NORTHSTAR GALAXY TRUST, 485APOS, 2000-01-28

NORTHSTAR GALAXY TRUST
485APOS, 2000-01-28

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As filed with the Securities and Exchange Commission on January 28, 2000
Securities Act File No. 33-73140
Investment Company Act File No. 811-8220
================================================================================

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------

FORM N-1A

Registration Statement Under The Securities Act Of 1933 [X]
Pre-Effective Amendment No.__ [ ]
Post-Effective Amendment No. 15 [X]

and/or

Registration Statement Under The Investment Company Act Of 1940 [X]
Amendment No. 16 [X]
(Check appropriate box or boxes)

NORTHSTAR GALAXY TRUST
(Exact Name of Registrant Specified in Charter)

40 North Central Avenue, Suite 1200
Phoenix, AZ 85004
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (800) 551-8643

James M. Hennessy, Esq. With Copies To:
Pilgrim Investments, Inc. Jeffrey S. Puretz, Esq.
40 North Central Avenue, Suite 1200 Dechert Price & Rhoads
Phoenix, AZ 85004 1775 Eye Street, N.W.
(Name and Address of Agent for Service) Washington, D.C. 20006

----------

It is proposed that this filing will become effective (check appropriate box):

[ ] Immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[X] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

[ ] This post-effective amendment designated a new effective
date for a previously filed post-effective amendment.

================================================================================
<PAGE>
PILGRIM (SM)
- ---------------------------
FUNDS FOR SERIOUS INVESTORS

Prospectus
Pilgrim Variable Products Trust
April 30, 2000

U.S. EQUITY PORTFOLIOS
Pilgrim VP MagnaCap Portfolio
Pilgrim VP Research Enhanced Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP MidCap Opportunities Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP SmallCap Opportunities Portfolio

INTERNATIONAL EQUITY PORTFOLIO
Pilgrim VP International Value Portfolio

INCOME PORTFOLIO
Pilgrim VP High Yield Bond Portfolio

This prospectus contains important
information about investing in the
Pilgrim Variable Products Trust
Portfolios. You should read it
carefully before you invest, and
keep it for future reference.
Please note that your investment:
is not a bank deposit, is not
insured or guaranteed by the FDIC,
the Federal Reserve Board or any
other government agency, is
affected by market fluctuations --
there is no guarantee that the
portfolios will achieve their
objectives. As with all portfolios,
the Securities and Exchange
Commission (SEC) has not approved
or disapproved these securities nor
has the SEC judged whether the
information in this prospectus is
accurate or adequate. Any
representation to the contrary is a
criminal offense.
<PAGE>
WHAT'S INSIDE
- --------------------------------------------------------------------------------

[GRAPHIC] These pages contain a description of each of our
portfolios, including its objective, investment strategy,
OBJECTIVE risks and portfolio manager.

[GRAPHIC] You'll also find:

INVESTMENT What you pay to invest. A list of the fees and expenses
STRATEGY you pay -- both directly and indirectly -- when you invest
in a portfolio.

[GRAPHIC]
How the portfolio has performed. A chart that shows the
RISKS portfolio's financial performance since inception.

[GRAPHIC]

HOW THE
PORTFOLIO HAS
PERFORMED

U.S. EQUITY PORTFOLIOS
MagnaCap Portfolio 2
Research Enhanced Index Portfolio 4
Growth Opportunities Portfolio 6
MidCap Opportunities Portfolio 8
Growth + Value Portfolio 10
SmallCap Opportunities Portfolio 12
INTERNATIONAL EQUITY PORTFOLIO
International Value Portfolio 14
PILGRIM INCOME PORTFOLIO
High Yield Bond Portfolio 16
What you pay to invest 18
Management of the Portfolios 20
Information for Investors 23
Portfolio earnings and your taxes 24
More information about risks 24
Financial highlights 28
Where to go for more information Back cover

Risk is the potential that your investment will lose money or not earn as much
as you hope. The Pilgrim Variable Products Trust Portfolios have varying degrees
of risk, depending on the securities they invest in. Please read this prospectus
carefully to be sure you understand the principal risks and strategies
associated with each of our portfolios. You should consult the Statement of
Additional Information (SAI) for a complete list of the risks and strategies.

[GRAPHIC]
<PAGE>
- ----------
Growth
Portfolios
- ----------
Adviser
PILGRIM VP MAGNACAP PORTFOLIO Pilgrim Investments, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks growth of capital, with dividend income as a secondary
consideration.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio is managed with the philosophy that companies that can best meet
the Portfolio's objectives have paid increasing dividends or have had the
capability to pay rising dividends from their operations. The Portfolio normally
invests at least 65% of its assets in equity securities of companies that meet
the following disciplined criteria:

Consistent Dividends -- A company must have paid or had the financial capability
from its operations to pay a dividend in 8 out of the last 10 years.

Substantial Dividend Increases -- A company must have increased its dividend or
had the financial capability from its operations to have increased its dividend
at least 100% over the past 10 years.

Reinvested Earnings -- Dividend payout must be less than 65% of current
earnings.

Strong Balance Sheet -- Long term debt should be no more than 25% of the
company's total capitalization or a company's bonds must be rated at least A- or
A-3.

Attractive Price -- A company's current share price should be in the lower half
of the stock's price/earnings ratio range for the past ten years, or the ratio
of the share price to its anticipated future earnings must be an attractive
value in relation to the average for its industry peer group or that of the
Standard & Poor's 500 Composite Stock Price Index.

The equity securities in which the Portfolio may invest include common stocks,
convertible securities, and rights or warrants. Normally, the Portfolio's
investments are primarily in larger companies that are included in the largest
500 U.S. companies. The remainder of the Portfolio's assets may be invested in
equity securities that the adviser believes have growth potential because they
represent an attractive value. In selecting securities for the Portfolio,
preservation of capital is also an important consideration. Although the
Portfolio normally will be invested as fully as practicable in equity
securities, assets that are not invested in equity securities may be invested in
high quality debt securities. The Portfolio may invest up to 5% of its assets,
measured at the time of investment, in foreign securities.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Market Trends -- from time to time, the stock market may not favor the value
securities that meet the Portfolio's disciplined investment criteria. Rather,
the market could favor growth-oriented stocks or small company stocks, or may
not favor equities at all.

Debt securities -- the value of debt securities may fall when interest rates
rise. Debt securities with longer maturities tend to be more sensitive to
changes in interest rates, usually making them more volatile than debt
securities with shorter maturities.

Credit Risk -- the Portfolio could lose money if the issuer of a debt security
is unable to meet its financial obligations or goes bankrupt. This is especially
true during periods of economic uncertainty or economic downturns.

2 Pilgrim VP MagnaCap Portfolio
<PAGE>
PILGRIM VP MAGNACAP PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The Portfolio does not have performance history because it did not commence
operations until April 30, 2000.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP MagnaCap Portfolio 3
<PAGE>
- ----------
Growth
Portfolios
- ----------

Adviser
Pilgrim Investments, Inc.
Sub-Adviser
J.P. Morgan
PILGRIM VP RESEARCH ENHANCED INDEX PORTFOLIO Investment Management
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in large companies that make up the S&P 500
Index. Based on extensive research regarding projected company earnings and
dividends, a valuation model ranks companies in each industry group according to
their relative value. Using this valuation model, the portfolio managers select
stocks for the Portfolio. Within each industry, the Portfolio modestly
overweights stocks that are ranked as undervalued or fairly valued while
modestly underweighting or not holding stocks that appear overvalued. Industry
by industry, the Portfolio's assets are invested so that the Portfolio's
industry sector allocations and market cap weightings closely parallel those of
the S&P 500.

By owning a large number of stocks within the S&P 500, with an emphasis on those
that appear undervalued or fairly valued, and by tracking the industry
weightings and other characteristics of that index, the Portfolio seeks returns
that modestly exceed those of the S&P 500 over the long term with virtually the
same level of volatility.

Under normal market conditions, the Portfolio invests at least 80% of its total
assets in common stocks included in the S&P 500. It may also invest in other
common stocks not included in the S&P 500. The Portfolio may also invest in
certain higher-risk investments, including derivatives (generally these
investments will be limited to S&P 500 options).

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. The Portfolio invests primarily in equity
securities of larger companies, which sometimes have more stable prices than
smaller companies. The portfolio managers try to remain fully invested in
companies included in the S&P 500, and generally do not change this strategy
even temporarily, which could make the Portfolio more susceptible to poor market
conditions.

Market Trends -- from time to time, the stock market may not favor the large
company securities that are ranked as undervalued or fairly valued in which the
Portfolio invests. Rather, the market could favor small company stocks,
growth-oriented stocks, or may not favor equities at all.

Risks of Using Derivatives -- derivatives are subject to the risk of changes in
the market price of the security, credit risk which respect to the counterparty
to the derivative instrument, and the risk of loss due to changes in interest
rates. The use of certain derivatives may also have a leveraging effect, which
may increase the volatility of the Portfolio. The use of derivatives may reduce
returns for the Portfolio.

4 Pilgrim VP Research Enhanced Index Portfolio
<PAGE>
PILGRIM VP RESEARCH ENHANCED INDEX PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The bar chart and table below show the Portfolio's annual returns and long-term
performance, and illustrate the variability of the Portfolio's returns. The
Portfolio's past performance is not an indication of future performance.

The bar chart below provides some indication of the risks of investing in the
Portfolio by showing changes in the performance of the Portfolio's shares from
year to year.(1)

[Bar chart to be added]

The table below compares the portfolio's long-term performance with the Lehman
Government/Corporate Bond Index (selected in light of the portfolio's previous
investment objective and strategies) and the S&P 500 Index.

Average annual total return
Lehman
Government/ S&P
Corporate 500
Portfolio Bond Index(2) Index(3)
----------- --------------- ----------
One year, ended
December 31, 1999 %
Five years, ended
December 31, 1999 %
Since inception(4) %

- -----------------

(1) The Portfolio commenced operations on May 6, 1994 as the Northstar
Multi-Sector Bond Fund with the investment objective of maximizing current
income consistent with the preservation of capital. From inception through
April 29, 1999, the Portfolio operated under this investment objective and
related investment strategies. However, effective April 30, 1999 and
pursuant to shareholder approval, the Portfolio changed its investment
objective and strategies to be managed as a large cap equity portfolio.

(2) The Lehman Brothers Government/Corporate Bond Index measures the
performance of U.S. government bonds, U.S. corporate bonds and Yankee
bonds.

(3) The S & P 500 Index measures the performance of approximately 500 large
capitalization stocks.

(4) The Portfolio commenced operations on May 6, 1994.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP Research Enhanced Index Portfolio 5
<PAGE>
- ----------
Growth
Portfolios
- ----------

Adviser
PILGRIM VP GROWTH OPPORTUNITIES PORTFOLIO Pilgrim Advisors, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

This Portfolio seeks long-term growth of capital.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in U.S. companies that the portfolio manager
feels have above average prospects for growth.

Under normal market conditions, the Portfolio invests at least 65% of its total
assets in securities purchased on the basis of the potential for capital
appreciation. These securities may be from large-cap, mid-cap or small-cap
companies.

The portfolio managers use a "top-down" disciplined investment process, which
includes extensive database screening, frequent fundamental research,
identification and implementation of a trend-oriented approach in structuring
the portfolio and a sell discipline. The portfolio managers seek to invest in
companies expected to benefit most from major social, economic and technological
trends that are likely to shape the future of business and commerce over the
next three to five years, and attempt to provide a framework for identifying the
industries and companies expected to benefit most. This top down approach is
combined with rigorous fundamental research (a bottom up approach) to guide
stock selection and portfolio structure.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. This Portfolio invests in companies that
the portfolio manager feels have the potential for rapid growth, which may give
the Portfolio a higher risk of price volatility than a fund that emphasizes
other styles, such as a value-oriented style. The Portfolio may invest in small
and medium-sized companies, which may be more susceptible to price swings than
larger companies because they have fewer financial resources, limited product
and market diversification and many are dependent on a few key managers.

Market Trends -- from time to time, the stock market may not favor the growth
securities in which the Portfolio invests. Rather, the market could favor
value-oriented stocks, or may not favor equities at all.

Inability to Sell Securities -- securities of smaller companies trade in lower
volume and may be less liquid than securities of larger, more established
companies. The Portfolio could lose money if it cannot sell a security at the
time and price that would be most beneficial to the Portfolio.

6 Pilgrim VP Growth Opportunities Portfolio
<PAGE>
PILGRIM VP GROWTH OPPORTUNITIES PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The Portfolio does not have performance history because it did not commence
operations until April 30, 2000.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP Growth Opportunities Portfolio 7
<PAGE>
- ----------
Growth
Portfolios
- ----------

Adviser
PILGRIM VP MIDCAP OPPORTUNITIES PORTFOLIO Pilgrim Advisors, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks long-term capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in the common stocks of mid-sized U.S. companies
that the portfolio managers feel have above average prospects for growth. For
this Portfolio, mid-sized companies are companies with market capitalizations
that fall within the range of companies in the S&P MidCap 400 Index. As of
November 30, 1999, the market capitalizations that fall within the range of
companies in the S&P MidCap 400 ranged from $195 million to $23 billion. The
market capitalization range will change as the range of the companies included
in the S&P MidCap 400 changes.

The portfolio managers use a "top-down" disciplined investment process, which
includes extensive database screening, frequent fundamental research,
identification and implementation of a trend-oriented approach in structuring
the portfolio and a sell discipline. The portfolio managers seek to invest in
companies expected to benefit most from the major social, economic and
technological trends that are likely to shape the future of business and
commerce over the next three to five years, and attempt to provide a framework
for identifying the industries and companies expected to benefit most. This
top-down approach is combined with rigorous fundamental research (a bottom-up
approach) to guide stock selection and portfolio structure.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. This Portfolio invests in companies that
the portfolio manager feels have the potential for growth, which may give the
Portfolio a higher risk of price volatility than a fund that emphasizes other
styles, such as a value-oriented style. The Portfolio invests in medium-sized
companies, which may be more susceptible to price swings than larger companies
because they have fewer financial resources, more limited product and market
diversification, and may be dependent on a few key managers.

Market Trends -- from time to time, the stock market may not favor the mid-cap
growth securities in which the Portfolio invests. Rather, the market could favor
value-oriented stocks or large or small company stocks, or may not favor
equities at all.

Inability to Sell Securities -- securities of mid-size companies usually trade
in lower volume and may be less liquid than securities of larger, more
established companies. The Portfolio could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Portfolio.

8 Pilgrim VP MidCap Opportunities Portfolio
<PAGE>
PILGRIM VP MIDCAP OPPORTUNITIES PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

This Portfolio does not have performance history because it did not commence
operations until April 30, 2000.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP MidCap Opportunities Portfolio 9
<PAGE>
- ----------
Growth
Portfolios
- ----------

Adviser
Pilgrim Advisors, Inc.
Sub-Adviser
PILGRIM VP GROWTH + VALUE PORTFOLIO Navellier Fund Management, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in a diversified portfolio of equity securities,
including common and preferred stock, warrants and convertible securities. The
Portfolio invests in common stock of companies the portfolio manager believes
are poised to rise in price. The Sub-Adviser uses a "bottom-up" quantitative
screening process designed to identify and select inefficiently priced stocks
that achieved superior returns compared to their risk characteristics. The
Sub-Adviser first uses a proprietary computer model to calculate and analyze a
"reward/risk" ratio. The reward/risk ratio is designed to identify stocks with
above average market returns and risk levels which are reasonable for higher
return rates. The Sub-Adviser then applies a quantitative analysis which focuses
on growth and value fundamental characteristics, such as earnings growth,
earnings momentum, price to earnings (P/E) ratios, and internal reinvestment
rates. The Sub-Adviser then allocates stocks according to how they complement
other portfolio holdings.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. The Portfolio's performance will be
affected if the portfolio manager makes an inaccurate assessment of economic
conditions and investment opportunities, and chooses growth companies that do
not grow as quickly as hoped, or value companies that continue to be undervalued
by the market. Although the Sub-Adviser invests in value companies to decrease
volatility, these investments may also lower the Portfolio's performance. The
Portfolio's investments in smaller and mid-sized companies may be more
susceptible to price swings than investments in larger companies because they
have fewer financial resources, limited product and market diversification and
many are dependent on a few key managers.

Market Trends -- from time to time, the stock market may not favor the growth
securities in which the Portfolio invests. Rather, the market could favor value
stocks, or favor value stocks to the exclusion of growth stocks, or may not
favor equities at all.

Inability to Sell Securities -- securities of smaller and mid-sized companies
usually trade in lower volume and may be less liquid than securities of larger,
more established companies. The Portfolio could lose money if it cannot sell a
security at the time and price that would be most beneficial to the Portfolio.

Changes in Interest Rates -- the value of the Portfolio's convertible securities
may fall when interest rates rise. Convertibles with longer durations tend to be
more sensitive to changes in interest rates, usually making them more volatile
than debt securities with shorter durations.

Credit Risk -- the Portfolio could lose money if the issuer of a convertible
security is unable to meet its financial obligations or goes bankrupt.

10 Pilgrim VP Growth + Value Portfolio

<PAGE>
PILGRIM VP GROWTH + VALUE PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The bar chart below provides some indication of the risks of investing in the
Portfolio by showing changes in the performance of the Portfolio's shares from
year to year.

Year by year total return (%)(1)

1995 1996 1997 1998 1999
- ----- ----- ----- ----- -----
24.78 22.99 14.65 19.32

Best and worst quarterly performance during this period:

4th quarter 1998: up 29.86%

3rd quarter 1998: down 17.04%

The table below provides some indication of the risks of investing in the
Portfolio by comparing the Portfolio's performance to that of a broad measure of
market performance -- Russell 2000 Index.

Average Annual Total Return
Russell
2000
Portfolio Index(2)
--------- --------
One year, ended
December 31, 1999 %

Five years ended
December 31, 1999 %

Since inception(3) %

(2) The Russell 2000 Index is an unmanaged index that measures the performance
of securities of small companies.

(3) The Portfolio commenced operations on May 6, 1994.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP Growth + Value Portfolio 11
<PAGE>
- ----------
Growth
Portfolios
- ----------

Adviser
PILGRIM VP SMALLCAP OPPORTUNITIES PORTFOLIO Pilgrim Advisors, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks long-term capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests at least 65% of its total assets in the common stock of
smaller, lesser-known U.S. companies that the portfolio manager believes have
above average prospects for growth. For this Portfolio, smaller companies are
those with market capitalizations that fall within the range of companies in the
Russell 2000 Index, which is an index that measures the performance of small
companies. The market capitalization range will change as the range of the
companies included in the Russell 2000 changes. The median market capitalization
of companies held by the Portfolio as of December 31, 1999 was $ billion.

The portfolio manager uses a "top-down" disciplined investment process, which
includes extensive database screening, frequent fundamental research,
identification and implementation of a brand-oriented approach in structuring
the portfolio and a sell discipline. The portfolio manager seeks to invest in
companies expected to benefit most from the major social, economic and
technological trends that are likely to shape the future of business and
commerce over the next three to five years, and attempts to provide a framework
for identifying the industries and companies expected to benefit most. This
top-down approach is combined with rigorous fundamental research (a bottom-up
approach) to guide stock selection and portfolio structure.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. This Portfolio invests in companies that
the portfolio manager feels have above average prospects for growth, which may
give the Portfolio a higher risk of price volatility than a Portfolio that
emphasizes other styles, such as a value-oriented style. The Portfolio invests
in smaller companies, which may be more susceptible to price swings than larger
companies because they have fewer financial resources, more limited product and
market diversification and many are dependent on a few key managers.

Market Trends -- from time to time, the stock market may not favor the small
sized growth securities in which the Portfolio invests. Rather, the market could
favor value-oriented stocks or large company stocks, or may not favor equities
at all.

Inability to Sell Securities -- securities of smaller companies usually trade in
lower volume and may be less liquid than securities of larger, more established
companies. The Portfolio could lose money if it cannot sell a security at the
time and price that would be most beneficial to the Portfolio.

12 Pilgrim VP SmallCap Opportunities Portfolio
<PAGE>
PILGRIM VP SMALLCAP OPPORTUNITIES PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The bar chart below provides some indication of the risks of investing in the
Portfolio by showing changes in the performance of the Portfolio's shares from
year to year.

Year by year total return (%)(1)

1995 1996 1997 1998 1999
- ----- ----- ----- ----- -----
21.39 13.61 15.82 17.30

Best and worst quarterly performance during this period:

4th quarter 1998: up 22.61%

3rd quarter 1998: down 8.12%

The table below provides some indication of the risks of investing in the
Portfolio by comparing the Portfolio's performance to that of a broad measure of
market performance -- Russell 2000 Index.

Average annual total return
Russell
2000
Portfolio Index(2)
--------- --------
One year, ended
December 31, 1999 %

Five years ended
December 31, 1999 %

Since inception(3) %

(2) The Russell 2000 Index is an unmanaged index that measures the performance
of securities of small companies.

(3) The Portfolio commenced operations on May 6, 1994.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP SmallCap Opportunities Portfolio 13
<PAGE>
- ----------------
International
Equity Portfolio
- ----------------

Adviser
Pilgrim Advisors, Inc.
Sub-Adviser
PILGRIM VP INTERNATIONAL VALUE PORTFOLIO Brandes Investment Partners
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks long-term capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in foreign companies with market capitalizations
greater than $1 billion, but it may hold up to 25% of its assets in companies
with smaller market capitalizations.

The portfolio managers apply the technique of "value investing" by seeking
stocks that their research indicates are priced below their long-term value.

The Portfolio holds common stocks, preferred stocks, American, European and
Global depository receipts, as well as convertible securities.

Under normal circumstances, the Portfolio will invest at least 65% of its total
assets in securities of companies located in at least three countries other than
the U.S. The Portfolio may invest up to the greater of:

* 20% of its assets in any one country or industry, or,

* 150% of the weighting of the country or industry in the MSCI EAFE Index, as
long as the Portfolio meets any industry concentration or diversification
requirements under the Investment Company Act.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio's
investments may be affected by the following additional risks:

Risks of Foreign Investing -- foreign investments may be riskier than U.S.
investments for many reasons, including changes in currency exchange rates,
unstable political and economic conditions, a lack of adequate company
information, differences in the way securities markets operate, less secure
foreign banks or securities depositories than those in the U.S., and foreign
controls on investment. To the extent the Portfolio invests in emerging market
countries, the risks may be greater, partly because emerging market countries
may be less politically and economically stable than other countries. It may
also be more difficult to buy and sell securities in emerging market countries.

Price Volatility -- the value of the Portfolio changes as the prices of its
investments go up or down. Equity securities face market, issuer and other
risks, and their values may go up or down, sometimes rapidly and unpredictably.
Market risk is the risk that securities may decline in value due to factors
affecting securities markets generally or particular industries. Issuer risk is
the risk that the value of a security may decline for reasons relating to the
issuer, such as changes in the financial condition of the issuer. While equities
may offer the potential for greater long-term growth than most debt securities,
they generally have higher volatility. The Portfolio invests primarily in equity
securities of larger companies, which sometimes have more stable prices than
smaller companies. However, the Portfolio may also invest in small and
medium-sized companies, which may be more susceptible to price swings than
larger companies because they have fewer financial resources, limited product
and market diversification and many are dependent on a few key managers.

Market Trends -- from time to time, the stock market may not favor the
value-oriented stocks that the Portfolio invest in. Rather, the market could
favor growth-oriented stocks, or may not favor equities at all.

Inability to Sell Securities -- securities of smaller companies and some foreign
companies may trade in lower volume and may be less liquid than securities of
larger, more established companies or U.S. companies. The Portfolio could lose
money if it cannot sell a security at the time and price that would be most
beneficial to the Portfolio.

14 Pilgrim VP International Value Portfolio
<PAGE>
PILGRIM VP INTERNATIONAL VALUE PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The bar chart below provides some indication of the risks of investing in the
Portfolio by showing changes in the performance of the Portfolio's shares from
year to year.

Year by year total return (%)(1)

1998 1999
----- -----
16.93

Best and worst quarterly performance during this period:

4th quarter 1998: up 18.80%

3rd quarter 1998: down 14.03%

The table below provides some indication of the risks of investing in the
Portfolio by comparing the Portfolio's performance to that of a broad measure of
market performance -- MSCI EAFE Index.

Average Annual Total Return
MSCI
EAFE
Portfolio Index(2)
--------- --------
One year, ended
December 31, 1999 %

Since inception(3) %

- ----------
(1) These figures are as of December 31, 1999. They do not reflect expenses and
charges which are, or may be, imposed under your annuity contract or life
insurance policy and would be lower if they did.

(2) The Morgan Stanley Capital International European Australasian Far East
(MSCI EAFE) Index measures the performance of securities listed on
exchanges in markets in Europe, Australia and the Far East.

(3) The Portfolio commenced operations on August 8, 1997.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP International Value Portfolio 15
<PAGE>
- ---------
Income
Portfolio
- ---------

Adviser
PILGRIM VP HIGH YIELD BOND PORTFOLIO Pilgrim Advisors, Inc.
- --------------------------------------------------------------------------------

OBJECTIVE

[GRAPHIC]

The Portfolio seeks high income and capital appreciation.

INVESTMENT
STRATEGY

[GRAPHIC]

The Portfolio invests primarily in higher-yielding, lower-rated bonds (junk
bonds) to achieve high current income with potential for capital growth.

Under normal market conditions, the Portfolio invests at least 65% of its total
assets in high-yielding, lower-rated U.S. dollar-denominated debt securities of
U.S. and foreign issuers. It may also invest up to 35% of its total assets in
securities denominated in foreign currencies. It may invest up to 50% of its
assets in securities of foreign issuers, including 35% in emerging market debt.
Most of the debt securities the Portfolio invests in are lower-rated and
considered speculative, including bonds in the lowest rating categories and
unrated bonds. It can invest up to 10%, and can hold up to 25% of its assets in
securities rated below Caa by Moody's or CCC by S&P. It also holds debt
securities that pay fixed, floating or adjustable interest rates and may hold
pay-in-kind securities and discount obligations, including zero coupon
securities, and mortgage-related or asset-backed debt securities.

The Portfolio may also invest in equity or equity-related securities, such as
common stock, preferred stock, convertible securities and rights and warrants
attached to debt instruments.

In selecting equity securities, the adviser uses a "bottom-up" analysis that
focuses on individual companies and assesses the company's valuation, financial
condition, management, competitiveness, and other factors.

- --------------------------------------------------------------------------------

RISKS

[GRAPHIC]

You could lose money on an investment in the Portfolio. The Portfolio may be
affected by the following risks, among others:

Changes in Interest Rates -- The Portfolio's performance is significantly
affected by changes in interest rates. The value of the Portfolio's investments
may fall when interest rates rise. The Portfolio may be sensitive to changes in
interest rates because it may invest in debt securities with longer durations.
Debt securities with longer durations tend to be more sensitive to changes in
interest rates, usually making them more volatile than debt securities with
shorter durations. The value of the Portfolio's high-yield and zero coupon
securities are particularly sensitive to changes in interest rates.

Credit Risk -- the Portfolio could lose money if the issuer of a debt security
is unable to meet its financial obligations or goes bankrupt. This Portfolio may
be subject to more credit risk than other income funds, because it invests in
high-yield debt securities, which are considered predominantly speculative with
respect to the issuer's continuing ability to meet interest and principal
payments. This is especially true for bonds in the lowest rating category and
unrated bonds, and during periods of economic uncertainty or economic downturns.

Prepayment Risk -- The Portfolio may invest in mortgage-related securities,
which can be paid off early if the borrowers on the underlying mortgages pay off
their mortgages sooner than scheduled. If interest rates are falling, the
Portfolio will be forced to reinvest this money at lower yields.

Inability to Sell Securities -- high-yield securities may be less liquid than
higher quality investments. Foreign securities and mortgage-related and
asset-backed debt securities may be less liquid than other debt securities. The
Portfolio could lose money if it cannot sell a security at the time and price
that would be most beneficial to the Portfolio. A security in one of the lowest
rating categories, that is unrated, or whose credit rating has been lowered may
be particularly difficult to sell. Valuing less liquid securities involves
greater exercise of judgment and may be more subjective than valuing securities
using market quotes.

