a diversified mutual fund except for the New Jersey and Pennsylvania
Municipal Securities Funds, which are non-diversified mutual funds. Information
regarding the Trust's other portfolios and the Class B shares of the Funds is
contained in separate prospectuses that may be obtained from the Trust's
Distributor, SEI Financial Services Company, 680 East Swedesford Road, Wayne,
Pennsylvania 19087 or by calling 1-800-932-7782.

SHARES OF THE TRUST ARE NOT DEPOSITS, OBLIGATIONS OR ACCOUNTS (TRUST OR
OTHERWISE) OF, OR INSURED, GUARANTEED, SPONSORED OR ENDORSED BY, ANY BANK
(INCLUDING UNITED JERSEY BANK OR ITS AFFILIATES OR CORRESPONDENTS), ANY STATE
OR STATE AGENCY, THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE U.S.
GOVERNMENT OR ANY U.S. GOVERNMENT AGENCY.

SHARES OF THE TRUST ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED. SEE "INVESTMENT OBJECTIVES AND POLICIES -- RISK
FACTORS; ADDITIONAL RISK FACTORS FOR NEW JERSEY MUNICIPAL SECURITIES;
ADDITIONAL RISK FACTORS FOR PENNSYLVANIA MUNICIPAL SECURITIES."

INVESTMENT OBJECTIVES AND POLICIES

THE SHORT-TERM INVESTMENT FUND

The investment objective of this Fund is to provide a high level of total
return, primarily through income, consistent with preservation of capital.
There is no assurance that the investment objective will be met. The Fund may
not invest in certain securities that may earn a higher return but which are
more volatile and riskier than the Fund's permitted investments.

At least 65% of the Fund's assets will be invested in (i) bills, notes and
bonds issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book entry system ("U.S. Treasury obligations") (ii) obligations issued or
guaranteed as to principal and interest by agencies and instrumentalities of
the U.S. Government; (iii) corporate debt obligations rated in one of the three
highest rating categories by a nationally recognized statistical ratings
organization ("NRSRO") or determined by the Adviser to be of comparable quality
at the time of investment; (iv) commercial paper rated in the highest short-
term rating category by an NRSRO or determined by the Adviser to be of
comparable quality at the time of investment; (v) short-term bank obligations
(certificates of deposit, time deposits and bankers' acceptances) of U.S.
commercial banks with assets of at least $1 billion as of the end of their most
recent fiscal year; (vi) securities of the government of Canada and its
provincial and local governments; (vii) custodial receipts evidencing
separately traded interest and principal component parts of U.S. Treasury
obligations; and (viii) repurchase agreements involving such securities. Of
this amount, the Fund may, for temporary defensive purposes, invest up to 35%
of its assets in commercial paper rated in one of the two highest short-term
rating categories or determined by the Adviser to be of comparable quality at
the time of investment. Securities rated A are considered to be investment
grade and of high credit quality. Issues rated A could be more vulnerable to
adverse developments than obligations with higher ratings. In addition, the
Fund may invest in corporate bonds

7
<PAGE>

and debentures and commercial paper issued by foreign issuers.

The remaining 35% of the Fund's assets may be invested in (i) mortgage-backed
securities consisting of collateralized mortgage obligations ("CMOs") and real
estate mortgage investment conduits ("REMICs") that are rated in one of the top
two rating categories by an NRSRO and which are backed solely by GNMA
certificates or other mortgage pass-throughs issued or guaranteed by the U.S.
Government or its agencies and instrumentalities; and (ii) asset backed
securities secured by company receivables, truck and auto loans, leases and
credit card receivables rated in one of the top two rating categories by an
NRSRO.

The Fund will maintain a dollar-weighted average maturity of three years or
less.

THE FIXED INCOME FUND

The investment objective of this Fund is to provide a high level of total
return, primarily through current income and capital appreciation, consistent
with preservation of capital. There is no assurance that the investment
objective will be met. The Fund may not invest in certain securities that may
earn a higher return but which are more volatile and riskier than the Fund's
permitted investments.

The Fund will be invested in the same investments, and its assets subject to
the same restrictions, as the Short-Term Investment Fund, although the actual
composition of the two Funds will normally differ substantially due to maturity
considerations.

The Fund expects to maintain a dollar-weighted average maturity of fifteen
years. The Advisor may vary this maturity substantially in anticipation of a
change in the interest rate environment.

THE NEW JERSEY MUNICIPAL SECURITIES FUND

The investment objective of this Fund is to provide current income exempt from
both Federal and New Jersey income taxes, consistent with preservation of
capital. There is no assurance that the investment objective will be met.

The New Jersey Municipal Securities Fund will invest at least 80% of its net
assets in obligations issued by or on behalf of the states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest of which,
in the opinion of bond counsel for the issuer, is exempt from Federal income
tax (collectively, "Municipal Securities"). Under normal circumstances, except
where acceptable securities are unavailable as determined by the Advisor, at
least 65% of the Fund's assets will be invested in Municipal Securities, the
interest of which, in the opinion of bond counsel for the issuer, is exempt
from the New Jersey gross income tax ("New Jersey Municipal Securities"). The
Fund will primarily purchase (i) municipal bonds rated in one of the three
highest rating categories by an NRSRO; (ii) municipal notes rated in one of the
two highest rating categories by an NRSRO; (iii) commercial paper rated in one
of the two highest short-term rating categories by an NRSRO Moody's Investors
Service, Inc. ("Moody's"); (iv) any of the foregoing determined by the Advisor
to be of comparable quality at the time of investment; or (v) securities of
closed-end investment companies traded on a national securities exchange.
Securities rated A are considered to be investment grade and of high credit
quality. Issues rated A could be more vulnerable to adverse developments than
obligations with higher ratings.

The Fund expects to maintain a dollar-weighted average portfolio maturity of
less than fifteen years.

The New Jersey Municipal Securities Fund is a non-diversified investment
company which means that more than 5% of its assets may be invested in each of
one or more issuers. Since a relatively high percentage of assets of the Fund
may be invested in the obligations of a limited number of issuers, the value of
shares of the Fund may be more susceptible to any single economic, political or
regulatory occurrence than the shares of a diversified investment company would
be. The Fund intends to satisfy the diversification requirements necessary to
qualify as a regulated investment

8
<PAGE>

company ("RIC") under the Internal Revenue Code of 1986, as amended (the
"Code").

The New Jersey Municipal Securities Fund reserves the right to engage in "put"
transactions although it has no present intention to do so. In addition, the
Advisor has discretion to invest up to a total of 20% of the Fund's assets in
taxable money market instruments (including repurchase agreements) and
securities subject to the alternative minimum tax. However, the Fund generally
intends to be fully invested in securities exempt from federal income tax.

THE PENNSYLVANIA MUNICIPAL SECURITIES FUND

The investment objective of this Fund is to provide current income exempt from
both federal and Pennsylvania income taxes, consistent with preservation of
capital. There is no assurance that this investment objective will be met.

At least 80% of the Fund's assets will be invested in Municipal Securities.
Under normal circumstances, except, where acceptable securities are unavailable
as determined by the Advisor, at least 65% of the Fund's assets will be
invested in Municipal Securities, the interest of which, in the opinion of bond
counsel for the issuer, is exempt from Pennsylvania income tax. The Portfolio
may invest up to 10% of its assets in securities the income tax from which is
subject to the alternative minimum tax.

Municipal Securities that the Fund may purchase include (i) municipal bonds
which are rated BBB or better by S&P or Baa or better by Moody's at the time of
investment or, if not rated, determined by the Advisor to be of comparable
quality; (ii) municipal notes which are rated at least SP-1 by S&P or MIG-1 or
V-MIG-1 by Moody's at the time of investment or, if not rated, determined by
the Advisor to be of comparable quality; and (iii) tax-exempt commercial paper
rated at least A-1 by S&P or Prime-1 by Moody's at the time of investment or,
if not rated, determined by the Adviser to be of comparable quality. Bonds
rated BBB by S&P or Baa by Moody's have speculative characteristics. Municipal
obligations owned by the Fund which become less than the prescribed investment
quality shall be sold at a time when, in the judgment of the Adviser, it does
not substantially impact the market value of the Fund.

The Fund may invest in commitments to purchase such securities on a "when
issued" basis, and reserves the right to engage in "put" transactions. The Fund
may also purchase other types of tax- exempt instruments as long as they are of
a quality equivalent to the long-term bond or commercial paper ratings stated
above. Although permitted to do so, the Fund has no present intention to invest
in repurchase agreements or purchase securities subject to the alternative
minimum tax.

The Fund expects to maintain a dollar-weighted average portfolio maturity of
less than fifteen years.

THE INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND

The objective of this Fund is to preserve principal value and maintain a high
degree of liquidity while providing current income. There is no assurance that
the investment objective will be met.

The Fund will be fully invested in U.S. Treasury obligations and obligations
issued or guaranteed as to principal and interest by the agencies and
instrumentalities of the U.S. Government.

The Fund will maintain a dollar-weighted average maturity of three to ten
years. Under normal circumstances, the Advisor anticipates that the Fund's
dollar-weighted average maturity will be approximately five years; however; the
Advisor may vary this average maturity substantially in anticipation of a
change in the interest rate environment.

THE GNMA FUND

The investment objective of this Fund is to provide the highest level of
current income consistent with preservation of principal and a high degree of
liquidity. There is no assurance that the investment objective will be met.

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<PAGE>

The Fund invests primarily in mortgage pass-through securities with at least
65% of its total assets generally being invested in instruments issued by GNMA.
The balance of the Fund's assets may consist of: (i) U.S. Treasury obligations;
(ii) obligations issued or guaranteed as to principal and interest by the
agencies or instrumentalities of the U.S. Government; (iii) repurchase
agreements involving any of such obligations; and (iv) shares of money market
investment companies investing exclusively in such obligations. The Fund
intends to maintain a reasonable cash position in money market instruments
which meet the foregoing criteria so as to provide a high degree of liquidity.

As a result of portfolio restructuring, the Fund's annual portfolio turnover
rate, for the fiscal year ended December 31, 1994, was 275%. Such a turnover
rate may result in higher transaction costs and may result in additional taxes
for Shareholders. See "Taxes."

GENERAL INVESTMENT POLICIES

For temporary defensive purposes when the Advisor determines that market
conditions warrant, each Fund (except the GNMA Fund) may invest up to 100% of
its assets in the money market instruments described as permissible investments
for the Short-Term Investment Fund and may hold a portion of its assets in
cash. For temporary defensive purposes when the Advisor determines that market
conditions warrant, the GNMA Fund may invest up to 100% of its assets in those
money market instruments which are among its permitted investments. To the
extent a Fund is engaged in temporary defensive investments, the Fund will not
be pursuing its investment objective.

Each of the Funds except the New Jersey and Pennsylvania Municipal Securities
Funds may purchase mortgage-backed securities issued or guaranteed as to
payment of principal and interest by the United States government or its
agencies or instrumentalities. The Short-Term Investment and Fixed Income Funds
may also invest in mortgage-backed securities issued by private issuers rated
in one of the two highest rating categories and backed by mortgage pass-
throughs issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. The principal governmental issuers or guarantors of
mortgage-backed securities are GNMA, the Federal National Mortgage Association
("FNMA") and the Federal Home Loan Mortgage Corporation ("FHLMC"). The GNMA
Fund may purchase mortgage pass-throughs, notes or debentures directly issued
and guaranteed by GNMA, FNMA, FHLMC and Federal Home Loan Banks. Obligations of
GNMA are backed by the full faith and credit of the United States Government
while obligations of FNMA and FHLMC are supported by the respective agency
only. The Funds may purchase mortgage-backed securities that are backed or
collateralized by fixed, adjustable or floating rate mortgages.

Each of the Funds may invest in floating or variable rate obligations and may
purchase securities on a when-issued basis. In addition, each Fund reserves the
right to engage in securities lending but has no present intention to do so.

If after purchase the rating of a security held by a Fund drops below
investment quality, such security shall be sold at a time when, in the judgment
of the Advisor, it is not in the Fund's interest to continue to hold such
security. For a description of each Fund's permitted investments and the
ratings listed above, see the "Description of Permitted Investments" and
"Description of Ratings" in the Statement of Additional Information.

