Schwab Announces New 'In Retirement' Investment Choice

March 9, 2005 ( - Schwab Corporate Services has unveiled a new collective trust fund that provides an investment choice for 401(k) participants in or near retirement.

A Schwab news release said that the Schwab Managed Retirement Trust Fund-Income is the fifth actively managed fund in the firm’s target retirement fund family, which is available only to plan participants.

According to the announcement, the new fund is designed to offer stability and income, along with a growth component. The fund invests 75% of its portfolio in bonds, stable value investments and cash and 25% in stocks. The company said that assets are diversified among a combination of underlying Schwab Institutional Trust Funds and/or mutual funds, including nonproprietary mutual funds. Plan participants can also draw monthly payments from the fund for day-to-day living.

The Schwab Managed Retirement Trust Funds are collective trust funds managed by independent sub-advisors, including Dodge & Cox, Goldman Sachs, INVESCO, Pictet, PIMCO, and Turner Investment Management, Schwab said. By using this multi-manager approach, Schwab is able to offer money managers in each asset class, unlike other target retirement funds that are confined to a single manager for an entire portfolio, according to the announcement. These funds also provide lower operating expenses than similar actively managed mutual funds, according to the press release.

“With so many 401(k) plan participants nearing retirement, demand is growing for an in-retirement investment solution that helps them manage the assets they have worked so hard to create,” said Trish Cox, vice president, Schwab Corporate Services, in the news release. “Now, participants at retirement can make a simple choice that offers all the benefits of the Schwab Managed Retirement Trust Funds along with continued access to the many services they have enjoyed as plan participants during their working years.”