MASSMUTUAL INSTITUTIONAL FUNDS, 497, 1999-10-14

MASSMUTUAL INSTITUTIONAL FUNDS
497, 1999-10-14

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MASSMUTUAL INSTITUTIONAL FUNDS

This Prospectus describes Class S shares of the following Funds:

. MassMutual Prime Fund
seeks to maximize current income, consistent with liquidity and capital
preservation, by investing in money market instruments.

. MassMutual Short-Term Bond Fund
seeks a high total rate of return primarily from current income while
minimizing fluctuations in capital values by investing primarily in
short-term investment grade fixed income securities.

. MassMutual Core Bond Fund
seeks a high total rate of return, consistent with prudent investment
risk and capital preservation, by investing primarily in investment
grade debt securities.

. MassMutual Diversified Bond Fund
seeks a superior total rate of return by investing in fixed income
instruments.

. MassMutual Balanced Fund
seeks a high total rate of return over time, consistent with capital
preservation, by investing in stock, fixed income and money market
securities.

. MassMutual Core Equity Fund
seeks long-term growth of capital and income by investing primarily in
large company stocks.

. MassMutual Growth Equity Fund
seeks long-term growth of capital and future income.

. MassMutual Small Cap Value Equity Fund
seeks long-term growth of capital and income by investing primarily in
small company stocks.

. MassMutual Mid Cap Growth Equity Fund
seeks long-term capital growth.

. MassMutual Small Cap Growth Equity Fund
seeks long-term capital appreciation.

. MassMutual International Equity Fund
seeks a high total rate of return over time by investing primarily in
foreign stocks.

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this Prospectus. Any statement to the
contrary is a crime.

PROSPECTUS

May 3, 1999, Supplemented October 14, 1999

CLASS S SHARES
<PAGE>

Table Of Contents Page

Summary Information ...................................................... 3

About the Funds
MassMutual Prime Fund ............................................... 4
MassMutual Short-Term Bond Fund ..................................... 6
MassMutual Core Bond Fund ........................................... 8
MassMutual Diversified Bond Fund .................................... 10
MassMutual Balanced Fund ............................................ 12
MassMutual Core Equity Fund ......................................... 14
MassMutual Growth Equity Fund ....................................... 16
MassMutual Small Cap Value Equity Fund .............................. 18
MassMutual Mid Cap Growth Equity Fund ............................... 20
MassMutual Small Cap Growth Equity Fund ............................. 22
MassMutual International Equity Fund ................................ 24

Summary of Principal Risks ............................................... 26

About the Investment Advisers and Sub-Advisers
Massachusetts Mutual Life Insurance Company ......................... 30
David L. Babson and Company Incorporated ............................ 30
HarbourView Asset Management Corporation ............................ 31
Massachusetts Financial Services Company ............................ 31
Miller Anderson & Sherrerd, LLP ..................................... 31
J.P. Morgan Investment Management Inc. .............................. 32
Waddell & Reed Investment Management Company ........................ 32

About the Classes of Shares - Multiple Class Information
Class S Shares ...................................................... 33
Compensation to Intermediaries ...................................... 33

Investing in the Funds
Buying, Redeeming and Exchanging Shares ............................. 34
Determining Net Asset Value ......................................... 34
How to Invest ....................................................... 35
Taxation and Distributions .......................................... 35

Investment Performance ................................................... 36

Financial Highlights ..................................................... 38

Appendix - Additional Investment Policies and Risk Considerations ........ 42

-2-
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Summary Information

MassMutual Institutional Funds provide a broad range of investment choices
across the risk/return spectrum. The summary pages that follow describe each
Fund:

. Investment objectives.

. Principal Investment Strategies and Risks. A "Summary of Principal Risks" of
investing in the Funds begins on page 26.

. Investment return over the past ten years, or since inception if less than
ten years old.

. Average annual total returns for the last one, five and ten year periods
(or, shorter periods for newer Funds) and how the Fund did against a
comparable broad-based index.

. Fees and Expenses.

Past Performance is not an indication of future performance. There is no
assurance that a Fund's investment objective will be achieved, and you can lose
money by investing in the Funds.

Important Notes about performance information for the Funds.

Where indicated, performance information for a Fund includes the performance of
a predecessor separate investment account of MassMutual before those Funds were
created.

The Growth Equity Fund, Mid Cap Growth Equity Fund and Small Cap Growth Equity
Fund are new funds effective May 3, 1999. They do not have actual performance.
Instead, the performance of the Sub-Adviser is provided based on a composite of
portfolios managed by the Sub-Adviser with similar investment objectives as the
Fund. The Performance Charts for those Sub-Advisers reflect the Sub-Adviser's
composite performance, adjusted for class specific expenses of the particular
fund.

In all cases, investment returns assume the reinvestment of dividends and
capital gains distributions.

Important Note about Fees and Expenses.

As an investor, you pay certain fees and expenses in connection with your
investment. These fees and expenses will vary depending on the Fund in which you
invest and the class of shares that you purchase. The fee tables shown on the
following pages under "Expense Information" are meant to assist you in
understanding these fees and expenses. Each fee table shows two categories of
expenses, Shareholder Fees and Annual Fund Operating Expenses. Shareholder Fees
refer to fees paid directly from your investment, such as up front or contingent
sales charges. None of the Funds charges any Shareholder Fees for any class of
share. Annual Fund Operating Expenses refer to the costs of operating the Funds.
These costs are deducted from a Fund's assets, which means you pay them
indirectly.

-3-
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MassMutual Prime Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to maximize current income to the extent consistent with
liquidity and the preservation of capital by investing in a diversified
portfolio of money market instruments.

The Prime Fund is not a money market fund.

The Fund invests in debt instruments that have a remaining maturity not
exceeding 397 days and that have one of the two highest ratings from at least
one nationally recognized statistical rating organization or, if unrated, that
the Adviser judges to be of equivalent quality. Generally, the majority of the
Fund's holdings do not have the highest rating. The Fund's principal investments
include:

. commercial paper and other corporate obligations;

. securities issued or guaranteed by the U.S. Government or its agencies;

. certificates evidencing participation in bank loans; and

. certificates of deposit and bankers' acceptances.

Some of these investments are subject to legal restrictions on resale.

The Principal Risks of investing in the Fund are Market Risk, Credit Risk and
Management Risk.

These Risks are described beginning on page 26.

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Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 9.17%
1990 8.15%
1991 6.15%
1992 3.75%
1993 2.92%
1994 4.01%
1995 5.78%
1996 5.24%
1997 5.39%
1998 5.39%

During the periods shown above, the highest quarterly return was 2.36% for the
quarter ended June 30, 1989 and the lowest was .71% for the quarter ended
June 30, 1993.

- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------
(for the periods ended December 31, 1998)

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

One Five Ten
Year Years Years

Class S* 5.39% 5.16% 5.58%
91-day Treasury Bills+ 5.05% 5.11% 5.44%

* Performance for Class S shares of the Fund includes performance of a
predecessor separate investment account of MassMutual for periods prior to
October 3, 1994. The performance shown does not reflect fees that may be paid by
Investors for administrative services or group annuity contract charges. For a
more detailed discussion, please refer to "Investment Performance" in this
Prospectus.

+ 91-day Treasury Bills are unmanaged and do not incur expenses. Treasury Bills
are backed by the full faith and credit of the United States government and
offer a fixed rate of interest, while the Fund's shares are not guaranteed.

-4-
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- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .35%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .10%
Total Annual Fund Operating Expenses(1)(2) .45%

(1) The expenses in the above table are based on expenses for the fiscal year
ended December 31, 1998, but restated to give effect to a change in the
management fees and administrative fees effective on May 3, 1999.

(2) Employee benefit plans which invest in the Fund through MassMutual separate
investment accounts may pay additional charges under their group annuity
contract or services agreement. Investors who purchase shares directly from
the Fund may also be subject to charges imposed in their administrative
services or other agreement with MassMutual or MassMutual affiliate. None of
these charges are deducted from Fund assets.

Examples

These examples are intended to help you compare the cost of investing in the
Fund with the cost of investing in other mutual funds. The examples assume that
you invest $10,000 in Class S shares of the Fund for the time periods indicated,
that your investment earns a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:

1 Year 3 Years 5 Years 10 Years

Class S $46 $144 $252 $567

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-5-
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MassMutual Short-Term Bond Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve a high total rate of return primarily from current
income while minimizing fluctuations in capital values by investing primarily in
a diversified portfolio of short-term investment grade fixed income securities.

The Fund invests primarily in investment grade debt securities, including:

. commercial paper and other corporate obligations;

. securities issued or guaranteed by the U.S. Government or its agencies; and

. mortgage-backed and other asset-backed securities.

The Fund's portfolio "duration" is the average of the periods remaining for
payments of principal and interest on the Fund's debt securities, weighted by
the dollar amount of each payment. The Fund's portfolio duration is estimated to
be generally less than three years. The Adviser may increase the portfolio's
duration when longer-term investments offer higher yields. When short-term
investments offer more attractive yields than longer-term investments, but with
less risk, the portfolio's duration may be decreased.

The Principal Risks of investing in the Fund are Market Risk, Credit Risk,
Management Risk and Prepayment Risk.

These Risks are described beginning on page 26.

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Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 N/A
1990 8.89%
1991 13.60%
1992 6.72%
1993 7.83%
1994 -0.99%
1995 11.77%
1996 5.57%
1997 6.84%
1998 6.29%

During the periods shown above, the highest quarterly return was 4.66% for the
quarter ended December 31, 1991 and the lowest was -1.56% for the quarter ended
March 31, 1994.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

Since
One Five Inception
Year Years (5/89)

Class S* 6.29% 5.82% 7.42%
Lehman Brothers 1-3
Year Government
Bond Index+ 6.97% 5.96% 7.30%

+ The Lehman Brothers 1-3 Year Government Bond Index is an unmanaged index of
U.S. government bonds with 1-3 years remaining to the scheduled payment of
principal. The Index does not incur expenses and cannot be purchased directly by
Investors.

-6-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .40%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .14%
Total Annual Fund Operating Expenses(1)(2) .54%

1 Year 3 Years 5 Years 10 Years

Class S $55 $172 $299 $664

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-7-
<PAGE>

MassMutual Core Bond Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve a high total rate of return consistent with prudent
investment risk and the preservation of capital by investing primarily in a
diversified portfolio of investment grade fixed income securities.

The Fund invests primarily in investment grade debt securities, including:

. domestic and foreign corporate bonds;

. bonds issued or guaranteed by the U.S. Government or its agencies;

. mortgage-backed and other asset-backed securities; and

. money market securities, including commercial paper.

Some of these investments may be in securities that are not denominated in U.S.
dollars and others may be purchased subject to legal restrictions on resale,
although no more than 15% of the Fund's investments may be illiquid at the time
of purchase.

The Principal Risks of investing in the Fund are Market Risk, Credit Risk,
Management Risk, Prepayment Risk, Liquidity Risk, Foreign Investment Risk,
Currency Risk and Leveraging Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 12.86%
1990 8.30%
1991 17.58%
1992 7.04%
1993 11.34%
1994 -4.11%
1995 19.15%
1996 2.80%
1997 9.78%
1998 8.44%

During the periods shown above, the highest quarterly return was 6.91% for the
quarter ended June 30, 1989 and the lowest was -3.49% for the quarter ended
March 31, 1994.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

One Five Ten
Year Years Years

Class S* 8.44% 6.93% 9.12%
Lehman Brothers
Government/
Corporate Bond Index+ 9.47% 7.30% 9.34%

+ The Lehman Brothers Government/Corporate Bond Index is an unmanaged index of
major U.S. government and investment grade bonds with more than one year
remaining to the scheduled payment of principal. The Index does not incur
expenses and cannot be purchased directly by Investors.

-8-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .48%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .11%
Total Annual Fund Operating Expenses(1)(2) .59%

Expenses

1 Year 3 Years 5 Years 10 Years

Class S $60 $188 $326 $724

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-9-
<PAGE>

MassMutual Diversified Bond Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks a superior total rate of return by investing in fixed income
instruments.

This Fund seeks to achieve its investment objective by investing primarily in
the following types of fixed income instruments:

. Public bonds;

. Private placement bonds, including securities issued pursuant to Rule 144A;

. Mortgage-backed securities, including commercial mortgage-backed securities;

. Asset-backed securities;

. Residential whole loan mortgage pools;

. Commercial mortgage loans;

. U.S. Treasury futures and forward contracts;

. Fully hedged foreign securities;

. Interest rate and currency swaps;

. Commercial paper; and

. Options on fixed income investments, including swaptions and interest rate
caps and floors.

The average credit quality of the Fund will not be less than BBB-/Baa3. In
determining the credit quality of assets that are not rated by an independent
credit rating firm, the Adviser will utilize its own proprietary credit rating
system. The Fund will also have specified liquidity and diversification
requirements for particular types of investments.

