MERRILL LYNCH
RETIREMENT
RESERVES
MONEY FUND
Merrill Lynch
Retirement Series Trust
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
October 31, 1999
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
DEAR SHAREHOLDER
For the year ended October 31, 1999, Merrill Lynch Retirement Reserves Money
Fund's Class I and Class II Shares had net annualized yields of 4.84%* and
4.63%,* respectively. The Fund's Class I and Class II Shares had 7-day yields as
of October 31, 1999 of 5.13% and 4.93%, respectively.
The average portfolio maturity for Merrill Lynch Retirement Reserves Money Fund
at October 31, 1999 was 72 days, compared to 78 days at April 30, 1999.
The Environment
During the six months ended October 31, 1999, the US economy enjoyed continued
strong growth while inflation and labor costs pressures remained contained. The
US financial markets exhibited volatility. In June, the broad US stock market
averages reached record highs. However, stock prices declined for the next three
months. By late October, the stock market began to rebound, gaining some
momentum by the end of the period.
The US bond market showed signs of volatility over the period as well.
Fixed-income investors had reacted poorly to evidence of incipient inflationary
pressures and the prospect of higher interest rates in the early part of the
period. However, a significant rally ensued in September driven by a slowdown in
average hourly earnings and extremely benign inflation reports. By the end of
October, interest rates were off their highs.
After the Federal Reserve Board raised short-term interest rates for the second
time in August, investor psychology was mixed as to whether there would be an
increase for the third time this year. The central bank announced its move to
tighten 25 basis points (0.25%) on November 16, 1999, essentially putting
short-term interest rates back to where they were before the three-quarter-point
cuts that were made last fall. Investors seem confident that there will not be
any additional moves before the advent of the Year 2000.
For the six-months ended October 31, 1999, the Fund's portfolio held a shorter
average life, commensurate with a rising interest rate environment. Our primary
focus was in one-month - three-month money market instruments while modestly
increasing our holdings in floating rate securities -- a hedge against rising
interest rates. Issuers, looking to avoid Year 2000 liquidity needs, offered the
Fund selective opportunities in one-year securities (fixed and floating rate) as
markets became oversold.
The Fund's portfolio composition at the end of the October period and as of our
last report to shareholders is detailed below:
- --------------------------------------------------------------------------------
10/31/99 4/30/99
- --------------------------------------------------------------------------------
Bank Notes ..................................... 7.6% 9.0%
Certificates of Deposit ........................ 2.2 0.8
Certificates of Deposit -- European ............ 1.3 1.0
Certificates of Deposit -- Yankee .............. 10.6 11.9
Commercial Paper ............................... 46.7 50.2
Corporate Notes ................................ 13.6 13.0
Funding Agreements ............................. 1.1 0.9
Master Notes ................................... 0.2 1.0
Promissory Notes ............................... 0.8 --
Repurchase Agreements .......................... 1.6 --
Time Deposits .................................. -- 0.1
US Government, Agency &
Instrumentality Obligations --
Discount ..................................... 1.0 1.8
US Government, Agency &
Instrumentality Obligations --
Non-Discount ................................. 13.8 13.4
Liabilities in Excess of Other Assets .......... (0.5) (3.1)
----- -----
Total .......................................... 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 in the
months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Trustee
/s/ John Ng
John Ng
Vice President and Portfolio Manager
December 7, 1999
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
1
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------
Bank Notes -- 7.6%
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Express $ 25,000 5.45+% 4/25/00 $ 25,000
Centurion Bank 50,000 5.45+ 4/27/00 50,000
75,000 5.45+ 5/05/00 75,000
- ---------------------------------------------------------------------------------------------------------------------------
Bank One, IL, NA 50,000 6.087+ 10/06/00 49,979
- ---------------------------------------------------------------------------------------------------------------------------
Comerica Bank 100,000 5.409+ 11/23/99 99,997
- ---------------------------------------------------------------------------------------------------------------------------
FCC National Bank 22,000 5.40+ 3/23/00 21,996
- ---------------------------------------------------------------------------------------------------------------------------
First USA Bank, NA 25,000 6.08 10/10/00 24,943
- ---------------------------------------------------------------------------------------------------------------------------
First Union 50,000 5.473+ 11/16/99 50,002
National Bank 50,000 5.30 3/01/00 49,869
75,000 5.573+ 8/31/00 74,934
- ---------------------------------------------------------------------------------------------------------------------------
Fleet National Bank 100,000 5.29+ 7/31/00 99,835
- ---------------------------------------------------------------------------------------------------------------------------
Harris Trust & 50,000 5.41+ 4/06/00 49,991
Savings
- ---------------------------------------------------------------------------------------------------------------------------
KeyBank NA 150,000 5.608+ 3/20/00 150,000
- ---------------------------------------------------------------------------------------------------------------------------
LaSalle National 25,000 5.11 4/24/00 24,912
Bank
- ---------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty 37,500 5.40+ 5/10/00 37,490
Trust Company of
New York
- ---------------------------------------------------------------------------------------------------------------------------
National City Bank -- 50,000 5.388+ 3/29/00 49,987
Ohio
- ---------------------------------------------------------------------------------------------------------------------------
NationsBank NA 200,000 5.42+ 3/16/00 199,978
- ---------------------------------------------------------------------------------------------------------------------------
U.S. Bank, NA 30,000 5.61 6/26/00 29,932
- ---------------------------------------------------------------------------------------------------------------------------
Total Bank Notes (Cost -- $1,164,378)............................................................... 1,163,845
- ---------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit -- 2.2%
- ---------------------------------------------------------------------------------------------------------------------------