RISK FACTORS

The market value of each Fund's fixed income investments will change in
response to interest rate changes and other factors. During periods of falling
interest rates, the values of outstanding fixed income securities generally
rise. Conversely, during periods of rising interest rates, the values of such
securities generally decline. Moreover, while securities with longer maturities
tend to produce higher yields, the prices of longer maturity securities are
also subject to greater market fluctuations as a result of changes in interest
rates. Changes by recognized agencies in the rating of any fixed income
security and in the ability of an issuer to make payments of interest and
principal will also affect the value of these investments. Changes in the value
of portfolio

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<PAGE>

securities will not affect cash income derived from these securities but will
affect a Fund's net asset value.

Mortgage-backed securities are subject to prepayment of the underlying
mortgages. During periods of declining interest rates, prepayment of mortgages
underlying these securities can be expected to accelerate. When the mortgage-
backed securities held by a Fund are prepaid, the Fund must reinvest the
proceeds in securities, the yield of which reflects prevailing interest rates.
Thus, mortgage-backed securities may not be an effective means of locking in
long-term interest rates for the Funds.

Investments in securities of foreign issuers may subject the Short-Term
Investment and Fixed Income Funds to different risks than those attendant to
investments in securities of U.S. issuers, such as differences in accounting,
auditing and financial reporting standards, the possibility of expropriation or
confiscatory taxation, and political instability. There may also be less
publicly available information with regard to foreign issuers than domestic
issuers. In addition, foreign markets may be characterized by less liquidity,
greater price volatility, less regulation and higher transaction costs than
U.S. markets.

ADDITIONAL RISK FACTORS FOR NEW JERSEY MUNICIPAL SECURITIES

New Jersey Municipal Securities are primarily issued by or on behalf of the
State of New Jersey, its political subdivisions, agencies and
instrumentalities. The concentration in obligations of New Jersey issuers by
the New Jersey Municipal Securities Fund subjects the Fund to special
investment risks. In particular, changes in economic conditions and
governmental policies of the State of New Jersey and its municipalities could
adversely affect the value of the Fund and the securities held by it. For a
further description of these risks, see "New Jersey Municipal Securities" in
the Statement of Additional Information.

ADDITIONAL RISK FACTORS FOR PENNSYLVANIA MUNICIPAL SECURITIES

Under normal conditions the Fund will be fully invested in obligations which
produce interest income exempt from Federal income tax and Pennsylvania state
income tax. Accordingly, the Fund will have considerable investments in
Pennsylvania municipal obligations. As a result, the Fund will be more
susceptible to factors that adversely affect issuers of Pennsylvania
obligations than a mutual fund which does not have as great a concentration in
Pennsylvania municipal obligations.

An investment in the Fund will be affected by the many factors that affect the
financial condition of the Commonwealth of Pennsylvania. For example, financial
difficulties of the Commonwealth, its counties, municipalities and school
districts that hinder efforts to borrow and lower credit ratings are factors
which may affect the Fund. See "Pennsylvania Municipal Securities" in the
Statement of Additional Information.

FUND TURNOVER

Under normal circumstances, it is anticipated that the annual portfolio
turnover rate for each Fund will not exceed 100%.

INVESTMENT LIMITATIONS

The investment objective and the following investment limitations are
fundamental policies of each Fund. In addition, it is a fundamental policy of
the New Jersey and Pennsylvania Municipal Securities Funds to invest at least
80% of total assets in Municipal Securities. Fundamental policies cannot be
changed with respect to a Fund without the consent of the holders of a majority
of that Fund's outstanding shares.

Each Fund may not:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if, as a result, more than 5% of the
total assets of the Fund would be invested in the securities of such issuer;
provided, however, that the limitation does not apply to the New Jersey
Municipal Securities or Pennsylvania Municipal Securities Funds. This
restriction applies to 75% of each Fund's total assets.

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<PAGE>

2. Purchase any securities which would cause more than 25% of the total assets
of any Fund to be invested in the securities of one or more issuers conducting
their principal business activities in the same industry, provided that this
limitation does not apply to investments in the obligations issued or
guaranteed by the U.S. Government or its agencies and instrumentalities and
repurchase agreements involving such securities or to investments in tax-exempt
securities issued by governments or political subdivisions of governments. For
purposes of this limitation, (i) utility companies will be divided according to
their services, for example, gas, gas transmission, electric and telephone will
each be considered a separate industry; and (ii) financial services companies
will be classified according to the end users of their services, for example,
automobile finance, bank finance and diversified finance will each be
considered a separate industry.

3. Make loans, except that a Fund may (a) purchase or hold debt instruments in
accordance with its investment objective and policies; (b) enter into
repurchase agreements; and (c) engage in securities lending as described in
this Prospectus and in the Statement of Additional Information.

The foregoing percentage limitations will apply at the time of the purchase of
a security. Additional investment limitations are set forth in the Statement of
Additional Information.

THE ADVISOR

United Jersey Bank Investment Management Division, a division of United Jersey
Bank (the "Advisor") serves as the Advisor of the Trust. The Advisor makes the
investment decisions for the assets of each Fund and continuously reviews,
supervises and administers each Fund's investment program subject to the
supervision of, and policies established by, the Trustees of the Trust.

United Jersey Bank, 210 Main Street, Hackensack, NJ 07601, was chartered in
1899 and has been exercising trust powers and managing money since 1916. The
Investment Management Division began as a separate operating division of the
Bank in 1973. The Bank's investment experts have, on average, over 20 years of
experience in investment management. As of December 31, 1994, total assets
under management were more than $3 billion.

United Jersey Bank is a wholly-owned subsidiary of UJB Financial Corp., an
interstate bank holding company with $15.4 billion in assets and 270 banking
offices in New Jersey and Eastern Pennsylvania as of December 31, 1994.

Robert B. Lowe is a Vice President of the Advisor and currently manages the
Short-Term Investment, Fixed Income, and GNMA Funds. Mr. Lowe has managed the
Short-Term Investment and Fixed Income Funds since their inception in April,
1992. He has managed the GNMA Fund since its inception in May, 1993. Mr. Lowe
has investment responsibility for equity and fixed income portfolios in the
Princeton Investment Office and joined United Jersey Bank in 1989.

Effective September 30, 1994, Randolph E. Lestyk serves as portfolio manager
for the Pennsylvania Municipal Securities Fund. Mr. Lestyk is a Vice President
and Regional Manager of the Advisor. Mr. Lestyk manages the investment function
in Pennsylvania and has responsibility for both equity and fixed income
portfolios. Prior to joining United Jersey Bank in January, 1994, Mr. Lestyk
was involved in equity and fixed income investing at several financial
institutions, serving as Director of Fixed Income Investing, Head of Trust
Investments, and most recently as Senior Vice President and Chief Investment
Officer of a major insurance company in Pennsylvania.

Charlene P. Palmer is a Vice President of the Advisor and has managed the New
Jersey Municipal Securities Fund since its inception in May, 1992. Mrs.
Palmer's experience has emphasized tax-exempt bonds. She joined United Jersey
Bank in 1981.

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<PAGE>

Market Fund. Mrs. Tendall joined United Jersey Bank in 1982 and is currently
responsible for managing both equity and fixed income portfolios.

The Advisor is entitled to a fee, which is calculated daily and paid monthly,
at an annual rate of .60% of the average daily net assets of each Fund. The
Advisor has voluntarily agreed to waive all or a portion of its fees in order
to limit the operating expenses of Class A of each Fund to .80%. For the fiscal
year ended December 31, 1994, each Fund paid the Adviser the following advisory
fee (shown as a percentage of its average daily net assets): Short-Term
Investment Fund, .46%; Fixed Income Fund, .50%; New Jersey Municipal Securities
Fund, .15%; Pennsylvania Municipal Securities Fund, .00%; Intermediate-Term
Government Securities Fund, .45%; and GNMA Fund, .43%. The Advisor reserves the
right to terminate its fee waiver at any time in its sole discretion.

United Jersey Bank has also entered into a Custodian Agreement with the Trust,
under which it will provide all securities safekeeping services as required by
the Funds and the Investment Company Act of 1940, as amended. The Trust pays
United Jersey Bank (referred to herein in its custodial capacity as the
"Custodian") a custodian fee, which is calculated daily and paid monthly, at an
annual rate of .025% of the average daily net assets of each Fund.

The Glass-Steagall Act restricts the securities activities of banks such as
United Jersey Bank, but federal regulatory authorities permit such banks to
provide investment advisory and other services to mutual funds. Should this
position be challenged successfully in court or reversed by legislation, the
Trust might have to make other investment advisory arrangements.

THE ADMINISTRATOR

SEI Financial Management Corporation (the "Administrator"), a wholly-owned
subsidiary of SEI Corporation ("SEI"), serves as the Administrator of the
Trust. The Administrator provides the Trust with administrative services, other
than investment advisory services, including regulatory reporting, all
necessary office space, equipment, personnel and facilities.

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each
Fund. The Administrator has agreed to waive all or a portion of its fees in
order to limit the total operating expenses of Class A of the New Jersey
Municipal Securities Fund and the Pennsylvania Municipal Securities Fund to
.80%. The Administrator reserves the right to terminate its fee waiver at any
time in its sole discretion.

THE SHAREHOLDER SERVICING AGENT

SEI Financial Management Corporation acts as the dividend dispursing agent and
shareholder servicing agent for the Trust. SEI Financial Management Corporation
also acts as the transfer agent for the Trust.

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary
of SEI, acts as the Distributor for the Trust. No compensation is paid to the
Distributor for distribution services for the Class A shares of any Fund. Class
B shares of each Fund bear the costs of their distribution expenses and related
service fees at the annual rate of up to .25% of the average daily net assets
of the Fund. In addition, a maximum sales charge of 4% is imposed on the sale
of Class B shares of the Fixed Income and Intermediate-Term Government
Securities Funds, 3% on the sale of Class B shares of the GNMA Fund, and 1% on
Class B shares of the Short-Term Investment, New Jersey Municipal Securities
and Pennsylvania Municipal Securities Funds. Class A shares of each Fund are
offered without distribution fees (i) to institutional investors (including
United Jersey Bank, its affiliates and correspondent banks) for the investment
of their own funds, and (ii) to individuals and institutions (including United
Jersey Bank, its affiliates and

13
<PAGE>

correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodial or other
representative capacity, and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.

Class B shares of each Fund are offered to all persons. Consequently, it is
possible that individuals or institutions may offer different classes of shares
to their customers and thus receive different compensation with respect to
different classes of shares. In addition, individuals or institutions that are
the record owner of shares for the account of their customers may impose
separate fees for account services to their customers. The Funds may also
execute brokerage or other agency transactions through an affiliate of the
Advisor or through the Distributor for which the affiliate or the Distributor
receives compensation.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions of shares of each Fund may be made on any Business
Day. State securities laws may require banks and financial institutions
purchasing shares for their customers to register as dealers pursuant to state
laws.

A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives the order before 4:00 p.m., Eastern
time, provided the Custodian receives Federal funds before 12:00 noon, Eastern
time, on the next Business Day. However, an order may be cancelled if the
Custodian does not receive Federal Funds before 12:00 noon, Eastern time, on
the next Business Day, and the investor could be liable for any fees or
expenses incurred by the Trust. Financial institutions may impose an earlier
cut-off time for receipt of purchase orders directed through them to allow time
for processing and transmittal of these orders to the Distributor for
effectiveness the same day. The purchase price of shares of each Fund is the
net asset value next determined after a purchase order is effective. The net
asset value per share of each Fund is determined by dividing the total market
value of the Fund's investments and other assets, less any liabilities, by the
total outstanding shares of the Fund. A Fund may use a pricing service to
provide market quotations. A pricing service may use a matrix system of
valuation to value fixed income securities which considers factors such as
securities prices, yield features, ratings and developments related to a
specific security. Net asset value per share is determined as of 4:00 p.m.,
Eastern time, on each Business Day. Purchases will be made in full and
fractional shares of the Trust calculated to three decimal places.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust or its Shareholders
to accept such order.

Shareholders who desire to redeem shares of the Fund must place their
redemption orders prior to 4:00 p.m. Eastern time, on any Business Day, for the
order to be effective on that Business Day. The redemption price of shares is
the net asset value of the Fund next determined after the redemption order is
effective. Payment on redemption will be made as promptly as possible and, in
any event, within seven Business Days after the redemption order is effective.

The Funds intend to pay cash for all shares redeemed, but under abnormal
conditions which make payment in cash unwise, payment may be made wholly or
partly in portfolio securities with a market value equal to the redemption
price. In such cases, an investor may incur brokerage costs in converting such
securities to cash.

