PaineWebber
------------------------------------------------------
RETIREMENT
MONEY FUND
ANNUAL REPORT
JUNE 30, 2000
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
ANNUAL REPORT
-----------------------
PAINEWEBBER RETIREMENT
MONEY FUND
INVESTMENT GOAL:
Current income
consistent with
liquidity and
conservation of capital
PORTFOLIO MANAGER:
Susan P. Ryan
Mitchell Hutchins Asset
Management Inc.
COMMENCEMENT:
July 2, 1988
DIVIDEND PAYMENTS:
Monthly
-----------------------
August 15, 2000
Dear Shareholder,
We are pleased to present you with the annual report for PaineWebber Retirement
Money Fund (the "Fund") for the 12-month period ended June 30, 2000.
MARKET REVIEW
================================================================================
[GRAPHIC OMITTED]
As the fiscal year came to a close, signs pointed to a slowing economy, giving
hope that the Federal Reserve might decide against additional belt-tightening at
its August 22 meeting. During the 12 months ended June 30, the Fed Funds rate
increased six times by a combined total of 1.75%, capped by a half-percent
increase in May. Speculation that rates would increase one more time in August
has been tempered by late economic news. Gross domestic product (GDP), adjusted
for inflation, slowed in the second quarter of 2000 after recording a 5.5%
increase during the first quarter and 7.3% surge in fourth quarter 1999.
Gasoline prices, which increased dramatically during the period, are expected to
drop slowly in the coming months. Unemployment figures remain a concern,
however, as a continuing shortage of workers may continue to pressure wages.
The U.S. Treasury's announcement in January to buy back $30 billion of debt
during 2000 continued to drive down the yield on the 30-year Treasury bond,
causing a dramatic yield curve inversion and creating only a 0.50% difference
between two-year notes and the 30-year bond. Short-term rates rose from January
through June, with the yield on 90-day T-bills increasing from 5.31% to 5.86% at
June 30, 2000.
PORTFOLIO REVIEW
================================================================================
[GRAPHIC OMITTED]
With weighted average maturity below its peer-group average during the one-year
period, the Fund's positions helped as interest rates rose significantly during
the span. At the same time, the Fund continued to focus on investments of the
highest credit quality.
PERFORMANCE AND CHARACTERISTICS(1) 6/30/00 12/31/99
--------------------------------------------------------------------------------
7-Day Current Yield 5.96% 4.98%
Weighted Average Maturity 37 days 38 days
Net Assets ($ billions) $4.870 $5.128
--------------------------------------------------------------------------------
SECTOR ALLOCATION* 6/30/00 12/31/99
--------------------------------------------------------------------------------
Commercial Paper 72.4% 49.5%
U.S. Government/Agency 15.0 23.4
Bank Obligations 8.3 17.6
Short-Term Corporate Obligations 2.6 1.0
Mutual Funds 1.6 7.9
Repurchase Agreements 0.0 0.2
Other Assets 0.1 0.4
--------------------------------------------------------------------------------
Total 100.0 100.0
(1) Yields will vary.
* Weightings represent percentages of net assets as of the dates indicated.
The Fund is actively managed and its portfolio composition will vary over
time.
1
<PAGE>
ANNUAL REPORT
OUTLOOK
================================================================================
Although there is no guarantee that the Federal Reserve won't have more
rate increases in the offing this year, we believe that rate increases of the
past year have served their purpose and the economy is primed for a soft
landing. We anticipate that inflation as measured by the Consumer Price Index
(CPI) will slow to 3.5% annually by year-end and to 3% annually in 2001. Reduced
Treasury supply may still hamper the recovery of long bonds, but this and
shorter-term instruments should stabilize and spreads should recover if the
economy cools and interest rates level off.
Whichever way the economy turns, our objective remains to help you 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,(2) please contact your Financial Advisor.
