<PAGE>
[LOGO OF PAINEWEBBER APPEARS HERE]
- --------------------------------------------------------------------------------
RETIREMENT
MONEY FUND
JUNE 30, 19999
ANNUAL REPORT
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND ANNUAL REPORT
August 20, 1999
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, 1999.
MARKET REVIEW
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[GRAPHIC APPEARS HERE]
The key market event in the first half of the fiscal year was the global
financial crisis that began with Russia's default in August 1998. Money market
mutual fund assets increased during the period as investors sought safety of
principal. The Federal Reserve cut the federal funds rate by 0.75% to help
restore confidence in the financial markets. At the same time, European central
banks began cutting interest rates in preparation for the January 1, 1999, debut
of the euro currency. Lower interest rates helped to calm the global financial
markets, and rates declined across the short-term yield curve (maturities of one
month to one year).
During the second half of the fiscal year, inflation risk became the dominant
theme driving bond yields. Interest rates rose as the markets reacted to
improving economic prospects in Asia and Latin America, rapidly growing U.S.
demand, higher oil prices and fears that future wage increases might not be
offset by commodity deflation. At the end of the fiscal year, the Federal
Reserve raised the federal funds rate by 0.25% to 5%.
PORTFOLIO REVIEW
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PERFORMANCE AND CHARACTERISTICS, JUNE 30, 1999
- -------------------------------------------------------------
7-Day Current Yield 4.32%
Weighted Average Maturity 59 days
Net Assets $5.1 billion
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[GRAPHIC APPEARS HERE]
We remained slightly bullish on the fixed income markets during the first nine
months of the Fund's fiscal year, expecting interest rates to remain unchanged.
Since we did not expect major changes in rates, we kept the Fund's weighted
average maturity slightly long, about 5-10 days above the average of its peer
group. During the last three months of the fiscal year, we shortened the
maturity to 3-5 days above the peer group average in anticipation of rising
interest rates. We maintained our focus on top-tier credit quality instruments.
<PAGE>
ANNUAL REPORT
OUTLOOK
We are closely monitoring the market as Y2K approaches. It is likely that
issues of new short-term debt will decrease toward year-end, limiting supplies
and triggering price increases. Also, investors might seek safety by reducing
their exposure to corporate credits and increasing their positions in U.S.
government securities, precipitating a "flight to quality." To provide
sufficient liquidity at year-end, we expect to maintain a position of about 20%
in U.S. Government securities. However, this planned defensive posture may
change in response to changing market circumstances as 1999 draws to a close.
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 Review on a fund in the PaineWebber Family of Funds/1/, please
contact your Financial Advisor.
Sincerely,
/s/ Margo Alexander /s/ Brian M. Storms
MARGO ALEXANDER BRIAN M. STORMS
Chairman and Chief Executive Officer President and Chief Operating Officer
Mitchell Hutchins Asset Management Inc. Mitchell Hutchins Asset Management Inc.
/s/ Dennis L. McCauley /s/ Susan P. Ryan
DENNIS L. MCCAULEY SUSAN P. RYAN
Chief Investment Officer--Fixed Income Portfolio Manager
Mitchell Hutchins Asset Management Inc. PaineWebber Retirement Money Fund
This letter is intended to assist shareholders in understanding how the Fund
performed during the fiscal year ended June 30, 1999, and refects our views at
the time of its writing. Of course, these views may change in response to
changing circumstances. We encourage you to consult your Financial Advisor
regarding your personal investment program.
/1/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.