PERFORMANCE

From time to time, the Funds may advertise yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. The yield of a Fund refers to the annualized income
generated by an investment in the Fund over a specified 30 day period. The
yield is calculated by assuming that the income generated

14
<PAGE>

by the investment during that period is generated over one year and is shown as
a percentage of the investment.

The total return of a Fund refers to the average compounded rate of return on a
hypothetical investment for designated time periods (including, but not limited
to, the period from which the Fund commenced operations through the specified
date), assuming that the entire investment is redeemed at the end of each
period and assuming the reinvestment of all dividend and capital gain
distributions.

The New Jersey and Pennsylvania Municipal Securities Funds may also advertise a
"tax-equivalent yield", which is calculated by determining the rate of return
that would have to be achieved on a fully taxable investment to produce the
after-tax equivalent of the respective Fund's yield, assuming certain tax
brackets for a Shareholder.

The advertised performance on Class A shares will normally be higher than for
Class B shares because Class A shares are not subject to distribution expenses
charged to Class B shares. The actual return to a Shareholder on Class A shares
may be reduced by any administrative or management charges that may be imposed
by individuals or institutions on their customers for account services. The
actual return to Shareholders on Class B shares will be reduced by the amount
of any sales load paid on Class B shares.

A Fund may periodically compare its performance to that of other mutual funds
tracked by mutual fund rating services (such as Lipper Analytical) or financial
and business publications and periodicals, of broad groups of comparable mutual
funds, unmanaged indices which may assume investment of dividends but generally
do not reflect deductions for administrative and management costs or to other
investment alternatives. The Fund may quote Morningstar, Inc., a service that
ranks mutual funds on the basis of risk-adjusted performance. The Fund may
quote Ibbotson Associates of Chicago, Illinois, which provides historical
returns of the capital markets in the U.S. The Fund may use long term
performance of these capital markets to demonstrate general long-term risk
versus reward scenarios and could include the value of a hypothetical
investment in any of the capital markets. The Fund may also quote financial and
business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques.

A Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.

TAXES

The following summary of federal income tax consequences is based on current
tax laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal, state, or local income tax treatment of the Funds
or their Shareholders. Accordingly, Shareholders are urged to consult their tax
advisers regarding specific questions as to federal, state and local income
taxes.

TAX STATUS OF THE FUNDS

Each Fund is treated as a separate entity for federal income tax purposes and
is not combined with the Trust's other Funds. Each Fund intends to qualify for
the special tax treatment afforded RICs under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), so as to be relieved of federal
income tax on that part of its net investment income and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) which is
distributed to Shareholders.

TAX STATUS OF DISTRIBUTIONS

Each Fund will distribute substantially all of its net investment income
(including, for this purpose, net

15
<PAGE>

short-term capital gain) to Shareholders. Dividends from net investment income
will be taxable to Shareholders as ordinary income whether received in cash or
in additional shares and will not qualify for the dividends-received deduction
otherwise available to corporate shareholders. Any net capital gains will be
distributed annually and distributions of net capital gains will be taxed to
Shareholders as long-term capital gains, regardless of how long the Shareholder
has held shares. Capital gains distributions also will not qualify for the
dividends-received deduction. Each Fund will make annual reports to
Shareholders of the federal income tax status of all distributions.

Certain securities purchased by the Funds (such as STRIPS, TRs, TIGRs and CATS,
defined under "Description of Permitted Investments") are sold at original
issue discount and thus do not make periodic cash interest payments. A Fund
will be required to include as part of its current income the accreted interest
on such obligations even though the Fund has not received any interest payments
on such obligations during that period. Because the Fund distributes all of its
net investment income to its Shareholders, the Fund may have to sell portfolio
securities to distribute such accreted income, which may occur at a time when
the Advisor would not have chosen to sell such securities and which may result
in a taxable gain or loss.

Interest received on direct U.S. Government obligations that is exempt from tax
at the state level when received directly may be exempt, depending on the
state, when received by a Shareholder from a Fund provided certain conditions
are satisfied. Each Fund will inform Shareholders annually of the percentage of
income and distributions derived from direct U.S. Government obligations.
Shareholders should consult their tax advisers to determine whether any portion
of the income dividends received from a Fund is considered tax exempt in their
particular states.

Dividends declared by a Fund in October, November or December of any year and
payable to Shareholders of record on a date in that month will be deemed to
have been paid by the Fund and received by the Shareholders on the last day of
that month if paid by the Fund at any time during the following January.

Each Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

Sale, exchange or redemption of Fund shares is a taxable event to a
Shareholder.

Income derived by a Fund from obligations of foreign issuers may be subject to
foreign withholding taxes. The Fund will not be able to elect to treat
Shareholders as having paid their proportionate share of such foreign taxes.

ADDITIONAL CONSIDERATIONS FOR THE NEW JERSEY MUNICIPAL SECURITIES AND
PENNSYLVANIA MUNICIPAL SECURITIES FUNDS

The New Jersey and Pennsylvania Municipal Securities Funds will each distribute
all of their net investment income (including net short-term capital gain) to
their respective Shareholders. If, at the close of each quarter of its taxable
year, at least 50% of the value of a Fund's assets consist of obligations the
interest on which is excludable from gross income, the Fund may pay "exempt-
interest dividends" to its Shareholders. Those dividends constitute the portion
of the aggregate dividends as designated by the Fund, equal to the excess of
the excludable interest over certain amounts disallowed as deductions. Exempt-
interest dividends are excludable from a Shareholder's gross income for federal
income tax purposes, but may have alternative minimum tax consequences. See the
Statement of Additional Information.

Current federal law limits the types and volume of bonds qualifying for the
federal income tax exemption of interest, which may have an effect on the
ability of a Fund to purchase sufficient amounts of tax-exempt securities to
satisfy the Code's requirements for the payment of "exempt-interest dividends".

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<PAGE>

Interest on indebtedness incurred or continued by a Shareholder in order to
purchase or carry shares of the New Jersey and Pennsylvania Municipal
Securities Funds is not deductible for federal income tax purposes.
Furthermore, the Fund may not be an appropriate investment for persons
(including corporations and other business entities) who are "substantial
users" (or persons related to "substantial users") of facilities financed by
industrial development private activity bonds. Such persons should consult
their tax advisers before purchasing shares. A "substantial user" is defined
generally to include "certain persons" who regularly use in their trade or
business a part of a facility financed from the proceeds of such bonds.

NEW JERSEY TAX CONSIDERATIONS

Investors of the New Jersey Municipal Securities Fund will not be subject to
the New Jersey Gross Income Tax on distributions from the Fund attributable to
interest income from (and net gain, if any, from the disposition of) New Jersey
Municipal Securities or obligations of the United States, its territories and
possessions and certain of its agencies and instrumentalities ("Federal
Securities") held by the Fund, either when received by the Fund or when
credited or distributed to the investors, provided that the Fund meets the
requirements for a qualified investment fund by: 1) maintaining its
registration as a registered investment company with the Securities and
Exchange Commission; 2) investing at least 80% of the aggregate principal
amount of the Fund's investments, excluding financial options, futures, forward
contracts, or other similar financial instruments relating to interest-bearing
obligations, obligations issued at a discount or bond indexes related thereto
to the extent such instruments are authorized under the regulated investment
company rules under the Code, cash and cash items, which cash items shall
include receivables, in New Jersey Municipal Securities or Federal Securities
at the close of each quarter of the tax year; 3) investing 100% of its assets
in interest-bearing obligations, discount obligations, cash and cash items,
including receivables including financial options, futures, forward contracts,
or other similar financial instruments relating to interest-bearing
obligations, discount obligations or bond indexes related thereto; and 4)
complying with certain continuing reporting requirements.

For New Jersey Gross Income Tax purposes, net income or gains and distributions
derived from investments in other than New Jersey Municipal Securities and
federal Securities, and distributions from net realized capital gains in
respect of such investments, will be taxable.

Gain on the disposition of Shares is not subject to New Jersey Gross Income
Tax, provided that the Fund meets the requirements for a qualified investment
fund set forth above.

PENNSYLVANIA TAX CONSIDERATIONS

For purposes of the Pennsylvania Personal Income Tax and the Philadelphia
School District Investment Net Income Tax, distributions which are attributable
to interest received by the Pennsylvania Municipal Securities Fund from its
investments in Pennsylvania Municipal Securities or Federal Securities are not
taxable. Distributions by the Fund to a Pennsylvania resident that are
attributable to most other sources may be subject to the Pennsylvania Personal
Income Tax and (for residents of Philadelphia) to the Philadelphia School
District Investment Net Income Tax.

Distributions paid by the Fund which are excludable as exempt income for
federal tax purposes are not subject to the Pennsylvania corporate net income
tax. An additional deduction from Pennsylvania taxable income is permitted for
the amount of distributions paid by the Fund attributable to interest received
by the Fund from its investments in Pennsylvania Municipal Securities and
Federal Securities to the extent included in federal taxable income, but such a
deduction is reduced by any interest on indebtedness incurred to carry the
securities and other expenses incurred in the production of such interest
income, including expenses deducted on the federal income tax return that would
not have been allowed under the Code if the interest were exempt from federal
income tax. Distributions by the Fund attributable to most other sources may be
subject to the Pennsylvania corporate net income tax. It is the current
position of

17
<PAGE>

the Pennsylvania Department of Revenue that Fund shares are considered exempt
assets (with a pro rata exclusion based on the value of the Fund attributable
to its investments in Pennsylvania Municipal Securities and Federal Securities
for purposes of determining a corporation's capital stock value subject to the
Commonwealth's capital stock or franchise tax.

Shares purchased as an investment in the Pennsylvania Municipal Securities Fund
are exempt from Pennsylvania county personal property taxes and (as to
residents of Pittsburgh) from personal property taxes imposed by the City of
Pittsburgh and the School District of Pittsburgh to the extent that the Fund's
investments consist of obligations which are themselves exempt from taxation in
Pennsylvania.

The Fund intends to invest primarily in obligations which produce interest
exempt from federal and Pennsylvania taxes. If the Fund invests in obligations
that are not exempt for Pennsylvania purposes but are exempt for federal
purposes, a portion of the Fund's distributions will be subject to Pennsylvania
personal income tax.

GENERAL INFORMATION

THE TRUST

The Trust was organized as a Massachusetts business trust under a Declaration
of Trust dated September 9, 1991. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each Fund. In
addition to the Portfolios, the Trust consists of the following portfolios:
U.S. Treasury Securities Money Market Fund, U.S. Treasury Securities Plus Money
Market Fund, Prime Obligation Money Market Fund, Tax-Exempt Money Market Fund,
Equity Value Fund, Equity Income Fund, Mid Cap Value Fund, Balanced Growth Fund
and International Growth Fund. All consideration by the Trust for shares of any
Fund and all assets of such Fund belong to that Fund and would be subject to
liabilities related thereto.

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.

TRUSTEES OF THE TRUST

The management and affairs of the Trust are supervised by a board of trustees
(the "Trustees") under the laws governing business trusts in the Commonwealth
of Massachusetts. The Trustees have approved contracts under which, as
described above, certain companies provide essential management services to the
Trust.

VOTING RIGHTS

Each share held entitles a Shareholder of record to one vote. The Shareholders
of each Fund or class will vote separately on matters relating solely to that
Fund or class. As a Massachusetts business trust, the Trust is not required to
hold annual meetings of Shareholders, but approval will be sought for certain
changes in the operation of the Trust and for the election of Trustees under
certain circumstances. In addition, a Trustee may be removed by the remaining
Trustees or by Shareholders at a special meeting called upon written request of
Shareholders owning at least 10% of the outstanding shares of the Trust. In the
event that such a meeting is requested the Trust will provide appropriate
assistance and information to the Shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to The Pillar Funds, P.O. Box 239,
Wayne, PA 19087-0239.

DIVIDENDS

Each Fund declares dividends of
substantially all of its net investment income (exclusive of capital gains)
daily and distributes such dividends on or about the first Business Day of the
following month. Shares purchased begin earning

18
<PAGE>

dividends on the Business Day after payment is received by the Custodian.
Normally, this will occur within two Business Days after the order is
effective. If any capital gain is realized, substantially all of it will be
distributed at least annually.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the Shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Administrator at least 15 days prior to the distribution.

Dividends and distributions of each Fund are paid on a per-share basis. The
amount of dividends payable on Class A shares will be more than the dividends
payable on the Class B shares because of the distribution expenses charged to
Class B shares.

