Merrill Lynch
Retirement Reserves
Money Fund
MERRILL LYNCH
RETIREMENT SERIES TRUST
FUND LOGO
Semi-Annual Report April 30, 1994
This report is not authorized for use as an offer
of sale or a solicitation of an offer to buy shares
of the Fund unless accompanied or preceded by the
Fund's current prospectus. Past performance results
shown in this report should not be considered a re-
presentation of future performance, which will fluc-
tuate. The Fund seeks to maintain a consistent $1.00
net asset value per share, although this cannot be
assured. An investment in the Fund is neither in-
sured nor guaranteed by the US Government.
Merrill Lynch
Retirement Reserves Money Fund
Box 9011
Princeton, NJ 08543-9011
Dear Shareholder:
For the six months ended April 30, 1994, Merrill Lynch Retirement
Reserves Money Fund's net annualized yield was 2.92%*. The Fund's
7-day yield as of April 30, 1994 was 3.27% (including gains and
losses) and 3.27% (excluding gains and losses).
<PAGE>
The Environment
The six months ended April 30, 1994 were characterized by a sharp
shift in inflationary expectations and investor sentiment. Al-
though the economic expansion gained momentum gradually through-
out much of 1993, it grew at an exceptionally strong 7.0% pace
during the final quarter of the year. Concerns of an overheating
economy and incipient inflationary pressures led the Federal Re-
serve Board to break with tradition on February 4, 1994 and pub-
licly announce a modest 25 basis point (0.25%) increase in short-
term interest rates. At the March 22, 1994 meeting of the Federal
Open Market Committee, the Federal Reserve Board again raised the
Federal Funds rate by 25 basis points, followed by another 25
basis point increase on April 18, 1994.
Rather than view the Federal Reserve Board's first tightening move
as a preemptive strike against inflation, fixed-income investors
focused on Chairman Greenspan's implicit promise of further tight-
ening should the rate of inflation accelerate, and bond prices de-
clined sharply. The setback in the bond market was also reflected
in greater stock market volatility. While the second and third in-
creases in the Federal Funds rate were less of a surprise, investors
remained concerned that interest rates would trend upward sharply
as the central bank aggressively attempted to contain the inflation-
ary pressures of an improving economy. At the same time, highly
leveraged investors were forced to liquidate positions in the face
of declining stock and bond prices. Investor confidence was not
restored with the announcement of the surprisingly slow 2.6% gross
domestic product growth rate for the first calendar quarter of
1994. Instead, investors focused on the higher-than-expected (but
still moderate) broad inflation measures and became concerned that
business activity was beginning to stagnate as inflationary pres-
sures were increasing.
The volatility in the US capital markets was mirrored in inter-
national markets during the latter part of the six-month period.
Political and economic developments, along with concerns of height-
ened global inflationary pressures, led to a sell-off in most
capital markets, especially the emerging markets that had apprec-
iated strongly in 1993.
Portfolio Matters
Since our last report to shareholders, Merrill Lynch Retirement
Reserves Money Fund has maintained an average portfolio maturity
ranging from a low of 41 days to a high of 90 days. This relatively
wide range reflects our changing view of the market as the economy
gathered strength and as the Federal Reserve Board tightened mon-
etary policy.
<PAGE>
As the period opened, the Fund maintained its constructive approach
to the market, owing both to favorable technical conditions and
encouraging news on the inflation front. Our strategy generally
favored short-term Government agency obligations and Treasury notes
in the 12-month--18-month area, where the yield curve was steepest.
As 1993 drew to a close, the Fund moderated its approach to the
market, establishing an average life centered in the 70-day area.
As the prospects for significantly lower interest rates dimmed,
we reduced the Fund's positions in 18-month--24-month Treasury
securities and instead focused on Treasury securities and agency
obligations with maturities under one year, where the risk/reward
relationship seemed most reasonable. Additionally, the Fund's com-
mercial paper holdings remained relatively underweighted at approx-
imately 36% of total assets in late December, in response to narrow
quality spreads.
[FN]
*Based on a constant investment throughout the period, with
dividends compounded daily, and reflecting a net return to the
investor after all expenses.
As 1994 opened, the Fund emphasized purchases of two-month com-
mercial paper as credit spreads started to widen. This strategy
temporarily boosted the portfolio's average maturity slightly.
However, as the month wore on, we reduced our positions in
longer-term securities, concerned that the economic momentum of
the fourth quarter would sustain itself in the first quarter.
