<PAGE>
PAINEWEBBER
----------------------------------------------------------------
RETIREMENT
MONEY FUND
ANNUAL REPORT
June 30, 1998
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND ANNUAL REPORT
August 19, 1998
Dear Shareholder,
We are pleased to present you with the annual report for the PaineWebber
Retirement Money Fund for the fiscal year ended June 30, 1998.
GENERAL MARKET OVERVIEW
[GRAPHIC] Interest rates fell across the U.S. Treasury yield curve through the
first half of 1998, aided by low inflation, a budget surplus and a strong
dollar. Short-term yields, as represented by the three-month U.S. Treasury bill,
fell from 5.3% at the beginning of January to 5.1% by the end of June.
Over the six-month period, the U.S. bond markets reflected the widening
reach of the Asian crisis. The impact of the crisis on the United States was
twofold: global support of the U.S. Treasury market and restrained inflation.
These effects persuaded the Federal Reserve to continue its "neutral stance"
for the time being--neither raising nor lowering interest rates.
PORTFOLIO REVIEW
[GRAPHIC] We remained somewhat bullish on the fixed income markets over the six
months ended June 30, 1998, expecting interest rates to hold steady or fall
slightly. Since we did not expect major changes in rates, we kept the Fund's
weighted average maturity in line with its peer group. The Fund's current
yield for the seven-day period ended June 30, 1998 was 4.9%. Its
weighted-average maturity was 71 days, and net assets totaled $4.2 billion as
of June 30, 1998.
2
<PAGE>
ANNUAL REPORT
GENERAL OUTLOOK
[GRAPHIC] We remain positive on bonds despite recent volatility in the
marketplace. The demand for U.S. debt remains high as the "flight to quality"
continues. We believe the Federal Reserve will hold monetary policy steady for
the foreseeable future due to the offsetting forces of a healthy domestic
economy and weak international economies, particularly in Asia.
Because we expect interest rates to remain stable with a bias toward
lowering, we plan to maintain our strategy of keeping the Fund's weighted
average maturity in line with its peer group.
Our ultimate objective in managing your investments is to help you
successfully meet your financial goals. We thank you for your continued
support and welcome any comments or questions you may have.
For a quarterly Fund Profile on any of the funds in the PaineWebber Family
of Funds,(1) please contact your investment executive.
Sincerely,
<TABLE>
<S> <C> <C>
/s/ Margo Alexander /s/ Dennis L. McCauley /s/ Susan P. Ryan
MARGO ALEXANDER DENNIS L. MCCAULEY SUSAN P. RYAN
President, Chief Investment Portfolio Manager,
Mitchell Hutchins Officer--Fixed Income, PaineWebber Retirement
Asset Management Inc. Mitchell Hutchins Money Fund
Asset Management Inc.
</TABLE>
This letter is intended to assist shareholders in understanding how the Fund
performed during the fiscal year ended June 30, 1998, and reflects our views
at the time we are writing this report. Of course, these views may change in
response to changing circumstances. We encourage you to consult your
investment executive regarding your personal investment program.
- ------
Mutual funds are sold by prospectus only. The prospectuses for the funds
contain more complete information regarding risks, charges and expenses, and
should be read carefully before investing.