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of certain of the permitted investments for the
Funds:

ASSET-BACKED SECURITIES--Asset-backed securities are securities secured by non-
mortgage assets such as company receivables, truck and auto loans, leases and
credit card receivables. Such securities are generally issued as pass-through
certificates, which represent undivided fractional ownership interests in the
underlying pools of assets. Such securities also may be debt instruments, which
are also known as collateralized obligations and are generally issued as the
debt of a special purpose entity, such as a trust, organized solely for the
purpose of owning such assets and issuing such debt.

Asset-backed securities are not issued or guaranteed by the United States
Government or its agencies or instrumentalities; however, the payment of
principal and interest on such obligations may be guaranteed up to certain
amounts and for a certain period by a letter of credit issued by a financial
institution (such as a bank or insurance company) unaffiliated with the issuers
of such securities. The purchase of asset-backed securities raises risk
considerations peculiar to the financing of the instruments underlying such
securities. For example, there is a risk that another party could acquire an
interest in the obligations superior to that of the holders of the asset-backed
securities. There also is the possibility that recoveries on repossessed
collateral may not, in some cases, be available to support payments on those
securities. Asset-backed securities entail prepayment risk, which may vary
depending on the type of asset, but is generally less than the prepayment risk
associated with mortgage-backed securities. In addition, credit card
receivables are unsecured obligations of the card holder.

BANKERS' ACCEPTANCE--A bill of exchange or time draft drawn on and accepted by
a commercial bank. It is used by corporations to finance the shipment and
storage of goods and to furnish dollar exchange. Maturities are generally six
months or less.

CERTIFICATES OF DEPOSIT--Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings and
loan institutions in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Certificates of deposit with
penalties for early withdrawal will be considered illiquid.

COMMERCIAL PAPER--The term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues
vary from a few to 270 days.

DERIVATIVES--Derivatives are securities that derive their value from other
securities. The following are considered derivative securities: options on
futures, futures, options (e.g., puts and calls), swap agreements, mortgage-
backed securities (CMOs, REMICs, IOs and POs), when-issued securities and
forward commitments, floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g., Receipts and STRIPs),
and privately issued stripped securities (e.g., TGRs, TRs and CATS). See
elsewhere in this "Description of Permitted Investments" for discussions of
these various instruments, and see "Investment Objectives

19
<PAGE>

and Policies" for more information about any investment policies and
limitations applicable to their use.

MORTGAGE-BACKED SECURITIES--Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed-rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment of mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.

Government Pass-Through Securities: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are GNMA, FNMA and FHLMC. FNMA and FHLMC obligations are not backed
by the full faith and credit of the U.S. Government as GNMA certificates are,
but FNMA and FHLMC securities are supported by the instrumentalities' right to
borrow from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantees timely
distributions of interest to certificate holders. GNMA and FNMA also each
guarantees timely distributions of scheduled principal. FHLMC has in the past
guaranteed only the ultimate collection of principal of the underlying mortgage
loan; however, FHLMC now issues mortgage-backed securities (FHLMC Gold PCs)
which also guarantee timely payment of monthly principal reductions. Government
and private guarantees do not extend to the securities' value, which is likely
to vary inversely with fluctuations in interest rates.

Private Pass-Through Securities: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include
collateralized mortgage obligations ("CMOs") and real estate mortgage
investment conduits ("REMICs") that are rated in one of the top two rating
categories. While they are generally structured with one or more types of
credit enhancement, private pass-through securities typically lack a guarantee
by an entity having the credit status of a governmental agency or
instrumentality.

Collateralized Mortgage Obligations ("CMOs"): CMOs are debt obligations or
multiclass pass-through certificates issued by agencies or instrumentalities of
the U.S. Government or by private originators or investors in mortgage loans.
In a CMO, series of bonds or certificates are usually issued in multiple
classes. Principal and interest paid on the underlying mortgage assets may be
allocated among the several classes of a series of a CMO in a variety of ways.
Each class of a CMO, often referred to as a "tranche," is issued with a
specific fixed or floating coupon rate and has a stated maturity or final
distribution date. Principal payments on the underlying mortgage assets may
cause CMOs to be retired substantially earlier then their stated maturities or
final distribution dates, resulting in a loss of all or part of any premium
paid.

REMICs: A REMIC is a CMO that qualifies for special tax treatment under the
Internal Revenue Code and invests in certain mortgages principally secured by
interests in real property. Investors may purchase beneficial interests in
REMICs, which are known as "regular" interests, or "residual" interests.
Guaranteed REMIC pass-through certificates ("REMIC Certificates") issued by
FNMA or FHLMC represent beneficial ownership interests in a REMIC trust
consisting principally of mortgage loans or FNMA, FHLMC or GNMA-guaranteed
mortgage pass-through certificates. For FHLMC REMIC Certificates, FHLMC
guarantees the timely payment of interest, and also guarantees the payment of
principal as payments are required to be made on the underlying mortgage
participation certificates. FNMA REMIC Certificates are issued and guaranteed
as to timely distribution of principal and interest by FNMA.

20
<PAGE>

Parallel Pay Securities; PAC Bonds: Parallel pay CMOs and REMICS are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which must be retired
by its stated maturity date or final distribution date, but may be retired
earlier. Planned Amortization Class CMOs ("PAC Bonds") generally require
payments of a specified amount of principal on each payment date. PAC Bonds are
always parallel pay CMOs with the required principal payment on such securities
having the highest priority after interest has been paid to all classes.

REITs: REITs are trusts that invest primarily in commercial real estate or real
estate-related loans. The value of interests in REITs may be affected by the
value of the property owned or the quality of the mortgages held by the trust.

Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive
all of the interest payments and is thus termed an interest-only class ("IO"),
while the other class may receive all of the principal payments and is thus
termed the principal-only class ("PO"). The value of IOs tends to increase as
rates rise and decrease as rates fall; the opposite is true of POs. SMBs are
extremely sensitive to changes in interest rates because of the impact thereon
of prepayment of principal on the underlying mortgage securities can experience
wide swings in value in response to changes in interest rates and associated
mortgage prepayment rates. During times when interest rates are experiencing
fluctuations, such securities can be difficult to price on a consistent basis.
The market for SMBs is not as fully developed as other markets; SMBs therefore
may be illiquid.

Risk Factors: Due to the possibility of prepayments of the underlying mortgage
instruments, mortgage-backed securities generally do not have a known maturity.
In the absence of a known maturity, market participants generally refer to an
estimated average life. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns, based upon current interest rates,
current conditions in the relevant housing markets and other factors. The
assumption is necessarily subjective, and thus different market participants
can produce different average life estimates with regard to the same security.
There can be no assurance that estimated average life will be a security's
actual average life.

MUNICIPAL SECURITIES--Municipal securities consist of (i) debt obligations
issued by or on behalf of public authorities to obtain funds to be used for
various public facilities, for refunding outstanding obligations, for general
operating expenses and for lending such funds to other public institutions and
facilities, and (ii) certain private activity and industrial development bonds
issued by or on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
facilities.

General obligation bonds are backed by the taxing power of the issuing
municipality. Revenue bonds are backed by the revenues of a project or facility
(tolls from a toll bridge, for example.) Certificates of participation
represent an interest in an underlying obligation or commitment, such as an
obligation issued in connection with a leasing arrangement. The payment of
principal and interest on private activity and industrial development bonds
generally is dependent solely on the ability of the facility's user to meet its
financial obligations and the pledge, if any, of real and personal property so
financed as security for such payment.

Municipal securities include municipal notes and municipal bonds. Municipal
notes include general obligation notes, tax anticipation notes, revenue
anticipation notes, bond anticipation notes, certificates of indebtedness,
demand notes, construction loan notes and participation interests in municipal
notes. Municipal bonds include general obligation bonds, revenue or special
obligation bonds, private activity and industrial development bonds and
participation interests in municipal bonds.

21
<PAGE>

STANDBY COMMITMENTS AND PUTS--Securities subject to standby commitments or puts
permit the holder thereof to sell the securities at a fixed price prior to
maturity. Securities subject to a standby commitment or put may be sold at any
time at the current market price. However, unless the standby commitment or put
was an integral part of the security as originally issued, it may not be
marketable or assignable; therefore, the standby commitment or put would only
have value to a Fund owning the security to which it relates. In certain cases,
a premium may be paid for a standby commitment or put, which premium will have
the effect of reducing the yield otherwise payable on the underlying security.
A Fund will limit standby commitment or put transactions to institutions
believed to present minimal credit risk.

RECEIPTS--Receipts are sold as zero coupon securities, which means that they
are sold at a substantial discount and redeemed at face value at their maturity
date without interim cash payments of interest or principal. This discount is
accreted over the life of the security, and such accretion will constitute the
income earned on the security for both accounting and tax purposes. Because of
these features, such securities may be subject to greater interest rate
volatility than interest paying investments.

TIME DEPOSITS--A non-negotiable receipt issued by a bank in exchange for the
deposit of funds. Like a certificate of deposit, it earns a specified rate of
interest over a definite period of time; however, it cannot be traded in the
secondary market. Time deposits are considered to be illiquid securities.

U.S. GOVERNMENT AGENCIES--Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the Federal Home Loan Mortgage Corporation, the
Federal Land Banks and the U.S. Postal Service. Some of these securities are
supported by the full faith and credit of the U.S. Treasury (e.g., Government
National Mortgage Association), others are supported by the right of the issuer
to borrow from the Treasury (e.g., Federal Farm Credit Bank), while still
others are supported only by the credit of the instrumentality (e.g., Federal
National Mortgage Association). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and
interest do not extend to the value or yield of these securities nor to the
value of a Fund's shares.

U.S. TREASURY OBLIGATIONS--Bills, notes and bonds issued by the U.S. Treasury
and separately traded interest and principal component parts of such
obligations that are transferable through the Federal book-entry system known
as Separately Traded Registered Interest and Principal Securities ("STRIPS").

VARIABLE OR FLOATING RATE INSTRUMENTS--Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed,
but which vary with changes in specified market rates or indices. The interest
rates on these securities may be reset daily, weekly, quarterly or some other
reset period, and may have a floor or ceiling on interest rate changes. There
is a risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand
notice exceeding seven days may be considered illiquid if there is no secondary
market for such security.

22
<PAGE>

A Fund will maintain with the Custodian a separate account with liquid high
grade debt securities or cash in an amount at least equal to these commitments.
The interest rate, if any, realized on these securities is fixed as of the
purchase date and no interest accrues to the Fund before settlement. Debt and
equity securities are subject to market fluctuation and it is possible that the
market value at the time of settlement could be higher or lower than the
purchase price. Although a Fund generally purchases securities on a when-issued
or forward commitment basis with the intention of actually acquiring securities
for its portfolio, a Fund may dispose of a when-issued security or forward
commitment prior to settlement if it deems appropriate.

23
<PAGE>

TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Summary..................................................................... 2
Expense Summary............................................................. 4
Financial Highlights........................................................ 5
The Trust................................................................... 7
Investment Objectives and Policies.......................................... 7
Investment Limitations...................................................... 11
The Advisor................................................................. 12
The Administrator........................................................... 13
</TABLE>
<TABLE>
<S> <C>
The Shareholder Servicing Agent............................................. 13
The Distributor............................................................. 13
Purchase and Redemption of Shares........................................... 14
Performance................................................................. 14
Taxes....................................................................... 15
General Information......................................................... 18
Description of Permitted Investments........................................ 19
</TABLE>
<PAGE>

THE PILLAR FUNDS

Fixed Income Fund
Class B Shares

Supplement dated December 15, 1995 to the Prospectus dated April 30, 1995

The investment policies of the Fixed Income Fund (the "Fund") are hereby amended
as follows:

The Fund expects to maintain a dollar-weighted average maturity that will not
exceed fifteen years.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
<PAGE>

THE PILLAR FUNDS

Investment Advisor:
UNITED JERSEY BANK INVESTMENT MANAGEMENT DIVISION, A
DIVISION OF UNITED JERSEY BANK

.SHORT-TERM INVESTMENT FUND
.FIXED INCOME FUND
.NEW JERSEY MUNICIPAL SECURITIES FUND
.PENNSYLVANIA MUNICIPAL SECURITIES FUND
.INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND
.GNMA FUND

CLASS B

The Trust's Class B Shares are offered to all persons (persons who own Class B
shares of a fund are referred to herein as "Shareholders").

CLASS B SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
INSURED, ENDORSED OR GUARANTEED BY, ANY BANK (INCLUDING UNITED JERSEY BANK
OR ITS AFFILIATES OR CORRESPONDENTS), ANY STATE OR STATE AGENCY, THE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE U.S. GOVERNMENT OR ANY
U.S. GOVERNMENT AGENCY.