In early February, we moved to further reduce the Fund's exposure
to interest rates. On the heels of strong auto sales and surging
new home sales, we reduced the portfolio's average life to the
60-day area on February 3, 1994, by selling Government agency
obligations at relatively narrow spreads to Treasury securities.
On February 4, 1994, the Federal Reserve Board moved to tighten
monetary policy by hiking its Federal Funds rate target to 3.25%.
For the balance of the month, we largely restricted new purchases
to one-month money market instruments, in anticipation of another
round of tightening from the central bank. Accordingly, our hold-
ings of commercial paper rose from 36% of total assets in late
December to 48% in late February.
<PAGE>
Throughout March and April we maintained this relatively defensive
posture, focusing on the likelihood that the Federal Reserve Board
would seek to push short-term interest rates higher. We restricted
new purchases to securities with short-term maturities while main-
taining a relatively large position (34% of net assets) in variable
rate instruments. On March 22, 1994, the Federal Reserve Board in-
creased the Federal Funds rate by 25 basis points to 3.50%, a move
which was mirrored on April 18, 1994 when the Federal Funds rate
was pushed to 3.75%.
Looking ahead, we believe that short-term interest rates still
have room to move higher, as the central bank plots a more neutral
course. Accordingly, we expect to maintain a relatively defensive
stance in the near term.
The Fund's portfolio composition at the end of the April period
and as of our last report is detailed below:
4/30/94 10/31/93
Bank Notes 5.5% 5.8%
Certificates of Deposit--European 1.3 4.3
Certificates of Deposit--Yankee 3.2 2.0
Commercial Paper--Discount 42.6 31.5
Corporate Notes 0.4 0.7
Master Notes 7.7 7.0
Medium-Term Notes -- 1.0
Repurchase Agreements -- 2.7
US Government, Agency &
Instrumentality Obligations--
Discount Notes 8.5 7.9
US Government, Agency &
Instrumentality Obligations--
Non-Discount Notes 30.8 37.1
------ ------
100.0% 100.0%
====== ======
In Conclusion
We appreciate your continued interest in Merrill Lynch Retirement
Reserves Money Fund, and we look forward to assisting you with your
financial needs and objectives in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Christopher G. Ayoub)
Christopher G. Ayoub
Vice President and Portfolio Manager
May 16, 1994
Retirement Reserves Money Fund
Schedule of Investments as of April 30, 1994 (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Bank Notes--5.7%
Bank of Delaware $ 50,000 3.30 % 6/10/94 $ 49,940
10,000 3.40 10/14/94 9,948
First National Bank of
Chicago 25,000 3.55 5/25/94 24,998
NationsBank, N.C. 97,000 3.65 6/21/94 96,879
NationsBank, Texas 25,000 3.625 11/30/94 24,863
PNC Bank, Kentucky 14,000 3.40 10/14/94 13,927
25,000 3.65 12/15/94 24,813
PNC Bank, N.A. 65,000 3.55 7/08/94 64,929
25,000 3.55 7/15/94 24,971
20,000 3.65 7/28/94 19,978
75,600 3.90 9/12/94 75,463
Total Bank Notes (Cost--$431,645) 430,709
<PAGE>
Certificates of Deposit--European--1.3%
Sumitomo Bank, London 73,000 3.85 6/08/94 73,001
25,000 3.85 6/13/94 25,000
Total Certificates of Deposit--European
(Cost--$98,001) 98,001
Certificates of Deposit--Yankee--3.2%
ABN-AMRO Bank N.V., NY 20,000 3.715 6/24/94 19,992
Dai-Ichi Kangyo Bank 30,000 4.05 6/21/94 30,000
Ltd., NY 35,000 3.89 7/05/94 34,986
Harris Trust & Savings 25,000 3.67 5/11/94 25,000
Bank, N.A., Chicago
National Westminster 50,000 3.77 6/15/94 50,003
Bank PLC, NY
Sumitomo Bank, NY 25,000 3.18 5/02/94 24,999
50,000 3.90 6/03/94 50,000
10,000 3.90 6/06/94 10,001
Total Certificates of Deposit--Yankee
(Cost--$244,984) 244,981
<PAGE>
Commercial Paper*--Discount--43.5%
APRECO, Inc. 20,000 3.77 6/07/94 19,918
25,000 3.93 7/11/94 24,789
Abbey National N.A. Corp. 8,000 4.05 9/28/94 7,858
Allomon Funding Corp. 10,034 3.70 5/17/94 10,015
10,053 3.77 6/02/94 10,017
American Express Credit 100,000 3.70 5/10/94 99,887
Corp.
