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Plan Design Continuum Offerings

Designing to get the most out of your plan.

We look at optimization on a scale of low to high. We’ve outlined our offerings on a continuum to help you with designing a plan within each of the key areas we focus on. The research can help you understand why these four areas matter. Then you can chart where you are in each of the key areas, which can help you determine the steps you can take toward optimizing your plan for participants.

Where are you on the continuum? Explore each key area below to find out and learn more about our options.

Advice – We believe in the value of a personalized savings and investment strategy.

No two participants are the same. That’s why we believe professional management that incorporates more individual participant data is a more effective approach to advice and is an improvement to investment allocation strategies and products that incorporate one or no participant data points.1

  • Low
  • Risk-based models
  • Age-based models
  • Target-date funds
  • Point-in-time advice
  • Managed account service
  • High

Risk-based models.

Our offering

These options are structured assets based on a participant’s tolerance for risk and can include models for a conservative, moderate, or aggressive investor, as defined by the plan.

Learn more about why advice matters.

Age-based models.

Our offering

These options are set up as mutual funds and are professionally managed according to the retirement age specified by the fund. Each has its own investment objective and automatically adjusts its asset allocation to be more conservative over time.

Learn more about why advice matters.

Target-date funds.

Our offering

These options are set up as mutual funds and are professionally managed according to participants’ approximate target date for retirement. Each target date fund has its own investment objective and automatically adjusts its asset allocation to be more conservative over time. Adjustments are typically based on a single input point of the approximate target date of the fund for retirement.

Learn more about why advice matters.

Point-in-time advice.

Our offering

This point-in-time third-party advice tool5 is an add-on option to the managed account service that lets employees take advantage of professional advice when needed. It allows participants to access and implement a one-time savings rate and asset allocation recommendation based on their current situation.

Learn more about why advice matters.

Managed account service.

The research Our offering

More wealth in retirement

Research suggests that participants using a managed account service could end up with nearly 40% more income in retirement.2

Increased contribution rates

After receiving guidance with a managed account service, 87% of participants increased their contribution rates.3

Better diversification

Before using a managed account service, nearly half of participants held three or fewer funds. Afterwards, the majority held six or more funds.4

With this third-party managed account service, every participant receives guidance based on their own unique set of information. They also receive ongoing professional management of their account. This approach is designed to help participants meet their retirement savings goals and build more savings over time.

Learn more about why advice matters.

Investment expense – We believe that lower investment expenses could help participants have more in retirement.

Reducing fund investment expense6 through low-cost index mutual funds or exchange-traded funds (ETFs)7 could help participants save more for retirement. And participants may achieve a better retirement outcome8 by paying for a personalized, professional management service. Together, these actions could result in a better outcome than investing in high-cost, actively managed funds and not using personalized, professional management services.9

  • Low
  • High operating expense ratio actively managed funds
  • Lower operating expense ratio share class funds
  • Low-cost index mutual funds
  • Low-cost exchange-traded funds
  • High

High operating expense ratio actively managed funds.

The research Our offering
According to Standard & Poor’s, from 2008 to 2013, more than half of active managers failed to outperform their benchmark.11

Actively managed funds are managed securities that try to beat a certain index benchmark—usually by taking more risks. Because the manager is picking the stocks, these funds tend to have higher expense ratios than passively managed funds.

Lower operating expense ratio share class.

The research Our offering

One study showed that simply by using lower-cost investments, a worker making a median starting salary of $30,502 annually could save up to $124,000 more over a lifetime, and a worker with a median starting salary of $75,000 could save up to $305,000 more—the equivalent of more than four extra years of work.10

Several mutual funds on the Schwab Retirement Plan Services platform offer a range of different share classes for the same fund. Each class has the same portfolio of securities but different expenses, reducing the overall cost of investing in the fund.

Low-cost index mutual funds.

The research Our offering

One study showed that simply by using lower-cost investments, a worker making a median starting salary of $30,502 annually could save up to $124,000 more over a lifetime, and a worker with a median starting salary of $75,000 could save up to $305,000 more—the equivalent of more than four extra years of work.10

These passively managed index funds are a type of mutual fund with a portfolio constructed to track the components of a market index, such as the Standard & Poor’s 500 Index (S&P 500®). Index mutual funds can provide broad market exposure, low operating expenses and low portfolio turnover.

Low-cost exchange-traded funds.

The research Our offering

One study showed that simply by using lower-cost index mutual fund investments, a worker making a median starting salary of $30,502 annually could save up to $124,000 more over a lifetime, and a worker with a median starting salary of $75,000 could save up to $305,000 more—the equivalent of more than four extra years of work.10

Low-cost ETFs could help participants build up their savings and provide diversified exposure to a particular segment of the market, a specific industry, or a geographical region. These ETFs can offer built-in diversification similar to an index mutual fund—the difference being that ETFs can be bought and sold at any time throughout the trading day. ETFs let participants view the underlying holdings of each investment on a daily basis. They can see the price of an ETF fluctuate during the day and can gain more insight into daily market movement, as opposed to waiting for a mutual fund price to be determined after market close.

Learn more about ETFs

Approach – We believe that plan design affects employee success.

Plan design can help to drive participant outcomes. With the right support, features, and services, sponsors can leverage inertia for the participant’s benefit. Plan design with automatic features that support effective design can simplify the decision-making process for participants and may result in better outcomes.8

  • Low
  • No automatic features
  • Automatic enrollment
  • Automatic savings adjustments
  • Plan reset with managed account service
  • High

Automatic enrollment.

Our offering

All employees are automatically enrolled into your plan to simplify the process and get them started right away. They can opt out at any time.

Learn more about our approach to plan design

Automatic savings adjustments.

The research Our offering

In a 2014 survey, only 11% of respondents said they spent more than 5 hours researching investment options, which is about what people spend researching a cell phone (12%) and less than what they spend researching which car to buy (55% spent 5+ hours) or vacation to take (39%).13

85% of participants in plans with automatic savings adjustments stay in the savings adjustments program.14

Participant contribution rates are automatically increased annually (at a rate the employee or employer selects) to keep raising the employee’s contribution rates and perhaps grow momentum with the employee’s savings.

Learn more about our approach to plan design

Auto plan reset with managed account service.

The research Our offering

Studies show that a personalized savings and investment strategy with ongoing professional management could help participants achieve better outcomes.12

In this case, all employees are automatically subscribed into the managed account service. This helps more participants take advantage of the ongoing help that the managed account service provides, although they can opt out at any time.

Learn more about our approach to plan design

Financial wellness – We believe in a holistic approach to financial wellness.

Because personal financial challenges and complexity can serve as a roadblock to achieving financial wellness, employers and participants can benefit from services provided by Charles Schwab & Co., Inc. that focus on the individual’s full financial life. You can expect support and resources for your participants that can address their broad spectrum of needs.

  • Low
  • Focused on workplace retirement plan
  • General education beyond the plan
  • Financial wellness services in and beyond the plan for a range of participant types
  • High

Focused on workplace retirement plan.

Our offering

Education that’s focused on the four key retirement messages: increase plan participation, increase contribution rates, diversification,17 and asset allocation.

General education beyond the plan.

Our offering

We offer articles, tools, and seminars supported by innovative technology to help participants make the most of their retirement plan and beyond.

Focus on participants’ full financial lives.

The research Our offering

82% of employees said, “My finances need to be in order for me to focus.”16

Financial wellness services for certain types of participants provide programs that go above and beyond the workplace retirement plan, like personalized services for executives15 and guidance for participants who have been terminated.

Talk with us about all the options available to your business.