The duration of the Fund is intended to be within 5% of the duration of the
Lehman Brothers Intermediate Aggregate Bond Index.

The Principal Risks of investing in the Fund are Market Risk, Credit Risk,
Management Risk, Prepayment Risk, Liquidity Risk, Derivative Risk, Foreign
Investment Risk, Currency Risk and Leveraging Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance
- --------------------------------------------------------------------------------

The Fund began operations May 3, 1999, and therefore has no performance history.
There will be risks of investing in the Fund because the returns would be
expected to vary from year to year.

- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------

Because this Fund is new, there is no table which shows how the Fund's returns
have deviated from the broad market.

-10-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .50%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .14%
Total Annual Fund Operating Expenses(1)(2) .64%

(1) Other Expenses and Total Annual Fund Operating Expenses are based on
estimated amounts for the first fiscal year of the Fund.

Examples

1 Year 3 Years

Class S $65 $204

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-11-
<PAGE>

MassMutual Balanced Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve a high total rate of return over an extended period
of time consistent with the preservation of capital values by investing in a
diversified portfolio of equity securities, fixed income securities and money
market instruments.

The Fund's portfolio consists of three segments:

. The Prime Segment, which seeks to meet liquidity needs by investing in
diverse money market instruments.

. The Core Bond Segment, which invests primarily in investment grade debt
securities.

. The Core Equity Segment, which invests primarily in stocks and convertible
securities of large capitalized companies which have below average price to
earnings ratios and higher dividend yields relative to their industry group.

The Fund adjusts the mix of investments among these three market segments based
on MassMutual's judgment about each segment's potential for returns in relation
to the corresponding risk. These adjustments normally will be made in a gradual
manner over a period of time. Under normal circumstances at least 25% of the
Fund's total assets will be invested in debt securities. In addition, under
normal circumstances, no investment will be made that would result in more than
35% of the Fund's net assets being invested in the Prime Segment, more than 35%
in the Core Bond Segment or more than 65% in the Core Equity Segment. In unusual
circumstances, the Fund may invest up to 70% of its total assets in the Equity
Segment or up to 50% of its total assets in the Core Bond Segment.

These Risks are described beginning on page 26.

-12-
<PAGE>

- --------------------------------------------------------------------------------
Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 18.83%
1990 3.12%
1991 22.47%
1992 8.90%
1993 9.09%
1994 2.44%
1995 21.31%
1996 12.83%
1997 18.72%
1998 13.50%

During the periods shown above, the highest quarterly return was 9.37% for the
quarter ended December 31, 1998 and the lowest was -6.91% for the quarter ended
September 30, 1990.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

One Five Ten
Year Years Years

Class S* 13.50% 13.57% 12.91%
S&P 500(R) Index+ 28.58% 24.07% 19.20%
Lipper Balanced Fund
Index+ 15.37% 13.71% 13.19%
Lehman Brothers
Government/
Corporate Bond Index+ 9.47% 7.30% 9.34%

+ The S&P 500(R) Index is a widely recognized, unmanaged index of common stock
of the 500 largest capitalized U.S. companies. The Lipper Balanced Fund Index is
an unmanaged, equally weighted index of the 30 largest mutual Funds within each
of the investment objective categories for the Balanced Fund. The Lehman
Brothers Government/Corporate Index is an unmanaged index of major U.S.
government and investment grade corporate bonds with more than one year
remaining until the scheduled payment of principal. These Indices do not incur
expenses and cannot be purchased directly by Investors.

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S

Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .48%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .10%
Total Annual Fund Operating Expenses(1)(2) .58%

Examples

1 Year 3 Years 5 Years 10 Years

Class S $59 $185 $321 $712

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-13-
<PAGE>

MassMutual Core Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve long-term growth of capital and income by investing
primarily in a diversified portfolio of equity securities of larger,
well-established companies.

The Fund invests primarily in dividend paying stocks, securities convertible
into stocks, and other securities, such as warrants and stock rights whose value
is based on stock prices. The Fund's portfolio manager follows a "value"
approach that favors the stocks of companies having below average share price to
company earnings ("P/E") ratios and higher dividend yields relative to their
industry groups. The Fund generally invests in the publicly traded stock of
companies with market capitalizations greater than $2 billion and a history of
operations of five years or more.

The Principal Risks of investing in the Fund are Market Risk, Management Risk
and Leveraging Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 23.02%
1990 -0.99%
1991 25.50%
1992 10.55%
1993 9.55%
1994 4.07%
1995 31.54%
1996 20.24%
1997 29.01%
1998 16.75%

During the periods shown above, the highest quarterly return was 16.49% for the
quarter ended December 31, 1998 and the lowest was -11.97% for the quarter ended
September 30, 1990.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

One Five Ten
Year Years Years

Class S* 16.75% 19.91% 16.46%
S&P 500(R)Index+ 28.58% 24.07% 19.20%

+ The S&P 500(R) Index is a widely recognized, unmanaged index of common stocks
of the 500 largest capitalized U.S. companies. The Index does not incur expenses
and cannot be purchased directly by Investors.

-14-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .50%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .08%
Total Annual Fund Operating Expenses(1)(2) .58%

Examples

1 Year 3 Years 5 Years 10 Years
Class S $59 $185 $321 $712

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-15-
<PAGE>

MassMutual Growth Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks long-term growth of capital and future income.

The Fund seeks to achieve its objective by investing its assets, except for
working cash balances, primarily in the common stocks and securities convertible
into common stocks of companies which the investment Sub-Adviser, Massachusetts
Financial Services Company ("MFS"), believes offer better than average prospects
for long-term growth.

The Sub-Adviser uses a bottom-up, as opposed to a top-down, investment style,
which means that securities are selected based upon fundamental analysis
performed by the portfolio manager and the Sub-Adviser's large group of equity
research analysts.

In managing the Fund, MFS seeks to purchase securities of companies which it
considers well-run and poised for growth, particularly companies which
demonstrate:

. a strong franchise, strong cash flows and a recurring revenue stream;

. a strong industry position, where there is potential for high profit margins
and/or substantial barriers to new entry in the industry;

. a strong management with a clearly defined strategy; and

. new products or services.

The Fund may invest up to 30% of its assets in foreign securities, including
companies in emerging markets, and may have exposure to foreign currencies
through its investment in these securities, its direct holdings of foreign
currencies, or through its use of foreign currency exchange contracts for the
purchase or sale of a fixed quantity of foreign currency at a future date.

The Principal Risks of investing in the Fund are Market Risk, Management Risk,
Liquidity Risk, Derivative Risk, Foreign Investment Risk, Currency Risk, Growth
Company Risk and Emerging Markets Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance
- --------------------------------------------------------------------------------

The Fund began operations May 3, 1999, and therefore has no performance history.
There will be risks of investing in the Fund because the returns would be
expected to vary from year to year.

- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------

Because this Fund is new, there is no table which shows how the Fund's returns
have deviated from the broad market.

-16-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .68%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .10%
Total Annual Fund Operating Expenses(1)(2) .78%

(1) Other Expenses and Total Annual Fund Operating Expenses are based on
estimated amounts for the first fiscal year of the Fund.

Examples

1 Year 3 Years

Class S $80 $249

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

- --------------------------------------------------------------------------------
MFS Prior Performance - Similar Accounts *
- --------------------------------------------------------------------------------

The bar chart is a composite of all accounts managed by MFS with substantially
similar investment objectives, adjusted for the fees and expenses of the Fund's
Class S shares. The bar chart illustrates the variability of returns achieved by
MFS for those accounts.

[BAR CHART APPEARS HERE]

1989 35.66%
1990 -5.04%
1991 47.83%
1992 6.44%
1993 14.50%
1994 -6.83%
1995 28.47%
1996 22.98%
1997 48.44%
1998 40.84%

During the periods shown above, the highest quarterly return was 25.97% for the
quarter ended December 31, 1998 and the lowest was -25.19% for the quarter ended
September 30, 1990.

- --------------------------------------------------------------------------------
MFS Average Annual Total Returns for
Similar Accounts*
- --------------------------------------------------------------------------------
(for the periods ended December 31, 1998)

The table is based on the composite of all accounts managed by MFS with
substantially similar investment objectives, adjusted for the Fund's Class S
share fees and expenses. The table compares MFS' investment results for those
accounts to that of an index measuring the broad market over different time
periods.

One Five Ten
Year Years Years

MFS Accounts* 40.84% 25.21% 21.72%
S&P 500 Index+ 28.58% 24.07% 19.20%

* The MFS composite is based on the performance of all accounts managed by MFS
with substantially similar investment objectives and without significant
client-imposed restrictions. The MFS composite includes performance of the
Massachusetts Investors Growth Stock Fund, which is registered under the 1940
Act. The performance shown does not reflect fees that may be paid by Investors
for administrative services or group annuity contract charges. The quoted
performance does not represent the historical performance of the MassMutual
Growth Equity Fund and should not be interpreted as being indicative of the
future performance of the Fund. For a more detailed discussion, please refer to
"Investment Performance" in this Prospectus.

+ The S&P 500(R) Index is a widely recognized, unmanaged index representative of
the largest capitalized U.S. companies. The Index does not incur expenses and
cannot be purchased directly by Investors.

-17-
<PAGE>

MassMutual Small Cap Value Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve long-term growth of capital and income by investing
primarily in a diversified portfolio of equity securities of smaller companies.

- --------------------------------------------------------------------------------
Principal Investment Strategies and Risks
- --------------------------------------------------------------------------------
The Fund invests primarily in stocks, securities convertible into stocks and
other securities, such as warrants and stock rights, whose value is based on
stock prices. The Fund generally invests in publicly traded stocks of companies
with a market capitalization, at the time of purchase, of $750 million or less.

The Principal Risks of investing in the Fund are Market Risk, Management Risk,
Liquidity Risk, Derivative Risk, Leveraging Risk and Smaller Company Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 18.33%
1990 -5.42%
1991 29.34%
1992 17.10%
1993 14.08%
1994 -4.43%
1995 20.01%
1996 22.82%
1997 36.36%
1998 -9.02%

During the periods shown above, the highest quarterly return was 18.72% for the
quarter ended June 30, 1997 and the lowest was -18.98% for the quarter ended
September 30, 1998.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

One Five Ten
Year Years Years

Class S* -9.02% 11.81% 12.95%
Russell 2000 Index+ -2.55% 11.88% 12.93%

+ The Russell 2000 Index is a widely recognized, unmanaged index representative
of small-capitalized U.S. companies. The Index does not incur expenses and
cannot be purchased directly by Investors.

-18-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .58%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .10%
Total Annual Fund Operating Expenses(1)(2) .68%

Examples

1 Year 3 Years 5 Years 10 Years
Class S $69 $217 $376 $835

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-19-
<PAGE>

MassMutual Mid Cap Growth Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks long-term capital growth.

This Fund seeks to achieve its investment objective by investing primarily in
common stocks and other equity securities having capitalizations in the range of
companies included in the S&P Mid Cap 400 Index. The Sub-Adviser for the Fund,
Miller Anderson & Sherrerd, LLP ("MAS"), focuses particularly on the
expectations of stock analysts and invests the portfolio in stocks of companies
that it believes will report earnings growth exceeding analysts' expectations.
The Fund may invest to a limited extent in foreign equity securities. MAS may
use derivatives in managing the portfolio.

MAS uses a quantitative screen to sort stocks based on revisions to analysts'
earnings predictions. MAS then conducts extensive fundamental research into
those companies with the most attractive earnings revisions. Finally, MAS
evaluates the valuation of the stocks to eliminate from consideration the most
overvalued stocks. MAS also follows a strict sell discipline. The Fund will sell
stocks when their earnings revision scores fall to unacceptable levels,
fundamental research reveals unfavorable trends, or their valuations exceed
levels that are reasonable in relation to the stock's growth prospects.

The Principal Risks of investing in the Fund are Market Risk, Management Risk,
Liquidity Risk, Derivative Risk, Foreign Investment Risk, Smaller Company Risk,
Growth Company Risk, Currency Risk and Emerging Markets Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance
- --------------------------------------------------------------------------------

The Fund began operations May 3, 1999, and therefore has no performance history.
However, there will be risks of investing in the Fund because the returns would
be expected to vary from year to year.

- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------

Because this Fund is new, there is no table which shows how the Fund's returns
have deviated from the broad market.

-20-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .70%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .10%
Total Annual Fund Operating Expenses(1)(2) .80%

(1) Other Expenses and Total Annual Fund Operating Expenses are based on
estimated amounts for the first fiscal year of the Fund.

Examples

1 Year 3 Years
Class S $82 $255

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

- --------------------------------------------------------------------------------
MAS Prior Performance - Similar Accounts*
- --------------------------------------------------------------------------------

The bar chart is a composite of all accounts managed by MAS with substantially
similar investment objectives, adjusted for the fees and expenses of the Fund's
Class S shares. The bar chart illustrates the variability of returns achieved by
MAS for those accounts.