Asset Securitization 20,000 3.83 6/13/94 19,904
Cooperative Corp.
BBV Finance 25,000 3.65 5/09/94 24,975
(Delaware), Inc.
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper*--Discount (continued)
BNP U.S. Finance Corp. $ 25,000 4.05 % 9/29/94 $ 24,554
BTR Dunlop Finance Inc. 19,269 3.55 5/02/94 19,263
Bass Finance (C.I.) Ltd. 47,275 3.80 6/17/94 47,024
21,505 3.95 7/18/94 21,306
Bear Stearns 20,000 3.63 5/05/94 19,988
Companies 50,000 3.68 5/10/94 49,944
25,000 3.85 5/19/94 24,947
<PAGE>
Bowater PLC 29,629 3.85 5/19/94 29,566
CIT Group Holdings 75,000 3.25 5/04/94 74,962
CS First Boston, Inc. 20,000 3.90 7/07/94 19,840
20,000 4.12 7/18/94 19,815
CXC Inc. 30,000 3.65 5/11/94 29,963
20,000 3.63 5/16/94 19,966
Central and South 13,000 3.70 5/17/94 12,976
West Corp. 6,466 3.97 6/20/94 6,429
Central Hispano N.A. 32,000 3.20 5/02/94 31,990
Capital Corp. 15,000 3.65 5/10/94 14,983
45,311 3.65 5/16/94 45,232
Cheltenham & Glouster 50,000 3.95 6/28/94 49,675
Building Society 16,000 3.90 7/11/94 15,865
Ciba-Geigy Corporation 10,000 3.69 5/09/94 9,990
Corporate Asset 28,100 3.73 5/05/94 28,083
Funding, Inc. 28,200 3.87 5/16/94 28,148
25,000 3.87 7/11/94 24,789
Deutsche Bank 13,800 3.85 6/20/94 13,722
Financial Inc.
Ford Motor Credit Company 150,000 3.66 5/09/94 149,847
55,000 3.98 6/27/94 54,641
General Electric 65,000 3.24 5/02/94 64,981
Capital Corp. 50,000 3.20 5/09/94 49,949
25,000 3.65 5/09/94 24,975
125,000 3.65 5/10/94 124,861
20,000 3.20 5/12/94 19,973
25,000 3.97 8/19/94 24,673
<PAGE>
Generale Bank, Inc. 10,000 3.25 5/02/94 9,997
Goldman Sachs Group, 100,000 4.00 7/05/94 99,224
L.P. 50,000 3.875 7/07/94 49,600
Halifax Building Society 25,000 3.93 7/19/94 24,765
Hanson Finance (U.K.) 10,000 3.60 5/05/94 9,994
PLC 35,000 3.63 5/10/94 34,961
35,000 3.90 7/06/94 34,724
30,000 3.97 7/06/94 29,764
42,000 3.90 7/07/94 41,664
50,000 3.88 7/13/94 49,566
50,000 3.90 7/13/94 49,566
10,000 4.17 7/28/94 9,896
Merrill Lynch Retirement Reserves Money Fund
Schedule of Investments as of April 30, 1994(continued) (in Thousands)
<PAGE>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
Commercial Paper*--Discount (continued)
Hertz Funding $ 18,000 3.65 % 5/09/94 $ 17,982
Corporation 6,500 3.80 6/20/94 6,463
13,800 4.00 6/23/94 13,716
International Lease 20,000 3.97 6/16/94 19,894
Finance Corp. 10,000 3.80 6/28/94 9,935
40,000 3.97 7/06/94 39,685
10,000 3.90 7/12/94 9,914
Leeds Permanent 50,000 3.29 7/20/94 49,525
Building Society
McKenna Triangle 25,000 3.60 5/02/94 24,992
National Corp. 25,000 3.80 5/18/94 24,950
35,000 3.95 6/14/94 34,823
10,000 3.80 6/27/94 9,936
50,000 3.88 7/12/94 49,572
13,400 4.12 7/13/94 13,284
NationsBank Corp. 17,000 4.04 7/05/94 16,868
New Center Asset Trust 50,000 3.62 5/02/94 49,985
60,491 3.84 5/23/94 60,336
20,000 3.77 6/07/94 19,918
50,000 3.76 6/13/94 49,759
25,000 3.91 7/07/94 24,800
New South Wales 25,000 4.05 9/26/94 24,562
Treasury Corp.
