November 1, 2006 [GRAPHIC
OMITTED][GRAPHIC OMITTED]
November 1, 2006
U.S. Securities and Exchange Commission
Division of Investment Management
Office of Insurance Products
100 F Street, N.E.
Washington, D.C. 20549
Re: Registration Statement on Form N-14 ("Registration Statement")
Pioneer Variable Contracts Trust (the "Trust")
File No. 333-137701
Ladies and Gentlemen:
This letter responds to comments of the staff of the Securities and Exchange
Commission (the "Commission") transmitted orally on October 25, 26 and 30, 2006
relating to the Trust's Registration Statement, which was filed with the
Commission on September 29, 2006. The Registration Statement relates to the
proposed reorganizations of the following series of the Trust:
--------------------------------- ----------------------------------- --------------------------------------
Acquired Portfolio Acquiring Portfolio
--------------------------------- ----------------------------------- --------------------------------------
--------------------------------- ----------------------------------- --------------------------------------
Proposal 1(a) Pioneer Balanced VCT Portfolio Pioneer Ibbotson Moderate Allocation
VCT Portfolio
--------------------------------- ----------------------------------- --------------------------------------
--------------------------------- ----------------------------------- --------------------------------------
Proposal 1(b) Pioneer placeEurope VCT Portfolio Pioneer International Value VCT
Portfolio
--------------------------------- ----------------------------------- --------------------------------------
--------------------------------- ----------------------------------- --------------------------------------
Proposal 1(c) Pioneer AmPac Growth VCT Portfolio Pioneer Oak Ridge Large Cap Growth
VCT Portfolio
--------------------------------- ----------------------------------- --------------------------------------
The Acquired Portfolios and the Acquiring Portfolios collectively are referred
to herein as the "Portfolios." For the staff's convenience, its comments are
restated below, followed by the Trust's responses.
General Staff Comments
Combined Proxy Statement/Prospectus ("Proxy Statement")
Comment 1. Pursuant to Item 3(b) of Form N-14, please provide a more detailed
summary of the material differences between each Acquired Portfolio and the
corresponding Acquiring Portfolio.
Response: The Trust respectfully submits that the Proxy Statement complies with
the requirements of Item 3(b). Item 3(b) requires a clear and concise discussion
of the key features of the transaction and the Portfolios. Item 3(b) further
requires a comparison that highlights the differences between each Acquired
Portfolio and the Acquiring Portfolio's (i) investment objectives and policies,
(ii) distribution and purchase procedures and exchange rights, (iii) redemption
procedures, and (iv) any other significant considerations.
The Trust believes that the "Introduction" section of the Proxy Statement
discusses the key features of the transaction and addresses the disclosure
required by Item 3(b). The Trust further believes that the introductory
paragraphs under each of Proposals 1(a), 1(b) and 1(c) highlight the material
differences between each Acquired Portfolio and corresponding Acquiring
Portfolio's investment objectives and policies, as well as any related risks.
The Trust notes that each Portfolio is a series of the same Trust and subject to
the same purchase and sales procedures. In addition, since shares of the
Portfolios are sold directly to separate accounts established and maintained by
insurance companies for the purpose of funding variable annuity and variable
life insurance contract and certain qualified plans, the Trust does not impose
any exchange or redemption procedures with respect to the Portfolios. Finally,
the Trust notes that all material differences required by Item 3(b) are
highlighted in the comparison chart provided under each of Proposals 1(a), 1(b)
and 1(c) and set forth in an easy to read format.
In response to the staff's comment, the Trust has added a sentence at the end of
the third paragraph for Proposal 1(a) that states that the reorganization will
be a taxable transaction for federal income tax purposes.
Comment 2. Under the heading, "Voting Rights and Required Vote," please provide
a description of how insurance companies will vote the shares of the Portfolios
it holds, which are not attributable to any variable contact, in the same
proportion as the voting instructions received from its contract holders with
respect to the Portfolio.
Response: Accepted. The Trust notes that the requested disclosure is currently
provided under the heading, "Information Concerning the Meeting - Voting
Contract Holders." The Trust will move this disclosure to the requested heading,
"Voting Rights and Required Vote."