[BAR CHART APPEARS HERE]

1989 N/A
1990 N/A
1991 59.50%
1992 2.71%
1993 18.12%
1994 -5.61%
1995 36.24%
1996 18.70%
1997 33.07%
1998 37.38%

During the periods shown above, the highest quarterly return was 35.87% for the
quarter ended December 31, 1998 and the lowest was -19.80% for the quarter ended
September 30, 1990.

- --------------------------------------------------------------------------------
MAS Average Annual Total Returns for
Similar Accounts*
- --------------------------------------------------------------------------------
(for the periods ended December 31, 1998)

The table is based on the composite of all accounts managed by MAS with
substantially similar investment objectives, adjusted for the Fund's Class S
share fees and expenses. The table compares MAS' investment results for those
accounts to that of an index measuring the broad market over different time
periods.
Since
One Five Inception
Year Years (4/90)

MAS Accounts* 37.38% 22.78% 22.53%
Russell 2500 Index+ .38% 14.13% 14.88%

* The MAS composite is based on the performance of all accounts managed by MAS
with substantially similar investment objectives and without significant
client-imposed restrictions. The MAS composite includes performance of the MAS
Funds Mid Cap Growth Portfolio, which is registered under the 1940 Act. The
performance shown does not reflect fees that may be paid by Investors for
administrative services or group annuity contract charges. The quoted
performance does not represent the historical performance of the MassMutual Mid
Cap Growth Equity Fund and should not be interpreted as being indicative of the
future performance of the Fund. For a more detailed discussion, please refer to
"Investment Performance" in this Prospectus.

+ The Russell 2500 Index is an unmanaged index representative of mid-capitalized
U.S. companies. The Index does not incur expenses and cannot be purchased
directly by Investors.

-21-
<PAGE>

MassMutual Small Cap Growth Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks long-term capital appreciation.

The Fund seeks to achieve its objective by investing primarily in common stocks
and equity securities of smaller companies which the managers believe offer
potential for long-term growth. The Fund may maintain cash reserves for
liquidity purposes. The Fund will generally buy companies whose market
capitalization is greater than $100 million, but less than $1.5 billion at the
time of purchase. The Fund is not required to invest in dividend paying stocks,
since current income is not an objective of the Fund. Two Sub-Advisers manage
the Fund, each being responsible for a portion of the portfolio.

The investment process of J.P. Morgan Investment Management Inc. ("J.P. Morgan")
emphasizes: in-depth proprietary research and stock valuation and selection;
insight into companies' real growth potential by forecasting prospects over
periods often up to 5 years; quantifying research results with rankings
according to relative value, and buying undervalued or fairly valued companies
poised for long-term growth; focusing on each company's business strategy and
competitive environment; and high growth sectors such as technology, health care
and consumer services.

Waddell & Reed Investment Management Company ("Waddell & Reed") uses a bottom-up
process, generally emphasizing long-term growth potential and superior financial
characteristics, such as: annual revenue and earnings growth rate of 25%+, pre-
tax margins of 20%+, and debt-free capital structure. Generally, companies also
are considered which are strong niche players with a defensible market position,
have active involvement of the founder-entrepreneur, and demonstrate commitment
to their employees, customers, suppliers and shareholders.

Waddell & Reed buys companies with an anticipated three year holding period, and
therefore expects this portion of the Fund's portfolio to typically have lower
than 50% annual turnover.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance
- --------------------------------------------------------------------------------

The Fund began operations May 3, 1999, and therefore has no performance history.
However, there will be risks of investing in the Fund because the returns would
be expected to vary from year to year.

- --------------------------------------------------------------------------------
Average Annual Total Returns
- --------------------------------------------------------------------------------

Because this Fund is new, there is no table which shows how the Fund's returns
have deviated from the broad market.

-22-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .82%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .13%
Total Annual Fund Operating Expenses(1)(2) .95%

(1) Other Expenses and Total Annual Fund Operating Expenses are based on
estimated amounts for the first fiscal year of the Fund.

Examples

1 Year 3 Years
Class S $97 $303

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

- --------------------------------------------------------------------------------
J.P. Morgan and Waddell & Reed Prior
Performance - Similar Accounts*
- --------------------------------------------------------------------------------

The bar charts show the respective composites of all accounts managed by each
Sub-Adviser with substantially similar investment objectives, adjusted for the
fees and expenses of the Fund's Class S shares. The bar chart illustrates the
variability of returns achieved by each Sub-Adviser and how they have differed.

[BAR CHART APPEARS HERE]

Date J.P. Morgan Waddel & Reed
- ---- ----------- -------------
1989 N/A N/A
1990 N/A 2.39%
1991 N/A 89.51%
1992 N/A 4.80%
1993 N/A 11.40%
1994 N/A 12.25%
1995 42.29% 34.38%
1996 24.39% 6.87%
1997 29.24% 37.11%
1998 1.19% 55.13%

Highest Quarter Lowest Quarter
J.P. Morgan 24.02%, 4Q 1998 -21.94%, 3Q 1998
Waddell & Reed 36.68%, 4Q 1998 -18.05%, 3Q 1990

- --------------------------------------------------------------------------------
J.P. Morgan and Waddell & Reed Average
Annual Total Returns for Similar Accounts*
- --------------------------------------------------------------------------------
(for the periods ended December 31, 1998)

The tables are based on the respective composites of all accounts managed by
each Sub-Adviser with substantially similar investment objectives, adjusted for
the Fund's Class S share fees and expenses. Each table compares the
Sub-Adviser's investment results for its those accounts to an index measuring
the broad market over different time periods.

Since
One Year Inception (9/94)
J. P. Morgan Accounts* 1.19% 21.80%
Russell 2000 Index+ -2.55% 13.71%

Since
One Five Inception
Year Years (4/89)
Waddell & Reed
Accounts* 55.13% 27.95% 24.21%
Russell 2000 Index+ -2.55% 11.88% 12.41%

* Each Sub-Adviser's composite is based on the performance of all accounts
managed by that Sub-Adviser with substantially similar investment objectives and
without significant client-imposed restrictions. The performance shown does not
reflect fees that may be paid by Investors for administrative services or group
annuity contract charges. The quoted performance does not represent the
historical performance of the MassMutual Small Cap Growth Equity Fund and should
not be interpreted as being indicative of the future performance of the Fund.
For a more detailed discussion, please refer to "Investment Performance" in this
Prospectus.

+ The S&P 500(R) Index is a widely recognized, unmanaged index representative of
the largest capitalized, U.S. companies. The Index does not incur expenses and
cannot be purchased directly by Investors.

-23-
<PAGE>

MassMutual International Equity Fund

- --------------------------------------------------------------------------------
Investment Objective
- --------------------------------------------------------------------------------

This Fund seeks to achieve a high total rate of return over the long term by
investing in a diversified portfolio of foreign and domestic equity securities.

The Fund seeks to achieve its objective by having at least 75% of its total
assets invested in stocks traded primarily in foreign markets, including markets
in Europe, Latin America and Asia. The Fund's Sub-Adviser, HarbourView Asset
Management Corporation ("HarbourView") focuses on well-positioned, well-managed
businesses that have strong revenue growth, sustainable profit margins, capital
efficiency and/or business integrity. HarbourView also considers the
macroeconomic outlook for various regional economies. The Fund tends to favor
companies involved in the following businesses:

. Capital Market Development;

. Telecommunications/Media;

. Efficiency Enhancing Technologies and Services;

. Healthcare and Biotechnology;

. Infrastructure Spending;

. Emerging Consumer Markets;

. Corporate Restructuring; and

. Natural Resources.

The Principal Risks of investing in the Fund are Market Risk, Management Risk,
Liquidity Risk, Derivative Risk, Foreign Investment Risk, Currency Risk,
Leveraging Risk and Emerging Markets Risk.

These Risks are described beginning on page 26.

- --------------------------------------------------------------------------------
Annual Performance*
- --------------------------------------------------------------------------------

The bar chart shows the risks of investing in the Fund because the returns vary
from year to year.

Class S Shares

[BAR CHART APPEARS HERE]

1989 N/A
1990 N/A
1991 N/A
1992 -2.37%
1993 59.84%
1994 -4.96%
1995 5.13%
1996 18.51%
1997 15.79%
1998 5.05%

During the periods shown above, the highest quarterly return was 21.33% for the
quarter ended December 31, 1993 and the lowest was -21.54% for the quarter ended
September 30, 1998.

The table shows the risks of investing in the Fund because the Fund's returns
may deviate from the broad market over different time periods.

Since
One Five Inception
Year Years (8/91)

Class S* 5.05% 7.57% 12.29%
MSCI EAFE+ 19.99% 9.19% 9.05%

+ MSCI EAFE is a widely recognized, unmanaged index representative of foreign
securities in the major non-U.S. markets of Europe, Australia and the Far East.
The Index does not incur expenses and cannot be purchased directly by Investors.

-24-
<PAGE>

- --------------------------------------------------------------------------------
Expense Information
- --------------------------------------------------------------------------------

Class S
Shareholder Fees
(fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses
that are deducted from Fund assets) (% of
average net assets)
Management Fees .85%
Distribution and Service (Rule 12b-1) Fees None
Other Expenses .23%
Total Annual Fund Operating Expenses(1)(2) 1.08%

(1) The expenses in the above table are based on expenses for the fiscal year
ended December 31, 1998, but restated to give effect to a change in
administrative fees effective on May 3, 1999.

Examples

1 Year 3 Years 5 Years 10 Years
Class S $110 $344 $597 $1326

Since the Fund does not impose any Shareholder Fees, the figures shown would be
the same whether you sold your shares at the end of a period or kept them.

-25-
<PAGE>

Summary of Principal Risks

The value of your investment in a Fund changes with the values of the
investments in a Fund's portfolio. Many factors can affect those values. Factors
that may affect a particular Fund's portfolio as a whole are called "principal
risks". They are summarized in this section. The chart at the end of this
section displays similar information. All Funds could be subject to additional
principal risks because the types of investments made by each Fund can change
over time. Although the Funds strive to reach their stated goals, they cannot
offer guaranteed results. You have the potential to make money in these Funds,
but you can also lose money.

. Market Risk - Prime/Bond Funds

All the Funds are subject to market risk, which is the general risk of
unfavorable market-induced changes in the value of a security. The Prime
Fund, the Short-Term Bond Fund, the Core Bond Fund, the Balanced Fund's
Core Bond Segment and the Diversified Bond Fund are subject to market risk
because they invest some or all of their assets in debt securities. Debt
securities are obligations of an issuer to pay principal and/or interest at
a specified interest rate over a predetermined period. If interest rates
rise close to or higher than the specified rate, those securities are
likely to be worth less and the value of the Funds will likely fall. If
interest rates fall, most securities held by Funds paying higher rates of
interest will likely be worth more, and the Fund's value will likely
increase.

This kind of market risk, also called interest rate risk, is generally
greater for debt securities with longer maturities and portfolios with
longer Durations. Even the highest quality debt securities are subject to
interest rate risk and market risk is generally greater for lower-rated
securities or comparable unrated securities.

. Market Risk - Equity Funds

The Core Equity Fund, the Small Cap Value Equity Fund, the International
Equity Fund, the Core Equity Segment of the Balanced Fund, the Growth
Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth Equity
Fund are subject to market risk. Market risk arises since stock prices can
fall for any number of factors, including general economic and market
conditions, prospects of the securities issuer, changing interest rates,
and real or perceived economic and competitive industry conditions.

These Funds maintain substantial exposure to equities and do not attempt to
time the market. Because of this exposure, the possibility that stock
market prices in general will decline over short or even extended periods
subjects these Funds to unpredictable declines in the value of their
shares, as well as periods of poor performance. Market risk also includes
specific risks affecting the companies whose shares are purchased by the
Fund, such as management performance, financial leverage, industry problems
and reduced demand for the issuer's goods or services.

. Credit Risk. All the Funds are subject to credit risk. This is
the risk that the issuer or the guarantor of a debt security, or
the counterparty to a derivatives contract or securities loan,
will be unable or unwilling to make timely principal and/or
interest payments, or to otherwise honor its obligations. There
are varying degrees of credit risk, which are often reflected in
credit ratings. Credit risk is particularly significant for the
Prime Fund, the Core Bond Fund, the Diversified Bond Fund and
the Prime Segment and the Core Bond Segment of the Balanced Fund
to the extent they invest in below investment grade

Terms appearing in bold type are discussed in greater detail under "Appendix -
Additional Investment Policies and Risk Considerations". Those sections also
include more information about the Funds, their investments and the related
risks.

