MERRILL LYNCH
RETIREMENT
RESERVES
MONEY FUND
Merrill Lynch
Retirement Series Trust
[FUND LOGO]
STRATEGIC
Performance
Semi-Annual Report
April 30, 1997
Officers and Trustees
Arthur Zeikel, President and Trustee
Joe Grills, Trustee
Walter Mintz, Trustee
Robert S. Salomon Jr., Trustee
Melvin R. Seiden, Trustee
Stephen B. Swensrud, Trustee
Terry K. Glenn, Executive Vice President
Joseph T. Monagle Jr., Senior Vice President
Christopher G. Ayoub, Vice President
Donald C. Burke, Vice President
Gerald M. Richard, Treasurer
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210
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 representation of future
performance, which will fluctuate. 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 insured nor guaranteed by
the US Government. Statements and other information herein are as dated
and are subject to change.
Merrill Lynch
Retirement Reserves
Money Fund
Box 9011
Princeton, New Jersey
08543-9011 #10262 -- 4/97
[RECYCLE LOGO] Printed on post-consumer recycled paper
Merrill Lynch Retirement Reserves Money Fund April 30, 1996
DEAR SHAREHOLDER
For the six-month period ended April 30, 1997, Merrill Lynch Retirement
Reserves Money Fund's net annualized yield was 4.93%.* The Fund's 7-day
yield as of April 30, 1997 was 5.18%.
The average portfolio maturity for Merrill Lynch Retirement Reserves
Money Fund at April 30, 1997 was 63 days, compared to 72 days at October
31, 1996.
The Environment
Stock and bond market turbulence increased during the six-month period
ended April 30, 1997. Mounting evidence of stronger-than-expected
economic growth suggested to investors that the Federal Reserve Board
(FRB) would make a preemptive strike to contain inflationary pressures.
These concerns were heightened by statements made by FRB Chairman Alan
Greenspan, and culminated in an increase in the Federal Funds rate of
0.25% to 5.50% on March 25. As investors became concerned that this
might prove to be only the first in a series of monetary policy
tightening moves, interest rates rose and stock and bond prices
declined. Following the central bank's action, investor sentiment
fluctuated from negative to more positive, depending upon whether the
latest economic data releases were perceived to suggest an overheating
or moderating trend. Stock prices were given a boost following a series
of strong corporate earnings reports and the likelihood that a capital
gains tax cut would be part of the Federal balanced budget agreement.
Nonetheless, clear-cut signs of continued low inflation and moderate
economic growth, as well as no further indications of monetary policy
tightening, are probably needed to bring stability to the financial
markets.
On the international front, although the FRB's action triggered some
weakness in the US dollar, the US dollar subsequently continued its
strong advance relative to the yen and the Deutschemark, raising
concerns about the outlook for US trade. In early February, the leading
industrialized nations expressed apparent agreement that it was time to
seek a lower dollar and less volatility in the foreign exchange markets.
It remains to be seen whether these stated intentions will be acted
upon, or if the US dollar continues to rise relative to other
major currencies.
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after
all expenses.
Throughout the six-month period ended April 30, 1997, we implemented a
somewhat cautious investment strategy in an effort to limit yield curve
exposure. We emphasized increasing the Fund's holdings of variable rate
securities which have performed well during periods of rising interest
rates.