Nomura Holding 15,000 3.24 5/09/94 14,985
America, Inc. 10,000 3.71 5/18/94 9,981
25,000 3.84 6/13/94 24,880
25,000 4.09 7/06/94 24,803
PHH Corporation 44,100 3.65 5/09/94 44,055
Panasonic Finance, Inc. 10,000 3.65 5/11/94 9,988
Paribas Finance, Inc. 50,000 3.10 5/02/94 49,985
Preferred Receivables 13,075 3.65 5/18/94 13,050
Funding Corp. 32,000 3.80 6/20/94 31,820
22,825 3.90 7/11/94 22,632
23,300 3.90 7/13/94 23,098
Premium Funding Inc. 25,000 3.85 5/16/94 24,955
25,078 3.65 5/18/94 25,030
4,000 4.00 6/27/94 3,974
Queensland Treasury Corp. 50,000 3.80 6/17/94 49,741
Sheffield Receivables 50,000 3.75 6/01/94 49,828
Corp. 20,000 4.12 7/14/94 19,824
Southwestern Bell 16,000 3.70 5/02/94 15,995
Telephone Co.
Svenska 35,000 3.23 5/09/94 34,964
Handelsbanken, Inc.
Transamerica Finance 34,000 3.75 6/02/94 33,880
Corporation 22,055 3.89 6/06/94 21,964
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<PAGE>
Commercial Paper*--Discount (concluded)
UBS Finance $150,000 3.57 % 5/02/94 $ 149,955
(Delaware), Inc.
USL Capital Corp. 31,933 3.98 6/27/94 31,729
United States Borax 15,000 3.90 6/30/94 14,896
& Chemical Corp.
WCP Funding Inc. 20,000 3.63 5/12/94 19,974
Western Australia 10,000 3.20 5/09/94 9,990
Treasury Corp. 25,000 3.87 7/12/94 24,786
15,000 4.14 7/12/94 14,871
Xerox Credit Corporation 51,981 3.92 7/14/94 51,523
Total Commercial Paper--Discount
(Cost--$3,296,644) 3,296,059
Corporate Notes--0.4%
Bank One Diversified $ 20,000 3.90 5/02/95 $ 19,980
Services++
General Electric 9,000 3.29 5/18/94 8,997
Capital Corp.
Total Corporate Notes
(Cost--$28,980) 28,977
Master Notes--7.9%
Bear Stearns 44,000 3.91 5/23/94 44,000
Companies, Inc. (The)++ 29,000 3.687 8/12/94 29,006
25,000 3.875 11/08/94 25,000
Goldman Sachs Group, L.P.++ 175,000 3.90 9/01/94 175,000
Kingdom of Sweden++ 325,000 3.75 7/15/94 325,000
<PAGE>
Total Master Notes
(Cost--$598,006) 598,006
US Government, Agency & Instrumentality
Obligations*--Discount Notes--8.7%
Federal Farm Credit Banks 40,000 3.70 7/05/94 39,704
Federal Home Loan Bank 25,000 3.75 7/05/94 24,815
46,205 4.00 7/25/94 45,761
75,000 4.30 9/20/94 73,725
Federal National 75,000 3.75 7/15/94 74,362
Mortgage Association 25,000 3.75 7/18/94 24,779
50,000 3.81 7/18/94 49,558
79,000 3.20 7/27/94 78,223
15,000 4.04 8/22/94 14,801
25,000 4.12 10/04/94 24,523
99,000 4.18 10/04/94 97,110
56,000 3.45 10/19/94 54,829
US Treasury Bills 10,000 2.96 5/05/94 9,994
50,000 3.43 2/09/95 48,165
Total US Government, Agency & Instrumentality
Obligations--Discount Notes (Cost--$709,395) 660,349
Merrill Lynch Retirement Reserves Money Fund