Chase Manhattan 75,000 5.18 3/15/00 74,700
Bank USA, NA
- ---------------------------------------------------------------------------------------------------------------------------
First Union 50,000 5.80 7/03/00 49,854
National Bank 61,000 5.50+ 7/19/00 60,942
44,000 5.563+ 8/29/00 43,812
- ---------------------------------------------------------------------------------------------------------------------------
Morgan Guaranty 100,000 6.08 3/21/00 100,009
Trust Company of
New York
- ---------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit (Cost -- $329,981).................................................... 329,317
- ---------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit -- European -- 1.3%
- ---------------------------------------------------------------------------------------------------------------------------
Abbey National 72,000 5.43+ 11/01/99 72,000
Treasury Services
PLC, London
- ---------------------------------------------------------------------------------------------------------------------------
Bank Brussels 25,000 5.45 12/23/99 24,999
Lambert, London
- ---------------------------------------------------------------------------------------------------------------------------
Svenska 50,000 5.44 12/29/99 49,935
Handelsbanken 50,000 5.45 12/29/99 49,937
AB, London
- ---------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit -- European
(Cost -- $197,002).................................................................................. 196,871
- ---------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit -- Yankee -- 10.6%
- ---------------------------------------------------------------------------------------------------------------------------
Bank Austria 50,000 5.12 % 4/07/00 49,741
AG, NY 25,000 5.20+ 5/08/00 24,858
- ---------------------------------------------------------------------------------------------------------------------------
Bank of Scotland 25,000 5.70+ 6/28/00 24,903
Treasury Services
PLC, NY
- ---------------------------------------------------------------------------------------------------------------------------
Banque Nationale 25,000 5.445+ 12/30/99 24,959
de Paris, Chicago
- ---------------------------------------------------------------------------------------------------------------------------
Barclays Bank 100,000 5.39+ 3/15/00 99,977
PLC, NY 50,000 5.39+ 5/12/00 49,984
- ---------------------------------------------------------------------------------------------------------------------------
Bayerische Hypo- 100,000 5.15 3/23/00 99,523
und -Vereinsbank 50,000 5.15 4/28/00 49,719
AG, NY
- ---------------------------------------------------------------------------------------------------------------------------
Canadian 25,000 5.27 3/03/00 24,905
Imperial Bank of
Commerce, NY
- ---------------------------------------------------------------------------------------------------------------------------
Commerzbank 100,000 5.085 2/17/00 99,605
AG, NY 100,000 5.16 4/07/00 99,499
- ---------------------------------------------------------------------------------------------------------------------------
Credit Agricole 20,000 5.16 4/03/00 19,901
Indosuez, NY
- ---------------------------------------------------------------------------------------------------------------------------
Credit Communal 50,000 5.96 10/02/00 49,838
de Belgique, NY
- ---------------------------------------------------------------------------------------------------------------------------
Credit Suisse 50,000 5.47+ 6/07/00 49,948
First Boston, NY 50,000 5.47+ 6/12/00 49,947
- ---------------------------------------------------------------------------------------------------------------------------
Deutsche Bank 50,000 5.405+ 4/10/00 49,990
AG, NY
- ---------------------------------------------------------------------------------------------------------------------------
Norddeutsche 25,000 5.20 5/08/00 24,858
Landesbank
Girozentrale, NY
- ---------------------------------------------------------------------------------------------------------------------------
Rabobank 25,000 5.32 3/03/00 24,909
Nederland NV, NY
- ---------------------------------------------------------------------------------------------------------------------------
Societe Generale, 100,000 5.18 2/28/00 99,600
NY 25,000 5.22 2/28/00 24,903
50,000 5.29 3/03/00 49,813
50,000 5.13 4/07/00 49,743
75,000 6.064+ 4/14/00 74,930
- ---------------------------------------------------------------------------------------------------------------------------
Svenska 50,000 5.195 2/28/00 49,803
Handelsbanken
AB, NY
- ---------------------------------------------------------------------------------------------------------------------------
Toronto -- Dominion 30,000 5.15 4/20/00 29,838
Bank, NY
- ---------------------------------------------------------------------------------------------------------------------------
UBS AG, Stamford 25,000 5.20 2/29/00 24,901
75,000 5.25 3/10/00 74,697
25,000 5.29 5/18/00 24,863
- ---------------------------------------------------------------------------------------------------------------------------
Westdeutsche 200,000 5.34+ 11/24/99 200,000
Landesbank
Girozentrale, NY
- ---------------------------------------------------------------------------------------------------------------------------
Total Certificates of Deposit -- Yankee
(Cost -- $1,624,626)................................................................................ 1,620,155
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------
Commercial Paper -- 46.7%
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AT&T Corporation $125,000 6.134+% 7/13/00 $ 124,805
75,000 5.473+ 8/07/00 75,000
- ---------------------------------------------------------------------------------------------------------------------------
Aegon Funding Corp. 40,000 5.39 2/14/00 39,287
- ---------------------------------------------------------------------------------------------------------------------------
Alpine Securitization 38,976 5.36 11/18/99 38,860
Corporation 117,739 5.37 11/23/99 117,300
68,285 5.42 11/29/99 67,966
50,000 6.15 1/18/00 49,331
- ---------------------------------------------------------------------------------------------------------------------------
American Express 22,000 5.28 11/01/99 21,990
Credit Corporation
- ---------------------------------------------------------------------------------------------------------------------------
Amsterdam Funding 5,000 5.35 11/15/99 4,987
Corporation 25,000 5.38 11/18/99 24,925
10,000 5.37 11/22/99 9,964
10,000 5.37 12/03/99 9,948
50,000 5.78 2/04/00 49,191
- ---------------------------------------------------------------------------------------------------------------------------
Apreco, Inc. 40,000 5.36 11/01/99 39,982
20,000 5.40 11/17/99 19,943
20,000 5.38 11/29/99 19,907
- ---------------------------------------------------------------------------------------------------------------------------
Asset Securitization 62,000 5.518+ 3/13/00 62,000
Cooperative Corp.