Sincerely,
/s/ MARGO ALEXANDER /s/ SUSAN P. RYAN
MARGO ALEXANDER SUSAN P. RYAN
Chairman and Chief Executive Officer Portfolio Manager
Mitchell Hutchins Asset Management Inc. PaineWebber Retirement Money Fund
/s/ BRIAN M. STORMS
BRIAN M. STORMS
President and Chief Operating Officer
Mitchell Hutchins Asset Management Inc.
This letter is intended to assist shareholders in understanding how the
Fund performed during the 12-month period ended June 30, 2000, and reflects 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.
(2) 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, 2000
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
------ -------------------- -------------- ----------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 14.98%
$15,000 U.S. Treasury Bills ...................................... 07/20/00 5.645% $ 14,955,310
40,000 Federal Home Loan Bank ................................... 07/26/00 6.470 39,820,278
55,000 Federal Home Loan Bank ................................... 07/03/00 to 07/04/00 6.471 to 6.950* 54,992,115
165,000 Federal Home Loan Mortgage Corporation ................... 07/05/00 to 09/28/00 6.450 to 6.500* 163,124,805
230,000 Federal National Mortgage Association .................... 07/05/00 to 09/14/00 6.400 to 6.500* 227,663,778
30,000 Federal National Mortgage Association .................... 07/04/00 6.530* 30,000,000
199,000 Student Loan Marketing Association ....................... 07/04/00 6.421 to 6.700* 198,948,582
-----------
Total U.S. Government and Agency Obligations (cost - $729,504,868) ... 729,504,868
-----------
BANK NOTES - 1.33%
YANKEE - 1.33%
25,000 Australia & New Zealand Bank* ............................ 09/05/00 6.811* 24,993,270
40,000 Bank of Nova Scotia ...................................... 02/20/01 to 04/30/01 6.750 to 6.850 39,992,251
-----------
Total Bank Notes (cost - $64,985,521) ................................ 64,985,521
-----------
DEPOSITORY NOTES - 0.20%
YANKEE - 0.20%
10,000 Westpac Banking Corporation (cost - $9,997,215) .......... 01/31/01 6.560 9,997,215
-----------
CERTIFICATES OF DEPOSIT - 6.80%
DOMESTIC - 1.19%
58,000 Fifth Third Bank Western of Northwestern Ohio, N.A. ...... 07/24/00 6.600 58,006,723
-----------
YANKEE - 5.09%
10,000 Bank of Scotland ......................................... 02/28/01 6.770 9,997,485
15,000 Bayerische Hypotheken-und Wechsel-Bank ................... 07/12/00 5.710 14,999,827
25,000 Commerzbank AG ........................................... 04/27/01 6.820 24,996,104
10,000 National Westminster Bank PLC ............................ 07/03/00 5.530 9,999,990
30,000 Rabobank Nederland ....................................... 02/22/01 6.760 29,990,803
20,000 Societe Generale ......................................... 07/19/00 6.594* 19,997,068
23,000 Societe Generale ......................................... 04/10/01 6.800 22,994,082
65,000 Svenska Handelsbanken .................................... 03/07/01 to 05/16/01 6.620 to 7.320 64,979,848
25,000 UBS AG ................................................... 04/30/01 6.880 24,996,068
25,000 Westpac Banking Corporation .............................. 05/14/01 6.770 25,000,000
-----------
247,951,275
-----------
EURO-DOLLAR - 0.52%
25,000 Bank of Scotland ......................................... 08/29/00 6.640 25,000,207
-----------
Total Certificates of Deposit (cost - $330,958,205) .................. 330,958,205
-----------
COMMERCIAL PAPER@ - 72.42%
ASSET BACKED - AUTO & TRUCK - 0.92%
45,000 New Center Asset Trust ................................... 07/26/00 6.560 44,795,000
-----------
ASSET BACKED - BANKING - 4.15%
80,000 Atlantis One Funding ..................................... 07/06/00 to 08/09/00 6.580 79,740,456
102,581 Centric Capital Corporation .............................. 07/12/00 to 08/14/00 6.540 to 6.580 102,259,371
20,000 Woodstreet Funding Corporation ........................... 07/13/00 6.600 19,956,000
-----------
201,955,827
-----------
ASSET BACKED - MISCELLANEOUS - 15.59%
