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                                                                EXHIBIT - 10.4

                            THE PIONEER GROUP, INC.

                          SUPPLEMENTAL AGREEMENT NO. 2


                                                      As of September 30, 1998


                        Re: 7.95% Senior Notes due 2004

To:  The Travelers Insurance Company
     One Tower Square
     Hartford, CT 06183-2030

Ladies and Gentlemen:

     THE PIONEER GROUP, INC., a Delaware corporation (the "Company"), hereby
agrees with you as follows:

     Section 1. AMENDMENTS. Pursuant to the Note Agreement dated as of August
14, 1997 (as amended, modified and in effect prior to giving effect to this
Agreement, the "ORIGINAL NOTE AGREEMENT") entered into by the Company with The
Travelers Insurance Company, the Company issued and sold $20,000,000 aggregate
principal amount of its 7.95% Senior Notes due 2004 (the "NOTES"). Unless the
context otherwise requires, capitalized terms used herein without definition
have the respective meanings ascribed thereto in the Original Note Agreement.
The Company has requested you, as the holder of all the outstanding Notes, to
amend the Original Note Agreement. Subject to this Supplemental Agreement No. 2
becoming effective as hereinafter provided, the Company and the holder of the
Notes do hereby agree that the Original Note Agreement is amended pursuant to
Section 11.1 thereof as follows:

     (a) Section 1 is amended by adding the following new definitions in proper
alphabetical order therein:

          ""B SHARE PURCHASE DOCUMENTS" means, collectively, the (a) Pioneer
     Program Master Agreement, dated as of September 30, 1998, by and among the
     Company, Pioneering Management Corporation (the "Advisor"), Pioneer Funds
     Distributor, Inc. (the "Distributor"), PLT Finance, L.P. (the "Purchaser"),
     Putnam, Lovell, de Guardiola & Thornton Inc. (the "Program Administrator")
     and Bankers Trust Company as collection agent (the "Collection Agent"); (b)
     the Pioneer Program Purchase Agreement, dated as of September 30, 1998, by
     and between the Distributor and the Purchaser; (c) the Pioneer Program
     Funding and Collection Agency Agreement, dated as of September 30, 1998, by
     and among the Collection Agent, the Purchaser, the Program Administrator
     and the Distributor; (d) the Pioneer Program Servicer Agent Agreement,
     dated as of September 30, 1998, by and among the Purchaser, the Program
     Administrator and the Distributor as program servicer agent; and all other
     instruments, documents and agreements executed by the Company or its
     Subsidiaries in connection with the foregoing, to be entered into for the
     purpose of generating net proceeds sufficient to prepay all of the Credit
     Obligations with respect to the B Share Term Loan."


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          ""PORTFOLIO ASSETS" means with respect to each applicable Fund, all of
     the rights under the related Distribution Agreement, the related
     Distribution Plan and the related prospectus to receive amounts paid or
     payable in respect of Distribution Fees (including interest) and Contingent
     Deferred Sales Charges, in each case in respect of the B Shares of such
     Fund and in respect of B Shares of any other Fund acquired in any permitted
     free exchange of B Shares of the Fund in question, including any similar
     amount paid or payable under any replacement distribution plan,
     distribution agreement or prospectus, and any continuation payments in
     respect thereof paid or payable by the related Trust in respect of the B
     Shares of such Fund in the event of a termination of the related
     Distribution Plan, Distribution Agreement or prospectus."

     (b) Section 7.11.7 shall be added immediately after Section 7.11.6 of the
Original Note Agreement to read in its entirety as follows:

          "Section 7.11.7. Pursuant to the B Share Purchase Documents, the
     Company and its Subsidiaries may sell, transfer, convey and assign to PLT
     Finance, L.P. or its Affiliates the right, title and interest in, to and
     under all Portfolio Assets to be conveyed, arising directly and indirectly
     out of all applicable B Shares of each applicable Fund, the date of
     issuance of which B Shares is (a) on or before September 30, 1998 or (b)
     during the period from the date on which the transactions contemplated by
     the B Share Purchase Documents are consummated through the third
     anniversary of such date; PROVIDED (i) that immediately before and after
     giving effect to any such sale, transfer, conveyance or assignment no
     Default exists, (ii) that the proceeds of the sale permitted in clause (a)
     of this Section 7.11.7 shall be used to prepay the B Share Term Loan (as
     defined in the Bank Credit Facility) as required by Section 4.3.2 of the
     Bank Credit Facility and (iii) that any sale permitted under clause (b) of
     this Section 7.11.7 shall be made at a purchase price which is equal to or
     greater than the amount at which the Portfolio Assets are reflected on the
     financial statements of the Company."