- ---------------------------------------------------------------------------------------------------------------------------
Associates First 50,000 5.72 3/01/00 48,979
Capital Corp. 50,000 5.72 3/02/00 48,971
50,000 5.72 3/03/00 48,963
- ---------------------------------------------------------------------------------------------------------------------------
BILLS Securitization 100,000 5.38 11/02/99 99,940
Ltd.
- ---------------------------------------------------------------------------------------------------------------------------
Banco Bozano, 35,000 5.95 4/17/00 34,019
Simonsen S.A., Grand
Cayman Branch
- ---------------------------------------------------------------------------------------------------------------------------
Banco De Galicia Y 25,000 5.40 11/23/99 24,906
Buenos Aires SA
- ---------------------------------------------------------------------------------------------------------------------------
BankAmerica Corp. 75,000 5.40 1/28/00 73,872
- ---------------------------------------------------------------------------------------------------------------------------
CXC Incorporated 25,000 5.35 12/01/99 24,877
75,000 5.78 2/11/00 73,700
25,000 5.77 2/25/00 24,510
50,000 5.77 2/29/00 48,987
- ---------------------------------------------------------------------------------------------------------------------------
Caisse des Depots 100,000 5.32 11/01/99 99,956
et Consignations
- ---------------------------------------------------------------------------------------------------------------------------
Cargill Global 15,000 5.40 1/28/00 14,774
Funding PLC
- ---------------------------------------------------------------------------------------------------------------------------
Centric Capital Corp. 49,722 5.37 11/15/99 49,596
52,496 5.33 11/24/99 52,293
27,800 5.36 11/26/99 27,684
14,982 5.36 11/29/99 14,913
50,000 5.40 12/01/99 49,753
45,000 5.40 12/03/99 44,764
35,000 5.39 12/17/99 34,747
- ---------------------------------------------------------------------------------------------------------------------------
China Merchants 50,000 6.05 2/24/00 49,028
(Cayman 3) Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Ciesco L.P. 30,000 5.39 11/17/99 29,915
- ---------------------------------------------------------------------------------------------------------------------------
Citicorp 50,000 5.78 2/10/00 49,142
- ---------------------------------------------------------------------------------------------------------------------------
Clipper Receivables 25,000 5.38 11/16/99 24,933
Corp.
- ---------------------------------------------------------------------------------------------------------------------------
Corporate Asset 89,000 5.35 11/02/99 88,947
Funding Co. Inc. 25,000 5.25 11/03/99 24,982
60,900 5.35 12/07/99 60,547
50,000 5.75 2/25/00 49,020
- ---------------------------------------------------------------------------------------------------------------------------
Corporate 100,000 5.37 11/10/99 99,821
Receivables Corp. 30,000 5.40 11/16/99 29,919
50,000 5.35 11/19/99 49,844
50,000 5.35 11/22/99 49,822
100,000 5.37 12/06/99 99,433
- ---------------------------------------------------------------------------------------------------------------------------
Countrywide Home 65,000 5.37 11/18/99 64,806
Loans, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Credit Suisse 50,000 5.41 2/02/00 49,207
First Boston Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Credit Suisse 25,000 5.95 3/08/00 24,461
First Boston
International
(Guernsey)
Limited
- ---------------------------------------------------------------------------------------------------------------------------
Daimler Chrysler 25,000 5.40 11/08/99 24,963
North America 50,000 5.37 11/17/99 49,858
Holdings Corp. 100,000 5.99 2/08/00 98,316
50,000 5.86 2/24/00 49,028
75,000 5.75 3/02/00 73,456
32,000 5.75 3/03/00 31,336
- ---------------------------------------------------------------------------------------------------------------------------
Delaware Funding 60,126 5.30 11/05/99 60,064
Corp. 15,027 5.30 11/08/99 15,005
30,000 5.33 11/18/99 29,911
172,174 5.34 11/22/99 171,561
40,684 5.40 12/16/99 40,395
- ---------------------------------------------------------------------------------------------------------------------------
Den Norske Bank 25,000 5.36 12/20/99 24,807
ASA
- ---------------------------------------------------------------------------------------------------------------------------
Diageo Capital PLC 50,000 5.75 2/02/00 49,207
- ---------------------------------------------------------------------------------------------------------------------------
Edison Asset 23,860 5.35 11/19/99 23,786
Securitization, LLC 53,000 5.75 2/23/00 51,978
46,240 5.83 2/24/00 45,341
30,000 5.75 2/25/00 29,412
69,072 5.75 2/28/00 67,684
21,165 5.85 2/29/00 20,736
19,180 5.80 3/20/00 18,729
- ---------------------------------------------------------------------------------------------------------------------------
Enterprise Funding 40,131 5.35 11/19/99 40,006
Corp. 130,684 5.37 11/22/99 130,216
22,554 5.35 11/29/99 22,450
- ---------------------------------------------------------------------------------------------------------------------------
Eureka 30,000 5.80 2/09/00 29,490
Securitization Inc. 50,000 5.78 2/11/00 49,134
- ---------------------------------------------------------------------------------------------------------------------------
Finova Capital Corp. 18,500 5.37 11/08/99 18,472
29,000 5.40 11/24/99 28,887
14,500 5.42 12/17/99 14,393
13,000 5.97 3/10/00 12,716
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------
Commercial Paper (continued)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fleet Funding Corp. $ 75,000 5.37 % 11/10/99 $ 74,865
- ---------------------------------------------------------------------------------------------------------------------------
Formosa Plastics 20,000 5.97 3/17/00 19,540
Corporation, USA 10,000 5.90 4/06/00 9,738
Series B 10,000 5.90 4/19/00 9,717
25,000 5.84 4/20/00 24,288
- ---------------------------------------------------------------------------------------------------------------------------
Fortis Funding, LLC 15,000 5.883 3/29/00 14,626
- ---------------------------------------------------------------------------------------------------------------------------
GE Capital 50,000 5.90 3/15/00 48,865
International 50,000 5.90 3/16/00 48,857
Funding, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
GTE Corporation 75,000 5.40 11/16/99 74,798
- ---------------------------------------------------------------------------------------------------------------------------
General Electric 95,000 5.89 2/25/00 93,137
Capital Corp. 75,000 5.72 3/09/00 73,371
75,000 5.88 4/06/00 73,032
- ---------------------------------------------------------------------------------------------------------------------------
General Motors 57,000 5.25 11/02/99 56,967
Acceptance Corp. 75,000 5.42 2/17/00 73,627
70,000 5.77 2/18/00 68,707
125,000 5.72 3/10/00 122,265
- ---------------------------------------------------------------------------------------------------------------------------
Goldman Sachs 75,000 5.73 2/29/00 73,481
Group, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Grand Funding Corp. 50,000 5.33 11/02/99 49,970
15,600 5.36 11/04/99 15,586
50,000 6.13 1/07/00 49,421
- ---------------------------------------------------------------------------------------------------------------------------
Greenwich Funding 29,198 5.35 11/04/99 29,172
Corp. 138,139 6.00 2/07/00 135,835
25,775 5.79 4/03/00 25,111
- ---------------------------------------------------------------------------------------------------------------------------
International 15,561 5.77 1/27/00 15,329
Securitization Corp.
