After First Year, Schwab’s Index-Based 401(k) Offering Cuts Investment Costs by 77%, Delivering on Low-Cost Goal

  After First Year, Schwab’s Index-Based 401(k) Offering Cuts Investment Costs
  by 77%, Delivering on Low-Cost Goal

87% of Workers in Schwab Index Advantage® Also Receiving Low-cost Personalized
                  Independent Savings and Investment Advice

Business Wire

SAN FRANCISCO -- February 21, 2013

Schwab Retirement Plan Services, a Top 10 401(k) provider* to approximately
1.6 million workers saving through company retirement plans, today announced
first-year results for Schwab Index Advantage, a one-of-a-kind 401(k) plan
offer designed to lower fund investment costs, simplify investing and help
workers better prepare for retirement.

Steve Anderson, Executive Vice President of Schwab Retirement Plan Services
(Photo: Business Wire)

Steve Anderson, Executive Vice President of Schwab Retirement Plan Services
(Photo: Business Wire)

“Last year we launched Schwab Index Advantage with the goal of stripping out
unnecessary cost and complexity to help workers save more for retirement,”
said Steve Anderson, executive vice president of Schwab Retirement Plan
Services. “Today, we are seeing the effective implementation of this new breed
of 401(k) plan through sharply lower investment expenses and markedly higher
rates of advice usage. We believe this is the right combination for success.”

Lower Investment Costs, Higher Advice Usage

Schwab Index Advantage integrates 401(k) features in a unique way to help
workers save and invest for retirement. To help drive costs down, Schwab Index
Advantage includes index mutual funds with low operating expenses instead of
the often more expensive actively-managed mutual funds found in many 401(k)
plans. Focusing on simplicity, the program includes a professional, low-cost,
independent advice service that develops an ongoing personalized savings and
investment strategy for individuals.

Workers enrolled in Schwab Index Advantage have seen the weighted average
operating expense ratio (OER) for investments in their 401(k) plans fall 77
percent to $14.78 per $10,000 invested because the plans now use index mutual
funds. Prior to transitioning to Schwab Index Advantage, the weighted average
OER for these same plans was $65.11 per $10,000 invested.** “Investment costs
are significantly lower in these plans, which can positively impact the amount
individuals can accumulate during their career,” Anderson said.

In addition, nearly 90 percent of workers in Schwab Index Advantage plans are
receiving low-cost, professional, third-party advice to help manage their
401(k) investments. Prior to the transition, only about four percent of these
same workers elected to receive advice.^+ “A year ago we predicted this new
approach would dramatically increase the number of individuals receiving
advice, and we are gratified to see such high usage rates. We believe advice
plays a critical role in helping people effectively save and invest for
retirement,” Anderson said.

When a plan transitions to Schwab Index Advantage, employees are automatically
enrolled in the advice service and receive ongoing, specific savings
recommendations and investment management services through an independent,
third party provider based on a variety of factors, including their age,
income, account balance and 401(k) savings rate.^++ Employees who prefer to
manage their account themselves can do so at any time. Prior to Schwab Index
Advantage, if an employee’s 401(k) plan offered advice, it was the employee’s
responsibility to proactively elect to receive the advice.

Schwab data shows that employees who have chosen to use independent,
professional, point-in-time 401(k) advice services in the past have tended to
save twice as much, were better diversified and stuck to their long-term plan,
even in the most volatile market environments.^+

Schwab Index Advantage Gains Adoption

One year after its launch, Schwab Index Advantage has already been selected by
50 employer-sponsored 401(k) plans with more than $4 billion in assets and
more than 36,000 individual participants. “We are very pleased with the growth
of Schwab Index Advantage, especially given the typical six- to 12-month
evaluation process employers in our market segments undertake when they select
new 401(k) services,” Anderson said.

Schwab Index Advantage is available to employers with retirement plan assets
of $20 million or higher. A broad range of employers have selected Schwab
Index Advantage, including manufacturing, healthcare, legal, professional and
financial services firms.

Next: ETFs in Schwab Index Advantage

Schwab is also developing a version of Schwab Index Advantage that will
provide only index-based exchange-traded funds (ETFs) in the investment lineup
so employers will ultimately have a choice – index mutual funds or ETFs.
Schwab expects to launch the ETF version of Schwab Index Advantage later this
year.

“Fund operating expenses for index ETFs are often lower than those of index
mutual funds. We believe integrating ETFs into a 401(k) lineup can drive costs
down further and provide workers with the opportunity to save even more for
retirement,” Anderson said.

Employers interested in learning more about Schwab Index Advantage should
visit rethinkyour401k.com or call Schwab at 877-223-7036.

Investors should consider carefully information contained in the prospectus,
including investment objectives, risks, charges and expenses. You can request
a prospectus by calling Schwab at 800-435-4000. Please read the prospectus
carefully before investing.