AMOUNTS INVESTED IN THE FUNDS ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.

SALES CHARGES ARE IMPOSED BY ALL FUNDS AT THE TIME OF PURCHASE.

APRIL 30, 1995

CLASS B
<PAGE>

SUMMARY

THE PILLAR FUNDS (THE "TRUST") CONSIST OF OPEN-END MANAGEMENT INVESTMENT
COMPANIES WHICH PROVIDE A CONVENIENT WAY TO INVEST IN PROFESSIONALLY MANAGED
PORTFOLIOS OF SECURITIES. THE FOLLOWING PROVIDES BASIC INFORMATION ABOUT THE
CLASS B SHARES OF THE TRUST'S SHORT-TERM INVESTMENT, FIXED INCOME, NEW JERSEY
MUNICIPAL SECURITIES, PENNSYLVANIA MUNICIPAL SECURITIES, INTERMEDIATE-TERM
GOVERNMENT SECURITIES AND GNMA FUNDS (COLLECTIVELY, THE "FUNDS"; INDIVIDUALLY,
A "FUND").

The Intermediate-Term Government Securities Fund invests in obligations
issued or guaranteed as to principal and interest by the U.S. Government or its
agencies or instrumentalities.

2
<PAGE>

primarily by or on behalf of the states of New Jersey and Pennsylvania,
respectively, subjects these Funds to special investment risks, such as the
possible adverse affects of changes in economic conditions and governmental
policies of the states or their underlying governmental units. These Funds will
be more susceptible to such factors than a fund which does not have as great a
concentration in municipal securities of a single state. See "Additional Risk
Factors for New Jersey Municipal Securities" and "Additional Risk Factors for
Pennsylvania Municipal Securities."

Who is the Advisor? United Jersey Bank Investment Management Division, a
division of United Jersey Bank, serves as the Advisor of the Trust. See "The
Advisor."

Who is the Administrator? SEI Financial Management serves as the
Administrator of the Trust. See "The Administrator".

Who is the Distributor? SEI Financial Services Company acts as distributor of
the Trust's shares. The Trust has adopted a distribution plan pursuant to Rule
12b-1 (the "Class B Plan") on behalf of the Class B shares. See "The
Distributor."

How Do I Purchase and Redeem Shares? Shares may be purchased through a
financial institution, such as United Jersey Bank, or a broker-dealer that has
entered into a dealer agreement with SEI Financial Services Company
("Intermediaries"). Shares may also be purchased directly through the
Distributor. Shareholders may redeem shares directly through the Distributor.
In addition, Intermediaries through which Shareholders may purchase shares
generally stand ready to assist Shareholders in effecting redemptions of shares
held in their Fund accounts. Purchase and redemption requests may be made on a
day on which both the New York Stock Exchange and the Federal Reserve wire
system are open for business ("Business Day"). The minimum initial investment
is $1,000. Shares are offered at net asset value per share plus a maximum sales
charge at time of purchase of 4% for the Fixed Income and Intermediate-Term
Government Securities Funds, 3% for the GNMA Fund and 1% for the Short-Term
Investment, New Jersey and Pennsylvania Municipal Securities Funds.
Shareholders who purchase higher amounts may qualify for a reduced sales
charge. The net asset value per share is determined as of 4:00 p.m., Eastern
time on each Business Day. See "Purchases of Shares" and "Redemption of
Shares."

How are Dividends Paid? Each Fund declares dividends of substantially all of
its net investment income (exclusive of capital gains) daily and distributes
such dividends on or about the first Business Day of the following month. Any
capital gain is distributed at least annually. Distributions are paid in
additional shares unless the Shareholder elects to take the payment in cash.
See "Dividends."

3
<PAGE>

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES CLASS B
(As a percentage of offering price)

ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)

<TABLE>
<CAPTION>
NEW JERSEY PENNSYLVANIA INTERMEDIATE-TERM
SHORT-TERM FIXED MUNICIPAL MUNICIPAL GOVERNMENT
INVESTMENT INCOME SECURITIES SECURITIES SECURITIES GNMA
FUND FUND FUND FUND FUND FUND
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Advisory Fees (after fee
waivers)(1)............ .46% .50% .15% .00% .45% .43%
12b-1 Fees.............. .25% .25% .25% .25% .25% .25%
Other Expenses.......... .34% .30% .32% .80% .35% .37%
- -------------------------------------------------------------------------------------------
Total Operating Expenses
(after fee waivers)(2). 1.05% 1.05% .72% 1.05% 1.05% 1.05%
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
(1) The Advisor and Administrator have agreed to voluntarily waive a portion
of their fees in an amount that operates to limit total operating expenses
of Class B of each Fund to not more than 1.05% of average daily net
assets. The Advisor and the Administrator each reserves the right to
terminate its fee waiver at any time in their sole discretion.
(2) Absent fee waivers, Advisory Fees would be .60%, Administration Fees for
each Fund would be .20% and Total Operating Expenses would be as follows:
Short-Term Investment Fund 1.19%, Fixed Income Fund 1.15%, New Jersey
Municipal Securities Fund 1.22%, Pennsylvania Municipal Securities Fund
1.85%, Intermediate-Term Government Securities Fund 1.20% and GNMA Fund
1.22%. Additional information may be found under "The Advisor," "The
Administrator" and "The Distributor."

4
<PAGE>

<TABLE>
<CAPTION>
EXAMPLE
- ------------------------------------------------------------------------------
1 YR. 3 YRS. 5 YRS. 10 YRS.
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a
$1,000 investment assuming (1) the maximum sales
charge set forth in the table above, (2) 5% an-
nual return and (3) redemption at the end of each
time period
Short-Term Investment Fund....................... $21 $43 $67 $137
Fixed Income Fund................................ $50 $72 $96 $163
New Jersey Municipal Securities Fund............. $17 $33 $50 $ 99
Pennsylvania Municipal Securities Fund........... $21 $43 $67 $137
Intermediate-Term Government Securities Fund..... $50 $72 $96 $163
GNMA Fund........................................ $40 $62 $86 $154
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. The
purpose of the expense table and example is to assist the investor in
understanding the various costs and expenses that may be directly or
indirectly borne by investors in the Funds. The information set forth in the
foregoing table and example relates only to Class B shares. The Trust also
offers Class A shares of each Fund which are subject to the same expenses
except there are no sales loads or distribution fees. Financial institutions
that are the record owner of shares for the account of their customers may
impose separate fees for account services to their customers. In addition, a
wire redemption charge of $10.00 is imposed for each redemption by wire.
Additional information may be found under "The Advisor," "The Administrator,"
"The Shareholder Servicing Agent" and "The Distributor."

The rules of the Securities and Exchange Commission require that the maximum
sales charge be reflected in the above table. However, certain investors may
qualify for reduced sales charges. See "Purchase of Shares."

Long-term shareholders may pay more than the equivalent of the maximum front-
end sales charges otherwise permitted by the Rules (the "Rules") of the
National Association of Securities Dealers, Inc. ("NASD"). The Trust intends
to operate the Class B distribution plan in accordance with its terms and with
the NASD Rules concerning sales charges.

5
<PAGE>

FINANCIAL HIGHLIGHTS THE PILLAR FUNDS

The following information has been audited by Arthur Andersen & LLP, the
Trust's independent public accountants, as indicated in their report dated
February 10, 1995 on the Trust's financial statements as of December 31, 1994
included in the Trust's Statement of Additional Information under "Financial
Information." Additional performance information is contained in the 1994
Annual Report to Shareholders and is available upon request and without charge
by calling 1-800-932-7782. This table should be read in conjunction with the
Trust's financial statements and notes thereto.

For a Class B Share Outstanding Throughout the Period

<TABLE>
<CAPTION>
NEW JERSEY
SHORT-TERM FIXED MUNICIPAL
INVESTMENT INCOME SECURITIES
FUND--CLASS B FUND--CLASS B FUND--CLASS B
------------------------------------ ------------------------------------ ------------------------------------
01/01/94 TO 01/01/93 TO 04/01/92 TO 01/01/94 TO 01/01/93 TO 04/01/92 TO 01/01/94 TO 01/01/93 TO 05/04/92 TO
12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 12/31/92 (2)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $10.03 $10.01 $10.00 $10.68 $10.38 $10.00 $10.85 $10.29 $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
Income from
Investment
Operations......
Net Investment
Income......... 0.33 0.28 0.25 0.56 0.58 0.47 0.45 0.46 0.29
Net Realized and
Unrealized
Gains (Loss) on
Securities..... (0.05) 0.01 0.03 (1.18) 0.52 0.44 (0.92) 0.56 0.29
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income from
Investment
Operations...... 0.28 0.29 0.28 (0.62) 1.10 0.91 (0.47) 1.02 0.58
- ---------------------------------------------------------------------------------------------------------------------------------
Less
Distributions:
Dividends from
Net Investment
Income......... (0.33) (0.27) (0.25) (0.56) (0.58) (0.47) (0.45) (0.46) (0.29)
Distributions
from Realized
Capital Gain... -- -- (0.02) (0.06) (0.22) (0.06) -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distribu-
tions........... (0.33) (0.27) (0.27) (0.62) (0.80) (0.53) (0.45) (0.46) (0.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Asset Value,
End of Period... $ 9.98 $10.03 $10.01 $ 9.44 $10.68 $10.38 $ 9.93 $10.85 $10.29
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Total Return (3). 2.85% 2.90% 3.23%* (5.90)% 10.76% 11.39%* (4.35)% 10.09% 8.29%*
- ---------------------------------------------------------------------------------------------------------------------------------
Ratios and Sup-
plemental Data
Net Assets, End
of Period (000). $769 $205 $193 $5,525 $6,519 $1,214 $21,195 $22,601 $5,424
Ratio of Expenses
to Average Net
Assets.......... 1.05% 1.05% 1.05%* 1.05% 1.05% 1.05%* 0.52% 0.45% 0.62%*
Ratio of Expenses
to Average Net
Assets
(Excluding
Waivers)........ 1.20% 1.13% 1.26%* 1.15% 1.13% 1.20%* 1.18% 1.23% 1.39%*
Ratio of Net
Income to
Average Net
Assets.......... 3.50% 2.09% 3.14%* 5.65% 5.24% 5.93%* 4.40% 4.34% 4.44%*
Ratio of Net
Income to
Average Net
Assets
(Excluding
Waivers)........ 3.35% 2.01% 2.93%* 5.55% 5.16% 5.78%* 3.74% 3.54% 3.67%*
Portfolio
Turnover Rate... 68.39% 81.92% 68.15% 15.24% 49.49% 23.86% 16.81% 23.83% 2.23%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) The Short-Term Investment and the Fixed Income Funds commenced operations
on April 1, 1992. Ratios for this period have been annualized.
(2) The New Jersey Municipal Securities Fund commenced operations on May 4,
1992. Ratios for this period have been annualized.
(3) Total return does not reflect the sales load charged on Class B shares.