Risk of Foreign Investing -- foreign investments may be riskier than U.S.
investments for many reasons, including changes in currency exchange rates,
unstable political and economic conditions, a lack of adequate company
information, differences in the way securities markets operate, less secure
foreign banks or securities depositories than those in the U.S., and foreign
controls on investment. To the extent the Portfolio invests in emerging markets
countries, the risks may be greater, partly because emerging market countries
may be less politically and economically stable than other countries. It may
also be more difficult to buy and sell securities in emerging market countries.

The Portfolio may invest in midcap and smallcap companies, which may be more
susceptible to price swings than larger companies because they have fewer
financial resources, more limited product and market diversification, and many
are dependent on a few key managers.

16 Pilgrim VP High Yield Bond Portfolio
<PAGE>
PILGRIM VP HIGH YIELD BOND PORTFOLIO
- --------------------------------------------------------------------------------

HOW THE
PORTFOLIO
HAS
PERFORMED

[GRAPHIC]

The bar chart below provides some indication of the risks of investing in the
Portfolio by showing changes in the performance of the Portfolio's shares from
year to year.

Year by year total return (%)(1)

1995 1996 1997 1998 1999
- ----- ----- ----- ----- -----
18.55 15.75 9.00 -0.12

Best and worst quarterly performance during this period:

1st quarter 1995: up 5.26%

3rd quarter 1998: down 7.97%

The table below provides some indication of the risks of investing in the
Portfolio by comparing the Portfolio's performance to that of a broad measure of
market performance -- Lehman High Yield Bond Index.

Average annual total return
Lehman
High Yield
Portfolio Bond Index(2)
--------- -------------
One year, ended
December 31, 1999 %

Five years ended
December 7, 1997 %

Since inception(3) %

- ----------
(1) These figures are as of December 31 of each year. They do not reflect
expenses and charges which are, or may be, imposed under your annuity
contract or life insurance policy and would be lower if they did.
(2) The Lehman Brothers High Yield Bond Index measures the performance of
fixed-income securities that are similar, but not identical, to those in
the portfolio.
(3) The Portfolio commenced operations on May 6, 1994.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP High Yield Bond Portfolio 17
<PAGE>
WHAT YOU PAY TO INVEST
- --------------------------------------------------------------------------------

The table that follows shows operating expenses paid each year by the Portfolio.
The table does not reflect expenses and charges which are, or may be, imposed
under your annuity contract or life insurance policy. You'll find details about
these expenses and charges in the accom-panying prospectus.

Operating expenses paid each year by the Portfolio(1)
(as a % of average net assets)

Total
Portfolio
Management Other operating
Portfolio fee expenses expenses(2)
- --------- ------------ -------- -----------
MagnaCap % 0.75
Research Enhanced Index % 0.75
Growth Opportunities % 0.75
MidCap Opportunities % 0.75
Growth + Value % 0.75
SmallCap Opportunities % 0.75
International Value % 1.00
High Yield Bond % 0.75

- ----------
(1) This table shows the estimated operating expenses for each Portfolio as a
ratio of expenses to average daily net assets. For the SmallCap
Opportunities Portfolio, Growth + Value Portfolio, International Value
Portfolio, Research Enhanced Index Portfolio, and High Yield Bond
Portfolio, these estimates are based on the Porfolio's actual operating
expenses for its most recent complete fiscal year. Because the Growth
Opportunities Portfolio, MagnaCap Portfolio, and MidCap Opportunities
Portfolio are new and therefore have no histroical expense data, their
expenses are estimated.
(2) The Adviser and Administrator have agreed to waive or reimburse voluntarily
certain expenses of the Portfolios. As a result of the voluntary fee
waivers or reimbursement, the net expenses, as a percentage of net assets,
of the Portfolios during the fiscal year ended December 31, 1999 were as
follows: SmallCap Opportunities Portfolio -- %; Growth + Value Portfolio --
%; International Value Portfolio -- %; Research Enhanced Index Portfolio --
%; and High Yield Bond Portfolio -- %.

Examples

The examples that follow are intended to help you compare the cost of investing
in the Portfolios with the cost of investing in other mutual funds. The examples
do not reflect expenses and changes which are, or may be, imposed under your
annuity contract or life insurance policy. Each example assumes that you
invested $10,000, reinvested all your dividends, the Portfolio earned an average
annual return of 5%, and annual operating expenses remained at the current
level. Keep in mind that this is only an estimate -- actual expenses and
performance may vary.

Portfolio 1 year 3 years 5 years 10 years
- --------- ------ ------- ------- --------
MagnaCap $
Research Enhanced Index $
Growth Opportunities $
MidCap Opportunities $
Growth + Value $
SmallCap Opportunities $
International Value $
High Yield Bond $

18 What You Pay to Invest
<PAGE>
ADVISERS MANAGEMENT OF THE PORTFOLIOS
- --------------------------------------------------------------------------------

Pilgrim Advisors, Inc., formerly Northstar Investment Management Corporation
("Pilgrim Advisors") or Pilgrim Investments, Inc. ("Pilgrim Investments") serves
as the investment adviser to each of the Portfolios. Both are indirect
wholly-owned subsidiaries of ReliaStar Financial Corp. ("ReliaStar") (NYSE:
RLR). Through its subsidiaries, ReliaStar offers individuals and institutions
life insurance and annuities, employee benefits products and services, life and
health reinsurance, retirement plans, mutual funds, bank products, and personal
finance education.

Pilgrim Advisors or Pilgrim Investments, as the case may be, has overall
responsibility for the management of the Portfolios for which it serves as
adviser. The adviser provides or oversees all investment advisory and portfolio
management services for each Portfolio, and assists in managing and supervising
all aspects of the general day-to-day business activities and operations of the
Portfolios, including custodial, transfer agency, dividend disbursing,
accounting, auditing, compliance and related services. Pilgrim Advisors is a
registered investment adviser that currently manages over $4 billion in mutual
funds and institutional accounts.

Pilgrim Advisors' and Pilgrim Investments' principal address is 40 North Central
Avenue, Suite 1200, Phoenix, Arizona 85004.

Organized in December 1994, Pilgrim Investments is registered as an investment
adviser. As of September 30, 1999, Pilgrim Investments managed over $7.7 billion
in assets. On October 29, 1999, ReliaStar acquired Pilgrim Investments. Pilgrim
Advisors and Pilgrim Investments share certain resources and investment
personnel.

Pilgrim Advisors or Pilgrim Investments, as the case may be, receives a monthly
fee for its services based on the average daily net assets of each of the
Portfolios it manages.

The table below shows the aggregate annual advisory fee paid by each Portfolio
for the most recent fiscal year as a percentage of that Portfolio's average
daily net assets. Because the Pilgrim VP Growth Opportunities Portfolio, Pilgrim
VP MagnaCap Portfolio and Pilgrim VP MidCap Opportunities Portfolio were not
offered until April 30, 2000, the advisory fee for those Portfolios reflects
current contract rate.

Portfolio Advisory Fee
--------- ------------
Pilgrim VP MagnaCap Portfolio 0.75
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP Growth Opportunities Portfolio 0.75
Pilgrim VP MidCap Opportunities Portfolio 0.75
Pilgrim VP Growth + Value Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP High Yield Bond Portfolio

Pilgrim Advisors directly manages the following Portfolios:

Growth Opportunities Portfolio and
MidCap Opportunities Portfolio

The following individuals share responsibility for the day-to-day management of
the Growth Opportunities Portfolio and MidCap Opportunities Portfolio:

Mary Lisanti and Jeffrey Bernstein have co-managed the Growth Opportunities
Portfolio and MidCap Opportunities Portfolio since the Portfolios were formed in
April 2000.

Ms. Lisanti joined Pilgrim Advisors in May 1998. She has over 20 years of
experience in small and mid-cap investments. Before joining Pilgrim Advisors,
Inc., Ms. Lisanti was a Portfolio Manager at Strong Capital Management where she
managed the Strong Small Cap Fund and co-managed the Strong Mid Cap Fund. From
1993 to 1996, Ms. Lisanti was a Managing Director and Head of Small and
Mid-Capitalization Equity Strategies at Bankers Trust Corp. where she managed
the BT Small Cap Fund and the BT Capital Appreciation Fund. Prior to Bankers
Trust, Ms. Lisanti was a Portfolio Manager with the Evergreen Funds. She began
her career as an Analyst specializing in emerging growth stocks with Donaldson,
Lufkin & Jenrette and Shearson Lehman Hutton, and was ranked the number one
Institutional Investor Emerging Growth Stock Analyst in 1989. She is a Chartered
Financial Analyst, and a Member of the New York Society of Security Analysts and
the Financial Analyst Federation.

Mr. Bernstein joined Pilgrim Advisors in May 1998. He has over 10 years of
experience in small and mid-cap investments. Before joining Pilgrim Advisors,
Mr. Bernstein was a Portfolio Manager at Strong Capital Management where he
co-managed the Strong MidCap Fund. From November 1995 to February 1997, Mr.
Bernstein was a Portfolio Manager with Berkeley Capital. From September 1993 to
November 1995, Mr. Bernstein was an Assistant Portfolio Manager at Bankers Trust
Corp. Prior to Bankers Trust, Mr. Bernstein was an Analyst for Cowen & Co.

SmallCap Opportunities Portfolio

Mary Lisanti, whose background is described above, has served as a manager of
the SmallCap Opportunities Portfolio since .

High Yield Bond Portfolio

Kevin Mathews has served as Senior Portfolio Manager of Pilgrim VP High Yield
Bond Portfolio since November 1999.

Mr. Mathews has over 16 years of experience in the management of high-yield
fixed income investments. At Pilgrim Investments, an affiliate of Pilgrim
Advisors, he serves as a Senior Vice President and Senior Portfolio Manager.
Prior to joining Pilgrim Investments, Mr. Mathews was a Vice President and
Senior Portfolio Manager of Van Kampen American Capital.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Management of the Portfolios 19
<PAGE>
MANAGEMENT OF THE PORTFOLIOS
- --------------------------------------------------------------------------------

Pilgrim Investments directly manages the following Portfolio:

MagnaCap Portfolio

The Pilgrim VP MagnaCap Portfolio is managed by a team led by Howard N.
Kornblue, Senior Vice President and Senior Portfolio Manager for Pilgrim
Investments. Mr. Kornblue has served as a Portfolio Manager of MagnaCap Fund,
which is a fund in the Pilgrim group of funds, since 1989. The other individuals
on the team are G. David Underwood and Robert M. Kloss.

Mr. Underwood is Vice President and Senior Portfolio Manager for Pilgrim
Investments. Prior to joining Pilgrim Investments in December, 1996, Mr.
Underwood served as Director of Funds Management for First Interstate Capital
Management. Mr. Underwood's prior experience includes a 10 year association with
Integra Trust Company of Pittsburgh where he served as Director of Research and
Senior Portfolio Manager.

20 Management of the Portfolios
<PAGE>
SUBADVISERS MANAGEMENT OF THE PORTFOLIOS
- --------------------------------------------------------------------------------

For the following portfolios, Pilgrim Advisors has employed a Sub-Adviser to
provide the day-to-day management of the Portfolio. The Sub-Advisers are among
the most respected institutional investment advisers in the world, and have been
situated primarily on the basis of their successful application of a consistent,
well-defined, long-term investment appraisals over a period of several market
cycles.

International Value Portfolio
Brandes Investment Partners, L.P.

A registered investment adviser, Brandes Investment Partners, L.P. (Brandes)
serves as Sub-Adviser to the Pilgrim VP International Value Portfolio. The
company was formed in May 1996 as the successor to its general partner, Brandes
Investment Partners, Inc. which has been providing investment advisory services
(through various predecessor entities) since 1974. Brandes currently manages
over $33 billion in international portfolios. Brandes' principal address is
12750 High Bluff Drive, San Diego, California 92130.

Charles Brandes has co-managed the Pilgrim VP International Value Portfolio
since the portfolio was formed in August 1997. Mr. Brandes has over 31 years of
investment management experience. He founded the general partner of Brandes
Investment Partners, L.P. in 1974 and owns a controlling interest in it. At
Brandes Investment Partners, L.P., he serves as a Managing Partner. He is a
Chartered Financial Analyst and a Member of the Association for Investment
Management and Research.

Jeff Busby has co-managed Pilgrim VP International Value Portfolio since the
portfolio was formed in August 1997. Mr. Busby has over 13 years of investment
management experience. At Brandes Investment Partners, L.P., he serves as a
Managing Partner. He is also responsible for overseeing all trading activities
for the firm. He is a Chartered Financial Analyst, and a Member of the
Association for Investment Management and Research and the Financial Analysts
Society.

Charles Brandes and Jeff Busby structure the portfolio of the Pilgrim VP
International Value Portfolio from a buy list determined by an investment
committee of Brandes.

Research Enhanced Index Portfolio
J.P. Morgan Investment Management Inc.

A registered investment adviser, J.P. Morgan Investment Management Inc. (J.P.
Morgan) serves as Sub-Adviser to the Pilgrim VP Research Enhanced Index
Portfolio. The firm was formed in 1984. The firm evolved from the Trust and
Investment Division of Morgan Guaranty Trust Company which acquired its first
tax-exempt client in 1913 and its first pension account in 1940. J.P. Morgan
currently manages approximately $326 billion for institutions and pension funds.
The company is a wholly owned subsidiary of J.P. Morgan & Co. J.P. Morgan's
principal address is 522 Fifth Avenue, New York, New York 10036.

James Wiess has co-managed the Pilgrim VP Research Enhanced Index Portfolio
since April 1999. At J.P. Morgan Investment Management Inc., he serves as a
Portfolio Manager and Member of the Structured Equity Group with the
responsibility of portfolio rebalancing and research and development of
structured equities strategies.

Mr. Wiess has over 16 years of investment management experience. Before joining
J.P. Morgan Investment Management Inc. In 1992, Mr. Wiess was a stock index
arbitrager for seven years at Oppenheimer & Co. and a consultant for Data
Resources. He is a chartered financial analyst.

Timothy Devlin has co-managed the Pilgrim VP Research Enhanced Index Portfolio
since April 1999. At J.P. Morgan Investment Management Inc., he serves as a
Portfolio Manager and Member of the Structured Equity Group.

Mr. Devlin has over 12 years of investment management experience. Before joining
J.P. Morgan Investment Management Inc. in 1996, Mr. Devlin was a Portfolio
Manager for nine years at Mitchell Hutchins Asset Management, Inc. where he
managed quantitatively-driven portfolios for institutional and retail investors.

Growth + Value Portfolio
Navellier Fund Management, Inc.

A registered investment adviser, Navellier Fund Management, Inc. (Navellier)
serves as Sub-Adviser to the Pilgrim VP Growth + Value Portfolio. Navellier and
its affiliate, Navellier & Associates, Inc., manage over $2 billion for
institutions, pension funds and high net worth individuals. The company is
wholly owned by Louis Navellier. Navellier's principal address is 1 East
Liberty, Third Floor, Reno, Nevada 89501.

Louis Navellier has managed the Pilgrim VP Growth + Value Portfolio since
February 1996. Mr. Navellier has over 19 years of investment management
experience and is the sole owner of Navellier & Associates, Inc., a registered
investment adviser that manages investments for institutions, pension funds and
high net worth individuals. Mr. Navellier's newsletter, MPT Review, has been
published for over 19 years and is widely renowned throughout the investment
community.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Management of the Portfolios 21
<PAGE>
INFORMATION FOR INVESTORS
- --------------------------------------------------------------------------------

About Your Investment

The Portfolios are available only to owners of variable annuity contracts or
variable life insurance policies issued by ReliaStar Life Insurance Company,
Northern Life Insurance Company and ReliaStar Life Insurance Company of New York
(collectively "ReliaStar Life"). Shares of the portfolios may be sold in the
future to separate accounts of other affilated or unaffiliated insurance
companies.

You do not buy, sell or exchange shares of the portfolios. You choose investment
options through your annuity contract or life insurance policy.

ReliaStar Life then invests in the Portfolios according to the investment
options you've chosen. You should consult the accompanying variable account
prospectus for additional information about how this works.

Pilgrim Variable Products Trust may discontinue offering shares of any portfolio
at any time. If a portfolio is discontinued, any allocation to that portfolio
will be allocated to another portfolio that the Trustees believe is suitable, as
long as any required regulatory standards are met.

How Shares Are Priced

The price that ReliaStar Life pays when it buys and the price that ReliaStar
Life receives when it sells or exchanges shares is determined by the net asset
value (NAV) per share of the portfolio. NAV per share for each Portfolio is
calculated each business day as the close of regular trading on the New York
Stock Exchange (usually 4:00 p.m. Eastern time). The NAV per share for each
Portfolio is calculated by taking the value of a Portfolio's assets,
substracting that Portfolio's liabilities, and dividing by the number of shares
that are outstanding. Please note that foreign securities may trade in their
primary markets on weekends or other days when the portfolios do not price their
shares. Therefore, the value of a portfolio's investments (if the portfolio
holds foreign securities) may change on days when you will not be able to
reallocate between investment options.

In general, assets are valued based on actual or estimated market value, with
special provisions for assets not having readily available market quotations,
and short-term debt securities, and for situations where market quotations are
deemed unreliable. Short-term debt securities having a maturity of 60 days or
less are valued at amortized cost, unless the amortized cost does not
approximate market value. Securities prices may be obtained from automated
pricing services. When market quotations are not readily available or are deemed
unreliable, securities are valued at their fair value as determined in good
faith under the supervision of the Board of Trustees. Valuing securities at fair
value involves greater reliance on judgment than securities that have readily
available market quotations.

When ReliaStar Life is buying shares, it will pay the NAV that is next
calculated after we receive its order in proper form. When ReliaStar Life is
selling shares, it will receive the NAV that is next calculated after we receive
its order in proper form.

22 Information For Investors
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------

Portfolio Earnings and Your Taxes

Each Portfolio distributes virtually all of its net investment income and net
capital gains to shareholders in the form of dividends. The portfolios pay
dividends quarterly.

As a contract owner invested in a Portfolio, you are entitled to a share of the
income and capital gains that the portfolio distributes. The amount you receive
is based on the number of shares you own.

How the Portfolios Pay Distributions

Each Portfolio intends to meet the requirements for being a tax-qualified
regulated investment company, which means they generally do not pay federal
income tax on the earnings they distribute to shareholders.

You should consult the variable account or variable contract prospectus, along
with your tax advisor for information as to how investing in variable accounts
affects your personal tax situation.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Dividends, Distributions and Taxes 23
<PAGE>

MORE INFORMATION ABOUT RISKS
- --------------------------------------------------------------------------------

All mutual funds involve risk -- some more than others -- and there is always
the chance that you could lose money or not earn as much as you hope. A
Portfolio's risk profile is largely a factor of the principal securities in
which it invests and investment techniques that it uses. The following pages
discuss the risks associated with certain of the types of securities in which
the Portfolios may invest and certain of the investment practices that the
Portfolios may use. For more information about these and other types of
securities and investment techniques that may be used by the Portfolios, see the
SAI.

Many of the investment techniques and strategies discussed in this prospectus
and in the Statement of Additional Information are discretionary, which means
that the adviser or sub-adviser can decide whether to use them or not. The
adviser or sub-adviser of a Portfolio may also use investment techniques or make
investments in securities that are not a part of the Portfolio's principal
investment strategy.

PRINCIPAL RISKS

Investments in Foreign Securities. There are certain risks in owning foreign
securities, including those resulting from: fluctuations in currency exchange
rates; devaluation of currencies; political or economic developments and the
possible imposition of currency exchange blockages or other foreign governmental
laws or restrictions; reduced availability of public information concerning
issuers; accounting, auditing and financial reporting standards or other
regulatory practices and requirements that are not uniform when compared to
those applicable to domestic companies; settlement and clearance procedures in
some countries that may not be reliable and can result in delays in settlement;
higher transaction and custody expenses than for domestic securities; and
limitations on foreign ownership of equity securities. Also, securities of many
foreign companies may be less liquid and the prices more volatile than those of
domestic companies. With certain foreign countries, there is the possibility of
expropriation, nationalization, confiscatory taxation and limitations on the use
or removal of funds or other assets of the Portfolios, including the withholding
of dividends.

Each Portfolio that invests in foreign securities may enter into foreign
currency transactions either on a spot or cash basis at prevailing rates or
through forward foreign currency exchange contracts to have the necessary
currencies to settle transactions, or to help protect Portfolio assets against
adverse changes in foreign currency exchange rates, or to provide exposure to a
foreign currency commensurate with the exposure to securities from that country.
Such efforts could limit potential gains that might result from a relative
increase in the value of such currencies, and might, in certain cases, result in
losses to the Portfolio.

Emerging Markets Investments. Because of less developed markets and economies
and, in some countries, less mature governments and governmental institutions,
the risks of investing in foreign securities can be intensified in the case of
investments in issuers domiciled or doing substantial business in emerging
market countries. These risks include: high concentration of market
capitalization and trading volume in a small number of issuers representing a
limited number of industries, as well as a high concentration of investors and
financial intermediaries; political and social uncertainties; over-dependence on
exports, especially with respect to primary commodities, making these economies
vulnerable to changes in commodity prices; overburdened infrastructure and
obsolete or unseasonal financial systems; environmental problems; less well
developed legal systems; and less reliable custodial services and settlement
practices.

Inability to Sell Securities -- some securities usually trade in lower volume
and may be less liquid than securities of large established companies. These
less liquid securities could include securities of small and mid-size U.S.
companies, high-yield securities, convertible securities, unrated debt and
convertible securities, securities that originate from small offerings, and
foreign securities, particularly those from companies in emerging markets. A
Portfolio could lose money if it cannot sell a security at the time and price
that would be most beneficial to a Portfolio.

High Yield Securities. Investments in high yield securities generally provide
greater income and increased opportunity for capital appreciation than
investments in higher quality debt securities, but they also typically entail
greater potential price volatility and principal and income risk. High yield
securities are not considered investment grade, and are regarded as
predominantly speculative with respect to the issuing company's continuing
ability to meet principal and interest payments. The prices of high yield
securities have been found to be less sensitive to interest rate changes than
higher-rated investments, but more sensitive to adverse economic downturns or
individual corporate developments. High yield securities structured as zero
coupon or pay-in-kind securities tend to be more volatile. The secondary market
in which high yield securities are traded is generally less liquid than the
market for higher grade bonds. At times of less liquidity, it may be more
difficult to value high yield securities.

Corporate Debt Securities. Corporate debt securities are subject to the risk of
the issuer's inability to meet principal and interest payments on the obligation
and may also be subject to price volatility due to such factors as interest rate
sensitivity, market perception of the credit-worthiness of the issuer and
general market liquidity. When interest rates decline, the value of a
Portfolios' debt securities can be expected to rise, and when interest rates
rise, the value of those securities can be expected to decline. Debt securities
with longer maturities tend to be more sensitive to interest rate movements than
those with shorter maturities.

One measure of risk for fixed income securities is duration. Duration is one of
the tools used by a portfolio manager in selection of fixed income securities.
Historically, the maturity of a bond was used as a proxy for the sensitivity of
a bond's price to changes in interest rates, otherwise known as a bond's
"interest rate risk" or "volatility." According to this measure, the longer the

24 More Information About Risks
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MORE INFORMATION ABOUT RISKS
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maturity of a bond, the more its price will change for a given change in market
interest rates. However, this method ignores the amount and timing of all cash
flows from the bond prior to final maturity. Duration is a measure of average
life of a bond on a present value basis, which was developed to incorporate a
bond's yield, coupons, final maturity and call features into one measure. For
point of reference, the duration of a noncallable 7% coupon bond with a
remaining maturity of 5 years is approximately 4.5 years, and the duration of a
noncallable 7% coupon bond with a remaining maturity of 10 years is
approximately 8 years. Material changes in interest rates may impact the
duration calculation.

U.S. Government Securities. Some U.S. Government agency securities may be
subject to varying degrees of credit risk particularly those not backed by the
full faith and credit of the United States Government. All U.S. Government
securities may be subject to price declines in the securities due to changing
interest rates.

Convertible Securities. The price of a convertible security will normally
fluctuate in some proportion to changes in the price of the underlying equity
security, and as such is subject to risks relating to the activities of the
issuer and general market and economic conditions. The income component of
convertible securities causes fluctuations based upon changes in interest rates
and the credit quality of the issuer. Convertible securities are often lower
rated securities. A Portfolio may be required to redeem or convert a convertible
security before the holder would otherwise choose.

Other Investment Companies. Each Portfolio (except the MagnaCap Portfolio) may
invest in other investment companies to the extent permitted by a Portfolio's
investment policies. When a Portfolio invests in other investment companies, you
indirectly pay a proportionate share of the expenses of that other investment
company (including management fees, administration fees, and custodial fees) in
addition to the expenses of the Portfolio.

Restricted and Illiquid Securities. Each Portfolio may invest in restricted and
illiquid securities (except MagnaCap Portfolio may not invest in restricted
securities). If a security is illiquid, the Portfolio might be unable to sell
the security at a time when the adviser might wish to sell, and the security
could have the effect of decreasing the overall level of a Portfolio's
liquidity. Further, the lack of an established secondary market may make it more
difficult to value illiquid securities, which could vary from the amount the
Portfolio could realize upon disposition. Restricted securities, i.e.,
securities subject to legal or contractual restrictions on resale, may be
illiquid. However, some restricted securities may be treated as liquid, although
they may be less liquid than registered securities traded on established
secondary markets.

Mortgage-Related Securities. Although mortgage loans underlying a
mortgage-backed security may have maturities of up to 30 years, the actual
average life of a mortgage-backed security typically will be substantially less
because the mortgages will be subject to normal principal amortization, and may
be prepaid prior to maturity. Like other fixed income securities, when interest
rates rise, the value of a mortgage-backed security generally will decline;
however, when interest rates are declining, the value of mortgage-backed
securities with prepayment features may not increase as much as other fixed
income securities. The rate of prepayments on underlying mortgages will affect
the price and volatility of a mortgage-related security, and may have the effect
of shortening or extending the effective maturity of the security beyond what
was anticipated at the time of the purchase. Unanticipated rates of prepayment
on underlying mortgages can be expected to increase the volatility of such
securities. In addition, the value of these securities may fluctuate in response
to the market's perception of the creditworthiness of the issuers of
mortgage-related securities owned by a Portfolio. Additionally, although
mortgages and mortgage-related securities are generally supported by some form
of government or private guarantee and/or insurance, there is no assurance that
private guarantors or insurers will be able to meet their obligations.

Interests in Loans. Certain Portfolios may invest in participation interests or
assignments in secured variable or floating rate loans, which include
participation interests in lease financings. Loans are subject to the credit
risk of nonpayment of principal or interest. Substantial increases in interest
rates may cause an increase in loan defaults. Although the loans will generally
be fully collateralized at the time of acquisition, the collateral may decline
in value, be relatively illiquid, or lose all or substantially all of its value
subsequent to a Portfolio's investment. Many loans are relatively illiquid, and
may be difficult to value.

Derivatives. Generally, derivatives can be characterized as financial
instruments whose performance is derived, at least in part, from the performance
of an underlying asset or assets. Some derivatives are sophisticated instruments
that typically involve a small investment of cash relative to the magnitude of
risks assumed. These may include swap agreements, options, forwards and futures.
Derivative securities are subject to market risk, which could be significant for
those that have a leveraging effect. Many of the Portfolios do not invest in
these types of derivatives, and some do, so please check the description of the
Portfolio's policies. Derivatives are also subject to credit risks related to
the counterparty's ability to perform, and any deterioration in the
counterparty's creditworthiness could adversely affect the instrument. A risk of
using derivatives is that the adviser might imperfectly judge the market's
direction. For instance, if a derivative is used as a hedge to offset investment
risk in another security, the hedge might not correlate to the market's
movements and may have unexpected or undesired results, such as a loss or a
reduction in gains.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

More Information About Risks 25
<PAGE>
MORE INFORMATION ABOUT RISKS
- --------------------------------------------------------------------------------

Temporary Defensive Strategies. When the adviser or sub-adviser to a Portfolio
anticipates unusual market or other conditions, the Portfolio may temporarily
depart from its principal investment strategies as a defensive measure. To the
extent that a Portfolio invests defensively, it likely will not achieve capital
appreciation.