About Charles Schwab

The Charles Schwab Corporation (NYSE: SCHW) is a leading provider of financial
services, with more than 300offices and 8.8million client brokerage
accounts, 1.6million corporate retirement plan participants, 874,000banking
accounts, and $2.01 trillion in client assets as of January 31, 2013.The
companywas ranked "Highest in Investor Satisfaction With Self-Directed
Services"in the 2012 US Self-Directed Investor Satisfaction Study^SM from J.D
Power and Associates. Through its operating subsidiaries, the company provides
a full range of securities brokerage, banking, money management and financial
advisory services to individual investors and independent investment advisors.
Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org), and affiliates offer a complete range of investment services
and products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation plan
services; compliance and trade monitoring solutions; referrals to independent
fee-based investment advisors; and custodial, operational and trading support
for independent, fee-based investment advisors through Schwab Advisor
Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an
Equal Housing Lender), provides banking and lending services and products.
More information is available at www.schwab.com and www.aboutschwab.com.
0213-1624

Schwab Retirement Plan Services is comprised of Schwab Retirement Plan
Services, Inc. and Schwab Retirement Plan Services Company, which provide
recordkeeping and related services with respect to retirement plans. Schwab
Retirement Plan Services, Inc., Schwab Retirement Plan Services Company,
Charles Schwab Bank, and Charles Schwab & Co., Inc. are separate but
affiliated companies and subsidiaries of The Charles Schwab Corporation.
Brokerage products and services are offered by Charles Schwab & Co., Inc.
Trust, custody and depositproducts and services are available through Charles
Schwab Bank.

*Top 10 ranking by total 401(k) recordkeeping assets. PLANSPONSOR 2012
Recordkeeping Survey, June 2012.

**Fund operating expenses represent the total of all a mutual fund's annual
fund operating expenses. Management fees are one component of the fund
operating expenses. Index funds generally have low management fees because
they don't have to pay investment managers to actively manage underlying
investments. Weighted Average Operating Expense Ratio (OER) is calculated
based on the core investment menus of plans that transitioned to Schwab Index
Advantage as of 1/31/2013 and does not include assets in Schwab Bank Savings,
Schwab Personal Choice Retirement Account®, and frozen investment funds
including Stable Value Fund balances.Schwab Bank Savings is a money market
deposit account ("MMDA") at Charles Schwab Bank ("Schwab Bank"). A MMDA is a
type of savings deposit. Schwab Bank Savings is only available in select
retirement plans serviced by Schwab Retirement Plan Services, Inc.

^+Advice data based on plans serviced by Schwab Retirement Plan Services, Inc.
that offer independent point-in-time advice at no additional cost to their
participants through GuidedChoice.

^++The savings and investment service provides participants with a retirement
savings and investment strategy, a major component of which is a discretionary
investment management service furnished by GuidedChoice Asset Management, Inc.
("GuidedChoice®"), an independent investment advisor. GuidedChoice creates
discretionary managed portfolios based on Modern Portfolio Theory using
investment alternatives available in the plan. GuidedChoice is not affiliated
with or an agent of Schwab Retirement Plan Services, Inc. ("SRPS"), Charles
Schwab & Co., Inc. ("CS & Co."), or their affiliates. Neither CS&Co., SRPS,
nor their affiliates supervise, make recommendations with respect to, or take
responsibility for monitoring the services provided to participants by
GuidedChoice. Schwab Advice Consultants, who are employees of CS&Co. and not
of GuidedChoice, facilitate participant access to the GuidedChoice services,
but do not provide investment advice or recommendations regarding the
GuidedChoice services or generally as part of the advice services.
Diversification and asset allocation strategies do not ensure a profit and
cannot protect against losses in a declining market. There is no guarantee a
participant's savings and investment strategy will provide adequate income at
or through retirement. Fees are charged for the advice services, including its
discretionary investment management service, based on the participant's
account balance. Participants should carefully consider information contained
in the disclosure materials furnished at the employer's direction regarding
the services provided by Schwab and GuidedChoice, including information
regarding compensation, affiliations, and potential conflicts.

Some of the statements may be forward looking and contain certain risks and
uncertainties. There can be no guarantee of future performance. The views
expressed are subject to change based on market and other various conditions.

Investment Products: Not FDIC Insured – No Bank Guarantee – May Lose Value

Follow us on Twitter: @charlesschwab

© 2013 Schwab Retirement Plan Services, Inc., and/or its affiliates. All
rights reserved.

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Contact:

Charles Schwab
Mike Peterson, 330-908-4334
mike.peterson@schwab.com
or
Intermarket Communications
Eric Hazard, 212-754-5610
ehazard@intermarket.com
 
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