<PAGE>
Paine Webber
---------------------------------------------------------------
Retirement
Money Fund
SEMIANNUAL REPORT
DECEMBER 31, 1998
<PAGE>
February 19, 1999
Dear Shareholder
We are pleased to present you with the semiannual report for the PaineWebber
Retirement Money Fund for the six-month period ended December 31, 1998.
MARKET REVIEW
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] Money market mutual fund assets increased during the
period as investors emphasized safety of principal in response to volatility in
the financial markets. The Federal Reserve cut the Federal Funds rate by 0.25%
in September, October and November, lowering it from 5.50% to 4.75%. At the same
time, European central banks were cutting rates in preparation for the January
1, 1999 debut of the euro currency.
Lower interest rates helped to calm the global financial markets, which had
become unsettled after Russia's default in August. Money-market yields were
lower across the short-term yield curve. Because inflation remained low,
however, money-market yields stayed relatively strong on an inflation-adjusted
basis and versus overseas short-term rates.
OUTLOOK
The Federal Reserve is likely to maintain a steady monetary policy given
strong U.S. economic growth and weak global growth. We expect the U.S. economy
to grow more slowly in 1999, with inflation remaining low and no recession on
the immediate horizon.
PORTFOLIO REVIEW
- --------------------------------------------------------------------------------
[GRAPHIC APPEARS HERE] We remain slightly bullish on the fixed income markets
over the six months ended December 31, 1998, expecting interest rates to hold
steady or fall slightly. Since we did not expect major changes in rates, we kept
the Portfolio's weighted average maturity slightly long, about 5-10 days above
the averages of its peer group.
The Fund's current yield for the seven-day period ended December 31, 1998
was 4.58%. Its weighted-average maturity was 57 days, and net assets totaled
$4.9 billion as of December 31, 1998.
1
<PAGE>
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 any of the funds in the PaineWebber Family of
Funds', please contact your Financial Advisor.
/S/ Margo Alexander /s/ Dennis L. McCauley /s/ Susan P. Ryan
MARGO ALEXANDER DENNIS L. McCAULEY SUSAN P. RYAN
President, Chief Investment Officer-- Portfolio Manager,
Mitchell Hutchins Asset Fixed Income PaineWebber Retirement
Management Inc. Mitchell Hutchins Asset Money Fund
Management Inc.
This letter is intended to assist shareholders in understanding how the
Fund performed during the six-month period ended December 31, 1998, and reflects
our views at the time of writing this report. Of course, these views may change
in response to changing circumstances. We encourage you to consult your
Financial Advisor regarding your personal investment program.
1Mutual 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
Statement of Net Assets December 31, 1998 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- --------------- --------------
<C> <S> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY
OBLIGATIONS - 25.98%
$ 43,000 Federal Farm Credit
Bank................... 01/20/99 to 08/27/99 4.680 to 5.240% $ 42,336,297
15,000 Federal Farm Credit
Bank................... 01/01/99 5.260* 15,000,000
201,225 Federal Home Loan Bank.. 01/04/99 to 12/29/99 4.500 to 5.580 200,667,149
51,000 Federal Home Loan Bank.. 01/04/99 to 01/06/99 4.630 to 5.073* 50,998,447
510,201 Federal Home Loan
Mortgage Corporation... 01/04/99 to 11/24/99 4.760 to 5.200 507,586,394
213,129 Federal National
Mortgage Association... 02/01/99 to 10/19/99 4.690 to 5.650 210,560,053
65,275 Student Loan Marketing
Association............ 02/22/99 to 10/29/99 4.900 to 5.450 65,278,251