Accounting Staff Comments
Proxy Statement: Proposal 1(a)
Comment 3. Under the heading, "Summary - Comparison of Pioneer Balanced VCT
Portfolio to Pioneer Ibbotson Moderate Allocation VCT Portfolio - Management
Fees," it states that a discussion regarding the basis for the Board of
Trustees' approval of the management contract is available in Pioneer Ibbotson
Moderate Allocation VCT Portfolio's January 31, 2006 semi-annual report to
shareholders. Please correct the date of the shareholder report.
Response: Accepted. The typographical error has been corrected to state that
the discussion will be available in the December 31, 2006 annual report to
shareholders.
Comment 4. The December 31, 2005 annual reports for the various Pioneer Ibbotson
Allocation VCT Portfolios do not appear to be included in the Trust's Form
N-CSR, which was filed with the Commission on March 6, 2006.
Response: The missing shareholder reports were filed with the Commission in an
amended Form N-CSR on October 27, 2006 (accession no. 0000930709-06-000084).
Comment 5. In the introductory paragraph to the section, "The Portfolios' Fees
and Expenses," please add a statement that Pioneer Ibbotson Moderate Allocation
VCT Portfolio will be offering new Class I shares in connection with the
reorganization.
Response: Accepted. The requested statement has been added to the Proxy
Statement.
Comment 6. Please delete the expense waiver and net expense line items in the
shareholder fee table since the expense limitations do not extend for at least a
year from the date of the Proxy Statement.
Response: The contractual expense limitations will be in effect through May 1,
2008. As a result, the expense limitation will extend beyond a year from the
date of the Proxy Statement and is appropriately reflected in the shareholder
fee table. In addition, the introductory paragraph to the hypothetical expense
examples, and the hypothetical expense example numbers have been revised to
reflect the expense limitations in effect for year one. Finally, the footnote to
the shareholder fee table has been revised to reflect the May 1, 2008 expiration
date for the expense limitations.
Comment 7. Pioneer Balanced VCT Portfolio Class I shares' 1997 annual return in
the bar chart differs from the return provided in the May 1, 2006 prospectus.
Response: Pioneer has reviewed the annual return numbers and has confirmed that
those contained in the Registration Statement on Form N-14 are correct.
Comment 8. Pioneer Balanced VCT Portfolio Class II shares' average annual total
returns for the one-year, five-year, 10-year and since inception periods differ
from the returns provided in the May 1, 2006 prospectus.
Response: Pioneer has reviewed the average annual total return numbers and has
confirmed that those contained in the Registration Statement on Form N-14 are
correct.
Comment 9. In the capitalization table, the pro forma Pioneer Ibbotson Moderate
Allocation VCT Portfolio numbers do not reflect any adjustments to account for
the costs of the reorganization. In addition, please revise footnote (1) to
reflect the estimated amount of the costs of the reorganization. Finally, please
adjust the pro forma numbers to reflect the estimated transaction costs in
connection with the liquidation of Pioneer Balanced VCT Portfolio, and please
include a footnote discussing this adjustment.
Response: Accepted. The pro forma capitalization table numbers and accompanying
footnotes have been revised to reflect both the estimated amount of the costs of
the reorganization as well as the estimated transaction costs in connection with
the liquidation of Pioneer Balanced VCT Portfolio.
Proxy Statement: Proposal 1(b)
Comment 10. In the average annual total return table, the following numbers
differ from the returns provided in the May 1, 2006 prospectus: Pioneer Europe
VCT Portfolio Class II returns for the five-year and since inception periods;
MSCI Europe Index returns for the one-year and five-year periods; Pioneer
International Value VCT Portfolio Class II returns for the five-year, 10-year
and since inception periods.
Response: Pioneer has reviewed the average annual total return numbers and has
confirmed that those contained in the Registration Statement on Form N-14 are
correct.