Portfolio Turnover. Each Portfolio (except the MagnaCap Portfolio) is generally
expected to engage in frequent and active trading of portfolio securities to
achieve its investment objective. A high portfolio turnover rate involves
greater expenses to a Portfolio, including brokerage commissions and other
transaction costs, and is likely to generate more taxable short-term gains for
shareholders, which may have an adverse effect on the performance of the
Portfolio.

OTHER RISKS

Repurchase Agreements. Each Portfolio may enter into repurchase agreements,
which involve the purchase by a Portfolio of a security that the seller has
agreed to buy back. If the seller defaults and the collateral value declines,
the Portfolio might incur a loss. If the seller declares bankruptcy, the
Portfolio may not be able to sell the collateral at the desired time.

Lending Portfolio Securities. In order to generate additional income, each
Portfolio may lend portfolio securities in an amount up to 331|M/3% of total
Portfolio assets to broker-dealers, major banks, or other recognized domestic
institutional borrowers of securities. As with other extensions of credit, there
are risks of delay in recovery or even loss of rights in the collateral should
the borrower default or fail financially.

Borrowing. Each Portfolio may borrow for certain types of temporary or emergency
purposes subject to certain limits. Borrowing may exaggerate the effect of any
increase or decrease in the value of portfolio securities or the net asset value
of a Portfolio, and money borrowed will be subject to interest costs. Interest
costs on borrowings may fluctuate with changing market rates of interest and may
partially offset or exceed the return earned on borrowed funds. Under adverse
market conditions, a Portfolio might have to sell portfolio securities to meet
interest or principal payments at a time when fundamental investment
considerations would not favor such sales.

Reverse Repurchase Agreements and Dollar Rolls. A reverse repurchase agreement
or dollar roll involves the sale of a security, with an agreement to repurchase
the same or substantially similar securities at an agreed upon price and date.
Whether such a transaction produces a gain for a Portfolio depends upon the
costs of the agreements and the income and gains of the securities purchased
with the proceeds received from the sale of the security. If the income and
gains on the securities purchased fail to exceed the costs, net asset value will
decline faster than otherwise would be the case. Reverse repurchase agreements
and dollar rolls, as leveraging techniques, may increase a Portfolio's yield;
however, such transactions also increase a Portfolio's risk to capital and may
result in a shareholder's loss of principal.

Short Sales. Each Portfolio (except the MagnaCap Portfolio), may make short
sales. A "short sale" is the sale by a Portfolio of a security which has been
borrowed from a third party on the expectation that the market price will drop.
If the price of the security rises, the Portfolio may have to cover its short
position at a higher price than the short sale price, resulting in a loss.

Pairing Off Transactions. A pairing-off transaction occurs when a Portfolio
commits to purchase a security at a future date, and then the Portfolio
"pairs-off" the purchase with a sale of the same security prior to or on the
original settlement date. Whether a pairing-off transaction on a debt security
produces a gain depends on the movement of interest rates. If interest rates
increase, then the money received upon the sale of the same security will be
less than the anticipated amount needed at the time the commitment to purchase
the security at the future date was entered and the Portfolio will experience a
loss.

Percentage and Rating Limitations Unless otherwise stated, the percentage
limitations in this prospectus apply at the time of investment.

26 More Information About Risks
<PAGE>
Financial
Highlights
- --------------------------------------------------------------------------------

The financial highlights tables on the following pages are intended to help you
understand each Portfolio's financial performance (other than the Pilgrim VP
Growth Opportunities Portfolio, Pilgrim VP MagnaCap Portfolio, and Pilgrim VP
MidCap Opportunities Portfolio which are being offered for the first time in
this Prospectus) for the past five years or, if shorter, the period of the
Portfolio's operations. Certain information reflects financial results for a
single share. The total returns in the tables represent the rate that an
investor would have earned or lost on an investment in the Portfolio (assuming
reinvestment of all dividends and distributions). A report of each Portfolio's
independent auditor, along with the Portfolio's financial statements, are
included in the Portfolio's annual report, which is available upon request.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

27
<PAGE>
Financial
PILGRIM VP RESEARCH ENHANCED INDEX PORTFOLIO(1) Highlights
- --------------------------------------------------------------------------------

The following chart shows the portfolio's financial performance. These figures
have been audited by PricewaterhouseCoopers LLP, whose report, along with the
portfolio's financial statements, are included in the annual report, which is
available upon request.

Ratios and supplemental data
Net assets at the end of the period ($000s) $ 14,437 10,548 6,277 3,766
Ratio of expenses to average net assets % 0.80 0.80 0.80 0.80
Ratio of expense reimbursement to average net assets % 0.49 0.56 0.88 1.26
Ratio of net investment income to average net assets % 7.53 8.31 8.38 8.52
Portfolio turnover rate % 93 162 121 83
</TABLE>
- ----------
(1) The Portfolio commenced operations on May 6, 1994 as the Northstar
Multi-Sector Bond Fund with the investment objective of maximizing current
income consistent with the preservation of capital. From inception through
April 29, 1999, the Portfolio operated under this investment objective and
related investment strategies. However Effective April 30, 1999 and
pursuant to shareholder approval, the Portfolio changed its investment
objective and strategies to be managed as a large cap equity portfolio.
Accordingly, the past performance in this table may not be indicative of
the Portfolio's future performance.

28 Pilgrim VP Research Enhanced Index Portfolio
<PAGE>
Financial
Highlights PILGRIM VP GROWTH + VALUE PORTFOLIO
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Year ended December 31, 1999 1998 1997 1996 1995
- ----------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Operating performance
Net asset value at the beginning of the period $ 15.85 14.08 11.56 10.04
Net investment income $ (0.03) 0.09 0.08 0.20
Net realized and unrealized gain on investments $ 3.09 1.95 2.57 2.27
Total from investment operations $ 3.06 2.04 2.65 2.47
Dividends from net investment income $ (0.01) (0.10) (0.09) (0.19)
Dividends from net realized gain on investments sold $ (0.14) (0.17) (0.04) (0.76)
Total distributions $ (0.15) (0.27) (0.13) (0.95)
Net asset value at the end of the period $ 18.76 15.85 14.08 11.56
Total investment return % 19.32 14.66 22.99 24.78
Ratios and supplemental data
Net assets at the end of the period ($000s) $ 41,593 32,156 15,564 3,813
Ratio of expenses to average net assets % 0.80 0.80 0.80 0.80
Ratio of expense reimbursement to average net assets % 0.22 0.29 0.90 1.24
Ratio of net investment income to average net assets % (0.17) 0.70 0.65 1.77
Portfolio turnover rate % 216 178 161 123
</TABLE>

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP Growth + Value Portfolio 29
<PAGE>
Financial
PILGRIM VP SMALLCAP OPPORTUNITIES PORTFOLIO Highlights
- --------------------------------------------------------------------------------

Ratios and supplemental data
Net assets at the end of the period ($000s) $ 24,053 21,531 12,579 7,410
Ratio of expenses to average net assets % 0.82 0.80 0.80 0.80
Ratio of expense reimbursement to average net assets % 0.32 0.31 0.60 0.94
Ratio of net investment income to average net assets % 3.00 3.72 3.67 3.63
Portfolio turnover rate % 161 55 129 74
</TABLE>
- ---------- 30 Pilgrim VP SmallCap Opportunities Portfolio
<PAGE>
Financial
Highlights PILGRIM VP INTERNATIONAL VALUE PORTFOLIO
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Year ended December 31, 1999 1998 1997(1)
- ----------------------- ---- ---- -------
<S> <C> <C> <C> <C>
Operating performance
Net asset value at the beginning of the period $ 10.10 10.00
Net investment income $ 0.21 0.03
Net realized and unrealized gain on investments $ 1.49 0.10
Total from investment operations $ 1.70 0.13
Dividends from net investment income $ (0.22) (0.03)
Dividends from net realized gain on investments sold $ (0.50) 0.00
Total distributions $ (0.72) (0.03)
Net asset value at the end of the period. $ 11.08 10.10
Total investment return % 16.93 1.30

Ratios and supplemental data
Net assets at the end of the period ($000s) $ 13,764 5,937
Ratio of expenses to average net assets % 0.84 0.80(2)
Ratio of expense reimbursement to average net assets % 0.84 1.81(2)
Ratio of net investment income to average net assets % 1.90 0.97(2)
Portfolio turnover rate % 30 5
</TABLE>
- ----------
(1) The portfolio commenced operations on August 8, 1997.

(2) Annualized.

[GRAPHIC]
If you have any questions, please call 1-800-992-0180.

Pilgrim VP International Value Portfolio 31
<PAGE>
Financial
PILGRIM VP HIGH YIELD BOND PORTFOLIO Highlights
- --------------------------------------------------------------------------------

Ratios and supplemental data
Net assets at the end of the period ($000s) $ 21,320 12,606 6,619 4,773
Ratio of expenses to average net assets % 0.80 0.79 0.80 0.80
Ratio of expense reimbursement to average net assets % 0.43 0.56 0.93 1.31
Ratio of net investment income to average net assets % 8.92 8.44 8.72 10.61
Portfolio turnover rate % 135 152 159 157
</TABLE>
- ----------
32 Pilgrim VP High Yield Bond Portfolio
<PAGE>
WHERE TO GO FOR MORE INFORMATION

You'll find more information about the Pilgrim Variable Products Trust
Portfolios in our:

ANNUAL/SEMIANNUAL REPORTS

Include a discussion of recent market conditions and investment strategies that
significantly affected performance, the financial statements and the auditor's
reports (in annual report only).

STATEMENT OF ADDITIONAL INFORMATION

The SAI contains more detailed information about the Pilgrim Variable Products
Trust Portfolios. The SAI is legally part of this prospectus (it is incorporated
by reference). A copy has been filed with the Securities and Exchange Commission
(SEC).

Please write or call for a free copy of the current Annual/semiannual reports,
the SAI or other portfolio information, or to make investment related inquiries:

Pilgrim Variable Products Trust
40 North Central Avenue, Suite 1200
Phoenix, AZ 85004

1-800-992-0180

This information may also be reviewed or obtained from the SEC. In order to
review the information in person, you will need to visit the SEC's Public
Reference Room in Washington, D.C. or call 202-942-8090. Otherwise, you may
obtain the information for a fee by contacting the SEC:

Securities and Exchange Commission
Public Reference Section
Washington, D.C. 20549-0102

Or at the e-mail address: [email protected].

Or obtain the information at no cost by visiting the SEC's Internet website at
http://www.sec.gov.

When contacting the SEC, you will want to refer to the Pilgrim Variable Products
Trust's SEC file number, which is 811-08220.
<PAGE>
GRAPHICS DESCRIPTION APPENDIX

There are four icon sized graphics used throughout the prospectuses as follows:

1. In the sections describing the Objective of the Funds, the graphic icon is
that of a dart in the bullseye of a target.

2. In the sections describing the Investment Strategy of the Funds, the
graphic icon is that of a compass pointing due north.

3. In the sections describing the Risks of the Funds, the graphic icon is that
of an old fashioned scale tilting heavy on the left side.

4. In the sections describing the Performance history of the Funds, the
graphic icon is that of a stack of US currency bills.

5. On the bottom footer of every odd numbered page (right hand page), the
graphic icon is that of a telephone by the 800 number of the fund to call
for information.
<PAGE>
PILGRIM VARIABLE PRODUCTS TRUST

STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000

40 North Central Avenue, Suite 1200
Phoenix, AZ 85004
(800) 334-3436

Pilgrim Variable Products Trust (the "Trust") is an open-end series
management investment company organized as a Massachusetts business trust. The
Trust changed its name on [__________], 1999 from the "Northstar Galaxy Trust"
to the "Pilgrim Variable Products Trust." The Trust consists of eight separate
series (each a "Portfolio"), each of which represents shares of beneficial
interest in a separate portfolio of securities and other assets with its own
objective and policies. Each Portfolio is managed separately by Pilgrim
Advisors, Inc. ("Pilgrim Advisors") or Pilgrim Investments, Inc. ("Pilgrim
Investments") (each, an "Adviser" or collectively the "Advisers"). Pilgrim
Advisors has engaged Navellier Fund Management, Inc. ("Navellier" or the
"Sub-Adviser") to serve as Sub-Adviser to the Pilgrim VP Growth + Value
Portfolio, subject to the supervision of Pilgrim Advisors. Pilgrim Advisors has
engaged Brandes Investment Partners, L.P. ("Brandes" or the "Sub-Adviser") to
serve as sub-adviser to the Pilgrim VP International Value Portfolio. The
Adviser has encouraged J.P. Morgan Investment Management Inc. ("J.P. Morgan" or
the "Sub-Adviser") to serve as Sub-Adviser to the Pilgrim VP Research Enhanced
Index Portfolio (formerly the Pilgrim Trust Multi-Sector Bond Portfolio").
Collectively Navellier, Brandes and J.P. Morgan will be referred to as the
"Sub-Advisers."

Shares of the Trust are issued and redeemed in conjunction with investments
in and payments under variable annuity and variable life contracts. Shares of
the Trust are currently offered to separate accounts ("Variable Accounts") of
ReliaStar Life Insurance Company (formerly "Northwestern National Life Insurance
Company"), Northern Life Insurance Company and ReliaStar Life Insurance Company
of New York (the "Affiliated Insurance Companies"). The Variable Accounts of the
Affiliated Insurance Companies invest in shares of one or more of the Portfolios
in accordance with allocation instructions received from Variable Contract
Owners. Such allocation rights are described further in the Prospectus for the
Variable Account.

A summary of the eight diversified investment portfolios comprising the
series of the Trust (the "Portfolios") is set forth herein and in the Prospectus
for the Portfolios. This document is not the Prospectus of the Portfolios but is
incorporated therein by reference and should be read in conjunction with the
Prospectus dated April 30, 2000. Copies of the Prospectus may be obtained upon
request and without charge by contacting the Trust at the address or phone
number above.

TABLE OF CONTENTS

INVESTMENT RESTRICTIONS................................................... 2
OTHER INVESTMENT TECHNIQUES............................................... 8
RISK FACTORS AND SPECIAL CONSIDERATIONS................................... 13
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION........................... 16
PORTFOLIO TURNOVER........................................................ 17
SERVICES OF THE ADVISERS AND ADMINISTRATOR................................ 18
SERVICES OF THE SUB-ADVISERS.............................................. 20
NET ASSET VALUE........................................................... 21
PURCHASES, REDEMPTIONS AND EXCHANGE TRANSACTIONS.......................... 21
DIVIDENDS AND DISTRIBUTIONS............................................... 22
FEDERAL INCOME TAX STATUS................................................. 22
TRUSTEES AND OFFICERS..................................................... 23
OTHER INFORMATION......................................................... 28
PERFORMANCE INFORMATION................................................... 28
APPENDIX ................................................................. A-1
<PAGE>
INVESTMENT RESTRICTIONS

PILGRIM VP EMERGING GROWTH, GROWTH + VALUE, RESEARCH ENHANCED INDEX AND
HIGH YIELD PORTFOLIOS. The following investment restrictions are fundamental
policies and cannot be changed without the approval of the holders of a majority
of the Portfolio's outstanding voting securities (defined in the Investment
Company Act of 1940 (the "1940 Act")) as the lesser of (a) more than 50% of the
outstanding shares or (b) 67% or more of the shares represented at a meeting at
which more than 50% of the outstanding shares are represented). If a percentage
restriction on investment or use of assets set forth below its adhered to at the
time a transaction is effected, later changes in percentage resulting from
changing market values will not be considered a deviation from this policy. A
Portfolio may not:

1. Borrow money, issue senior securities, or pledge, mortgage or
hypothecate its assets, except that it may (i) borrow from banks, but only if
immediately after such borrowing there is asset coverage of 300% and (ii) enter
into transactions in options, futures, and options on futures as described in
the Portfolio's Prospectus and Statement of Additional Information (the deposit
of assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when- issued or delayed delivery
basis and collateral arrangements with respect to initial or variation margin
deposits for futures contracts will not be deemed to be pledges of the
Portfolio's assets);

2. Underwrite the securities of others;

3. Purchase or sell real property, including real estate limited
partnerships (but each Portfolio may purchase marketable securities of companies
which deal in real estate or interests therein, including real estate investment
trusts;

4. Deal in commodities or commodity contracts except in the manner
described in the current Prospectus and Statement of Additional Information of
the Trust;

5. Make loans to other persons (but each Portfolio may, however, lend
portfolio securities, up to 33% of net assets at the time the loan is made, to
brokers or dealers or other financial institutions not affiliated with the
Portfolio or the Adviser, subject to conditions established by the Adviser) (See
"Risk Factors and Special Considerations: Securities Lending"), and may purchase
or hold participations in loans in accordance with the investment objectives and
policies of the Portfolio as described in the current Prospectus and Statement
of Additional Information of the Trust;

6. Participate in any joint trading accounts;

7. Purchase on margin (except that for purposes of this restriction, the
deposit or payment of initial or variation margin in connection with futures
contracts will not be deemed to be purchases of securities on margin);

8. Sell short, except that the Portfolio may enter into short sales against
the box in the manner described in the current Prospectus and Statement of
Additional Information for the Portfolio;

9. Invest more than 25% of its assets in any one industry or related group
of industries;

10. With respect to 75% of a Portfolio's assets, purchase a security (other
than U.S. government obligations) if as a result more than 5% of the value of
total assets of the Portfolio would be invested in securities of a single
issuer; or

11. With respect to 75% of a Portfolio's assets, purchase a security if as
a result more than 10% of any class of securities, or more than 10% of the
outstanding voting securities of an issuer, would be held by the Portfolio.

2
<PAGE>
The following policies are non-fundamental and may be changed without
shareholder approval. A Portfolio may not:

1. Purchase securities of other investment companies, except in connection
with a merger, consolidation or sale of assets, and except that the Portfolio
may purchase shares of other investment companies subject to such restrictions
as may be imposed by the 1940 Act and rules thereunder or by any state in which
shares of the Portfolio are registered; and provided further that the Portfolios
may invest all of their assets in the securities or beneficial interests of a
singly pooled investment fund having substantially the same objectives, policies
and limitations as the Portfolio.

2. Make an investment for the purpose of exercising control or management;
or

3. Invest more than 15% of its net assets (determined at the time of
investment) in illiquid securities, including securities subject to legal or
contractual restrictions on resale (which may include private placements and
those 144A securities for which the Trustees, pursuant to procedures adopted by
the Portfolio, have determined there is no liquid secondary market), repurchase
agreements maturing in more than seven days, options traded over the counter
that a Portfolio has purchased, securities being used to cover options a
Portfolio has written, securities for which market quotations are not
readily-available, or other securities which legally or in the Adviser's or
Trustees' opinion may be deemed illiquid;

As a fundamental policy, the Portfolios may borrow money from banks to the
extent permitted under the 1940 Act. As an operating (non-fundamental) policy,
the Portfolios do not intend to borrow any amount in excess of 10% of their
respective assets, and would do so only for temporary emergency or
administrative purposes. In addition, to avoid the potential leveraging of
assets, the Portfolios will not make additional investments when its borrowings
are in excess of 5% of total assets. If a Portfolio should determine to expand
its ability to borrow beyond the current operating policy, the Portfolio's
Prospectus would be amended and shareholders would be notified.

PILGRIM VP INTERNATIONAL VALUE PORTFOLIO. The following investment
restrictions are fundamental policies and cannot be changed without the approval
of the holders of a majority of the Portfolio's outstanding voting securities
(defined in the Investment Company Act of 1940 (the "1940 Act")) as the lesser
of (a) more than 50% of the outstanding shares or (b) 67% or more of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented). If a percentage restriction on investment or use of assets set
forth below its adhered to at the time a transaction is effected, later changes
in percentage resulting from changing market values will not be considered a
deviation from this policy. The Portfolio may not:

1. Issue senior securities, except to the extent permitted under the 1940
Act, borrow money or pledge its assets, except that the Portfolio may borrow on
an unsecured basis from banks for temporary or emergency purposes or for the
clearance of transactions in amounts not exceeding 10% of its total assets (not
including the amount borrowed), provided that it will not make investments while
borrowings in excess of 5% of the value of its total assets are outstanding;

2. Act as underwriter (except to the extent the Portfolio may be deemed to
be an underwriter in connection with the sale of securities in its investment
portfolio);

3. Invest 25% or more of its total assets, calculated at the time of
purchase and taken at market value, in any one industry (other than U.S.
government securities), except that the Portfolio reserves the right to invest
all of its assets in shares of another investment company;

4. Purchase or sell real estate or interests in real estate or real estate
limited partnerships (although the Portfolio may purchase and sell securities
which are secured by real estate, securities of companies which invest or deal
in real estate and securities issued by real estate investment trusts);

3
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5. Purchase or sell commodities or commodity futures contracts, except that
the Portfolio may purchase and sell stock index futures contracts for hedging
purposes to the extent permitted under applicable federal and state laws and
regulations and except that the Portfolio may engage in foreign exchange forward
contracts;

6. Make loans of cash (except for purchases of debt securities consistent
with the investment policies of the Portfolio and except for repurchase
agreements);

The following policies are non-fundamental and may be changed without
shareholder approval. The Portfolio may not:

1. Make short sales of securities or maintain a short position, except for
short sales against the box;

2. Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of transactions;

3. Write put or call options, except that the Portfolio may (i) write
covered call options on individual securities and on stock indices; (ii)
purchase put and call options on securities which are eligible for purchase by
the Portfolio and on stock indices; and (iii) engage in closing transactions
with respect to its options writing and purchases, in all cases subject to
applicable federal and state laws and regulations;

4. Purchase any security if as a result the Portfolio would then hold more
than 10% of any class of voting securities of an issuer (taking all common stock
issues as a single class, all preferred stock issues as a single class, and all
debt issues as a single class), except that the Portfolio reserves the right to
invest all of its assets in a class of voting securities of another investment
company;

5. Invest more than 10% of its assets in the securities of other investment
companies or purchase more than 3% of any other investment company's voting
securities or make any other investment in other investment companies except as
permitted by federal and state law;

6. Invest more than 15% of its net assets in illiquid securities.

PILGRIM VP MAGNACAP PORTFOLIO. The following investment restrictions are
fundamental policies and cannot be changed without the approval of the holders
of a majority of the Portfolio's outstanding voting securities (defined in the
Investment Company Act of 1940 (the "1940 Act")) as the lesser of (a) more than
50% of the outstanding shares or (b) 67% or more of the shares represented at a
meeting at which more than 50% of the outstanding shares are represented). If a
percentage restriction on investment or use of assets set forth below its
adhered to at the time a transaction is effected, later changes in percentage
resulting from changing market values will not be considered a deviation from
this policy. The Portfolio may not:

1. Engage in the underwriting of securities of other issuers.

2. Engage in the purchase and sale of interests in real estate, commodities
or commodity contracts (although this does not preclude marketable securities of
companies engaged in these activities).

3. Engage in the making of loans to other persons, except (a) through the
purchase of a portion of an issue of publicly distributed bonds, debentures or
other evidences of indebtedness customarily purchased by institutional investors
or (b) by the loan of its portfolio securities in accordance with the policies
described under "Lending of Portfolio Securities."

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4. Borrow money except in conformity with the limits set forth in the
Investment Company Act of 1940; notwithstanding the foregoing, short-term
credits necessary for settlements of securities transactions are not considered
borrowings.

5. Mortgage, pledge or hypothecate its assets in any manner, except in
connection with any authorized borrowings and then not in excess of 33% of the
value of its total assets.

6. Effect short sales, or purchase or sell puts, calls, spreads or
straddles.

7. Buy or sell oil, gas, or other mineral leases, rights or royalty
contracts, or participate on a joint or joint and several basis in any
securities trading account.

8. Invest more than 25% of the value of its total assets in any one
industry.

9. Issue senior securities, except insofar as the Portfolio may be deemed
to have issued a senior security by reason of borrowing money in accordance with
the Portfolio's borrowing policies or investment techniques, and except for
purposes of this investment restriction, collateral, escrow, or margin or other
deposits with respect to the making of short sales, the purchase or sale of
futures contracts or related options, purchase or sale of forward foreign
currency contracts, and the writing of options on securities are not deemed to
be an issuance of a senior security.

The following policies are non-fundamental and may be changed without
shareholder approval. The Portfolio may not:

1. The Portfolio will limit its investments in warrants, valued at the
lower of cost or market, to 5% of its net assets. Included within that amount,
but not to exceed 2% of the Portfolio's net assets, may be warrants that are not
listed on the New York Stock Exchange.

2. The Portfolio will not invest in "restricted securities" which cannot in
the absence of an exemption be sold without an effective registration statement
under the Securities Act of 1933, as amended.

3. The Portfolio will not engage in the purchase or sale of real estate or
real estate limited partnerships.

4. The Portfolio will not make loans to other persons unless collateral
values are continuously maintained at no less than 100% by "marking to market"
daily.

5. The Portfolio may not invest more than 5% of its total assets in
securities of companies which, including predecessors, have not had a record of
at least three years of continuous operations, and may not invest in any
restricted securities.

6. The Portfolio will not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation or
acquisition of assets.

PILGRIM VP GROWTH OPPORTUNITIES PORTFOLIO. The following investment
restrictions are fundamental policies and cannot be changed without the approval
of the holders of a majority of the Portfolio's outstanding voting securities
(defined in the Investment Company Act of 1940 (the "1940 Act")) as the lesser
of (a) more than 50% of the outstanding shares or (b) 67% or more of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented). If a percentage restriction on investment or use of assets set
forth below its adhered to at the time a transaction is effected, later changes
in percentage resulting from changing market values will not be considered a
deviation from this policy. The Portfolio may not:

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1. Borrow money except in conformity with the limits set forth in the
Investment Company Act of 1940; notwithstanding the foregoing, short-term
credits necessary for settlements of securities transactions are not considered
borrowings.

2. Purchase securities of any one issuer (except U.S. government
securities) if, as a result, more than 5% of the Portfolio's total assets would
be invested in that issuer, or the Portfolio would own or hold more than 10% of
the outstanding voting securities of the issuer; PROVIDED, HOWEVER, that up to
25% of the Portfolio's total assets may be invested without regard to these
limitations.

3. Underwrite the securities of other issuers, except to the extent that,
in connection with the disposition of portfolio securities, the Portfolio may be
deemed to be an underwriter.

4. Concentrate its assets in the securities of issuers all of which conduct
their principal business activities in the same industry (this restriction does
not apply to obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities).

5. Make any investment in real estate, commodities or commodities
contracts, except that the Portfolio may: (a) purchase or sell readily
marketable securities that are secured by interests in real estate or issued by
companies that deal in real estate, including real estate investment and
mortgage investment trusts; and (b) engage in financial futures contracts and
related options, as described herein and in the Prospectus.

6. Make loans, except that the Portfolio may: (a) invest in repurchase
agreements, and (b) loan its portfolio securities in amounts up to one-third of
the market or other fair value of its total assets.

7. Issue senior securities, except as appropriate to evidence indebtedness
that it is permitted to incur, provided that the deposit or payment by the
Portfolio of initial or maintenance margin in connection with futures contracts
and related options is not considered the issuance of senior securities.

8. Pledge, mortgage or hypothecate in excess of 5% of its total assets (the
deposit or payment by the Portfolio of initial or maintenance margin in
connection with futures contracts and related options is not considered a pledge
or hypothecation of assets).

The following policies are non-fundamental and may be changed without
shareholder approval. The Portfolio may not:

1. Invest more than 15% of its net assets in illiquid securities, including
repurchase agreements maturing in more than 7 days, that cannot be disposed of
within the normal course of business at approximately the amount at which the
Portfolio has valued the securities, excluding restricted securities that have
been determined by the Trustees of the Portfolio (or the persons designated by
them to make such determinations) to be readily marketable.