128,000 Student Loan Marketing
Association............ 01/04/99 to 01/05/99 4.670 to 5.588* 128,000,000
45,000 United States Treasury
Bills.................. 10/14/99 to 12/09/99 3.850 to 4.180 43,395,528
--------------
Total U.S. Government and Agency
Obligations (cost -
$1,263,822,119)................... 1,263,822,119
--------------
BANK NOTES (DOMESTIC) - 3.51%
18,000 FCC National Bank....... 01/07/99 5.700 17,999,915
20,000 FCC National Bank....... 01/04/99 4.810* 19,998,598
15,000 First National Bank of
Chicago................ 01/14/99 5.190 14,996,298
40,000 KeyBank, N.A. .......... 01/04/99 4.670 to 4.800* 39,996,516
43,000 NationsBank, N.A........ 01/19/99 to 04/01/99 5.120 to 6.100 43,004,514
35,000 PNC Bank, N.A. ......... 01/04/99 4.790* 34,989,294
--------------
Total Bank Notes (cost -
$170,985,135)..................... 170,985,135
--------------
DEPOSITORY NOTES (YANKEE) - 0.53%
25,800 Westpac Banking
Corporation (cost -
$25,844,585).......... 04/23/99 to 06/09/99 5.730 25,844,585
--------------
CERTIFICATES OF DEPOSIT - 12.70%
Domestic - 2.35%
4,150 Bankers Trust Company... 04/06/99 5.680 4,149,044
20,000 Bankers Trust Company... 01/04/99 4.820* 19,994,061
90,000 First Tennessee Bank
N.A. .................. 01/11/99 to 01/28/99 5.220 to 5.500 90,000,000
--------------
114,143,105
--------------
Yankee - 10.35%
20,000 Bank of Nova Scotia..... 01/19/99 5.460 20,000,000
13,000 Bayerische Landesbank
Girozentrale........... 07/23/99 5.650 12,993,762
35,000 Credit Agricole
Indosuez............... 04/16/99 to 05/19/99 5.750 35,018,604
15,000 Den Danske Bank A/S..... 05/10/99 5.780 14,997,970
35,000 Deutsche Bank AG........ 03/02/99 to 04/23/99 5.650 to 5.720 34,997,055
25,000 Lloyds Bank PLC......... 03/15/99 5.110 25,000,000
60,000 National Bank of Canada. 03/05/99 to 07/20/99 5.680 to 5.760 59,986,452
25,000 National Westminster
Bank PLC............... 01/20/99 5.220 25,000,000
29,000 Rabobank Nederland...... 04/28/99 to 07/30/99 5.640 to 5.740 29,018,801
70,500 Societe Generale........ 01/13/99 to 07/14/99 5.580 to 5.765 70,493,658
45,000 Societe Generale........ 01/04/99 4.890 to 5.457* 44,990,887
66,000 Svenska Handelsbanken... 02/23/99 to 05/14/99 5.540 to 5.820 65,999,619
10,000 Swiss Bank Corporation.. 04/29/99 5.810 10,002,401
35,000 Toronto-Dominion Bank... 06/04/99 to 07/26/99 5.650 to 5.680 34,997,945
20,000 Westpac Banking
Corporation............ 05/18/99 5.750 19,995,687
--------------
503,492,841
--------------
Total Certificates of Deposit
(cost - $617,635,946).............. 617,635,946
--------------
</TABLE>
3
<PAGE>
PaineWebber Retirement Money Fund
<TABLE>
<CAPTION>
Principal
Amount Maturity Interest
(000) Dates Rates Value
--------- -------------------- -------------- --------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER@ - 46.70%
Asset Backed-Finance - 2.07%
$ 45,000 Beta Finance
Incorporated........... 03/02/99 to 03/08/99 5.220 to 5.270% $ 44,592,950
56,550 CC (USA) Incorporated... 01/07/99 to 03/10/99 5.180 to 5.220 56,239,664
--------------
100,832,614
--------------
Asset Backed-Miscellaneous - 6.39%
80,087 Enterprise Funding
Corporation............ 01/08/99 to 01/29/99 5.370 to 6.090 79,932,053
63,615 Preferred Receivables
Funding Corporation.... 01/04/99 to 02/19/99 5.190 to 5.500 63,310,492
48,755 Quincy Capital
Corporation............ 01/13/99 to 01/22/99 5.550 to 5.560 48,629,927
39,519 Triple-A One Funding
Corporation............ 01/28/99 5.360 39,360,134
80,000 Variable Funding Capital
Corporation............ 01/04/99 to 02/02/99 5.000 to 5.460 79,784,639
--------------
311,017,245
--------------
Auto & Truck - 5.42%
25,000 BMW US Capital
Corporation............ 01/25/99 5.310 24,911,500
20,000 Daimler-Benz North
