Charles Schwab Releases Summary of Recent 401(k) Plan Participant Behavior

Participant Engagement Increasing but Most Trying to Stay the Course

Tuesday, December 9, 2008 9:00 am PST



Public Company Information:


SAN FRANCISCO--(BUSINESS WIRE)--Charles Schwab has found that participant engagement in Schwab-serviced 401(k) plans increased dramatically both online and over the phone in the months of September and October 2008. And while the number of people reducing their contribution rates into plans has increased, the majority of participants in Schwab-serviced plans are not significantly shifting asset allocations or reducing contribution rates. Schwab recently released information about retirement plan participant behavior to help employers better understand how their employees are approaching their 401(k) plans in the current market and economic environment.

Here is a summary of Schwab-serviced retirement plan participant behavior for September and October 2008:

  • Participants were engaged
    Participant activity online increased 37 percent and phone calls into Schwab service teams were up nearly 30 percent over monthly averages from January through August 2008. “The most common inquiry our service teams are receiving is participants asking for account log-in information like pin numbers and passwords,” said Catherine Miller, Charles Schwab vice president of 401(k) education and advice. “This is a real indication that people who have been very hands-off with their 401(k) in the past are all of the sudden getting engaged and paying much more attention.”
  • More people were seeking advice
    One-on-one participant advice consultations via the phone increased more than 40 percent from September to October. Schwab makes personalized one-on-one advice sessions available at no additional cost to participants or employers.
  • Transfers to capital preservation represented less than one percent of total assets
    Participants conducted 50 to 70 percent more transfers compared with the same period in 2007, and more participants moved assets to stable value and money market funds than usual. However, transfers during the two month period still represented less than one percent of total plan assets.
  • Three percent of participants decreased deferrals in October
    Participants enrolling into plans for the first time or increasing deferral amounts remained consistent or even increased compared with prior months. However, the number of participants decreasing their deferral amount rose to three percent in October. For comparison, in a typical month (including September 2008) a little more than one percent of participants decrease deferrals.
  • Loan and hardship withdrawal activity remained low
    Although the percentage of participants taking hardship withdrawals increased in September and October, the combined percentage of participants taking loans or hardship withdrawals remained below one percent for each month.

Schwab Makes Market Volatility Resources Available

As 401(k) plan participants and plan sponsors remain concerned and continue to seek help, Schwab is also making a number of resources available to help meet clients’ needs during these challenging times. A few examples include:

  • The Plan Sponsor Report Center on allows employers to review information regarding their plan and work with Schwab to address the specific needs of participants.
  • All defined contribution plans serviced by Schwab can include objective advice provided by an independent investment adviser, plus ready access to Schwab Advice Consultants - at no additional cost. More than 60 percent of plans on the Schwab Retirement Plan Services platform currently make advice available to participants.
  • Recorded education sessions, webcasts and guides are available at Schwab for both plan sponsors and participants. These resources include an education session about navigating today’s markets, a webcast hosted by Schwab Center for Financial Research Senior Vice President Mark Riepe about tips for approaching a tough market, and a guide to decision making during times of market turbulence that contains specific strategies for participants.

About Charles Schwab

The Charles Schwab Corporation (Nasdaq:SCHW) is a leading provider of financial services, with more than 300 offices and 7.4 million client brokerage accounts, 1.3 million corporate retirement plan participants, 427,000 banking accounts, and $1.2 trillion in client assets as of Oct. 31, 2008. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors. The Charles Schwab Bank (member FDIC) provides banking and mortgage services and products. More information is available at (1208-8417)

The Charles Schwab Corporation (Charles Schwab) provides services to retirement and other benefit plans and participants as well as equity compensation plan services and other financial and retirement services to corporations and executives through its separate but affiliated companies and subsidiaries, Schwab Retirement Plan Services, Inc.; The 401(k) Companies, Inc. and its subsidiaries; Charles Schwab Trust Company, a division of the Charles Schwab Bank; and Charles Schwab & Co., Inc. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC).

Retirement plan investment advice is formulated and provided by GuidedChoice Asset Management, Inc. (GuidedChoice). GuidedChoice is not affiliated with, nor is it an employee or agent of Charles Schwab & Co., Inc. Member SIPC. (CS&Co.) or any of its affiliates. Schwab does not supervise, make recommendations with respect to, or take responsibility for monitoring the advice provided to participants by GuidedChoice. Advice consultants are employees of Charles Schwab & Co., Inc. and not of GuidedChoice.


Charles Schwab
Michael Cianfrocca, 415-667-3252

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