2. Purchase securities of any issuer with a record of less than 3 years of
continuous operations, including predecessors, except U.S. government securities
and obligations issued or guaranteed by any foreign government or its agencies
or instrumentalities, if such purchase would cause the investments of the
Portfolio in all such issuers to exceed 5% of the total assets of the Portfolio
taken at market value.

3. Purchase securities on margin, except the Portfolio may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities (the deposit or payment by the Portfolio of initial or maintenance
margin in connection with futures contracts or related options is not considered
the purchase of a security on margin).

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4. Write put and call options, unless the options are covered and the
Portfolio invests through premium payments no more than 5% of its total assets
in options transactions, other than options on futures contracts.

5. Purchase and sell futures contracts and options on futures contracts,
unless the sum of margin deposits on all futures contracts held by the
Portfolio, and premiums paid on related options held by the Portfolio, does not
exceed more than 5% of the Portfolio's total assets, unless the transaction
meets certain "bona fide hedging" criteria (in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded in
computing the 5%).

6. Invest in interests in oil, gas or other mineral exploration or
development programs (although it may invest in issuers that own or invest in
such interests).

7. Purchase securities of any investment company, except by purchase in the
open market where no commission or profit to a sponsor or dealer results from
such purchase, or except when such purchase, though not made in the open market,
is part of a plan of merger, consolidation, reorganization or acquisition of
assets.

8. Make short sales, unless, by virtue of its ownership of other
securities, the Portfolio has the right to obtain securities equivalent in kind
and amount to the securities sold and, if the right is conditional, the sale is
made upon the same conditions, except in connection with arbitrage transactions.

PILGRIM VP MIDCAP OPPORTUNITIES PORTFOLIO. The following investment
restrictions are fundamental policies and cannot be changed without the approval
of the holders of a majority of the Portfolio's outstanding voting securities
(defined in the Investment Company Act of 1940 (the "1940 Act")) as the lesser
of (a) more than 50% of the outstanding shares or (b) 67% or more of the shares
represented at a meeting at which more than 50% of the outstanding shares are
represented). If a percentage restriction on investment or use of assets set
forth below its adhered to at the time a transaction is effected, later changes
in percentage resulting from changing market values will not be considered a
deviation from this policy. The Portfolio may not:

1. Borrow money except in conformity with the limits set forth in the 1940
Act; notwithstanding the foregoing, short-term credits necessary for settlements
of securities transactions are not considered borrowings.

2. Underwrite the securities of others.

3. Purchase or sell real property, including real estate limited
partnerships (the Portfolio may purchase marketable securities of companies that
deal in real estate or interests therein, including real estate investment
trusts).

4. Deal in commodities or commodity contracts, except in the manner
described in the current Prospectus and SAI of the Portfolio.

5. Make loans to other persons (but the Portfolio may, however, lend
portfolio securities, up to 33% of net assets at the time the loan is made, to
brokers or dealers or other financial institutions not affiliated with the
Portfolio or Pilgrim, subject to conditions established by Pilgrim), and may
purchase or hold participations in loans, in accordance with the investment
objectives and policies of the Portfolio, as described in the current Prospectus
and SAI of the Portfolio.

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<PAGE>
6. Purchase on margin (except that for purposes of this restriction, the
deposit or payment of initial or variation margin in connection with futures
contracts will not be deemed to be purchases of securities on margin).

7. Sell short, except that the Portfolio may enter into short sales against
the box.

8. Invest more than 25% of its assets in any one industry or related group
of industries.

9. With respect to 75% of the Portfolio's assets, purchase a security
(other than U.S. government obligations) if, as a result, more than 5% of the
value of total assets of the Portfolio would be invested in securities of a
single issuer.

10. Purchase a security if, as a result, more than 10% of any class of
securities, or more than 10% of the outstanding voting securities of an issuer,
would be held by the Portfolio.

The following policies are non-fundamental and may be changed without
shareholder approval. The Portfolio may not:

2. Invest more than 15% of its net assets in illiquid securities.

OTHER INVESTMENT TECHNIQUES

COVERED CALL OPTIONS. Each Portfolio may sell covered call options and
purchase options to close out options , previously written. The Portfolios, in
return for the premium received upon the sale of a call option, give up the
opportunity to benefit from a price increase in the underlying security above
the exercise price, but conversely retains the risk of loss should the price of
the security decline. A Portfolio has no control over when it may be required to
sell the underlying securities, since it may be assigned an exercise notice at
any time prior to the expiration of its obligation as a seller.

Because call options give the purchaser the right to purchase a specified
security at a designated strike price for a limited period of time, the option
is likely to be exercised only when and if the market price of the security
exceeds the strike price. If the market price never exceeds the strike price
during, the option term, the purchaser's loss will be limited to the cash
premium paid to the seller of the option. However, if the market price does
exceed the strike price during the option term by an amount greater than the
premium paid for the option, the purchaser may exercise the option and purchase
the security at the strike price and realize a profit to the extent the proceeds
exceed the amount of premiums and transaction costs. In either circumstance, the
seller of the option retains the premium received for the option but forgoes any
potential profit from an increase in the market price of the underlying security
over the strike price. The option will be terminated upon expiration of the
option, the purchase of an identical option in a closing transaction, or
delivery of the underlying security upon the exercise of the option.

Each Portfolio will sell only covered call options, meaning that a
Portfolio will only sell a call option on a security which it already owns. The
Portfolios will not write call options on when-issued securities. In addition,
the Portfolios will not sell a covered call option if, as a result, the
aggregate market value of all portfolio securities of a Portfolio covering call
options or subject to put options exceeds 10% of the market value of the
Portfolio's net assets.

If a Portfolio desires to sell a particular security from its portfolio on
which it has written a call option, or purchased a put option, it will seek to
effect a closing transaction prior to, or concurrently with, the sale of the
security. There is no assurance that the Portfolio will be able to effect such
closing transactions at a favorable price. If the Portfolio cannot enter into

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<PAGE>
such a transaction, it may be required to hold a security that it might
otherwise have sold, in which case it would continue to be at market risk on the
security.

DERIVATIVE INSTRUMENTS. The International Value Portfolio may invest in
derivative instruments for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. The Research Enhanced Index
Portfolio also may invest in derivatives although generally investments in
derivatives for this Portfolio will be limited to S&P 500 Options. Derivatives
may provide a cheaper, quicker or more specifically focused way for the
International Value Portfolio to invest than "traditional" securities would. The
Portfolio does not currently intend to make use of any derivatives, including,
transactions in currency forwards for hedging purposes.

Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Portfolio to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Portfolio can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.

Derivatives may be purchased on established exchanges or through privately
negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., margin requirements) operated by
the clearing agency in order to reduce overall credit risk. As a result, unless
the clearing agency defaults, there is relatively little counterparty credit
risk associated with Derivatives purchased on an exchange. By contrast, no
clearing agency guarantees over-the-counter Derivatives. Therefore, each party
to an over- the-counter Derivative bears the risk that the counterparty will
default. Accordingly, the Adviser or the Sub-Adviser will consider the
creditworthiness of counterparties; to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Portfolio. Over-the-counter Derivatives are less liquid than exchange-traded
Derivatives since the other party to the transaction may be the only investor
with sufficient understanding of the Derivative to be interested in bidding for
it.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS. The Portfolios may engage in
foreign currency exchange transactions to hedge against uncertainty in the level
of future exchange rates. The Portfolios may conduct its currency exchange
transactions on a "spot" (i.e., cash) basis at the rate then prevailing in the
currency exchange market, or on a forward basis, by entering into futures or
forward contracts to purchase or sell currency. The Portfolio's dealings in
foreign currency exchange contracts is limited to hedging.

FOREIGN CURRENCY FUTURES CONTRACTS. A foreign currency futures contract
provides for the future sale and purchase of a specified amount of a certain
foreign currency at a stated date, place and price. The Portfolios may enter
into foreign currency futures contracts to attempt to establish the rate at
which it would be entitled to make a future exchange of U.S. dollars for another
currency.

FORWARD FOREIGN CURRENCY CONTRACTS. A forward foreign currency contract
involves an obligation to purchase or sell a specific currency at a future date,
which may be any fixed number of days from the date of the contract as agreed
upon by the parties, at a price set at the date of the contract. Forward
currency contracts are entered into in the interbank market on a principal basis
directly between currency dealers, which usually are large commercial banks and
brokerage houses, and their customers, and therefore generally involve no
margin, commissions or other fees. Forward currency contracts will establish a
rate of exchange that can be achieved in the future and thus limit the risk of
loss due to a decline in the value of the hedged currency but also limit any
potential gain that might result in the event the value of the currency
increases.

FUTURES CONTRACTS. Each Portfolio may enter into both interest rate futures
contracts and foreign currency futures contracts on domestic and foreign
exchanges. A futures contract to sell a debt security or foreign currency (a
"short" futures position), creates an obligation by the seller to deliver a
specified amount of the underlying security or foreign currency at a certain

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<PAGE>
future time and price. A futures contract to purchase a debt security or foreign
currency (a "long" futures position) creates an obligation by the purchaser to
take delivery of a specified amount of the underlying security or foreign
currency at a certain future time and price. Although the terms of futures
contracts specify actual delivery or receipt of the underlying commodity,
futures contracts generally are closed out before the delivery date without
making or taking delivery by entering into an opposite position in the same
commodity on the same (or a linked) exchange.

Upon entering into a futures contract, a Portfolio will be required to
deposit with a broker an amount of cash or cash equivalents equal to
approximately 1% to 5% of the contract price, which amount is subject to change
by the exchange on which the contract is traded or by the broker. This amount,
which is known as "initial margin" does not involve the borrowing of funds to
finance the transactions; rather, it is in the nature of a performance bond or
good faith deposit on the contract that will be returned to the Portfolio upon
termination of the contract, assuming all contractual obligations have been
satisfied. Subsequent payments, known as "variation margin," to and from the
broker, will be made daily as the price of the instrument underlying the futures
contract fluctuates, making the long and short positions in the futures contract
more or less valuable ("marking-to-market").

The International Value Portfolio will engage in futures transactions only
as a hedge against the risk of unexpected changes in the values of securities
held or intended to be held by the Portfolio. As a general rule, the
International Value Portfolio will not purchase or sell futures if, immediately
thereafter, more than 25% of its net assets would be hedged. In addition, the
Portfolio will not purchase or sell futures or related options if, immediately
thereafter, the sum of the amount of margin deposits on the Portfolio's existing
futures positions and premiums paid for such options would exceed 5% of the
market value of the Portfolio's net assets.

FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS AND FOREIGN CURRENCY
TRANSACTIONS. Each Portfolio may enter into futures contracts, options on
futures contracts and foreign currency transactions. The Portfolios will enter
into these transactions solely for the purpose of hedging against the effects of
changes in the value of its portfolio securities or those it intends to purchase
due to anticipated changes in interest rates and currency values, and not for
the purpose of speculation.

OTHER INVESTMENT COMPANIES. Each Portfolio (except the MagnaCap Portfolio)
may invest in other investment companies ("Underlying Funds") in accordance with
the Portfolio's investment policies or restrictions. The 1940 Act provides that
an investment company may not: (i) invest more than 10% of its total assets in
Underlying Funds, (ii) invest more than 5% of its total assets in any one
Underlying Fund, or (iii) purchase greater than 3% of the total outstanding
securities of any one Underlying Fund. The Portfolios (except the MagnaCap
Portfolio) may also make indirect foreign investments through other investment
companies that have comparable investment objectives and policies as the
Portfolios. In addition to the advisory and operational fees a Portfolio bears
directly in connection with its own operation, the Portfolio would also bear its
pro rata portions of each other investment company's advisory and operational
expenses.

INTEREST RATE FUTURES CONTRACTS. An interest rate futures contract provides
for the future sale and purchase of a specified amount of a certain debt
security at a stated date, place and price. The Portfolios may enter into
interest rate futures contracts to protect against fluctuations in interest
rates affecting the value of debt securities that a Portfolio either holds or
intends to acquire. Interest rate futures contracts currently are based on
long-term Treasury Bonds, Treasury Notes, three-month Treasury Bills and
Government National Mortgage Association modified pass-through mortgage-backed
securities ("GNMA pass-through securities"), and 90-day commercial paper.

LOAN PARTICIPATIONS. Each Portfolio may invest up to 10% of its assets in
loan participations denominated in U.S. dollars when the Adviser or Sub-Adviser
believes such an investment is consistent with a Portfolio's investment
objective. Loan participations entail the payment by a Portfolio of a sum to a
U.S. bank or other domestic financial institution which has lent or will lend
money to a U.S. corporation. In exchange for such payment, the bank agrees to
pay to that Portfolio, to the extent it is received, a specified portion of the
principal and interest in respect of such loan. A Portfolio has no contractual
relationship with the borrower. Loan participations may be considered illiquid
investments and may entail the credit risk of both the underlying borrower and
the bank or financial institution which is the intermediary. Loan participations
are typically unrated but the Adviser will limit its investment in loan

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<PAGE>
participations based upon its opinion of the quality of the investment and the
Portfolio's general limitations with respect to lower rated investments.

MORTGAGE-BACKED SECURITIES. The Portfolios may invest in mortgage-backed
securities which are securities that directly or indirectly represent an
ownership participation in, or are secured by and payable from, mortgage loans
on real property ("Mortgage-Backed Securities"). Such securities include
mortgage pass-through securities representing participation interests in pools
of residential mortgage loans originated by U.S. governmental or private lenders
and guaranteed, to the extent provided in such securities, by the U.S.
government or one of its agencies or instrumentalities. Mortgage pass-through
securities differ from conventional debt securities, which provide for periodic
payment of interest in fixed amounts (usually semi-annually) and principal
payments at maturity or on specified call dates. Mortgage pass-through
securities provide for monthly payments that are a "pass-through" of the monthly
interest and principal payments, including any repayments made by the individual
borrowers on the pooled mortgage loans, net of any fees paid to the guarantor of
such securities and the servicer of the underlying mortgage loans. The
underlying mortgages may be prepaid at any time and such payments are passed
through to the certificate holder as a prepayment of principal. As a result, if
the Portfolio purchases such a Mortgage-Backed Security at a premium, a
prepayment rate that is faster than expected will reduce yield-to-maturity,
while a prepayment rate that is slower than expected will have the opposite
effect of increasing yield-to-maturity. Conversely, if the Portfolio purchases a
Mortgage-Backed Security at a discount, faster than expected prepayments will
increase, while slower than expected prepayment will reduce, yield-to- maturity.

Prepayments on a pool of mortgage loans are influenced by a variety of
economic, geographic, social and other factors, including changes in mortgagors'
housing needs, job transfers, unemployment, mortgagors' net equity in the
mortgaged properties and servicing decisions. Generally, however, prepayments on
fixed rate mortgage loans will increase during periods of falling interest rates
and decrease during periods of rising interest rates. Mortgage-Backed Securities
may decrease in value as a result of increases in interest rates and may benefit
less than other fixed income securities from declining interest rates because of
the risk of prepayment. Accelerated prepayments on Mortgage-Backed Securities
purchased by the Portfolio at a premium also impose a risk of loss of principal
because the premium may not have been fully amortized at the time the principal
is repaid in full. See "More Information About Risks" in the Prospectus.

OPTIONS ON FOREIGN CURRENCY. The Portfolios may also purchase and sell put
and call options for the purpose of hedging against changes in future currency
exchange rates. An option on a foreign currency gives the purchaser, in return
for a premium paid plus related transaction costs, the right to sell (in the
case of a put option) or to buy (in the case of a call option) the underlying
currency at a specified price until the option expires. The value of an option
on foreign currency depends upon the value of the foreign currency when compared
to the value of the U.S. dollar. Currency options traded on United States or
other exchanges may be subject to position limits, which may affect the ability
of the Portfolio to hedge its positions. The Portfolios will purchase and sell
options on foreign exchanges to the extent permitted by the Commodity Futures
Trading Commission ("CFTC").

The Portfolios may purchase or sell options on currency only when the
Adviser believes that a liquid secondary markets exists for these options;
however, no assurance can be given that a liquid secondary market will exist for
a particular option at any specific time.

OPTIONS ON FOREIGN CURRENCY FUTURES. The purchase of options on foreign
currency futures contracts gives each Portfolio the right to enter into a
futures contract to purchase (in the case of a call option) or to sell (in the
case of a put option) a particular currency at a specified price at any time
during the period before the option expires. Options on foreign currency futures
currently are available with respect to British pounds, German marks and Swiss
francs. The Portfolios may purchase options on foreign currency futures as a
hedge against fluctuating currency values.

OPTIONS ON FUTURES CONTRACTS. The Portfolios may purchase and sell put and
call options on interest rate futures contracts as a hedge against changes in
interest rates and on foreign currency futures contracts as a hedge against
fluctuating currency values, in lieu of purchasing and writing options directly
on the underlying security or currency or purchasing and selling the underlying
futures contracts.

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The purchase of an option on an interest rate futures contract will give
the Portfolios the right to enter into a futures contract to purchase (in the
case of a call option) or to enter into a futures contract to sell (in the case
of a put option) a. particular debt security at a specified exercise price at
any time prior to the expiration date of the option. The potential loss related
to the purchase of an option on a futures contract is limited to the premium
paid for the option plus related transaction costs. A call option sold by a
Portfolio exposes the Portfolio during the term of the option to the possible
loss of an opportunity to realize appreciation in the market price of the
underlying security or to the possible continued holding of a security which
might otherwise have been sold to protect against depreciation in the market
price of the security. In selling puts, there is a risk that a Portfolio may be
required to buy the underlying security at a disadvantageous price. Options on
interest rate futures contracts currently are available with respect to Treasury
Bonds, Treasury Notes, and Eurodollars.

OPTIONS ON INTEREST RATE FUTURES. Each Portfolio may purchase a put option
on an interest rate futures contract to hedge against a decline in the value of
its portfolio securities as a result of rising interest rates. Each Portfolio
may purchase a call option on an interest rate futures contract to hedge against
the risk of an increase in the price of securities it intends to purchase
resulting from declining interest rates. The Portfolios may sell put and call
options on interest rates futures contracts as part of closing sale transactions
to terminate its option positions.

OVER-THE-COUNTER OPTIONS. The Portfolios may invest in Over-the-Counter
options ("OTC options") on U.S. government securities. OTC options are purchased
from or sold (written) to dealers or financial institutions which have entered
into direct agreements with a Portfolio. With OTC options, such variables as
expiration date, exercise price and premium will be agreed upon between a
Portfolio and the transacting dealer, without the intermediation of a third
party such as the Options Clearing Corporation. The Adviser or Sub-Adviser
monitors the creditworthiness of dealers with whom a Portfolio enters into OTC
option transactions under the general supervision of the Trustees of the
Portfolios. If the transaction dealer fails to make or take delivery of the U.S.
government securities underlying an option it has written in accordance with the
terms of the option as written, the Portfolios would lose the premium paid for
the option as well as any anticipated benefit of the transaction. The Portfolios
will engage in OTC option transactions only with primary U.S. government
securities dealers recognized by the Federal Reserve Bank of New York.

PRIVATELY ISSUED COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS ("CMOS"),
INTEREST OBLIGATIONS ("IOS") AND PRINCIPAL OBLIGATIONS ("POS"). Each Portfolio
may invest up to 5% of its net assets in Privately Issued Collateralized
Mortgage-Backed Obligations ("CMOs"), Interest Obligations ("IOs") and Principal
Obligations ("POs") when the Adviser or Sub-Adviser believes that such
investments are consistent with the Portfolio's investment objective.
Collateralized mortgage obligations or "CMOs" are debt obligations
collateralized by mortgage loans or mortgage pass-through securities Typically,
privately issued CMOs are collateralized by Ginnie Mae, Fannie Mae or Freddie
Mac Certificates, but also may be collateralized by whole loans or private
pass-throughs (such collateral collectively hereinafter referred to as "Mortgage
Assets"). Multi-class pass-through securities are equity interests in a trust
composed of Mortgage Assets. Unless the context indicates otherwise, all
references herein to CMOs include multi-class pass-through securities. Payments
of principal of and interest on the Mortgage Assets, and any reinvestment income
thereon, are the sources of funds used to pay debt service on the CMOs or make
scheduled distributions on the multi-class pass-through securities.

In a CMO, a series of bonds or certificates is issued in multiple classes.
Each class of CMOs, often referred to as a "tranche," is issued at a specific
fixed or floating coupon rate and has a stated maturity or final distribution
date. Principal prepayments on the Mortgage Assets may cause the CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates. The principal of and interest on the Mortgage Assets may be allocated
among the several classes of a series of a CMO in innumerable ways.

The Portfolios may also invest in, among others, parallel-pay CMOs and
Planned Amortization Class CMOs ("PAC Bonds"). Parallel-pay CMOs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which, as with other CMO
structures, must be retired by its stated maturity date or final distribution
date but may be retired earlier. PAC Bonds generally call for payments of a
specified amount of principal on each payment date.

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Stripped mortgage-backed securities ("SMBS") are derivative multi-class
mortgage securities. SMBS may be issued by agencies or instrumentalities of the
U.S. government, or by private originators of, or investors in, mortgage loans,
including savings and loan associations, mortgage banks, commercial banks,
investment banks and special purpose subsidiaries of the foregoing. SMBS are
structured with two or more classes of securities that receive different
proportions of the interest and principal distributions on a pool of Mortgage
Assets. A common type of SMBS will have at least one class receiving only a
small portion of the interest and a larger portion of the principal from the
Mortgage Assets, while the other classes will receive primarily interest and
only a small portion of the principal. In the most extreme case, one class will
receive all of the interest (the interest-only or "IO" class), while the other
class will receive all of the principal (the principal-only or "PO" class). The
yield to maturity on an 10 class is extremely sensitive to the rate of principal
payments (including prepayments) on the related underlying Mortgage Assets, and
a rapid rate of principal payments may have a material adverse effect on such
security's yield to maturity. If the underlying Mortgage Assets experience
greater than anticipated prepayments of principal, a Portfolio may fail to
recoup fully its initial investment in these securities. The determination of
whether a particular Government-issued IO or PO backed by fixed-rate mortgages
is liquid is made by the Adviser or Sub-Adviser under guidelines and standards
established by the Board of Trustees. Such a security may be deemed liquid if it
can be disposed of promptly in the ordinary course of business at a value
reasonably close to that used in the calculation of net asset value per share.

REVERSE REPURCHASE AGREEMENTS AND DOLLAR ROLL AGREEMENTS. Each Portfolio
may enter into reverse repurchase agreements and dollar roll agreements. A
dollar roll agreement is identical to a reverse repurchase agreement except for
the fact that substantially identical securities may be repurchased. Under a
reverse repurchase agreement or a dollar roll agreement, a Portfolio sells
securities and agrees to repurchase them, or substantially similar securities in
the case of a dollar roll agreement, at a mutually agreed upon date and price.
The Portfolio does not account for dollar rolls as borrowing. At the time the
Portfolio enters into a reverse repurchase agreement or a dollar roll agreement,
it will establish and maintain a segregated account with its custodian
containing cash, U.S. government securities, or other liquid assets from its
portfolio having a value not less than the repurchase price (including accrued
interest).

While the use of reverse repurchase agreements and dollar roll agreements
creates opportunities for increased income, the use of these agreements may
involve the risk that the market value of the securities to be repurchased by a
Portfolio may decline below the price at which the Portfolio is obligated to
repurchase. Also, in the event the buyer of securities under a reverse
repurchase agreement or a dollar roll agreement files for bankruptcy or becomes
insolvent, such buyer or its trustee or receiver may receive an extension of
time to determine whether to enforce the Portfolio's obligation to repurchase
the securities, and the Portfolio's use of the proceeds of the reverse
repurchase agreement or the dollar roll agreement may effectively be restricted
pending such decision. Dollar roll agreements may be treated as sales for tax
purposes.

RISK FACTORS AND SPECIAL CONSIDERATIONS

FUTURES CONTRACTS AND RELATED OPTIONS. A Portfolio will not use leverage
when it enters into long futures contracts or related options. For each long
position that a Portfolio enters into, it will segregate cash or cash
equivalents having a value equal to the market value of the contract as
collateral with the custodian of the Portfolio. A Portfolio will not enter into
futures contracts and related options if as a result the aggregate of the
initial margin deposits on a Portfolio's existing futures and premiums paid for
unexpired options exceeds 5% of the fair market value of that Portfolio's
assets.

Using, futures contracts and related options involves certain risks,
including (1) the risk of imperfect correlation between fluctuations in the
value of a futures contract and the portfolio security that is being hedged; (2)
the risk that a Portfolio may underperform a fund that does not make use of
these instruments; (3) the risk that no active market will be available to
offset a position; and (4) the risk that the Adviser or Sub-Adviser will not be
able to predict correctly movements in the direction of the interest rate and
foreign currency markets. Loss from futures transactions is potentially
unlimited.

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Certain exchanges on which futures are traded may establish daily limits in
the amount that the price of a futures or related option contract may fluctuate
from the previous day's settlement price. When a daily limit has been reached in
a particular contract, no trades may be made that day at a price beyond that
limit. If a daily limit were reached, a Portfolio might be prevented from
liquidating unfavorable positions and thus incur losses. In certain situations,
a Portfolio might be unable to close a position and might also have to make
daily cash payments of variation margin.

SECURITIES LENDING. Each Portfolio may lend portfolio securities to
broker/dealers or other institutional borrowers (up to 33% of net assets at the
time the loan is made), but only when the borrower pledges cash collateral to
the Portfolio and agrees to maintain such with the Portfolios' custodian so that
it amounts at all times to at least 100% of the value of the securities loaned.
Furthermore, each Portfolio may terminate its loans at any time, and must
receive compensation that, in total and in whatever form, is equivalent to the
sum of reasonable interest on the collateral as well as dividends, interest, or
other distributions paid on the security during the loan period. The loan
agreement shall not reduce the risk of loss or opportunity for gain by the
Portfolio on the securities transferred pursuant to the agreement. Upon
expiration of the loan, the borrower of the securities will be obligated to
return to that Portfolio the same number and kind of securities as those loaned
together with any applicable duly executed stock powers and the Portfolios must
be permitted to exercise all voting rights, if there are any, with respect to
the securities lent. The Portfolios may pay reasonable fees in connection with
the loan, including reasonable fees to the Portfolios' custodian for its
services.

SHORT SALES. Each Portfolio (except the MagnaCap Portfolio) may each make
short sales "against the box." A short-sale is a transaction in which a party
sells a security it does not own in anticipation of a decline in the market
value of that security. A short sale is "against the box" to the extent that a
Portfolio contemporaneously owns or has the right to obtain securities identical
to those sold short.

STOCK INDEX OPTIONS. The Portfolios may purchase options to hedge against
risks of broad price movements in the equity markets which in some market
environments may correlate more closely with movements in the value of lower
rated bonds than to changes in interest rates. When a Portfolio sells an option
on a stock index, it will have to establish a segregated account with its
custodian in which the Portfolio will deposit cash or other liquid assets or a
combination of both in an amount equal to the market value of the option,
measured on a daily basis, and will have to maintain the account while the
option is open. For some options, no liquid secondary market may exist or the
market may cease to exist.

ZERO COUPON, STEP COUPON AND PIK BONDS. The Portfolios may invest their
assets in any combination of zero coupon bonds, step coupon bonds and bonds on
which interest is payable in kind ("PIK bonds"). A zero coupon bond is a bond
that does not pay interest currently for its entire life. Step coupon bonds
frequently do not entitle the holder to any periodic payments of interest for
some initial period after the issuance of the obligation; thereafter, step
coupon bonds pay interest for fixed periods of time at particular interest rates
(a "step coupon bond"). In the case of a zero coupon bond, the nonpayment of
interest on a current basis may result from the bond having no stated interest
rate, in which case the bond pays only principal at maturity and is initially
issued at a discount from the face value. Alternatively, a zero coupon
obligation may provide for a stated rate of interest, but provide that such
interest is not payable until maturity, in which case the bond may initially be
issued at par. The value to the investor of a zero coupon or step coupon bond is
represented by the economic accretion either of the difference between the
purchase price and the nominal principal amount (if no interest is stated to
accrue) or of accrued, unpaid interest during the bond's life or payment
deferral period. PIK bonds are obligations which provide that the issuer thereof
may, at its option, pay interest on such bonds in cash or in the form of
additional debt securities. Such securities benefit the issuer by mitigating its
need for cash to meet debt service, but also require a higher rate of return to
attract investors who are willing to defer receipt of such cash. The Portfolio
generally will accrue income on such investments for tax and accounting
purposes, which would be distributed to the shareholder (Variable Account) from
available cash or liquidated assets. See also "Dividends and Distributions" and
"Federal Income Tax Status." The market prices of zero coupon, step coupon and
PIK bonds are more volatile than the market prices of securities that pay
interest periodically in cash, and are likely to respond to changes in interest
rates to a greater degree than do bonds that have similar maturities and credit
quality on which regular cash payments of interest are being made.

