<PAGE>
<TABLE>
<C> <S>
THE FUND IS A SERIES OF PAINEWEBBER RMA MONEY PAINEWEBBER
FUND, INC. THIS PROSPECTUS CONCISELY SETS RETIREMENT MONEY FUND
FORTH INFORMATION ABOUT THE FUND A PROSPECTIVE 1285 AVENUE OF THE AMERICAS
INVESTOR SHOULD KNOW BEFORE INVESTING. PLEASE NEW YORK, NEW YORK 10019
RETAIN THIS PROSPECTUS FOR FUTURE REFERENCE. A
STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST
29, 1997 (WHICH IS INCORPORATED BY REFERENCE
HEREIN) HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"). THE STATEMENT
OF ADDITIONAL INFORMATION CAN BE OBTAINED WITHOUT
CHARGE, AND FURTHER INQUIRIES CAN BE MADE, BY
CONTACTING THE FUND, YOUR PAINEWEBBER INVESTMENT
EXECUTIVE OR PAINEWEBBER'S CORRESPONDENT FIRMS OR
BY CALLING TOLL-FREE 1-800-647-1568.
- ------------------------------------------- -------------------------------------------
A PROFESSIONALLY MANAGED MONEY MARKET FUND OFFERED
TO INDIVIDUAL RETIREMENT ACCOUNTS AND QUALIFIED
RETIREMENT PLANS SEEKING:
/ / CURRENT INCOME
/ / HIGH LIQUIDITY
/ / CONSERVATION OF CAPITAL
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. WHILE THE FUND
SEEKS TO MAINTAIN A STABLE NET ASSET VALUE OF
$1.00 PER SHARE, THERE CAN BE NO ASSURANCE THAT IT
WILL BE ABLE TO DO SO.
- --------------------------------------- ---------------------------------------
THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL
OFFENSE. AUGUST 29, 1997
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
HIGHLIGHTS
See elsewhere in the Prospectus for more information on the topics discussed
in these highlights.
<TABLE>
<S> <C>
The Fund: PaineWebber Retirement Money Fund ("Fund") is a professionally
managed, diversified money market fund offered exclusively to
individual retirement accounts and qualified retirement plans. The
Fund is a series of a Maryland corporation ("Corporation").
Investment Objective
and Policies: Current income consistent with liquidity and conservation of
capital; invests primarily in high quality money market instruments.
Net Assets: Over $4.1 billion at July 31, 1997.
Distributor and
Investment Adviser: PaineWebber Incorporated ("PaineWebber"). See "Management."
Sub-Adviser: Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins").
Purchases: Shares of common stock are available exclusively through PaineWebber
and its correspondent firms. See "Purchases."
Redemptions: Shares may be redeemed through PaineWebber or its correspondent
firms. See "Redemptions."
Yield: Based on current money market rates; quoted in the financial section
of most newspapers.
Dividends: Declared daily and paid monthly. See "Dividends and Taxes."
Reinvestment: All dividends are automatically paid in Fund shares.
Minimum Purchase: $25 minimum for first purchase; no minimum for subsequent purchases.
Check Writing: Generally available to plan owners eligible for distributions; $250
minimum per check.
Public Offering Price: Net asset value, which the Fund seeks to maintain at $1.00 per
share.
</TABLE>
WHO SHOULD INVEST. The Fund is designed for investors seeking safety,
liquidity and current income. Shares of the Fund are offered to qualified
retirement plans, including pension and profit-sharing plans, whether
established by corporations, partnerships or self-employed individuals, and
individual retirement accounts ("Retirement Plans"). The Fund provides a
convenient means for Retirement Plans to earn current income at money market
rates with minimal risk of fluctuation of principal.
RISK FACTORS. There can be no assurance that the Fund will achieve its
investment objective. In periods of declining interest rates, the Fund's yield
will tend to be somewhat higher than prevailing short-term market rates, and in
periods of rising interest rates, the Fund's yield generally will be somewhat
lower. See "Investment Objective and Policies."
2
<PAGE>
EXPENSES OF INVESTING IN THE FUND. The following tables are intended to
assist investors in understanding the expenses associated with investing in the
Fund.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales charge on purchases of shares.................................. None
Sales charge on reinvested dividends................................. None
Redemption fee or deferred sales charge.............................. None
</TABLE>
ANNUAL FUND OPERATING EXPENSES*
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<S> <C> <C>
Management fees................................................. 0.41%
12b-1 fees...................................................... 0.08%
Other expenses.................................................. 0.26%
-----
Total operating expenses........................................ 0.75%
-----
-----
</TABLE>
- ------------
* See "Management" for additional information. The fees and expenses shown are
those actually incurred for the fiscal year ended June 30, 1997.