70,000 Asset Securitization Cooperative Corporation ............. 07/25/00 to 07/27/00 6.530 to 6.550 69,683,950
86,924 Delaware Funding Corporation ............................. 07/06/00 to 07/20/00 6.530 to 6.670 86,701,523
59,253 Enterprise Funding Corporation ........................... 07/20/00 to 07/26/00 6.580 to 6.650 58,989,964
55,885 Falcon Asset Securitization Corporation .................. 07/05/00 to 07/19/00 6.590 to 6.600 55,754,208
131,003 Giro Funding US Corporation .............................. 07/06/00 to 08/02/00 6.540 to 6.580 130,642,987
98,822 Parthenon Receivables Funding LLC ........................ 07/17/00 to 07/18/00 6.550 to 6.600 98,525,553
25,000 Preferred Receivables Funding Corporation ................ 08/07/00 6.570 24,831,187
45,478 Quincy Capital Corporation ............................... 07/05/00 to 08/03/00 6.580 to 6.590 45,312,214
34,705 Receivables Capital Company .............................. 07/14/00 to 07/26/00 6.160 to 6.600 34,585,808
114,433 Triple-A One Funding Corporation ......................... 07/07/00 to 07/28/00 6.560 to 6.600 114,064,120
40,000 Variable Funding Capital Corporation ..................... 07/05/00 to 07/12/00 6.599 to 6.660* 40,000,000
-----------
759,091,514
-----------
</TABLE>
3
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
------ -------------------- -------------- ----------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER@ - (CONTINUED)
AUTO & TRUCK - 3.98%
$16,000 BMW US Capital Inc. ...................................... 07/06/00 6.520 $15,985,511
89,000 Daimler-Chrysler N.A. Holding Corporation ................ 07/05/00 to 09/12/00 6.540 to 6.800 88,121,436
45,000 Ford Motor Credit Company ................................ 07/06/00 6.500 44,959,375
35,000 General Motors Acceptance Corporation .................... 07/31/00 6.550 34,808,958
10,000 PACCAR Financial Corporation ............................. 07/17/00 6.190 9,972,489
-----------
193,847,769
-----------
BANKING - DOMESTIC - 5.01%
20,000 BCI Funding Corporation .................................. 07/11/00 6.530 19,963,722
30,000 BHF Finance Incorporated (Delaware) ...................... 07/12/00 6.540 29,940,050
25,000 Canadian Imperial Holdings Incorporated .................. 07/19/00 6.530 24,918,375
15,000 Cariplo Finance Incorporated ............................. 07/13/00 6.520 14,967,400
25,000 Den Danske Corporation ................................... 07/10/00 6.505 24,959,344
30,000 Dexia CLF Finance Company ................................ 07/19/00 6.530 29,902,050
20,000 Fortis Funding LLC. ...................................... 07/17/00 6.520 19,942,044
30,000 J.P. Morgan & Company Incorporated ....................... 07/25/00 6.530 29,869,400
25,000 Nordbanken North America Incorporated .................... 07/25/00 6.530 24,891,167
25,000 Santander Finance (Delaware) Incorporated ................ 09/14/00 6.570 24,657,813
-----------
244,011,365
-----------
BANKING - FOREIGN - 2.24%
40,000 Bank of Scotland Treasury Services PLC ................... 09/12/00 6.620 39,463,045
40,000 Halifax PLC .............................................. 07/12/00 6.530 39,920,189
30,000 Nationwide Building Society .............................. 07/26/00 6.530 29,863,958
-----------
109,247,192
-----------
BROKER/DEALER - 4.39%
80,000 Bear Stearns Companies, Incorporated ..................... 07/10/00 to 07/11/00 6.130 to 6.510 79,869,125
40,000 Goldman Sachs Group Incorporated ......................... 08/08/00 6.570 39,722,600
40,000 Merrill Lynch & Co. Incorporated ......................... 10/11/00 6.610 39,250,867
55,000 Morgan Stanley, Dean Witter & Company .................... 07/03/00 7.150* 55,000,000
-----------
213,842,592
-----------
BUILDING MATERIALS - 0.16%
8,000 Sherwin Williams Company ................................. 08/07/00 6.550 7,946,144
-----------
BUSINESS SERVICES - 0.41%
20,000 First Data Corporation ................................... 07/18/00 6.520 19,938,422
-----------
CHEMICALS - 0.20%