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RISKS OF INTERNATIONAL INVESTING. Investments in foreign securities involve
special risks, including currency fluctuations, political or economic
instability in the country of issue and the possible imposition of exchange
controls or other laws or restrictions. In addition, securities prices in
foreign markets are generally subject to different economic, financial,
political and social factors than are the prices of securities in U.S. markets.
With respect to some foreign countries there may be the possibility of
expropriation or confiscatory taxation, limitations on liquidity of securities
of political or economic developments which could affect the foreign investments
of the Portfolio. Moreover, securities of foreign issuers generally will not be
registered with the SEC, and such issuers will generally not be subject to the
SEC's reporting requirements. Accordingly, there is likely to be less publicly
available information concerning certain of the foreign issuers of securities
held by the Portfolio than is available concerning U.S. companies. Foreign
companies are also generally not subject to uniform accounting, auditing and
financial reporting standards or to practices and requirements comparable to
those applicable to U.S. companies. There may also be less government
supervision and regulation of foreign broker-dealers, financial institutions and
listed companies than exists in the U.S. These factors could make foreign
investments, especially those in developing countries, more volatile. All of the
above issues should be considered before investing in the Portfolio.

EMERGING MARKETS AND RELATED RISKS. The International Value Portfolio may
invest up to 25% of its assets in securities of companies located in countries
with emerging securities markets. Emerging markets are the capital markets of
any country that in the opinion of the Sub-Adviser is generally considered a
developing country by the international financial community. Currently, these
markets include, but are not limited to, the markets of Argentina, Brazil,
Chile, China, Colombia, Czech Republic, Greece, Hungary, India, Indonesia,
Israel, Korea, Malaysia, Mexico, Pakistan, Peru, the Philippines, Poland,
Portugal, Slovak Republic, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and
countries of the former Soviet Union. As opportunities to invest in other
emerging markets countries develop, the International Value Portfolio expects to
expand and diversify further the countries in which it invests.

Investing in emerging market securities involves risks which are in
addition to the usual risks inherent in foreign investments. Some emerging
markets countries may have fixed or managed currencies that are not
free-floating against the U.S. dollar. Further, certain currencies may not be
traded internationally. Certain of these currencies have experienced a steady
devaluation relative to the U.S. dollar. Any devaluations in the currencies in
which the Portfolio's portfolio securities are denominated may have a
detrimental impact on the Portfolio.

Some countries with emerging securities markets have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have negative effects on the economies and securities markets of
certain countries. Moreover, the economies of some countries may differ
favorably or unfavorably from the U.S. economy in such respects as rate of
growth of gross domestic product, the rate of inflation, capital reinvestment,
resource self-sufficiency, number and depth of industries forming the economy's
base, governmental controls and investment restrictions that are subject to
political change and balance of payments position. Further, there may be greater
difficulties or restrictions with respect to investments made in emerging
markets countries.

Emerging securities markets typically have substantially less trading
volume than U.S. markets, securities in many of such markets are less liquid,
and their prices often are more volatile than securities of comparable U.S.
companies. Such markets often have different clearance and settlement procedures
for securities transactions, and in some markets there have been times when
settlements have been unable to keep pace with the volume of transactions,
making it difficult to conduct transactions. Delays in settlement could result
in temporary periods when assets which the Portfolio desires to invest in
emerging markets may be uninvested. Settlement problems in emerging markets
countries also could cause the Portfolio to miss attractive investment
opportunities. Satisfactory custodial services may not be available in some
emerging markets countries, which may result in the Portfolio incurring
additional costs and delays in the transportation and custody of such
securities.

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PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

The Advisers, and the Sub-Advisers in the case of the Growth + Value
Portfolio, International Value Portfolio and Research Enhanced Index Portfolio,
place orders for the purchase and sale of securities, supervise their execution
and negotiate brokerage commissions on behalf of each Portfolio. For purposes of
this section, discussion of the Advisers includes the Sub-Advisers, but only
with respect to the Growth + Value Portfolio, International Value Portfolio and
Research Enhanced Index Portfolio. It is the practice of each Adviser to seek
the best prices and best execution of orders and to negotiate brokerage
commissions which in the Adviser's opinion are reasonable in relation to the
value of the brokerage services provided by the executing broker. Brokers who
have executed orders for the Portfolios are asked to quote a fair commission for
their services. If the execution is satisfactory and if the requested rate
approximates rates currently being quoted by the other brokers selected by the
Adviser, the rate is deemed by an Adviser to be reasonable. Brokers may ask for
higher rates of commission if all or a portion of the securities involved in the
transaction are positioned by the broker, if the broker believes it has brought
a Portfolio an unusually favorable trading opportunity, or if the broker regards
its research services as being of exceptional value, and payment of such
commissions is authorized by the Adviser after the transaction has been
consummated. If an Adviser more than occasionally differs with the broker's
appraisal of opportunity or value, the broker will not be selected to execute
trades in the future. The Advisers believe that each Portfolio benefits from a
securities industry comprised of many and diverse firms and that the long-term
interest of shareholders of the Portfolios is best served by brokerage policies
which include paying a fair commission rather than seeking to exploit its
leverage to force the lowest possible commission rate. The primary factors
considered in determining the firms to which brokerage orders are given are an
Adviser's appraisal of the firm's ability to execute the order in the desired
manner, the value of research services provided by the firm, and the firm's
attitude toward and interest in mutual funds in general, including the sale of
mutual funds managed and sponsored by the Adviser. The Advisers do not offer or
promise to any broker an amount or percentage of brokerage commissions as an
inducement or reward for the sale of shares of the Portfolios. Over-the-counter
purchases and sales are transacted directly with principal market-makers except
in those circumstances where in the opinion of an Adviser better prices and
execution are available elsewhere.

In general terms, the nature of research services provided by brokers
encompasses statistical and background information, and forecasts and
interpretations with respect to U.S. and foreign economies, U.S. and foreign
money markets, fixed income markets and equity markets, specific industry
groups, and individual issues. Research services will vary from firm to firm,
with broadest coverage generally from the large full-line firms. Smaller firms
in general tend to provide information and interpretations on a smaller scale,
frequently with a regional emphasis. In addition, several firms monitor federal,
state, local and foreign political developments; many of the brokers also
provide access to outside consultants. The outside research assistance is
particularly useful to the Advisers' staff since the brokers as a group tend to
monitor a broader universe of securities and other matters than the Advisers'
staff can follow. In addition, it provides the Advisers with a diverse
perspective on financial markets. Research and investment information is
provided by these and other brokers at no cost to the Advisers and is available
for the benefit of other accounts advised by the Advisers and their affiliates
and not all of this information will be used in connection with the Portfolios.
While this information may be useful in varying degrees and may tend to reduce
the Advisers' expenses, it is not possible to estimate its value and in the
opinion of the Advisers it does not reduce the Advisers' expenses in a
determinable amount. The extent to which an Adviser makes use of statistical,
research and other services furnished by brokers is considered by the Adviser in
the allocation of brokerage business but there is no formula by which such
business is allocated. The Adviser does so in accordance with its judgment of
the best interest of the Portfolios and their shareholders.

Purchases and sales of fixed-income securities will usually be principal
transactions. Such securities often will be purchased or sold from or to dealers
serving as market-makers for the securities at a net price. Each Portfolio will
also purchase such securities in underwritten offerings and will, on occasion,
purchase securities directly from the issuer. Generally, fixed-income securities
are traded on a net basis and do not involve brokerage commissions. The cost of
executing fixed-income securities transactions consists primarily of dealer
spreads and underwriting commissions.

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In purchasing and selling fixed-income securities, it is the policy of each
Portfolio to obtain the best results taking into account the dealer's general
execution and operational facilities, the type of transaction involved and other
factors, such as the dealer's risk in positioning the securities involved. While
the Advisers generally seek reasonably competitive spreads or commissions, the
Portfolios will not necessarily pay the lowest spread or commission available.

Each Portfolio may, in circumstances in which two or more dealers are in a
position to offer comparable results, give preference to a dealer which has
provided statistical or other research services to the Portfolios. By allocating
transactions in this manner, the Advisers are able to supplement their research
and analysis with the views and information of other securities firms.

During the fiscal years ended December 31, 1999, 1998 and 1997,
respectively, each of the Portfolios listed below paid total brokerage
commission indicated below. Information is not provided for the MagnaCap
Portfolio, Growth Opportunities Portfolio or MidCap Opportunities Portfolio
because those Portfolios were not operational during the periods shown.

BROKERAGE COMMISSIONS PAID DURING MOST RECENT FISCAL YEARS

1999 1998 1997
---- ---- ----
Pilgrim VP SmallCap Opportunities Portfolio....... [ ] $53,311 $19,044
Pilgrim VP Growth + Value Portfolio............... [ ] $87,380 $80,568
Pilgrim VP International Value Portfolio.......... [ ] $20,741 $15,426
Pilgrim VP Research Enhanced Index Portfolio...... [ ] $ -- $ --
Pilgrim VP High Yield Bond Portfolio.............. [ ] $ -- $ --

PORTFOLIO TURNOVER

A change in securities held in the portfolio of a Portfolio is known as
"Portfolio Turnover" and may involve the payment by a Portfolio of dealer
mark-ups or brokerage or underwriting commissions and other transaction costs on
the sale of securities, as well as on the reinvestment of the proceeds in other
securities. Portfolio turnover rate for a fiscal year is the percentage
determined by dividing the lesser of the cost of purchases or proceeds from
sales of portfolio securities by average of the value of portfolio securities
during such year, all excluding securities whose maturities at acquisition were
one year or less. A Portfolio cannot accurately predict its turnover rate,
however the rate will be higher when a Portfolio finds it necessary to
significantly change its portfolio to adopt a temporary defensive position or
respond to economic or market events. A high turnover rate would increase
commission expenses and may involve realization of gains. Each Portfolio's
historical turnover rates are included in the Financial Highlights tables in the
prospectus.

SERVICES OF THE ADVISERS AND ADMINISTRATOR

Pursuant to Investment Advisory Agreements with the Portfolios, Pilgrim
Advisors acts as the investment adviser to each Portfolio except MagnaCap
Portfolio, and Pilgrim Investments acts as the investment adviser to MagnaCap
Portfolio. The Advisers, subject to the authority of the Trustees, and subject
to certain responsibilities being delegated to the Sub-Adviser for the Growth +
Value Portfolio, the Sub-Adviser for the International Value Portfolio and the
Sub-Adviser for the Research Enhanced Index Portfolio, are responsible for
furnishing continuous investment supervision to the Portfolios and are
responsible for the management of the Portfolios.

Pilgrim Advisors is an indirect, wholly owned subsidiary of ReliaStar
Financial Corporation ("ReliaStar"). Prior to November, 1, 1999 Northstar
Investment Management Corporation ("NIMC") served as investment adviser to the
Portfolios (other than the MagnaCap Portfolio, the Growth Opportunities
Portfolio and the MidCap Opportunities Portfolio). As a result of the
acquisition of Pilgrim Capital Corporation by ReliaStar, on November 1, 1999,
NIMC changed its name to Pilgrim Advisors, Inc. ReliaStar is a publicly traded
holding company whose subsidiaries specialize in the insurance business. Through
the Affiliated Insurance Companies and other subsidiaries, ReliaStar issues and
distributes individual life insurance and annuities, employee benefit contracts,
retirement contracts and life and health reinsurance, and mutual funds and
provides related investment management services. The address of the Adviser is
40 North Central Avenue, Suite 1200, Phoenix, AZ 85004. The address of ReliaStar
is 20 Washington Avenue South, Minneapolis, MN 55401.

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Pilgrim Advisors charges each of the SmallCap Opportunities, Growth +
Value, Research Enhanced Index and High Yield Bond Portfolios, a fee at the
annual rate of 0.75% on the first $250,000,000 of aggregate average daily net
assets of each of these Portfolios, 0.70% on the next $250,000,000 of such
assets, 0.65% on the next $250,000,000 of such assets; 0.60% on the next
$250,000,000 of such assets, and 0.55% on the remaining aggregate daily net
assets of each of these Portfolios, in excess of $1 billion.

Pilgrim Advisors charges the International Value Portfolio a fee at the
annual rate of 1.00% of aggregate average daily net assets of this Portfolio.

Pilgrim Advisors charges the Growth Opportunities Portfolio and the MidCap
Opportunities Portfolio a fee at the annual rate of 0.75% of aggregate average
daily net assets of those Portfolios.

Pilgrim Investments charges the MagnaCap Portfolio a fee at the annual rate
of 0.75% of the aggregate average daily net assets of that Portfolio.

The Investment Advisory Agreement for the SmallCap Opportunities, Growth +
Value, Research Enhanced Index and High Yield Bond Portfolios was approved by
the Trustees of the Trust on January 26, 1994, and by the sole Shareholder of
the SmallCap Opportunities, Growth + Value, Research Enhanced Index, and High
Yield Bond Portfolios on April 15, 1994. The Investment Advisory Agreement
continues in effect from year to year if specifically approved annually by (a)
the Trustees, acting separately on behalf of the SmallCap Opportunities, Growth
+ Value, Research Enhanced Index and High Yield Bond Portfolios, including a
majority of the Disinterested Trustees, or (b) a majority of the outstanding
voting securities of each class of the SmallCap Opportunities, Growth + Value,
Research Enhanced Index, and High Yield Bond Portfolios as defined in the 1940
Act.

The Investment Advisory Agreement for the International Value Portfolio was
approved by the Trustees of the Trust on April 24, 1997, and by the sole
Shareholder of the International Value Portfolio on April 30, 1997. The
Investment Agreement continues in effect from year to year if specifically
approved annually by (a) the Trustees, acting separately on behalf of the
International Value Portfolio, including a majority of the Disinterested
Trustees, or (b) a majority of the outstanding voting securities of each class
of the International Value Portfolio as defined in the 1940 Act.

The Investment Advisory Agreement for the Growth Opportunities Portfolio
and the MidCap Opportunities Portfolio was approved by the Trustees of the Trust
on [January 27, 2000] and by the sole Shareholder of these Portfolios on
[January 27, 2000]. The Investment Advisory Agreement became effective on [April
30, 2000] and will continue in effect for a period of two years. Thereafter, the
Investment Advisory Agreement will continue in effect from year to year if
specifically approved annually by (a) the Trustees, acting separately on behalf
of each of those Portfolios, including a majority of the Disinterested Trustees,
or (b) a majority of the outstanding voting securities of each class of each of
those Portfolios as defined in the 1940 Act.

The Investment Advisory Agreement for the MagnaCap Portfolio was approved
by the Trustees of the Trust on [January 27, 2000] and by the sole Shareholder
of the MagnaCap Portfolio on [January 27, 2000]. The Investment Advisory
Agreement became effective on [April 30, 2000] and will continue in effect for a
period of two years. Thereafter, the Investment Advisory Agreement will continue
in effect from year to year if specifically approved annually by (a) the
Trustees, acting separately on behalf of that Portfolio, including a majority of
the Disinterested Trustees, or (b) a majority of the outstanding voting
securities of each class of each of those Portfolios as defined in the 1940 Act.

Any Portfolio's Investment Advisory Agreement may be terminated without
payment of any penalty by the Adviser, the Trustees or the sole Shareholder of
the respective Portfolio on not more than 60 days and not less than 30 days
prior written notice. Otherwise, a Portfolio's Investment Advisory Agreement
will remain in effect for two years and will, thereafter, continue in effect
from year to year, subject to the annual approval of the Trustees or the vote of
a majority of the outstanding voting securities of the respective Portfolio, and
the vote, cast in person at a meeting duly called and held, of a majority of the
Trustees of the respective Portfolio who are not parties to the Investment

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Agreement or "interested persons" (as defined in the 1940 Act) of any such
Party. Such agreement will automatically terminate in the event of its
assignment, as defined in Section 2(a)(4) of the 1940 Act.

Pilgrim Group, Inc. ("Administrator") serves as administrator for the
Portfolios pursuant to an Administrative Services Agreement with the Portfolios.
Prior to November 1, 1999, Northstar Administrators Corporation provided
administrative services to the Trust. However, as a result of the acquisition of
Pilgrim Capital Corporation by ReliaStar, Northstar Administrators Corporation
was merged with Pilgrim Group Inc. The Administrator is an affiliate of the
Advisers. The address of the Administrator is 40 North Central Avenue, Suite
1200, Phoenix, AZ 85004. Subject to the supervision of the Board of Trustees,
the Administrator provides the overall business management and administrative
services necessary to the proper conduct of the Portfolios' business, except for
those services performed by the Portfolios' Advisers under the Investment
Advisory Agreements, and the custodian and accounting agent for the Portfolios
under the Custodian Agreement.

The Administrator acts as liaison among these service providers to the
Portfolios. The Administrator is also responsible for ensuring that the
Portfolios operate in compliance with applicable legal requirements and for
monitoring the Advisers for compliance with requirements under applicable law
and with the investment policies and restrictions of the Portfolios.

The Administrator's fee is accrued daily against the value of each
Portfolio's net assets and is payable by each Portfolio monthly. The fee is
computed daily and payable monthly, at an annual rate of 0.10% of each
Portfolio's average daily net assets.

The Administrative Services Agreement for the SmallCap Opportunities,
Growth + Value, Research Enhanced Index and High Yield Bond Portfolios was
approved by the Trustees of the Trust on January 26, 1994 and became effective
on May 2, 1994. This Agreement continues in effect from year to year, provided
such continuance is approved annually by a majority of the Trustees of the
Trust.

The Administrative Services Agreement for the International Value Portfolio
was approved by the Trustees of the Trust on April 24, 1997. The Administrative
Services Agreement for the International Value Portfolio became effective on May
1, 1997 and continues in effect from year to year provided such continuance is
approved annually by a majority of the Trustees of the Trust.

The Administrative Services Agreement for the Growth Opportunities
Portfolio, the MagnaCap Portfolio and the MidCap Opportunities Portfolio was
approved by the Trustees of the Trust on [January 27, 2000]. The Administrative
Services Agreement for the Growth Opportunities Portfolio, the MagnaCap
Portfolio and the MidCap Opportunities Portfolio became effective on [April 30,
2000] and will continue in effect for a period of two years. Thereafter, it will
continue from year to year provided such continuance is approved annually by a
majority of the Trustees of the Trust.

During the fiscal years ended December 31, 1999, 1998 and 1997, the
Portfolios(1) paid the Adviser and Administrator the following investment
advisory and administrative fees, respectively. Information is not provided for
the MagnaCap portfolio, Growth Opportunities Portfolio, or MidCap Opportunities
Portfolio because those portfolios were not operational during the periods
shown.

<TABLE>
<CAPTION>
Advisory Fees Administrative Fees
------------------------------ -----------------------------
1999 1998 1997 1999 1998 1997
-------- -------- -------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
SmallCap Opportunities Portfolio(2) $166,694 $134,697 $22,226 $17,960
Growth + Value Portfolio(3) $263,659 $187,902 $35,154 $25,053
International Value Portfolio(4) $ 92,299 $ 18,050 $ 9,230 $ 1,805
Research Enhanced Index
Portfolio(5) $ 94,002 $ 65,503 $12,534 $ 8,734
High Yield Bond Portfolio(6) $120,634 $ 73,225 $16,085 $ 9,763
</TABLE>

- ----------
(1) The International Value Portfolio commenced operations on August 8, 1997.
(2) Does not reflect expense reimbursements, respectively, of $[ ],
$71,511, and $56,065.

19
<PAGE>
(3) Does not reflect expense reimbursements, respectively, of $[ ],
$77,366, and $72,598.
(4) Does not reflect expense reimbursements, respectively during, respectively,
of $[ ], $77,795 and $32,742.
(5) Does not reflect expense reimbursements, respectively, of $[ ],
$61,380, and $49,206.
(6) Does not reflect expense reimbursements, respectively, of $[ ],
$69,669, and $55,011.

SERVICES OF THE SUB-ADVISERS

Pursuant to a Sub-Advisory Agreement between Pilgrim Advisers and Navellier
Fund Management Inc., ("Navellier"), dated February 1, 1996, Navellier serves as
Sub-Adviser to the Growth + Value Portfolio. In this capacity, Navellier,
subject to the supervision and control of Pilgrim Advisors and the Trustees of
the Growth + Value Portfolio, manages the Growth + Value Portfolio's
investments, consistently with the Growth + Value Portfolio's investment
objective, and executes any of the Growth + Value Portfolio's investment
policies that it deems appropriate to utilize from time to time. Fees payable
under the Sub-Advisory Agreement accrue daily and are paid monthly by Pilgrim
Advisors. As compensation for its services, Pilgrim Advisors pays the
Sub-Adviser at the annual rate of 0.35 of 1% of the average daily net assets of
the Growth + Value Portfolio. Navellier is wholly owned and controlled by its
sole stockholder, Louis G. Navellier. Navellier's address is 1 East Liberty,
Third Floor, Reno, NV 89301. The Sub-Advisory Agreement was approved by the
Trustees of the Growth + Value Portfolio on December 1, 1995, and by vote of
shareholders of the Growth + Value Portfolio on January 31, 1996. The
Sub-Advisory Agreement may be terminated without payment of any penalty by
Pilgrim Advisors, the Sub-Adviser, the Trustees of the Growth + Value Portfolio
or the shareholders on not more than 60 nor less than 30 days prior written
notice. Otherwise, the Sub-Advisory Agreement continues in effect from year to
year, subject to the annual approval of the Trustees of the Growth + Value
Portfolio, or the vote of a majority of the outstanding voting securities of the
Growth + Value Portfolio, and the vote, cast in person at a meeting duly called
and held, of a majority of the Trustees of Growth + Value Portfolio who are not
parties to the Sub-Advisory Agreement or "interested persons" (as defined in the
1940 Act) of any such party.

Pursuant to a Sub-Advisory Agreement between Pilgrim Advisors and Brandes
Investment Partners, L.P. ("Brandes"), dated July 24, 1997, Brandes acts as
Sub-Adviser to the International Value Portfolio. In this capacity, Brandes,
subject to the supervision and control of Pilgrim Advisors and the Trustees of
the International Value Portfolio, manages the International Value Portfolio's
investments, consistently with International Value Portfolio's investment
objective, and executes any of the International Value Portfolio's investment
policies that it deems appropriate to utilize from time to time. Fees payable
under the Sub-Advisory Agreement accrue daily and are paid monthly by Pilgrim
Advisors. As compensation for its services, Pilgrim Advisors pays Brandes at the
annual rate of 50% of the management fee that the International Value Portfolio
pays Pilgrim Advisors. Brandes' address is 12750 High Bluff Drive, San Diego,
California 92130. Charles Brandes, who controls the general partner of Brandes,
serves as one of the Managing Directors of Brandes. The Sub-Advisory Agreement
for the International Value Portfolio was approved by the Trustees of the
International Value Portfolio on April 24, 1997. The Sub-Advisory Agreement may
be terminated without payment of any penalty by Pilgrim Advisors, Brandes, the
Trustees of the International Value Portfolio, or the shareholders of the
International Value Portfolio on not more than 60 days and not less than 30 days
prior written notice. Otherwise, the Sub-Advisory Agreement, continues in effect
from year to year, subject to the annual approval of the Trustees of the
International Value Portfolio, or the vote of a majority of the outstanding
voting securities of the International Value Portfolio, and the vote, cast in
person at a meeting duly called and held, of a majority of the Trustees of the
International Value Portfolio who are not parties to the Sub-Advisory Agreement
or "interested persons" (as defined in the 1940 Act) of any such Party.

Pursuant to a Sub-Advisory Agreement between Pilgrim Advisors and J.P.
Morgan Investment Management Inc., ("J.P. Morgan"), dated April 30, 1999, J.P.
Morgan acts as Sub-Adviser to the Research Enhanced Index Portfolio. In this
capacity, J.P. Morgan, subject to the supervision and control of Pilgrim
Advisors and the Trustees of the Research Enhanced Index Portfolio, manages the
Research Enhanced Index Portfolio's investments, consistently with the Research
Enhanced Index Portfolio's investment objective, and executes any of the
Research Enhanced Index Portfolio's investment policies that it deems
appropriate to utilize from time to time. Fees payable under the Sub-Advisory
Agreement accrue daily and are paid monthly by Pilgrim Advisors. As compensation
for its services, Pilgrim Advisors will pay J.P. Morgan at the annual rate of
0.20% of the average daily net assets of the Research Enhanced Index Portfolio.
J.P. Morgan's address is 522 Fifth Avenue, New York, New York 10036. The
Sub-Advisory Agreement for the Research Enhanced Index Portfolio was approved by

20
<PAGE>
the Trustees of the Research Enhanced Index Portfolio, on behalf of the Research
Enhanced Index Portfolio on January 22, 1999. The Sub-Advisory Agreement may be
terminated without payment of any penalty by Pilgrim Advisors, the Trustees of
the Research Enhanced Index Portfolio, or the shareholders of the Research
Enhanced Index Portfolio on not more than 60 days and not less than 30 days
prior written notice. Otherwise, the Sub-Advisory Agreement continues in effect
from year to year, subject to the annual approval of the Trustees of the
Research Enhanced Index Portfolio, or the vote of a majority of the outstanding
voting securities of the Research Enhanced Index Portfolio, and the vote, cast
in person at a meeting duly called and held, of a majority of the Trustees of
the Research Enhanced Index Portfolio who are not parties to the Sub-Advisory
Agreement or "interested persons" (as defined in the 1940 Act) of any such
Party.

During the fiscal years ended December 31, 1999, 1998 and 1997, the
Portfolios paid the Sub-Advisers the following Sub-Advisory fees respectively:

Sub-Advisory Fees
----------------------------------
1999 1998 1997
---- ---- ----
Growth + Value Portfolio.................... $ ____ $160,837 $84,784
International Value Portfolio(1)............ $ ____ ____ ____
Research Enhanced Index Portfolio(2)........ $ ____ ____ ____

- ----------
(1) The International Value Portfolio commenced operations on August 8, 1997.
(2) J.P. Morgan began sub-advising the Research Enhanced Index Portfolio on
[April 30, 1999].

NET ASSET VALUE

The net asset value ("NAV") per share of each Portfolio will be determined
at the close of the general trading session of the New York Stock Exchange (the
"Exchange"), on each business day the Exchange is open. The Exchange is
scheduled to be closed on New Year's Day, Martin Luther King, Jr.'s Birthday,
President's Day (observed), Good Friday, Memorial Day (observed), Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.

The NAV per share of each Portfolio is computed by dividing the value of
such Portfolio's securities, plus any cash and other assets (including dividends
and interest accrued but not collected) less all liabilities (including accrued
expenses) by the number of shares of the Portfolio outstanding. See the Trust's
current Prospectus for more information.

PURCHASES, REDEMPTIONS AND EXCHANGE TRANSACTIONS

For information on purchases and redemptions of shares, see "Purchase of
Shares" and "Redemption of Shares" in the Trust's Prospectus. The Trust may
suspend the right of redemption of shares of any Portfolio and may postpone
payment for more than seven days for any period: (i) during which the Exchange
is closed other than customary weekend and holiday closings or during which
trading on the Exchange is restricted; (ii) when the Securities and Exchange
Commission determines that a state of emergency exists which may make payment or
transfer not reasonably practicable; (iii) as the Securities and Exchange
Commission may by order permit for the protection of the security holders of the
Portfolios; or (iv) at any other time when the Portfolios may, under applicable
laws and regulations, suspend payment on the redemption of their shares.