The portfolio's composition at the end of the April period and as of our
last report is detailed below:
4/30/97 10/31/96
Bank Notes 2.2% 3.6%
Certificates of Deposit 2.2 1.9
Certificates of Deposit -- European -- 2.7
Certificates of Deposit -- Yankee 2.0 2.9
Commercial Paper 37.0 32.3
Corporate Notes 9.8 11.0
Funding Agreements 0.5 0.9
Master Notes 2.0 2.2
Repurchase Agreements 1.0 6.9
Time Deposits 8.4 --
US Government, Agency &
Instrumentality Obligations --
Discount Notes 5.9 4.0
US Government, Agency &
Instrumentality Obligations --
Non-Discount Notes 29.5 32.7
Liabilities in Excess of Other
Assets (0.5) (1.1)
------ ------
Total 100.0% 100.0%
====== ======
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/CHRISTOPHER G. AYOUB
Christopher G. Ayoub
Vice President and Portfolio Manager
May 28, 1997
<TABLE>
<CAPTION>
Merrill Lynch Retirement Reserves Money Fund April 30, 1997
SCHEDULE OF INVESTMENTS (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Bank Notes -- 2.2%
Barclays Bank PLC $70,000 5.65+% 4/16/98 $69,967
Colorado National 10,000 5.658+ 5/21/97 10,000
Bank of Denver
KeyBank National 30,000 5.608+ 8/21/97 30,000
Association 44,000 5.57+ 5/06/98 43,981
Morgan Guaranty 65,000 5.615+ 2/19/98 64,972
Trust Company
U.S. National 15,000 5.665+ 4/14/98 14,992
Bank of Oregon
Total Bank Notes
(Cost -- $233,907) 233,912
Certificates of Deposit -- 2.2%
Bankers Trust 155,000 5.72 7/09/97 155,009
Company
Morgan Guaranty 50,000 5.90 9/30/97 49,990
Trust Company 30,000 5.94 3/20/98 29,948
Total Certificates of Deposit
(Cost -- $235,031) 234,947
Certificates of Deposit -- Yankee -- 2.0%
Bayerische 20,000 6.03 6/13/97 20,002
Landesbank 25,000 5.78 1/27/98 24,939
Girozentrale, NY 25,000 5.78 1/30/98 24,938
Deutsche Bank, NY 25,000 5.63 2/26/98 24,898
Hongkongbank, NY 100,000 5.65 6/25/97 99,993
Rabobank 15,000 5.50 12/05/97 14,944
Nederland, NY
Total Certificates of Deposit -- Yankee
(Cost -- $209,979) 209,714
Commercial Paper -- 37.0%
ABN-AMRO 100,000 5.28 8/12/97 98,353
North America 50,000 5.42 9/19/97 48,876
Finance Inc.
Allomon Funding 22,606 5.57 5/28/97 22,508
Corporation
Alpine 50,000 5.55 5/14/97 49,892
Securitization 46,890 5.57 5/29/97 46,680
Corporation
American Express 225,000 5.60 5/01/97 224,965
Credit Corporation
American Honda 10,000 5.55 5/22/97 9,966
Finance Corp. 30,000 5.65 7/31/97 29,564
Asset Securitization 30,000 5.65 8/04/97 29,544
Cooperative Corp
Atlantic Asset 19,405 5.54 5/13/97 19,366
Securitization Corp. 30,000 5.55 5/13/97 29,940
CSW Credit, Inc. 12,200 5.57 5/14/97 12,174
18,900 5.53 5/28/97 18,819
Caisse des Depots 100,000 5.60 5/01/97 99,984
et Consignations 50,000 5.35 5/15/97 49,887
50,000 5.30 5/30/97 49,767
25,000 5.28 6/11/97 24,836
25,000 5.32 6/11/97 24,836
Carnival 53,150 5.55 5/09/97 53,076
Corporation
Chrysler Financial 25,000 5.57 5/21/97 24,919
Corporation
Clipper Receivables 125,000 5.62 5/06/97 124,883
Corp.
Columbia/HCA 20,000 5.58 5/27/97 19,916
Healthcare 10,000 5.59 5/27/97 9,958
Corporation 10,000 5.58 5/29/97 9,955
Countrywide Home 79,000 5.56 5/09/97 78,890
Loans, Inc. 21,000 5.67 7/21/97 20,728
Eureka 60,906 5.55 5/23/97 60,690
Securitization, Inc.
Finova Capital Corp. 25,000 5.30 5/15/97 24,944
30,400 5.63 5/16/97 30,324
27,000 5.42 6/25/97 26,764
11,210 5.46 7/15/97 11,076
GTE Corporation 25,000 5.53 5/27/97 24,896
General Electric 125,000 5.31 5/08/97 124,851
Capital Corp.