-26-
<PAGE>

securities. These debt securities and similar unrated securities, which are
commonly known as "junk bonds," either have speculative elements or are
predominantly speculative investments. The Core Bond Fund, the Core Bond
Segment of the Balanced Fund and the Diversified Bond Fund invest in
foreign debt securities and, accordingly, are also subject to increased
credit risk because of the difficulties of requiring foreign entities,
including issuers of sovereign debt, to honor their contractual
commitments, and because a number of foreign governments and other issuers
are already in default.

. Management Risk. Each Fund is subject to management risk
because it is an actively managed investment portfolio.
Management risk is the chance that poor security selection will
cause the Fund to underperform other Funds with similar
investment objectives. The Funds' investment advisers and
Sub-Advisers manage the Funds according to the traditional
methods of active investment management, which involves the
buying and selling of securities based upon economic, financial
and market analysis and investment judgment. The Funds'
investment advisers and Sub-Advisers apply their investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that they will produce
the desired result.

. Prepayment Risk. Prepayment risk is the risk that principal
will be repaid at a different rate than anticipated, causing the
return on mortgage-backed securities to be less than expected
when purchased. The interest rate risk described above may be
compounded for the Short-Term Bond Fund, the Core Bond Fund, the
Core Bond Segment of the Balanced Fund and the Diversified Bond
Fund to the extent that these Funds invest to a material extent
in mortgage-related or other asset-backed securities that may be
prepaid. These securities have variable maturities that tend to
lengthen when interest rates are rising, which is the least
desirable time. These Funds are also subject to reinvestment
risk, which is the chance that cash flows from securities will
be reinvested at lower rates if interest rates fall.

. Liquidity Risk. Liquidity risk exists when particular
investments are difficult to sell. A Fund may not be able to
sell these illiquid securities at the best prices. Investments
in derivatives, foreign investments and securities having small
market capitalization, substantial market and/or credit risk
tend to involve greater liquidity risk. Accordingly, the Core
Bond Fund, the Mid Cap Growth Equity Fund, the Diversified Bond
Fund, the Growth Equity Fund, the Small Cap Value Equity Fund,
the Small Cap Growth Equity Fund, the International Equity Fund
and the Core Bond Segment of the Balanced Fund may be subject to
liquidity risk.

. Derivatives Risk. All Funds may use derivatives, which are
financial contracts whose value depends on, or is derived from,
the value of an underlying asset, interest rate or index. The
Funds will sometimes use derivatives as part of a strategy
designed to reduce other risks and sometimes will use
derivatives for leverage, which increases opportunities for gain
but also involves greater risk. In addition to other risks such
as the credit risk of the counterparty, derivatives involve the
risk of mispricing or improper valuation and the risk that
changes in the value of the derivative may not correlate
perfectly with relevant assets, rates and indices. In addition,
a Fund's use of derivatives may affect the timing and amount of
taxes payable by shareholders.

. Foreign Investment Risk. Funds investing in foreign securities
may experience more rapid and extreme changes in value than
Funds which invest solely in U.S. companies. This is because
the securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. In addition, foreign companies are
usually not subject to the same degree of regulation as U.S.
companies. Reporting, accounting and auditing standards of
foreign countries differ, in some cases

-27-
<PAGE>

significantly, from U.S. standards. Also, nationalization, expropriation or
confiscatory taxation, currency blockage, political changes or diplomatic
developments could adversely affect a Fund's non-U.S. investments. In the
event of nationalization, expropriation or other confiscation, a Fund could
lose its entire investment. Economic downturns in certain regions, such as
Southeast Asia, can also adversely affect other countries whose economies
appear to be unrelated. The Core Bond Fund, the International Equity Fund,
the Diversified Bond Fund, the Core Bond Segment of the Balanced Fund, the
Growth Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth
Equity Fund are subject to foreign investment risk.

These Funds may also invest in foreign securities known as American
Depositary Receipts ("ADRs"), Global Depositary Receipts ("GDRs") and
European Depositary Receipts ("EDRs"). ADRs, GDRs and EDRs represent
securities or a pool of securities of an underlying foreign or, in the case
of GDRs and EDRs, U.S. or non-U.S. issuer. They are subject to many of the
same risks as foreign securities. ADRs, GDRs and EDRs are more completely
described in the Statement of Additional Information.

. Emerging Markets Risk. The Growth Equity Fund, the Mid Cap Growth Equity
Fund, the Small Cap Growth Equity Fund and the International Equity Fund
may invest in emerging markets, subject to the applicable restrictions on
foreign investments, when the Sub-Adviser deems those investments are
consistent with the Fund's investment objectives and policies. Emerging
markets are generally considered to be the countries having "emerging
market economies" based on factors such as the country's foreign currency
debt rating, its political and economic stability, the development of its
financial and capital markets and the level of its economy. Investing in
foreign securities in emerging markets involves special risks, including
less liquidity and more price volatility than securities of comparable
domestic issuers or in established foreign markets. Emerging markets also
may be concentrated towards particular industries. There may also be
different clearing and settlement procedures, or an inability to handle
large volumes of transactions. These could result in settlement delays and
temporary periods when a portion of a Fund's assets are not invested, or a
loss in value due to illiquidity.

. Currency Risk. The Core Bond Fund, the International Equity Fund, the
Diversified Bond Fund, the Core Bond Segment of the Balanced Fund, the
Growth Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth
Equity Fund are subject to currency risk to the extent that they invest in
securities of foreign companies that are traded in, and receive revenues
in, foreign currencies. Currency risk is caused by uncertainty in foreign
currency exchange rates. Fluctuations in the value of the U.S. dollar
relative to foreign currencies may enhance or diminish returns that a U.S.
investor would receive on foreign investments. The Funds may, but will not
necessarily, engage in foreign currency transactions in order to protect
against fluctuations in the value of holdings denominated in other
currencies. Those currencies can decline in value relative to the U.S.
Dollar, or, in the case of hedging positions, the U.S. Dollar can decline
in value relative to the currency hedged. A Fund's investment in foreign
currencies may increase the amount of ordinary income recognized by the
Fund.

. Smaller Company Risk. Market risk and liquidity risk are particularly
pronounced for stocks of smaller companies. These companies may have
limited product lines, markets or financial resources or they may depend on
a few key employees. The Small Cap Value Equity Fund, Mid Cap Growth Equity
Fund and Small Cap Growth Equity Fund generally have the greatest exposure
to this risk.

. Growth Company Risk. Market risk is also particularly pronounced for
"growth" companies. The prices of growth company securities may fall to a
greater extent than

-28-
<PAGE>
the overall equity markets (represented by the S&P 500 Index) due to
changing economic, political or market factors. Growth company securities
tend to be more volatile in terms of price swings and trading volume.

. Leveraging Risk. When a Fund borrows money or otherwise leverages its
portfolio, the value of an investment in that Fund will be more volatile
and all other risks will tend to be compounded. All of the Funds may take
on leveraging risk by investing collateral from securities loans, by using
derivatives and by borrowing money to repurchase shares or to meet
redemption requests.

Principal Risks by Fund

The following chart summarizes the Principal Risks of each Fund. A particular
Fund may, however, still have risks even if not marked.

<TABLE>
Management Prepayment Liquidity Derivative
Fund Market Risk Credit Risk Risk Risk Risk Risk
<S> <C> <C> <C> <C> <C> <C>
Prime Fund X X X X
Short-Term Bond Fund X X X X X
Core Bond Fund X X X X X X
Diversified Bond Fund X X X X X X
Balanced Fund X X X X X X
Core Equity Fund X X X X
Growth Equity Fund X X X X X
Small Cap Value Equity Fund X X X X X
Mid Cap Growth Equity Fund X X X X X
Small Cap Growth Equity Fund X X X X X
International Equity Fund X X X X X
</TABLE>

<TABLE>

Foreign Growth Emerging
Investment Leveraging Smaller Company Markets
Fund Risk Currency Risk Risk Company Risk Risk Risk

<S> <C> <C> <C> <C> <C> <C>
Prime Fund X
Short-Term Bond Fund X
Core Bond Fund X X X
Diversified Bond Fund X X X
Balanced Fund X X X
Core Equity Fund X
Growth Equity Fund X X X X X
Small Cap Value Equity Fund X X
Mid Cap Growth Equity Fund X X X X X X
Small Cap Growth Equity Fund X X X X X X
International Equity Fund X X X X
</TABLE>

-29-
<PAGE>

About the Investment Advisers and Sub-Advisers

MassMutual is the Funds' investment adviser and is responsible for providing all
necessary investment management and administrative services. Founded in 1851,
MassMutual is a mutual life insurance company that provides a broad range of
insurance, money management, retirement and asset accumulation products and
services for individuals and businesses. MassMutual, together with its
subsidiaries, has assets of $67 billion and assets under management in excess of
$176 billion. MassMutual contracts with its subsidiaries, David L. Babson and
Company, Incorporated and HarbourView Asset Management Corporation to help
manage certain Funds. In 1998, MassMutual was paid an investment management fee
based on a percentage of its average daily net assets as follows: .45% for the
Prime Fund, the Short-Term Bond Fund, the Core Bond Fund, the Balanced Fund and
the Core Equity Fund; .55% for the Small Cap Value Equity Fund; and .85% for the
International Equity Fund. The current investment management fee paid by each
Fund to MassMutual is identified under "Expense Information" for each Fund. The
Funds also pay MassMutual an administrative and shareholder services fee at an
annual rate based on a percentage of their average daily net assets for the
applicable class of shares. In 1998, the fee ranges for each share class of
those funds were .0774% to .0777% for Class S shares; .0823% to .2875% for Class
Y shares; and .4752% to .4875% for Class A shares. At the date of this
Prospectus, the fee ranges for each share class of all Funds is .0675% to .1232%
for Class S shares; .1432% to .2575% for Class Y shares; .2932% to .4075% for
Class L shares; and .2932% to .4075% for Class A shares. There were no Class L
shares offered for sale in 1998. The Diversified Bond Fund, the Growth Equity
Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth Equity Fund were
not in operation in 1998.

Mary Wilson Kibbe
------------------------------------------------------
Principally responsible for the day-to-day management of the Prime
Fund, the Core Bond Fund, the Prime and Core Bond Segments of the
Balanced Fund and the Diversified Bond Fund. She has managed these
Funds since their inception. She has been associated with MassMutual
since 1982 and is responsible for overseeing all public fixed income
trading for MassMutual and its insurance company subsidiaries.

Ronald Desautels
-------------------------------------------------------
Principally responsible for the day-to-day management of the Short-Term
Bond Fund. He has managed the Fund since its inception. He has 22 years
of investment experience and has been associated with MassMutual since
1989.

David L. Babson and Company Incorporated manages the investments of the Core
Equity Fund, the Small Cap Value Equity Fund and the Core Equity Segment of the
Balanced Fund. David L. Babson has provided investment advice to individual and
institutional investors for more than 50 years and manages more than $21
billion.

Walter T. McCormick
----------------------------------------------------
Principally responsible for the day-to-day management of the Core
Equity Fund and the Core Equity Segment of the Balanced Fund. Mr.
McCormick, who has 14 years of investment experience, joined David L.
Babson in June, 1998. He began managing these Funds in July 1998. Prior
to that, he managed equity portfolios for Keystone Investments, Inc.

George M. Ulrich
-------------------------------------------------------
Principally responsible for the day-to-day management of the Small Cap
Value Equity Fund. He has managed the Fund since its inception and has
32 years of investment experience. He joined David L. Babson in 1996
and has been associated with the MassMutual organization as a portfolio
manager since 1983.

-30-
<PAGE>

HarbourView Asset Management Corporation manages the investments of the
International Equity Fund. HarbourView Asset Management is a subsidiary of
OppenheimerFunds, Inc., which together with its subsidiaries, manages mutual
Funds with assets of more than $99 billion.

George Evans
-----------------------------------------------------------
Primarily responsible for the day-to-day management of the
International Equity Fund. Mr. Evans, has managed the Fund since its
inception. He has been an officer and portfolio manager for
OppenheimerFunds for the past five years, and prior to that was an
international equities portfolio manager/analyst for Brown Brothers,
Harriman & Co.

William Wilby
----------------------------------------------------------
A HarbourView investment professional, Mr. Wilby assists George Evans
in managing the International Equity Fund. He is a senior vice
president of Oppenheimer Funds, Inc. and has been a portfolio manager
for OppenheimerFunds for more than five years.

Massachusetts Financial Services Company manages the investments of the Growth
Equity Fund. MFS has approximately $100 billion in assets under management. MFS
is an indirect, wholly-owned subsidiary of Sun Life Assurance Company of Canada.

Stephen Pesek
----------------------------------------------------------
Primarily responsible for the day-to-day management of the portfolio of
the Growth Equity Fund. Mr. Pesek has been a portfolio manager with MFS
since 1994. Mr. Pesek is a vice president of MFS and manages other
portfolios with similar investment objectives to the Fund.