Schedule of Investments as of April 30, 1994(concluded) (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government, Agency & Instrumentality
Obligations*--Non-Discount Notes--31.4%
Federal Farm Credit $ 36,000 3.36 % 2/09/95 $ 36,000
Banks++
Federal Home Loan Bank++ 42,000 4.68 6/21/95 42,000
117,000 4.19 8/09/95 117,035
60,000 3.68 12/28/95 60,000
70,000 3.71 6/17/96 70,000
29,000 3.71 6/21/96 29,000
<PAGE>
Federal Home Loan 146,000 4.002 1/06/95 145,965
Mortgage Corp.++ 84,000 4.10 8/09/95 84,009
54,000 3.61 9/01/95 53,986
34,000 3.62 9/01/95 33,996
15,500 3.58 5/06/96 15,500
16,000 4.25 5/13/98 16,000
Federal National 48,000 3.59 7/08/94 47,991
Mortgage Association++ 30,000 3.65 12/20/95 30,000
98,000 3.58 5/13/96 98,000
80,000 3.58 5/24/96 80,000
88,000 3.58 8/13/96 88,000
68,500 3.70 5/19/97 68,500
71,000 3.75 5/14/98 71,000
22,150 3.82 12/14/98 22,064
Student Loan Marketing 62,100 3.94 5/12/94 62,100
Association++ 25,000 3.95 7/14/94 25,000
50,000 4.29 7/22/94 50,004
20,000 4.44 8/22/94 20,010
15,000 4.24 9/09/94 14,997
50,000 3.87 10/13/94 50,000
97,850 4.24 12/30/94 97,966
2,000 4.54 3/20/95 2,009
2,000 4.54 3/23/95 2,009
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
US Government, Agency & Instrumentality
Obligations*--Non-Discount Notes (concluded)
Student Loan Marketing $ 26,850 4.15 % 6/02/95 $ 26,925
Association++ 27,000 4.24 6/02/95 27,005
(concluded) 20,000 4.24 6/30/95 20,017
20,000 4.20 8/07/95 20,005
109,000 4.29 8/07/95 109,028
59,000 4.29 3/20/96 58,999
11,830 4.34 11/01/96 11,901
45,000 4.30 1/14/97 45,031
25,000 4.26 3/03/97 25,000
67,075 4.29 1/21/98 67,422
<PAGE>
US Treasury Notes 55,000 5.125 5/31/94 55,063
75,000 5.00 6/30/94 75,094
20,000 4.25 8/31/94 20,000
35,000 4.25 10/31/94 34,945
75,000 6.00 11/15/94 75,539
65,000 4.625 11/30/94 65,010
15,000 4.625 12/31/94 14,981
48,000 3.875 8/31/95 47,145
5,000 3.875 10/31/95 4,894
45,000 5.125 3/31/96 44,550
Total US Government, Agency & Instrumentality
Obligations--Non-Discount Notes
(Cost--$2,336,089) 2,381,695
Total Investments (Cost--$7,743,744)--102.1% 7,738,777
Liabilities in Excess of Other Assets--(2.1%) (157,286)
----------
Net Assets--100.0% $7,581,491
==========
[FN]
*Commercial Paper and certain US Government, Agency & Instrumentality
Obligations are traded on a discount basis; the interest rates shown
are the discount rates paid at the time of purchase by the Fund. Other
securities bear interest at the rates shown, payable at fixed dates or
upon maturity. Interest rates on variable rate securities are adjusted
periodically based upon appropriate indexes. The interest rates shown
are the rates in effect at April 30, 1994.
++Floating Rate Notes.
See Notes to Financial Statements.