EXAMPLE OF EFFECT OF FUND EXPENSES
An investor would pay directly or indirectly the following expenses on a
$1,000 investment in the Fund, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
--------- ------------ ---------- ----------
<S> <C> <C> <C>
$ 8 $ 24 $ 42 $ 93
</TABLE>
This Example assumes that all dividends are reinvested and that the
percentage amounts listed under Annual Fund Operating Expenses remain the same
in the years shown. The above tables and the assumption in the Example of a 5%
annual return are required by regulations of the SEC applicable to all mutual
funds; the assumed 5% annual return is not a prediction of, and does not
represent, the Fund's projected or actual performance.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES, AND THE FUND'S ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
The actual expenses of the Fund will depend upon, among other things, the level
of average net assets and the extent to which the Fund incurs variable expenses,
such as transfer agency costs.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The table below provides selected per share data and ratios for one share of
the Fund for each of the periods shown. This information is supplemented by the
financial statements, accompanying notes and the report of Ernst & Young LLP,
independent auditors, which appear in the Fund's Annual Report to Shareholders
for the fiscal year ended June 30, 1997, and are incorporated by reference into
the Statement of Additional Information. The financial statements and notes,
as well as the information in the table appearing below insofar as it relates to
each of the five years in the period ended June 30, 1997, have been audited by
Ernst & Young LLP, independent auditors. The Annual Report to Shareholders may
be obtained without charge by calling 1-800-647-1568. The information appearing
below for the fiscal periods ended prior to June 30, 1993 also has been audited
by Ernst & Young LLP, whose reports thereon were unqualified.
<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 2, 1988
(COMMENCEMENT
FOR THE YEARS ENDED JUNE 30, OF OPERATIONS)
-------------------------------------------------------------------------------------- TO JUNE 30,
1997 1996 1995 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- --------- --------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- --------- --------- ---------------
Net investment
income............ 0.048 0.050 0.047 0.028 0.027 0.044 0.068 0.079 0.081
Dividends from net
investment
income............ (0.048) (0.050) (0.047) (0.028) (0.027) (0.044) (0.068) (0.079) (0.081)
--------- --------- --------- --------- --------- --------- --------- --------- ---------------
Net asset value, end
of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
--------- --------- --------- --------- --------- --------- --------- --------- ---------------
--------- --------- --------- --------- --------- --------- --------- --------- ---------------
Total investment
return(1)......... 4.89% 5.13% 4.83% 2.75% 2.78% 4.40% 6.80% 7.90% 8.10%
Ratios/Supplemental Data:
Net assets, end of
period (000's).... $3,922,753 $3,500,508 $2,966,199 $2,450,235 $2,280,840 $2,163,935 $2,122,973 $1,812,092 $1,340,550
Expenses to average
net assets........ 0.75% 0.70% 0.78% 0.77% 0.79% 0.79% 0.79% 0.85% 0.91%*
Net investment
income to average
net assets........ 4.79% 5.01% 4.75% 2.77% 2.76% 4.39% 6.69% 7.84% 8.13%*
</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 investment returns for periods of less
than one year have not been annualized.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to provide current income consistent with
liquidity and conservation of capital. The Fund invests in high quality money
market instruments having or deemed to have remaining maturities of 13 months or
less. These instruments include (1) U.S. government securities, (2) obligations
of U.S. and foreign banks, (3) commercial paper and other short-term obligations
of U.S. and foreign companies, governments and similar entities, including
variable and floating rate securities and participation interests, and (4)
repurchase agreements involving any of the foregoing. The Fund maintains a
dollar-weighted average portfolio maturity of 90 days or less.
The Fund may invest in obligations (including certificates of deposit,
bankers' acceptances, time deposits and similar obligations) of U.S. and foreign
banks having total assets at the time of purchase in excess of $1.5 billion. The
Fund may invest in non-negotiable time deposits of U.S. banks, savings
associations and similar depository institutions having total assets in excess
of $1.5 billion at the time of purchase only if the time deposits have
maturities of seven days or less. The Fund may also make interest-bearing
savings deposits in U.S. commercial banks and savings associations having total
assets of $1.5 billion or less, in principal amounts at each such bank not
greater than are insured by the Federal Deposit Insurance Corporation, provided
that the aggregate amount of such deposits (plus interest earned) does not
exceed 5% of the Fund's assets.
The commercial paper and other short-term obligations purchased by the Fund
consist only of obligations that Mitchell Hutchins determines, pursuant to
procedures adopted by the Corporation's board of directors (sometimes referred
to as the "board"), present minimal credit risks and are "First Tier Securities"
as defined in Rule 2a-7 under the Investment Company Act of 1940 ("1940 Act").