3
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
STATEMENT OF NET ASSETS JUNE 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- -------------- ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 6.12%
<S> <C> <C> <C>
$40,000 United States Treasury Bills............................ 04/29/99 to 05/27/99 5.100 to 5.103% $ 38,208,875
110,645 Federal Home Loan Bank.................................. 12/23/98 to 05/12/99 5.579 to 5.760 110,637,462
15,000 Federal Home Loan Bank.................................. 07/01/98 5.557* 14,995,044
10,000 Federal National Mortgage Association................... 07/07/98 5.596* 9,998,677
17,650 Student Loan Marketing Association...................... 11/20/98 5.850 17,650,000
65,000 Student Loan Marketing Association...................... 07/07/98 5.451 to 5.481* 65,000,000
------------
Total U.S. Government and Agency Obligations (cost-$256,490,058).. 256,490,058
------------
BANK NOTES (DOMESTIC) - 5.75%
15,000 Bank One Wisconsin N.A. ................................ 07/07/98 5.460* 14,996,341
18,000 FCC National Bank....................................... 01/07/99 5.700 17,997,306
30,000 FCC National Bank....................................... 07/01/98 5.560 to 5.610* 29,993,344
60,000 KeyBank N.A. ........................................... 07/01/98 5.540 to 5.740* 59,983,886
18,000 NationsBank of the Carolinas............................ 01/19/99 6.100 18,050,662
60,000 PNC Bank, N.A. ......................................... 07/01/98 5.540 to 5.600* 59,971,631
10,000 SunTrust Bank, Atlanta.................................. 07/14/98 5.830 9,999,776
30,000 Wachovia Bank of North Carolina......................... 09/03/98 to 10/08/98 5.560 to 5.810 29,999,064
------------
Total Bank Notes (cost-$240,992,010).............................. 240,992,010
------------
DEPOSITORY NOTES (YANKEE) - 0.21%
8,800 Westpac Banking Corp. (cost-$8,795,932)................. 04/23/99 5.730 8,795,932
------------
BANKERS ACCEPTANCES (YANKEE) - 0.60%
25,000 Toronto-Dominion Bank (cost-$24,977,042)................ 07/07/98 5.510@ 24,977,042
------------
CERTIFICATES OF DEPOSIT - 21.27%
Domestic - 3.12%
25,000 American Express Centurion Bank......................... 07/06/98 5.540 25,000,000
74,800 Bankers Trust Company................................... 08/28/98 to 05/06/99 5.680 to 5.990 74,783,919
31,000 Bankers Trust Company................................... 07/01/98 5.570 to 5.740* 30,985,645
------------
130,769,564
------------
Euro - 0.95%
20,000 Deutsche Bank AG........................................ 07/06/98 5.570 20,000,027
10,000 Svenska Handelsbanken................................... 07/29/98 5.600 10,000,000
10,000 Westdeutsche Landesbank Girozentrale.................... 08/03/98 5.820 10,000,087
------------
40,000,114
------------
Yankee - 17.20%
25,000 Bayerische Landesbank Girozentrale...................... 07/01/98 5.595 25,000,000
10,000 Canadian Imperial Bank of Commerce...................... 10/21/98 5.940 9,998,211
45,200 Credit Agricole Indosuez................................ 09/30/98 to 05/19/99 5.650 to 5.830 45,192,319
30,000 Credit Suisse First Boston.............................. 07/07/98 5.651* 30,000,000
15,000 Den Danske Bank A/S..................................... 05/10/99 5.780 14,995,076
35,000 Deutsche Bank AG........................................ 03/02/99 to 04/23/99 5.650 to 5.720 34,990,533
55,000 National Bank of Canada................................. 08/10/98 to 06/09/99 5.590 to 5.870 54,994,197
16,000 National Westminster Bank PLC........................... 07/30/98 5.790 15,999,878
45,000 Rabobank Nederland...................................... 07/13/98 to 12/11/98 5.400 to 5.620 45,001,127
15,000 Royal Bank of Canada.................................... 10/01/98 5.800 14,998,191
75,000 Skandinaviska Enskilda Banken........................... 07/01/98 to 07/28/98 5.580 to 5.640 75,000,192
138,750 Societe Generale........................................ 07/07/98 to 06/18/99 5.580 to 5.970 138,742,910