General Motors 35,000 5.31 5/19/97 34,900
Acceptance Corp. 50,000 5.31 5/20/97 49,846
100,000 5.33 6/02/97 99,480
100,000 5.40 6/20/97 99,204
55,000 5.37 7/01/97 54,462
50,000 5.48 7/09/97 49,448
35,000 5.66 7/21/97 34,547
10,000 5.43 7/29/97 9,858
50,000 5.38 8/04/97 49,240
20,000 5.33 8/19/97 19,648
Goldman Sachs 25,000 5.30 5/01/97 24,996
Group, L.P.
Greenwich Funding 25,112 5.53 5/16/97 25,050
Corp. 55,188 5.57 6/10/97 54,838
Industrial Bank 10,000 5.38 5/05/97 9,992
of Korea 11,000 5.65 6/10/97 10,929
29,000 5.70 7/17/97 28,643
International Lease 50,000 5.30 5/07/97 49,948
Finance Corp.
International 70,284 5.55 5/27/97 69,991
Securitization Corp. 63,762 5.55 5/30/97 63,467
22,800 5.60 5/30/97 22,694
20,625 5.62 6/20/97 20,461
52,100 5.69 7/11/97 51,508
Kingdom of Sweden 70,000 5.30 8/28/97 68,670
Korea Development 65,000 5.36 5/07/97 64,932
Bank 35,000 5.58 5/08/97 34,957
50,000 5.70 7/25/97 49,322
Lehman Brothers 80,000 5.67 5/05/97 79,937
Holdings, Inc. 20,000 5.67 5/16/97 19,950
Mont Blanc Capital 50,000 5.53 5/16/97 49,877
Corp. 48,814 5.53 5/20/97 48,664
26,186 5.54 5/21/97 26,101
Monte Rosa 96,646 5.57 5/05/97 96,571
Capital Corp.
Morgan Stanley 100,000 5.70 5/01/97 99,984
Group, Inc. 50,000 5.31 5/16/97 49,880
NYNEX Corporation 36,000 5.585 5/28/97 35,844
National Fleet 36,000 5.54 5/14/97 35,922
Funding Corp.
Old Line Funding 61,635 5.58 5/05/97 61,587
Corp. 11,365 5.33 5/13/97 11,343
22,121 5.57 5/20/97 22,053
23,058 5.54 5/21/97 22,983
Rexam PLC 23,700 5.36 5/08/97 23,672
Santander Finance 25,000 5.40 7/23/97 24,669
(Delaware) Inc.
Three Rivers 18,828 5.55 5/12/97 18,793
Funding Corp. 14,177 5.54 5/20/97 14,133
16,995 5.54 5/21/97 16,940
Transamerica 20,000 5.55 5/15/97 19,954
Finance Corp.
Twin Towers Inc. 54,610 5.64 7/17/97 53,938
WCP Funding Inc. 20,500 5.60 6/09/97 20,372
Windmill Funding 12,277 5.55 5/05/97 12,268
Corp. 17,953 5.57 5/08/97 17,931
20,512 5.57 5/09/97 20,483
10,501 5.57 5/12/97 10,482
25,671 5.53 5/20/97 25,592
54,024 5.54 5/21/97 53,849
29,446 5.54 5/22/97 29,346
100,000 5.60 5/27/97 99,580
19,762 5.60 6/05/97 19,651
50,000 5.68 7/28/97 49,298
Total Commercial Paper
(Cost -- $3,879,043) 3,878,505
Corporate Notes -- 9.8%
Abbey National 100,000 5.563 5/16/97 99,995
Treasury Services 75,000 5.61 2/10/98 74,960
PLC 65,000 5.59 2/25/98 64,959
5,000 5.93 3/25/98 4,992
100,000 5.65 4/15/98 99,954
Asset-Backed 91,000 5.688+ 10/15/97 91,000
Securities Investment
Trust (ABSIT) (1996-M)
CIT Group Holdings, 85,000 5.61 10/27/97 84,971
Inc. (The)
Chase Manhattan 11,734 5.489 1/15/98 11,723
Auto Owner Trust
1996-C
First Bank System, 29,000 5.668 11/19/97 29,000
Inc.