As so defined, First Tier Securities include securities that are rated in the
highest short-term rating category by at least two nation-
ally recognized statistical rating organizations ("NRSROs"), or by one NRSRO if
only one NRSRO has assigned the obligation a short-term rating. First Tier
Securities also include unrated securities if Mitchell Hutchins has determined
the obligations to be of comparable quality to rated securities that so qualify.
The Fund may also purchase participation interests in any of the securities in
which it is permitted to invest. Participation interests are pro rata interests
in securities held by others. The Fund generally may invest no more than 5% of
its total assets in the securities of a single issuer (other than securities
issued by the U.S. government, its agencies or instrumentalities).
INVESTMENT CONSIDERATIONS. In managing the Fund's portfolio, Mitchell
Hutchins may employ a number of professional money management techniques,
including varying the composition and the weighted average maturity of the
portfolio based upon its assessment of the relative values of various money
market instruments and future interest rate patterns, in order to respond to
changing economic and money market conditions and to shifts in fiscal and
monetary policy. Mitchell Hutchins may also seek to improve the Fund's yield by
purchasing or selling securities to take advantage of yield disparities among
similar or dissimilar money market instruments that regularly occur in the money
markets.
In periods of declining interest rates, the Fund's yield will tend to be
somewhat higher than prevailing short-term market rates, and in periods of
rising interest rates the opposite generally will be true. Also, when interest
rates are falling, net cash inflows from the continuous sale of Fund shares are
likely to be invested in portfolio instruments producing lower yields than the
balance of the Fund's portfolio, thereby reducing its yield. In
5
<PAGE>
periods of rising interest rates, the opposite can be true. There can be no
assurance that the Fund will achieve its investment objective.
U.S. GOVERNMENT SECURITIES. The U.S. government securities in which the
Fund may invest include direct obligations of the U.S. Treasury (such as
Treasury bills, notes and bonds) and obligations issued or guaranteed by U.S.
government agencies and instrumentalities, including securities that are
supported by the full faith and credit of the United States (such as Government
National Mortgage Association certificates ("GNMAs")), securities supported
primarily or solely by the creditworthiness of the issuer (such as securities of
the Resolution Funding Corporation and the Tennessee Valley Authority) and
securities that are supported primarily or solely by specific pools of assets
and the creditworthiness of a U.S. government-related issuer (such as mortgage-
backed securities issued by Fannie Mae, also known as the Federal National
Mortgage Association, and Freddie Mac, also known as the Federal Home Loan
Mortgage Corporation).
The Fund may also acquire custodial receipts that evidence ownership of
future interest payments, principal payments or both that have been "stripped"
from certain U.S. Treasury notes or bonds. These custodial receipts are known by
various names, including "Treasury Investment Growth Receipts" ("TIGRs") and
"Certificates of Accrual on Treasury Securities" ("CATS"). The Fund may also
invest in separately traded principal and interest components of securities
issued or guaranteed by the U.S. Treasury, which are traded independently under
the Separate Trading of Registered Interest and Principal of Securities
("STRIPS") program. Under the STRIPS program, the principal and interest
components are individually numbered and separately issued by the U.S. Treasury.
VARIABLE AND FLOATING RATE SECURITIES. The Fund may purchase variable and
floating rate securities with remaining maturities in excess of 13 months issued
by U.S. government agencies or instrumentalities or guaranteed by the U.S.
government. In addition, the Fund may purchase variable and floating rate
securities of other issuers with remaining maturities in excess of 13 months if
the securities are subject to a demand feature exercisable within 13 months or
less. The yields on these securities are adjusted in relation to changes in
specific rates, such as the prime rate, and different securities may have
different adjustment rates. The Fund's investment in these securities must
comply with conditions established by the SEC under which they may be considered
to have remaining maturities of 13 months or less. A demand feature gives the
Fund the right to tender them back to the issuer or a remarketing agent and
receive the principal amount of the security prior to maturity. The demand
feature may be backed by letters of credit or other liquidity support
arrangements provided by banks or other financial institutions, whose credit
standing affects the credit quality of the obligation. Changes in the credit
quality of these institutions could cause losses to the Fund and affect its
share price.
Variable rate securities include variable amount master demand notes, which
are unsecured redeemable obligations that permit investment of varying amounts
at fluctuating interest rates under a direct agreement between the Fund and the
issuer. The principal amount of these notes may be increased from time to time
by the parties (subject to specified maximums) or decreased by the Fund or the
issuer. These notes are payable on demand and are typically unrated.
REPURCHASE AGREEMENTS. Repurchase agreements are transactions in which the
Fund purchases securities from a bank or recognized securities dealer and
simultaneously commits to resell the securities to that bank or dealer at an
agreed upon date or upon demand and at a price reflecting a market rate of
interest unrelated to the coupon rate or maturity of the purchased securities.
