<PAGE>
(ART)
PAINEWEBBER
RETIREMENT MONEY FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1995
<PAGE>
- -------------------------------------------------------------------------------
February 15, 1996
Dear Shareholder,
It is widely recognized that the Federal Reserve Board achieved its goal of a
"soft landing" for the economy in 1995. In an effort to slow the pace of
economic growth, the Federal Reserve Board raised short-term interest interest
rates seven times between February 1994 and February 1995. However, on July 6,
1995, the Federal Reserve Board cut the benchmark Federal Funds rate by 0.25%.
This decrease, the first in nearly three years, signaled that the Federal
Reserve Board believed that inflationary pressures had eased enough to
accommodate an adjustment in monetary policy. Citing low inflation, the
Federal Reserve Board trimmed short-term interest rates by another 0.25% on
December 19, 1995 and January 31, 1996, bringing the Federal Funds rate down
to 5.25%.
Although the pace of economic growth was lackluster during the year ended
December 31, 1995, the economic climate was favorable for investing. Stocks
achieved record-breaking highs and bonds far outperformed their historical
averages. The stock market, as measured by the Standard & Poor's 500 Index,
advanced 37.5% in 1995. The Dow Jones Industrial Average topped the 4,000
point level in March and the 5,000 point level in November and posted its
fourth best advance since World War II. The bond market also rallied strongly
during 1995, as a declining interest rate environment prevailed for most of
the year. Soaring bond prices gave fixed income investors their third best
year since the 1920s and caused intermediate and long-term interest rates to
fall to their lowest levels in two years. Rates on long-term U.S. Treasury
bonds, for example, declined nearly two full percentages points. Generally, as
yields move lower, bond prices increase. Coming after 1994, when the bonds
market had one of its worst years on record and the Standard & Poor's 500
Index gained just 1.3%, 1995 was a strongly positive investment environment
for most domestic investors.
PORTFOLIO REVIEW
PaineWebber Retirement Money Fund's net assets totalled $3.6 billion as of
December 31, 1995. The Fund's current yield for the seven-day period ended
December 31, 1995 was 5.16%. During the six months ended December 31, 1995,
the Fund maintained a slightly longer weighted average maturity. On December
31, 1995, the Fund's weighted average maturity was 66 days. The Federal
Reserve Board's consecutive increases in the Federal Funds rate during 1994
and early 1995 were implemented to slow the pace of economic growth and kept
inflation almost non-existent. During this time, money market investors
enjoyed relatively high inflation-adjusted returns. However, three short-term
interest rate cuts in 1995 and early 1996 reduced the Federal Funds rate to
5.25%
Going forward, the Fund expects to maintain a slightly longer weighted average
maturity as short-term rates find stability. Although Federal Reserve Board
policy is being impacted by the stalemated budget negotiations, it is still
likely that the Fed will lower short-term interest rates again in 1996.
Although we are interested in maintaining higher yields, we will not do so by
sacrificing the Portfolio's emphasis on security, quality and liquidity.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
We value you as a shareholder and as a client, and thank you for your
continued support. We welcome any comments or questions you may have.
Sincerely,
/s/ DENNIS L> McCAULEY /s/ SUSAN P. MESSINA
DENNIS L. McCAULEY SUSAN P. MESSINA
Managing Director and Chief Investment Senior Vice President,
Officer--Fixed Income, Mitchell Hutchins Asset
Mitchell Hutchins Asset Management Inc. Management Inc.