45,000 Societe Generale........................................ 07/01/98 5.562 to 5.780* 44,976,369
93,000 Svenska Handelsbanken................................... 07/14/98 to 05/14/99 5.540 to 5.860 92,989,912
43,000 Swiss Bank Corporation.................................. 07/17/98 to 12/18/98 5.850 to 5.880 43,000,092
15,000 Toronto-Dominion Bank................................... 06/04/99 5.680 14,990,685
20,000 Westpac Banking Corporation............................. 05/18/99 5.750 19,989,895
------------
720,859,587
------------
Total Certificates of Deposit (cost-$891,629,265)................. 891,629,265
------------
</TABLE>
4
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
COMMERCIAL PAPER @ - 52.29%
Asset-Backed - 11.43%
$100,852 Atlantis One Funding Corporation........................ 07/01/98 to 09/30/98 5.480 to 5.550% $100,198,692
8,000 CC (USA) Incorporated................................... 09/21/98 5.520 7,899,413
20,111 Delaware Funding Corporation............................ 07/30/98 5.580 20,020,601
64,308 Enterprise Funding Corporation.......................... 07/02/98 to 11/23/98 5.510 to 5.590 63,825,814
25,000 Falcon Asset Securitization Corporation................. 07/15/98 5.540 24,946,139
10,000 New Center Asset Trust.................................. 08/17/98 5.380 9,929,761
146,840 Preferred Receivables Funding Corporation............... 07/06/98 to 10/19/98 5.500 to 5.550 146,057,902
37,213 Receivables Capital Corporation......................... 07/06/98 to 07/20/98 5.520 to 5.550 37,147,247
69,105 Triple-A One Funding Corporation........................ 07/06/98 to 07/22/98 5.530 to 5.550 68,991,069
------------
479,016,638
------------
Auto & Truck - 3.57%
25,000 Daimler-Benz North America Corporation.................. 07/22/98 5.520 24,919,500
25,000 Ford Motor Credit Company............................... 07/02/98 5.530 24,996,160
80,000 General Motors Acceptance Corporation................... 07/01/98 6.500 80,000,000
20,000 PACCAR Financial Corporation............................ 07/06/98 5.500 19,984,722
------------
149,900,382
------------
Banking - 15.01%
20,000 B.B.V. Finance (Delaware) Incorporated.................. 07/07/98 5.510 19,981,633
64,000 Bankers Trust Corporation............................... 07/07/98 to 03/15/99 5.470 to 5.530 62,756,673
54,199 BBL North America Incorporated.......................... 07/01/98 to 07/09/98 5.520 to 5.550 54,156,821
20,000 BCI Funding Corporation................................. 09/21/98 5.520 19,748,533
60,000 BHF Finance (Delaware) Incorporated..................... 07/14/98 to 07/16/98 5.520 to 5.540 59,871,721
20,000 Canadian Imperial Holdings Incorporated................. 07/06/98 5.515 19,984,681
60,000 Cregem North America Incorporated....................... 07/02/98 to 07/17/98 5.480 to 5.500 59,922,181
35,000 Den norske Bank......................................... 07/20/98 to 08/11/98 5.500 to 5.520 34,830,725
40,000 Morgan (J.P.) & Company Incorporated.................... 09/10/98 to 12/11/98 5.480 to 5.500 39,286,811
20,000 National Bank of Canada................................. 08/19/98 5.390 19,853,272
118,000 Nordbanken North America Incorporated................... 07/08/98 to 09/18/98 5.390 to 5.520 117,252,171
30,000 San Paolo U.S. Financial Company........................ 07/07/98 to 07/13/98 5.480 to 5.510 29,954,283
81,000 Unifunding Incorporated................................. 07/08/98 to 12/03/98 5.450 to 5.510 79,880,533
11,500 Westpac Capital Corporation............................. 07/02/98 5.500 11,498,243
------------
628,978,281
------------
Broker-Dealer - 6.11%
20,000 Credit Suisse First Boston.............................. 08/25/98 5.510 19,831,639
15,000 Goldman Sachs Group L.P. (The).......................... 09/25/98 5.580 14,800,050
90,000 Lehman Brothers Holdings Incorporated................... 07/15/98 to 08/25/98 5.520 to 5.570 89,617,624