Although repurchase agreements carry
6
<PAGE>
certain risks not associated with direct investments in securities, including
possible decline in the market value of the underlying securities and delays and
costs to the Fund if the other party to the repurchase agreement becomes
insolvent, the Fund intends to enter into repurchase agreements only with banks
and dealers in transactions believed by Mitchell Hutchins to present minimal
credit risks in accordance with guidelines established by the board.
FOREIGN SECURITIES. The Fund may invest in U.S. dollar-denominated
securities of foreign issuers, including debt securities of foreign banks,
corporations, governments and similar entities. Such investments may consist of
obligations of foreign and domestic branches of foreign banks and foreign
branches of domestic banks. Such investments may involve risks that are
different from investments in U.S. issuers. These risks may include future
unfavorable political and economic developments, possible withholding taxes,
seizure of foreign deposits, currency controls, interest limitations or other
governmental restrictions that might affect the payment of principal or interest
on the securities held by the Fund. Additionally, there may be less publicly
available information about foreign issuers, as these issuers may not be subject
to the same regulatory requirements as domestic issuers.
LENDING OF PORTFOLIO SECURITIES. The Fund may lend its securities to
qualified broker-dealers or institutional investors in an amount up to 33 1/3%
of its total assets taken at market value. Lending securities enables the Fund
to earn additional income but could result in a loss or delay in recovering
these securities.
OTHER INFORMATION. The Fund may borrow money for temporary purposes, but
not in excess of 10% of its total assets, including reverse repurchase
agreements involving up to 5% of its net assets.
The Fund may purchase securities on a "when-issued" basis, that is, for
delivery beyond the normal settlement date at a stated price and yield. The Fund
generally would not pay for such securities or start earning interest on them
until they are received. However, when the Fund purchases securities on a
when-issued basis, it immediately assumes the risks of ownership, including the
risk of price fluctuation. Failure by the issuer to deliver a security purchased
on a when-issued basis may result in a loss or missed opportunity to make an
alternative investment.
The Fund may not invest more than 10% of its net assets in illiquid
securities, including repurchase agreements with maturities in excess of seven
days.
The Fund's investment objective may not be changed without the approval of
its shareholders. Certain investment limitations, as described in the Statement
of Additional Information, also may not be changed without shareholder approval.
All other investment policies may be changed by the board without shareholder
approval.
PURCHASES
GENERAL. Fund shares are offered to Retirement Plans through brokerage
accounts established as Retirement Plan Sweep Accounts for such Retirement Plans
at PaineWebber or its correspondent firms. The minimum initial investment is
$25. Cash balances of $1 or more in a Retirement Plan Sweep Account (including
proceeds from securities sold) are invested daily, provided that the Fund
account value after any such subsequent purchase is at least $25. The Fund and
PaineWebber reserve the right to reject any purchase order and to suspend the
offering of Fund shares for a period of time.
An order to purchase Fund shares will be executed on the Business Day on
which federal funds become available to the Fund, at the Fund's next determined
net asset value per share. A
7
<PAGE>
"Business Day" is any day on which the Boston offices of the Fund's custodian,
State Street Bank and Trust Company ("Custodian"), and the New York City offices
of PaineWebber and PaineWebber's bank are all open for business. "Federal funds"
are funds deposited by a commercial bank in an account at a Federal Reserve Bank
that can be transferred to a similar account of another bank in one day and thus
may be made immediately available to the Fund through its Custodian.
To the extent that amounts transferred by check or wire or from funds held
at PaineWebber into a Retirement Plan Sweep Account create a free credit cash
balance, that cash balance will be automatically invested in Fund shares, as
described above, when federal funds are available for the investment, unless the
account holder specifically instructs its PaineWebber Investment Executive or
correspondent firm not to purchase Fund shares with such amounts.
On any Business Day, the Fund will accept purchase orders and credit shares
to investors' accounts as follows.
PURCHASES WITH FUNDS HELD AT PAINEWEBBER. Investors may invest in Fund
shares with funds held in their Retirement Plan Sweep Account, including funds
from the sale of securities, as described above under "General." Federal funds
normally are available for cash balances arising from the sale of securities
held in a Retirement Plan Sweep Account on the Business Day following
settlement, but in some cases can take longer.
PURCHASES BY CHECK. Investors may purchase Fund shares by depositing into
their Retirement Plan Sweep Account checks drawn on a U.S. bank. The Retirement
Plan's brokerage account number should be included on the check.
As noted above, Fund shares will be purchased when federal funds are
available. Federal funds are deemed available to the Fund two Business Days
after deposit of a personal check and one Business Day after deposit of a
cashier's or certified check. PaineWebber may benefit from the temporary use of
the proceeds of personal checks to the extent those checks are converted to
federal funds in fewer than two Business Days.