America Corporation.... 01/22/99 5.070 19,940,850
69,000 Ford Motor Credit
Company................ 01/08/99 to 02/18/99 5.060 to 5.240 68,765,069
150,000 General Motors
Acceptance Corporation. 01/04/99 5.200 149,935,000
--------------
263,552,419
--------------
Banking - 5.59%
34,000 Bankers Trust
Corporation............ 01/15/99 to 04/05/99 5.458 to 5.530 33,648,799
20,000 Banque et Caisse
d'Epargne de L'Etat.... 02/01/99 5.250 19,909,583
85,000 BBL North America
Incorporated........... 01/05/99 to 01/19/99 5.470 to 5.830 84,845,628
25,000 Cregem North America
Incorporated........... 03/15/99 5.040 24,744,500
25,000 Morgan (J.P.) & Company
Incorporated........... 03/22/99 5.200 24,711,111
19,200 Nordbanken North America
Incorporated........... 02/12/99 5.470 19,077,472
40,000 SunTrust Banks
Incorporated........... 01/06/99 to 01/27/99 5.200 to 6.050 39,922,660
25,000 Unifunding Incorporated. 02/19/99 5.080 24,827,139
--------------
271,686,892
--------------
Broker-Dealer - 2.80%
7,000 BT Alex Brown
Incorporated........... 04/14/99 5.470 6,890,448
30,000 Lehman Brothers Holdings
Incorporated........... 01/12/99 to 02/18/99 5.520 to 5.530 29,892,533
20,000 Lehman Brothers Holdings
Incorporated........... 01/11/99 5.545* 20,001,006
20,000 Merrill Lynch & Company
Incorporated........... 04/30/99 5.470 19,638,372
60,000 Morgan Stanley Dean
Witter & Company....... 01/13/99 to 02/11/99 5.460 to 5.490 59,765,834
--------------
136,188,193
--------------
Business Services - 1.22%
30,000 Block Financial
Corporation............ 01/19/99 5.170 29,922,450
15,400 First Data Corporation.. 01/05/99 5.350 15,390,845
14,086 Xerox Capital........... 01/12/99 5.220 14,063,533
--------------
59,376,828
--------------
Consumer Products - 1.33%
20,000 Clorox Company.......... 01/20/99 5.150 19,945,639
45,000 Fortune Brands
Incorporated........... 01/13/99 to 01/22/99 5.100 to 5.300 44,890,292
--------------
64,835,931
--------------
Drugs, Health Care - 2.00%
25,000 Bayer Corporation....... 01/04/99 5.050 24,989,479
53,000 Glaxo Wellcome PLC...... 03/03/99 to 03/09/99 5.050 to 5.060 52,514,645
20,000 Johnson & Johnson....... 02/08/99 5.120 19,891,911
--------------
97,396,035
--------------
Electronics - 0.57%
27,704 Vermont American
Corporation............ 01/08/99 5.200 27,675,988
--------------
</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 - 1.95%
$ 15,000 Chevron USA
Incorporated........... 01/12/99 5.250% $ 14,975,937
20,000 Repsol International
Finance B.V............ 03/29/99 5.050 19,755,917
60,000 Texaco Incorporated..... 01/11/99 to 01/21/99 5.120 to 5.200 59,870,667
--------------
94,602,521
--------------
Finance - Aircraft - 0.62%
30,000 International Lease
Finance Corporation.... 01/15/99 5.200 29,939,333
--------------
Finance - Conduit - 0.51%
25,000 Svenska Handelsbanken
Incorporated........... 03/30/99 5.100 24,688,333
--------------
Finance - Consumer - 0.57%
27,888 Transamerica Finance
Corporation............ 01/21/99 to 02/05/990 5.140 27,772,517
--------------
Finance - Diversified - 0.72%
35,000 Associates Corporation
of North America....... 01/12/99 5.320 34,943,106
--------------
Finance - Subsidiary - 1.84%
25,000 Deutsche Bank Financial
Incorporated........... 01/11/99 5.440 24,962,222
65,000 National Australia
Funding (DE)
Incorporated........... 02/16/99 to 03/10/99 5.200 to 5.240 64,476,522
--------------
89,438,744
--------------
Food, Beverage & Tobacco - 1.92%
48,500 Diageo Capital PLC...... 01/08/99 to 02/03/99 5.130 to 5.330 48,361,749
25,000 Heinz (H.J.) Company.... 02/04/99 5.110 24,879,347
20,000 Pepsico Incorporated.... 01/19/99 5.150 19,948,500
--------------
93,189,596
--------------
Insurance - 3.20%
33,100 General Re Corporation.. 01/29/99 5.170 32,966,901