20,000 Lehman Brothers Holdings Incorporated................... 07/08/98 5.656* 20,000,000
92,000 Morgan Stanley, Dean Witter & Company................... 07/09/98 to 08/26/98 5.450 to 5.530 91,681,849
20,000 Morgan Stanley, Dean Witter & Company................... 07/07/98 5.616* 20,000,000
------------
255,931,162
------------
Business Services - 1.09%
46,000 Block Financial Corporation............................. 08/17/98 to 09/03/98 5.510 to 5.530 45,590,351
------------
Chemicals - 0.53%
10,475 DuPont (E. I.) de Nemours & Company..................... 07/10/98 5.500 10,460,597
12,000 Henkel Corporation...................................... 07/08/98 5.510 11,987,143
------------
22,447,740
------------
Consumer Products - 0.35%
15,000 Rubbermaid Incorporated................................. 12/10/98 5.510 14,628,075
------------
Drugs, Health Care - 2.76%
16,000 Abbott Laboratories..................................... 07/20/98 5.540 15,953,218
24,280 Glaxo Wellcome PLC...................................... 07/27/98 5.500 24,183,555
44,900 Novartis Finance Corporation............................ 07/10/98 to 07/15/98 5.500 to 5.510 44,817,320
12,382 Pfizer Incorporated..................................... 07/22/98 5.500 12,342,274
18,550 SmithKline Beecham Corporation.......................... 08/18/98 5.520 18,413,472
------------
115,709,839
------------
Finance - Aircraft - 0.23%
10,000 International Lease Finance Corporation................. 10/29/98 5.480 9,817,333
------------
</TABLE>
5
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- -------------- ------------
<S> <C> <C> <C>
COMMERCIAL PAPER (CONCLUDED)
Finance - Conduit - 2.00%
$39,236 MetLife Funding Incorporated............................ 07/10/98 to 07/30/98 5.510 to 5.530% $ 39,120,408
20,000 Svenska Handelsbanken Incorporated...................... 07/27/98 5.510 19,920,411
25,000 Texaco Incorporated..................................... 07/09/98 5.510 24,969,389
------------
84,010,208
------------
Finance - Consumer - 0.82%
20,000 American General Finance Corporation.................... 08/03/98 5.500 19,899,167
14,600 Transamerica Finance Corporation........................ 08/25/98 5.510 14,477,096
------------
34,376,263
------------
Finance - Subsidiary - 1.31%
10,000 Creditanstalt Finance Incorporated...................... 07/07/98 5.480 9,990,867
20,000 Deutsche Bank Financial Incorporated.................... 07/14/98 5.510 19,960,205
25,000 National Australia Funding (Delaware) Incorporated...... 07/02/98 to 11/10/98 5.320 to 5.530 24,802,629
------------
54,753,701
------------
Food, Beverage & Tobacco - 0.83%
35,000 Diageo Capital PLC...................................... 08/20/98 to 09/03/98 5.430 to 5.500 34,691,319
------------
Insurance - 0.98%
15,000 Prudential Funding Corporation.......................... 07/16/98 5.520 14,965,500
10,200 St. Paul Companies Incorporated......................... 07/23/98 5.520 10,165,592
15,920 USAA Capital Corporation................................ 07/08/98 5.510 15,902,944
------------
41,034,036
------------
Insurance - Property/Casualty - 0.60%
25,000 John Hancock Capital Corporation........................ 07/06/98 5.560 24,980,695
------------
Machinery - 0.33%
14,000 Caterpillar Financial Services Corporation.............. 07/28/98 5.370 13,943,615
------------
Metals & Mining - 0.62%
26,000 Rio Tinto America Incorporated.......................... 08/05/98 to 08/17/98 5.500 to 5.510 25,831,430
------------
Miscellaneous - 1.24%
52,600 Beta Finance Incorporated............................... 07/20/98 to 11/18/98 5.510 to 5.520 52,045,787
------------
Printing & Publishing - 0.48%
20,000 Scripps (E.W.) Company.................................. 07/21/98 5.510 19,938,778
------------
Telecommunications - 0.95%
20,000 Bell Atlantic Network Funding Corporation............... 07/20/98 5.540 19,941,522
20,000 Lucent Technologies Incorporated........................ 07/07/98 5.520 19,981,600
------------
39,923,122
------------
Utility - Electric - 1.05%