Portfolio Manager,
PaineWebber Retirement Money Fund
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2
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Statement of Net Assets
December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- ------------
<C> <S> <C> <C> <C>
U.S GOVERNMENT & AGENCY OBLIGATIONS--4.76%
$15,000 U.S. Treasury Bills..... 04/25/96 5.310%@ $ 14,745,562
25,000 Federal Farm Credit
Bank................... 09/03/96 5.875 24,982,925
12,850 Federal Home Loan Bank.. 04/25/96 5.580 12,620,949
45,000 Federal Home Loan
Mortgage Corp. ........ 05/13/96 to 08/15/96 5.645 to 6.210 44,970,335
50,000 Federal National
Mortgage Association.... 02/08/96 to 10/07/96 5.475 to 5.680 49,896,748
22,500 Student Loan Marketing
Association............. 01/03/96 5.220 22,492,141
------------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (cost--
$169,708,660).................... 169,708,660
------------
BANK NOTES--12.10%
DOMESTIC-11.34%
30,000 Bank of America
Illinois............... 01/12/96 to 03/14/96 5.700 to 5.800 30,000,000
15,000 Bank of New York........ 05/28/96 5.600 15,000,000
10,000 Bank One, Milwaukee,
N.A. .................. 03/07/96 6.820 10,008,467
37,000 FCC National Bank....... 09/18/96 to 11/01/96 5.600 to 5.650 36,998,803
45,000 Greenwood Trust Co. .... 01/30/96 to 02/16/96 5.780 to 5.800 45,000,000
15,000 Huntington National
Bank................... 01/02/96 5.870* 14,998,694
25,000 NationsBank of GA,
N.A. .................. 06/05/96 5.650 25,000,000
85,000 NationsBank of TX,
N.A. .................. 01/26/96 to 11/08/96 5.550 to 7.300 84,980,383
25,000 NBD Bank, N.A. ......... 04/25/96 6.400 24,996,245
18,000 Old Kent Bank & Trust
Co. ................... 12/04/96 5.530 17,993,602
10,000 PNC Bank, N.A. ........ 05/24/96 6.040 10,018,296
20,000 PNC Bank, N.A. ......... 01/02/96 5.580* 19,984,569
44,800 Seattle-First National
Bank................... 06/07/96 to 10/24/96 5.500 to 5.730 44,789,093
24,450 Wachovia Bank & Trust
Co. ................... 01/22/96 5.750 24,449,935
------------
404,218,087
------------
YANKEE-0.76%
15,000 ABN AMRO Bank N.V. ..... 06/05/96 5.570 14,998,102
12,000 Westdeutsche Landesbank
Girozentrale........... 03/01/96 6.625 11,997,646
------------
26,995,748
------------
TOTAL BANK NOTES (cost--
$431,213,835)..................... 431,213,835
------------
CERTIFICATES OF DEPOSIT--3.65%
DOMESTIC-0.42%
15,000 NBD Bank, N.A. ......... 01/04/96 5.810 15,000,000
------------
YANKEE-3.23%
15,000 Industrial Bank of Japan
Ltd. .................. 01/17/96 5.820 14,999,377
25,000 National Westminster
Bank PLC............... 01/16/96 5.780 24,999,981
75,200 Societe Generale........ 01/09/96 to 02/15/96 5.740 to 7.250 75,200,000
------------
115,199,358
------------
TOTAL CERTIFICATES OF DEPOSIT
(cost--$130,199,358).............. $130,199,358
------------
COMMERCIAL [email protected]%
AEROSPACE-DEFENSE--2.10%
50,000 Raytheon Co ............ 01/04/96 5.930 49,975,292
25,000 Rockwell International
Corp. ................. 02/08/96 5.660 24,850,639
------------
74,825,931
------------
</TABLE>
1
<PAGE>
PaineWebber Retirement Money Fund
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(CONTINUED)
AGRICULTURE-0.92%
$13,000 Cargill Financial
Services Corp. ........ 01/11/96 5.720% $ 12,979,344
20,000 Cargill Inc. ........... 01/10/96 5.720 19,971,400
--------------
32,950,744
--------------
ASSET-BACKED-10.20%
130,000 Asset Securitization