2
<PAGE>
PaineWebber Retirement Money Fund June 30, 1999
Statement of Net Assets
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- --------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS - 18.08%
$ 45,000 Federal Farm Credit
Bank................... 07/01/99 to 07/29/99 4.800 to 5.589%* $ 44,985,421
20,000 Federal Farm Credit
Bank................... 08/27/99 4.680 19,851,800
182,645 Federal Home Loan Bank.. 08/18/99 to 05/24/00 4.700 to 5.210 182,501,653
71,000 Federal Home Loan Bank.. 07/01/99 to 07/07/99 4.630 to 5.399* 70,988,900
157,990 Federal Home Loan
Mortgage Corporation... 07/15/99 to 09/03/99 4.750 to 4.850 157,467,107
39,000 Federal Home Loan
Mortgage Corporation... 07/07/99 5.389* 39,008,915
124,620 Federal National
Mortgage Association... 07/01/99 to 08/24/99 4.690 to 4.920 124,362,907
188,000 Student Loan Marketing
Association............ 07/01/99 to 07/07/99 4.670 to 5.639* 187,993,616
95,000 United States Treasury
Bills.................. 10/14/99 to 01/06/00 3.850 to 4.260 93,192,444
--------------
Total U.S. Government and Agency
Obligations (cost - $920,352,763).. 920,352,763
--------------
BANK NOTES (DOMESTIC) - 4.56%
45,000 Comerica Bank N.A.
Detroit................ 07/01/99 to 07/29/99 4.884 to 4.890* 44,988,343
25,000 FCC National Bank....... 01/31/00 4.950 25,000,000
67,000 First Tennessee Bank
N.A.--Memphis.......... 01/14/00 to 04/12/00 5.100 to 5.210 67,000,000
95,000 First Tennessee Bank
N.A.--Memphis.......... 07/01/99 to 07/07/99 4.875 to 5.449* 95,000,000
--------------
Total Bank Notes (cost -
$231,988,343)..................... 231,988,343
--------------
CERTIFICATES OF DEPOSIT - 15.56%
Euro - 0.69%
35,000 Bank of Scotland........ 07/06/99 4.890 35,000,042
--------------
Yankee - 14.88%
15,000 ABN AMRO Bank NV ....... 02/14/00 5.045 14,992,900
15,000 Bank of Montreal ....... 05/03/00 5.160 14,994,533
22,000 Bank of Nova Scotia..... 03/03/00 5.340 22,015,207
20,000 Barclays Bank PLC....... 07/01/99 4.890* 19,991,269
20,000 Bayerische Hypotheken
und Wechsel Bank....... 07/13/00 4.908* 19,992,240
13,000 Bayerische Landesbank
Girozentrale........... 07/23/99 5.650 12,999,324
94,000 Canadian Imperial Bank
of Commerce............ 02/07/00 to 04/12/00 5.010 to 5.200 93,992,896
50,000 Lloyds Bank PLC......... 07/14/99 to 10/05/99 4.900 to 4.965 50,000,000
40,000 National Bank of Canada. 07/20/99 5.680 to 5.700 39,998,934
68,000 National Westminster
Bank PLC............... 01/07/00 to 07/03/00 4.980 to 5.530 67,996,016
36,000 Rabobank Nederland...... 07/30/99 to 01/07/00 4.990 to 5.640 35,994,810
62,800 Royal Bank of Canada.... 07/01/99 4.890 to 4.895* 62,778,357
24,500 Societe Generale........ 07/02/99 to 07/14/99 5.670 to 5.730 24,499,841
133,000 Svenska Handelsbanken... 02/16/00 to 05/22/00 5.063 to 5.280 132,961,694
30,000 Toronto-Dominion Bank... 07/01/99 4.885* 29,987,362
61,400 Toronto-Dominion Bank... 07/26/99 to 04/17/00 4.990 to 5.650 61,391,451
52,700 Westpac Banking
Corporation ........... 03/31/00 to 04/17/00 5.065 to 5.165 52,684,259
--------------
757,271,093
--------------
Total Certificates of Deposit
(cost - $792,271,135).............. 792,271,135
--------------
COMMERCIAL PAPER@ - 55.52%
Asset Backed - Auto & Truck - 0.43%
22,000 New Center Asset Trust.. 07/01/99 5.500 22,000,000
--------------
Asset Backed - Banking - 2.27%
105,000 Atlantis One Funding
Corporation............ 07/28/99 to 09/24/99 4.800 to 4.870 104,288,529
11,425 Woodstreet Funding
Corporation............ 07/02/99 to 07/27/99 4.900 to 5.100 11,413,087
--------------
115,701,616
--------------
Asset Backed - Credit Cards - 0.55%
28,000 Riverwoods Funding
Corporation............ 07/26/99 5.020 27,902,389
--------------
Asset Backed - Finance - 1.93%
49,500 Beta Finance
Incorporated........... 07/15/99 to 02/04/00 4.820 to 4.940 48,398,671
