A number of news outlets reported the switch, and Reuters said the company is moving to the Charles Schwab platform. Schwab announced plans to introduce an all-ETF 401(k) index-based lineup in 2013 (see “Running the Fund: Changing Plans”).
The news reports are speculating whether the move by such a large company will encourage others to follow suit.
Proponents of using ETFs in 401(k) plans contend the funds have a much lower cost for investors (see “Has the Time Come for ETFs in DC Plans?”).
Others argue that most 401(k) plans have access to index mutual funds that are cheaper than or as cheap as ETFs, and that the fact ETFs can trade throughout the day may incur more costs for some participants (see “No Need to Switch to ETFs for Most Plan Sponsors”).