- ---------------------------------------------------------------------------------------------------------------------------
InterPeru Funding 30,000 5.79 3/31/00 29,242
Limited 20,000 5.90 4/05/00 19,478
- ---------------------------------------------------------------------------------------------------------------------------
Kitty Hawk Funding 20,367 5.35 11/05/99 20,346
Corp. 50,000 5.38 11/08/99 49,925
9,553 5.40 11/23/99 9,517
50,000 5.78 2/15/00 49,101
- ---------------------------------------------------------------------------------------------------------------------------
Lehman Brothers 40,000 5.90 2/15/00 39,281
Holdings Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Morgan Stanley, 125,000 5.51+ 1/28/00 125,000
Dean Witter & Co.
- ---------------------------------------------------------------------------------------------------------------------------
New Center Asset 150,000 5.77 2/15/00 147,303
Trust 50,000 5.91 2/18/00 49,076
- ---------------------------------------------------------------------------------------------------------------------------
Old Line Funding 38,545 5.37 11/01/99 38,528
Corp. 19,787 5.32 11/04/99 19,769
25,886 5.35 11/12/99 25,832
47,682 5.40 12/01/99 47,446
60,100 5.36 12/02/99 59,796
8,000 6.00 2/10/00 7,863
- ---------------------------------------------------------------------------------------------------------------------------
Park Avenue 64,809 5.38 11/15/99 64,644
Receivables Corp. 57,134 5.38 11/19/99 56,955
28,000 5.508+ 2/11/00 27,998
- ---------------------------------------------------------------------------------------------------------------------------
Salomon, Smith 75,000 5.77 2/11/00 73,700
Barney Holdings, 25,000 5.73 2/22/00 24,522
Inc. 50,000 5.75 3/07/00 48,930
50,000 5.79 3/10/00 48,906
- ---------------------------------------------------------------------------------------------------------------------------
Tulip Funding Corp. 66,735 6.00 2/07/00 65,622
8,265 5.86 2/11/00 8,122
25,000 5.78 2/14/00 24,554
- ---------------------------------------------------------------------------------------------------------------------------
United Mexican 75,000 5.80 3/17/00 73,274
States
- ---------------------------------------------------------------------------------------------------------------------------
Variable Funding 82,000 5.33 11/17/99 81,769
Capital Corp. 18,000 5.35 11/26/99 17,925
200,000 5.559+ 2/01/00 200,000
- ---------------------------------------------------------------------------------------------------------------------------
WCP Funding Inc. 25,000 5.38 11/09/99 24,959
25,000 5.38 12/02/99 24,873
- ---------------------------------------------------------------------------------------------------------------------------
Windmill Funding 75,000 5.30 11/05/99 74,923
Corp. 69,000 5.35 11/29/99 68,682
20,000 5.40 12/02/99 19,898
30,000 5.45 1/24/00 29,569
55,830 5.80 2/09/00 54,881
100,000 5.80 2/10/00 98,283
- ---------------------------------------------------------------------------------------------------------------------------
Total Commercial Paper (Cost -- $7,113,170)......................................................... 7,111,551
- ---------------------------------------------------------------------------------------------------------------------------
Corporate Notes -- 13.6%
- ---------------------------------------------------------------------------------------------------------------------------
Abbey National 31,000 5.91+ 8/09/00 30,882
Treasury Services
PLC
- ---------------------------------------------------------------------------------------------------------------------------
American Honda 50,000 5.53+ 8/02/00 49,993
Finance Corp.