Cooperative Corp. ..... 01/11/96 to 02/23/96 5.670 to 5.770 129,375,008
45,000 Delaware Funding Corp. . 02/05/96 to 03/19/96 5.500 to 5.680 44,591,639
92,809 Eiger Capital Corp. .... 01/10/96 to 01/23/96 5.750 to 5.830 92,550,264
20,000 Falcon Asset
Securitization Corp. .. 01/16/96 5.850 19,951,250
77,575 Preferred Receivables
Funding Corp. ......... 01/11/96 to 02/26/96 5.600 to 5.750 77,095,775
--------------
363,563,936
--------------
AUTO & TRUCK-2.71%
26,795 Daimler-Benz North
America Corp. ......... 01/10/96 to 01/30/96 5.690 to 5.770 26,735,004
50,000 General Motors
Acceptance Corp. ...... 01/02/96 6.125 49,991,493
20,000 Toyota Motor Credit
Corp. ................. 01/12/96 5.700 19,965,167
--------------
96,691,664
--------------
BANKING-7.85%
35,000 Abbey National North
America ............... 01/08/96 to 02/01/96 5.600 to 5.680 34,904,856
20,000 Bankers Trust NY Corp. . 02/29/96 5.690 19,813,494
65,000 BEX America Finance
Inc. .................. 01/12/96 to 02/14/96 5.660 to 5.730 64,808,692
15,000 Cariplo Finance Inc. ... 01/10/96 5.800 14,978,250
10,000 Credito Italiano (DE)
Inc. .................. 01/10/96 5.740 9,985,650
48,000 Cregem North America
Inc. .................. 01/12/96 to 01/26/96 5.700 47,860,983
23,160 Indosuez N.A. Inc. ..... 01/03/96 to 01/10/96 5.620 to 5.710 23,138,338
25,000 MPS U.S. Commercial
Paper Corp. ........... 03/04/96 to 03/07/96 5.620 to 5.630 24,746,925
25,000 Societe Generale N.A.
Inc. .................. 02/20/96 5.640 24,804,167
15,000 Unifunding Inc. ........ 02/05/96 5.700 14,916,875
--------------
279,958,230
--------------
BROKER-DEALER-9.24%
38,000 Bear Stearns Companies,
Inc. .................. 05/10/96 to 05/20/96 5.450 to 5.520 37,217,311
13,000 BT Securities Corp. .... 01/10/96 5.670 12,981,573
20,000 CS First Boston Inc. ... 01/18/96 5.730 19,945,883
10,000 Dean Witter, Discover &
Company ............... 02/12/96 5.700 9,933,500
10,000 Goldman Sachs Group
L.P. .................. 04/09/96 5.600 9,846,000
75,000 Lehman Brothers Holdings
Inc. .................. 01/02/96 6.100 74,987,292
60,000 Merrill Lynch & Co.
Inc. .................. 01/30/96 to 01/31/96 5.650 to 5.760 59,717,219
105,000 Morgan Stanley Group
Inc. .................. 01/12/96 to 01/26/96 5.650 to 5.750 104,694,206
--------------
329,322,984
--------------
BUSINESS SERVICES-1.21%
43,390 PHH Corp. .............. 01/11/96 to 01/19/96 5.730 to 5.740 43,297,928
--------------
</TABLE>
2
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- --------------- -----------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(CONTINUED)
CHEMICAL-2.32%
$83,800 Dupont (E.I) deNemours &
Co. ................... 01/04/96 to 08/06/96 5.500 to 5.800% $82,895,174
-----------
CONGLOMERATE-0.61%
22,000 BTR Dunlop Finance
Inc.. ................. 02/15/96 5.670 21,844,075
-----------
DRUGS & HEALTH CARE-3.14%
42,350 Lilly (Eli) & Company .. 01/08/96 to 04/04/96 5.650 to 5.750 41,914,194
20,500 Pfizer Inc. ............ 01/09/96 5.700 20,474,033
20,000 Warner-Lambert Co.. .... 06/26/96 5.300 19,478,833
30,000 Zeneca Wilmington Inc. . 01/16/96 5.730 29,928,375
-----------
111,795,435
-----------
ELECTRONICS-0.84%
30,000 Motorola Credit Corp. .. 01/08/96 5.750 29,966,458
-----------
ENERGY-4.44%
45,000 Chevron Oil Finance
Co. ................... 01/10/96 to 01/25/96 5.750 to 5.760 44,875,250
65,000 Exxon Asset Management
Co. ................... 01/12/96 to 01/16/96 5.690 64,877,507
28,800 Exxon Imperial U.S.