123,000 Prudential Funding
Corporation............ 01/06/99 to 01/27/99 5.170 to 5.510 122,701,546
--------------
155,668,447
--------------
Machinery - 0.37%
18,300 Caterpillar Financial
Services Corporation... 01/19/99 5.100 18,253,335
--------------
Manufacturing - Diversified - 0.82%
40,000 BTR Dunlop Finance
Incorporated........... 01/11/99 to 02/11/99 5.200 to 5.280 39,829,944
--------------
Metals - 1.01%
49,400 Rio Tinto America
Incorporated........... 02/03/99 to 02/25/99 5.100 to 5.360 49,093,296
--------------
Printing & Publishing - 2.35%
25,000 Gannett Company......... 01/12/99 5.200 24,960,278
25,000 The McGraw-Hill
Companies Incorporated. 03/31/99 5.000 24,690,972
65,000 Reed Elsevier
Incorporated........... 01/07/99 to 01/21/99 5.080 to 5.270 64,892,264
--------------
114,543,514
--------------
Telecommunications - 1.38%
15,000 Ameritech Capital
Funding Corporation.... 01/06/99 5.170 14,989,229
52,500 Lucent Technologies
Incorporated........... 01/14/99 to 02/04/99 5.130 to 5.300 52,340,899
--------------
67,330,128
--------------
Utility-Electric - 2.05%
80,000 Southern Company........ 01/14/99 to 02/03/99 5.120 to 5.310 79,706,059
20,000 Southern California
Edison Company......... 01/06/99 5.180 19,985,611
--------------
99,691,670
--------------
Total Commercial Paper (cost -
$2,271,546,629)................... 2,271,546,629
--------------
</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 -
11.00%
Asset Backed-Finance - 1.56%
$ 58,000 Beta Finance
Incorporated........... 01/15/99 to 07/15/99 5.560 to 5.770% $ 58,000,000
18,000 Beta Finance
Incorporated........... 01/05/99 5.318* 18,000,000
--------------
76,000,000
--------------
Banking - 1.25%
13,000 Banc One Corporation.... 01/04/99 5.487* 12,995,212
25,000 Bank of New York Company
Incorporated........... 01/05/99 5.138* 25,000,000
7,755 Bankers Trust
Corporation............ 07/30/99 6.625 7,790,962
15,000 Bankers Trust
Corporation............ 02/19/99 5.379 14,999,799
--------------
60,785,973
--------------
Broker-Dealer - 6.38%
15,000 Bear Stearns Companies
Incorporated........... 04/26/99 5.800 15,000,000
117,000 Bear Stearns Companies
Incorporated........... 01/04/99 to 2/26/99 4.920 to 5.747* 117,010,745
8,040 Lehman Brothers Holdings
Incorporated........... 05/15/99 10.000 8,161,334
113,000 Lehman Brothers Holdings
Incorporated........... 01/04/99 to 01/26/99 4.970 to 5.751* 113,037,216
16,000 Merrill Lynch & Company
Incorporated........... 07/19/99 6.200 16,037,932
20,000 Merrill Lynch & Company
Incorporated........... 01/04/99 4.850* 20,000,000
13,215 Morgan Stanley Dean
Witter & Company....... 03/01/99 5.625 13,213,336
8,000 Morgan Stanley Dean
Witter & Company....... 01/20/99 5.677* 8,005,146
--------------
310,465,709
--------------
Computers - 0.72%
10,000 IBM Credit Corporation.. 07/07/99 5.680 9,996,465
25,000 IBM Credit Corporation.. 03/15/99 to 03/17/99 5.170* 25,000,000
--------------
34,996,465
--------------
Finance-Aircraft - 0.17%
8,467 International Lease
Finance Corporation.... 04/30/99 6.700 8,488,212
--------------
Finance-Diversified - 0.46%
22,000 Associates Corporation
of North America....... 06/01/99 to 10/15/99 6.750 to 7.220 22,201,041
--------------
Insurance - 0.46%
22,000 Prudential Funding
Corporation............ 01/05/99 5.196 to 5.258* 22,000,000
--------------
Total Short-Term Corporate
Obligations (cost - $534,937,400). 534,937,400
--------------
REPURCHASE AGREEMENT - 0.28%
13,667 Repurchase Agreement
dated 12/31/98 with SG
Cowen Securities
Corporation,
collateralized by
$13,651,000 U.S.
Treasury Notes, 5.625%
due 04/30/00
(value - $13,958,148);
proceeds: $13,674,289
(cost - $13,667,000)... 01/04/99 4.800 13,667,000
--------------
Total Investments (cost -
$4,898,438,814 which approximates