PURCHASES BY WIRE. Investors may also purchase Fund shares by instructing
their banks to transfer federal funds by wire to their Retirement Plan Sweep
Account. Wire transfers should be directed to: The Bank of New York, ABA
021000018, PaineWebber Inc., A/C 890-0114-088, OBI=FBO [Account Name]/[Brokerage
Account Number]. The wire must include the investor's name and the Retirement
Plan brokerage account number. Investors wishing to transfer federal funds into
their accounts should contact their PaineWebber Investment Executives or
correspondent firms to determine the appropriate wire instructions.
If PaineWebber receives a notice from an investor's bank of a wire transfer
of federal funds for a purchase of Fund shares by 12:00 noon, Eastern time, on a
Business Day, the purchase will be executed on that Business Day. All other wire
purchase orders will be executed at 12:00 noon, Eastern time, on the next
Business Day. PaineWebber and/or an investor's bank may impose a service charge
for wire purchases.
ELIGIBLE PLANS. PaineWebber offers a variety of Retirement Plans, including
individual retirement accounts (standard and rollover), savings investment match
plans for employees ("SIMPLE IRAs"), simplified employee pension plans, cash or
deferred arrangement/simplified employee pension plans, profit sharing plans,
401(k) plans, money purchase plans, defined benefit plans and target benefit
plans. Other Retirement Plans also may be held in custody at PaineWebber or its
correspondent firms. For further information regarding any of these Retirement
Plans, investors should contact their PaineWebber Investment Executives or
correspondent firms.
8
<PAGE>
Although the amount that may be contributed to a Retirement Plan in any one
year is subject to certain limitations, assets already held by a Retirement Plan
may be invested in the Fund without regard to such limitations.
Shares of the Fund may not be purchased by any Retirement Plan for which
either PaineWebber, Mitchell Hutchins or PW Trust Company is a fiduciary (within
the meaning of the Employee Retirement Income Security Act or the Internal
Revenue Code) in any capacity other than solely by reason of the sponsorship of
a master or prototype plan adopted by such Plan or the provision of
nondiscretionary trust services to such Plan. Thus, if PaineWebber, Mitchell
Hutchins or PW Trust Company serves as investment manager or renders investment
advice to a Retirement Plan, that Plan may not purchase Fund shares.
REDEMPTIONS
Shareholders may redeem (sell) any number of shares by submitting a
redemption request to PaineWebber. Shareholders should contact their PaineWebber
Investment Executives or correspondent firms to effect such redemptions. Fund
shares will be redeemed at the net asset value per share next determined after
receipt by the Fund's transfer agent ("Transfer Agent") of instructions from
PaineWebber to redeem. PaineWebber delivers such instructions to the Transfer
Agent prior to the determination of net asset value at 12:00 noon, Eastern time,
on any Business Day. In addition, unless shareholders otherwise notify their
PaineWebber Investment Executives or correspondent firms, any securities
purchase or other debit in their Retirement Plan Sweep Accounts will be paid for
automatically on the settlement date by redeeming Fund shares held in such
accounts.
No adverse tax consequences result from a redemption of Fund shares if the
redemption proceeds remain in the Retirement Plan Sweep Account.
Shareholders with questions about redemption requirements should consult
their PaineWebber Investment Executives or correspondent firms. Shareholders who
redeem all their shares will receive cash credits to their Retirement Plan Sweep
Accounts for dividends earned on those shares to the day of redemption. The
redemption price may be more or less than the purchase price, depending on the
market value of the Fund's portfolio; however, the Fund anticipates that its net
asset value per share will normally be $1.00 per share. See "Valuation of
Shares."
Because the Fund incurs certain fixed costs in maintaining shareholder
accounts, the Fund reserves the right to redeem all Fund shares in any
shareholder account of less than $25 net asset value. If the Fund elects to do
so, it will notify the shareholder and provide the shareholder with an
opportunity to increase the amount invested to $25 or more within 60 days of the
notice. This notice may appear on the shareholder's account statement. If a
shareholder requests redemption of shares that were purchased recently, the Fund
may delay the payment of redemption proceeds until it is assured that it has
received good payment for the purchase of the shares. In the case of purchases
by check, this can take up to 15 days.
RETIREMENT PLAN DISTRIBUTIONS
Distributions from a Retirement Plan, except those representing returns of
non-deductible contributions thereto, generally are taxable income to the
participant. Distributions from a Retirement Plan to a participant prior to the
time the participant reaches age 59 1/2 or becomes permanently disabled may
subject the participant to an additional 10% penalty tax. Shareholders should
consult their tax advisers concerning the timing and consequences of
distributions from a Retirement Plan.