Ford Motor Credit Co. 57,000 5.672 5/27/97 57,009
International 30,000 5.67 1/28/98 29,901
Business Machines
Corporation
LABS Trust Series 108,540 5.688+ 12/29/97 108,540
1996-C Senior Notes
LINCS Series 1996-3 50,000 5.688+ 1/12/98 50,000
Morgan Stanley 15,000 5.78 2/23/98 15,014
Group, Inc.
Premier Auto Trust 30,314 5.477 12/08/97 30,271
1997-1
SMM Trust 182,000 5.688+ 1/15/98 181,999
1997-Q
Total Corporate Notes (Cost -- $1,034,416) 1,034,288
Funding Agreements -- 0.5%
Jackson National 50,000 5.72+ 5/01/98 50,000
Life Insurance Co.
Total Funding Agreements (Cost -- $50,000) 50,000
Master Notes -- 2.0%
Goldman Sachs 34,000 5.59+ 5/01/97 34,000
Group, L.P. 175,000 5.59+ 8/01/97 175,000
Total Master Notes (Cost -- $209,000) 209,000
Time Deposits -- 8.4%
Canadian Imperial 150,000 5.688 5/01/97 150,000
Bank of Commerce --
Grand Cayman
Chase Manhattan 28,651 5.625 5/01/97 28,651
Bank -- Nassau
Deutsche 400,000 5.65 5/01/97 400,000
Bank AG --
Grand Cayman
First Union 150,000 5.656 5/01/97 150,000
National Bank of
North Carolina --
Nassau
SunTrust Bank, 150,000 5.688 5/01/97 150,000
Atlanta --
Grand Cayman
Total Time Deposits (Cost -- $878,651) 878,651
US Government, Agency & Instrumentality Obligations --
Discount Notes -- 5.9%
Federal Home Loan 61,065 5.21 7/10/97 60,404
Banks 50,000 5.25 7/23/97 49,360
50,000 5.25 7/24/97 49,352
30,000 5.25 7/25/97 29,607
30,500 5.20 8/13/97 30,005
45,000 5.29 9/02/97 44,125
31,615 5.23 10/01/97 30,850
44,500 5.23 10/09/97 43,367
47,580 5.28 10/31/97 46,204
55,000 5.18 11/17/97 53,253
Federal National 50,000 5.55 9/24/97 48,857
Mortgage 75,000 5.64 10/20/97 72,960
Association 61,000 5.24 1/13/98 58,508
Total US Government, Agency & Instrumentality
Obligations -- Discount Notes (Cost -- $617,649) 616,852
US Government, Agency & Instrumentality Obligations --
Non-Discount Notes -- 29.5%
Federal Farm 25,000 5.62 10/01/97 24,973
Credit Banks 60,000 5.85 10/01/97 60,000
40,000 5.63+ 11/25/97 39,995
50,000 5.65 2/03/98 49,859
Federal Home 120,000 5.55+ 12/10/97 119,964
Loan Banks 75,000 5.56+ 1/15/98 74,968
25,000 5.99 2/09/98 24,990
15,000 6.12 11/19/98 14,910
25,000 6.26 1/22/99 24,855
17,500 6.25 2/05/99 17,432
Federal Home Loan 25,000 5.55+ 10/07/97 24,994
Mortgage Corp. 35,000 5.58+ 4/15/98 34,984
Federal National 42,000 5.538+ 5/14/97 41,999
Mortgage 68,500 5.95+ 5/19/97 68,500
Association 140,000 5.553+ 5/22/97 139,994
140,000 5.54+ 7/16/97 139,980
66,000 5.56+ 8/01/97 65,993
55,000 5.56+ 8/22/97 54,990
55,000 5.545+ 9/03/97 54,986
42,000 5.55+ 9/09/97 41,990
41,000 5.55+ 9/29/97 40,990
35,000 5.53 10/14/97 34,951
50,000 5.79 10/16/97 49,984
73,000 5.535 10/20/97 72,970
75,000 5.47 12/30/97 74,808
25,000 5.19 1/08/98 24,865
150,000 5.55+ 1/15/98 150,000
70,000 6.00+ 3/26/98 69,963
83,000 5.56+ 3/27/98 82,949
65,000 5.59+ 4/21/98 64,975
60,000 5.60+ 4/24/98 59,977
38,000 5.75+ 5/14/98 38,000
15,000 5.81 12/01/98 14,747
22,150 5.42+ 12/14/98 22,120
22,000 6.50 4/30/99 21,943
60,000 5.68+ 7/14/99 59,778
Student Loan 25,000 5.51+ 5/08/97 25,000
Marketing 115,000 5.555+ 8/21/97 114,984
Association 35,000 5.50 10/24/97 34,944
67,075 5.71+ 1/21/98 67,143
85,000 5.565+ 2/05/98 84,971
29,200 5.66+ 2/17/98 29,189
75,000 5.605+ 4/21/98 74,983
100,000 5.61+ 11/06/98 99,957
15,000 6.02 11/20/98 14,935
51,425 5.80 12/18/98 50,854
US Treasury Notes 25,000 8.50 7/15/97 25,156
40,000 5.75 9/30/97 40,000
50,000 8.75 10/15/97 50,664
110,000 5.625 10/31/97 109,914
48,000 5.25 12/31/97 47,805
60,000 5.00 1/31/98 59,587
95,000 5.625 11/30/98 94,228
50,000 5.875 1/31/99 49,641
15,000 5.875 2/28/99 14,880
Total US Government, Agency & Instrumentality
Obligations -- Non-Discount Notes
(Cost -- $3,095,678) 3,092,211
<CAPTION>
Face
Amount Issue
<S> <C> <C>
Repurchase Agreements** -- 1.0%
$100,000 Fuji Securities, Inc., purchased
on 4/30/1997 to yield 5.55% to
5/01/97 100,000
Total Repurchase Agreements (Cost -- $100,000) 100,000