50,000 CC (USA), Incorporated.. 07/12/99 4.830 49,926,208
--------------
98,324,879
--------------
</TABLE>
3
<PAGE>
PaineWebber Retirement Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@ - (continued)
Asset Backed - Miscellaneous -
7.69%
$ 75,000 Asset Securitization
Cooperative
Corporation............ 07/01/99 to 07/06/99 4.850 to 5.500% $ 74,966,320
72,885 Falcon Asset
Securitization
Corporation............ 07/06/99 to 07/21/99 4.860 to 5.030 72,782,685
32,300 Preferred Receivables
Funding Corporation.... 07/01/99 to 08/12/99 4.830 32,271,825
112,119 Quincy Capital
Corporation............ 07/06/99 to 08/04/99 4.820 to 5.020 111,827,929
34,777 Triple-A One Funding
Corporation............ 07/12/99 to 07/19/99 4.930 to 5.110 34,711,455
65,000 Variable Funding Capital
Corporation............ 07/01/99 to 07/19/99 5.020 to 5.560 64,949,800
--------------
391,510,014
--------------
Auto & Truck - 9.38%
102,863 BMW US Capital
Incorporated........... 07/01/99 to 07/28/99 4.860 to 5.650 102,764,661
115,000 DaimlerChrysler N. A.
Holding Corporation.... 07/09/99 to 07/22/99 4.810 to 5.020 114,762,672
148,000 Ford Motor Credit
Company................ 07/08/99 to 07/28/99 4.810 to 5.000 147,761,994
50,000 General Motors
Acceptance Corporation. 07/26/99 5.010 49,826,042
62,605 PACCAR Financial
Corporation............ 07/01/99 to 08/02/99 4.810 to 4.960 62,467,827
--------------
477,583,196
--------------
Banking - Domestic - 2.45%
20,000 BBL North America
Funding Corporation.... 08/11/99 4.810 19,890,439
30,000 Cregem North America
Incorporated........... 07/06/99 4.820 29,979,917
25,000 Den Danske Corporation.. 07/26/99 5.030 24,912,673
20,000 Morgan (J.P.) & Company
Incorporated........... 07/07/99 4.820 19,983,933
30,000 Nordbanken North America
Incorporated........... 07/22/99 4.810 29,915,825
--------------
124,682,787
--------------
Banking - Foreign - 2.72%
25,000 Banque et Caisse
d'Epargne de L'Etat.... 07/07/99 4.830 24,979,875
39,000 Bayerische Hypotheken
und Wechsel Bank....... 04/28/00 5.150 38,977,011
75,000 Nationwide Building
Society................ 08/04/99 to 08/11/99 4.820 74,607,036
--------------
138,563,922
--------------
Broker - Dealer - 5.94%
20,000 Bear Stearns Companies
Incorporated........... 08/09/99 4.920 19,893,400
93,000 Goldman Sachs Group
L.P.................... 07/20/99 to 07/27/99 4.980 92,726,515
120,000 Merrill Lynch & Company
Incorporated........... 07/14/99 to 07/22/99 4.810 to 5.030 119,678,831
25,000 Morgan Stanley, Dean
Witter & Company ...... 07/01/99 5.110* 25,000,000
45,000 Morgan Stanley, Dean
Witter & Company....... 07/12/99 to 07/16/99 4.800 to 4.970 44,918,896
--------------
302,217,642
--------------
Business Services - 0.39%
20,000 Xerox Capital PLC....... 07/22/99 5.000 19,941,667
--------------
Chemicals - 0.49%
25,000 Henkel Corporation...... 08/10/99 4.800 24,866,667
--------------
Computers - 0.78%
40,000 IBM Credit Corporation.. 07/20/99 4.980 39,894,866
--------------
Consumer Products - 1.16%
58,901 Kimberly Clark
Corporation............ 07/09/99 to 07/19/99 4.970 to 5.000 58,797,089
--------------
Drugs & Health Care - 3.46%
21,700 Abbott Laboratories..... 07/22/99 5.200 21,634,176
25,000 Glaxo Wellcome PLC...... 08/10/99 4.800 24,866,667
129,745 Pfizer Incorporated..... 07/06/99 to 07/22/99 4.850 to 4.960 129,482,789
--------------
175,983,632
--------------
Electronics - 1.55%
44,200 Motorola Incorporated... 07/01/99 to 08/03/99 4.830 to 5.080 44,013,733
35,135 Vermont American
Corporation............ 07/07/99 to 07/15/99 4.850 to 4.980 35,084,037
--------------
79,097,770
--------------
</TABLE>
4
<PAGE>
PaineWebber Retirement Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@ - (concluded)
Energy - 1.85%
$ 25,000 Chevron USA