cost for federal income tax
purposes) - 100.70%............... 4,898,438,814
Liabilities in excess of other
assets - (0.70)%.................. (34,112,497)
--------------
Net Assets (applicable to
4,866,185,381 shares of Common
Stock
outstanding at $1.00 per share) -
100.00%.......................... $4,864,326,317
==============
</TABLE>
- --------
*Variable rate securities-maturity dates reflect earlier of reset dates or
maturity dates. The interest rates shown are the current rates as of December
31, 1998.
@Interest rates shown are discount rates at date of purchase.
MTNMedium Term Notes
Weighted Average Maturity--57 Days
See accompanying notes to financial statements
6
<PAGE>
PaineWebber Retirement Money Fund
Statement of Operations __For the Six Months Ended December 31, 1998 (unaudited)
<TABLE>
<S> <C>
Investment Income:
Interest........................................................... $124,516,763
------------
Expenses:
Investment advisory and administration............................. 9,079,977
Transfer agency and related services fees.......................... 3,686,039
Distribution fees.................................................. 2,837,702
Reports and notices to shareholders................................ 268,575
Custody and accounting............................................. 216,778
Federal and state registration..................................... 89,112
Insurance expense.................................................. 65,479
Legal and audit.................................................... 62,632
Directors' fees.................................................... 5,250
Other expenses..................................................... 939
------------
16,312,483
------------
Net investment income.............................................. 108,204,280
Net realized gain from investment transactions..................... 54,773
------------
Net increase in net assets resulting from operations............... $108,259,053
============
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six
Months Ended For the
December 31, 1998 Year Ended
(unaudited) June 30, 1998
----------------- --------------
<S> <C> <C>
From operations:
Net investment income........................ $ 108,204,280 $ 201,955,156
Net realized gains (losses) from investment
transactions................................ 54,773 (125,003)
-------------- --------------
Net increase in net assets resulting from op-
erations.................................... 108,259,053 201,830,153
-------------- --------------
Dividends to shareholders from:
Net investment income........................ (108,204,280) (201,955,156)
-------------- --------------
Net increase in net assets from capital stock
transactions................................ 673,253,166 268,390,274
-------------- --------------
Net increase in net assets................... 673,307,939 268,265,271
Net assets:
Beginning of period.......................... 4,191,018,378 3,922,753,107
-------------- --------------
End of period................................ $4,864,326,317 $4,191,018,378
============== ==============
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
Notes to Financial Statements (unaudited)
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 up to $1.5 billion........................ 0.44
Over $1.5 billion................................................... 0.36
</TABLE>
At December 31, 1998, the Fund owed PaineWebber $1,631,435 in investment advi-
sory and adminstration 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 (unaudited)
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. 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 December 31, 1998,
the Fund owed PaineWebber $513,388 in distribution fees.