     Section 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to you as follows:

     (a) ORGANIZATION, AUTHORIZATION, ETC. The Company and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the State of its organization, and has all requisite
power and authority to execute, deliver and perform its obligations under this
Supplemental Agreement No. 2. The execution, delivery and performance of this
Supplemental Agreement No. 2 has been duly authorized by all necessary corporate
and, if required, stockholders action on the part of the Company and each
Subsidiary Guarantor, as applicable. This Supplemental Agreement No. 2 is the
legal, valid and binding obligation of the Company and each Subsidiary
Guarantor, as applicable, enforceable against the Company or such Subsidiary
Guarantor in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).


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     (b) COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution, delivery
and performance by the Company or the Subsidiary Guarantors of this Supplemental
Agreement No. 2 does not and will not (1) contravene, result in any breach of,
or constitute a default under, or result in the creation of any Lien in respect
of any property of the Company under any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective properties may
be bound or affected, (2) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or ruling of any
court, arbitrator or Governmental Authority applicable to the Company or any
Subsidiary or (3) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or any
Subsidiary.

     (c) GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or authorization
of, or registration, filing or declaration with, any Governmental Authority is
required in connection with the execution, delivery or performance by the
Company or any Subsidiary Guarantor of this Supplemental Agreement No. 2.

     (d) NO DEFAULT, ETC. No Event of Default or Default has occurred and is
continuing and neither the Company nor any Core Mutual Fund Subsidiary is in
default (whether or not waived) in the performance or observance of any of the
terms, covenants or conditions contained in any instrument evidencing any
Indebtedness and there is no pending request by the Company (except pursuant to
this Supplemental Agreement No. 2) or any Core Mutual Fund subsidiary for any
amendment or waiver in respect of any contemplated or possible default with
respect to such Indebtedness and no event has occurred and is continuing which,
with notice or lapse of time or both, would become such a default.

     Section 3. REPRESENTATION OF THE NOTEHOLDER. You represent to the Company
that you are the beneficial owner of the Notes in an aggregate principal amount
of $20,000,000.

     Section 4. EFFECTIVENESS OF THIS SUPPLEMENTAL AGREEMENT NO. 1. This
Supplemental Agreement No. 1 will become effective on the date (the "EFFECTIVE
DATE") on which all of the following conditions precedent shall have been
satisfied:

     (a) PROCEEDINGS. All proceedings taken by the Company and the Subsidiary
Guarantors in connection with the transactions contemplated hereby and all
documents and papers incident thereto shall be satisfactory to you, and you and
your special counsel shall have received all such counterpart originals or
certified or other copies of such documents and papers, all in form and
substance satisfactory to you, as you or they may reasonably request in
connection therewith.

     (b) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 2 of this Supplemental Agreement No. 2 shall be
true on and as of the Effective Date as though such representations and
warranties had been mad on and as of the Effective Date, and you shall have
received a certificate of a senior financial officer of the Company dated the
Effective Date, to such effect.


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     Section 5. EXPENSES. Without limiting the generality of Section 5.8 of the
Original Note Agreement, the Company agrees, whether or not the transactions
contemplated hereby are consummated, to pay the reasonable fees and
disbursements of Willkie Farr & Gallagher, your special counsel, for their
services rendered in connection with such transactions and with respect to this
Supplemental Agreement No. 2 and any other document delivered pursuant to this
Supplemental Agreement No. 2 and to reimburse you for your out-of-pocket
expenses in connection with the foregoing.

     Section 6. RATIFICATION. Except as amended hereby, the Original Note
Agreement is in all respects ratified and confirmed and the provisions thereof
shall remain in full force and effect, and the Subsidiary Guarantors hereby
ratify their obligations thereunder and under the Subsidiary Guarantees to which
they are party.

     Section 7. COUNTERPARTS. This Supplemental Agreement No. 2 may be executed
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.

     Section 8. GOVERNING LAW. This Supplemental Agreement No. 2 shall be
governed by and construed in accordance with the laws of the State of New York.


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     If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below, whereupon this Supplemental Agreement
No. 2 shall become a binding agreement between you and the Company, with the
approval of the Subsidiary Guarantors, subject to becoming effective as
hereinabove provided.

COMPANY:

THE PIONEER GROUP, INC.

By: /s/ Frank M. Polestra
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   Title: Vice President
60 State Street
Boston, Massachusetts 02109-1820


GUARANTORS:


PIONEERING MANAGEMENT CORPORATION


By: /s/ Theresa A. Hamacher
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   Title: Senior Vice President

60 State Street
Boston, Massachusetts 02109-1820


PIONEERING MANAGEMENT (IRELAND) LIMITED


By: /s/ John F. Lawlor
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   Title: Director

60 State Street
Boston, Massachusetts 02109-1820


PIONEERING SERVICES CORPORATION


By: /s/ Rober B. Rainville
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   Title: President
60 State Street
Boston, Massachusetts 02109-1820


PURCHASER:


THE TRAVELERS INSURANCE COMPANY

By: /s/ Pamela Westmoreland
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    Title:  Investment Officer


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