CHECK REDEMPTIONS. Shareholders eligible for distributions from their
Retirement Plan gen-
9
<PAGE>
erally may redeem Fund shares by drawing a check, a supply of which may be
obtained through PaineWebber, for $250 or more against their Fund accounts. With
respect to Retirement Plans that permit participants to direct the investment of
their Plan account balances, only those Plan participants who are 59 1/2 years
of age or older are eligible for the check redemption service; with respect to
other Retirement Plans, the Plan fiduciary having investment responsibility is
eligible for the service. When a check is presented to the Transfer Agent for
payment, the Transfer Agent will cause the Fund to redeem sufficient shares to
cover the amount of the check. The shareholder will continue to receive
dividends on those shares until the check is presented to the Transfer Agent for
payment. The date on which the Transfer Agent processes the check, not the date
written on the check, determines the year in which the distribution is reported
to the Internal Revenue Service. Shareholders who must take annual distributions
by December 31 should allow sufficient time for processing.
Checks can be made payable to the order of any person in any amount not less
than $250; however, these checks may not be used to purchase securities in
transactions with PaineWebber. Shareholders will receive copies of their
cancelled checks. If a shareholder has insufficient shares to cover a check, the
check will be returned to the payee marked "nonsufficient funds." Checks written
in amounts less than $250 also will be returned. Shareholders should not
attempt, by writing checks, to redeem all assets held in their Retirement Plan
Sweep Accounts, transfer such accounts, correct excess contributions to a
Retirement Plan or withdraw amounts classified as voluntary contributions to a
Retirement Plan. All check redemptions will be reported to the Internal Revenue
Service as taxable distributions; therefore, any of these actions could have
adverse tax consequences. Charges may be imposed for specially imprinted checks,
additional copies of cancelled checks, stop payment orders, checks returned
"nonsufficient funds" and checks returned because they are written for less than
$250. Charges not paid by the shareholder may be paid by the automatic
redemption of an appropriate number of Fund shares. PaineWebber reserves the
right to modify or terminate the check redemption service at any time or to
impose a service charge in connection with it.
Shareholders who are interested in the check redemption service should
contact their PaineWebber Investment Executives or correspondent firms.
SYSTEMATIC WITHDRAWAL PLAN. Shareholders eligible for distributions from
their Retirement Plan may have PaineWebber redeem a portion of their Fund shares
monthly, quarterly or semi-annually under the Fund's systematic withdrawal plan
("SWP"). Minimum monthly, quarterly and semi-annual withdrawal amounts are $100,
$300 and $600, respectively. The SWP is not available to shareholders who have
elected to have income taxes withheld from their Retirement Plan distributions.
The proceeds of redemptions under the SWP will be mailed directly to the
shareholder or deposited into a non-Retirement Plan account held at PaineWebber.
A shareholder's participation in the SWP will be suspended if the shareholder's
Fund balance is below the minimum withdrawal amount designated by the
shareholder (for example, monthly withdrawals will be suspended for a
shareholder whose Fund balance is below $100). With respect to Retirement Plans
that permit participants to direct the investment of their Retirement Plan
account balances, only those participants who are 59 1/2 years of age or older
are eligible to participate in the SWP; with respect to other Retirement Plans,
the Retirement Plan fiduciary having investment responsibility is eligible for
the SWP. Shareholders who are interested in the SWP should contact their
PaineWebber Investment Executives or correspondent firms for more information
and an application. PaineWebber reserves the right to modify or terminate the
10
<PAGE>
SWP at any time or to impose a service charge in connection with it.
VALUATION OF SHARES
The Fund uses its best efforts to maintain its net asset value at $1.00 per
share. Net asset value per share is determined by dividing the value of the
securities plus any cash or other assets held by the Fund less all its
liabilities by the number of Fund shares outstanding. The Fund's net asset value
is computed once each Business Day at 12:00 noon, Eastern time.
The Fund values its portfolio securities using the amortized cost method of
valuation, under which market value is approximated by amortizing the difference
between the acquisition cost and value at maturity of an instrument on a
straight-line basis over its remaining life. All cash, receivables and current
payables are carried at their face value. Other assets are valued at fair value
as determined in good faith by or under the direction of the board.
DIVIDENDS AND TAXES
DIVIDENDS. Each Business Day, the Fund declares as dividends all of its net
investment income. Shares begin earning dividends on the day they are purchased;
dividends are accrued to shareholder accounts daily and are automatically paid
in additional Fund shares monthly. Shares do not earn dividends on the day they
are redeemed. Net investment income includes accrued interest and earned
discount (including both original issue and market discounts), less amortization
of premium and accrued expenses.
The Fund distributes any net short-term capital gain annually but may make
more frequent distributions of such gain if necessary to maintain its net asset
value per share at $1.00 or to avoid income or excise taxes. The Fund does not
expect to realize net long-term capital gain and thus does not anticipate
payment of any long-term capital gain distributions.