10,000 Henkel Corporation ....................................... 08/03/00 6.520 9,940,233
-----------
CONSUMER PRODUCTS - 2.21%
40,000 Fortune Brands Incorporated .............................. 08/03/00 6.570 39,759,100
30,000 Gillette Company ......................................... 07/25/00 6.540 29,869,200
38,000 Procter & Gamble Company ................................. 07/10/00 6.500 37,938,250
-----------
107,566,550
-----------
DRUGS, HEALTH CARE - 2.68%
53,000 Glaxo Wellcome PLC ....................................... 07/17/00 6.520 to 6.530 52,846,240
10,000 Johnson & Johnson ........................................ 07/24/00 6.510 9,958,408
40,000 Merck & Co., Incorporated ................................ 07/07/00 6.800 39,954,667
28,000 Pfizer Incorporated ...................................... 07/25/00 6.520 27,878,293
-----------
130,637,608
-----------
ELECTRONICS - 1.03%
31,596 Motorola Incorporated .................................... 09/13/00 to 09/25/00 6.550 to 6.610 31,131,982
19,132 Vermont American Corporation ............................. 07/06/00 6.500 19,114,728
-----------
50,246,710
-----------
</TABLE>
4
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
------ -------------------- -------------- ----------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER@ - (CONTINUED)
ENERGY - 1.74%
$55,000 Exxon Mobil Australia Incorporated ....................... 07/05/00 to 07/18/00 6.520 to 6.650 $54,900,861
30,000 Texaco Incorporated ...................................... 07/06/00 6.530 29,972,792
-----------
84,873,653
-----------
ENTERTAINMENT - 0.21%
10,000 Walt Disney Company ...................................... 07/13/00 6.550 9,978,167
-----------
FINANCE - AIRCRAFT - 1.02%
50,000 International Lease Finance Corporation .................. 07/14/00 6.510 49,882,458
-----------
FINANCE - CONDUIT - 2.22%
18,420 Metlife Funding Incorporated ............................. 07/18/00 6.530 18,363,200
90,000 UBS Finance (Delaware) LLC. .............................. 07/03/00 to 07/20/00 6.540 to 6.960 89,842,600
-----------
108,205,800
-----------
FINANCE - CONSUMER - 1.13%
20,000 American General Finance Corporation ..................... 07/13/00 6.510 19,956,600
35,000 Household Finance Corporation ............................ 07/20/00 6.530 34,879,376
-----------
54,835,976
-----------
FINANCE - DIVERSIFIED - 0.82%
40,000 Associates Corporation of North America .................. 07/26/00 6.530 39,818,611
-----------
FINANCE - RETAIL - 1.02%
50,000 American Express Credit Company .......................... 07/24/00 6.510 49,792,042
-----------
FINANCE - SUBSIDIARY - 2.26%
75,000 Dresdner U.S. Finance .................................... 07/05/00 to 07/10/00 6.500 to 6.850 74,917,000
35,000 National Australia Funding (Delaware) Incorporated ....... 07/03/00 6.730 34,986,914
-----------
109,903,914
-----------
FINANCIAL SERVICES - 1.53%
75,000 Deutsche Bank Financial Incorporated ..................... 07/24/00 6.530 to 6.560 74,686,529
-----------
FOOD & BEVERAGE - 2.70%
15,000 Bestfoods Corporation .................................... 07/17/00 6.540 14,956,400
28,000 Coca Cola Company ........................................ 07/21/00 6.510 27,898,733
20,000 Coca Cola Enterprises .................................... 07/07/00 6.500 19,978,333
39,900 General Mills Incorporated ............................... 07/11/00 6.500 to 6.510 39,827,917
19,098 Heinz (H.J.) Company ..................................... 07/27/00 6.500 19,008,345
10,000 Kellogg Company .......................................... 08/18/00 6.520 9,913,067
-----------
131,582,795
-----------
INSURANCE - 2.57%
35,000 Aegon Funding ............................................ 07/11/00 6.520 34,936,611
44,000 Allstate Corporation ..................................... 07/18/00 6.550 43,863,905
21,000 Teachers Insurance & Annuity Association of America ...... 07/05/00 6.520 20,984,787
25,200 USAA Capital Corporation ................................. 07/12/00 6.570 25,149,411
-----------