Incorporated........... 07/19/99 5.010% $ 24,937,375
69,400 Koch Industries
Incorporated........... 07/1/99 5.520 69,400,000
--------------
94,337,375
--------------
Finance - Aircraft - 0.97%
49,600 International Lease
Finance Corporation.... 07/08/99 to 08/09/99 4.800 to 4.850 49,501,396
--------------
Finance - Conduit - 1.27%
20,000 ANZ Delaware
Incorporated........... 07/26/99 4.800 19,933,333
45,000 MetLife Funding
Incorporated........... 07/21/99 to 07/29/99 4.980 to 5.190 44,850,100
--------------
64,783,433
--------------
Finance - Subsidiary - 1.57%
80,000 National Australia
Funding Incorporated... 07/12/99 to 08/04/99 4.800 to 5.020 79,784,129
--------------
Food, Beverage & Tobacco - 1.26%
31,893 Coca Cola Company....... 07/23/99 4.950 31,796,523
25,000 Diageo Capital PLC...... 07/06/99 4.820 24,983,264
7,200 Sara Lee Corporation.... 07/01/99 4.830 7,200,000
--------------
63,979,787
--------------
Insurance - 0.79%
40,000 Prudential Funding
Corporation............ 07/08/99 4.820 39,962,511
--------------
Insurance - Property/Casualty -
0.10%
4,950 A.I. Credit Corporation. 07/07/99 4.850 4,945,999
--------------
Manufacturing - Diversified - 0.59%
30,000 BTR Dunlop Finance
Incorporated........... 07/09/99 4.900 29,967,333
--------------
Metals & Mining - 0.49%
25,000 Rio Tinto America
Incorporated........... 07/08/99 4.825 24,976,545
--------------
Paper & Forest Products - 0.53%
27,023 Weyerhaeuser Real Estate
Company................ 07/07/99 to 07/12/99 4.850 to 5.000 26,994,665
--------------
Telecommunications - 3.80%
42,519 Ameritech Capital
Funding Corporation.... 07/06/99 to 07/13/99 4.850 to 4.900 42,461,567
30,000 AT&T Capital
Corporation............ 07/27/99 to 07/29/99 4.790 29,890,895
25,000 Bell Atlantic Financial
Services Incorporated.. 07/19/99 5.000 24,937,500
96,478 BellSouth Capital
Funding Corporation.... 07/09/99 to 07/20/99 4.830 to 4.960 96,290,185
--------------
193,580,147
--------------
Utility - Electric - 1.11%
57,350 Southern Company........ 07/06/99 to 02/16/00 4.850 to 5.350 56,632,381
--------------
Total Commercial Paper (cost -
$2,826,513,837)................... 2,826,513,837
--------------
SHORT-TERM CORPORATE OBLIGATIONS -
4.80%
Asset Backed - Finance - 0.39%
20,000 Beta Finance
Incorporated........... 07/15/99 5.700 20,000,000
--------------
Banking - Domestic - 0.90%
13,000 Banc One Corporation.... 07/01/99 4.870* 12,998,387
25,000 Bank of New York
Incorporated........... 07/07/99 5.389* 25,000,000
7,755 Bankers Trust Company... 07/30/99 6.625 7,759,966
--------------
45,758,353
--------------
Broker - Dealer - 1.87%
22,000 Bear Stearns Companies
Incorporated........... 07/01/99 to 07/14/99 5.030 to 5.210* 22,000,651
37,000 Lehman Brothers Holdings
Incorporated........... 07/01/99 to 07/15/99 5.040 to 5.220* 37,007,120
20,000 Merrill Lynch & Company
Incorporated........... 07/01/99 4.850* 20,000,000
16,000 Merrill Lynch & Company
Incorporated........... 07/19/99 6.200 16,003,431
--------------
95,011,202
--------------
</TABLE>
5
<PAGE>
PaineWebber Retirement Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- --------------- --------------
<C> <S> <C> <C> <C>
SHORT-TERM CORPORATE OBLIGATIONS -
(concluded)
Computers - 0.69%
$10,000 IBM Credit Corporation.. 07/07/99 5.680% $ 9,999,887
25,000 IBM Credit Corporation.. 09/15/99 to 09/16/99 5.094 to 5.105* 25,000,000
--------------
34,999,887
--------------
Finance - Diversified - 0.66%
23,500 Associates Corporation
of North America....... 07/29/99 5.097* 23,485,930
10,000 Associates Corporation
of North America....... 10/15/99 6.750 10,044,820
--------------
33,530,750
--------------
Insurance - 0.29%
15,000 Prudential Funding
Corporation............ 07/07/99 5.509* 15,000,000
--------------
Total Short-Term Corporate