Transfer Agency and Related Service Fees
PaineWebber provides transfer agency related services to the Fund pursuant to
a delegation of authority from PFPC, Inc., the Funds transfer agent, and is
compensated for these services by PFPC, Inc., not the Fund. For the six months
ended December 31, 1998, PaineWebber received approximately 51% of the total
transfer agency and related services fees collected by PFPC, Inc. from the
Fund.
Other Liabilities
At December 31, 1998, the amount payable for investments purchased and divi-
dends payable aggregate $49,230,340, and $9,080,795, 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 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, 1998, the Fund had a net capital loss carryforward of $1,767,532
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 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 Six For the
Months Ended Year Ended
December 31, 1998 June 30, 1998
----------------- ---------------
<S> <C> <C>
Shares sold............................. 8,735,542,936 16,116,961,408
Shares repurchased...................... (8,167,015,388) (16,046,156,107)
Dividends reinvested.................... 104,725,618 197,584,973
-------------- ---------------
Net increase............................ 673,253,166 268,390,274
============== ===============
</TABLE>
9
<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 Six
Months Ended For the Years Ended June 30,
December 31, 1998 --------------------------------------------------------------
(unaudited) 1998 1997 1996 1995 1994
----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
Net investment income... 0.024 0.049 0.048 0.050 0.047 0.028
Dividends from net
investment income...... (0.024) (0.049) (0.048) (0.050) (0.047) (0.028)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of
period................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
Total investment return
(1).................... 2.43 % 5.03 % 4.89 % 5.13 % 4.83 % 2.75 %
========== ========== ========== ========== ========== ==========
Ratios/Supplemental
Data:
Net assets, end of
period (000's)......... $4,864,326 $4,191,018 $3,922,753 $3,500,508 $2,966,199 $2,450,235
Expenses to average net
assets................. 0.72 %* 0.78 % 0.75 % 0.70 % 0.78 % 0.77 %
Net investment income to
average net assets..... 4.77 %* 4.91 % 4.79 % 5.01 % 4.75 % 2.77 %
</TABLE>
- --------
* Annualized.
(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. Total investment
return for period of less than one year has not been annualized.
10
<PAGE>
- ------------------------------------------------------------------
Directors
E. Garrett Bewkes, Jr. Mary C. Farrell
Chairman
Meyer Feldberg
Margo N. Alexander
George W. Gowen
Richard Q. Armstrong
Frederic V. Malek
Richard R. Burt Carl W. Schafer
Principal Officers
Margo N. Alexander Paul H. Schubert
President Vice President and Treasurer
Victoria E. Schonfeld Dennis L. McCauley
Vice President Vice President
Dianne E. O'Donnell Susan P. Ryan
Vice President and Secretary 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
The financial information herein is taken from the records of the Fund without
examination by independent auditors who do not express an opinion thereon.
This report is not be used in connection with the offering of shares of the Fund
unless accompanied or preceded by an effective prospectus.
<PAGE>
PaineWebber
(c) 1999 PaineWebber Incorporated
Member SIPC