- ---------------------------------------------------------------------------------------------------------------------------
The CIT Group 100,000 5.39+ 3/27/00 99,976
Holdings, Inc. 73,000 5.405+ 5/30/00 72,977
50,000 5.448+ 6/29/00 49,983
50,000 5.50+ 8/14/00 49,939
- ---------------------------------------------------------------------------------------------------------------------------
Citicorp 50,000 5.43+ 8/02/00 50,000
- ---------------------------------------------------------------------------------------------------------------------------
Ford Motor Credit 70,000 5.45+ 5/05/00 70,000
Company 150,000 5.45+ 5/23/00 150,000
28,000 5.759+ 6/08/00 28,050
150,000 5.499+ 10/02/00 149,698
- ---------------------------------------------------------------------------------------------------------------------------
General Electric 45,000 6.126+ 4/12/00 44,983
Capital Corp. 31,000 5.293+ 5/03/00 30,998
29,400 5.39+ 5/12/00 29,391
100,000 5.433+ 5/26/00 99,941
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------
Corporate Notes (concluded)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Motors $ 25,000 6.138+% 1/20/00 $ 24,995
Acceptance Corp. 79,000 5.323+ 2/03/00 78,987
25,000 5.37+ 3/02/00 24,992
25,000 5.431+ 6/12/00 24,950
21,000 6.80+ 7/03/00 21,118
25,000 5.75+ 7/28/00 24,960
75,000 6.114+ 10/06/00 74,884
48,500 5.653+ 12/01/00 48,451
33,000 5.526+ 2/27/01 32,881
- ---------------------------------------------------------------------------------------------------------------------------
Goldman Sachs 30,000 6.00 8/07/00 29,896
Group, Inc. 27,000 5.39+ 11/13/00 27,000
- ---------------------------------------------------------------------------------------------------------------------------
Household Finance 25,000 5.553+ 3/09/00 24,977
Corp. 50,000 5.46+ 3/13/00 50,003
25,000 6.254+ 11/01/00 25,000
- ---------------------------------------------------------------------------------------------------------------------------
LINCS, Series 1998-2 50,000 5.426+ 3/01/00 50,000
- ---------------------------------------------------------------------------------------------------------------------------
Restructured Asset 48,000 5.458+ 8/11/00 48,000
Securities with
Enhanced Returns,
Series 1998-MM-12-3
Trust
- ---------------------------------------------------------------------------------------------------------------------------
Restructured Asset 69,600 5.509+ 1/21/00 69,600
Securities with
Enhanced Returns,
Series 1998-MM-7-1
Trust
- ---------------------------------------------------------------------------------------------------------------------------
SMM Trust 1999-H 175,000 5.594+ 9/25/00 175,000
- ---------------------------------------------------------------------------------------------------------------------------
Structured Asset 40,000 6.184+ 10/04/00 40,000
Vehicle Securities
Trust, Series 99-1
- ---------------------------------------------------------------------------------------------------------------------------
Wells Fargo & Co. 20,000 5.389+ 4/26/00 19,960
- ---------------------------------------------------------------------------------------------------------------------------
Xerox Capital 75,000 6.131+ 7/19/00 74,898
(Europe) PLC
- ---------------------------------------------------------------------------------------------------------------------------
Xerox Corp. 20,000 5.635 7/14/00 19,959
15,000 5.70 7/26/00 14,986
- ---------------------------------------------------------------------------------------------------------------------------
Xerox Credit Corp. 46,000 5.37+ 4/06/00 45,984
- ---------------------------------------------------------------------------------------------------------------------------
Total Corporate Notes (Cost -- $2,079,264).......................................................... 2,078,292
- ---------------------------------------------------------------------------------------------------------------------------
Funding Agreements -- 1.1%
- ---------------------------------------------------------------------------------------------------------------------------
Hartford Life 50,000 5.43+ 11/30/99 50,000
Insurance
Company
- ---------------------------------------------------------------------------------------------------------------------------
Jackson National 50,000 5.42+ 5/01/00 50,000
Life Insurance Co.
- ---------------------------------------------------------------------------------------------------------------------------
John Hancock 22,000 5.44+ 12/13/99 22,000
Mutual Life
Insurance Co.
- ---------------------------------------------------------------------------------------------------------------------------
Principal Life 20,000 5.506+ 8/16/00 20,000
Insurance Co.
- ---------------------------------------------------------------------------------------------------------------------------
The Travelers 20,000 5.43+ 2/01/00 20,000
Insurance Company
- ---------------------------------------------------------------------------------------------------------------------------
Total Funding Agreements (Cost -- $162,000)......................................................... 162,000
- ---------------------------------------------------------------------------------------------------------------------------
Master Notes -- 0.2%
- ---------------------------------------------------------------------------------------------------------------------------
Goldman Sachs 25,000 5.40+ 11/18/99 25,000
Group, L.P.
- ---------------------------------------------------------------------------------------------------------------------------
Total Master Notes (Cost -- $25,000)................................................................ 25,000
- ---------------------------------------------------------------------------------------------------------------------------
Promissory Notes -- 0.8%
- ---------------------------------------------------------------------------------------------------------------------------
Goldman Sachs 125,000 5.476+ 7/07/00 125,000
Group, Inc.