Shares of any Portfolio may be exchanged for shares of any other Portfolio.
Exchanges are treated as a redemption of shares of one Portfolio and a purchase
of shares of one or more of the other Portfolios and are effected at the
respective NAV per share of each Portfolio on the date of the exchange. The
Trust reserves the right to modify or discontinue its exchange privilege at any
time without notice.

21
<PAGE>
Variable Contract Owners do not deal directly with the Trust with respect
to the purchase, redemption, or exchange of shares of a Portfolio, and should
refer to the prospectus for the Variable Contract for information on allocation
of premiums and on transfers of account value among divisions of the insurance
company separate account that invest in the Portfolios.

The Trust reserves the right to discontinue offering shares of one or more
Portfolios at any time. In the event that a Portfolio ceases offering its
shares, any investments allocated by the insurance company to such Portfolio
will be invested in the fixed account portfolio or any successor to such
portfolio.

DIVIDENDS AND DISTRIBUTIONS

Net investment income of the High Yield Bond and Research Enhanced Index
Portfolios is declared as dividends daily and paid quarterly. For the Emerging
Growth, Growth + Value, International Value, [MagnaCap, Growth Opportunities,
and MidCap Opportunities] Portfolios, net investment income will be declared and
paid quarterly. Any net realized long-term capital gains (the excess of net
long-term capital gains over net short-term capital losses) for any Portfolio
will be declared and paid at least once annually. Net realized short-term
capital gains may be declared and paid more frequently.

FEDERAL INCOME TAX STATUS

Each Portfolio intends to qualify each year as a regulated investment
company under Subchapter M of the Internal Revenue Code (the "Code").
Accordingly, a Portfolio generally expects not to be subject to federal income
tax if it meets certain source of income, diversification of assets, income
distribution, and other requirements, to the extent it distributes its
investment company taxable income and its net capital gains.

Distributions of investment company taxable income (which includes among
other items, interest, dividends, and net realized short-term capital gains in
excess of net realized long-term capital losses) and of net realized capital
gains, whether received in cash or additional shares, are included in the gross
income of the shareholder (the Variable Account). Distributions of investment
company taxable income are treated as ordinary income for tax purposes in the
hands of a separate account. Net capital gains designated as capital gain
distributions by a Portfolio will, to the extent distributed, be treated as
long-term capital gains in the hands of the Variable Account regardless of the
length of time the Variable Account may have held the shares. A distribution
will be treated as paid on December 31 of the calendar year if it is declared by
a Portfolio in October, November, or December of that year to the shareholder of
record on a date in such a month and paid by the Portfolio during January of the
following calendar year. Such distributions will be taxable to the Variable
Account in the calendar year in which they are declared, rather than the
calendar year in which they are received. Tax consequences to the Variable
Contract Owners are described in the prospectus for the Variable Account.

If a Portfolio invests in stock of certain foreign corporations that
generate largely passive investment-type income, or which hold a significant
percentage of assets that generate such income (referred to as "passive foreign
investment companies" or "PFICs"), these investments would be subject to special
tax rules designed to prevent deferral of U.S. taxation of the Portfolio's share
of the PFIC's earnings. In the absence of certain elections to report these
earnings on a current basis, regardless of whether the Portfolio actually
receives any distributions from the PFIC, investors in the Portfolio would be
required to report certain "excess distributions" from, and any gain from the
disposition of stock of, the PFIC as ordinary income. This ordinary income would
be allocated ratably to the Portfolio's holding period for the stock. Any
amounts allocated to prior years would be taxable at the highest rate of tax
applicable in that year, increased by an interest charge determined as though
the amounts were underpayments of tax.

Certain requirements relating to the qualification of a Portfolio as a
regulated investment company under the Code may limit the extent to which a
Portfolio will be able to engage in transactions in options, futures contracts,
or forward contracts. In addition, certain Portfolio investments may generate
income for tax purposes which must be distributed even though cash representing
such income is not received until a later period. To meet its distribution

22
<PAGE>
requirement the Portfolio may in those circumstances be forced to raise cash by
other means, including borrowing or disposing of assets at a time when it may
not otherwise be advantageous to do so.

To comply with regulations under Section 817(h) of the Code, each Portfolio
generally will be required to diversify its investments, so that on the last day
of each quarter of a calendar year, no more than 55% of the value of its assets
is represented by any one investment, no more than 70% is represented by any two
investments, no more than 80% is represented by any three investments, and no
more than 90% is represented by any four investments. For this purpose,
securities of a single issuer are treated as one investment and each U.S.
government agency or instrumentality is treated as a separate issuer. Any
security issued, guaranteed, or insured (to the extent so guaranteed or insured)
by the U.S. or an agency or instrumentality of the U.S. is treated as a security
issued by the U.S. government or its agency or instrumentality, whichever is
applicable. These regulations will limit the ability of a Portfolio to invest
more than 55% of its assets in direct obligations of the U.S. Treasury or in
obligations which are deemed to be issued by a particular agency or
instrumentality of the U.S. government. If a Portfolio fails to meet the
diversification requirements under Code Section 817(h), income with respect to
Variable Contracts invested in the Portfolio at any time during the calendar
quarter in which the failure occurred could become currently taxable to the
owners of such Variable Contracts and income for prior periods with respect to
such Variable Contracts also would be taxable, most likely in the year of the
failure to achieve the required diversification. Other adverse tax consequences
also could ensue.

In connection with the issuance of the regulations governing
diversification under Section 817(h) of the Code, the Treasury Department
announced that it would issue future regulations or rulings addressing the
circumstances in which a Variable Contract owner's control of the investments of
a separate account may cause the contract owner, rather than the insurance
company, to be treated as the owner of the assets held by a separate account. If
the Variable Contract Owner is considered the owner of the securities underlying
a separate account, income and gains produced by those securities would be
included currently in the Variable Contract owner's gross income. Although it is
not known what standards will be incorporated in future regulations or other
pronouncements, the Treasury staff has indicated informally that it is concerned
that there may be too much contract owner control where the Portfolio underlying
a separate account invests solely in securities issued by companies in a
specific industry. Similarly, the ability of a contract owner to select a
Portfolio representing a specific economic risk may also be prescribed. These
future rules and regulations proscribing investment control may adversely affect
the ability of the Portfolios to operate as described in this Prospectus. There
is, however, no certainty as to what standard, if any, the Treasury will
ultimately adopt, and there can be no certainty that the future rules and
regulations will not be given retroactive application. In the event that
unfavorable rules or regulations are adopted, there can be no assurance that
these or other Portfolios will be able to operate as currently described in the
Prospectus, or that a Portfolio will not have to change its investment
objectives, investment policies, or investment restrictions. While a Portfolio's
investment objective is fundamental and may be changed only by a vote of a
majority of its outstanding shares, the Trustees have reserved the right to
modify the investment policies of a Portfolio as necessary to prevent any such
prospective rules and regulations from causing the Variable Contract Owners to
be considered the owners of the Portfolios underlying the Variable Account.

Reference is made to the prospectus of the Variable Account for information
regarding the federal income tax treatment of distributions to the Variable
Account.

TRUSTEES AND OFFICERS

The Trustees, advisory officers, and principal officers of the Portfolios
and their business affiliations for the past five years are set forth below.
Unless otherwise noted, the mailing address of the Trustees and officers of the
Portfolios is c/o Pilgrim Advisors, Inc., 40 North Central Avenue, Suite 1200,
Phoenix, AZ 85004.

PAUL S. DOHERTY, Trustee. Age: 64. President, Doherty, Wallace, Pillsbury
and Murphy, P.C., Director, Tambrands, Inc. Since October 1993, Trustee of other
Northstar affiliated investment companies.

23
<PAGE>
ROBERT B. GOODE, JR., Trustee. Age: 68. Currently retired. From 1990 to
1991, Chairman of The First Reinsurance Company of Hartford. From 1987 to 1989,
President and Director of American Skandia Life Assurance Company. Since October
1993, Trustee of other Northstar affiliated investment companies.

ALAN R. GOSULE, Trustee. Age: 58. Partner, Rogers & Wells. Director, F.L.
Putnam Investment Management Company.

*MARK L. LIPSON, Trustee and President. Age: 49. Director, Chairman and
Chief Executive Officer of Northstar Investment Management Corporation and
Northstar Holding, Inc. Director of Northstar Administrators Corporation.
Director and President of Northstar Funding, Inc. and Director, Chairman and
Chief Executive Officer of Northstar Distributors, Inc. Trustee and President of
other Northstar affiliated investment companies. Prior to August, 1993,
Director, President and Chief Executive Officer of National Securities &
Research Corporation and Director/Trustee and President of the National
Affiliated Investment Companies and certain of National's subsidiaries.

WALTER H. MAY, JR., Trustee. Age: 62. Currently retired. Former Marketing
Director for Piper Jaffray, Inc.

DAVID W.C. PUTNAM, Trustee. Age: 59. President, Clerk and Director of F.L.
Putnam Securities Company Incorporated, F.L. Putnam Investment Management
Company, Interstate Power Company. Trust Realty Corp. and Bow Ridge Mining Co;
Director of Anchor Investment Management Corp; President and Trustee of Anchor
Capital Accumulation Trust, Anchor International Bond Trust, Anchor Gold and
Currency Trust, Anchor Resources and Commodities Trust and Anchor Strategic
Assets Trust.

JOHN R. SMITH, Trustee. Age: 75 President of New England Fiduciary Company
(financial planning) since 1991; Chairman Massachusetts Educational Financing
Authority since 1987; Vice Chairman of Massachusetts Health and Education
Authority, and from 1970-1991 Financial Vice President of Boston College.

*JOHN TURNER, Trustee and Chairman. Age: 59. Chairman and Chief Executive
Officer of ReliaStar Financial Corporation and ReliaStar Life Insurance Company
("ReliaStar Life") since May 1993, and Chairman of other ReliaStar affiliated
insurance companies since 1995. Since October 1993, Director of Northstar and
affiliates. Prior to May 1993, President and Chief Executive Officer of
ReliaStar Financial Corp. and ReliaStar Life.

DAVID W. WALLACE, Trustee. Age: 74. Chairman of Putnam Trust Company, Lone
Star Industries and FECO Engineered Systems, Incorporated. He is also President
and Trustee of the Robert R. Young Foundation and Governor of New York Hospital.
Director of UMC Electronics and Zurn Industries, Inc. Former Chairman and Chief
Executive Officer, Todd Shipyards and Bangor Punta Corporation, and former
Chairman and Chief Executive Officer of National Securities & Research
Corporation. Since October 1993, Trustee of other Northstar affiliated
investment companies,

ADVISORY OFFICERS

Unless otherwise noted, the mailing address of the Advisory Officers is 40
North Central Avenue, Suite 1200, Phoenix, Arizona 85004. The following
individuals serve as Advisory Officers for the Trust:

AL BURTON. Advisory Officer. Age: 71. President of Al Burton Productions
for more than the last five years; formerly Vice President, First Run
Syndication, Castle Rock Entertainment (July 1992 - November 1994). Mr. Burton
is also a Director, Trustee, or a member of the Advisory Board of each of the
Funds managed by the Investment Managers.

JOCK PATTON. Advisory Officer. Age: 54. Private Investor. Director of
Hypercom Corporation (since January 1999), Stuart Entertainment, Inc. (since
January 1999), and JDA Software Group, Inc. (since January 1999). Mr. Patton was
formerly Director of Artisoft, Inc. (August 1994 - July 1998); President and
Co-owner of StockVal, Inc. (April 1993 - June 1997) and a Partner and Director
of the law firm of Streich, Lang, P.A. (1972 - 1993). Mr. Patton is also a

24
<PAGE>
Director, Trustee, or a member of the Advisory Board of each of the Funds
managed by the Investment Managers.

MARY A. BALDWIN, PH.D. Advisory Officer. Age: 60. Realtor, Coldwell Banker
Success Realty (formerly, The Prudential Arizona Realty) for more than the last
five years. Ms. Baldwin is also Vice President, United States Olympic Committee
(November 1996 - Present), and formerly Treasurer, United States Olympic
Committee (November 1992 - November 1996). Ms. Baldwin is also a Director,
Trustee, or a member of the Advisory Board of each of the Funds managed by the
Investment Managers.

ROBERT W. STALLINGS. Advisory Officer. Age: 50. Chief Executive Officer and
President. Chairman, Chief Executive Officer and President of Pilgrim Group,
Inc. ("Pilgrim Group") (since December 1994); Chairman, Pilgrim Investments,
Inc. (since December 1994); Chairman, Pilgrim Securities, Inc. ("Pilgrim
Securities") (since December 1994); President and Chief Executive Officer of
Pilgrim Funding, Inc. (since November 1999); and Chairman, President and Chief
Executive Officer of Pilgrim Holdings Corporation (Pilgrim Capital Corporation
merged into this subsidiary October 29, 1999) (since August 1991). Mr. Stallings
is also a Director, Trustee, or a member of the Advisory Board of each of the
Funds managed by the Investment Managers.

OFFICERS

Unless otherwise noted, the mailing address of the officers is 40 North
Central Avenue, Suite 1200, Phoenix, Arizona 85004. The following individuals
serve as officers for the Trust:

ROBERT W. STALLINGS. President. Age: 50. Chief Executive Officer and
President. Chairman, Chief Executive Officer and President of Pilgrim Group,
Inc. ("Pilgrim Group") (since December 1994); Chairman, Pilgrim Investments,
Inc. (since December 1994); Chairman, Pilgrim Securities, Inc. ("Pilgrim
Securities") (since December 1994); President and Chief Executive Officer of
Pilgrim Funding, Inc. (since November 1999); and Chairman, President and Chief
Executive Officer of Pilgrim Holdings Corporation (Pilgrim Capital Corporation
merged into this subsidiary October 29, 1999) (since August 1991). Mr. Stallings
is also a Director, Trustee, or a member of the Advisory Board of each of the
Funds managed by the Investment Managers.

JAMES R. REIS. Executive Vice President and Assistant Secretary. Age: 42.
Director, Vice Chairman (since December 1994), Executive Vice President (since
April 1995), and Director of Structured Finance (since April 1998), Pilgrim
Group, Inc. and Pilgrim Investments; Director (since December 1994) and Vice
Chairman (since November 1995) of Pilgrim Securities; Executive Vice President,
Assistant Secretary and Chief Credit Officer of Pilgrim Prime Rate Trust;
Executive Vice President and Assistant Secretary of each of the other Pilgrim
Funds. Chief Financial Officer (since December 1993), Vice Chairman and
Assistant Secretary (since April 1993) and former President (May 1991 - December
1993), Pilgrim Capital (formerly Express America Holdings Corporation).
Presently serves or has served as an officer or director of other affiliates of
Pilgrim Capital.

STANLEY D. VYNER. Executive Vice President. Age: 49. President and Chief
Executive Officer (since August 1996), Pilgrim Investments; Executive Vice
President of most of the other Pilgrim Funds (since July 1996). Formerly Chief
Executive Officer (November 1993 - December 1995) HSBC Asset Management
Americas, Inc., and Chief Executive Officer, and Actuary (May 1986 - October
1993) HSBC Life Assurance Co.

JAMES M. HENNESSY. Executive Vice President and Secretary. Age: 50.
Executive Vice President and Secretary (since April 1998), Pilgrim Capital
(formerly Express America Holdings Corporation), Pilgrim Group, Pilgrim
Securities and Pilgrim Investments; Executive Vice President and Secretary of
each of the other Pilgrim Funds. Formerly Senior Vice President, Pilgrim Capital
(April 1995 - April 1998); Senior Vice President, Express America Mortgage
Corporation (June 1992 - August 1994) and President, Beverly Hills Securities
Corp. (January 1990 - June 1992).

MICHAEL J. ROLAND. Senior Vice President and Principal Financial Officer.
Age: 41. Senior Vice President and Chief Financial Officer, Pilgrim Group,
Pilgrim Investments and Pilgrim Securities (since June 1998); Senior Vice
President and Principal Financial Officer of each of the other Pilgrim Funds. He

25
<PAGE>
served in same capacity from January, 1995 - April, 1997. Formerly, Chief
Financial Officer of Endeaver Group (April, 1997 to June, 1998).

ROBERT S. NAKA. Senior Vice President and Assistant Secretary. Age: 36.
Senior Vice President, Pilgrim Investments (since November 1999) and Pilgrim
Group, Inc. (since August 1999). Senior Vice President and Assistant Secretary
of each of the other Pilgrim Funds. Formerly Vice President, Pilgrim Investments
(April 1997 - October 1999), Pilgrim Group, Inc. (February 1997 - August 1999).
Formerly Assistant Vice President, Pilgrim Group, Inc. (August 1995 - February
1997). Formerly Operations Manager, Pilgrim Group, Inc. (April 1992 - April
1995).

ROBYN L. ICHILOV. Vice President and Treasurer. Age: 32. Vice President,
Pilgrim Investments (since August 1997), Accounting Manager (since November
1995). Vice President and Treasurer of most of the other Pilgrim Funds. Formerly
Assistant Vice President and Accounting Supervisor for PaineWebber (June 1993 -
April 1995).

KEVIN G. MATHEWS. Senior Vice President. Age: 40. Senior Vice President,
Pilgrim Investments (since July 1998). Formerly Vice President, Pilgrim
Investments (August 1995 - July 1998); Vice President, Van Kampen America
Capital (May 1987 - April 1995).

MARY LISANTI. Executive Vice President. Age: 43. Executive Vice President
and Chief Investment Adviser-Equities, Pilgrim Investments (since November
1999). Formerly Sub-Adviser, Strong Capital Management (September 1996 - May
1998); Managing Director and Sub-Adviser, Banker Trust Corporation (March 1993 -
August 1996).

Pilgrim Advisors, Pilgrim Investments, and Pilgrim Group, Inc. make their
personnel available to serve as Officers and "Interested Trustees" of the
Portfolios. All Officers and Interested Trustees of the Portfolios are
compensated by Pilgrim Advisors or Pilgrim Investments. Trustees who are not
"interested persons" of the Adviser are paid by the Trust and other investment
companies in the Pilgrim group of funds ("Pilgrim Funds"), a pro rata share, as
described below: (i) annual retainer of $20,000; (ii) 5,000 per quarterly Board
meeting; (iii) $500 per committee meeting; (iv) $500 per special or telephonic
meeting; and (v) out-of-pocket expenses. The pro rata share paid by the Trust
and the Pilgrim Funds is based on the average net assets as a percentage of the
average net assets of all the funds managed by the Investment Manager for which
the trustees serve in common as Trustees (or as Directors or on an Advisory
Board as the case may be). The Trust also reimburses the Trustees for expenses
incurred by them in connection with such meetings. Such fees are allocated
evenly among the Portfolios. The Portfolios currently have an Audit Committee,
Valuation Committee and a Nominating Committee consisting of all of the
Independent Trustees. On _________, 2000, no Officer or Trustee of the
Portfolios, owned beneficially or of record or had an interest in shares of any
Portfolio.

The following individuals serve on the Trust's Audit Committee: Paul S.
Doherty, Robert B. Goode, Jr., John R. Smith, David W. Wallace and Mary A.
Baldwin. Mr. Wallace serves as Chairman of the Audit Committee.

The following individuals serve on the Trust's Valuation Committee: Alan R.
Gosule, Walter H. May, Jr., David W.C. Putnam, Al Burton, and Jock Patton. Mr.
Putnam serves as Chairman of the Valuation Committee.

The following individuals serve on the Trust's Nominating Committee: Paul
S. Doherty, Robert B. Goode, Jr., Walter H. May, Jr., Al Burton and Mary A.
Baldwin. Mr. May serves as Chairman of the Nominating Committee.

26
<PAGE>
COMPENSATION TABLE*

<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Benefits Estimated From
Aggregate Accrued Annual Registrant
Compensation as Part of Benefits and Fund
Name of From Pilgrim Fund Upon Complex Paid
Person, Position Variable Products Trust(1) Expenses Retirement to Trustees(1)
- ---------------- -------------------------- -------- ---------- --------------
<S> <C> <C> <C> <C>
Mary A. Baldwin (2)
Advisory Officer N/A N/A (15 boards)

Al Burton (2)
Advisory Officer N/A N/A (15 boards)

Paul S. Doherty (2)
Trustee N/A N/A (15 boards)

Robert B. Goode, Jr
Trustee (3) N/A N/A (15 boards)

Alan S. Gosule (3)
Trustee N/A N/A (15 boards)

Mark L. Lipson
Trustee (3)(4) N/A N/A (15 boards)

Walter H. May (3)
Trustee N/A N/A (15 boards)

Jock Patton (2)
Advisory Officer N/A N/A (15 boards)

David W.C. Putnam (3)
Trustee N/A N/A (15 boards)

John R. Smith (3)
Trustee N/A N/A (15 boards)

Robert W. Stallings (2)(4)
President and Advisory
Officer N/A N/A (15 boards)

John G. Turner (3)(4)
Trustee N/A N/A (15 boards)

David W. Wallace (3)
Trustee N/A N/A (15 boards)
</TABLE>

- ----------
* Officers and Trustees who are interested persons do not receive any
compensation from the Funds.

(1) Information provided for the fiscal year ended December 31, 1999.
(2) Elected a Trustee or non-voting advisory board member of SmallCap
Opportunities Fund, Growth Opportunities Fund, High Yield Fund III, Equity
Trust, Mayflower Trust, Balance Sheet Opportunities Fund, and Government
Securities Fund on November 16, 1999.
(3) Elected a Director/Trustee of Mutual Funds, Advisory Funds, Investment
Funds, Bank and Thrift Fund, Government Securities Income Fund, and Prime
Rate Trust on October 26, 1999.
(4) "Interested person," as defined in the Investment Company Act of 1940, of
the Company because of the affiliation with the Investment Adviser.

27
<PAGE>
OTHER INFORMATION

INDEPENDENT ACCOUNTANTS. Pricewaterhouse Coopers LLP has been selected as
the independent accountants for the Trust. PricewaterhouseCoopers LLP will audit
the Trust's annual financial statements and issue an opinion thereon.

CUSTODIAN/ACCOUNTING SERVICES AGENT. State Street Bank and Trust Company
acts as custodian of the Portfolios' assets and performs fund accounting
services.

REPORTS TO SHAREHOLDERS. The fiscal year of the Trust ends on December 31.
Each Portfolio will send financial statements to its shareholders at least
semi-annually. An annual report containing financial statements audited by the
independent accountants will be sent to shareholders each year.

SHAREHOLDER AND TRUSTEE RESPONSIBILITY. Shareholders of a Massachusetts
business trust may, under certain circumstances, be held personally liable as
partners for the obligations of the Trust. The risk of a shareholder incurring
any financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its obligations.
The Declaration of Trust contains an express disclaimer of shareholder liability
for acts or obligations of the Trust and provides that notice of the disclaimer
must be given in each agreement, obligation or instrument entered into or
executed by the Trust or Trustees. The Declaration of Trust provides for
indemnification of any shareholder held personally liable for the obligations of
the Trust and also provides for the Trust to reimburse the shareholder for all
legal and other expenses reasonably incurred in connection with any such claim
or liability.

Under the Declaration of Trust, the trustees or officers are not liable for
actions or failure to act; however, they are not protected from liability by
reason of their willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of their office. The Trust
provides indemnification to its trustees and officers as authorized by the 1940
Act and the rules and regulations thereunder.

FINANCIAL STATEMENTS. Pilgrim Variable Products Trust's audited financial
statements dated December 31, 1999 and the report of the independent
accountants, PricewaterhouseCoopers LLP with respect to such financial
statements, are hereby incorporated by reference to the Annual Report to
Shareholders of the Pilgrim Variable Products Trust for the year ended December
31, 1999.

REGISTRATION STATEMENT. A registration statement has been filed with the
Securities and Exchange Commission under the 1933 Act and the 1940 Act. The
Prospectus and this Statement of Additional Information do not contain all
information set forth in the registration statement, its amendments and exhibits
thereto that the Trust has filed with the Securities and Exchange Commission,
Washington, D.C., to all of which reference is hereby made.

PERFORMANCE INFORMATION

Each Portfolio may, from time to time, include its total return and the
Northstar High Yield Bond Portfolio may include its yield in advertisements or
reports to shareholders or prospective investors. Performance information for
the Portfolios will not be advertised or included in sales literature unless
accompanied by comparable performance information for a Separate Account to
which the Portfolios offer their shares.

A. TOTAL RETURN. Standardized quotations of average annual total return for
a Portfolio will be expressed in terms of the average annual compounded rate of
return for a hypothetical investment in the Portfolio over periods of 1, 5 and
10 years (or up to the life of the Portfolio), calculated pursuant to the
following formula: P(1 + T) to the power of n = ERV (where P = a hypothetical

28
<PAGE>
initial payment of $1,000, T = the average annual total return, n = the number
of years, and ERV = the ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period). All total return figures reflect the
deduction of Portfolio expenses (on an annual basis), and assume that all
dividends and distributions on shares are reinvested when paid.

The total return for SmallCap Opportunities, Growth + Value, International
Value, Research Enhanced Index, and High Yield Bond Portfolios, so calculated,
for the period since inception of each Portfolio (May 6, 1994 for all Portfolios
other than the International Value Portfolio, inception being August 8, 1997)
and for the one-year and five-year periods ended December 31, 1999 is set forth
below. Information is not provided for the MagnaCap, Growth Opportunities,
MidCap Opportunities Portfolios because these portfolios were not operational
for the periods shown.

Since
One Year Five Year Inception
-------- --------- ---------
SmallCap Opportunities Portfolio..........
Growth + Value Portfolio..................
International Value Portfolio.............
Research Enhanced Index Portfolio(1)......
High Yield Bond Portfolio.................

- ----------
(1) The portfolio commenced operations on May 6, 1994 as the Northstar
Multi-Sector Bond Fund with the investment objective of maximizing current
income consistent with the preservation of capital. From inception through
April 29, 1999, the portfolio operated under this investment objective and
related investment strategies. However, effective April 30, 1999 and
pursuant to shareholder approval, the portfolio changed its investment
objective and strategies to be managed as a large cap equity portfolio.
Accordingly, the past performance in this table may not be indicative of
the portfolio's future performance.

Performance information for the Portfolios may be compared in reports and
promotional literature, to: (i) the Standard & Poor's 500 Stock Index ("S&P
500"), Dow Jones Industrial Average ("DJIA"), or other unmanaged indices so that
investors may compare each Portfolio's results with those of a group of
unmanaged securities widely regarded by investors as representative of the
securities markets general; (ii) other groups of mutual funds tracked by Lipper
Analytical Services, Inc., a widely used independent research firm which ranks
mutual funds by overall performance, investment objectives, and assets, or
tracked by other services, companies, publications, or persons who rank mutual
funds on overall performance or other criteria; and (iii) the Consumer Price
Index (measure for inflation) to assess the real rate of return from an
investment in the Portfolio; (iv) well known monitoring sources of certificates
of deposit performance rates such as Salomon Brothers, Federal Reserve Bulletin,
American Bankers, Tower Data/The Wall Street Journal. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect deductions for
administrative and management costs and expenses.

The Portfolio also may quote annual, average annual and annualized total
return and aggregate total return performance data, both as a percentage and as
a dollar amount based on a hypothetical $10,000 investment for various periods
other than those noted below. Such data will be computed as described above,
except that the rates of return calculated will not be average annual rates, but
rather, actual annual, annualized or aggregate rates of return.

29
<PAGE>
B. YIELD. Yield is the net annualized yield based on a specified 30-day (or
one month) period assuming a semiannual compounding of income. Yield is computed
by dividing the net investment income per share earned during the period by the
maximum offering price per share on the last day of the period, according to the
following formula:

Yield= 2[(a-b + 1)6 -1]
---
cd
Where:
a = dividends and interest earned during the period, including the
amortization of market premium or accretion of market discount
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends
d = the maximum offering price per share on the last day of the
period

To calculate interest earned (for the purpose of "a" above) on debt
obligations, each Portfolio computes the yield to maturity of each obligation
held by the Portfolio based on the market value of the obligation (including
actual accrued interest) at the close of the last business day of the month, or,
with respect to obligations purchased during the month, the purchase price (plus
actual accrued interest). The yield-to-maturity is then divided by 360 and the
quotient is multiplied by the market value of the obligation (including actual
accrued interest) to determine the interest income on the obligation for each
day of the subsequent month that the obligation is in the Portfolio's portfolio.