Inc. .................. 01/04/96 to 01/12/96 5.700 28,773,653
20,000 Shell Oil Co. .......... 02/02/96 to 02/08/96 5.600 to 5.670 19,890,372
-----------
158,416,782
-----------
FINANCE-CONDUIT-8.39%
20,000 Commerzbank United
States Finance ........ 02/21/96 5.650 19,839,917
28,120 Compagnie Bancaire ..... 01/03/96 to 01/23/96 5.740 to 5.800 28,085,072
100,466 MetLife Funding Inc. ... 02/01/96 to 02/28/96 5.620 to 5.660 99,814,488
13,000 SBNSW (Delaware) Inc. .. 06/10/96 5.350 12,688,957
139,925 Svenska Handelsbanken
Inc. .................. 01/25/96 to 04/30/96 5.410 to 5.730 138,544,125
-----------
298,972,559
-----------
FINANCE-DIVERSIFIED-0.56%
20,000 Associates Corp. of
North America ......... 01/09/96 5.720 19,974,578
-----------
FINANCE-EQUIPMENT-0.39%
14,000 AT & T Capital Corp. ... 01/19/96 5.720 13,959,960
-----------
FINANCE-SUBSIDIARY-1.39%
20,000 Dresdner U.S. Finance... 01/16/96 5.750 19,952,083
30,000 National Australia
Funding. .............. 05/03/96 5.410 29,445,475
-----------
49,397,558
-----------
FOOD & BEVERAGE-1.35%
30,000 Campbell Soup Co. ...... 01/12/96 to 10/04/96 5.420 to 6.090 29,147,314
19,000 Heinz (H.J.) Co. ....... 02/07/96 to 02/08/96 5.700 18,887,108
-----------
48,034,422
-----------
GENERAL TRADE-1.54%
55,000 Mitsubishi International
Corp. ................. 01/18/96 to 01/30/96 5.760 54,821,600
-----------
</TABLE>
3
<PAGE>
PaineWebber Retirement Money Fund
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@--(CONCLUDED)
INSURANCE-2.45%
$37,000 Prudential Funding
Corp. ................. 01/08/96 5.780% $ 36,958,416
15,400 Transamerica Corp. ..... 01/17/95 5.780 15,360,439
35,000 USAA Capital Corp....... 01/04/96 to 01/18/96 5.700 to 5.750 34,949,771
-------------
87,268,626
-------------
INSURANCE-PROPERTY/CASUALTY-0.42%
15,000 A.I. Credit Corp. ...... 01/05/96 5.720 14,990,467
-------------
METALS & MINING-0.70%
25,000 U.S. Borax Inc. ........ 02/07/96 5.670 24,854,312
-------------
MISCELLANEOUS-0.61%
22,000 Beta Finance Inc. ...... 01/22/96 to 03/18/96 5.510 to 5.800 21,858,351
-------------
OIL EQUIPMENT & SERVICES-0.21%
7,500 Colonial Pipeline Co. .. 02/26/96 5.570 7,435,017
-------------
PAPER & FOREST PRODUCTS-0.70%
25,000 Kimberly-Clark Corp..... 02/09/96 5.950 24,848,604
-------------
POLLUTION CONTROL-3.10%
114,200 WMX Technologies Inc. .. 05/23/96 to 09/13/96 5.170 to 5.570 110,551,930
-------------
PRINTING & PUBLISHING-0.84%
30,000 Gannett Co. ............ 01/11/96 5.800 29,951,667
-------------
TELECOMMUNICATIONS-0.70%
10,000 BellSouth Capital
Funding Corp. ......... 01/17/96 5.750 9,974,445
