Charles Schwab has announced that the Charles Schwab Trust Company (CSTC) will offer target-date collective trust funds for retirement plans.
CSTC will now include the Schwab Indexed Retirement Trust Funds, which specifically focus around the use of index strategies. As it stands, the Schwab Indexed Retirement Trust funds are passively managed and are primarily designed for defined contribution plan participants with target retirement dates from 2010 to 2050.
"We're expanding our offer to include these passively manage funds to give plan sponsors more choice and flexibility in the type of investments they can make available to their employees," said John Sturiale, investment officer for Schwab's collective trust funds for retirement plan clients.
There is no minimum balance requirement for the Schwab Indexed Retirement Funds, and there is an all-in operation expense ratio of 0.18%. Over time, the funds' portfolios are constructed in such a way that they become more conservative. That is, once the funds' are composed of 75% fixed income allocations and 25% stock, no more changes occur.