Miller Anderson & Sherrerd, LLP manages the investments of the Mid Cap Growth
Equity Fund. Miller Anderson & Sherrerd, LLP ("MAS"), a Pennsylvania limited
liability partnership founded in 1969, is a wholly-owned indirect subsidiary of
Morgan Stanley Dean Witter & Co., and a division of Morgan Stanley Dean Witter
Investment Management. As of December 31, 1998, Morgan Stanley Dean Witter
Investment Management had in excess of $163 billion in assets under management.

Arden Armstrong
--------------------------------------------------------
Primarily responsible for the day-to-day management of the portfolio of
the Mid Cap Growth Equity Fund. Ms. Armstrong, a managing director of
Morgan Stanley & Co., Incorporated, joined Miller Anderson & Sherrerd,
LLP in 1986. She joined the Mid Cap Growth management team in 1990.

David P. Chu
-----------------------------------------------------------
A vice president of Morgan Stanley Dean Witter & Co., Mr. Chu assists
Ms. Armstrong in the day-to-day management of the Mid Cap Growth Equity
Fund. Mr. Chu joined Miller Anderson & Sherrerd, LLP and the Mid Cap
Growth management team in 1998. He served as senior equity analyst from
1992 to 1997 and as co-portfolio manager in 1997 for NationsBank and
its subsidiary TradeStreet Investment Associates.

-31-
<PAGE>

J.P. Morgan Investment Management Inc. manages a portion of the portfolio of the
Small Cap Growth Equity Fund. J.P. Morgan manages over $300 billion in assets,
and $65 billion in U.S. equity assets.

Candice Eggerss
--------------------------------------------------------
Primarily responsible for the day-to-day management of the portfolio of
the Small Cap Growth Equity Fund. Ms. Eggerss has been with J.P. Morgan
since May of 1996 as a member of the U.S. small company portfolio
management team, and from June of 1993 to May of 1996 held a similar
position with Weiss, Peck and Greer. Ms. Eggerss is a vice president of
J.P. Morgan and manages other portfolios for J.P. Morgan with similar
investment objectives to the Fund.

Saira Malik
------------------------------------------------------------
A J.P. Morgan professional, Ms. Malik assists Ms. Eggerss with the
day-to-day management of the portfolio of the Small Cap Growth Equity
Fund. Ms. Malik has been with J.P. Morgan since July of 1995 as a small
company equity analyst and portfolio manager after graduating from the
University of Wisconsin with an M.S. in finance. Ms. Malik is a vice
president of J.P. Morgan and manages or assists with managing other
portfolios for J.P. Morgan with similar investment objectives to the
Fund.

Waddell & Reed Investment Management Company manages a portion of the portfolio
of the Small Cap Growth Equity Fund. Waddell & Reed has approximately $27
billion in assets under management, including approximately $3.4 billion in
institutional assets.

Mark Seferovich, CFA
---------------------------------------------------
Primarily responsible for the day-to-day management of the portfolio of
the Small Cap Growth Equity Fund. Mr. Seferovich is a senior vice
president of Waddell & Reed and the lead portfolio manager of its small
cap style. He joined Waddell & Reed in February 1989 as manager of
small capitalization growth equity funds. From 1982 to 1988 he was a
portfolio manager for Security Management Company and prior to that was
security analyst/portfolio manager with Reimer & Koger Associates.

Grant Sarris
-----------------------------------------------------------
A vice president and portfolio manager for Waddell & Reed, Mr. Sarris
assists Mr. Seferovich in the day-to-day management of the portfolio of
the Small Cap Growth Equity Fund. He joined Waddell & Reed in 1991 as
an investment analyst. In 1996 he was named assistant portfolio manager
of the small capitalization growth equity style. Prior to joining
Waddell & Reed, he was an intern with Shin-Nihon Kohan, Ltd. in Tokyo.

-32-
<PAGE>

About the Classes of Shares -- Multiple Class Information

The Funds offer four Classes of shares: Class S, Class Y, Class L and Class A.
The shares offered by this Prospectus are Class S shares. None of the Classes of
shares has up-front or deferred sales charges. Only Class A shares charge a
distribution and service (Rule 12b-1) fee.

Class S, Class Y and Class L shares are primarily offered to institutional
investors through institutional distribution channels, such as
employer-sponsored retirements plans or through broker-dealers, financial
institutions or insurance companies. Class A shares are primarily offered
through retail distribution channels, such as broker-dealers or financial
institutions. The different Classes have different fees, expenses and/or minimum
investor size requirements. The difference in the fee structures among the
Classes is the result of their separate arrangements for shareholder and
distribution services and not the result of any difference in amounts charged by
the Adviser for investment advisory services. Accordingly, investment advisory
expenses do not vary by Class. Different fees and expenses of a Class will
affect performance of that Class. For additional information about the other
Classes not offered by this Prospectus, call us at 1-888-743-5274 or contact a
sales representative or financial intermediary who offers the Classes.

Except as described below, all Classes of shares of a Fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various Classes are: (a) each Class
may be subject to different expenses specific to that Class; (b) each Class has
a different Class designation; (c) each Class has exclusive voting rights with
respect to matters solely affecting such Class; (d) each Class offered in
connection with a 12b-1 Plan will bear the expense of the payments that would be
made pursuant to that 12b-1 Plan, and only that Class will be entitled to vote
on matters pertaining to that 12b-1 Plan; and (e) each Class will have different
exchange privileges.

Each Class of a Fund's shares invests in the same portfolio of securities.
Because each Class will have different expenses, they will likely have different
share prices. All Classes of shares are available for purchase by insurance
company separate investment accounts

Class S Shares

Eligible Purchasers. Class S shares may be purchased by:

. Qualified plans under Section 401(a) of the Internal Revenue Code of 1986
(the "Code"), Code Section 403(b) plans, Code Section 457 plans and other
retirement plans, where plan assets of the employer generally or are
expected to exceed $100 million;
. Registered mutual funds; and
. Other institutional investors with assets generally in excess of $100
million.

These Eligible Purchasers must have an agreement with MassMutual or a MassMutual
affiliate to purchase Class S Shares.

Shareholder and Distribution Fees. Class S shares of each Fund are purchased
directly from the Trust without a front-end sales charge. Therefore, 100% of an
Investor's money is invested in the Fund or Funds of its choice. Class S shares
do not have deferred sales charges or any Rule 12b-1 distribution or services
fees.

Compensation to Intermediaries

MassMutual does not expect to pay compensation on account of sales of Class S
shares. The Funds may pay brokerage commissions to Advest, Inc. ("Advest") and
Jefferies & Co., Inc. ("Jefferies"). Jefferies and Advest are each wholly-owned
subsidiaries of companies for which one Trustee serves as director. Each Fund
may also pay brokerage commissions to affiliates of its Sub-Adviser.

-33-
<PAGE>

Investing In The Funds

Buying, Redeeming and Exchanging Shares

The Funds sell their shares at a price equal to their net asset value (NAV). The
Funds' generally determine their NAV at 4:00 p.m. Eastern standard time every
day the New York Stock Exchange is open. Your purchase order will be priced at
the next net asset value calculated after the transfer agent accepts your
purchase order. The Funds will suspend selling their shares during any period
when the determination of NAV is suspended. The Funds can reject any purchase
order and can suspend purchases if it is in their best interest.

The Funds redeem their shares at their next NAV computed after the Funds'
transfer agent receives your redemption request. You will usually receive
payment for your shares within 7 days after the transfer agent receives your
written redemption request. If, however, you request redemption of shares
recently purchased by check, you may not receive payment until the check has
been collected, which may take up to 15 days from receipt of the check. The
Funds can also suspend or postpone payment, when permitted by applicable law and
regulations.

You can exchange shares of one Fund for the same class of shares of another
Fund. An exchange is treated as a sale of shares in one Fund, and a purchase of
shares in another Fund at the NAV next determined after the transfer agent
received the exchange request. Your right to exchange shares is subject to
applicable regulatory requirements or contractual obligations. The Funds may
limit or refuse exchanges, if, in the opinion of MassMutual:

. you have engaged in excessive trading;
. a Fund receives or expects simultaneous orders affecting significant portions
of the Fund's assets;
. a pattern of exchanges occurs which coincides with a market timing strategy
which may be disruptive to the Fund; or
. the Fund would be unable to invest the Funds effectively based on its
investment objectives and policies, or if the Fund would be adversely
affected.

The Funds reserve the right to modify or terminate the exchange privilege on 60
days written notice.

The Funds do not accept purchase, redemption or exchange orders or compute their
NAVs on days when the NYSE is closed. This includes: weekends, Good Friday and
all federal holidays other than Columbus Day and Veterans Day. Certain foreign
markets may be open on days when the Funds do not accept orders or price their
shares. As a result, the NAV of a Fund's shares may change on days when you will
not be able to buy or sell shares.

Determining Net Asset Value

We calculate the net asset value of each class of shares of each Fund
separately. The net asset value (closing price) for shares of a class of a Fund
is determined by adding the current value of all of the Fund's assets
attributable to that Class, subtracting the liabilities attributable to that
class and then dividing the resulting number by the total outstanding shares of
the class.

Each Fund's assets are valued based on market value of the Fund's total
portfolio. The Fund's valuation methods are defined in the Statement of
Additional Information.

-34-
<PAGE>

How to Invest

When you buy shares of the Fund through an agreement with MassMutual, your
agreement will describe how you need to submit buy, sell and exchange orders.
Purchase orders must be accompanied by sufficient Funds. You can pay by check or
Federal Funds wire transfer. You must submit any buy, sell or exchange orders in
"good form" as described in your agreement.

Taxation and Distributions

Each Fund intends to continue to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code. As a regulated investment company, a
Fund will not be subject to Federal income taxes on its ordinary income and net
realized capital gain distributed to its shareholders. In general, a Fund that
fails to distribute at least 98% of such income and gain in the calendar year in
which earned will be subject to a 4% excise tax on the undistributed amount.
Many investors, including most tax qualified plan investors, may be eligible for
preferential federal income tax treatment on distributions received from a Fund
and dispositions of Fund shares. This Prospectus does not attempt to describe in
any respect such preferential tax treatment. Any prospective investor that is a
trust or other entity eligible for special tax treatment under the Code that is
considering purchasing shares of a Fund, including either directly or indirectly
through a life insurance company separate investment account, should consult its
tax advisers about the federal, state, local and foreign tax consequences
particular to it, as should persons considering whether to have amounts held for
their benefit by such trusts or other entities investing in shares of a Fund.

Investors that do not receive preferential tax treatment are subject to federal
income taxes on distributions received in respect of their shares. Distributions
of the Fund's ordinary income and short-term capital gains (i.e. gains from
capital assets held for one year or less) are taxable to the shareholder as
ordinary income whether received in cash or additional shares. Certain
designated dividends may be eligible for the dividends-received
deduction for corporate shareholders. Designated capital gain dividends
(relating to gains from capital assets held for more than one year) are taxable
as long-term capital gains in the hands of the investor whether distributed in
cash or additional shares and regardless of how long the investor has owned
shares of the Fund. The nature of each Fund's distributions will be affected by
its investment strategies. A Fund whose investment return consists largely of
interest, dividends and capital gains from short-term holdings will distribute
largely ordinary income. A Fund whose return comes largely from the sale of
long-term holdings will distribute largely capital gain dividends. Distributions
are taxable to a shareholder even though they are paid from income or gains
earned by a Fund prior to the shareholder's investment and thus were included in
the NAV paid by the shareholder.

Any gain resulting from the exchange or redemption of an investor's shares in a
Fund will generally be subject to tax. A loss incurred with respect to shares of
a Fund held for six months or less will be treated as a long-term capital loss
to the extent of capital gains dividend with respect to such shares.

The Fund's investments in foreign securities may be subject to foreign
withholding taxes. In that case, the Fund's yield on those securities would be
decreased. Shareholders of the Funds other than the International Equity Fund
generally will not be entitled to claim a credit or deduction with respect to
foreign taxes. Shareholders of the International Equity Fund however, may be
entitled to claim a credit or deduction with respect to foreign taxes. In
addition, the Fund's investments in foreign securities or foreign currencies may
increase or accelerate the Fund's recognition of ordinary income and may affect
the timing or amount of the Fund's distributions.

Shareholders should consult their tax adviser for more information on their own
tax situation, including possible state, local and foreign taxes.

-35-
<PAGE>

Investment Performance

The registration statement for the Prime Fund, Short-Term Bond Fund, Core Bond
Fund, Balanced Fund, Core Equity Fund, Small Cap Value Equity Fund and
International Equity Fund became effective, and those Funds commenced
operations, on October 3, 1994. Those Funds were the successors to seven
separate investment accounts of MassMutual having corresponding investment
objectives, policies and limitations. Class S shares of the Funds were exchanged
for the assets of the separate investment accounts, and while the separate
investment accounts continue to exist, their assets consist solely of Class S
shares of the corresponding Funds. Except for the seed capital provided by
MassMutual, each Fund's portfolio of investments on October 3, 1994 was the same
as the portfolio of the corresponding separate investment account immediately
prior to the transfer.