TAXES. The Fund intends to continue to qualify for treatment as a regulated
investment company under the Internal Revenue Code so that it will be relieved
of federal income tax on that part of its investment company taxable income
(consisting generally of net investment income and net short-term capital gain,
if any) that is distributed to its shareholders.
Dividends received by a Retirement Plan ordinarily will not be subject to
taxation until the participant withdraws the proceeds from the Retirement Plan.
Generally, withdrawals from a Retirement Plan will be taxable as ordinary
income; and withdrawals made prior to the time the participant reaches age
59 1/2 or becomes permanently disabled will be subject to an additional tax
equal to 10% of the amount distributed (unless, for withdrawals after 1997, they
are used to pay certain higher education expenses and certain acquisition costs
of first time home buyers). If the distributions from a Retirement Plan (other
than a governmental or church plan) for any taxable year following the year in
which the participant reaches age 70 1/2 are less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed. Moreover, certain contributions to a Retirement Plan
in excess of the amounts permitted by law may be subject to an excise tax.
The Fund notifies its shareholders following the end of each calendar year
of the amount of all dividends paid that year.
The foregoing is only a summary of some of the important federal tax
considerations generally affecting the Fund and its shareholders; see the
Statement of Additional Information for a further discussion. There may be other
federal, state or local tax considerations applicable to a particular investor.
Prospective shareholders are urged to consult their tax advisers.
11
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MANAGEMENT
The board, as part of its overall management responsibility, oversees
various organizations responsible for the Fund's day-to-day management.
PaineWebber, the Fund's investment adviser and administrator, provides a
continuous investment program for the Fund and supervises all aspects of its
operations. As sub-adviser to the Fund, Mitchell Hutchins makes and implements
investment decisions and, as sub-administrator, is responsible for the
day-to-day administration of the Fund.
PaineWebber receives a monthly fee for these services, and for the fiscal
year ended June 30, 1997, the Fund's effective advisory and administration fee
paid to PaineWebber was equal to 0.41% of the Fund's average daily net assets.
PaineWebber (not the Fund) pays Mitchell Hutchins a fee for its sub-advisory and
sub-administration services, at an annual rate of 20% of the fee received by
PaineWebber from the Fund for advisory and administrative services.
The Fund also incurs other expenses. For the fiscal year ended June 30,
1997, the Fund's ratio of expenses as a percentage of average net assets was
0.75%. The Fund's expense ratio may be higher than those of other PaineWebber
money market funds due in part to the relatively small size of the accounts in
the Fund.
In accordance with procedures adopted by the board, the Fund may pay fees to
PaineWebber for its services as lending agent in its portfolio securities
lending program.
PaineWebber and Mitchell Hutchins are located at 1285 Avenue of the
Americas, New York, New York 10019. Mitchell Hutchins is a wholly owned
subsidiary of PaineWebber, which is in turn wholly owned by Paine Webber Group
Inc., a publicly owned financial services holding company. At July 31, 1997,
PaineWebber or Mitchell Hutchins was investment adviser of 29 registered
investment companies with 64 separate portfolios and aggregate assets in excess
of $34.8 billion.
Mitchell Hutchins personnel may engage in securities transactions for their
own accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
DISTRIBUTION ARRANGEMENTS. PaineWebber is the distributor of Fund shares.
Under a plan of distribution ("Plan"), the Fund is authorized to pay PaineWebber
a 12b-1 service fee at the annual rate of up to 0.15% of the Fund's average
daily net assets. The Fund currently pays PaineWebber a 12b-1 service fee at the
annual rate of 0.08% of the Fund's average daily net assets, and any increase in
this annual rate would require prior approval by the Corporation's board of
directors.
Under the Plan, PaineWebber uses the 12b-1 service fee to pay PaineWebber
Investment Executives and correspondent firms for shareholder servicing,
currently at the annual rate of 0.06% of the Fund's average daily net assets
held in accounts serviced by such Investment Executives and correspondent firms.
The fee is also used to offset PaineWebber's other expenses in servicing and
maintaining shareholder accounts. These expenses may include the costs of the
PaineWebber branch office in which the Investment Executive is based, such as
rent, communications equipment, employee salaries and other overhead costs.
During the period they are in effect, the Plan and a related distribution
contract ("Distribution Contract") obligate the Fund to pay the 12b-1 service
fee to PaineWebber as compensation for its service activities and not as
reimbursement for specific expenses incurred. Thus, even if PaineWebber's
expenses exceed its 12b-1 service fee, the Fund will not be obliged to pay more
than the fee and, if PaineWebber's expenses are less than the fee, it will
retain its full fee and realize a profit. The Fund will pay the 12b-1 service
fee to PaineWebber until either the Plan or the
Distribu-
12
<PAGE>
tion Contract is terminated or not renewed. In that event, PaineWebber's 12b-1
service expenses in excess of 12b-1 service fees received or accrued through the
termination date will be PaineWebber's sole responsibility and not obligations
of the Fund.