124,934,714
-----------
INSURANCE - PROPERTY/CASUALTY - 0.31%
15,000 John Hancock Capital Corporation ......................... 07/19/00 6.530 14,951,025
-----------
MACHINERY - 0.21%
10,000 Caterpillar Financial Services ........................... 07/13/00 6.520 9,978,267
-----------
MANUFACTURING - DIVERSIFIED - 1.58%
61,275 Honeywell International Inc. ............................. 07/12/00 to 07/19/00 6.510 to 6.520 61,100,660
16,000 United Technologies Corporation .......................... 07/07/00 6.520 15,982,614
-----------
77,083,274
-----------
</TABLE>
5
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
------ -------------------- -------------- ----------
<S> <C> <C> <C> <C>
COMMERCIAL PAPER@ - (CONCLUDED)
METALS & MINING - 2.19%
$31,895 Alcoa Incorporated 07/07/00 6.500 $31,860,447
75,000 Rio Tinto America Incorporated ........................... 07/05/00 to 07/25/00 6.550 to 6.580 74,776,564
--------------
106,637,011
--------------
PRINTING & PUBLISHING - 3.03%
56,500 Gannett Company .......................................... 07/10/00 to 07/18/00 6.500 to 6.510 56,379,204
20,000 Reed Elsevier USA Incorporated ........................... 07/13/00 6.520 19,956,534
71,300 Tribune Company .......................................... 07/18/00 to 08/03/00 6.550 to 6.630 70,945,165
--------------
147,280,903
--------------
RETAIL - MERCHANDISE - 0.82%
40,000 Wal-Mart Stores Incorporated ............................. 07/18/00 6.510 39,877,033
--------------
TELECOMMUNICATIONS - 3.44%
98,000 American Telephone & Telegraph ........................... 07/10/00 to 07/11/00 6.510 to 6.570 97,830,630
15,000 Bell Atlantic Financial Services Incorporated ............ 07/28/00 6.570 14,926,088
40,000 Bell Atlantic Network Funding Corporation ................ 07/11/00 6.550 39,92 7,222
15,000 BellSouth Capital Funding Corporation .................... 07/20/00 6.510 14,94 8,462
--------------
167,632,402
--------------
UTILITY - ELECTRIC - 0.65%
10,000 Southern California Edison Company ....................... 07/25/00 6.550 9,956,333
21,800 Southern Company ......................................... 07/10/00 6.570 21,764,194
--------------
31,720,527
--------------
Total Commercial Paper (cost - $3,526,722,027) ....................... 3,526,722,027
--------------
SHORT-TERM CORPORATE OBLIGATIONS - 2.61%
ASSET BACKED-FINANCE - 0.51%
25,000 Beta Finance Incorporated ................................ 07/03/00 7.060* 25,000,000
--------------
AUTO & TRUCK - 0.86%
25,000 Ford Motor Credit Corporation ............................ 07/03/00 6.740* 24,997,447
17,000 General Motors Acceptance Corporation .................... 09/11/00 7.100* 17,019,529
--------------
42,016,976
--------------
BANKING - DOMESTIC - 0.41%
20,000 J.P. Morgan & Company Incorporated ....................... 07/17/00 6.640* 20,000,000
--------------
BANKING - FOREIGN - 0.21%
10,000 Bank of Scotland Treasury Services PLC ................... 07/04/00 6.580* 10,000,000
--------------
BROKER/DEALER - 0.62%
30,000 Merrill Lynch & Company Incorporated ..................... 07/06/00 6.616* 29,997,984
--------------
Total Short-Term Corporate Obligations (cost - $127,014,960) ......... 127,014,960
--------------
NUMBER OF
SHARES
(000)
--------
MUTUAL FUNDS - 1.62%
15,886 AIM Liquid Assets Portfolio .............................. 15,885,960
62,942 Provident Prime Portfolio ................................ 62,942,173
--------------
Total Mutual Funds (cost - $78,828,133) .............................. 78,828,133
--------------
Total Investments (cost - $4,868,010,929 which approximates
cost for federal income tax purposes) - 99.96% ..................... 4,868,010,929
Other assets in excess of liabilities - 0.04% ........................ 1,908,492
--------------
Net Assets (applicable to 4,871,736,836 shares of Common Stock
outstanding at $1.00 per share) - 100.00% .......................... $4,869,919,421
==============
</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, 2000 and reset periodically.