The quoted performance data in this Prospectus for those funds includes the
performance of the separate investment accounts for periods before the
Registration Statement became effective on October 3, 1994. The separate
investment accounts were not registered under the Investment Company Act of 1940
and thus were not subject to certain investment restrictions that are imposed by
this Act. If the separate investment accounts had been registered under the
Investment Company Act, their performance might have been adversely affected.
The historical performance of the separate investment accounts have been
restated to reflect the Funds' expenses, as described in the Fees and Expenses
section of the prospectus.

Sub-Adviser Performance

MFS. Performance data shown for the Growth Equity Fund is based on a composite
of all other substantially similar portfolios managed by MFS, the Fund's
substantially Sub-Adviser, adjusted to reflect the fees and expenses of each of
the Fund's share classes. Some of these portfolios are mutual funds registered
with the SEC, including Massachusetts Investors Growth Stock Fund, and some are
private accounts. All the portfolios have substantially the same investment
objectives and policies and are managed in accordance with essentially the same
investment strategies and techniques as those of the Fund. However, the private
account portfolios are not registered with the SEC and therefore are not subject
to the limitations, diversification requirements and other restrictions which
the Fund, as a registered mutual fund, will be subject to. The performance of
the private accounts may have been adversely affected if they had been
registered with the SEC.

MAS. Performance data shown for the Mid Cap Growth Equity Fund is based on a
composite of all other substantially similar portfolios managed by Miller
Anderson & Sherrerd, LLP, the Fund's Sub-Adviser, adjusted to reflect the fees
and expenses of each of the Fund's share classes. One of these portfolios is the
MAS Funds Mid Cap Growth Portfolio, a mutual fund registered with the SEC. All
the portfolios have substantially the same investment objective and policies and
are managed in accordance with essentially the same investment strategies and
techniques as those of the Fund. However, the private account portfolios are not
registered with the SEC and therefore are not subject to the limitations,
diversification requirements and other restrictions which the Fund, as a
registered mutual fund, will be subject to. The performance of the private
accounts may have been adversely affected if they had been registered with the
SEC.

J.P. Morgan and Waddell & Reed. J.P. Morgan and Waddell & Reed each manage a
portion of the Small Cap Growth Equity Fund. The J.P. Morgan performance
information is shown based on the historical performance of all discretionary
investment management accounts under the management of J.P. Morgan with
substantially similar investment objectives and policies as the Fund, adjusted
to reflect the fees and expenses of each of the Fund's share classes. Some of
these portfolios are mutual funds registered with the SEC, including the J.P.
Morgan U.S. Small Company Opportunities Fund, and some are private accounts. The
private account portfolios are not registered with

-36-
<PAGE>

the SEC and therefore are not subject to the limitations, diversification
requirements and other restrictions which the MassMutual Small Cap Growth Equity
Fund, as a registered mutual fund, will be subject to. The performance of the
private accounts may have been adversely affected if they had been registered
with the SEC.

From January 1, 1996, the Waddell & Reed performance information shown is based
on a composite of accounts it manages with substantially similar investment
objectives and policies as the Fund, adjusted to reflect the fees and expenses
of each of the Fund's share classes. From inception of Waddell & Reed's Small
Cap Composite on 4/1/89 through 12/31/95, performance is based on data of Small
Cap style mutual fund portfolios managed by the Waddell & Reed. The private
account portfolios are not registered with the SEC and therefore are not subject
to the limitations, diversification requirements and other restrictions which
the Fund, as a registered mutual fund, will be subject to. The performance of
the private accounts may have been adversely affected if they had been
registered with the SEC.

Composite performance for each of the Sub-Adviser's portfolios is provided
solely to illustrate that Sub-Adviser's performance in managing portfolios with
investment objectives similar to the applicable Fund. Such performance is not
indicative of future rates of return. Prior performance of the Sub-Advisers is
no indication of future performance of any of the Funds.

-37-
<PAGE>

Financial Highlights

The financial highlights table is intended to help you understand the Funds'
financial performance for Class S shares for the past 5 years. The total returns
in the table represent the rate that an investor would have earned on an
investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Deloitte & Touche LLP,
whose report, along with the Funds' financial statements, are included in the
Annual Report, which is available on request. Financial information for the
other share classes of the Funds is available in the Funds' Annual Report.

PRIME FUND
<TABLE>
<CAPTION>
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94/\**
---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 150.84 $ 151.00 $ 151.06 $ 150.36 $ 150.00
---------- ---------- ---------- ----------- ----------
Income (loss) from investment operations:
Net investment income 8.10*** 8.14*** 7.85*** 8.70*** 1.55
Net realized and unrealized gain (loss) on
investments 0.03 (0.01) 0.06 (0.02) 0.34
---------- ---------- ---------- ----------- ----------
Total income (loss) from investment
operations 8.13 8.13 7.91 8.68 1.89
---------- ---------- ---------- ----------- ----------
Less distributions to shareholders:
From net investment income (8.23) (8.29) (7.97) (7.98) (1.53)
---------- ---------- ---------- ----------- ----------
Net asset value, end of period $ 150.74 $ 150.84 $ 151.00 $ 151.06 $ 150.36
========== ========== ========== =========== ==========
Total Return @ 5.39% 5.39% 5.24% 5.78% 1.26%

Ratios / Supplemental Data:
Net assets, end of period (000's) $251,757 $241,370 $258,729 $253,936 $170,548
Net expenses to average daily net assets # 0.5482% 0.5399% 0.5160% 0.5160% 0.5160% *
Net investment income to average daily net assets 5.23% 5.25% 5.10% 5.61% 5.01% *

/\ All per share amounts for the period have been restated to reflect a 1-for-15 reverse stock split effective December 16, 1994.
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
*** Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1) Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.
</TABLE>

-38-
<PAGE>

SHORT-TERM BOND FUND
<TABLE>
<CAPTION>
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.23 $ 10.11 $ 10.15 $ 9.85 $ 10.00
----------- ---------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income 0.56 0.65*** 0.60 0.66 0.16
Net realized and unrealized gain (loss) on
investments 0.08 0.04 (0.03) 0.50 (0.15)
----------- ---------- --------- --------- ---------
Total income (loss) from investment
operations 0.64 0.69 0.57 1.16 0.01
--------- ---------- ----------- -------- --------
Less distributions to shareholders:
From net investment income (0.56) (0.57) (0.60) (0.66) (0.16)
From net realized gains (0.01) 0.00 (0.01) (0.20) -
----------- --------- -------- -------- -------
Total distributions (0.57) (0.57) (0.61) (0.86) (0.16)
----------- ---------- --------- -------- ------
Net asset value, end of period $ 10.30 $ 10.23 $ 10.11 $ 10.15 $ 9.85
=========== ======== ======== ======== ========
Total Return @ 6.29% 6.84% 5.57% 11.77% 0.13%
Ratios / Supplemental Data:
Net assets, end of period (000's) $283,673 $200,268 $145,182 $122,904 $106,846
Net expenses to average daily net assets # 0.5482% 0.5423% 0.5190% 0.5190% 0.5190% *
Net investment income to average daily net
assets 5.58% 6.22% 6.00% 6.32% 6.37% *
Portfolio turnover rate 44% 48% 61% 114% 15%
# Computed after giving effect to the
voluntary partial waiver of management fee by
MassMutual, which terminated May 1, 1997.
Without this partial waiver of fees by
MassMutual, the ratio of expenses to average
daily net assets would have been: N/A 0.5530% 0.5545% 0.5524% 0.5654% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
***Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1)Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Total return figures would be lower for the periods Plan Documents. presented if they
reflected these charges.
</TABLE>

CORE BOND FUND
<TABLE>
<CAPTION>
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
----------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.81 $ 10.45 $ 10.75 $ 9.84 $ 10.00
----------- ---------- --------- --------- ---------
Income (loss) from investment operations:
Net investment income 0.67 *** 0.69 *** 0.67 *** 0.72 *** 0.18
Net realized and unrealized gain (loss) on
investments 0.24 0.33 (0.37) 1.17 (0.16)
----------- ---------- --------- --------- ---------
Total income (loss) from investment
operations 0.91 1.02 0.30 1.89 0.02
----------- ---------- --------- --------- ---------
Less distributions to shareholders:
From net investment income (0.56) (0.64) (0.54) (0.65) (0.18)
From net realized gains (0.10) (0.02) (0.06) (0.33) -
----------- ---------- --------- --------- ---------
Total distributions (0.66) (0.66) (0.60) (0.98) (0.18)
---------- --------- --------- -------- ---------
Net asset value, end of period $ 11.06 $ 10.81 $ 10.45 $ 10.75 $ 9.84
=========== ========== ========= ========= =========
Total Return @ 8.44% 9.78% 2.80% 19.15% 0.20%
Ratios / Supplemental Data:
Net assets, end of period (000's) $709,459 $455,931 $356,699 $253,540 $194,150
Net expenses to average daily net assets # 0.5454% 0.5393% 0.5130% 0.5130% 0.5130% *
Net investment income to average daily net
assets 5.92% 6.34% 6.26% 6.56% 6.86% *
Portfolio turnover rate 51% 54% 54% 104% 7%

# Computed after giving effect to the
voluntary partial waiver of management fee
by MassMutual, which terminated May 1,
1997. Without this partial waiver of fees
by MassMutual, the ratio of expenses to
average daily net assets would have been: N/A 0.5512% 0.5550% 0.5553% 0.5672% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
***Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1)Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.
</TABLE>

-39-
<PAGE>

<TABLE>
<CAPTION>
BALANCED FUND
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.59 $ 12.34 $ 11.51 $ 9.92 $ 10.00
-------- --------- -------- ------- --------
Income (loss) from investment operations:
Net investment income 0.49*** 0.48 0.46 0.44 0.11
Net realized and unrealized gain (loss)
on investments 1.33 1.82 1.02 1.68 (0.08)
-------- --------- -------- ------- --------
Total income (loss) from investment
operations 1.82 2.30 1.48 2.12 0.03
-------- --------- -------- ------- --------
Less distributions to shareholders:
From net investment income (0.48) (0.48) (0.46) (0.44) (0.11)
From net realized gains (0.73) (0.57) (0.19) (0.09) -
-------- --------- -------- ------- --------
Total distributions (1.21) (1.05) (0.65) (0.53) (0.11)
-------- --------- -------- ------- --------
Net asset value, end of period $ 14.20 $ 13.59 $ 12.34 $11.51 $ 9.92
======== ========= ======== ======= ========
Total Return @ 13.50% 18.72% 12.83% 21.31% 0.29%
Ratios / Supplemental Data:
Net assets, end of period (000's) $771,763 $655,135 $563,280 $456,773 $349,688
Net expenses to average daily net assets # 0.5433% 0.5389% 0.5120% 0.5120% 0.5120% *
Net investment income to average daily net
assets 3.42% 3.57% 3.83% 4.18% 4.29% *
Portfolio turnover rate 30% 28% 26% 23% 2%
# Computed after giving effect to the
voluntary partial waiver of management fee
by MassMutual, which terminated May 1, 1997.
Without this partial waiver of fees by
MassMutual, the ratio of expenses to average
daily net assets would have been: N/A 0.5510% 0.5522% 0.5514% 0.5650% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
***Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1)Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.