44,000 Southern Company........................................ 07/10/98 to 07/15/98 5.510 to 5.520 43,916,397
-------------
Total Commercial Paper (cost-$2,191,465,152)...................... 2,191,465,152
-------------
SHORT-TERM CORPORATE OBLIGATIONS - 13.37%
Banking - 1.34%
7,755 Bankers Trust Corporation............................... 07/30/99 6.625 7,821,615
15,000 Bankers Trust Corporation............................... 08/19/98 5.679* 14,999,043
32,970 National Australia Bank Limited......................... 10/15/98 9.700 33,319,845
------------
56,140,503
------------
Broker-Dealer - 7.20%
35,000 Bear Stearns Companies Incorporated..................... 04/26/99 to 06/14/99 5.800 35,000,000
145,000 Bear Stearns Companies Incorporated..................... 07/07/98 to 08/26/98 5.531 to 5.769* 145,011,395
6,268 Lehman Brothers Holdings Incorporated................... 11/01/98 to 11/10/98 6.590 to 8.875 6,291,549
76,000 Lehman Brothers Holdings Incorporated................... 07/01/98 to 07/26/98 5.706 to 5.720* 76,003,945
26,000 Merrill Lynch & Company Incorporated.................... 10/09/98 to 07/19/99 5.960 to 6.200 26,073,004
13,215 Morgan Stanley, Dean Witter & Company................... 03/01/99 5.625 13,208,145
------------
301,588,038
------------
</TABLE>
6
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
- --------- -------------------- -------------- --------------
<S> <C> <C> <C>
SHORT-TERM CORPORATE OBLIGATIONS (CONCLUDED)
Business Services - 0.29%
$12,000 First Data Corporation................................. 08/07/98 6.190% $ 12,003,957
--------------
Computers - 1.19%
10,000 IBM Credit Corporation.................................. 07/07/99 5.680 9,993,100
40,000 IBM Credit Corporation.................................. 07/07/98 to 09/21/98 5.538 to 5.731* 39,996,823
--------------
49,989,923
--------------
Finance - Aircraft - 0.20%
8,467 International Lease Finance Corporation................. 04/30/99 6.700 8,521,010
--------------
Finance - Independent - 0.36%
15,000 National Rural Utilities Cooperative Finance
Corporporation........................................ 07/10/98 5.980 15,000,000
--------------
Insurance - 0.64%
15,000 Prudential Funding Corporation.......................... 10/14/98 5.840 14,996,370
7,000 Prudential Funding Corporation.......................... 07/07/98 5.761* 7,000,000
5,000 USAA Capital Corporation................................ 09/18/98 6.320 5,003,574
--------------
26,999,944
--------------
Miscellaneous - 2.15%
72,000 Beta Finance Incorporated............................... 08/17/98 to 04/27/99 5.560 to 5.920 72,000,000
18,000 Beta Finance Incorporated............................... 07/07/98 5.811* 18,000,000
--------------
90,000,000
--------------
Total Short-Term Corporate Obligations (cost-$560,243,375)........ 560,243,375
--------------
REPURCHASE AGREEMENT - 0.32%
13,587 Repurchase Agreement dated 06/30/98 with HSBC
Securities Inc., collateralized by $13,374,000 U.S.
Treasury Notes, 6.875% due 08/31/99 (value
$13,858,808); proceeds: $13,589,151
(cost-$13,587,000)..................................... 07/01/98 5.700 13,587,000
--------------
Total Investments (cost-$4,188,179,834 which approximates
cost for federal income tax purposes)-99.93%........... 4,188,179,834
Other assets in excess of liabilities-0.07%....................... 2,838,544
--------------
Net Assets (applicable to 4,192,932,215 shares of Common
Stock outstanding at $1.00 per share)-100.00%.......... $4,191,018,378
--------------
--------------
</TABLE>
- ----------
* Variable rate securities--maturity dates reflect earlier of reset dates or
maturity dates. The interest rates shown are the current rates as of June 30,
1998 and reset periodically.
+ Security exempt from registration under Rule 144 of the Securities Act of
1933. These Securities may be resold in transactions exempt from registration
normally to qualified institutional buyers.
@ Interest rates shown are discount rates at date of purchase.
