Schwab Retirement Plan Services has made inroads into the 401(k) market with a low-cost plan offering index mutual funds. Now the company is going to drive costs even lower by offering a 401(k) plan with only index exchange-traded funds.

The company announced in a press release today that it expects to launch an ETF-only version of Schwab Index Advantage, its index-fund 401(k) plan, later this year. Earlier this month, Schwab unveiled a new no-commission, no-transaction-fee ETF platform called Schwab ETF OneSource that is likely to reshape the ETF marketplace.

“Fund operating expenses for index ETFs are often lower than those of index mutual funds. We believe integrating ETFs into a 401(k) lineup can drive costs down further and provide workers with the opportunity to save even more for retirement,” said Steve Anderson, executive vice president of Schwab Retirement Plan Services.

Meanwhile,the company says Schwab Index Advantage, launched a year ago, has already been chosen by 50 employer-sponsored 401(k) plans with more than $4 billion in assets and more than 36,000 individual participants. The plan is available to employers who have retirement plan assets of $20 million or more.

Workers enrolled in Schwab Index Advantage have seen the weighted average operating expense ratio for investments in their 401(k) plans fall 77 percent to $14.78 per $10,000 invested because the plans now use index mutual funds, Schwab says. Prior to transitioning to Schwab Index Advantage, the weighted average operated expense ratio for these same plans was $65.11 per $10,000 invested, the company added.