Obligations (cost - $244,300,192). 244,300,192
--------------
TIME DEPOSIT - 1.20%
Banking - Domestic - 1.20%
61,281 First National Bank of
Chicago (cost -
$61,281,739)........... 07/01/99 5.500 61,281,739
--------------
Total Investments (cost -
$5,076,708,009 which approximates
cost for federal income tax
purposes) - 99.72%................ 5,076,708,009
Other assets in excess of
liabilities - 0.28%............... 14,230,360
--------------
Net Assets (applicable to
5,092,797,100 shares of common
stock
outstanding at $1.00 per share) -
100.00%.......................... $5,090,938,369
==============
</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,
1999.
@Interest rates shown are discount rates at date of purchase.
Weighted Average Maturity--59 Days
See accompanying notes to financial statements
6
<PAGE>
PaineWebber Retirement Money Fund
Statement of Operations For the Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment Income:
Interest.......................................................... $251,283,008
------------
Expenses:
Investment advisory and administration............................ 19,032,089
Transfer agency and related services fees......................... 7,227,283
Distribution fees................................................. 5,983,366
Reports and notices to shareholders............................... 553,500
Custody and accounting............................................ 483,198
Federal and state registration.................................... 196,422
Insurance expense................................................. 108,568
Legal and audit................................................... 132,435
Directors' fees................................................... 10,500
Other expenses.................................................... 2,627
------------
33,729,988
------------
Net investment income............................................. 217,553,020
Net realized gains from investment transactions................... 55,106
------------
Net increase in net assets resulting from operations.............. $217,608,126
============
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Years Ended June 30,
------------------------------
1999 1998
-------------- --------------
<S> <C> <C>
From operations:
Net investment income.......................... $ 217,553,020 $ 201,955,156
Net realized gains (losses) from investment
transactions.................................. 55,106 (125,003)
-------------- --------------
Net increase in net assets resulting from oper-
ations........................................ 217,608,126 201,830,153
-------------- --------------
Dividends to shareholders from:
Net investment income.......................... (217,553,020) (201,955,156)
-------------- --------------
Net increase in net assets from capital stock
transactions.................................. 899,864,885 268,390,274
-------------- --------------
Net increase in net assets..................... 899,919,991 268,265,271
Net assets:
Beginning of year.............................. 4,191,018,378 3,922,753,107
-------------- --------------
End of year.................................... $5,090,938,369 $4,191,018,378
============== ==============
</TABLE>
See accompanying notes to financial statements
7
<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 Ex-
change Commission under the Investment Company Act of 1940, as amended, as an
open-end, diversified management investment company. The Corporation is a se-
ries mutual fund with three funds: PaineWebber Retirement Money Fund (the
"Fund"), PaineWebber RMA Money Market Portfolio and PaineWebber RMA U.S. Gov-
ernment Portfolio. The financial statements of PaineWebber RMA Money Market
Portfolio and PaineWebber RMA U.S. Government Portfolio are not included here-
in.