6
<PAGE>

FINANCIAL HIGHLIGHTS (CONTINUED) THE PILLAR FUNDS

For a Class B Share Outstanding Throughout the Periods Indicated

<TABLE>
<CAPTION>
INTERMEDIATE-TERM PENNSYLVANIA
GOVERNMENT MUNICIPAL
SECURITIES SECURITIES GNMA
FUND--CLASS B FUND--CLASS B FUND--CLASS B
------------------------------------ ------------------------ ------------------------
01/01/94 TO 01/01/03 TO 04/01/92 TO 01/01/94 TO 05/13/93 TO 01/01/94 TO 05/05/93 TO
12/31/94 12/31/93 12/31/92 (1) 12/31/94 12/31/93 (2) 12/31/94 12/31/93 (3)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Begin-
ning of Period......... $10.53 $10.24 $10.00 $10.17 $ 9.98 $ 9.85 $10.01
- ----------------------------------------------------------------------------------------------------------------
Income from Investment
Operations:
Net Investment Income.. 0.49 0.49 0.39 0.33 0.20 0.50 0.31
Net Realized and
Unrealized Gain (Loss)
on Securities......... (1.01) 0.31 0.25 (0.62) 0.19 (1.00) (0.16)
- ----------------------------------------------------------------------------------------------------------------
Total Income from
Investment Operations. (0.52) 0.80 0.64 (0.29) 0.39 (0.50) 0.15
- ----------------------------------------------------------------------------------------------------------------
Less Distributions:
Dividends from Net
Investment Income..... (0.49) (0.49) (0.39) (0.33) (0.20) (0.50) (0.31)
Distributions from Re-
alized Capital Gain .. (0.01) (0.02) (0.01) -- -- (0.01) --
- ----------------------------------------------------------------------------------------------------------------
Total Distributions.... (0.50) (0.51) (0.40) (0.33) (0.20) (0.51) (0.31)
- ----------------------------------------------------------------------------------------------------------------
Net Asset Value, End of
Period................. $ 9.51 $10.53 $10.24 $ 9.55 $10.17 $ 8.84 $ 9.85
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Total Return (4)........ (5.09)% 7.94% 7.86%* (2.83)% 6.28%* (5.05)% 2.31%*
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
Ratios and Supplemental
Data
Net Assets, End of Pe-
riod (000)............. $2,372 $4,903 $2,190 $ 336 $ 289 $1,853 $2,633
Ratio of Expenses to Av-
erage Net Assets....... 1.05% 1.05% 1.05%* 1.05% 1.05%* 1.05% 1.05%*
Ratio of Expenses to
Average Net Assets
(Excluding Waivers).... 1.20% 1.23% 1.36%* 1.92% 1.48%* 1.22% 1.29%*
Ratio of Net Income to
Average Net Assets..... 4.83% 4.59% 5.00%* 3.42% 3.24%* 5.47% 4.70%*
Ratio of Net Income to
Average Net Assets
(Excluding Waivers).... 4.68% 4.41% 4.69%* 2.55% 2.81%* 5.30% 4.46%*
Portfolio Turnover Rate. 40.27% 31.69% 12.38% 38.20% 16.51% 102.77% 252.73%
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
(1) The Intermediate-Term Government Securities Fund commenced operations on
April 1, 1992. Ratios for this period have been annualized.
(2) The Pennsylvania Municipal--Class B Fund commenced operations on May 13,
1993. Ratios for this period have been annualized.
(3) The GNMA--Class B Fund commenced operations on May 5, 1993. Ratios for this
period have been annualized.
(4) Total return does not reflect the sales load charged on Class B shares.

7
<PAGE>

THE TRUST

THE PILLAR FUNDS (the "Trust") consist of open-end management investment
companies that have diversified and non-diversified portfolios. The Trust
offers units of beneficial interest ("shares") in one of fourteen separate
investment portfolios. Shareholders may purchase shares in each portfolio
(except for the U.S. Treasury Securities Plus Money Market Fund) through two
separate classes (Class A and Class B) which provide for variations in
distribution costs, voting rights, and dividends. Except for these differences
between classes, each share of each portfolio represents an undivided,
proportionate interest in that portfolio. This Prospectus relates to the Class
B shares of the Trust's Short-Term Investment, Fixed Income, New Jersey
Municipal Securities, Pennsylvania Municipal Securities, Intermediate-Term
Government Securities and GNMA Funds (each of these, a "Fund"). Each of the
Funds is a diversified mutual fund except for the New Jersey and Pennsylvania
Municipal Securities Funds, which are non-diversified mutual funds. Information
regarding the Trust's other portfolios and the Class A shares of the Funds is
contained in separate prospectuses that may be obtained from the Trust's
Distributor, SEI Financial Services Company, 680 East Swedesford Road, Wayne,
Pennsylvania 19087 or by calling 1-800-932-7782.

SHARES OF THE TRUST ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF
THE PRINCIPAL AMOUNT INVESTED. SEE "INVESTMENT OBJECTIVES AND POLICIES--RISK
FACTORS; ADDITIONAL RISK FACTORS FOR NEW JERSEY MUNICIPAL SECURITIES;
ADDITIONAL RISK FACTORS FOR PENNSYLVANIA MUNICIPAL SECURITIES."

A SALES CHARGE IS IMPOSED BY ALL FUNDS AT THE TIME OF PURCHASE. SEE "PURCHASE
OF SHARES--OTHER INFORMATION REGARDING PURCHASES."

INVESTMENT OBJECTIVES AND POLICIES

THE SHORT-TERM INVESTMENT FUND

At least 65% of the Fund's assets will be invested in (i) bills, notes and
bonds issued by the U.S. Treasury and separately traded interest and principal
component parts of such obligations that are transferable through the Federal
book entry system ("U.S. Treasury obligations") (ii) obligations issued or
guaranteed as to principal and interest by agencies and instrumentalities of
the U.S. Government; (iii) corporate debt obligations rated in one of the three
highest rating categories by a nationally recognized statistical rating
organization ("NRSRO") or determined by the Advisor to be of comparable quality
at the time of investment; (iv) commercial paper rated in the highest short-
term rating category by an NRSRO or determined by the Advisor to be of
comparable quality at the time of investment; (v) short-term bank obligations
(certificates of deposit, time deposits and bankers' acceptances) of U.S.
commercial banks with assets of at least $1 billion as of the end of their most
recent fiscal year; (vi) securities of the government of Canada and its
provincial and local governments; (vii) custodial receipts evidencing
separately traded interest and principal component parts of U.S. Treasury
obligations; and (viii) repurchase agreements involving such securities. Of
this amount, the Fund may, for temporary defensive purposes, invest up to 35%
of its assets in commercial paper rated in one of the two highest short-term
rating categories or determined by the Advisor to be of comparable quality at
the time of investment. Securities rated A are considered to be

8
<PAGE>

investment grade and of high credit quality. Issues rated A could be more
vulnerable to adverse developments than obligations with higher ratings. In
addition, the Fund may invest in corporate bonds and debentures and commercial
paper issued by foreign issuers.

The Fund will maintain a dollar-weighted average maturity of three years or
less.

THE FIXED INCOME FUND

The Fund expects to maintain a dollar-weighted average maturity of fifteen
years. The Advisor may vary this maturity substantially in anticipation of a
change in the interest rate environment.

THE NEW JERSEY MUNICIPAL SECURITIES FUND

The New Jersey Municipal Securities Fund will invest at least 80% of its net
assets in obligations issued by or on behalf of the states, territories and
possessions of the United States and the District of Columbia and their
political subdivisions, agencies and instrumentalities, the interest of which,
in the opinion of bond counsel for the issuer, is exempt from Federal income
tax (collectively, "Municipal Securities"). Under normal circumstances, except
where acceptable securities are unavailable as determined by the Advisor, at
least 65% of the Fund's assets will be invested in Municipal Securities, the
interest of which, in the opinion of bond counsel for the issuer, is exempt
from the New Jersey gross income tax ("New Jersey Municipal Securities"). The
Fund will primarily purchase (i) municipal bonds rated in one of the three
highest rating categories by an NRSRO; (ii) municipal notes rated in one of the
two highest rating categories by an NRSRO; (iii) commercial paper either rated
in one of the two highest short-term rating categories by an NRSRO; (iv) any of
the foregoing determined by the Advisor to be of comparable quality at the time
of investment; or (v) securities of closed-end investment companies traded on a
national securities exchange. Securities rated A are considered to be
investment grade and of high credit quality. Issues rated A could be more
vulnerable to adverse developments than obligations with higher ratings.

The Fund expects to maintain a dollar-weighted average portfolio maturity of
less than fifteen years.

9
<PAGE>

securities subject to the alternative minimum tax. However, the Fund generally
intends to be fully invested in securities exempt from federal income tax.

THE PENNSYLVANIA MUNICIPAL SECURITIES FUND

At least 80% of the Fund's assets will be invested in Municipal Securities.
Under normal circumstances, except where acceptable securities are unavailable
as determined by the Advisor, at least 65% of the Fund's assets will be
invested in Municipal Securities, the interest of which, in the opinion of bond
counsel for the issuer, is exempt from Pennsylvania income tax. The Fund may
invest up to 10% of its assets in securities the income tax from which is
subject to the alternative minimum tax.

The Fund expects to maintain a dollar-weighted average portfolio maturity of
less than fifteen years.

THE INTERMEDIATE-TERM GOVERNMENT SECURITIES FUND

The objective of this Fund is to preserve principal value and maintain a high
degree of liquidity while providing current income. There is no assurance that
the investment objective will be met.

The Fund will be fully invested in U.S. Treasury obligations and obligations
issued or guaranteed as to principal and interest by the agencies and
instrumentalities of the U.S. Government. The Fund will maintain a dollar-
weighted average maturity of three to ten years. Under normal circumstances,
the Advisor anticipates that the Fund's dollar-weighted average maturity will
be approximately five years; however, the Advisor may vary this average
maturity substantially in anticipation of a change in the interest rate
environment.

THE GNMA FUND

The investment objective of this Fund is to provide the highest level of
current income consistent with

10
<PAGE>

preservation of principal and a high degree of liquidity. There is no assurance
that the investment objective will be met.

As a result of portfolio restructuring, the Fund's annual portfolio turnover
rate, for the fiscal year ended December 31, 1994, was 103%. Such a turnover
rate may result in additional taxes for Shareholders. See "Taxes."

GENERAL INVESTMENT POLICIES

RISK FACTORS

11
<PAGE>

longer maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal will also affect the value of these investments. Changes
in the value of portfolio securities will not affect cash income derived from
these securities but will affect a Fund's net asset value.

ADDITIONAL RISK FACTORS FOR NEW JERSEY MUNICIPAL SECURITIES

New Jersey Municipal Securities are primarily issued by or on behalf of the
state of New Jersey, its political subdivisions, agencies and
instrumentalities. The concentration in obligations of New Jersey issuers by
the New Jersey Municipal Securities Fund subjects the Fund to special
investment risks. In particular, changes in economic conditions and
governmental policies of the State of New Jersey and its municipalities could
adversely affect the value of the Fund and the securities held by it. For a
further description of these risks, see "New Jersey Municipal Securities" in
the Statement of Additional Information.

ADDITIONAL RISK FACTORS FOR PENNSYLVANIA MUNICIPAL SECURITIES

FUND TURNOVER

Under normal circumstances, it is anticipated that the annual portfolio
turnover rate for each Fund will not exceed 100%.

INVESTMENT LIMITATIONS

12
<PAGE>

Each Fund may not:

1. Purchase securities of any issuer (except securities issued or guaranteed by
the United States Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if, as a result, more than 5% of the
total assets of the Fund would be invested in the securities of such issuer
provided, however, that this limitation does not apply to the New Jersey
Municipal Securities or Pennsylvania Municipal Securities Funds. This
restriction applies to 75% of each Fund's total assets.

The foregoing percentage limitations will apply at the time of the purchase of
a security. Additional investment limitations are set forth in the Statement of
Additional Information.

THE ADVISOR

13
<PAGE>

Frances M. Tendall is a Vice President and Regional Manager (Princeton) of the
Advisor. Mrs. Tendall has managed the Intermediate-Term Government Securities
Fund since its inception in April, 1992 and co-manages the U.S. Treasury
Securities Money Market Fund. Mrs. Tendall joined United Jersey Bank in 1982
and is currently responsible for managing both equity and fixed income
portfolios.

The Advisor is entitled to a fee, which is calculated daily and paid monthly,
at an annual rate of .60% of the average daily net assets of each Fund. The
Advisor has voluntarily agreed to waive all or a portion of its fees in order
to limit the operating expenses of Class B of each Fund to 1.05%. For the
fiscal year ended December 31, 1994, each Fund paid the Adviser the following
advisory fee (shown as a percentage of its average daily net assets): Short-
Term Investment Fund, .46%; Fixed Income Fund, .50%; New Jersey Municipal
Securities Fund, .15%; Pennsylvania Municipal Securities Fund, .00%;
Intermediate-Term Government Securities Fund, .45%; and GNMA Fund, .43%. The
Advisor reserves the right to terminate its fee waiver at any time in its sole
discretion.

United Jersey Bank has also entered into a Custodian Agreement with the Trust,
under which it will provide all securities safekeeping services as required by
the Funds and the Investment Company Act of 1940, as amended. The Trust pays
United Jersey Bank (referred to herein in its custodial capacity as the
"Custodian") a Custodian fee, which is calculated daily and paid monthly, at an
annual rate of .025% of the average daily net assets of each Fund.

THE ADMINISTRATOR

The Administrator is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of .20% of the average daily net assets of each
Fund. The Administrator has agreed to waive all or a portion of its fees in
order to limit the total operating expenses of Class B of the New Jersey
Municipal Securities Fund and the Pennsylvania Municipal Securities Fund to
.80%. The Administrator reserves the right to terminate its fee waiver at any
time in its sole discretion.

THE SHAREHOLDER SERVICING AGENT

THE DISTRIBUTOR

SEI Financial Services Company (the "Distributor"), a wholly-owned subsidiary
of SEI, acts as the Distributor for the Trust.

