Schwab Makes Trusts Available via NSCC

December 1, 2005 ( - Schwab Corporate Services has opened its Schwab Managed Retirement Trust Funds to all plan providers who trade through the National Securities Clearing Corporation (NSCC).

A Schwab news release said that the five collective trust funds, which are managed by The Charles Schwab Trust Company (CSTC), are age-based retirement funds. Up until now, only those using Schwab’s own CSTC trading platform had access to the funds.

“While target-date retirement funds are surging in popularity, the vast majority fail to meet two key demands of retirement plan sponsors: open investment architecture and true fee transparency,” said Jim McCool, president, Schwab Corporate Services in the announcement. “Our funds are built on a unique, independent sub-advisor structure that offers plan sponsors and their investment consultants a clear alternative to traditional proprietary fund houses.”

CSTC has hired institutional investment firms as sub-advisors to help in its daily management of the underlying funds in each of the portfolios. Sub-advisors include Dodge & Cox, Goldman Sachs, INVESCO, Pictet, PIMCO, Turner Investment Partners and The Vanguard Group (to be added in January 2006).

By using this approach, CSTC is able to manage the funds with input from money managers in each asset class, Schwab said. These funds also provide lower operating expenses than similar actively managed mutual funds.

Four of the Schwab Managed Retirement Trust Funds are target-date funds designed for retirement plan participants who want to retire in 2010, 2020, 2030 or 2040. The Schwab Managed Retirement Trust Fund-Income is designed to provide income for participants nearing or in retirement and has a fixed allocation of 75% bonds, stable value and cash, and 25% stocks.

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