PacTel Capital
15,000 Resources............... 01/05/96 5.800 14,990,333
-------------
24,964,778
-------------
UTILITY-ELECTRIC-2.43%
87,000 Southern Co. ........... 01/23/96 to 02/22/96 5.660 to 5.720 86,524,827
-------------
UTILITY-TELEPHONE-2.83%
10,000 AT&T Corp. ............. 05/10/96 5.470 9,802,472
19,000 Bell Atlantic Financial
Services Inc........... 01/17/96 to 01/24/96 5.750 18,943,618
Southern New England
29,874 Telecommunications
Corp................... 01/25/96 to 02/02/96 5.700 to 5.720 29,742,692
42,950 Southwestern Bell
Capital Corp........... 02/07/96 to 05/06/96 5.480 to 5.650 42,529,742
-------------
101,018,524
-------------
Total Commercial Paper (cost--
$2,644,957,121)................. 2,644,957,121
-------------
</TABLE>
4
<PAGE>
PaineWebber Retirement Money Fund
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
SHORT-TERM CORPORATE OBLIGATIONS--
4.31%
BANKING-1.40%
$25,000 Bankers Trust NY Corp.... 01/02/96 5.660*% $ 25,000,000
25,000 Morgan (J.P.) & Co. Inc.. 05/13/96 6.200 25,000,580
--------------
50,000,580
--------------
BROKER-DEALER-2.38%
15,000 Bear Stearns Companies
Inc. ................... 07/17/96 5.780 15,000,000
10,000 Goldman Sachs Group L.P.. 01/03/96 5.530* 9,997,604
40,000 Merrill Lynch & Co. Inc.. 04/29/96 to 09/03/96 5.610 to 6.491 39,999,474
20,000 Merrill Lynch & Co. Inc.. 01/02/96 5.680* 20,000,000
--------------
84,997,078
--------------
BUSINESS SERVICES-0.53%
18,750 PHH Corp................. 01/03/96 5.480* 18,743,596
--------------
TOTAL SHORT-TERM CORPORATE OBLIGA-
TIONS (cost--$153,741,254)........ 153,741,254
--------------
REPURCHASE AGREEMENT--0.74%
26,416 Repurchase agreement
dated 12/29/95, with
Daiwa Securities America
Inc., collateralized by
$25,815,000 U.S.
Treasury Notes, 6.000%
due 12/31/97; proceeds:
$26,432,730 (cost--
$26,416,000).............. 01/02/96 5.700 26,416,000
--------------
TOTAL INVESTMENTS (cost--$3,556,236,228, which approximates cost for
federal income tax purposes)--99.75%................................... 3,556,236,228
Other assets in excess of liabilities--0.25%............................ 8,938,341
--------------
NET ASSETS (applicable to 3,567,190,762 Series C common stock
outstanding at $1.00 per share)--100.00%............................... $3,565,174,569
==============
</TABLE>
- --------
*Variable rate securities--maturity date reflects earlier of reset date or
maturity date. The interest rates shown are the current rates as of December
31, 1995 and reset periodically.
@Interest rates shown are discount rates.