Total Investments (Cost -- $10,543,354) -- 100.5% 10,538,080
Liabilities in Excess of Other Assets -- (0.5%) (55,398)
------------
Net Assets -- 100.0% $10,482,682
============
* 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, 1997.
** Repurchase Agreements are fully collateralized by US Government Obligations.
+ Floating Rate Notes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of April 30, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $10,543,353,990*)(Note 1a) $10,538,080,483
Cash 238,060
Receivables:
Securities sold $73,537,350
Interest 36,297,814
Beneficial interest sold 221,136 110,056,300
---------------
Prepaid registration fees and other assets (Note 1d) 383,191
---------------
Total assets 10,648,758,034
---------------
Liabilities: Payables:
Beneficial interest redeemed 116,123,979
Securities purchased 43,981,016
Investment adviser (Note 2) 3,202,422
Dividends to shareholders (Note 1e) 4,995 163,312,412
---------------
Accrued expenses and other liabilities 2,763,313
---------------
Total liabilities 166,075,725
---------------
Net Assets: Net assets $10,482,682,309
===============
Net Assets Shares of beneficial interest, $0.10 par value, unlimited number of
Consist of: shares authorized $1,048,795,582
Paid-in capital in excess of par 9,439,160,234
Unrealized depreciation on investments -- net (5,273,507)
---------------
Net assets -- Equivalent to $1.00 per share based on 10,487,955,816
shares of beneficial interest outstanding $10,482,682,309
===============
* Cost for Federal income tax purposes. As of April 30, 1997, net unrealized depreciation
for Federal income tax purposes amounted to $5,273,507, of which $96,250 related to appreciated
securities and $5,369,757 related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended April 30, 1997
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned $279,264,611
(Note 1c):
Expenses: Investment advisory fees (Note 2) $18,689,290
Transfer agent fees (Note 2) 7,194,647
Registration fees (Note 1d) 460,242
Printing and shareholder reports 308,593
Accounting services (Note 2) 261,451
Custodian fees 137,083
Interest expense 53,090
Professional fees 42,350
Trustees' fees and expenses 37,219
Other 59,652
---------------
Total expenses 27,243,617
---------------
Investment income -- net 252,020,994
---------------
Realized & Unreal- Realized gain on investments -- net 230,693
ized Gain (Loss) on Change in unrealized appreciation on investments -- net (6,110,037)
---------------
Investments -- Net Net Increase in Net Assets Resulting from Operations $246,141,650
(Note 1c): ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
April 30, 1997 Oct. 31, 1996
Increase (Decrease) in Net Assets:
<S> <C> <C> <C>
Operations: Investment income -- net $252,020,994 $457,309,800
Realized gain on investments -- net 230,693 471,407
Change in unrealized appreciation on investments -- net (6,110,037) (2,850,451)
--------------- ---------------
Net increase in net assets resulting from operations 246,141,650 454,930,756
--------------- ---------------
Dividends & Investment income -- net (252,020,994) (457,309,800)
Distributions to Realized gain on investments -- net (230,693) (471,407)
Shareholders --------------- ---------------
(Note 1e): Net decrease in net assets resulting from dividends and
distributions to shareholders (252,251,687) (457,781,207)
--------------- ---------------
Beneficial Interest Net proceeds from sale of shares 17,319,912,206 27,785,847,538
Transactions Net asset value of shares issued to shareholders in
(Notes 1e & 3): reinvestment of dividends and distributions 252,249,073 457,779,630
--------------- ---------------
17,572,161,279 28,243,627,168
Cost of shares redeemed (16,423,598,005) (27,549,454,162)
--------------- ---------------
Net increase in net assets derived from beneficial