@ Interest rates shown are discount rates at date of purchase.
Weighted Average Maturity - 37 Days
See accompanying notes to financial statements
6
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
STATEMENT OF OPERATIONS FOR THE YEAR ENDED JUNE 30, 2000
INVESTMENT INCOME:
Interest ........................................................ $294,166,365
------------
EXPENSES:
Investment advisory and administration .......................... 20,256,815
Transfer agency and related services fees ....................... 8,625,319
Distribution fees ............................................... 6,408,618
Reports and notices to shareholders ............................. 519,500
Custody and accounting .......................................... 514,549
Federal and state registration .................................. 163,465
Legal and audit ................................................. 121,939
Insurance expense ............................................... 53,863
Directors' fees ................................................. 10,500
Other expenses .................................................. 4,058
------------
36,678,626
------------
NET INVESTMENT INCOME ........................................... 257,487,739
NET REALIZED GAINS FROM INVESTMENT TRANSACTIONS ................. 41,316
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $257,529,055
============
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED JUNE 30,
--------------- ---------------
2000 1999
--------------- ---------------
FROM OPERATIONS:
Net investment income .................... $ 257,487,739 $ 217,553,020
Net realized gains from investment
transactions ........................... 41,316 55,106
--------------- ---------------
Net increase in net assets resulting
from operations ........................ 257,529,055 217,608,126
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income .................... (257,487,739) (217,533,020)
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS ........ (221,060,264) 899,864,885
--------------- ---------------
Net increase (decrease) in net assets .... (221,018,948) 899,919,991
NET ASSETS:
Beginning of year ........................ 5,090,938,369 4,191,018,378
--------------- ---------------
End of year .............................. $ 4,869,919,421 $ 5,090,938,369
=============== ===============
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
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 accounting
principles generally accepted in the United States 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 RATES
-------------- -----
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
At June 30, 2000, the Fund owed PaineWebber $1,613,319 in investment
advisory and administration fees.
Mitchell Hutchins Asset Management Inc. ("Mitchell Hutchins"), a
wholly-owned asset management subsidiary of PaineWebber Incorporated
("PaineWebber"), a wholly owned subsidiary of Paine Webber Group Inc. ("PW
Group"), 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 the 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.
On July 12, 2000, PW Group and UBS AG ("UBS") announced that they had
entered into an agreement and plan of merger under which PW Group will merge
into a wholly owned subsidiary of UBS. If all required approvals are obtained
and the required conditions are satisfied, PW Group and UBS expect to complete
the transaction in the fourth quarter of 2000. UBS, with headquarters in Zurich,
Switzerland, is an internationally diversified organization with operations in
many areas of the financial services industry.
8
<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. For the year ended June 30, 2000 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, 2000, the Fund owed PaineWebber $508,951 in distribution
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, 2000, PaineWebber received approximately 52% of the
total transfer agency and related services fees collected by PFPC, Inc. from the
Fund.