Weighted average maturity-66 days
See accompanying notes to financial statements
5
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended December 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................................... $95,182,310
-----------
EXPENSES:
Investment advisory and administration............................ 6,694,376
Transfer agency and service fees.................................. 2,616,164
Distribution fees................................................. 1,285,996
Reports and notices to shareholders............................... 283,463
Federal and state registration.................................... 191,206
Custody and accounting............................................ 160,882
Legal and audit................................................... 90,101
Insurance expense................................................. 73,876
Directors' fees................................................... 4,375
Other expenses.................................................... 265,121
-----------
11,665,560
-----------
NET INVESTMENT INCOME............................................... 83,516,750
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS..................... 114,339
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $83,631,089
===========
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Six Months
Ended For the
December 31, 1995 Year Ended
(unaudited) June 30, 1995
----------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income...................... $ 83,516,750 $ 120,983,589
Net realized gains (losses) from investment
transactions.............................. 114,339 (645,464)
-------------- --------------
Net increase in net assets resulting from
operations................................ 83,631,089 120,338,125
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income...................... (83,516,750) (120,983,589)
-------------- --------------
NET INCREASE IN NET ASSETS FROM CAPITAL SHARE
TRANSACTIONS................................ 598,861,133 516,609,725
-------------- --------------
Net increase in net assets................. 598,975,472 515,964,261
NET ASSETS:
Beginning of period........................ 2,966,199,097 2,450,234,836
-------------- --------------
End of period.............................. $3,565,174,569 $2,966,199,097
============== ==============
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
PaineWebber Retirement Money Fund
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Notes to Financial Statements--(unaudited)
- -------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber Retirement Money Fund ("Fund") is a portfolio of the PaineWebber
RMA Money Fund, Inc. ("Corporation"). The Corporation is an open-end
diversified management investment company organized under the laws of Maryland
on July 2, 1982 and is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended ("1940 Act"). The
Corporation currently offers three series of shares: the Fund, the PaineWebber
RMA Money Market Portfolio and the PaineWebber RMA U.S. Government Portfolio.
The financial statements of the PaineWebber RMA Money Market and PaineWebber
RMA U.S. Government Portfolios are not included herein.
Valuation and Accounting for Investments and Investment Income--Investments
are valued at amortized cost which approximates market value. Investment
transactions are accounted for on the trade date. Realized gains and losses
from investment transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Premiums are amortized and
discounts are accreted as adjustments to interest income and the identified
cost of investments.
Repurchase Agreements--The Fund's custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Fund has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligations.
Under certain circumstances, in the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings.
Federal Taxes--The Fund intends to distribute all of its taxable income and to
comply with the other requirements of the Internal Revenue Code applicable to
regulated investment companies. Accordingly, no provision for federal income
taxes is required. In addition, by distributing during each calendar year
substantially all of its net investment income, capital gains and certain
other amounts, if any, the Fund intends not to be subject to a federal excise
tax. At June 30, 1995, the Fund had a net capital loss carryforward of
$2,110,755 which is available as a reduction, to the extent provided in the
regulations, of any future net capital gains realized before the end of fiscal
year 2003. To the extent that the losses are used to offset future capital
gains, it is probable that the gains so offset will not be distributed.
Dividends and Distributions--The Fund declares dividends on a daily basis from
net investment income. Dividends from net investment income and distributions
from realized gains from investment transactions have been determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are either considered
temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal tax-basis treatment; temporary differences do not
require reclassification. Net capital gains, if any, will be distributed
annually, but the Fund may make more frequent distributions of such gains, if
necessary, to maintain its net asset value per share at $1.00 or to avoid
income or excise taxes.
CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Fund to meet
their obligations may be affected by economic developments, including those
particular to a specific industry or region.
7
<PAGE>
PaineWebber Retirement Money Fund
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- -------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
The Corporation's Board of Directors has approved an Investment Advisory and
Administration Contract ("Advisory Contract") with PaineWebber, under which
PaineWebber serves as investment adviser and administrator of the Corporation
and each of its series. In accordance with the Advisory Contract, the Fund
pays PaineWebber an investment advisory and administration fee which is
accrued daily and paid monthly, in accordance with the following schedule:
<TABLE>
<CAPTION>
ANNUAL
AVERAGE DAILY NET ASSETS RATE
------------------------ ------
<S> <C>
Up to $1 billion.................................................. 0.50%
In excess of $1 billion up to $1.5 billion........................ 0.44%
Over $1.5 billion................................................. 0.36%
</TABLE>
At December 31, 1995, the Fund owed PaineWebber $1,239,671 for investment
advisory and administration fees.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a wholly owned
subsidiary of PaineWebber, serves as sub-adviser and sub-administrator of the
Fund pursuant to a Sub-Advisory and Sub-Administration Contract between
PaineWebber and Mitchell Hutchins. In accordance with that contract,
PaineWebber (not the Fund) pays Mitchell Hutchins a fee, computed daily and
paid monthly, at an annual rate of 20% of the fee paid by the Fund to
PaineWebber under the Advisory Contract.