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 differ-
ences 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 ad-
ministrator of the Corporation and each of its series. In accordance with the
Advisory Contract, the Fund pays PaineWebber an investment advisory and admin-
istration 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 $1.0 billion.................................................. 0.50%
In excess of $1.0 billion and up to $1.5 billion.................... 0.44
Over $1.5 billion................................................... 0.36
</TABLE>
At June 30, 1999, the Fund owed PaineWebber $1,670,904 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-ad-
ministrator of the Fund pursuant to a Sub-Advisory and Sub-Administration Con-
tract between PaineWebber and Mitchell Hutchins. In accordance with that con-
tract, 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.
8
<PAGE>
Notes to Financial Statements (continued)
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 au-
thorized 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 as-
sets. For the year ended June 30, 1999 PaineWebber was compensated for its
services under the plan at an annual rate of 0.125% of the Fund's average daily
net assets. At June 30, 1999, the Fund owed PaineWebber $528,806 in distribu-
tion fees.
Transfer Agency and Related Services Fees
PaineWebber provides transfer agency and 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 year ended
June 30, 1999, PaineWebber received approximately 51% of the total transfer
agency and related services fees collected by PFPC, Inc. from the Fund.
Other Liabilities
At June 30, 1999, the amount payable for dividends payable aggregate
$8,431,245.
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 sub-
stantially 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, 1999, the Fund had a net capital loss carryforward of $1,858,732
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 2007. To
the extent that the losses are used to offset future capital gains, it is prob-
able 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:
<TABLE>
<CAPTION>
For the Years Ended June 30,
--------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
Shares sold.............................. 19,511,897,445 16,116,961,408
Shares repurchased....................... (18,824,533,330) (16,046,156,107)
Dividends reinvested..................... 212,500,770 197,584,973
--------------- ---------------
Net increase............................. 899,864,885 268,390,274
=============== ===============
</TABLE>
9
<PAGE>
PaineWebber Retirement Money Fund
Financial Highlights
Selected data for a share of common stock outstanding throughout each period is
presented below:
<TABLE>
<CAPTION>
For the Years Ended June 30,
--------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<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... 0.046 0.049 0.048 0.050 0.047
Dividends from net
investment income...... (0.046) (0.049) (0.048) (0.050) (0.047)
---------- ---------- ---------- ---------- ----------
Net asset value, end of
year................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total investment return
(1).................... 4.66 % 5.03 % 4.89 % 5.13 % 4.83 %
========== ========== ========== ========== ==========
Ratios/Supplemental
Data:
Net assets, end of year
(000's)................ $5,090,938 $4,191,018 $3,922,753 $3,500,508 $2,966,199
Expenses to average net
assets................. 0.71 % 0.78 % 0.75 % 0.70 % 0.78 %
Net investment income to
average net assets..... 4.55 % 4.91 % 4.79 % 5.01 % 4.75 %
</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 year reported.
10
<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 Re-
tirement Money Fund (one of the portfolios of PaineWebber RMA Money Fund, Inc.)
as of June 30, 1999, 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 stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial high-
lights 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, 1999, by correspondence with the custodian. An au-
dit also includes assessing the accounting principles used and significant es-
timates made by management, as well as evaluating the overall financial state-
ment 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, 1999, the results of its opera-
tions 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 19, 1999
11
<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,
1999) as to the federal tax status of distributions received by shareholders
during such fiscal year. Accordingly, we are advising you that all of the dis-
tributions 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 re-
porting.
Because the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1999. 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 2000. Shareholders are advised to consult their own tax ad-
visers with respect to the tax consequences of their investment in the Fund.
12
<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
Brain M. Storms
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>
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(C)1999 PaineWebber Incorporated
Member SIPC