<CAPTION>
CORE EQUITY FUND
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
---------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 17.00 $ 14.46 $ 12.63 $ 9.91 $ 10.00
-------- --------- -------- -------- --------
Income (loss) from investment operations:
Net investment income 0.31 0.32 0.34 0.31 0.08
Net realized and unrealized gain (loss) on
investments 2.49 3.83 2.22 2.82 (0.09)
-------- --------- -------- -------- --------
Total income (loss) from investment
operations 2.80 4.15 2.56 3.13 (0.01)
-------- --------- -------- -------- --------
Less distributions to shareholders:
From net investment income (0.31) (0.31) (0.34) (0.31) (0.08)
From net realized gains (1.10) (1.30) (0.39) (0.10) -
-------- --------- -------- -------- --------
Total distributions (1.41) (1.61) (0.73) (0.41) (0.08)
-------- --------- -------- -------- --------
Net asset value, end of period $ 18.39 $ 17.00 $ 14.46 $ 12.63 $ 9.91
======== ========= ======== ======== ========

Total Return @ 16.75% 29.01% 20.24% 31.54% (0.10)%
Ratios / Supplemental Data:
Net assets, end of period (000's) $3,586,177 $3,197,848 $2,485,743 $2,125,248 $1,563,563
Net expenses to average daily net assets # 0.5391% 0.5378% 0.5067% 0.5067% 0.5067% *
Net investment income to average daily net
assets 1.67% 1.91% 2.42% 2.72% 3.20% *
Portfolio turnover rate 12% 20% 13% 16% 3%
# Computed after giving effect to the voluntary
partial waiver of management fee by
MassMutual, which terminated May 1, 1997.
Without this partial waiver of fees by
MassMutual, the ratio of expenses to average
daily net assets would have been: N/A 0.5512% 0.5534% 0.5528% 0.5681% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
***Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1)Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
SMALL CAP VALUE EQUITY FUND
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 16.61 $ 13.43 $ 11.44 $ 9.69 $ 10.00
--------- -------- --------- ------- --------
Income (loss) from investment operations:
Net investment income
Net realized and unrealized gain (loss) on
investments 0.13 0.13 0.31 0.19 0.04
Total income (loss) from investment
operations (1.67) 4.73 2.29 1.75 (0.31)
--------- -------- --------- ------- --------
(1.54) 4.86 2.60 1.94 (0.27)
--------- -------- --------- ------- --------
Less distributions to shareholders:
From net investment income (0.13) (0.14) (0.30) (0.19) (0.04)
From net realized gains (0.88) (1.54) (0.31) - -
--------- -------- --------- ------- --------
Total distributions (1.01) (1.68) (0.61) (0.19) (0.04)
--------- -------- --------- ------- --------
Net asset value, end of period $ 14.06 $ 16.61 $ 13.43 $11.44 $ 9.69
========= ======== ========= ======= ========
Total Return @ (9.02)% 36.36% 22.82% 20.01% (2.66)%
Ratios / Supplemental Data:
Net assets, end of period (000's) $682,578 $690,378 $456,935 $380,398 $310,789
Net expenses to average daily net assets # 0.6434% 0.6400% 0.6110% 0.6110% 0.6110% *
Net investment income to average daily net
assets 0.86% 0.89% 2.40% 1.78% 1.78% *
Portfolio turnover rate 31% 31% 28% 28% 4%
# Computed after giving effect to the
voluntary partial waiver of management fee
by MassMutual, which terminated May 1, 1997.
Without this partial waiver of fees by
MassMutual, the ratio of expenses to average
daily net assets would have been: N/A 0.6515% 0.6546% 0.6553% 0.6681% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
***Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1)Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
Class S (1)
-----------
Year ended Year ended Year ended Year ended Period ended
12/31/98 12/31/97 12/31/96 12/31/95 12/31/94**
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 12.38 $ 11.11 $ 9.58 $ 9.28 $ 10.00
---------- -------- -------- ------- --------
Income (loss) from investment operations:
Net investment income 0.10 0.06 0.06 0.07 0.00
Net realized and unrealized gain (loss) on
investments and foreign currency 0.51 1.69 1.71 0.41 (0.72)
---------- -------- -------- ------- --------
Total income (loss) from investment
operations 0.61 1.75 1.77 0.48 (0.72)
---------- -------- -------- ------- --------
Less distributions to shareholders:
From net investment income (0.17) (0.07) (0.24) (0.07) -
In excess of net investment income - - - (0.11) -
From net realized gains (1.45) (0.41) - - -
---------- -------- -------- ------- --------
Total distributions (1.62) (0.48) (0.24) (0.18) -
---------- -------- -------- ------- --------
Net asset value, end of period $ 11.37 $ 12.38 $ 11.11 $ 9.58 $ 9.28
========== ======== ======== ======= ========
Total Return @ 5.05% 15.79% 18.51% 5.13% (7.20)%
Ratios / Supplemental Data:
Net assets, end of period (000's) $640,498 $546,790 $356,311 $220,718 $150,199
Net expenses to average daily net assets # 1.0389% 1.0580% 1.0020% 1.0020% 1.0020% *
Net investment income to average daily net
assets 0.73% 0.53% 0.59% 0.76% 0.04% *
Portfolio turnover rate 80% 83% 58% 121% 18%
# Computed after giving effect to the voluntary
partial waiver of management fee by MassMutual,
which terminated May 1, 1997. Without this
partial waiver of fees by MassMutual, the
ratio of expenses to average daily net assets
would have been N/A 1.0684% 1.0718% 1.0920% 1.0877% *
* Annualized
** For the period from October 3, 1994 (commencement of operations) through December 31, 1994.
*** Per share amount calculated on the average shares method, which more appropriately presents the per share data for the period
since the use of the undistributed income method does not accord with the results of operations.
(1) Class S shares were previously designated as Class 4 shares.
@ Employee retirement benefit plans that invest plan assets in the Separate Investment Accounts (SIAs) may be subject to certain
charges as set forth in their respective Plan Documents. Total return figures would be lower for the periods presented if they
reflected these charges.
</TABLE>

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<PAGE>

APPENDIX
ADDITIONAL INVESTMENT POLICIES
AND RISK CONSIDERATIONS

The Funds may invest in a wide range of investments and engage in various
investment-related transactions and practices. These practices are pursuant to
non-Fundamental policies and therefore may be changed by the Board of Trustees
without the consent of shareholders. Some of the more significant practices and
some associated risks are discussed below.

Euro Risk

The International Equity Fund and, to a lesser extent, the other Funds,
including the Growth Equity Fund, may be subject to an additional risk regarding
their foreign securities holdings. On January 1, 1999, eleven countries in the
European Monetary Union adopted the euro as their official currency. However,
their current currencies (for example, the franc, the mark and the lire) will
also continue in use until January 1, 2002. After that date, it is expected that
only the euro will be used in those countries. A common currency is expected to
confer some benefits in those markets, by consolidating the government debt
market for those countries and reducing some currency risks and costs. But the
conversion to the new currency will affect the Funds operationally and also has
potential risks, some of which are listed below. Among other things, the
conversion will affect:

. Issuers in which the Funds invest, because of changes in the competitive
environment from a consolidated currency market and greater operational
costs from converting to the new currency. This might depress stock values.

. Vendors the Funds depend on to carry out their business, such as custodians
(which hold the foreign securities the Funds buy), the Fund's managers and
Sub-Advisers (which must price the Funds' investments to deal with the
conversion to the euro) and brokers, foreign markets and securities
depositories. If they are not prepared, there could be delays in
settlements and additional costs to the Funds.

. Exchange contracts and derivatives that are outstanding during the
transition to the euro. The lack of currency rate calculations between the
affected currencies and the need to update the Funds' contracts could pose
extra costs to the Funds.

The Sub-Adviser to the International Equity Fund is upgrading (at its expense)
its computer and bookkeeping systems to deal with the conversion. The Funds'
custodian has advised MassMutual of its plans to deal with the conversion
including how it will update its recordkeeping systems and handle the
redenomination of outstanding foreign debt. The possible effect of these factors
on the Funds' investments cannot be determined at this time, but they may reduce
the value of some of the Funds' holdings and increase their operational costs.

Year 2000 Issue

Like other businesses and governments around the world, the Funds could be
adversely affected if the computer systems used by the Funds' service providers
and those with which they do business do not properly recognize the year 2000.
This is commonly known as the "Year 2000 issue." In 1996, MassMutual began an
enterprise-wide process of identifying, evaluating and implementing changes to
its computer systems to address the Year 2000 issue. MassMutual is addressing
the Year 2000 issue internally with modifications to existing programs and
conversions to new programs. MassMutual has advised the Funds that the Year 2000
issue is one of MassMutual's highest business operational priorities. MassMutual
is also seeking assurances from the Funds' other service providers, including
the Sub-Advisers, and others with which MassMutual and the Funds conduct
business in order to identify and resolve Year 2000 issues. In addition, because
the Year 2000 issue affects

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<PAGE>

virtually all organizations, the companies in which the Funds invest could be
adversely impacted by the Year 2000 issue. The extent of such impact cannot be
predicted.

Repurchase Agreements and Reverse Repurchase Agreements

Each Fund may engage in repurchase agreements and reverse repurchase agreements.
A repurchase agreement is a contract pursuant to which a Fund agrees to purchase
a security and simultaneously agrees to resell it at an agreed-upon price at a
stated time, thereby determining the yield during the Fund's holding period. A
reverse repurchase agreement is a contract pursuant to which a Fund agrees to
sell a security and simultaneously agrees to repurchase it at an agreed-upon
price at a stated time. The Statement of Additional Information provides a
detailed description of repurchase agreements, reverse repurchase agreements and
related risks.

Securities Lending

Each Fund may seek additional income by making loans of portfolio securities of
not more than 33% of its total assets taken at current value. Although lending
portfolio securities may involve the risk of delay in recovery of the securities
loaned or possible loss of rights in the collateral should the borrower fail
financially, loans will be made only to borrowers deemed by MassMutual and the
Fund's Sub-Adviser to be in good standing.

Under applicable regulatory requirements and securities lending agreements
(which are subject to change), the loan collateral received by a Fund when it
lends portfolio securities must, on each business day, be at least equal to the
value of the loaned securities. Cash collateral received by a Fund will be
reinvested by the Fund's securities lending agent in high quality, short term
instruments, including bank obligations, U.S. Government Securities, repurchase
agreements, money market Funds and U.S. dollar denominated corporate instruments
with an effective maturity of one-year or less, including variable rate and
floating rate securities, insurance company Funding agreements and asset-backed
securities. All investments of cash collateral by a Fund are for the account and
risk of that Fund.

Hedging Instruments and Derivatives

Each Fund may buy or sell forward contracts and other similar instruments and
may engage in foreign currency transactions (collectively referred to as
"hedging instruments" or "derivatives"), as more fully discussed in the
Statement of Additional Information.

The portfolio managers may normally use derivatives:

. to protect against possible declines in the market value of a Fund's
portfolio resulting from downward trends in the markets (for example, in
the debt securities markets generally due to increasing interest rates);

. to protect a Fund's unrealized gains or limit its unrealized losses; and

. to manage a Fund's exposure to changing securities prices.

Our portfolio managers may also use derivatives to establish a position in the
debt or equity securities markets as a temporary substitute for purchasing or
selling particular securities and to manage the effective maturity or duration
of fixed income securities in a Fund's portfolio.

(1) Forward Contracts - Each Fund may purchase or sell securities on a "when
issued" or delayed delivery basis or may purchase or sell securities on a
forward commitment basis ("forward contracts"). When such transactions are
negotiated, the price is fixed at the time of commitment, but delivery and
payment for the securities can take place a month or more after the
commitment date. The securities so purchased or sold are subject to market
fluctuations and no interest accrues to the purchaser during this period.
While a Fund also may enter into forward contracts with the initial
intention of acquiring securities for its portfolio, it may dispose of a

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<PAGE>

commitment prior to settlement if MassMutual or the Fund's Sub-Adviser
deems it appropriate to do so.

(2) Currency Transactions - The International Equity Fund, the Growth Equity
Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth Equity Fund
may, but will not necessarily, engage in foreign currency transactions with
counterparties in order to hedge the value of portfolio holdings
denominated in particular currencies against fluctuations in relative
value. The Short-Term Bond Fund, the Core Bond Fund, the Core Bond Segment
of the Balanced Fund and the Diversified Bond Fund may invest in foreign
securities that are not denominated in U.S. dollars only if the Fund
contemporaneously enters into a foreign currency transaction to hedge the
currency risk associated with the particular foreign security.

Certain limitations apply to the use of forward contracts by the Funds. For
example, a Fund will not enter into a forward contract if as a result more than
25% of its total assets would be held in a segregated account covering such
contracts. For more information about forward contracts and currency
transactions and the extent to which tax considerations may limit a Fund's use
of such instruments, see the SAI.

There can be no assurance that the use of hedging instruments and derivatives by
a Fund will assist it in achieving its investment objective. Risks inherent in
the use of these instruments include the following:

. the risk that interest rates and securities prices will not move in the
direction anticipated;

. the imperfect correlation between the prices of a forward contract and the
price of the securities being hedged; and

. the Fund's portfolio manager may not have the skills needed to manage these
strategies.

Therefore, there is no assurance that hedging instruments and derivatives will
assist the Fund in achieving its investment objective. As to forward contracts,
the risk exists that the counterparty to the transaction will be incapable of
meeting its commitment, in which case the desired hedging protection may not be
obtained and the Fund may be exposed to risk of loss. As to currency
transactions, risks exist that purchases and sales of currency and related
instruments can be negatively affected by government exchange controls,
blockages, and manipulations or exchange restrictions imposed by governments
which could result in losses to the Fund if it is unable to deliver or receive
currency or Funds in settlement of obligations. It also could cause hedges it
has entered into to be rendered useless, resulting in full currency exposure as
well as incurring transaction costs.