<PAGE>
<TABLE>
Merrill Lynch Retirement Reserves Money Fund
Statement of Assets and Liabilities as of April 30, 1994
<CAPTION>
<S> <C> <C>
Assets:
Investments, at value (identified cost--$7,743,743,636*) (Note 1a) $ 7,738,777,411
Cash 1,790,010
Receivables:
Interest $ 28,213,329
Beneficial interest sold 13,873 28,227,202
-------------
Prepaid registration fees and other assets (Note 1d) 332,674
---------------
Total assets 7,769,127,297
---------------
Liabilities:
Payables:
Beneficial interest redeemed 112,874,090
Securities purchased 69,980,000
Investment adviser (Note 2) 2,322,241 185,176,331
-------------
Accrued expenses and other liabilities 2,460,174
---------------
Total liabilities 187,636,505
---------------
Net Assets $ 7,581,490,792
===============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares
authorized $ 758,645,702
Paid-in capital in excess of par 6,827,811,315
Unrealized depreciation on investments--net (4,966,225)
---------------
Net Assets--Equivalent to $1.00 per share based on 7,586,457,017 shares
of beneficial interest outstanding $ 7,581,490,792
===============
<FN>
*Cost for Federal income tax purposes. As of April 30, 1994, net
unrealized depreciation for Federal income tax purposes amounted
to $4,966,225, of which $44,576 related to appreciated securities
and $5,010,801 related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Merrill Lynch Retirement Reserves Money Fund
Statement of Operations for the Six Months Ended April 30, 1994
<CAPTION>
<S> <C> <C>
Investment Income (Note 1c):
Interest and amortization of premium and discount earned $ 126,534,576
Expenses:
Investment advisory fees (Note 2) $ 14,191,667
Transfer agent fees (Note 2) 6,850,614
Registration fees (Note 1d) 535,464
Printing and shareholder reports 146,672
Accounting services (Note 2) 142,227
Custodian fees 121,564
Professional fees 57,615
Trustees' fees and expenses 32,117
Other 51,820
-------------
Total expenses 22,129,760
---------------
Investment income--net 104,404,816
Realized Gain on Investments--Net (Note 1c) 213,050
Change in Unrealized Appreciation/Depreciation on Investments--Net (6,265,712)
---------------
Net Increase in Net Assets Resulting from Operations $ 98,352,154
===============
</TABLE>
<PAGE>
<TABLE>
Merrill Lynch Retirement Reserves Money Fund
Statements of Changes in Net Assets
<CAPTION>
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: April 30, 1994 October 31, 1993
<S> <C> <C>
Operations:
Investment income--net $ 104,404,816 $ 193,085,929
Realized gain on investments--net 213,050 1,945,804
Change in unrealized appreciation/depreciation on investments--net (6,265,712) 381,890
---------------- ----------------
Net increase in net assets resulting from operations 98,352,154 195,413,623
---------------- ----------------
Dividends & Distributions to Shareholders (Note 1e):
Investment income--net (104,404,816) (193,085,929)
Realized and unrealized gain on investments--net (213,050) (1,945,804)
---------------- ----------------
Net decrease in net assets resulting from dividends and distributions to
shareholders (104,617,866) (195,031,733)
---------------- ----------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 12,532,967,791 21,925,175,618
Net asset value of shares issued to shareholders in reinvestment of
dividends (Note 1e) 104,613,325 195,031,928
---------------- ----------------
12,637,581,116 22,120,207,546
Cost of shares redeemed (12,116,151,055) (21,528,902,531)
---------------- ----------------
Net increase in net assets derived from beneficial interest transactions 521,430,061 591,305,015
---------------- ----------------
Net Assets:
Total increase in net assets 515,164,349 591,686,905
Beginning of period 7,066,326,443 6,474,639,538
---------------- ----------------
End of period $ 7,581,490,792 $ 7,066,326,443
================ ================
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Merrill Lynch Retirement Reserves Money Fund
Financial Highlights
<CAPTION>
For the Six
The following per share data and ratios have been derived Months Ended
from information provided in the financial statements. April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Investment income--net .0144 .0279 .0370 .0609 .0775
Realized and unrealized gain (loss) on investments--net (.0009) .0004 .0012 .0025 --
---------- ---------- ---------- ---------- ----------
Total from investment operations .0135 .0283 .0382 .0634 .0775
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.0144) (.0279) (.0370) (.0609) (.0775)
Realized gain on investments--net --++ (.0003) (.0010) (.0025)** --
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0144) (.0282) (.0380) (.0634) (.0775)
---------- ---------- ---------- ---------- ----------
Net asset value, at end of year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 2.92%* 2.86% 3.95% 6.54% 8.06%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses .61%* .62% .63% .64% .69%
========== ========== ========== ========== ==========
Investment income and realized gain (loss) on
investments--net 2.90%* 2.82% 3.88% 6.30%** 7.75%**
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $7,581,491 $7,066,326 $6,474,640 $6,485,985 $5,597,641
========== ========== ========== ========== ==========
<FN>
*Annualized.
**Includes unrealized gain (loss).
++Less than $.0001 per share.
See Notes to Financial Statements.
</TABLE>
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies:
Merrill Lynch Retirement Reserves Money Fund (the "Fund") is a
separate Fund offering a separate class of shares of Merrill
Lynch Retirement Series Trust (the "Trust"). The Trust is reg-
istered under the Investment Company Act of 1940 as a diversified,
open-end management investment company which will comprise a
series of separate portfolios offering a separate class of shares
to participants in the retirement plans for which Merrill Lynch,
Pierce, Fenner & Smith Inc. ("MLPF&S") acts as passive custodian.