OTHER LIABILITIES
At June 30, 2000, the aggregate amount for dividends payable was
$7,145,810.
MONEY MARKET FUND BOND
Effective September 30, 1999, the Fund obtained an insurance bond that
provides limited coverage for certain loss events involving certain money market
instruments held by the Fund. These loss events include non-payment of principal
or interest or a bankruptcy or insolvency of the issuer or credit enhancement
provider (if any). The insurance bond provides for coverage up to $200 million
for a number of funds with a deductible of 10 basis points (0.10%) of the total
assets of the Fund for First Tier Securities and 50 basis points (0.50%) of the
total assets of the Fund for Second Tier Securities, in each case determined as
of the close of business on the first business day prior to the loss event. In
the event of a loss covered under the bond, the Fund would expect to retain the
security in its portfolio, rather than having to sell it at its current market
value, until the date of payment of the loss, which is generally no later than
the maturity of the security. While the policy is intended to provide some
protection against credit risk and to help the Fund maintain a constant price
per share of $1.00, there is no guarantee that the insurance will do so. For the
period September 30, 1999 to June 30, 2000, the Fund did not use this insurance
bond.
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, 2000, the Fund had a net capital loss carryforward of
$1,817,417 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 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 YEARS ENDED JUNE 30,
-----------------------------------
2000 1999
--------------- ---------------
Shares sold .................. 22,517,062,640 19,511,897,445
Shares repurchased ........... (22,990,737,912) (18,824,533,330)
Dividends reinvested ......... 252,615,008 212,500,770
--------------- ---------------
Net increase (decrease) in
shares outstanding ......... (221,060,264) 899,864,885
=============== ===============
9
<PAGE>
PAINEWEBBER RETIREMENT MONEY FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of common stock outstanding throughout each year is
presented below:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
----------------------------------------------------------------------
2000 1999 1998 1997 1996
---------- ---------- ---------- ---------- ----------
<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 ................................... 0.050 0.046 0.049 0.048 0.050
Dividends from net investment income .................... (0.050) (0.046) (0.049) (0.048) (0.050)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year ............................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total investment return (1) ............................. 5.14% 4.66% 5.03% 4.89% 5.13%
========== ========== ========== ========== ==========
Ratios/Supplemental Data:
Net assets, end of year (000's) ......................... $4,869,919 $5,090,938 $4,191,018 $3,922,753 $3,500,508
Expenses to average net assets .......................... 0.71% 0.71% 0.78% 0.75% 0.70%
Net investment income to average net assets ............. 5.02% 4.55% 4.91% 4.79% 5.01%
</TABLE>
----------
(1) Total investment return is calculated assuming a $10,000 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>
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 (one of the portfolios of PaineWebber RMA Money Fund,
Inc.) as of June 30, 2000, 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 audit standards generally
accepted in the United States. 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, 2000, by correspondence with the
custodian. 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, 2000, 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 accounting
principles generally accepted in the United States.
Ernst & Young LLP
New York, New York
August 24, 2000
11
<PAGE>
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,
2000) 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 2000. 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 2001. Shareholders are advised to
consult their own tax advisers with respect to the tax consequences of their
investment in the Fund.
12
<PAGE>
================================================================================
DIRECTORS
E. Garrett Bewkes, Jr. Meyer Feldberg
CHAIRMAN George W. Gowen
Margo N. Alexander Frederic V. Malek
Richard Q. Armstrong Carl W. Schafer
Richard R. Burt Brian M. Storms
Mary C. Farrell
PRINCIPAL OFFICERS
Margo N. Alexander Dennis L. McCauley
PRESIDENT VICE PRESIDENT
Dianne E. O'Donnell Susan P. Ryan
VICE PRESIDENT AND SECRETARY VICE PRESIDENT
Paul H. Schubert
VICE PRESIDENT AND TREASURER
INVESTMENT ADVISER,
ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
SUB-ADVISER AND
SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
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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