Weighted Average Maturity--71 days
See accompanying notes to financial statements
7
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 1998
Investment Income:
Interest..................................................... $233,922,479
------------
Expenses:
Investment advisory and administration....................... 16,593,019
Transfer agency and related services fees.................... 8,010,054
Distribution fees............................................ 4,006,886
Reports and notices to shareholders.......................... 1,397,544
Federal and state registration............................... 616,445
Custody and accounting....................................... 414,998
Legal and audit.............................................. 265,435
Insurance expense............................................ 198,507
Directors' fees.............................................. 10,500
Other expenses............................................... 453,935
------------
31,967,323
------------
Net investment income........................................ 201,955,156
------------
Net realized loss from investment transactions............... (125,003)
------------
Net increase in net assets resulting from operations......... $201,830,153
------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended June 30,
------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
From operations:
Net investment income............................................................... $ 201,955,156 $ 178,312,501
Net realized gains (losses) from investment transactions............................ (125,003) 52,049
-------------- --------------
Net increase in net assets resulting from operations................................ 201,830,153 178,364,550
-------------- --------------
Dividends to shareholders from:
Net investment income............................................................... (201,955,156) (178,312,501)
-------------- --------------
Net increase in net assets from capital stock transactions.......................... 268,390,274 422,192,652
-------------- --------------
Net increase in net assets.......................................................... 268,265,271 422,244,701
-------------- --------------
Net Assets:
Beginning of year................................................................... 3,922,753,107 3,500,508,406
-------------- --------------
End of year......................................................................... $4,191,018,378 $3,922,753,107
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber RMA Money Fund, Inc. (the "Corporation") was incorporated in
the state of Maryland on July 2, 1982 and is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940, as amended,
as an open-end, diversified management investment company. The Corporation is
a series mutual fund with three funds: PaineWebber Retirement Money Fund (the
"Fund"), PaineWebber RMA Money Market Portfolio and PaineWebber RMA U.S.
Government Portfolio. The financial statements of PaineWebber RMA Money Market
Portfolio and PaineWebber RMA U.S. Government Portfolio are not included herein.
The preparation of financial statements in accordance with generally
accepted accounting principles requires Fund management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is
a summary of significant accounting policies.
Valuation and Accounting for Investments and Investment Income--
Investments are valued at amortized cost which approximates market value.
Investment transactions are recorded 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
obligation. 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.
Dividends and Distributions--Dividends and distributions to shareholders
are recorded on the ex-dividend date. The amount of dividends and
distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
These "book/tax" 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.
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.
INVESTMENT ADVISER AND ADMINISTRATOR
The Corporation's board of directors has approved an Investment Advisory
and Administration Contract ("Advisory Contract") with PaineWebber
Incorporated ("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:
Annual
Average Daily Net Assets Rate
------------------------ ------
Up to $1.0 billion....................................... 0.50%
In excess of $1.0 billion up to $1.5 billion............. 0.44
Over $1.5 billion........................................ 0.36
At June 30, 1998, the Fund owed PaineWebber $1,407,408 in investment
advisory and administration fees.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a wholly
owned asset management 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.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DISTRIBUTION PLAN
PaineWebber is the distributor of the Fund's shares and the exclusive
dealer for the sale of those shares. Under the plan of distribution, the Fund
is authorized to pay PaineWebber a service fee, which is accrued daily and
paid monthly, at an annual rate of up to 0.15% of the Fund's average daily net
assets. Prior to February 12, 1998, PaineWebber was compensated for its
services under the plan at an annual rate of 0.08% of the Fund's average daily
net assets. Effective February 12, 1998, the board of directors approved an
increase in the annual rate of such fee to 0.125%. At June 30, 1998, the Fund
owed PaineWebber $437,313 in distribution fees.
TRANSFER AGENCY AND RELATED SERVICES FEES
Prior to August 1, 1997, the Fund paid 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
these services for the month ended July 31, 1997, PaineWebber earned $251,757
in service fees from the Fund.