Solely for the purpose of computing yield, the Portfolios recognize
dividend income by accruing 1/360 of the stated dividend rate of a security in
the portfolio.

Undeclared earned income, computed in accordance with generally accepted
accounting principles, may be subtracted from the maximum offering price.
Undeclared earned income is the net investment income which, at the end of the
base period, has not been declared as a dividend, but is reasonably expected to
be declared as a dividend shortly thereafter.

The yield for the Northstar High Yield Bond Portfolio, calculated, for the
one month period ended December 31, 1999 was ___%.

Quotations of yield or total return for the Portfolios will not take into
account charges and deductions against the Variable Account to which the
Portfolios' shares are sold or charges and deductions against the Variable
Contracts issued by ReliaStar Life Insurance Company or its affiliates. The
Portfolios' yield and total return should not be compared with mutual funds that
sell their shares directly to the public since the figures provided do not
reflect charges against the Variable Account or the Variable Contracts.
Performance information for any Portfolio reflects only the performance of a
hypothetical investment in the Portfolio during the particular time period in
which the calculations are based. Performance information should be considered
in light of the Portfolios' investment objectives and policies, characteristics
and quality of the portfolios and the market conditions during the given time
period, and should not be considered as a representation of what may be achieved
in the future.

30
<PAGE>
APPENDIX

DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC. ("MOODY'S")
CORPORATE BOND RATINGS

Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which made the long-term risks appear somewhat larger than in Aaa securities.

A - Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa - Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements maybe lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca - Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

Note: Moody's may apply numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.

DESCRIPTION OF STANDARD & POOR'S CORPORATION'S ("S&P") CORPORATE DEBT RATINGS

AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.

A-1
<PAGE>
A - Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB - Debt rated BBB is regarded as having adequate capacity to pay
interest and repay principal. Whereas it normally exhibits protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.

BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures and adverse
conditions.

CI -- rating CI is reserved for income bonds on which no interest is being
paid.

D -- Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating also will be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.

Plus (+) or Minus(-) -- The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.

A-2
<PAGE>
PART C: OTHER INFORMATION

ITEM 23. EXHIBITS

(a)(1) Declaration of Trust (1)
(2) Certificate of Amendment of Declaration of Trust and Redesignation
of Series (2)
(3) Certificate of Establishment and Designation (3)
(4) Certificate of Establishment and Designation (4)
(5) Certificate of Amendment of Declaration of Trust and Redesignation
of Series (filed herewith)
(6) Certificate of Amendment of Declaration of Trust (filed herewith)
(7) Certificate of Amendment of Declaration of Trust (filed herewith)
(8) Certificate of Establishment and Designation of Series (filed
herewith)
(9) Certificate of Amendment of Declaration of Trust and Redesignation
of Series (filed herewith)
(b) By-laws. (1)
(c) Not applicable
(d)(1) Investment Advisory Contract between the Registrant and Northstar
Investment Management Corporation (4)
(2) Form of Sub-Advisory Agreement between Northstar Investment
Management Corporation and Navellier Fund Management, Inc. (1)
(3) Form of Sub-Advisory Agreement between Northstar Investment
Management Corporation and Brandes Investment Partners (4)
(4) Form of Sub-Advisory Agreement between Northstar Investment
Management Corporation and J.P. Morgan Investment Management,
Inc. (7)
(5) Form of Amended and Restated Investment Advisory Agreement between
the Registrant and Pilgrim Advisors, Inc. (filed herewith)
(6) Form of Investment Advisory Agreement between the Registrant and
Pilgrim Investments, Inc. (filed herewith)
(e) Not applicable
(f) Not applicable
(g)(1) Custodian Agreement (1)
(2) Amendment to Custodian Agreement (6)
(h)(1) Administrative Services Agreement (4)
(2) Amended and Restated Administrative Services Agreement (filed
herewith)
(i)(1) Legal Opinion (5)
(2) Legal Opinion with respect to the Pilgrim VP MagnaCap Portfolio,
Pilgrim VP Growth Opportunities Portfolio, and Pilgrim VP MidCap
Opportunities Portfolio (7)
(3) Consent of Dechert Price & Rhoads (7)
(j) Consent of Independent Public Accountants (7)
(k) N/A
(l) N/A
(m) N/A
(n) Not applicable
(p) Code of Ethics (7)
(q)(1) Power of Attorney (filed herewith)
(q)(2) Power of Attorney (filed herewith)
<PAGE>
- ----------
(1) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement on Form N-1A as filed on February 28, 1996.

(2) Incorporated by reference to Post-Effective Amendment No. 6 to the
Registration Statement on Form N-1A as filed on April 30, 1997.

(3) Incorporated by reference to Post-Effective Amendment No. 7 to the
Registration Statement on Form N-1A as filed on May 16, 1997.

(4) Incorporated by reference to Post-Effective Amendment No. 8 to the
Registration Statement on Form N-1A as filed on May 20, 1997.

(5) Incorporated by reference to Post-Effective Amendment No. 10 to the
Registration Statement on Form N-1A as filed on August 8, 1997.

(6) Incorporated by reference to Post-Effective Amendment No. 11 to the
Registration Statement on Form N-1A as filed on February 27, 1998.

(7) To be filed by Amendment

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

ReliaStar Life Insurance Company (formerly "Northwestern National Life Insurance
Company"), Northern Life Insurance Company, and ReliaStar Bankers Security Life
Insurance Co., which are affiliated through a common parent company, ReliaStar
Financial Corp., on behalf of their respective separate accounts, together own a
majority of the outstanding shares of the Trust. These insurance companies will
vote shares of the Trust in accordance with instructions of contract owners
having interests in these separate accounts.

ITEM 25. INDEMNIFICATION

Section 4.3 of Registrant's Declaration of Trust provides the following:

(a) Subject to the exceptions and limitations contained in paragraph (b)
below:

(i) every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by
law against all liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit
or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and
against amounts paid or incurred by him in the settlement thereof;
and

(ii) the word "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions suits or proceedings (civil, criminal,
administrative or other, including appeals), actual or threatened;
and the words "liability" and "expenses" shall include, without
limitation, attorneys fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

-2-
<PAGE>
(b) No indemnification shall be provided hereunder to a Trustee or officer:

(i) against any liability to the Trust, a Series thereof, or the
Shareholders by reason of a final adjudication by a court or other
body before which a proceeding was brought that he engaged in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office;

(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust; or

(iii) in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b) (i) or (b) (ii)
resulting in a payment by a Trustee or officer, unless there has
been a determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office:

(A) by the court or other body approving the settlement or other
disposition; or

(B) based upon a review of readily available facts (as opposed to
a full trial-type inquiry) by (x) vote of a majority of the
Disinterested Trustees acting on the matter (provided that a
majority of the Disinterested Trustees then in office act on
the matter) or (y) written opinion of independent legal
counsel.

(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee
or officer and shall inure to the benefit of the heirs, executors,
administrators and assigns of such a person. Nothing contained herein
shall affect any rights to indemnification to which personnel of the Trust
other than Trustees and officers may be entitled by contract or otherwise
under law.

(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of
this Section 4.3 may be advanced by the Trust prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to
repay such amount if it is ultimately determined that he is not entitled
to indemnification under this Section 4.3, provided that either:

(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust shall
be insured against losses arising out of any such advances; or

(ii) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the disinterested Trustees act on the
matter) or an independent legal counsel in a written opinion shall
determine, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to
believe that the recipient ultimately will be found entitled to
indemnification.

-3-
<PAGE>
As used in this Section 4.3, a "Disinterested Trustee" is one who is
not (i) an Interested Person of the Trust (including anyone who has been
exempted from being an Interested Person by any rule, regulation or order
of the Commission), or (ii) involved in the claim, action, suit or
proceeding.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, Officers and controlling persons of the
Registrant pursuant to the foregoing provisions or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Trustee, Officer or controlling person of the Registrant in
connection with the successful defense of any action suit or proceeding) is
asserted by such Trustee, Officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy, as expressed in the Act and be governed by final
adjudication of such issue.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS

Information as to the directors and officers of Pilgrim Advisors, Inc., together
with information as to any other business, profession, vocation or employment of
a substantial nature engaged in by the directors and officers of Pilgrim
Advisors, Inc. in the last two years, is included in its application for
registration as an investment adviser on Form ADV (File No. 801-44637) filed
under the Investment Advisers Act of 1940 and is incorporated herein by
reference thereto.

Information as to the directors and officers of Pilgrim Investments, Inc.,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by the directors and officers of
Pilgrim Investments, Inc. in the last two years, is included in its application
for registration as an investment adviser on Form ADV (File No. 801-48282) filed
under the Investment Advisers Act of 1940 and is incorporated herein by
reference thereto.

Information as to the directors and officers of Brandes Investment Partners LP,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by the directors and officers of
Brandes Investment Partners LP in the last two years, is included in its
application for registration as an investment adviser on Form ADV (File No.
801-24896) filed under the Investment Advisers Act of 1940 and is incorporated
herein by reference thereto.

Information as to the directors and officers of Navellier Fund Management, Inc.,
together with information as to any other business, profession, vocation or
employment of a substantial nature engaged in by the directors and officers of
Navellier Fund Management, Inc. in the last two years, is included in its
application for registration as an investment adviser on Form ADV (File No.
801-50932) filed under the Investment Advisers Act of 1940 and is incorporated
herein by reference thereto.

-4-
<PAGE>
Information as to the directors and officers of J.P. Morgan Investment
Management, Inc., together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by the
directors and officers of J.P. Morgan Investment, Inc. in the last two years, is
included in its application for registration as an investment adviser on Form
ADV (File No. 801-21011) filed under the Investment Advisers Act of 1940 and is
incorporated herein by reference thereto.

ITEM 27. PRINCIPAL UNDERWRITER

There is no principal underwriter for the Registrant.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

State Street Bank and Trust Co., located at 225 Franklin Street, Boston, MA
02110-2804 maintains such records as Custodian, Transfer Agent and Fund
Accounting Agent, for the Trust and each Portfolio:

(1) Receipts and delivery of securities including certificate numbers;
(2) Receipts and disbursement of cash;
(3) Records of securities in transfer, securities in physical
possession, securities owned and securities loaned.
(4) Shareholder Records

All other records required by item 30(a) are maintained at the office of the
Administrator, 40 North Central Avenue, Suite 1200, Phoenix, AZ 85004 and the
offices of the Subadvisers.

The addresses of the Subadvisers are as follows: Brandes Investment Partners,
L.P., 12750 High Bluff Drive, San Diego, CA 92130; J.P. Morgan Investment
Management Inc., 522 Fifth Avenue, New York, NY 10036; and Navellier Fund
Management, Inc., 1 East Liberty, 3rd Floor, Reno, NV 89501.

ITEM 29. MANAGEMENT SERVICES

Not Applicable

ITEM 30. UNDERTAKINGS

None

-5-
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, Registrant certifies that it has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Phoenix and
the State of Arizona on the 27th day of January 2000.

Registrant

By: /s/ Robert W. Stallings
------------------------------------
Robert W. Stallings, President

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.

Signature Title Date
- --------- ----- ----

/s/ Robert W. Stallings President January 27, 2000
- --------------------------
Robert W. Stallings

Trustee January 27, 2000
- --------------------------
John G. Turner*

Trustee January 27, 2000
- --------------------------
Mark L. Lipson*

Trustee January 27, 2000
- --------------------------
Paul S. Doherty*

Trustee January 27, 2000
- --------------------------
Robert B. Goode, Jr.*

Trustee January 27, 2000
- --------------------------
David W. Wallace*

Trustee January 27, 2000
- --------------------------
Walter May*

Trustee January 27, 2000
- --------------------------
Alan L. Gosule*

Trustee January 27, 2000
- --------------------------
David W.C. Putnam*

-1-
<PAGE>
Trustee January 27, 2000
- --------------------------
John R. Smith*

Senior Vice President and
- -------------------------- Principal Financial Officer January 27, 2000
Michael J. Roland*

*By: /s/ James M. Hennessy
-------------------------------------
James M. Hennessy, Attorney-in-fact**

** Powers of Attorney for Trustees and Michael J. Roland are attached hereto.

-2-
<PAGE>
EXHIBIT LIST

Exhibit
Number Name of Exhibit
- ------ ---------------
(a)(5) Certificate of Amendment of Declaration of Trust and
Redesignation of Series

(a)(6) Certificate of Amendment of Declaration of Trust

(a)(7) Certificate of Amendment of Declaration of Trust

(a)(8) Certificate of Establishment and Designation of Series

(a)(9) Certificate of Amendment of Declaration of Trust and
Redesignation of Series

(d)(5) Form of Amended and Restated Investment Advisory Agreement
between the Registrant and Pilgrim Advisors, Inc.

(d)(6) Form of Investment Advisory Agreement between the Registrant and
Pilgrim Investments, Inc.

(h)(2) Amended and Restated Administrative Services Agreement

(q)(1) Power of Attorney

(q)(2) Power of Attorney

NORTHSTAR GALAXY TRUST

CERTIFICATE OF AMENDMENT OF DECLARATION OF TRUST
AND REDESIGNATION OF SERIES

The undersigned being all of the trustees of the Northstar Galaxy Trust, a
Massachusetts business trust (the "Trust"), acting pursuant to Section 8.3 and
Section 5. 11 of the Trust's Declaration of Trust dated December 17, 1993, as
amended (the "Declaration of Trust"), hereby amend the Declaration of Trust to
redesignate each existing series of the Trust, as follows:

I. The five (5) existing Series of the Trust are redesignated as follows:

(a) The "Northstar Galaxy Trust Emerging Growth Portfolio" is
redesignated the "PILGRIM EMERGING GROWTH PORTFOLIO".

(a) The "Northstar Galaxy Trust Growth + Value Portfolio" is
redesignated the "PILGRIM GROWTH + VALUE PORTFOLIO".

(b) The "Northstar Galaxy Trust High Yield Bond Portfolio" is
redesignated the "PILGRIM HIGH YIELD BOND PORTFOLIO".

(d) The "Northstar Galaxy Trust International Value Portfolio" is
redesignated the "PILGRIM INTERNATIONAL VALUE PORTFOLIO".

(e) The "Northstar Galaxy Trust Research Enhanced Index Portfolio" is
redesignated the "PILGRIM RESEARCH ENHANCED INDEX PORTFOLIO".

IN WITNESS WHEREOF, the undersigned have this day signed this Certificate of
Amendment of Declaration of Trust.

Dated: November 1, 1999

/s/ John G. Turner /s/ Mark L. Lipson
- --------------------------- ---------------------------
John G. Turner Mark L. Lipson

/s/ Paul S. Doherty, Esq. /s/ Robert B. Goode, Jr.
- --------------------------- ---------------------------
Paul S. Doherty, Esq. Robert B. Goode, Jr.

/s/ David W. Wallace /s/ Walter H. May
- --------------------------- ---------------------------
David W. Wallace Walter H. May

/s/ David W.C. Putnam /s/ Alan L. Gosule, Esq.
- --------------------------- ---------------------------
David W.C. Putnam Alan L. Gosule, Esq.

/s/ John R. Smith
- ---------------------------
John R. Smith

NORTHSTAR GALAXY TRUST

UNANIMOUS WRITTEN CONSENT OF THE TRUSTEES
AND
CERTIFICATE OF AMENDMENT OF DECLARATION OF TRUST

The undersigned, being all the trustees of Northstar Galaxy Trust, a
Massachusetts business trust (the "Trust") acting pursuant to Article VIII of
the Trust's Declaration of Trust executed on December 17, 1993 (the "Declaration
of Trust"), approve, adopt and consent to the following resolution:

RESOLVED, that the change in the principal place of business from 300 First
Stamford Place, Stamford, Connecticut 06902 to 40 North Central Avenue,
Suite 1200, Phoenix, Arizona 85004 be, and hereby is, approved; and

FURTHER RESOLVED, that Section 10.6 of the Declaration of Trust, executed
on December 17, 1993, is hereby amended in its entirety to read as follows:

"Section 10.6 Principal Place of Business. The principal place of business
of the Trust is 40 North Central Avenue, Suite 1200, Phoenix, Arizona
85004. The principal place of business may be changed by resolution of a
majority of the Trustees."

IN WITNESS WHEREOF, the undersigned have this day signed this Unanimous Written
Consent and Certificate of Amendment of Declaration of Trust.

Dated: November 1, 1999

/s/ John G. Turner /s/ Mark L. Lipson
- --------------------------- ---------------------------
John G. Turner Mark L. Lipson

/s/ Paul S. Doherty, Esq. /s/ Robert B. Goode, Jr.
- --------------------------- ---------------------------
Paul S. Doherty, Esq. Robert B. Goode, Jr.

/s/ David W. Wallace /s/ Walter H. May
- --------------------------- ---------------------------
David W. Wallace Walter H. May

/s/ David W.C. Putnam /s/ Alan L. Gosule, Esq.
- --------------------------- ---------------------------
David W.C. Putnam Alan L. Gosule, Esq.

/s/ John R. Smith
- ---------------------------
John R. Smith

NORTHSTAR GALAXY TRUST

CERTIFICATE OF AMENDMENT OF DECLARATION OF TRUST

The undersigned being all of the trustees of the Northstar Galaxy Trust, a
Massachusetts business trust (the "Trust"), acting pursuant to Section 8.3 of
the Trust's Declaration of Trust dated December 17, 1993, as amended (the
"Declaration of Trust"), hereby amend the Declaration of Trust to change the
name of the Trust set forth in Section 1.1 thereof, as follows;

1. Section I. I. of the Declaration of Trust, executed on December 17,
1993, as amended, is hereby amended to read in its entirety as follows:

"Section 1.1 Name. The name of the Trust created hereby is "PILGRIM TRUST."

IN WITNESS WHEREOF, the undersigned have this day signed this Certificate of
Amendment of Declaration of Trust.

Dated: November 1, 1999

/s/ John G. Turner /s/ Mark L. Lipson
- --------------------------- ---------------------------
John G. Turner Mark L. Lipson

/s/ Paul S. Doherty, Esq. /s/ Robert B. Goode, Jr.
- --------------------------- ---------------------------
Paul S. Doherty, Esq. Robert B. Goode, Jr.

/s/ David W. Wallace /s/ Walter H. May
- --------------------------- ---------------------------
David W. Wallace Walter H. May

/s/ David W.C. Putnam /s/ Alan L. Gosule, Esq.
- --------------------------- ---------------------------
David W.C. Putnam Alan L. Gosule, Esq.

/s/ John R. Smith
- ---------------------------
John R. Smith

NORTHSTAR GALAXY TRUST
(ALSO KNOWN AS PILGRIM TRUST)

ESTABLISHMENT AND DESIGNATION OF SERIES

The undersigned, being a majority of the Trustees of the Northstar Galaxy Trust,
a Massachusetts business trust (the "Trust"), acting pursuant to Section 5.11 of
the Declaration of Trust dated December 17, 1993, as amended (the "Declaration
of Trust"), hereby establish and designate three additional series of the Trust
(each a "Portfolio" and collectively, the "Portfolios"), which Portfolios hereby
created shall have the following special and relative rights:

1. The Portfolios shall be designated as the:

* Pilgrim VP Growth Opportunities Portfolio
* Pilgrim VP MagnaCap Portfolio
* Pilgrim VP MidCap Opportunities Portfolio

2. The Portfolios shall be authorized to invest in cash, securities,
instruments and other property as from time to time described in the
then current prospectus and registration statement for the Portfolios
under the Securities Act of 1933. Each share of beneficial interest of
the Portfolios ("Share") shall be redeemable, shall represent a pro
rata beneficial interest in the assets of the respective Portfolio,
and shall be entitled to receive its pro rata share of net assets
allocable to such shares of such Portfolio upon liquidation of that
Portfolio, all as provided in the Declaration of Trust. The proceeds
of sales of Shares of a Portfolio, together with any income and gain
thereon, less any dimunition or expenses thereof, shall irrevocably
belong to that Portfolio, unless otherwise required by law.

3. Each share of beneficial interest of a Portfolio shall be entitled to
one vote (or fraction thereof in respect of a fractional share) on
matters which such Shares shall be entitled to vote except to the
extent otherwise required by the Investment Company Act of 1940, or
when the Trustees have determined that the matter affects only the
interest of Shareholders of certain series within the Trust, in which
case only the Shareholders of such series shall be entitled to vote
thereon. Any matter shall be deemed to have been effectively acted
upon with respect to a Portfolio if acted upon as provided in Rule
l8f-2 under the Investment Company Act or any successor rule and in
the Declaration of Trust.

4. The assets and liabilities of the Trust shall be allocated among the
Portfolios and each other series within the Trust, as set forth in
Section 5.11 of the Declaration of Trust, except as described below:

(a) Costs incurred by the Trust on behalf of a Portfolio in
connection with the organization and initial registration and
public offering of Shares of that Portfolio shall be allocated to
that Portfolio.
<PAGE>
(b) The Trustees may from time to time in particular cases make
specific allocation of assets or liabilities among the series
within the Trust and each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive
and binding upon the Shareholders of all series for all purposes.

5. The Trustees (including any successor Trustee) shall have the right at
any time and from time to time to reallocate assets and expenses or to
change the designation of the Portfolios now or hereafter created, or
to otherwise change the special and relative rights of the
Shareholders of the Portfolios, provided that such change shall not
adversely affect the rights of the Shareholders of the Portfolios.

Dated: January 27, 2000

/s/ John G. Turner /s/ Mark L. Lipson
- --------------------------- ---------------------------
John G. Turner Mark L. Lipson

/s/ Paul S. Doherty /s/ Robert B. Goode, Jr.
- --------------------------- ---------------------------
Paul S. Doherty Robert B. Goode, Jr.

/s/ David W. Wallace /s/ Walter H. May
- --------------------------- ---------------------------
David W. Wallace Walter H. May

/s/ David W.C. Putnam /s/ Alan L. Gosule, Esq.
- --------------------------- ---------------------------
David W.C. Putnam Alan L. Gosule, Esq.

/s/ John R. Smith
- ---------------------------
John R. Smith

-2-

NORTHSTAR GALAXY TRUST
(ALSO KNOWN AS PILGRIM TRUST)

CERTIFICATE OF AMENDMENT OF DECLARATION OF TRUST
AND REDESIGNATION OF SERIES

The undersigned, being all of the Trustees of the Northstar Galaxy Trust, a
Massachusetts business trust (the "Trust"), acting pursuant to Section 8.3 and
Section 5.11 of the Trust's Declaration of Trust dated December 17, 1993, as
amended (the "Declaration of Trust"), hereby amend the Declaration of Trust
effective as of April 30, 2000 to redesignate the Trust and each existing series
of the Trust, as follows:

1. The name of the Trust is redesignated the "PILGRIM VARIABLE PRODUCTS
TRUST."

2. The five (5) existing Series of the Trust are redesignated as follows:

(a) The "Northstar Galaxy Emerging Growth Portfolio" is redesignated
the "Pilgrim VP SmallCap Opportunities Portfolio."

(b) The "Northstar Galaxy Research Enhanced Index Portfolio" is
redesignated the "Pilgrim VP Research Enhanced Index Portfolio."

(d) The "Northstar Galaxy International Value Portfolio" is
redesignated the "Pilgrim VP International Value Portfolio."

(e) The "Northstar Galaxy High Yield Bond Portfolio" is redesignated
the "Pilgrim VP High Yield Bond Portfolio."
<PAGE>
IN WITNESS WHEREOF, the undersigned have this day signed this Certificate of
Amendment of Declaration of Trust.

Dated: January 27, 2000

/s/ John G. Turner /s/ Mark L. Lipson
- --------------------------- ---------------------------
John G. Turner Mark L. Lipson

/s/ Paul S. Doherty /s/ Robert B. Goode, Jr.
- --------------------------- ---------------------------
Paul S. Doherty Robert B. Goode, Jr.

/s/ David W. Wallace /s/ Walter H. May
- --------------------------- ---------------------------
David W. Wallace Walter H. May

/s/ David W.C. Putnam /s/ Alan L. Gosule, Esq.
- --------------------------- ---------------------------
David W.C. Putnam Alan L. Gosule, Esq.

/s/ John R. Smith
- ---------------------------
John R. Smith

PILGRIM VARIABLE PRODUCTS TRUST
INVESTMENT ADVISORY AGREEMENT
AS AMENDED AND RESTATED ON APRIL 30, 2000

WHEREAS, Northstar Galaxy Trust (the "Trust"), a Massachusetts business
trust, is an open-end management investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and

WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and assets; and

WHEREAS, the Northstar Investment Management Corporation (the "Adviser"), a
Delaware business corporation, is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice, investment management and administrative services,
as an independent contractor; and

WHEREAS, the Trust and the Adviser have entered into an Investment Advisory
Agreement dated May 2, 1994, as amended May 1, 1997 (the "Agreement'), under
which the Adviser renders investment advisory services to certain series of the
Trust that are identified on Schedule A; and

WHEREAS, the Trust wishes to restate the Agreement to reflect that the name
of the Adviser, Northstar Investment Management Corporation, has been changed to
Pilgrim Advisors, Inc.; and

WHEREAS, the Trust wishes to restate the Agreement to reflect that the
Trust's name has been changed from Northstar Galaxy Trust to Pilgrim Variable
Products Trust; and

WHEREAS, the Trust wishes to retain the Adviser to render investment
advisory services to the Pilgrim VP Growth Opportunities Portfolio and the
Pilgrim VP MidCap Opportunities Portfolio (together with the other series of the
Trust identified on Schedule A, the "Funds"), and the Adviser is willing to
render such investment advisory services on the terms set forth below.

NOW, THEREFORE, the parties agree as follows:

1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and the Funds for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.
<PAGE>
2. Subject to the supervision of the Trustees, the Adviser shall manage the
investment operations of the Funds and the composition of each Fund's portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with each Fund's investment objectives, policies and restrictions as
stated in the Trust's Prospectus and Statement of Additional Information (as
defined below) subject to the following understandings:

(a) The Adviser shall provide supervision of each Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by each Fund,
and what portion of the assets will be invested or held uninvested as cash.

(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.

(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws, Prospectus and Statement of Additional Information of the Trust, with
the instructions and directions of the Trustees and (ii) conform to and comply
with the requirements of the Investment Company Act and all other applicable
federal and state laws and regulations.

(d) (i) The Adviser shall determine the securities to be purchased or sold
by each Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing each
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Funds recognize that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.

(ii) When the Adviser deems the purchase or sale of a security to be in the
best interest of a Fund as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transactions, will
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to each Fund and to such other
clients.

(e) The Adviser shall maintain, or cause to be maintained, all books and
records required under the Investment Company Act to the extent not maintained
by the custodian of the Trust. The Adviser shall render to the Trustees such
periodic and special reports as the Trustees may reasonably request.

-2-
<PAGE>
(f) The Adviser shall provide the Trust's custodian on each business day
information relating to all transactions concerning each Fund's assets.

(g) The investment management services of the Adviser to the Trust and to
each Fund under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.

3. The Trust has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:

(a) Declaration of Trust, as amended, as filed with the Secretary of the
Commonwealth of Massachusetts (such Declaration of Trust, as in effect on the
date hereof and as further amended from time to time, are herein called the
"Declaration of Trust");

(b) By-Laws of the Trust (such By-Laws, as in effect on the date hereof and
as amended from time to time, are herein called the "By-Laws");

(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Trust and each Fund;

(d) Registration Statement on Form N-lA under the Investment Company Act
and the Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Securities and Exchange Commission (the
"Commission"), relating to the Trust and shares of beneficial interest of each
Fund and all amendments thereto.

(e) Notification of Registration of the Trust under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;

(f) Prospectus and Statement of Additional Information included in the
Registration Statement, as amended from time to time. All references to this
Agreement, the Prospectus and the Statement of Additional Information shall be
to such documents as most recently amended or supplemented and in effect.

4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/or the
Funds to serve in the capacities in which they are elected. All services to be
furnished by the Adviser under this Agreement may be furnished through such
directors, officers or employees of the Adviser.