PERFORMANCE INFORMATION
From time to time the Fund may advertise its "yield" and "effective yield."
Both yield figures are based on historical earnings and are not intended to
indicate future performance. The "yield" of the Fund is the income on an
investment in the Fund over a specified seven-day period. This income is then
"annualized" (that is, assumed to be earned each week over a 52-week period) and
shown as a percentage of the investment. The "effective yield" is calculated
similarly but, when annualized, the income earned is assumed to be reinvested.
The "effective yield" will be higher than the "yield" because of the compounding
effect of this assumed reinvestment.
The Fund may also advertise other performance data, which may consist of the
annual or cumulative return (including realized net short-term capital gain, if
any) earned on a hypothetical investment in the Fund since it began operations
on July 2, 1988, or for shorter periods. This return data may or may not assume
reinvestment of dividends (compounding).
The performance of shareholder accounts with small balances will differ from
the quoted performance because daily income for each shareholder account is
rounded to the nearest whole penny. Accordingly, very small shareholder accounts
(approximately $31 or less at current interest rates) that generate less than
1/2 cent per day of income will earn no dividends.
GENERAL INFORMATION
The Corporation's name is "PaineWebber RMA Money Fund, Inc." The Corporation
was incorporated in Maryland on July 2, 1982 and is registered with the SEC as
an open-end management investment company. The Corporation has an authorized
capitalization of 30 billion shares of $0.001 par value common stock; 10 billion
of these shares are designated as shares of the Fund, and the remaining shares
are classified as shares of the two other series of the Corporation.
Shareholders of the Fund are entitled to one vote for each full share held and
fractional votes for fractional shares held. Voting rights are not cumulative,
and as a result, the holders of more than 50% of the shares of the Corporation
may elect all of its directors.
The Corporation does not hold annual shareholder meetings. There normally
will be no meetings of shareholders to elect directors unless fewer than a
majority of the directors holding office have been elected by shareholders. The
directors are required to call a meeting of shareholders when requested in
writing to do so by the shareholders of record holding at least 25% of the
Corporation's outstanding shares. Each share of the Fund has equal voting,
dividend and liquidation rights. The shares of each series of the Corporation
will be voted separately except when an aggregate vote of all series is required
by the Investment Company Act of 1940 or under Maryland law.
CERTIFICATES. To avoid additional operating expenses and for investor
convenience, share certificates are not issued. Ownership of Fund shares is
recorded on a stock register by the Transfer Agent, and shareholders have the
same rights of ownership with respect to such shares as if certificates had been
issued.
REPORTS. Shareholders receive audited annual and unaudited semiannual
financial statements of the Fund. All purchases and redemptions of Fund shares
are confirmed to shareholders at least quarterly. To avoid sending duplicate
copies of materials to households, the Fund may mail only one copy of each
annual and semiannual
13
<PAGE>
report to shareholders having the same last name and address on the Fund's
records. However, each shareholder may call 201-902-8312 to ask that copies of
those materials be sent personally to that shareholder.
CUSTODIAN AND TRANSFER AGENT. State Street Bank and Trust Company, One
Heritage Drive, North Quincy, Massachusetts 02171, is custodian of the Fund's
assets. PFPC Inc. ("PFPC"), a subsidiary of PNC Bank, N.A., 400 Bellevue
Parkway, Wilmington, Delaware 19809, is the Fund's transfer and dividend
disbursing agent. PFPC (not the Fund) pays PaineWebber for certain transfer
agency related services that PFPC has delegated to PaineWebber.
14
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TABLE OF CONTENTS
Highlights ....................................................... 2
Financial Highlights ............................................. 4
Investment Objective and Policies ................................ 5
Purchases ........................................................ 7
Redemptions ...................................................... 9
Retirement Plan Distributions .................................... 9
Valuation of Shares ............................................. 11
Dividends and Taxes ............................................. 11
Management ...................................................... 12
Performance Information ......................................... 13
General Information ............................................. 13
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INVESTORS SHOULD RELY ON THE INFORMATION CONTAINED OR REFERRED TO IN
THIS PROSPECTUS. THE FUND AND ITS DISTRIBUTOR HAVE NOT AUTHORIZED
ANYONE TO PROVIDE INVESTORS WITH INFORMATION THAT IS DIFFERENT. THE
PROSPECTUS IS NOT AN OFFER TO SELL SHARES OF THE FUND IN ANY
JURISDICTION WHERE THE FUND OR ITS DISTRIBUTOR MAY NOT LAWFULLY SELL
THOSE SHARES.
[LOGO]
-C-1997 PaineWebber Incorporated
[LOGO]
Prospectus
---------------------------------
RETIREMENT
MONEY
FUND
AUGUST 29, 1997