- ---------------------------------------------------------------------------------------------------------------------------
Total Promissory Notes (Cost -- $125,000)........................................................... 125,000
- ---------------------------------------------------------------------------------------------------------------------------
US Government Agency & Instrumentality Obligations --
Discount -- 1.0%
- ---------------------------------------------------------------------------------------------------------------------------
Federal Home 150,000 5.10 12/23/99 148,869
Loan Mortgage
Corporation
- ---------------------------------------------------------------------------------------------------------------------------
Total US Government Agency & Instrumentality
Obligations -- Discount (Cost -- $148,831).......................................................... 148,869
- ---------------------------------------------------------------------------------------------------------------------------
US Government, Agency & Instrumentality Obligations --
Non-Discount -- 13.8%
- ---------------------------------------------------------------------------------------------------------------------------
Federal Home 50,000 5.29+ 11/09/99 49,999
Loan Banks 81,500 5.29+ 11/12/99 81,498
5,095 5.83 12/24/99 5,096
177,000 4.935 1/19/00 176,699
60,000 4.875 1/21/00 59,888
35,000 5.655+ 4/24/00 34,965
40,000 5.655+ 4/24/00 39,992
60,000 5.458+ 4/28/00 59,988
100,000 5.605+ 7/14/00 99,825
6,500 4.905 11/20/00 6,425
13,050 5.33 3/20/01 12,913
- ---------------------------------------------------------------------------------------------------------------------------
Federal Home 125,000 5.645+ 7/14/00 124,956
Loan Mortgage 30,000 5.05 11/17/00 29,700
Corporation 25,000 5.13 11/24/00 24,763
52,000 5.18 11/24/00 51,485
17,525 5.25 1/19/01 17,356
40,000 5.15 1/26/01 39,550
20,000 5.18 2/09/01 19,774
20,000 5.53 3/09/01 19,839
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
- ---------------------------------------------------------------------------------------------------------------------------
US Government, Agency & Instrumentality Obligations --
Non-Discount (continued)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Federal National $ 50,000 5.675+% 7/21/00 $ 49,982
Mortgage 50,000 5.666+ 8/02/00 49,962
Association 50,620 4.89 10/13/00 50,105
50,000 5.07 12/14/00 49,469
23,500 5.21 1/26/01 23,257
20,000 5.48 5/03/01 19,801
24,000 6.00 6/21/01 23,898
10,000 6.00 7/17/01 9,953
- ---------------------------------------------------------------------------------------------------------------------------
Student Loan 200,000 5.20+ 12/03/99 199,988
Marketing 50,000 5.545+ 1/12/00 49,986
Association 46,000 5.59+ 2/04/00 45,997
50,000 5.795+ 2/14/00 49,990
125,000 5.794+ 9/29/00 124,965
125,000 5.795+ 9/29/00 124,978
150,000 5.79+ 10/02/00 149,925
50,000 4.75 12/11/00 49,305
7,415 5.46 3/30/01 7,347
- ---------------------------------------------------------------------------------------------------------------------------
US Treasury Notes 25,000 4.625 11/30/00 24,734
30,000 4.625 12/31/00 29,644
10,000 5.00 4/30/01 9,894
- ---------------------------------------------------------------------------------------------------------------------------
Total US Government, Agency & Instrumentality
Obligations -- Non-Discount (Cost -- $2,103,802).................................................... 2,097,891
- ---------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements** -- 1.6%
- ---------------------------------------------------------------------------------------------------------------------------
$248,907 SG Cowen Securities Corporation,
purchased on 10/29/1999 to yield
5.30% on 11/01/1999 248,907
- ---------------------------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (Cost -- $248,907)...................................................... 248,907
- ---------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost -- $15,321,961) -- 100.5%................................................... 15,307,698
Liabilities in Excess of Other Assets -- (0.5%)..................................................... (77,938)
-----------
Net Assets -- 100.0%................................................................................ $15,229,760
===========
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commercial Paper and certain US Government, Agency & Instrumentality
Obligations are traded on a discount basis; the interest rates shown
reflect 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 October 31, 1999.
** Repurchase Agreements are fully collateralized by US Government & Agency
Obligations.
+ Floating rate note.
See Notes to Financial Statements.
6
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
FINANCIAL INFORMATION
Statement of Assets and Liabilities as of October 31, 1999
<TABLE>
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $15,321,961,249*)
(Note 1a)................................................. $15,307,697,807
Cash...................................................... 101,210
Receivables:
Interest............................................... $ 85,766,319
Beneficial interest sold............................... 1,634,523 87,400,842
--------------
Prepaid registration fees and other assets (Note 1e)...... 575,827
---------------
Total assets.............................................. 15,395,775,686
---------------
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities: Payables:
Beneficial interest redeemed........................... 157,210,655
Investment adviser (Note 2)............................ 5,125,028
Distributor (Note 2)................................... 212,600
Dividends to shareholders (Note 1f).................... 3,110 162,551,393
--------------
Accrued expenses and other liabilities.................... 3,464,615
---------------
Total liabilities......................................... 166,016,008
---------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets................................................ $15,229,759,678
===============
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets Class I shares of beneficial interest, $.10 par
Consist of: value, unlimited number of shares authorized.............. $ 1,387,827,155
Class II shares of beneficial interest, $.10 par value,
unlimited number of shares authorized..................... 136,575,157
Paid-in capital in excess of par.......................... 13,719,620,808
Unrealized depreciation on investments -- net............. (14,263,442)
---------------
Net assets................................................ $15,229,759,678
===============
- ------------------------------------------------------------------------------------------------------------------------------------
Net Asset Class I -- Based on net assets of $13,865,024,958
and Value: 13,878,271,547 shares outstanding......................... $ 1.00
===============
Class II -- Based on net assets of $1,364,734,720 and
1,365,751,573 shares outstanding.......................... $ 1.00
===============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Cost for Federal income tax purposes. As of October 31, 1999, net
unrealized depreciation for Federal income tax purposes amounted to
$14,263,442, of which $177,452 related to appreciated securities and
$14,440,894 related to depreciated securities.
See Notes to Financial Statements.