In compliance with applicable state securities laws, PaineWebber will
reimburse the Fund if and to the extent that the aggregate operating expenses
in any fiscal year, exclusive of taxes, distribution fees, interest, brokerage
fees and extraordinary expenses, exceed limitations imposed by various state
regulations. Currently, the most restrictive limitation applicable to the Fund
is 2.5% of the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of any excess over $100 million. For the six months ended
December 31, 1995, no reimbursements were required pursuant to the above
limitation.
DISTRIBUTION PLAN
PaineWebber is the distributor of the Fund's shares. Under the plan of
distribution, the Fund is authorized to pay PaineWebber a monthly distribution
fee at the annual rate of up to 0.15% of its average daily net assets.
Currently, PaineWebber is compensated for its services as distributor at the
annual rate of 0.08% of the Fund's average daily net assets. At December 31,
1995, the Fund owed PaineWebber $241,510 for distribution fees.
TRANSFER AGENCY SERVICE FEES
The Fund pays PaineWebber an annual fee of $4.00 per active PaineWebber
shareholder account, plus certain out-of-pocket expenses, for certain services
not provided by the Fund's transfer agent. For the six months ended December
31, 1995, PaineWebber earned $1,237,991 in shareholder service fees. At
December 31, 1995, the Fund owed PaineWebber $200,160 for such shareholder
service fees and reimbursement of out-of-pocket expenses.
OTHER LIABILITIES
At December 31, 1995, dividends payable aggregated $43,447.
8
<PAGE>
PaineWebber Retirement Money Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
There are 10 billion $0.001 par value shares of Series C Common Stock
authorized. Transactions in capital shares, at $1.00 per share, were as
follows:
<TABLE>
<CAPTION>
For The For The
Six Months Ended Year Ended
December 31, 1995 June 30, 1995
----------------- ---------------
<S> <C> <C>
Shares sold.................................. 6,110,788,706 9,662,868,008
Shares repurchased........................... (5,597,963,531) (9,264,795,651)
Dividends reinvested......................... 86,035,958 118,537,368
--------------- ---------------
Net increase in shares outstanding........... 598,861,133 516,609,725
=============== ===============
</TABLE>
9
<PAGE>
PaineWebber Retirement Money Fund
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of Series C Common Stock outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended June 30,
December 31, 1995 --------------------------------------------------------------
(unaudited) 1995 1994 1993 1992 1991
----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
Net investment income.. 0.026 0.047 0.028 0.027 0.044 0.068
Dividends from net
investment income..... (0.026) (0.047) (0.028) (0.027) (0.044) (0.068)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
Total investment
return(1)............. 2.64 % 4.83 % 2.75 % 2.78 % 4.40 % 6.80 %
========== ========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000's)........ $3,565,175 $2,966,199 $2,450,235 $2,280,840 $2,163,935 $2,122,973
Ratio of expenses to
average net assets.... 0.73 %* 0.78 % 0.77 % 0.79 % 0.79 % 0.79 %
Ratio of net investment
income to average net
assets................ 5.20 %* 4.75 % 2.77 % 2.76 % 4.39 % 6.69 %
</TABLE>
- -------
* Annualized
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends at net
asset value on the payable dates, and a sale at net asset value on the last
day of each period reported. Total return information for the period of
less than one year is not annualized.
10
<PAGE>
- -----------------------------------------
BOARD OF DIRECTORS
E. Garrett Bewkes, Jr., Chairman
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Judith Davidson Moyers
- -----------------------------------------
OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
- -----------------------------------------
INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
- -----------------------------------------
SUB-ADVISER AND SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
- -----------------------------------------
This report is not to be used in
connection with the offering of shares
of the Fund unless accompanied or
preceded by an effective prospectus.
The financial information included
herein is taken from the records of the
Fund without examination by independent
accountants who do not express an
opinion thereon.
(C)1996 PaineWebber Incorporated
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