At the present time, the Fund is the only series offered. The
following is a summary of significant accounting policies con-
sistently followed by the Fund.
(a) Valuation of investments--Investments maturing more than
sixty days after the valuation date are valued at the most recent
bid price or yield equivalent as obtained from dealers that make
markets in such securities. When securities are valued with sixty
days or less to maturity, the difference between the valuation
existing on the sixty-first day before maturity and maturity value
is amortized on a straight-line basis to maturity. Investments
maturing within sixty days from their date of acquisition are val-
ued at amortized cost, which approximates market.
For the purposes of valuations, the maturity of variable rate cer-
tificates of deposit, variable rate commercial paper, short-term
corporate bond notes and variable rate corporate notes is deemed to
be the next coupon date on which the interest rate is to be adjusted.
Assets for which market quotations are not readily available are
valued at fair value as determined in good faith by or under the
direction of the Board of Trustees.
(b) Income taxes--It is the Fund's policy to comply with the re-
quirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income
to its shareholders. Therefore, no Federal income tax provision
is required.
(c) Security transactions and investment income--Security trans-
actions are recorded on the dates the transactions are entered
into (the trade dates). Interest income (including amortization
of premium and discount) is recognized on the accrual basis.
Realized gains and losses on security transactions are determined
on the identified cost basis.
(d) Prepaid registration fees--Prepaid registration fees are
charged to expense as the related shares are issued.
<PAGE>
(e) Dividends to shareholders--The Fund declares dividends daily
and reinvests daily such dividends in additional fund shares at
net asset value. Dividends are declared from the total of net
investment income and net realized gains or losses on investments.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Merrill Lynch Asset Management, L.P. ("MLAM"). Effective January 1,
1994, the investment advisory business of MLAM was reorganized from
a corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of MLAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of MLAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch In-
vestment Management, Inc. ("MLIM"), which is also an indirect wholly-
owned subsidiary of ML & Co. The Fund has also entered into a Dis-
tribution Agreement and a Distribution Plan with Merrill Lynch Funds
Distributor, Inc. ("MLFD" or "Distributor"), a wholly-owned subsidiary
of MLIM.
Notes to Financial Statements
(concluded)
MLAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.50%
of the Fund's average daily net assets not exceeding $1 billion;
0.45% of average daily net assets in excess of $1 billion but not
exceeding $2 billion; 0.40% of average daily net assets in excess of
$2 billion but not exceeding $3 billion; 0.375% of average daily net
assets in excess of $3 billion but not exceeding $3.5 billion; and
0.35% of average daily net assets in excess of $3.5 billion. The most
restrictive annual expense limitation requires that MLAM reimburse
the Fund to the extent the Fund's expenses (excluding interest,
taxes, distribution fees, brokerage fees and commissions, and ex-
traordinary charges such as litigation costs) exceed 2.5% of the
Fund's first $30 million of average daily net assets, 2.0% of the
next $70 million of average daily net assets, and 1.5% of the
remaining average daily net assets. The Manager's obligation to
reimburse the Fund is limited to the amount of the management fee.
No fee payment will be made to MLAM during the period which will
cause such expenses to exceed the most restrictive expense lim-
itation at the time of such payment.
<PAGE>
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary
of ML & Co., is the Fund's transfer agent. Accounting services are
provided to the Fund by MLAM at cost.
Certain officers and/or trustees of the Trust are officers and/or
directors of MLIM, FDS, MLPF&S, and/or ML & Co.
3. Shares of Beneficial Interest:
The number of shares purchased and redeemed during the periods
corresponds to the amounts included in the Statements of Changes
in Net Assets, since shares are recorded at $1.00 per share.
Officers and Trustees
Arthur Zeikel--President and Trustee
Joe Grills--Trustee
Walter Mintz--Trustee
Melvin R. Seiden--Trustee
Stephen B. Swensrud--Trustee
Harry Woolf--Trustee
Terry K. Glenn--Executive Vice President
Joseph T. Monagle, Jr.--Senior Vice President
Christopher G. Ayoub--Vice President
Donald C. Burke--Vice President
Don Underwood--Vice President
Gerald M. Richard--Treasurer
Mark B. Goldfus--Secretary
Custodian
The Bank of New York
110 Washington Street
New York, New York 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, Florida 32246-6484
(800) 221-7210