Subsequent to July 31, 1997, PaineWebber provides transfer agency related
services to the Fund pursuant to a delegation of authority from PFPC, Inc.,
the Fund's transfer agent, and is compensated for these services by PFPC,
Inc., not the Fund. For the eleven months ended June 30, 1998, PaineWebber
received approximately 51% of the total transfer agency service fees collected
by PFPC, Inc. from the Fund.
OTHER LIABILITIES
At June 30, 1998, the amount payable for investments purchased and
dividends payable aggregate $18,037,349, and $7,394,479, respectively.
FEDERAL TAX STATUS
The Fund intends to distribute substantially 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, 1998, the Fund had a net capital loss carryforward of
$1,767,582 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.
CAPITAL STOCK
There are 20 billion shares of $0.001 par value common stock authorized.
Transactions in common stock, at $1.00 per share, were as follows:
For the Year Ended June 30,
----------------------------------
1998 1997
-------------- --------------
Shares sold..................... 16,116,961,408 13,353,452,948
Shares repurchased.............. (16,046,156,107) (13,105,386,823)
Dividends reinvested............ 197,584,973 174,126,527
-------------- --------------
Net increase.................... 268,390,274 422,192,652
10
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<TABLE>
<CAPTION>
For the Year Ended June 30,
--------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Net investment income.......................................... 0.049 0.048 0.050 0.047 0.028
Dividends from net investment income........................... (0.049) (0.048) (0.050) (0.047) (0.028)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total investment return (1).................................... 5.03% 4.89% 5.13% 4.83% 2.75%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Ratios/Supplemental Data:
Net assets, end of year (000's)............................. $4,191,018 $3,922,753 $3,500,508 $2,966,199 $2,450,235
Expenses to average net assets.............................. 0.78% 0.75% 0.70% 0.78% 0.77%
Net investment income to average net assets................. 4.91% 4.79% 5.01% 4.75% 2.77%
</TABLE>
- -------
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each year reported, reinvestment of all dividends and
distributions at net asset value on the payable dates and a sale at net
asset value on the last day of each period reported.
11
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
Board of Directors and Shareholders
PaineWebber RMA Money Fund, Inc.
We have audited the accompanying statement of net assets of PaineWebber
Retirement Money Fund, Inc. (one of the portfolios of the PaineWebber RMA
Money Fund, Inc.) as of June 30, 1998, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended and the financial highlights for each
of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
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
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 and financial highlights. Our procedures included
confirmation of securities owned at June 30, 1998, by correspondence with the
custodian and brokers. 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, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
PaineWebber Retirement Money Fund at June 30, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
August 21, 1998
12
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
TAX INFORMATION (UNAUDITED)
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end (June 30,
1998) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that all of the
distributions paid during the fiscal year were derived from net investment
income. This entire amount is taxable as ordinary income, none of which
qualifies for the dividend received deduction available to corporate
shareholders.
Dividends received by tax-exempt recipients (e.g., IRAs and Keoghs) need
not be reported as taxable income. Some retirement trusts (e.g., corporate,
Keogh and 403(b)(7) plans) may need this information for their annual
information reporting.
Because the Fund's fiscal year is not the calendar year, another
notification will be sent in respect of calendar year 1998. The second
notification, which will reflect the amount to be used by calendar year
taxpayers on their federal income tax returns, will be made in conjunction
with Form 1099 DIV and will be mailed in January 1999. Shareholders are advised
to consult their own tax advisers with respect to the tax consequences of
their investment in the Fund.
13
<PAGE>
[This Page Intentionally Left Blank]
14
<PAGE>
DIRECTORS
E. Garrett Bewkes, Jr.
Chairman
Margo N. Alexander
Richard Q. Armstrong
Richard R. Burt
Mary C. Farrell
Meyer Feldberg
George W. Gowen
Frederic V. Malek
Carl W. Schafer
PRINCIPAL OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Paul H. Schubert
Vice President and Treasurer
Dennis L. McCauley
Vice President
Susan P. Ryan
Vice President
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.
<PAGE>
PaineWebber
(C)1998 PaineWebber Incorporated
Member SIPC