Restricted and Illiquid Securities

None of the Funds currently expects to invest in restricted or illiquid
securities except for the Diversified Bond Fund. However, each Fund may invest
not more than 15% of its net assets in illiquid securities. These policies do
not limit the purchase of securities eligible for resale to qualified
institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended, provided that such securities are determined to be liquid by the Fund
or its adviser or Sub-Adviser pursuant to Board-approved guidelines. If there is
a lack of trading interest in particular Rule 144A securities, a Fund's holdings
of those securities may be illiquid, resulting in the possibility of undesirable
delays in selling these securities at prices representing fair value.

Foreign Securities

Investments in foreign securities offer potential benefits not available from
investing solely in securities of domestic issuers, such as the opportunity to
invest in foreign issuers that appear to offer growth potential, or to invest in
foreign countries with economic policies or business cycles different from those
of the United States or foreign stock markets that do not move in a manner
parallel to U.S. markets,

-44-
<PAGE>

thereby diversifying risks of fluctuations in portfolio value.

Investments in foreign securities, however, entail certain risks, such as: the
imposition of dividend or interest withholding or confiscatory taxes; currency
blockages or transfer restrictions; expropriation, nationalization, military
coups or other adverse political or economic developments; less government
supervision and regulation of securities exchanges, brokers and listed
companies; and the difficulty of enforcing obligations in other countries.
Certain markets may require payment for securities before delivery. A Fund's
ability and decision to purchase and sell portfolio securities may be affected
by laws or regulations relating to the convertibility of currencies and
repatriation of assets. Further, it may be more difficult for a Fund's agents to
keep currently informed about corporate actions which may affect the prices of
portfolio securities. Communications between the United States and foreign
countries may be less reliable than within the United States, thus increasing
the risk of delayed settlements of portfolio transactions or loss of
certificates for portfolio securities.

Portfolio Management

The Fund's Adviser and Sub-Advisers may use trading as a means of managing the
portfolios of the Funds in seeking to achieve their investment objectives.
Transactions will occur when MassMutual or Sub-Advisers believes that the trade,
net of transaction costs, will improve interest income or capital appreciation
potential, or will lessen capital loss potential. Whether the goals discussed
above will be achieved through trading depends on the manager's or Sub-Adviser's
ability to evaluate particular securities and anticipate relevant market
factors, including interest rate trends and variations from such trends. If such
evaluations and expectations prove to be incorrect, a Fund's income or capital
appreciation could fall and its capital losses could increase. In addition, high
portfolio turnover in any Fund can result in additional brokerage commissions to
be paid by the Fund.

Cash Positions

Each Fund may hold cash or cash equivalents to provide for expenses and
anticipated redemption payments and so that an orderly investment program may be
carried out in accordance with the Fund's investment policies. To provide
liquidity or for temporary defensive purposes, each Fund may invest in
investment grade debt securities, government obligations, or money market
instruments.

Industry Diversification

As a general rule, a Fund will not acquire securities of issuers in any one
industry (as determined by the Board of Trustees) if as a result more than 25%
of the value of the total assets of the Fund would be invested in such industry,
with the following exceptions:

(1) There is no limitation for U.S. Government Securities.

(2) In the case of the Prime Fund and the Short-Term Bond Fund, there is no
industry concentration limitation for certificates of deposit and bankers'
acceptances.

Mortgage-Backed U.S. Government Securities and CMOs

The Funds may invest in mortgage-backed U.S. Government Securities and
collateralized mortgage obligations ("CMOs"). These securities represent
participation interests in pools of residential mortgage loans made by lenders
such as banks and savings and loan associations. The pools are assembled for
sale to investors (such as the Funds) by government agencies and also, in the
case of CMOs, by private issuers, which issue or guarantee the securities
relating to the pool. Such securities differ from conventional debt securities
which generally provide for periodic payment of interest in fixed or
determinable amounts (usually semi-annually) with principal payments at maturity
or specified call dates. Some mortgage-backed U.S. Government Securities in
which a Fund may invest may be backed by the full faith and credit of the U.S.
Treasury (e.g.,

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<PAGE>

direct pass-through certificates of Government National Mortgage Association);
some are supported by the right of the issuer to borrow from the U.S. Government
(e.g., obligations of Federal Home Loan Mortgage Corporation); and some are
backed by only the credit of the issuer itself (e.g., Federal National Mortgage
Association). Those guarantees do not extend to the value or yield of the
mortgage-backed securities themselves or to the net asset value of a Fund's
shares. These government agencies may also issue derivative mortgage backed
securities such as CMOs.

The expected yield on mortgage-backed securities is based on the average
expected life of the underlying pool of mortgage loans. The actual life of any
particular pool will be shortened by any unscheduled or early payments of
principal. Principal prepayments generally result from the sale of the
underlying property or the refinancing or foreclosure of underlying mortgages.
The occurrence of prepayments is affected by a wide range of economic,
demographic and social factors and, accordingly, it is not possible to predict
accurately the average life of a particular pool. Yield on such pools is usually
computed by using the historical record of prepayments for that pool, or, in the
case of newly-issued mortgages, the prepayment history of similar pools. The
actual prepayment experience of a pool of mortgage loans may cause the yield
realized by a Fund to differ from the yield calculated on the basis of the
expected average life of the pool.

Prepayments tend to increase during periods of falling interest rates, while
during periods of rising interest rates prepayments may likely decline. When
prevailing interest rates rise, the value of a pass-through security may
decrease as do the values of other debt securities, but, when prevailing
interest rates decline, the value of a pass-through security is not likely to
rise to the extent that the values of other debt securities rise, because of the
risk of prepayment. A Fund's reinvestment of scheduled principal payments and
unscheduled prepayments it receives may occur at times when available
investments offer higher or lower rates than the original investment, thus
affecting the yield of the Fund. Monthly interest payments received by the Fund
have a compounding effect which may increase the yield to the Fund more than
debt obligations that pay interest semi-annually. Because of these factors,
mortgage-backed securities may be less effective than Treasury bonds of similar
maturity at maintaining yields during periods of declining interest rates. A
Fund may purchase mortgage-backed securities at a premium or at a discount.
Accelerated prepayments adversely affect yields for pass-through securities
purchased at a premium (i.e., at a price in excess of their principal amount)
and may involve additional risk of loss of principal because the premium may not
have been fully amortized at the time the obligation is repaid. The opposite is
true for pass-through securities purchased at a discount.

Asset-Backed Securities

These securities, issued by trusts and special purpose entities, are backed by
pools of assets, such as automobile and credit-card receivables and home equity
loans, which pass through the payments on the underlying obligations to the
security holders (less servicing fees paid to the originator or fees for any
credit enhancement). The value of an asset-backed security is affected by
changes in the market's perception of the asset backing the security, the
creditworthiness of the servicing agent for the loan pool, the originator of the
loans, or the financial institution providing any credit enhancement, and is
also affected if any credit enhancement has been exhausted. Payments of
principal and interest passed through to holders of asset-backed securities are
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guarantee by another entity or by having a priority
to certain of the borrower's other assets. The degree of credit enhancement
varies, and generally applies to only a fraction of the asset-backed security's
par value until exhausted. If the credit enhancement of an asset-backed security
held by a Fund has been exhausted, and if any required payments of principal and
interest are not made with respect to the underlying loans, the Fund may
experience losses or delays in receiving payment.

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<PAGE>

The risks of investing in asset-backed securities are ultimately dependent upon
payment of consumer loans by the individual borrowers. As a purchaser of an
asset-backed security, the Funds would generally have no recourse to the entity
that originated the loans in the event of default by a borrower. The underlying
loans are subject to prepayments, which shorten the weighted average life of
asset-backed securities and may lower their return, in the same manner as
described above for prepayments of a pool of mortgage loans underlying mortgage-
backed securities. However, asset-backed securities do not have the benefit of
the same security interest in the underlying collateral as do mortgage-backed
securities.

Roll Transactions

To take advantage of attractive financing opportunities in the mortgage market
and to enhance current income, each of the Funds may engage in dollar roll
transactions. A dollar roll transaction involves a sale by a Fund of a GNMA
certificate or other mortgage backed securities to a financial institution, such
as a bank or broker-dealer, currently with an agreement by the Fund to
repurchase a similar security from the institution at a later date at an agreed
upon price. The securities that are repurchased will bear the same interest rate
as those sold, but generally will be collateralized by different pools of
mortgages with different prepayment histories than those sold. Dollar roll
transactions involve potential risks of loss which are different from those
related to the securities underlying the transaction. The Statement of
Additional Information gives a more detailed description of dollar roll
transactions and related risks.

Certain Debt Securities

While the Funds, except for the Prime Fund, may invest in investment grade debt
securities that are rated in the fourth highest rating category by at least one
nationally recognized statistical rating organization (e.g., Baa3 by Moody's)
or, if unrated, are judged by MassMutual to be of equivalent quality, such
securities have speculative characteristics, are subject to greater credit risk,
and may be subject to greater market risk than higher rated investment grade
securities.

When Issued Securities

The Growth Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth
Equity Fund may purchase securities on a "when-issued" or on a "forward
delivery" basis, which means securities will be delivered to the Fund at a
future date beyond the settlement date. A Fund will not have to pay for
securities until they are delivered. While waiting for delivery of the
securities, the Fund will segregate sufficient liquid assets to cover its
commitments. Although the Funds do not intend to make such purchases for
speculative purposes, there are risks related to liquidity and market
fluctuations prior to the Fund taking delivery.

Options and Futures Contracts

The Growth Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth
Equity Fund may engage in options transactions, such as writing covered put and
call options on securities and purchasing put and call options on securities.
These strategies are designed to increase a Fund's portfolio return, or to
protect the value of the portfolio, by offsetting a decline in portfolio value
through the options purchased. Writing options, however, can only constitute a
partial hedge, up to the amount of the premium, and due to transaction costs.

These Funds may also write covered call and put options and purchase call and
put options on stock indexes in order to increase portfolio income or to protect
the Fund against declines in the value of portfolio securities. In addition,
these Funds and the International Equity Fund may also purchase and write
options on foreign currencies to protect against declines in the dollar value of
portfolio securities and against increases in the dollar cost of securities to
be acquired.

The Growth Equity Fund, the Mid Cap Growth Equity Fund and the Small Cap Growth
Equity Fund may also enter into stock index futures contracts. These Funds and
the International

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Equity Fund may enter into foreign currency futures contracts. These
transactions are hedging strategies. They are designed to protect a Fund's
current or intended investments from the effects of changes in exchange rates or
market declines. A Fund will incur brokerage fees when it purchases and sells
futures contracts. Futures contracts entail risk of loss in portfolio value, if
the Sub-Adviser is incorrect in anticipating the direction of exchange rates or
the securities markets.

These Funds may also purchase and write options on these futures contracts. This
strategy also is intended to protect against declines in the values of portfolio
securities or against increases in the costs of securities to be acquired. Like
other options, options on futures contracts constitute only a partial hedge up
to the amount of the premium, and due to transaction costs.

While these strategies will generally be used by a Fund for hedging purposes,
there are risks. For example, the Sub-Adviser may incorrectly forecast the
direction of exchange rates or of the underlying securities index or markets.
When these hedging transactions are unsuccessful, the Fund may experience
losses. When a Fund enters into these transactions to increase portfolio value
(i.e., other than for hedging purposes), there is a liquidity risk that no
market will arise for resale and the Fund could also experience losses. Options
and Futures Contracts strategies and risks are described more fully in the
Statement of Additional Information.

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MASSMUTUAL INSTITUTIONAL FUNDS
1295 State Street
Springfield, Massachusetts 01111

Learning More About the Funds

You can learn more about the Funds by reading the Funds' Annual and Semiannual
Reports and the Statement of Additional Information (SAI). This information is
available free upon request. In the Annual and Semiannual Reports, you will find
a discussion of market conditions and investment strategies that significantly
affected each Fund's performance during the period covered by the Report and a
listing of portfolio securities. The SAI will provide you more detail regarding
the organization and operation of the Funds, including their investment
strategies. The SAI is incorporated by reference into this Prospectus and is
therefore legally considered a part of this Prospectus.

How to Obtain Information

From MassMutual Institutional Funds: You may request information about the Funds
(including the Annual/Semiannual Reports and the SAI) or make shareholder
inquiries by calling 1-888-743-5274 or by writing MassMutual Institutional Funds
c/o Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield,
Massachusetts 01111-0111, Attention: MassMutual Institutional Funds Coordinator,
MIP C218.

From the SEC: You may review information about the Funds (including the SAI) at
the SEC's Public Reference Room in Washington, D.C. (call 1-800-SEC-0330 for
information regarding the operation of the SEC's public reference room). You can
get copies of this information, upon payment of a copying fee, by writing to the
SEC's Public Reference Section, Washington, D.C. 20549-6009. Alternatively, if
you have access to the Internet, you may obtain information about the Funds from
the SEC's Internet site at http://www.sec.gov. When obtaining information about
the Funds from the SEC, you may find it useful to reference the Funds' SEC file
number: 881-8274.