Comment 11. In the capitalization table, the pro forma Pioneer International
Value VCT Portfolio numbers do not reflect any adjustments to account for the
costs of the reorganization. Please note that the pro forma Pioneer
International Value VCT Portfolio Class II shares should reflect a net asset
value per share of $14.65 rather than $14.66. In addition, please revise
footnote (1) to reflect the estimated amount of the costs of the reorganization.
Response: Accepted.
Comment 12. Under the heading, "Proposal to Approve the Agreement and Plan of
Reorganization - Reasons for the Proposed Reorganization," it states that the
Boards also considered that a significant portion of Pioneer Europe VCT
Portfolio's assets would likely be liquidated before or after the
Reorganization. Please provide an estimate of the liquidation costs.
Response: Pioneer Europe VCT Portfolio is not required to dispose of a portion
of its assets in light of the investment policies and restrictions of Pioneer
International Value VCT Portfolio. Any liquidations would be discretionary and
would most likely occur after the closing of the reorganization. In addition,
the Board was not provided with an estimate of the liquidation costs. For these
reasons, the Trust respectfully submits that providing such an estimate of the
liquidation costs would be speculative and is not necessary or appropriate.
Proxy Statement: Proposal 1(c)
Comment 13. Please delete the expense waiver and net expense line items in the
shareholder fee table since the expense limitations do not extend for at least a
year from the date of the Proxy Statement.
Response: The contractual expense limitation for the Acquiring Portfolio and the
combined Acquiring Portfolio will be in effect through May 1, 2008. As a result,
the expense limitations will extend beyond a year from the date of the Proxy
Statement and are appropriately reflected in the shareholder fee table. In
addition, the introductory paragraph to the hypothetical expense examples, and
the hypothetical expense example numbers have been revised to reflect the
expense limitations in effect for year one. Finally, the footnote to the
shareholder fee table has been revised to reflect the May 1, 2008 expiration
date of the expense limitations.
With respect to the Acquired Portfolio's current contractual expense limitation
in effect through May 1, 2007, the Trust respectfully submits that maintaining
such disclosure in the fee table provides shareholders with a complete, accurate
and clear understanding of each Portfolio's historical expense structure as of
the applicable date indicated in the shareholder fee table in order to assist
such shareholders in their assessment of how the pro forma combined Acquiring
Fund's expense structure will differ from that of each Portfolio's historical
expenses. The Trust is aware of the staff's general position on this matter but
respectfully requests that the pre-combination expense limit arrangements of
each Portfolio be presented to better aid the shareholders' comparative
analysis. As stated above, the expense caps for the Acquiring Portfolio and the
pro forma combined Acquiring Portfolio will be in effect through May 1, 2008.
For these reasons, the Trust submits that the current disclosure is appropriate
for the purpose of this Registration Statement. The Trust notes that the staff
has agreed with the Trust's position on this matter for prior registration
statements filed on Form N-14.
Comment 14. In the capitalization table, the pro forma Pioneer Oak Ridge Large
Cap Growth VCT Portfolio numbers do not reflect any adjustments to account for
the costs of the reorganization. In addition, please revise footnote (1) to
reflect the estimated amount of the costs of the reorganization.
Response: Accepted.
Comment 15. Under the heading, "Proposal to Approve the Agreement and Plan of
Reorganization - Reasons for the Proposed Reorganization," it states that the
Boards also considered that a portion of the holdings of Pioneer AmPac Growth
VCT Portfolio may need to be liquidated. Please provide an estimate of the
liquidation costs.
Response: Pioneer AmPac Growth VCT Portfolio is not required to dispose of a
portion of its assets in light of the investment policies and restrictions of
Pioneer Oak Ridge Large Cap Growth VCT Portfolio. Any liquidations would be
discretionary and would most likely occur after the closing of the
reorganization. In addition, the Board was not provided with an estimate of the
liquidation costs. For these reasons, the Trust respectfully submits that
providing such an estimate of the liquidation costs would be speculative and is
not necessary or appropriate.
Statement of Additional Information ("SAI")
Comment 16. Please revise the section titled, "Exhibits," to reflect only pro
forma financial statements for the semi-annual period. Pro forma financial
statements are not required for the annual period ended December 31, 2005.