7
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
FINANCIAL INFORMATION (continued)
Statement of Operations
<TABLE>
<CAPTION>
For the Year Ended
October 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount
(Note 1d): earned.................................................... $ 775,791,307
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees (Note 2)......................... $ 51,735,739
Transfer agent fees -- Class I (Note 2)................... 17,034,063
Registration fees (Note 1e)............................... 2,428,386
Distribution fees -- Class II (Note 2).................... 1,741,307
Transfer agent fees -- Class II (Note 2).................. 1,085,406
Custodian fees............................................ 591,347
Printing and shareholder reports.......................... 522,673
Accounting services (Note 2).............................. 489,344
Professional fees......................................... 202,894
Trustees' fees and expenses............................... 79,441
Interest expense.......................................... 77,251
Other..................................................... 120,116
Total expenses............................................ -------------- 76,107,967
--------------
Investment income -- net.................................. 699,683,340
--------------
- ------------------------------------------------------------------------------------------------------------------------------------
Realized & Unreal- Realized loss on investments -- net....................... (134,258)
ized Loss on Change in unrealized appreciation/depreciation on
Investments -- Net investments -- net........................................ (18,651,934)
(Note 1d): --------------
Net Increase in Net Assets Resulting from Operations...... $ 680,897,148
==============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
FINANCIAL INFORMATION (continued)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the
Year Ended
October 31,
-----------------------------------------
Increase (Decrease) in Net Assets: 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations: Investment income -- net...................................... $ 699,683,340 $ 615,417,170
Realized gain (loss) on investments -- net.................... (134,258) 1,292,223
Change in unrealized appreciation/depreciation on investments
-- net........................................................ (18,651,934) 3,920,495
--------------- ---------------
Net increase in net assets resulting from operations.......... 680,897,148 620,629,888
--------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income -- net:
Distributions to Class I.................................................... (659,925,475) (615,358,911)
Shareholders Class II*.................................................. (39,623,607) (58,259)
(Note 1f): Realized gain on investments -- net:
Class I.................................................... -- (1,292,074)
Class II*.................................................. -- (149)
--------------- ---------------
Net decrease in net assets resulting from dividends and
distributions to shareholders................................. (699,549,082) (616,709,393)
--------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------------------
Beneficial Interest Net increase in net assets derived from
Transactions beneficial interest transactions.............................. 1,274,305,349 3,279,840,626
(Note 3): --------------- ---------------
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets: Total increase in net assets.................................. 1,255,653,415 3,283,761,121
Beginning of year............................................. 13,974,106,263 10,690,345,142
--------------- ---------------
End of year................................................... $15,229,759,678 $13,974,106,263
=============== ===============
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Class II Shares commenced operations on October 5, 1998.
See Notes to Financial Statements.
9
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
FINANCIAL INFORMATION (continued)
Financial Highlights
<TABLE>
<CAPTION>
Class I
The following per share data and ratios have been derived -----------------------------------------------------------------------
from information provided in the financial statements. For the Year Ended October 31,
-----------------------------------------------------------------------
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Operating ----------- ----------- ----------- ---------- ----------
Performance: Investment income -- net ............. .0474 .0517 .0512 .0509 .0540
Realized and unrealized gain (loss) on
investments -- net ................... (.0012) .0004 .0001 (.0002) .0015
----------- ----------- ----------- ---------- ----------
Total from investment operations ..... .0462 .0521 .0513 .0507 .0555
----------- ----------- ----------- ---------- ----------
Less dividends and distributions:
Investment income -- net .......... (.0474) (.0517) (.0512) (.0509) (.0540)
Realized gain on investments -- net -- (.0001) (.0001) (.0001) (.0002)
----------- ----------- ----------- ---------- ----------
Total dividends and distributions .... (.0474) (.0518) (.0513) (.0510) (.0542)
----------- ----------- ----------- ---------- ----------
Net asset value, end of year ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== =========== =========== ========== ==========
Total investment return .............. 4.84% 5.31% 5.35% 5.19% 5.55%
=========== =========== =========== ========== ==========
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ............................. .50% .55% .54% .56% .59%
Net Assets: =========== =========== =========== ========== ==========
Investment income and realized gain
on investments -- net ................ 4.75% 5.19% 5.13% 5.07% 5.43%
=========== =========== =========== ========== ==========
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of year (in thousands) $13,865,025 $13,917,721 $10,690,345 $9,340,229 $8,648,907
Data: =========== =========== =========== ========== ==========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
FINANCIAL INFORMATION (concluded)
Financial Highlights (concluded)
<TABLE>
<CAPTION>
Class II
----------------------------
For the For the
The following per share data and ratios have been derived Year Period
from information provided in the financial statements. Ended Oct. 5, 1998+
Oct. 31, to Oct. 31,
Increase (Decrease) in Net Asset Value: 1999 1998
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per Share Net asset value, beginning of period ..................... $ 1.00 $ 1.00
Operating ---------- -------
Performance: Investment income -- net ................................. .0454 .0037
Realized and unrealized gain (loss) on investments -- net (.0019) .0010
---------- -------
Total from investment operations ......................... .0435 .0047
---------- -------
Less dividends and distributions:
Investment income -- net .............................. (.0454) (.0037)
Realized gain on investments -- net ................... -- --++
---------- -------
Total dividends and distributions ........................ (.0454) (.0037)
---------- -------
Net asset value, end of period ........................... $ 1.00 $ 1.00
========== =======
Total investment return .................................. 4.63% 5.16%*
========== =======
- -----------------------------------------------------------------------------------------------------------------
Ratios to Average Expenses ................................................. .71% .72%*
Net Assets: ========== =======
Investment income and realized gain on investments -- net 4.54% 4.69%*
========== =======
- -----------------------------------------------------------------------------------------------------------------
Supplemental Net assets, end of period (in thousands) ................. $1,364,735 $56,385
Data: ========== =======
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
+ Commencement of operations.
++ Amount is less than $.0001 per share.
See Notes to Financial Statements.
11
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Merrill Lynch Retirement Reserves Money Fund (the "Fund") is a separate Fund
offering separate classes of shares of Merrill Lynch Retirement Series Trust
(the "Trust"). 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 Incorporated ("MLPF&S") acts as passive custodian. The Fund's financial
statements are prepared in accordance with generally accepted accounting
principles, which may require the use of management accruals and estimates. The
Fund offers two classes of shares. Class I and Class II have equal voting,
dividend, liquidation and other rights, except that only shares of the
respective classes are entitled to vote on matters concerning only that class
and Class II Shares bear certain expenses related to the distribution of such
shares. At the present time, the Fund is the only series offered. The following
is a summary of significant accounting policies consistently followed by the
Fund.
