Schwab Debuts New DB Offering

February 4, 2003 ( - Charles Schwab Corporate Services has expanded its defined benefit plan services for both traditional and cash balance pension plans, in a move to tap into the growing market for total retirement outsourcing, or TRO.

Though perhaps better known for its mutual fund marketplace, self-directed brokerage account prowess, and defined contribution services, Schwab has actually had defined benefit capabilities, including actuarial services through a sister firm for some time now.   However, with the new offering, which will begin rolling out mid-year, Schwab will offer plan sponsors and participants alike a more seamless presentation, including integrated pension and defined contribution plan information for participants via a variety of channels, as well as a new standalone defined benefit plan offering.

New Tools

Schwab’s new defined benefit offering will include access to online investment management tools that will provide plan sponsors and their investment consultants with applications for selecting and monitoring investments.   Through an alliance with InvestorForce, a provider of technology-based business solutions for the institutional investment community, Schwab’s new offering will now allow plan sponsors and consultants to:

  • perform detailed fund screening,
  • rebalance investments,
  • view plan holdings and transactions, and
  • monitor investment performance.  

 “InvestorForce technology will enable Schwab to deliver advanced pension investment management business applications right to the desktops of plan sponsors and their consultants for the first time,” according to Ben Brigeman, senior vice president, Charles Schwab Corporate Services.

As part of the alliance, InvestorForce has customized its platform for the Schwab product.   Plan sponsors who choose the Schwab DB offering will have the option of using the InvestorForce reporting, or not, for an additional fee.    

Other Features

Schwab says the product will include a “broad array of institutional mutual funds and collective trust funds from leading management companies”, including Barclays Global Investors, Goldman Sachs and Mellon, as well as the firm’s own institutional trust funds.

In terms of participant communications, Schwab will provide quarterly benefit statements, and workers will have access to a website as well as a Voice Response System (VRS) that will provide benefits information, as well as the option to speak directly with a Participant Service Representative. Participants will be able to use Internet-based tools to plug in different “what if” scenarios based on expected salary increases and different retirement ages to help them project future benefits.