The Class B shares of each Fund have a distribution plan dated February 28,
1992 or, for the Pennsylvania Municipal Securities and GNMA Fund, April 30,
1993 ("Class B Plan"). As provided in the Distribution Agreement and the Class
B Plan, the Trust will pay the Distributor a fee of .25% of the

14
<PAGE>

PURCHASE OF SHARES

Shares of the Funds may be purchased through a financial institution, such as
United Jersey Bank, or a broker-dealer that has entered into a dealer agreement
with SEI Financial Services Company. Shares may also be purchased directly
through the Distributor by mail, by telephone, or by wire.

Shares of each Fund are sold on a continuous basis and may be purchased on any
Business Day. The minimum initial investment in the Trust is $1,000; however,
the minimum investment may be waived at the Distributor's discretion. All
subsequent purchases must be at least $50.

A purchase order will be effective as of the Business Day received by the
Distributor if the Distributor receives the order and payment before 4:00 p.m.,
Eastern time, on such Business Day.

PURCHASES THROUGH INTERMEDIARIES

Customers should contact their Intermediary for information about the
institution's procedures for purchasing shares of the Funds and any charges for
services provided by the institution. Intermediaries may impose an earlier cut-
off time for receipt of purchase orders directed through them to allow for
processing and transmittal of these orders to the Distributor for effectiveness
the same day. In addition, state securities laws may require banks and
financial institutions purchasing shares for their customers to register as
dealers pursuant to state laws.

DIRECT PURCHASES

By Mail

Investors may purchase shares of any Fund by completing and signing an Account
Application form and mailing it, along with a check (or other negotiable bank
instrument or money order) payable to "The Pillar Funds (Fund Name)," to the
Distributor. Subsequent purchases of shares may be made at any time by mailing
a check (or other negotiable bank draft or money order) to the Distributor.
average daily net assets of each Fund's Class B shares. The Distributor may
apply this fee toward: a) compensation for its services in connection with
distribution assistance or provision of shareholder services; or b) payments to
financial institutions and intermediaries such as banks (including United
Jersey Bank), savings and loan associations, insurance companies, and
investment counselors, broker-dealers, and the Distributor's affiliates and
subsidiaries as compensation for services, reimbursement of expenses incurred
in connection with distribution assistance, or provision of shareholder
services. The Class B Plan is characterized as a compensation plan since the
distribution fee will be paid to the Distributor without regard to the
distribution or shareholder service expenses incurred by the Distributor or the
amount of payments made to financial institutions and intermediaries. The Funds
may also execute brokerage or other agency transactions through an affiliate of
the Advisor or through the Distributor for which such affiliate or the
Distributor receives compensation.

Class A shares of each Fund are offered without distribution fees (i) to
institutional investors (including United Jersey Bank, its affiliates and
correspondent banks) for the investment of their own funds, and (ii) to
individuals and institutions (including United Jersey Bank, its affiliates and
correspondent banks) but (A) only for the investment of funds held by such
individuals or institutions in a fiduciary, agency, custodial or other
representative capacity, and (B) only if such individuals or institutions are
able to provide complete shareholder recordkeeping services with respect to
shares purchased and held in such capacity.

15
<PAGE>

Account Application forms can be obtained by calling SEI Financial Services
Company at 1-800-932-7782.

By Telephone or by Wire

If your Account Application has been previously received, you may also purchase
shares by telephone or by wire. To buy shares by telephone or by wire, call SEI
Financial Services Company toll-free at 1-800-932-7782.

Automatic Investment Plan (AIP)

A Shareholder may also arrange for periodic additional investments in the Funds
through automatic deductions by ACH from a checking account by completing an
Optional Services Form. The minimum pre-authorized investment amount is $50 per
month. An Optional Service Form may be obtained by contacting the Distributor
at 1-800-932-7782.

OTHER INFORMATION REGARDING PURCHASES

A purchase order for shares will be executed at a per share price equal to the
net asset value next determined after the receipt of the purchase order by the
Distributor plus any applicable sales charge (the "offering price").

Orders by telephone will not be executed until payment has been received. If a
check received does not clear, the purchase will be cancelled and the investor
could be liable for any losses or fees incurred. No certificates representing
shares will be issued.

The net asset value per share of each Fund is determined by dividing the total
market value of the Fund's investments and other assets, less any liabilities,
by the total outstanding shares of the Fund. A Fund may use a pricing service
to provide market quotations. A pricing service may use a matrix system of
valuation to value fixed income securities which considers factors such as
securities prices, yield features, ratings and developments related to a
specific security. Net asset value per share is determined as of 4:00 p.m.,
Eastern time, on each Business Day. Purchases will be made in full and
fractional shares of the Fund calculated to three decimal places. Although the
methodology and procedures are identical, the net asset value per share of
classes within a Fund may differ because of the distribution expenses charged
to the Class B shares.

The following table shows the regular sales charge on Class B shares of the
Fixed Income and Intermediate Term Government Securities Funds to a "single
purchaser" (defined below) together with the reallowance paid to dealers and
the agency commission paid to brokers:

<TABLE>
<CAPTION>
SALES REALLOWANCE
CHARGE AS AND
SALES APPROPRIATE BROKERAGE
CHARGE AS A PERCENTAGE COMMISSION AS
PERCENTAGE OF NET PERCENTAGE OF
AMOUNT OF OF OFFERING AMOUNT OFFERING
PURCHASE PRICE INVESTED PRICE
---------- ----------- ----------- -------------
<S> <C> <C> <C>
$0-99,999 4.00% 4.17% 3.50%
$100,000- 249,999 3.00% 3.10% 2.70%
$250,000- 499,999 2.00% 2.05% 1.80%
$500,000- 999,999 1.00% 1.01% 0.90%
$1,000,000 and above 0.00% 0.00% 0.00%
</TABLE>

The following table shows the regular sales charge on Class B Shares for the
GNMA Fund to a "single purchaser" (defined below) together with the reallowance
paid to dealers and the agency commission paid to brokers:

<TABLE>
<CAPTION>
SALES REALLOWANCE
CHARGE AS AND
SALES APPROPRIATE BROKERAGE
CHARGE AS A PERCENTAGE COMMISSION AS
PERCENTAGE OF NET PERCENTAGE OF
AMOUNT OF OF OFFERING AMOUNT OFFERING
PURCHASE PRICE INVESTED PRICE
---------- ----------- ----------- -------------
<S> <C> <C> <C>
$0-249,999 3.00% 3.10% 2.70%
$250,000- 499,999 2.00% 2.05% 1.80%
$500,000- 999,999 1.00% 1.01% 0.90%
$1,000,000 and above 0.00% 0.00% 0.00%
</TABLE>

The following table shows the regular sales charge on Class B shares of the
Short-Term Investment, New Jersey Municipal Securities and Pennsylvania
Municipal Securities Funds to a "single purchaser"

16
<PAGE>

(defined below) together with the reallowance paid to dealers and the agency
commission paid to brokers:

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE REALLOWANCE
AS A AS APPROPRIATE AND BROKERAGE
PERCENTAGE PERCENTAGE OF COMMISSION AS
AMOUNT OF OF OFFERING NET AMOUNT PERCENTAGE OF
PURCHASE PRICE INVESTED OFFERING PRICE
--------- ------------ -------------- --------------
<S> <C> <C> <C>
$0-999,999 1.00% 1.01% 0.90%
$1,000,000 and above 0.00% 0.00% 0.00%
</TABLE>

The commissions shown in the tables apply to sales through financial
institutions. Under certain circumstances, some financial institutions,
including United Jersey Bank and its affiliates, will be reallowed the entire
sales charge imposed on purchases of Class B shares and may, therefore, be
deemed to be "underwriters" under the Securities Act of 1933, as amended.

Right of Accumulation

In calculating the sales charge rates applicable to current purchases of a
Fund's shares, a "single purchaser" is entitled to cumulate current purchases
with the net purchases of previously purchased shares of the Fund and other
portfolios of The Pillar Funds ("Eligible Funds") which are sold subject to a
sales charge.

The term "single purchaser" refers to (i) an individual, (ii) an individual and
spouse purchasing shares of the Fund for their own account or for trust or
custodial accounts for their minor children, or (iii) a fiduciary purchasing
for any one trust, estate or fiduciary account, including employee benefit
plans created under Sections 401 or 457 of the Code, including related plans of
the same employer. To be entitled to a reduced sales charge based upon shares
already owned, the investor must ask the Distributor for such entitlement at
the time of purchase and provide the account number(s) of the investor, the
investor and spouse, and their minor children, and give the ages of such
children. The Fund may amend or terminate this right of accumulation at any
time as to subsequent purchases.

Letter of Intent

By initially investing at least $1,000 and submitting a Letter of Intent to the
Distributor, a "single purchaser" may purchase shares of the Fund and the other
Eligible Funds during a 13-month period at the reduced sales charge rates
applying to the aggregate amount of the intended purchases stated in the
Letter. The Letter may apply to purchases made up to 90 days before the date of
the Letter.

Other Circumstances

No sales charge is imposed on shares of the Fund: (i) issued in plans of
reorganization, such as mergers, asset acquisitions and exchange offers, to
which the Trust is a party; (ii) sold to dealers or brokers that have a sales
agreement with the Distributor for their own account or for retirement plans
for their employees or sold to present employees of dealers or brokers that
certify to the Distributor at the time of purchase that such purchase is for
their own account; (iii) sold to investors who are present or retired employees
of United Jersey Bank or one of its affiliates; or (iv) sold to investors who
are present employees of any entity which is a current service provider to the
Trust.

The Trust reserves the right to reject a purchase order when the Distributor
determines that it is not in the best interest of the Trust or its Shareholders
to accept such order.

EXCHANGES

Some or all of the shares of the Funds for which payment has been received
(i.e., an established account) may be exchanged for shares at their net asset
value, of other Funds within the Trust with similar or lower sales loads or for
shares of other Funds within the Trust which do not have sales loads. Exchanges
will be made only after instructions in writing or by telephone (an "Exchange
Request") are received for an established account by the Distributor.

Shareholders may effect exchanges of shares directly through the Distributor.
Additionally,

17
<PAGE>

Intermediaries, through which Shareholders may purchase shares, generally stand
ready to assist Shareholders in effecting through the Distributor exchanges of
shares held in Fund accounts. Shareholders wishing to effect an exchange with
the assistance of an Intermediary should contact that Intermediary for
information about exchange procedures and cut-off times.

If an Exchange Request in good order is received by the Distributor by 4:00
p.m., Eastern time, on any Business Day, the exchange usually will occur on
that day. Any Shareholder or Customer who wishes to make an exchange must have
received a current prospectus of the Fund in which he or she wishes to invest
before the exchange will be effected.

A description of the above and other plans and privileges by which a sales
charge may be reduced is set forth in the "Shareholder Services" section of the
Statement of Additional Information.

REDEMPTION OF SHARES

Shares may be redeemed without charge on any Business Day at their net asset
value. Redemption requests received in good order by 4:00 p.m., Eastern time,
will be effective on the Business Day received. Requests received after 4:00
p.m. will be effective on the next Business Day.

REDEMPTIONS THROUGH INTERMEDIARIES

Intermediaries, through which Shareholders may purchase shares, generally stand
ready to assist Shareholders in effecting through the Distributor redemptions
of shares held in Fund accounts. Shareholders wishing to effect a redemption
with the assistance of an Intermediary should contact that Intermediary for
information about redemption procedures and cut-off times.

DIRECT REDEMPTIONS

Shares may be redeemed directly through the Distributor by mail, by telephone
or by wire.

By Mail

A written request for redemption must be received by the Distributor in order
to constitute a valid request for redemption. The Distributor may require that
the signature on the written request be guaranteed by a commercial bank or by a
member firm of a domestic stock exchange. The signature guarantee requirement
will be waived if all of the following conditions apply: (1) the redemption is
for $5,000 worth of shares or less, (2) the redemption check is payable to the
Shareholder(s) of record, and (3) the redemption check is mailed to the
Shareholder(s) at the address of record. The Shareholder may also have the
proceeds mailed to a commercial bank account previously designated on the
Account Application or by written instruction to SEI Financial Services
Company. There is no charge for having redemption requests mailed to a
designated bank account.