Response: Accepted. The pro forma financial statements for the annual period
ended December 31, 2005 have been deleted from the exhibits to the SAI, and the
reference to these financial statements in the section titled, "Exhibits" has
been deleted.
Pro Forma Schedule of Investments
Comment 17. Please make all column headings consistent in the pro forma schedule
of investments for each proposal.
Response: Accepted.
Comment 18. With respect to pro forma schedule of investments for Proposal 1(a),
the pro forma combined net assets should be adjusted to reflect the transaction
costs associated with liquidating Pioneer Balanced VCT Portfolio.
Response: Accepted. As discussed with the staff on October 30, 2006, the
footnote to the pro forma schedule of investments for Proposal 1(a) has been
revised to state that it reflects the costs of the reorganization and the
transaction costs resulting from the liquidation of Pioneer Balanced VCT
Portfolio's assets, and these adjustments are reflected in the relevant line
items rather than adjusting each portfolio holding with respect to a nominal
amount.
Comment 19. With respect to pro forma schedule of investments for Proposal 1(b),
the "Total Investments at Cost" numbers for Pioneer Europe VCT Portfolio and
Pioneer International Value VCT Portfolio should be swapped.
Response: Accepted.
Comment 20. With respect to pro forma schedule of investments for Proposal 1(c),
the "Total Common Stock" number for Pioneer AmPac Growth VCT Portfolio should be
changed from $1,963,966 to $1,742,589.
Response: Accepted.
Pro Forma Statement of Assets and Liabilities
Comment 21. With respect to pro forma statement of assets and liabilities for
Proposal 1(b), Pioneer International Value VCT Portfolios Pro Forma Combined
Class II net asset value per share should be revised to reflect a net asset
value per share of $14.65 rather than $14.66.
Response: Accepted.
Pro Forma Statement of Operations
Comment 22. With respect to pro forma statement of operations for Proposal 1(a)
and Proposal 1(b), please include the words "expenses and" at the beginning of
the footnote referring to the expense limitations.
Response: Accepted.
Comment 23. The pro forma statement of operations for each proposal should not
reflect the costs of the reorganization because it is a one-time, non-recurring
cost. See Regulation S-X, Article 11, Rule 0-2(b)(6).
Response: As discussed with the staff on October 30, 2006, the Trust believes
that the effect of the costs of the reorganization will have a continuing impact
on the Registrant and should therefore be included in the pro forma statement of
operations. However, the Trust will consider the staff's comment in any future
registration statements filed on Form N-14.
Notes to Financial Statements
Comment 24. The notes to the pro forma financial statements should include a
note explaining the use of estimates in preparing pro forma financial statements
and a statement that actual results could differ from estimated amounts.
Response: Accepted. The following note has been added: "In preparation of these
pro forma financial statements, management of the Portfolio was required to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
income, expenses and gains and losses on investments during the reporting
period. Actual results could differ from those estimates."
Comment 25. Please delete the last sentence of note 5 to the financial
statements for Proposal 1(a).
Response: Accepted.
*****
The staff's comments and the Trust's responses will be reflected the definitive
Proxy Statement mailed to the shareholders of each Acquired Portfolio and filed
with the Commission.
Per the staff of the Commission's request and pursuant to the Commission's press
release ("Commission Staff to Publicly Release Comment Letters and Responses,"
2004-89), the Trust acknowledges the following:
o the Trust is responsible for the adequacy and accuracy of the
disclosure in the filing;
o staff comments or changes to disclosure in response to staff
comments in filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
o the Trust may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
If you have any questions or comments on the Registration Statement, please
contact either Elaina Kim at (617) 526-6685 (collect) or me at 617-526-6532
(collect), counsel to the Trust.
Best regards,
/s/ Christopher P. Harvey
Christopher P. Harvey
cc: Tony Burak (SEC Accounting Staff)
Robert Lamont, Esq. (SEC Division of Investment
Management - Insurance Products)
Christopher J. Kelley, Esq.