5. The Adviser agrees that all records which it maintains for the Trust
and/or the Funds are property of the Trust and/or the Funds. The Adviser will
surrender promptly to the Trust and/or the Funds any such records upon either
the Trust's or a Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.

-3-
<PAGE>
6. In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:

(a) the salaries and expenses of all personnel of the Trust, the Funds and
the Adviser required to perform the services to be provided pursuant to this
Agreement, except the fees of the trustees who are not affiliated persons of the
Adviser, and

(b) all expenses incurred by the Adviser, the Trust or by the Funds in
connection with the performance of the Adviser's responsibilities hereunder,
other than brokers' commissions and any issue or transfer taxes chargeable to
each respective Fund in connection with its securities transactions.

7. For the services provided and the expenses assumed pursuant to this
Agreement, each Fund, other than the Pilgrim VP International Value Portfolio,
the Pilgrim VP Growth Opportunities Portfolio and the Pilgrim MidCap
Opportunities Portfolio, will pay to the Adviser as compensation a fee accrued
daily and paid monthly at the annual rate of 0.75% of the first $250,000,000 of
aggregate average daily net assets of the Fund; 0.70% of the next $250,000,000
of such assets; 0.65% of the next $250,000,000 of such assets; 0.60% of the next
$250,000,000 of such assets and 0.55% of the remaining aggregate average daily
net assets of the Fund in excess of $1,000,000,000. The Pilgrim VP International
Value Portfolio will pay to the Adviser as compensation a fee accrued daily and
paid monthly at the annual rate of 1.00% of aggregate average daily net assets
of the Fund. The Pilgrim VP Growth Opportunities Portfolio and the Pilgrim VP
MidCap Opportunities Portfolio will pay to the Adviser as compensation a fee
accrued daily and paid monthly at the annual rate of 0.75% of aggregate average
daily net assets of the Fund.

8. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or a Fund
in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.

9. Generally, this Agreement shall continue in effect for an initial period
of two years from the date of adoption by the Trust on behalf of a particular
Fund and shall continue in effect thereafter for so long as such continuance is
specifically approved at least annually by the affirmative vote of (i) a
majority of the Trustees of the Trust acting separately on behalf of each Fund,
who are not interested persons of the Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) a majority of the Trustees
of the Trust or the holders of a majority of the outstanding voting securities
of each respective Fund; provided however, that this Agreement may be terminated
by the Trust, on behalf of a Fund at any time, without the payment of any
penalty, by the Trustees acting on behalf of a Fund or by vote of a majority of
the outstanding voting securities (as defined in the Investment Company Act) of
a Fund, or by the Adviser at any time, without the payment of any penalty, on
not more than 60 days' nor less than 30 days' written notice to the other party.

-4-
<PAGE>
This Agreement shall terminate automatically in the event of its assignment
provided that a transaction which does not, under the Investment Company Act,
result in a change of actual control or management of the Adviser's business
shall not be deemed to be an assignment for the purposes of this Agreement.

(a) This Agreement became effective on May 2, 1994 with respect to Pilgrim
VP SmallCap Opportunities Portfolio, Pilgrim VP Growth + Value Portfolio,
Pilgrim VP International Value Portfolio, Pilgrim VP Research Enhanced Index
Portfolio, and Pilgrim VP High Yield Bond Portfolio, and it was last renewed on
April __, 2000. This Agreement with respect to the Funds named in this
sub-paragraph shall remain in effect until April 30, 2001.

(b) This Agreement became effective on April 30, 2000 with respect to
Pilgrim VP Growth Opportunities Portfolio and the Pilgrim VP MidCap
Opportunities Portfolio. This Agreement with respect to the Funds named in this
sub-paragraph shall remain in effect until April 30, 2002.

10. This agreement shall terminate automatically in the event of its
assignment; the term "assignment" for this purpose shall have the meaning
defined in Section 2(a) (4) of the Investment Company Act.

11. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a trustee, officer
or employee of the Trust and/or the Funds to engage in any other business or to
devote his time and attention in part to the management or other aspect of any
business, whether of a similar or dissimilar nature, nor limit or restrict the
right of the Adviser to engage in any other business or to render services of
any kind to any other person or entity.

12. During the term of this Agreement, the Trust and each Fund agrees to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of each Fund or the public, which refer in any way
to the Adviser, prior to use thereof and not to use such material if the Adviser
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt. In the event of termination of the
Agreement, the Trust and/or each Fund will continue to furnish to the Adviser
such other information relating to the business affairs of the Trust and/or each
Fund as the Adviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.

13. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of each Fund and (ii) a
majority of the members of the Trustees who are not interested persons of the
Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.

14. The Adviser, the Trust and the Funds each agree that the name "Pilgrim"
is proprietary to, and a property right of, the Adviser. The Trust and the Funds
agree and consent that (i) each will only use the name "Pilgrim" as part of its

-5-
<PAGE>
name and for no other purpose, (ii) each will not purport to grant any third
party the right to use the name "Pilgrim" and (iii) upon the termination of this
Agreement, the Trust and the Funds shall, upon the request of the Adviser, cease
to use the name "Pilgrim," and shall use its best efforts to cause its officers,
trustees and shareholders to take any and all actions which the Adviser may
request to effect the foregoing.

15. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at 40 North Central Avenue, Suite 1200,
Phoenix, Arizona 85004; or (2) to the Trust and/or the Funds at 40 North Central
Avenue, Suite 1200, Phoenix, Arizona 85004.

16. This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut. The terms "interested person",
"assignment", and "vote of the majority of the outstanding securities" shall
have the meaning set forth in the Investment Company Act.

17. The Declaration of Trust, establishing the Trust, dated December 17,
1993, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Pilgrim Variable Products Trust" refers to the Trustees
under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of the Trust
and/or the Funds may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the Trust property
only shall be liable.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year written
above.

PILGRIM VARIABLE PRODUCTS TRUST

By:
------------------------------------

PILGRIM ADVISORS, INC.

By:
------------------------------------

-6-
<PAGE>
SCHEDULE A

TO THE
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
BETWEEN

PILGRIM VARIABLE PRODUCTS TRUST

AND

PILGRIM ADVISORS, INC.

FUNDS
- -----
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP MidCap Opportunities Portfolio
Pilgrim VP Growth + Value Portfolio
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP High Yield Bond Portfolio

-7-

PILGRIM VARIABLE PRODUCTS TRUST
INVESTMENT ADVISORY AGREEMENT

DATED APRIL 30, 2000

AGREEMENT, made on this 30th day of April 2000, by and between PILGRIM
VARIABLE PRODUCTS TRUST, a Massachusetts business trust, (the "Trust") and
PILGRIM INVESTMENTS, INC., a Delaware business corporation (the "Adviser").

WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"); and

WHEREAS, the Trust is authorized to issue shares of beneficial interest in
separate series with each such series representing interests in a separate
portfolio of securities and assets; and

WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
supplying investment advice, investment management and administrative services,
as an independent contractor; and

WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to the series of the Trust identified in Schedule A (the
"Fund"), and the Adviser is willing to render such investment advisory on the
terms set forth below.

NOW, THEREFORE, the parties agree as follows:

1. The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and the Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to render the
services described, for the compensation provided, in this Agreement.

2. Subject to the supervision of the Trustees, the Adviser shall manage the
investment operations of the Fund and the composition of the Fund's portfolio,
including the purchase and retention and disposition of portfolio securities, in
accordance with the Fund's investment objectives, policies and restrictions as
stated in the Trust's Prospectus and Statement of Additional Information (as
defined below) subject to the following understandings:

(a) The Adviser shall provide supervision of the Fund's investments and
determine from time to time what investments will be made, held or disposed of
or what securities will be purchased and retained, sold or loaned by the Fund,
and what portion of the assets will be invested or held uninvested as cash.

(b) The Adviser shall use its best judgment in the performance of its
duties under this Agreement.
<PAGE>
(c) The Adviser, in the performance of its duties and obligations under
this Agreement, shall (i) act in conformity with the Declaration of Trust,
By-Laws, Prospectus and Statement of Additional Information of the Trust, with
the instructions and directions of the Trustees and (ii) conform to and comply
with the requirements of the Investment Company Act and all other applicable
federal and state laws and regulations.

(d) (i) The Adviser shall determine the securities to be purchased or sold
by the Fund and will place orders pursuant to its determinations with or through
such persons, brokers or dealers to carry out the policy with respect to
brokerage as set forth in the Trust's Prospectus and Statement of Additional
Information or as the Trustees may direct from time to time. In providing the
Fund with investment supervision, the Adviser will give primary consideration to
securing the most favorable price and efficient execution. The Adviser may also
consider the financial responsibility, research and investment information and
other services and research related products provided by brokers or dealers who
may effect or be a party to any such transactions or other transactions to which
other clients of the Adviser may be a party. The Trust recognizes that the
services and research related products provided by such brokers may be useful to
the Adviser in connection with its services to other clients.

(ii) When the Adviser deems the purchase or sale of a security to be in the
best interest of the Fund as well as other clients, the Adviser, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the most favorable price or lower brokerage
commissions and efficient execution. In such event, allocation of the securities
so purchased or sold, as well as the expenses incurred in the transactions, will
be made by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other clients.

(f) The Adviser shall provide the Trust's custodian on each business day
information relating to all transactions concerning the Fund's assets.

(g) The investment management services of the Adviser to the Trust and to
the Fund under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.

3. The Trust has delivered to the Adviser copies of each of the following
documents and will deliver to it all future amendments and supplements, if any:

-2-
<PAGE>
(b) By-Laws of the Trust (such By-Laws, as in effect on the date hereof and
as amended from time to time, are herein called the "By-Laws");

(c) Certified resolutions of the Trustees authorizing the appointment of
the Adviser and approving this Agreement on behalf of the Trust and the Fund;

(e) Notification of Registration of the Trust under the Investment Company
Act on Form N-8A as filed with the Commission and all amendments thereto;

4. The Adviser shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/or the
Fund to serve in the capacities in which they are elected. All services to be
furnished by the Adviser under this Agreement may be furnished through such
directors, officers or employees of the Adviser.

5. The Adviser agrees that all records which it maintains for the Trust
and/or the Fund are property of the Trust and/or the Fund. The Adviser will
surrender promptly to the Trust and/or the Fund any such records upon either the
Trust's or the Fund's request. The Adviser further agrees to preserve such
records for the periods prescribed in Rule 3la-2 of the Commission under the
Investment Company Act.

6. (i) In connection with the services rendered by the Adviser under this
Agreement, the Adviser will pay all of the following expenses:

(a) the salaries and expenses of all personnel of the Trust, the Fund and
the Adviser required to perform the services to be provided pursuant to this
Agreement, except the fees of the trustees who are not affiliated persons of the
Adviser, and

(b) all expenses incurred by the Adviser, the Trust or by the Fund in
connection with the performance of the Adviser's responsibilities hereunder,
other than brokers' commissions and any issue or transfer taxes chargeable to
the Fund in connection with its securities transactions.

7. For the services provided and the expenses assumed pursuant to this
Agreement, the Fund will pay to the Adviser as compensation a fee accrued daily
and paid monthly at the annual rate of 0.75% of the aggregate average daily net
assets of the Fund.

-3-
<PAGE>
8. The Adviser may rely on information reasonably believed by it to be
accurate and reliable. Neither the Adviser nor its officers, directors,
employees or agents or controlling persons shall be liable for any error or
judgment or mistake of law, or for any loss suffered by the Trust and/or the
Fund in connection with or arising out of the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.

9. This Agreement shall continue in effect for an initial period of two
years from the date of adoption and shall continue in effect thereafter for so
long as such continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the Trustees of the Trust, who are not
interested persons of the Trust, cast in person at a meeting called for the
purpose of voting on such approval, and (ii) a majority of the Trustees of the
Trust or the holders of a majority of the outstanding voting securities of the
Fund; provided however, that this Agreement may be terminated by the Trust, on
behalf of the Fund at any time, without the payment of any penalty, by the
Trustees acting on behalf of the Fund or by vote of a majority of the
outstanding voting securities (as defined in the Investment Company Act) of the
Fund, or by the Adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the other party.
This Agreement shall terminate automatically in the event of its assignment
provided that a transaction which does not, under the Investment Company Act,
result in a change of actual control or management of the Adviser's business
shall not be deemed to be an assignment for the purposes of this Agreement.

11. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Adviser who may also be a trustee, officer
or employee of the Trust to engage in any other business or to devote his time
and attention in part to the management or other aspect of any business, whether
of a similar or dissimilar nature, nor limit or restrict the right of the
Adviser to engage in any other business or to render services of any kind to any
other person or entity.

12. During the term of this Agreement, the Trust and the Fund agree to
furnish the Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature, or other material prepared for
distribution to shareholders of the Fund or the public, which refer in any way
to the Adviser, prior to use thereof and not to use such material if the Adviser
reasonably objects in writing within five business days (or such other time as
may be mutually agreed) after receipt. In the event of termination of the
Agreement, the Trust and/or the Fund will continue to furnish to the Adviser
such other information relating to the business affairs of the Trust and/or the
Fund as the Adviser at any time, or from time to time, reasonably requests in
order to discharge its obligations hereunder.

-4-
<PAGE>
13. This Agreement may be amended by mutual agreement, but only after
authorization of such amendments by the affirmative vote of (i) the holders of
the majority of the outstanding voting securities of the Fund and (ii) a
majority of the members of the Trustees who are not interested persons of the
Trust or the Adviser, cast in person at a meeting called for the purpose of
voting on such approval.

14. The Adviser, the Trust and the Fund each agree that the name "Pilgrim"
is proprietary to, and a property right of, the Adviser. The Trust and the Fund
agree and consent that (i) each will only use the name "Pilgrim" as part of its
name and for no other purpose, (ii) each will not purport to grant any third
party the right to use the name "Pilgrim" and (iii) upon the termination of this
Agreement, the Trust and the Fund shall, upon the request of the Adviser, cease
to use the name "Pilgrim," and shall use its best efforts to cause its officers,
trustees and shareholders to take any and all actions which the Adviser may
request to effect the foregoing.

15. Any notice or other communications required to be given pursuant to
this Agreement shall be deemed to be given if delivered or mailed by registered
mail, postage paid, (1) to the Adviser at 40 North Central Avenue, Suite 1200,
Phoenix, Arizona 85004; or (2) to the Trust and/or the Fund at 40 North Central
Avenue, Suite 1200, Phoenix, Arizona 85004.

17. The Declaration of Trust, establishing the Trust, dated December 17,
1993, a copy of which, together with all amendments thereto (the "Declaration"),
is on file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name "Pilgrim Variable Products Trust" refers to the Trustees
under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder, officer, employee or agent of the Trust
and/or the Fund may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with the affairs of the Trust, but the Trust property
only shall be liable.

-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year written
above.

PILGRIM VARIABLE PRODUCTS TRUST

By:
------------------------------------

PILGRIM INVESTMENTS, INC.

By:
------------------------------------

-6-
<PAGE>
SCHEDULE A

TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN

PILGRIM VARIABLE PRODUCTS TRUST

AND

PILGRIM INVESTMENTS, INC.

FUNDS
- -----
Pilgrim VP MagnaCap Portfolio

-7-

ADMINISTRATIVE SERVICES AGREEMENT
AS AMENDED AND RESTATED APRIL 30, 2000

WHEREAS, Northstar Galaxy Trust (the "Trust"), on behalf of each of its
series listed on Schedule A hereto, as may be amended from time to time (the
"Funds"), has entered into an Administrative Services Agreement with Northstar
Administrators Corporation (the "Administrator"), pursuant to which Northstar
Administrators Corporation renders administrative and other services to the
Funds pursuant to an Administrative Services Agreement dated May 2, 1994, as
amended May 1, 1997 (the "Agreement"); and

WHEREAS, the Trust wishes to restate the Agreement to reflect that
Northstar Administrators Corp. has merged with Pilgrim Group, Inc., and that the
merged entity is known as Pilgrim Group, Inc.; and

WHEREAS, the Trust wishes to restate the Agreement to reflect that the name
of the Trust has been changed to Pilgrim Variable Products Trust; and

WHEREAS, the Trust wishes to add three series (Pilgrim VP MagnaCap
Portfolio, Pilgrim VP Growth Opportunities Portfolio, and Pilgrim VP MidCap
Opportunities Portfolio) to the Funds covered by the Agreement and listed on
Schedule A to the Agreement; and

WHEREAS, Pilgrim Advisors, Inc. and Pilgrim Investments, Inc.
(collectively, the "Adviser") serve as investment adviser to the Funds.

NOW, THEREFORE, the Agreement is hereby amended and restated this [30th day
of April, 2000] as follows:

1. APPOINTMENT

The Trust hereby appoints the Administrator to serve as administrator to
the Funds for the periods and on the terms set forth herein. The Administrator
accepts this appointment and agrees to furnish the services set forth herein for
the compensation provided herein.

2. SERVICES AS ADMINISTRATOR

A. GENERAL SERVICES

Subject to the supervision and direction of the Board of Trustees of
the Trust, the Administrator will (a) assist in supervising all aspects of the
Funds' operations except those performed by the Funds' Adviser under its
investment advisory agreement; (b) furnish such statistical or other factual
information, advice regarding economic factors and trends and advice and
guidelines as to transactions in specific securities (but without generally
furnishing advice or making recommendations regarding the purchase or sale of
securities); (c) maintain or supervise, as the case may be, the maintenance by
the Adviser or third parties approved by the Trust of such books and records of
the Funds as may be required by applicable federal or state law; (d) perform all
<PAGE>
corporate secretarial functions on behalf of the Funds; (e) provide the Funds
with office facilities, assemble and provide statistical and research data,
provide data processing, clerical, internal legal, internal executive,
administrative and bookkeeping services, and provide stationary and office
supplies; (f) supervise the performance by third parties of Fund accounting and
portfolio pricing services, internal audits and audits by independent
accountants for the Funds; (g) prepare and arrange for the printing, filing and
distribution of prospectuses, proxy materials, and periodic reports to the
shareholders of the Funds as required by applicable law; (h) prepare or
supervise the preparation by third parties approved by the Trust of all federal,
state, and local tax returns and reports of the Funds required by applicable
law, (i) prepare, update, and arrange for the filing of the Funds' registration
statement and amendments thereto and other documents as the Securities and
Exchange Commission ("Commission") and other federal regulatory authorities may
require by applicable law, and oversee compliance under all state regulatory
requirements to which the Funds are subject; (j) render to the Board of Trustees
of the Trust such periodic and special reports respecting the Funds as the Board
may reasonably request; (k) arrange, assemble information and reports for, and
attend meetings of the Trustees and the shareholders of the Funds; (l) maintain
a fidelity bond as required under the Investment Company Act of 1940 (the "1940
Act") for the Trust and liability insurance for the Trustees and officers of the
Trust; and (m) make available its officers and employees to the Board of
Trustees and officers of the Trust for consultation and discussions regarding
the administration of the Funds.

B. PERFORMANCE OF DUTIES

The Administrator, at its discretion, may enter into contracts with third
parties for the performance of the services to be provided by the Administrator
under this Agreement.

The Administrator, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Registration Statement, as
amended, of the Funds and with the instructions and directions of the Board of
Trustees of the Trust and will conform to, and comply with, the requirements of
the 1940 Act and all other applicable federal and state laws and regulations.

3. DOCUMENTS

The Trust has delivered to the Administrator copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:

(a) Declaration of Trust, as amended, as filed with the Secretary of
the Commonwealth of Massachusetts;

(b) By-Laws of the Trust;

(c) Certified resolutions of the Trustees authorizing the appointment
of the Administrator and approving this Agreement on behalf of the Trust and
each Fund;

(d) Registration Statement on Form N-1A under the 1940 Act and the
Securities Act of 1933, as amended from time to time (the "Registration
Statement"), as filed with the Commission, relating to the Trust and shares of
beneficial interest of each Fund and all amendments thereto;

-2-
<PAGE>
(e) Notification of Registration of the Trust under the 1940 Act on
Form N-8A as filed with the Commission and all amendments thereto;

4. DIRECTORS, OFFICERS AND EMPLOYEES

The Administrator shall authorize and permit any of its directors, officers
and employees who may be elected as trustees or officers of the Trust and/or the
Funds to serve in the capacities in which they are elected. All services to be
furnished by the Administrator under this Agreement may be furnished through
such directors, officers or employees of the Administrator.

5. RECORDS

The Administrator agrees that all records which it maintains for the Trust
and/or the Funds are property of the Trust and/or the Funds. The Administrator
will surrender promptly to the Trust and/or the Funds any such records upon
either the Trust's or the Fund's request. The Administrator further agrees to
preserve such records for the periods prescribed in Rule 31a-2 of the Commission
under the 1940 Act.

6. COMPENSATION

In consideration of the services rendered pursuant to this Agreement, the
Funds will pay the Administrator a fee, computed and accrued daily and payable
monthly, at an annual rate of 0.10% of each Fund's average daily net assets. For
the purpose of determining fees payable to the Administrator, the value of a
Fund's average daily net assets shall be computed at the times and in the manner
specified in the Prospectus and Statement of Additional Information of the Fund
as from time to time in effect.

7. EXPENSES

The Administrator will bear all expenses in connection with the performance
of its services under this Agreement, except that the Administrator will be
reimbursed by the Funds for the out-of-pocket costs incurred in connection with
this Agreement or by third parties who are performing services as permitted by
paragraph 2. The Funds will bear certain other expenses to be incurred in their
operation, including: taxes, interest, brokerage fees and commissions, if any,
fees of Trustees of the Trust who are not officers, directors, or employees of
the Adviser or Administrator; Securities and Exchange Commission fees; charges
of custodians and transfer and dividend disbursing agents; certain insurance
premiums; outside auditing and legal expenses; cost of maintenance of the Funds'
existence; including charges of accounting, internal auditing, and pricing of
portfolio securities for the Funds, including the charges an independent pricing

-3-
<PAGE>
service; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Funds and of the officers or Board of Trustees of the Trust; and any
extraordinary expenses.

8. STANDARD OF CARE

The Administrator shall exercise its best judgment in rendering the
services under this Agreement. The Administrator shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Funds or the
Funds' shareholders in connection with the matters to which this Agreement
relates, provided that nothing herein shall, be deemed to protect or purport to
protect the Administrator against liability to the Funds or to their
shareholders to which the Administrator would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Administrator's reckless disregard
of its obligations and duties under this Agreement. As used in this Section 8,
the term "Administrator" shall include any officers, directors, employees, or
other affiliates of the Administrator performing services with respect to the
Funds.

9. DURATION AND TERMINATION

This Agreement shall continue in effect unless sooner terminated as
provided herein, for two years from the date hereof and shall continue from year
to year thereafter, provided each continuance is specifically approved at least
annually by a majority of the Board of Trustees of the Trust, including a
majority of the Board of Trustees who are not "interested persons" (as defined
in the 1940 Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting such approval. This Agreement is
terminable, without penalty, on 60 days' written notice by the Board of Trustees
of the Trust or by vote of holders of a majority of the Funds' shares, or upon
90 days' written notice by the Administrator.

10. SERVICE TO OTHER COMPANIES OR ACCOUNTS

The administrative services of the Administrator to the Funds under this
Agreement are not to be deemed exclusive, and the Administrator, or any
affiliate thereof, shall be free to render similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the Funds) and to engage in other activities,
so long as it's services hereunder are not impaired thereby.

11. ASSIGNMENT

This Agreement may be assigned by either party only upon the prior written
consent of the other party.

12. MISCELLANEOUS

(a) This Agreement constitutes the full and complete agreement of the
parties hereto with respect to the subject matter hereof.

-4-
<PAGE>
(b) Titles or captions of Sections contained in this Agreement are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Agreement or the intent of
any provisions thereof.

(c) This Agreement may be executed in several counterparts, all of
which together shall for all purposes constitute one Agreement, binding on all
the parties.

(d) This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and interpreted, construed and enforced in
accordance with the laws of the State of Connecticut.

(e) If any provisions of this Agreement or the application thereof to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid or unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such person or circumstance,
other than those as to which it is so determined to be invalid or unenforceable,
shall not be affected thereby, and each provision hereof shall be valid and
shall be enforced to the fullest extent permitted by law.

(f) Notices of any kind to be given to the Administrator by the Trust
shall be in writing and shall be duly given if mailed or delivered to the
Administrator at 40 N. Central Avenue, Phoenix, Arizona 85004, or at such other
address or to such individual as shall be specified by the Administrator to the
Trust. Notices of any kind to be given to the Trust by the Administrator shall
be in writing and shall be duly given if mailed or delivered to 40 N. Central
Avenue, Phoenix, Arizona 85004, or at such other address or to such individual
as shall be specified by the Trust to the Administrator.

(g) The Administrator, the Trust and the Funds each agree that the
name "Pilgrim" is proprietary to, and a property right of, the Administrator.
The Trust and the Funds agree and consent that (i) each will only use the name
"Pilgrim" as part of its name and for no other purpose, (ii) each will not
purport to grant any third party the right to use the name "Pilgrim" and (iii)
upon the termination of this Agreement, the Trust and the Funds shall, upon the
request of the Administrator, cease to use the name "Pilgrim," and shall use its
best efforts to cause its officers, trustees and shareholders to take any and
all actions which the Administrator may request to effect the foregoing.

(h) The Declaration of Trust, establishing the Trust, dated December
8, 1993, a copy of which, together with all amendments thereto (the
"Declaration"), is on file in the office of the Secretary of the Commonwealth of
Massachusetts, provides that the name "Pilgrim Variable Products Trust" refers
to the Trustees under the Declaration collectively as trustees, but not
individually or personally; and no Trustee, shareholder, officer, employee or
agent of the Trust and/or the Funds may be held to any personal liability, nor
may resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust,
but the Trust property only shall be liable.

-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.

PILGRIM VARIABLE PRODUCTS TRUST

By:
------------------------------------

PILGRIM GROUP, INC.

By:
------------------------------------

-6-
<PAGE>
SCHEDULE A

TO THE
AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN

PILGRIM VARIABLE PRODUCTS TRUST

AND

PILGRIM GROUP, INC.

FUNDS
- -----
Pilgrim VP SmallCap Opportunities Portfolio
Pilgrim VP Growth Opportunities Portfolio
Pilgrim VP Growth & Value Portfolio
Pilgrim VP International Value Portfolio
Pilgrim VP MagnaCap Portfolio
Pilgrim VP MidCap Opportunities Portfolio
Pilgrim VP Research Enhanced Index Portfolio
Pilgrim VP High Yield Bond Portfolio

-7-

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Robert W. Stallings, James M. Hennessy, Jeffrey S. Puretz and Karen L.
Anderberg, and each of them his true and lawful attorney-in-fact as agent with
full power of substitution and resubstitution of him in his name, place, and
stead, to sign any and all registration statements on Form N-1A applicable to
the Northstar Galaxy Trust and any amendment or supplement thereto, and to file
the same with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.

Dated: November 16, 1999

/s/ Robert B. Goode, Jr. /s/ Paul S. Doherty
- --------------------------- ---------------------------
Robert B. Goode, Jr. Paul S. Doherty

/s/ Mark Lipson /s/ Alan L. Gosule
- --------------------------- ---------------------------
Mark Lipson Alan L. Gosule

/s/ John R. Smith /s/ Walter H. May
- --------------------------- ---------------------------
John R. Smith Walter H. May

/s/ John G. Turner /s/ David W.C. Putnam
- --------------------------- ---------------------------
John G. Turner David W.C. Putnam

/s/ David W. Wallace
---------------------------
David W. Wallace

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Robert W. Stallings, James M. Hennessy, Jeffrey S. Puretz and Karen L.
Anderberg, and each of them his true and lawful attorney-in-fact as agent with
full power of substitution and resubstitution of him in his name, place, and
stead, to sign any and all registration statements on Form N-1A applicable to
the Pilgrim Variable Products Trust (formerly, Northstar Galaxy Trust) and any
amendment or supplement thereto, and to file the same with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitutes, may lawfully do or cause to be done by virtue hereof.

Dated: January 27, 2000

/s/ Michael J. Roland
- ---------------------------
Michael J. Roland