By Telephone

Shares may be redeemed by telephone if the Shareholder elects that option on
the Account Application. The Shareholder may have the proceeds mailed to his or
her address or mailed or wired to a commercial bank account previously
designated on the Account Application. Under most circumstances, payments will
be transmitted on the next Business Day following receipt of a valid request
for redemption. Wire redemption requests may be made by the Shareholder by
calling SEI Financial Services Company at 1-800-932-7782, who will add a wire
redemption charge (presently $10.00) to the amount of the redemption.
Shareholders may not close their accounts by telephone.

Neither the Trust nor its transfer agent will be responsible for any loss,
liability, cost or expense for acting upon wire instructions or upon telephone
instructions that it reasonably believes to be genuine. The Trust and its
transfer agent will each employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, including requiring a form
of personal identification prior to acting upon instructions received by
telephone and

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recording instructions. If market conditions are extraordinarily active, or
other extraordinary circumstances exist, Shareholders who experience
difficulties placing redemption orders by telephone may wish to consider
placing the redemption order by other means.

Systematic Withdrawal Plan (SWP)

The Funds offer a Systematic Withdrawal Plan which may be utilized by
Shareholders who wish to receive regular distribution from their account. Upon
commencement of the SWP, the account must have a current value of $1,000 or
more. Shareholders may elect to receive automatic payment by check or ACH of
$50 or more on a monthly or quarterly basis. An Optional Services Form may be
obtained by contacting the Distributor at 1-800-932-7782.

OTHER INFORMATION REGARDING REDEMPTIONS

All redemption orders are effected at the net asset value per share next
determined after receipt of a valid request for redemption, as described above.
Net asset value per share is determined as of 4:00 p.m., Eastern time, on each
Business Day. Payment to Shareholders for shares redeemed will be made within
seven days after receipt by the Distributor of the request for redemption.

At various times, any Fund may be requested to redeem shares for which it has
not yet received good payment in connection with their purchase. In such
circumstances, the forwarding of redemption proceeds may be delayed until such
payment has been collected. The Funds intend to pay cash for all shares
redeemed, but under abnormal conditions which make payment in cash unwise,
payment may be made wholly or partly in portfolio securities with a market
value equal to the redemption price. In such cases, an investor may incur
brokerage costs in converting such securities to cash.

Due to the relatively high costs of handling small investments, each Fund
reserves the right to redeem, at net asset value, the shares of any Shareholder
if, because of redemptions of shares by or on behalf of the Shareholder, the
account of such Shareholder in any Fund has a value of less than $1,000, the
minimum initial purchase amount. Accordingly, an investor purchasing shares of
any Fund in only the minimum investment amount may be subject to such
involuntary redemption if he or she thereafter redeems any of these shares.
Before any Fund exercises its right to redeem such shares and to send the
proceeds to the Shareholder, the Shareholder will be given notice that the
value of the shares in his or her account is less than the minimum amount and
will be allowed 60 days to make an additional investment in such Fund in an
amount which will increase the value of the account to at least $1,000.

See "Purchase and Redemption of Shares" in the Statement of Additional
Information for examples of when the right of redemption may be suspended.

PERFORMANCE

The total return of a Fund refers to the average compounded rate of return on a
hypothetical investment, net of any sales charge imposed, for designated time
periods (including, but not limited to, the period from which the Fund
commenced operations through the specified date), assuming that the entire
investment is redeemed at the end of each period and assuming the reinvestment
of all dividend and capital gain distributions. Each Fund's performance may be
compared to other funds or to relevant indices which may calculate total return
without reflecting sales charges, in which case a Fund may advertise its total
return in the same manner. If reflected, sales charges would reduce these total
return calculations.

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The advertised performance on Class A shares will normally be higher than for
Class B shares because Class A shares are not subject to the distribution
expenses charged to Class B shares. The actual return to a Shareholder on Class
A shares may be reduced by any administrative or management charges that may be
imposed by individuals or institutions on their customers for account services.
The actual return to Shareholders on Class B shares will be reduced by the
amount of any sales load paid on Class B shares.

TAXES

TAX STATUS OF THE FUNDS

Each Fund is treated as a separate entity for federal income tax purposes and
is not combined with the Trust's other Funds. Each Fund intends to qualify
for the special tax treatment afforded RICs under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), so as to be relieved of federal
income tax on that part of its net investment income and net capital gain (the
excess of net long-term capital gain over net short-term capital loss) which is
distributed to Shareholders.

TAX STATUS OF DISTRIBUTIONS

Each Fund will distribute substantially all of its net investment income
(including, for this purpose, net short-term capital gain) to Shareholders.
Dividends from net investment income will be taxable to Shareholders as
ordinary income whether received in cash or in additional shares and will not
qualify for the dividends-received deduction otherwise available to corporate
shareholders. Any net capital gains will be distributed annually and will be
taxed to Shareholders as long-term capital gains, regardless of how long the
Shareholder has held shares. Capital gains distributions also will not qualify
for the corporate dividends-received deduction. Each Fund

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will make annual reports to Shareholders of the federal income tax status of
all distributions.

Certain securities purchased by the Funds (such as STRIPS, TRs, TIGRs and CATS,
defined under "Description of Permitted Investments") are sold at original
issue discount and thus do not make periodic cash interest payments. A Fund
will be required to include as part of its current income the accreted interest
on such obligations even though the Fund has not received any interest payments
on such obligations during that period. Because the Fund distributes all of its
net investment income to its Shareholders, the Fund may have to sell portfolio
securities to distribute such accreted income which may occur at a time when
the Advisor would not have chosen to sell such securities and which may result
in a taxable gain or loss.

Each Fund intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

Sale, exchange or redemption of Fund shares is a taxable event to a
Shareholder.

ADDITIONAL CONSIDERATIONS FOR THE NEW JERSEY MUNICIPAL SECURITIES AND
PENNSYLVANIA MUNICIPAL SECURITIES FUNDS

Current federal law limits the types and volume of bonds qualifying for the
Federal income tax exemption of interest, which may have an effect on the
ability of a Fund to purchase sufficient amounts of tax-exempt securities to
satisfy the Code's requirements for the payment of "exempt-interest dividends".

Interest on indebtedness incurred or continued by a Shareholder in order to
purchase or carry shares of the New Jersey Municipal Securities Fund or the
Pennsylvania Municipal Securities Fund is not deductible for federal income tax
purposes. Furthermore, the Fund may not be an appropriate investment for
persons (including corporations and other business entities) who are
"substantial users" (or persons related to "substantial users") of facilities
financed by industrial development private activity bonds. Such persons should
consult their tax

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<PAGE>

advisers before purchasing shares. A "substantial user" is defined generally to
include "certain persons" who regularly use in their trade or business a part
of a facility financed from the proceeds of such bonds.

NEW JERSEY TAX CONSIDERATIONS

For New Jersey Gross Income Tax purposes, net income or gains and distributions
derived from investments in other than New Jersey Municipal Securities and
Federal Securities, and distributions from net realized capital gains in
respect of such investments, will be taxable.

Gain on the disposition of Shares is not subject to New Jersey Gross Income
Tax, provided that the Fund meets the requirements for a qualified investment
fund set forth above.

PENNSYLVANIA TAX CONSIDERATIONS

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<PAGE>

GENERAL INFORMATION

THE TRUST

The Trust was organized as a Massachusetts business trust under a Declaration
of Trust dated September 9, 1991. The Declaration of Trust permits the Trust to
offer separate portfolios of shares and different classes of each Fund. In
addition to the Funds, the Trust consists of the following portfolios: U.S.
Treasury Securities Money Market Fund, U.S. Treasury Securities Plus Money
Market Fund, Prime Obligation Money Market Fund, Tax-Exempt Money Market Fund,
Equity Value Fund, Equity Income Fund, Mid Cap Value Fund, Balanced Growth Fund
and International Growth Fund. All consideration received by the Trust for
shares of any Fund and all assets of such Fund belong to that Fund and would be
subject to liabilities related thereto.

The Trust pays its expenses, including fees of its service providers, audit and
legal expenses, expenses of preparing prospectuses, proxy solicitation material
and reports to Shareholders, costs of custodial services and registering the
shares under Federal and state securities laws, pricing, insurance expenses,
litigation and other extraordinary expenses, brokerage costs, interest charges,
taxes and organization expenses.

TRUSTEES OF THE TRUST

VOTING RIGHTS

REPORTING

The Trust issues unaudited financial information semi-annually and audited
financial statements annually. The Trust furnishes proxy statements and other
reports to Shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to The Pillar Funds, P.O. Box 239,
Wayne, PA 19087-0239.

DIVIDENDS

Each Fund declares dividends of substantially all of its net investment income
(exclusive of capital gains) daily and distributes such dividends on or about
the first Business Day of the following month. Shares purchased begin earning
dividends on the Business

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<PAGE>

Day after payment is received by the Custodian. If any capital gain is
realized, substantially all of it will be distributed at least annually.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares at the net asset value next determined
following the record date, unless the Shareholder has elected to take such
payment in cash. Shareholders may change their election by providing written
notice to the Administrator at least 15 days prior to the distribution.

Dividends and distributions of each Fund are paid on a per-share basis. The
amount of dividends payable on Class B shares will be less than the dividends
payable on the Class A shares because of the distribution expenses charged to
Class B shares.

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius serves as counsel to the Trust. Arthur Andersen LLP
serves as the independent public accountants of the Trust.

DESCRIPTION OF PERMITTED INVESTMENTS

The following is a description of certain of the permitted investments for the
Funds:

COMMERCIAL PAPER--The term used to designate unsecured short-term promissory
notes issued by corporations and other entities. Maturities on these issues
vary from a few to 270 days.

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<PAGE>

forward commitments, floating and variable rate securities, convertible
securities, "stripped" U.S. Treasury securities (e.g., Receipts and STRIPs),
and privately issued stripped securities (e.g., TGRs, TRs and CATS). See
elsewhere in this "Description of Permitted Investments" for discussions of
these various instruments, and see "Investment Objectives and Policies" for
more information about any investment policies and limitations applicable to
their use.

MORTGAGE-BACKED SECURITIES--Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed-rate mortgages, graduated payment
mortgages, and adjustable rate mortgages. During periods of declining interest
rates, prepayment or mortgages underlying mortgage-backed securities can be
expected to accelerate. Prepayment of mortgages which underlie securities
purchased at a premium often results in capital losses, while prepayment of
mortgages purchased at a discount often results in capital gains. Because of
these unpredictable prepayment characteristics, it is often not possible to
predict accurately the average life or realized yield of a particular issue.

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<PAGE>

trust consisting principally of mortgage loans or FNMA, FHLMC or GNMA-
guaranteed mortgage pass-through certificates. For FHLMC REMIC Certificates,
FHLMC guarantees the timely payment of interest, and also guarantees the
payment of principal as payments are required to be made on the underlying
mortgage participation certificates. FNMA REMIC Certificates are issued and
guaranteed as to timely distribution of principal and interest by FNMA.

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<PAGE>

security for such payment. Municipal securities include municipal notes and
municipal bonds.

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<PAGE>

rate changes. There is a risk that the current interest rate on such
obligations may not accurately reflect existing market interest rates. A demand
instrument with a demand notice exceeding seven days may be considered illiquid
if there is no secondary market for such security.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES (EQUITY AND DEBT SECURITIES)--When-
issued or delayed delivery basis transactions involve the purchase of an
instrument with payment and delivery taking place in the future. Delivery of
and payment for these securities may occur a month or more after the date of
the purchase commitment. A Fund will maintain with the Custodian a separate
account with liquid high grade debt securities or cash in an amount at least
equal to these commitments. The interest rate, if any, realized on these
securities is fixed as of the purchase date and no interest accrues to the Fund
before settlement. Debt and equity securities are subject to market fluctuation
and it is possible that the market value at the time of settlement could be
higher or lower than the purchase price. Although a Fund generally purchases
securities on a when-issued or forward commitment basis with the intention of
actually acquiring securities for its portfolio, a Fund may dispose of a when-
issued security or forward commitment prior to settlement if it deems
appropriate.

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TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Summary..................................................................... 2
Expense Summary............................................................. 4
Financial Highlights........................................................ 6
The Trust................................................................... 8
Investment Objectives and Policies.......................................... 8
Investment Limitations...................................................... 12
The Advisor................................................................. 13
The Administrator........................................................... 14
</TABLE>
<TABLE>
<S> <C>
The Shareholder Servicing Agent............................................. 14
The Distributor............................................................. 14
Purchase of Shares.......................................................... 15
Redemption of Shares........................................................ 18
Performance................................................................. 19
Taxes....................................................................... 20
General Information......................................................... 23
Description of Permitted Investments........................................ 24
</TABLE>