interest transactions 1,148,563,274 694,173,006
--------------- ---------------
Net Assets: Total increase in net assets 1,142,453,237 691,322,555
Beginning of period 9,340,229,072 8,648,906,517
--------------- ---------------
End of period $10,482,682,309 $9,340,229,072
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended For the Year Ended October 31,
April 30, 1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Operating ------------ ------------ ------------ ------------ ------------
Performance: Investment income -- net .0250 .0509 .0540 .0345 .0279
Realized and unrealized gain (loss) on ------------ ------------ ------------ ------------ ------------
investments -- net (.0006) (.0002) .0015 (.0011) .0004
------------ ------------ ------------ ------------ ------------
Total from investment operations .0244 .0507 .0555 .0334 .0283
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Investment income -- net (.0250) (.0509) (.0540) (.0345) (.0279)
Realized gain on investments -- net --+ (.0001) (.0002) --+ (.0003)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions (.0250) (.0510) (.0542) (.0345) (.0282)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
============ ============ ============ ============ ============
Total investment return 4.93%* 5.21% 5.57% 3.48% 2.86%
============ ============ ============ ============ ============
Ratios to Average Expenses .54%* .56% .59% .59% .62%
Net Assets: ============ ============ ============ ============ ============
Investment income and realized gain
on investments -- net 5.04%* 5.07% 5.43% 3.44% 2.82%
============ ============ ============ ============ ============
Supplemental Net assets, end of period (in thousands) $10,482,682 $9,340,229 $8,648,907 $7,403,684 $7,066,326
Data: ============ ============ ============ ============ ============
* Annualized.
+ Amount is less than $.0001 per share.
See Notes to Financial Statements.
</TABLE>
Merrill Lynch Retirement Reserves Money Fund April 30, 1997
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"). These unaudited financial statements reflect
all adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented. All such
adjustments are of a normal recurring nature. The Trust is registered
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 polices consistently 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 valued at amortized cost, which
approximates market value.
For the purposes of valuations, the maturity of variable rate
certificates of deposit, variable rate commercial paper, short-term
corporate bond notes, variable rate Government agency 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
requirements 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 transactions
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.
(e) Dividends and distributions to shareholders -- The Fund declares
dividends daily and reinvests daily such dividends in additional fund
shares at net asset value. Dividends and distributions 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"). The general partner of MLAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of
Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner.
The Fund has also entered into a Distribution Agreement and Distribution
Plans with Merrill Lynch Funds Distributor, Inc. ("MLFD" or
"Distributor"), a wholly-owned subsidiary of Merrill Lynch Group, Inc.
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 $4 billion; 0.35% of average daily net
assets in excess of $4 billion but not exceeding $7 billion; 0.325% of
average daily net assets in excess of $7 billion but not exceeding $10
billion; and 0.30% of average daily net assets in excess of $10 billion.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), 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 MLAM, MLFD, MLFDS, PSI, 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.