(a) Valuation of investments -- Portfolio securities with remaining maturities
of greater than sixty days, for which market quotations are readily available,
are valued at market value. As securities transition from sixty-one to sixty
days 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. Securities maturing sixty days or less from
their date of acquisition are valued at amortized cost, which approximates
market value. For the purposes of valuation, the maturity of a variable rate
security is deemed to be the next coupon date on which the interest rate is to
be adjusted. Other investments and assets for which market quotations are not
available are valued at their fair value as determined in good faith by or under
the direction of the Fund's Board of Trustees.
(b) Repurchase agreements -- The Fund invests in US Government and Agency
securities pursuant to repurchase agreements. Under such agreements, the
counterparty agrees to repurchase the security at a mutually agreed upon time
and price. The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additional securities daily
to ensure that the contract is fully collateralized.
(c) 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.
(d) 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.
(e) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(f) 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 entered into
a Distribution Agreement and Distribution Plans with Merrill Lynch Funds
Distributor ("MLFD" or the "Distributor"), a division of Princeton Funds
Distributor, Inc. ("PFD"), which is 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: .50% of the Fund's average
12
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
daily net assets not exceeding $1 billion; .45% of average daily net assets in
excess of $1 billion but not exceeding $2 billion; .40% of average daily net
assets in excess of $2 billion but not exceeding $3 billion; .375% of average
daily net assets in excess of $3 billion but not exceeding $4 billion; .35% of
average daily net assets in excess of $4 billion but not exceeding $7 billion;
.325% of average daily net assets in excess of $7 billion but not exceeding $10
billion; .30% of average daily net assets in excess of $10 billion but not
exceeding $15 billion; and .29% of average daily net assets in excess of $15
billion.
Pursuant to the Distribution Plan adopted by the Fund in accordance with Rule
12b-1 under the Investment Company Act of 1940, the Fund pays the Distributor an
ongoing distribution fee accrued daily and paid monthly at the annual rate of
.20% of the Fund's average daily net assets attributable to Class II Shares.
This fee is used to help defray the expenses associated with marketing
activities and services related to Class II Shares.
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
MLAM, PFD, FDS, PSI, and/or ML & Co.
3. Shares of Beneficial Interest:
Net increase in net assets derived from beneficial interest transactions was
$1,274,305,349 and $3,279,840,626 for the years ended October 31, 1999 and
October 31, 1998, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- --------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended October 31, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................... 43,972,818,950 $ 43,972,818,950
Shares issued to share-
holders in reinvestment
of dividends .................. 659,870,375 659,870,375
--------------- ----------------
Total issued .................. 44,632,689,325 44,632,689,325
Shares redeemed ............... (44,667,735,705) (44,667,735,705)
--------------- ----------------
Net decrease .................. (35,046,380) $ (35,046,380)
=============== ================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class I Shares for the Year Dollar
Ended October 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................... 42,739,661,096 $ 42,739,661,096
Shares issued to share-
holders in reinvestment
of dividends and
distributions ................. 616,611,073 616,611,073
--------------- ----------------
Total issued .................. 43,356,272,169 43,356,272,169
Shares redeemed ............... (40,132,831,388) (40,132,831,388)
--------------- ----------------
Net increase .................. 3,223,440,781 $ 3,223,440,781
=============== ================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class II Shares for the Year Dollar
Ended October 31, 1999 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................... 7,590,795,757 $ 7,590,795,757
Shares issued to share-
holders in reinvestment
of dividends .................. 39,614,823 39,614,823
--------------- ----------------
Total issued .................. 7,630,410,580 7,630,410,580
Shares redeemed ............... (6,321,058,851) (6,321,058,851)
--------------- ----------------
Net increase .................. 1,309,351,729 $ 1,309,351,729
=============== ================
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class II Shares for the
Period October 5, 1998+ Dollar
to October 31, 1998 Shares Amount
- --------------------------------------------------------------------------------
Shares sold ................... 85,369,645 $ 85,369,645
Shares issued to share-
holders in reinvestment
of dividends and
distributions ................. 58,435 58,435
--------------- ----------------
Total issued .................. 85,428,080 85,428,080
Shares redeemed ............... (29,028,235) (29,028,235)
--------------- ----------------
Net increase .................. 56,399,845 $ 56,399,845
=============== ================
- --------------------------------------------------------------------------------
+ Prior to October 5, 1998 (commencement of operations), the Fund issued
10,000 shares to MLAM for $10,000.
4. Capital Loss Carryforward:
At October 31, 1999, the Fund had a net capital loss carryforward of
approximately $325,000, all of which expires in 2007. This amount will be
available to offset like amounts of any future taxable gains.
13
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders, Merrill Lynch Retirement Reserves Money
Fund of Merrill Lynch Retirement Series Trust:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Merrill Lynch Retirement Reserves Money Fund of
Merrill Lynch Retirement Series Trust as of October 31, 1999, the related
statements of operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended. These
financial statements and the financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1999 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Merrill Lynch
Retirement Reserves Money Fund of Merrill Lynch Retirement Series Trust as of
October 31, 1999, the results of its operations, the changes in its net assets,
and the financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 10, 1999
14
<PAGE>
Merrill Lynch Retirement Reserves Money Fund October 31, 1999
OFFICERS AND TRUSTEES
Terry K. Glenn, President and Trustee
Joe Grills, Trustee
Walter Mintz, Trustee
Robert S. Salomon Jr., Trustee
Melvin R. Seiden, Trustee
Stephen B. Swensrud, Trustee
Arthur Zeikel, Trustee
Kevin J. McKenna, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
John Ng, Vice President
Donald C. Burke, Vice President and Treasurer
Ira P. Shapiro, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210
15
<PAGE>
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. An
investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other Government agency. Although the Fund seeks to
preserve the value of your investment at $1.00 per share, it is possible to lose
money by investing in the Fund. 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--10/99
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